EVAAIR - Annual Report 2020 | FinancialReports.eu

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2020
ANNUAL REPORT
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Notice to readers This English version annual report is a summary translation of the Chinese version and is not an official document of the shareholders’ meeting. If there is any discrepancy between the English version and Chinese version, the Chinese version shall prevail.

Taiwan Stock Exchange Market Observation Post System: https://mops.twse.com.tw EVA Airways Corp. annual report is available at:https://www.evaair.com Printed on 30 April, 2021

EVA Airways Corporation

No.376, Sec.1, Hsin-Nan Rd., Luchu District, Taoyuan City, Taiwan Tel: 886-3-351-5151

Internet Address: https://www.evaair.com

No.117, Sec.2, Chang An E. Rd., Zhongshan Dist., Taipei, Taiwan Tel: 886-2-8500-2345

Spokesman

Chen, Yao-Min Executive Vice President, Public Relations Div. Tel: 886-2-2500-1122

Deputy Spokesman

Lin, Szu-Chung Junior Vice President, Public Relations Div. Tel: 886-2-2500-1122

Shareholder Services

Address: 2F, No.166, Sec. 2, Minsheng E. Rd. Zhongshan Dist., Taipei, Taiwan Tel: 886-2-2500-1668 Internet Address: https://stock.evergreen.com.tw

Auditors

KPMG 68F, No.7, Sec. 5, Xinyi Rd., Taipei, Taiwan (Taipei 101 Tower) Tel: 886-2-8101-6666 Internet Address: www.kpmg.com.tw

Financial Calendar Year Ended December 31, 2020

*Contents*
I. Letter to Shareholders…………………………………………………………………………….	1
II. Company Profile………………………………………………………………………………….	11
III. Corporate Governance Report………………………………………………………………….	16
3.1 Organization……………………………………………………………………………………….	18
3.2 Directors, Supervisors and Management Team…………………………………………………...	22
3.3 Remuneration of Directors, Supervisors, President, and Vice Presidents………………………...	40
3.4 Implementation of Corporate Governance………………………………………………………...	47
3.5 Information Regarding the Company’s Audit Fee and Independence.............................................	103
3.6 Replacement of CPA………………………………………………………………………………	104
3.7 Audit Independence……………………………………………………………………………….	104
3.8 Changes in Shareholding of Directors, Managers and Major Shareholders and Information
of Stock Transfer or Stock Pledge………………………………………………………………...	104
3.9 Relationship Among the Top Ten Shareholders…………………………………………………..	108
3.10 Ownership of Shares in Affiliated Enterprises…………………………………………………..	110
IV. Capital Overview………………………………………………………………………………...	111
4.1 Capital and Shares…………………………………………………………………………………	111
4.2 Corporate Bond……………………………………………………………………………………	116
4.3 Preferred Stock…………………………………………………………………………………….	118
4.4 Global Depository Receipts……………………………………………………………………….	118
4.5 Employee Stock Options…………………………………………………………………………..	118
4.6 New Restricted Employee Shares…………………………………………………………………	118
4.7 Status of New Shares Issuance in Connection with Mergers and Acquisitions…………………...	118
4.8 Financing Plans and Implementation……………………………………………………………...	118
V. Operational Highlights…………………………………………………………………………...	119
5.1 Business Activities………………………………………………………………………………...	119
5.2 Market and Sales Overview……………………………………………………………………….	135
5.3 Human Resources………………………………………………………………………………….	143
5.4 Environmental Protection Expenditure............................................................................................	144
5.5 Labor Relations……………………………………………………………………………………	149
5.6 Important Contracts………………………………………………………………………………..	156
VI. Financial Information…………………………………………………………………………...	162
6.1 Five-Year Financial Summary…………………………………………………………………….	162
6.2 Five-Year Financial Analysis……………………………………………………………………...	166

*Contents*
6.3 Audit Committees’ Report for the Most Recent Year……………………………………………..	170
6.4 Consolidated Financial Statements for the Years Ended December 31, 2020 and 2019
and Independent Auditors’ Report………………………………………………………………...	170
6.5 The Parent-Company-Only Financial Statements for the Years Ended December 31,
2020 and 2019 and Independent Auditors’ Report………………………………………………..	170
6.6 If the Company or its affiliates have experienced financial difficulties in the most recent
fiscal year or during the current fiscal year up to the printing date of the annual report, the
annual report shall explain how said difficulties will affect the company’s Financial
situation...........................................................................................................................................	170
VII. Review of Financial Conditions, Financial Performance, and Risk Management…………	171
7.1 Analysis of Financial Status……………………………………………………………………….	171
7.2 Analysis of Financial Performance………………………………………………………………..	172
7.3 Analysis of Cash Flow…………………………………………………………………………….	172
7.4 Major Capital Expenditure Items………………………………………………………………….	173
7.5 Investment Policy in the Last Year, Main Causes for Profits or Losses, Improvement
Plans and the Investment Plans for the Coming Year……………………………………………..	174
7.6 The evaluation of risks by the Company in recent year and by the printed date
of annual report……………………………………………………………………………………	174
7.7 Other Important Items……………………………………………………………………………..	181
VIII. Special Disclosure……………………………………………………………………………...	182
8.1 Summary of Affiliated Companies………………………………………………………………..	182
8.2 Private Placement Securities in the Most Recent Years…………………………………………..	188
8.3 Shares in the Company Held or Disposed by Subsidiaries in the Most Recent Years……………	188
8.4 Other Supplementary Information to be Disclosed………………………………………………..	188
8.5 Until the Printing Date of the Annual Report, the Items That Have Great Impact on the
Company’s Shareholders’ Interests or Stock Prices Which Related to Securities and Exchange
Act Article 36 Paragraph 3 section 2……………………………………………………………...	188
Appendix
Appendix 1 Consolidated Financial Statements for the Years Ended December 31, 2020 and 2019
and the Independent Auditors’ Report…………………………………………………...	189
Appendix 2 The Parent-Company-Only Financial Statements for the Years Ended December 31,
2020 and 2019 and the Independent Auditors’ Report…………………………………..	290

I. Letter to Shareholders

Dear Shareholders,

In 2020, the operation of the global aviation industry has encountered severe challenges due to the impact of the COVID-19 pandemic. Travel restrictions, border controls and quarantine regulations are implemented around the world, resulting in drastic decline in passenger demand. Cargo was affected by the suspension of a large number of passenger flights, leading to imbalanced supply and demand for cargo capacity and boost in cargo volume and rate. Nevertheless, the increase in cargo revenue still unable to make up for the loss in passenger revenue, making the overall revenue to drop substantially. In 2020, the annual revenue of EVA Airways was NT$79.6 billion, with passenger revenue of NT$24.5 billion, and a record-high cargo revenue of NT$50 billion.

2020 Results

 Passenger revenue was NT$24.5 billion, a decrease of NT$76.1 billion compared with 2019 or an annual drop of 76%

The number of passengers in 2020 was 2.33 million people or a decline of 81.8%, giving a passenger load factor of 51.4% and the yield increased by 10.7%. Before the outbreak of the COVID-19 pandemic, passenger revenue performed well. In January, passenger revenue increased by 15% YoY. However, as the epidemic spread, countries around the world implemented strict quarantine and border control measures, causing passenger demand to fall sharply and a drastic decline in passenger revenue. During the epidemic prevention period, EVA Airways fully cooperated with the government’s epidemic prevention policies, maintaining only the essential routes to fulfill the traveling needs of people returning to/departing from Taiwan. Moreover, EVA Airways also adjusted the in-flight services, implemented safe traveling plan, and promoted automatic flight check-in service to increase the confidence of passengers in taking the flight.

 Cargo revenue was NT$50 billion, an increase of NT$24.6 billion compared with 2019 or an annual increase of 97%

The cargo we carried was 700 thousand tons in 2020 an annual increase of 15.3%, the cargo load factor was 87.7% and the yield increased by 74.6%. In response to the imbalance of market supply and demand, in addition to maximize the utilization of air

freighters, measures such as fully utilize the belly capacity of passenger aircraft, deploying passenger aircraft on freighter destinations, loading cargo on passenger cabin seats, carrying cargo in the passenger cabin by removing the seats, etc. were implemented to reduce the impact of the epidemic on the overall revenue.

 Optimize fleet composition, with a total of 87 aircraft

EVA Airways operated 87 aircraft by the end of 2020, including 82 passenger aircraft and 5 freighters. Two new Boeing 787-10s were delivered throughout the year. In response to COVID-19 impact and market changes, we continued to optimize fleet and flight network, EVA Airways has reached agreement with Boeing to reshuffle seven of the 787-10s yet to be delivered to four 787-9s and three 777 freighters.

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Aircraft Type Quantity
777-300ER 34
A330-300 9
A330-200 3
A321-200 24
ATR72-600 2
777F (Freighter) 5
787-9 4
787-10 6
Total 87
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 Create diversified income and strive for cost-effectiveness

Rolling out flights-to-nowhere, experiencing camps for crews and chefs, customized services such as blocked extra seats, blocked zones, blocked cabins and charters, and the promotion of EVA SKY SHOP to increase revenue. Furthermore, to reduce the operation cost, EVA Airways has negotiated with airports around the world to lower the operating expenses, applied for relevant salary relief subsidies, negotiated with suppliers to reduce contract prices and adjust preferential payment terms, suspended non-essential system development, equipment procurement and repairing projects, and suspended non-essential commercial campaign and sponsorship activities.

 Affiliated companies

EVA Airways has invested in 11 affiliates including Evergreen Aviation Technologies Corporation, Evergreen Sky Catering Corporation, Evergreen Airline Services Corporation, Evergreen Air Cargo Services Corporation and EVA Flight Training Academy, etc. These

companies construct a complete downstream aviation service network and upstream supply chain. The annual investment income was NT$0.8 billion in 2020.

Results vs. Projections

EVA Airways and subsidiaries estimated total consolidated operating revenue of NT$163.06 billion for 2020 and actually achieved NT$89.05 billion, surpassing our goal with 54.61%. Expected net profit before taxes was NT$9.64 billion and actual loss before taxes amounted to NT$4.32 billion.

Analysis of Financial Results and Profitability

EVA Airways and subsidiaries reported consolidated operating revenue of NT$89.05 billion for 2020, a 50.9% decrease over the previous year. Consolidated operating expense was NT$89.88 billion, a 47.7% decrease over the previous year.

Profitability analysis (consolidated):

Return on assets: 0.2% Return on equity: -4.2% Profit margin: -3.7% Loss per share: NT$0.69

Research and Development

In response to the trend of mobile technologies and to meet the diverse needs of passengers, EVA Airways has completed the renovation of our official website. We created an optimal cross-device visual interface for our passengers to enjoy their traveling experience at every moment of their journey with these delicate and welldesigned digital services.
To comply with the New Distribution Capability (NDC) standard promoted by the International Air Transport Association (IATA) in recent years, EVA Airways has established the NDC function that integrates with the passenger reservation system to provide customers with instant and diversified high-quality products and services.
Since the cross-industry cooperation partners of the Infinity MileageLands of EVA Airways continue to increase, including hotel/car rental, banking and insurance businesses, to speed up the preparation time for the cooperation between the parties involved and shorten the development time for adjusting the program of each new cooperation project, a cross-industry cooperation platform module was constructed in 2020 to set business rules based on the Rule Engine approach. Once the platform module is online, cooperation between the two parties can be carried out.
EVA Airways has improved its capability of information security governance and cyber defense conducted in 2020. Focused on reinforce security control mechanism and the protection of payment card transaction-related applications and the

cardholder data. Meanwhile, the company has enhanced the resilient information security practice, to aim precisely prevent and predict, immediately detect, and quickly respond to a security incident before, during, and after the incident.

In response to the growth of e-commerce and mail order demand and to get a hold on the real-time air freight rates as well as the changes in mail volume, EVA Airways has completed the development of the freight and mailbag rate management system, which can flexibly and efficiently adjust the flight cabin and airmail rates, improving management efficiency to maximize the profit.
In response to the development trend of mobile technologies and to meet the diverse needs of air freight forwarders, EVA Airways has completed the revision of its website for freight services, which is designed based on user experience. The website incorporated traffic data analysis and utilized customer experience to create an optimized cross-device visual interface, providing air freight forwarders instant, convenient and comprehensive digital services.
To effectively predict the in-flight fuel, formulate fuel strategy, monitor changes in aircraft performance, analyze the best route, improve crew training, and gain insight into flight safety factors, the QAR datalake and the QAR big data analysis platform were completed in this project. Under the optimization of system performance and maintenance costs, the voyage history can be completely retained, and the QAR big data storage capacity was expanded. The big data analysis technology is effectively used to successfully promote the development of aircraft-related business.
To improve the overall network service, quality and management, EVA Airways completed the implementation of a new generation core network. The new network is design with the goal of achieving centralized network management, optimized cable management, enhanced network redundancy and stability and also network security, while proving high-speed network service.
EVA Airways designed and implemented the next generation intelligent wireless management platform, built with multiple wireless network redundancy, as well as integrating multiple wireless software and hardware management solutions, in order to improve the internal and guest wireless network needs of the company, while achieving the goal of improving centralized management, and wireless network stability and security.

2021 Preview

Operating Objectives

Implement the core values of “safety, service, and sustainability”: Based on the existing safety structure, EVA Airways will continue to strengthen flight security, ground security, food safety and information security and improve service quality. By adhering to the UN Sustainable Development Goals (SDGs), EVA Airways is committed to promoting sustainable economic, environmental and social activities, fulfilling corporate social responsibilities, and developing towards sustainable goals.
Strengthen the capacity of regional routes and maintain the connection of the flight network: With the release of vaccines, the border control policies for countries around the world are expected to be eased, to accelerate the recovery of business activities. To grasp the returning business opportunities after the pandemic, the global flight network will be strengthened. In addition, by combining with the resources of Star Alliance partners, the benefits of flight network connection can be unleashed, bringing convenient services to the customers and becoming the airline favored by passengers.
Use smart technology to improve the flight experience: To comply with the trend of green travel and zero contact in the post-pandemic period, smart technology will be adopted to simplify the boarding process, reduce personnel contact and maintain flight safety, providing passengers with safe and convenient traveling experience.
Fleet renewal: Three 787-10s and three 777 freighters are scheduled to be delivered in 2021. The total fleet will reach 93 aircraft by the end of 2021.

Operational Adjustments In Response To The COVID-19 Pandemic

According to the forecast issued by the International Air Transport Association (IATA) in April 2021, owing to the increase of vaccination in developed countries and the popularization of virus test, economic recovery in scale is expected in the second half of 2021 to boost the demand back to the level in 2019, 34%. However, since the trend of demand in 2021 is exactly the opposite of that in 2020, the demand in the beginning of 2020 was strong, followed by a weak demand, whereas the demand in the beginning of 2021 was weak and will start to rise in the second half of the year. It is projected that the international air travel demand in 2021 will maintain at the same level as in 2020.

Passenger Business:

In the first half of 2021, the fleet will be flexibly dispatched and essential flights will be maintained based on the border regulations of various countries and route characteristics. In the second half of 2021, depending on the recovery of business

activities, essential routes will be gradually strengthened, and tourism routes will be gradually restored.

Based on the market demand and the source structure passengers, flights will be flexibly adjusted to maintain the structure of flight network, gathering passengers for transportation. During the epidemic, the rates of flight tickets will be flexibly adjusted depending on different sources of direct flight and transfer passengers. Moreover, services will be provided to special passengers such as foreign workers and crews, offering products with rates depending on the market demand.
Continue to observe the development and demand of tourism after the pandemic and organize diversified products such as special chartered flights, blocked extra seats and blocked cabins. Adjust the type of aircraft flexibly according to market trends to expand and meet the needs of different sources of passengers.

Cargo Business:

Maximizing the cargo capacity of passenger aircraft and freighters: Due to the epidemic, passenger flights have been canceled substantially. The freighter fleet and available capacity on passenger aircraft will be fully utilized for cargo delivery.
Optimizing the freighter network to further enhance their efficiency: Adjusting the proportion of long-haul and short-haul freighter routes to optimize the flight network, improving the efficiency of freighters.
The major air freight market will maintain operating by wide-body aircraft: Major air freight market in Southeast Asia, Northeast Asia, Hong Kong, and China will maintain operating wide-body aircraft to increase efficiency.
Seize the business opportunities for charters and blocked capacity: In response to the manufacturers’ project and urgent cargo needs, chartered flights and blocked capacity will be provided.

Future Development Strategies and Important Marketing Policies

Fleet planning: To enhance the service of medium and long-haul flights, we will bring in twenty-one 787s by the end of 2023 after successfully introducing the new generation 787s in 2018. As for the freighters, all five 777 freighters have come into service. To further enhance the competitiveness in cargo service, EVA Airways has reached an agreement with Boeing to reshuffle seven of the 787-10s yet to be delivered to three 777 freighters and four 787-9s. In addition, in response to the development of the epidemic, EVA Airways also re-examined the network and the changes in passenger and cargo demand to optimize the fleet composition. Part of the A321 and A330 fleet will be phased out from 2022. EVA Airways will consider

the follow up plan by studying on the occasion to the market demand for sustainability and business strategy at the time.

Maintain regional transportation capacity and bring out the benefits of the hub:
(1) With Taiwan as the hub, adjust the flight network deployment based on the global business activities and the degree of border control. Restore first the flight routes demanded for business activities and family visits to increase the economic benefits of the flight network, providing passengers with convenient and economical flights.
(2) With the recovery of economic activities, the frequency of flights for essential routes will be increased and the capacity of tourist routes will be restored based on the demand to boost regional capacity, and facilitate the transfer of passengers with connected flights. In addition, new flight routes will be opened for markets with potential passenger and cargo development in Southern Europe and Southeast Asia, such as Milan, Penang and the Clark route to increase the competitiveness of the hub.
Adjust the fleet flexibly and optimize the flight route revenue:
(1) With the releasing of vaccines, the market is gradually returning to the right track. To enhance the competitiveness of the flight routes, the 787 fleet will be adjusted to strengthen operation revenue based on the degree of border control in various countries and the delivery schedule of new aircraft. By the end of 2021, two 787 aircraft will be assigned for operation at Songshan Airport to replace the existing two A333 aircraft.
(2) Both the passenger and cargo demand for the European routes are equally important. The 777 or 787 aircraft with better benefits will be dispatched flexibly to enhance the efficiency of the flight routes.
Design products with additional services to enhance the ticket-purchase experience: Design products with diversified services to meet various traveling needs of passengers. Provide accurate services to customers by using the intelligent networking system, improving the ticket-purchase experience, strengthening passenger adhesion, and achieving the goal of one-stop service.
Utilize artificial intelligence and biometric technology to improve automated services:
(1) The use of technological systems to optimize the processes of various services is the future trend. EVA Airways is currently participating in the U.S. Biometric Exit Program, taking the lead in providing facial recognition for boarding services at San Francisco Airport, which in turn reduces personnel contact,

simplifies boarding operations, and ensures the health and safety of passengers.

(2) With the help of biometric technology from alliance partners, “touchless” customs clearance and boarding operations were developed. With the establishment of various airport facilities, the development of automated services is accelerated. Biometric technology can be applied to seat reservation, luggage check-in, customs clearance and lounge access, etc., providing passengers with a safe and convenient flight experience.
Strengthen the cooperation with alliance partners: Through Star Alliance network, mileage reward program, ticket products and global corporate account sales mechanism, more premium customers will be attracted to EVA Airways. Moreover, through joint procurement, practice exchange system co-development and resource sharing with member airlines, operating costs can be reduced, and efficiency can be improved.
EVA Air currently has code-sharing agreements with 20 airlines, including Air Canada, Air China, Air India, Air New Zealand, All Nippon Airways, Asiana Airlines, Avianca, Bangkok Airways, Copa Airlines, Hainan Airlines, Hong Kong Airlines, Juneyao Airlines, Shandong Airlines, Shenzhen Airlines, Singapore Airlines, Thai Airways, Turkish Airlines, UNI Air, United Airlines and Air China Cargo. 13 of these airlines are members of Star Alliance, and one is the connecting partner of Star Alliance.
Expand cold storage facility and actively participate in the vaccine-related delivery. In response to the launch of vaccines, EVA Airways collaborated with professional temperature-controlled manufacturers to provide shippers the required delivery, with a temperature-controlled range to reach as low as -80℃. Vaccine-related manufacturers can utilize the cold storage facility and the flights of EVA Airways to transport their products to places around the world.
Actively gathered cargos from diversified sources: Besides focusing on major air cargos such as mobile devices and e-commerce products, EVA Airways will strengthen the development of cold chain goods such as food ingredients and precision electronic components, as well as mobile networks, automation, AI (artificial intelligence), epidemic prevention materials, and electronic network & communication products, etc.
Continue to promote electronic cargo services: To comply with IATA’s initiative in the use of electronic air waybill (e-AWB), as of the end of 2020, the penetration of e-AWB for EVA Airways has reached 75.6%. In the future, EVA Airways will continue to expand the scope of the electronic cargo services.

Impact of External Competition, Legal Issues and Overall Operating Environment

External Competition

Due to the COVID-19 pandemic in 2020, the global economy, aviation industry and tourism industry were severely hit. According to the latest data from IATA, the aviation industry lost approximately US$126.4 billion in 2020, and the overall demand declined by 66% compared with that in 2019. In just a few months during the epidemic, 21 years of growth in the aviation industry have been wiped out, slamming directly the passenger volume down to the level of 1999. More than 40 airlines have completely stopped or suspended their operations. After the pandemic, the global aviation market will be reshuffled.

Legal Environment

The political and economic situation as well as the policy stability will directly affect the rise and fall of the passenger and cargo market for the aviation industry.
The revision of relevant regulations for flight crews and the harmony of the employer-employee relations will have a direct impact on the operation and the operating costs of the aviation industry. For example, since January 1, 2021, the Centers for Disease Control (CDC) requires crew members after long-haul flights or from other countries to complete a 7-day home quarantine when entering Taiwan and have negative result for the COVID-19 PCR test before they can enter the community, and from the 8th to the 14th day, they shall follow the enhanced version of the self-health management practice. Such regulation seriously affected the scheduling of airline crews and flight planning, making the aviation market even worse.

Overall Operating Environment

In 2020, the global economy was affected by strict control measures, such as city lockdown, border control and restriction of personal activities, implemented by various countries to prevent the spread of the epidemic. With the releasing of vaccines and the resume of economic activities in various countries, most international institutions predict that the global economy will gradually recover in 2021, and economic growth will be better than that in 2020. Domestic institutions estimate that Taiwan’s economic growth in 2021 will outperform that before the epidemic, expecting to bring positive effect for the aviation industry in terms of import and export.

With the dual effects of extended travel restrictions and economic shrinkage in certain countries, the impact of the epidemic on the world continues to grow. If the border controls for some countries are eased in 2021, IATA predicts that the total number of passengers will increase compared with 2020, rising from 0.6 billion to 2.4 billion people, while the passenger revenue is expected to reach about US$231 billion. Although improvement compared with 2020 can be expected, the road to recovery is long and difficult. It is projected that the number of passengers will reach the level of 2019 in 2024 at the earliest. Due to the slow recovery of the belly compartment capacity of passenger planes, the transportation capacity continues to be limited. With the increasing demand of vaccine delivery, cargo market will continue to show strong performance. It is expected that the cargo volume will increase to 63.1 million tons, which will boost the cargo revenue in 2021 to a record high of US$152 billion.

Facing with such difficult operation challenges, all employees of EVA Airways have not only implemented the required epidemic-prevention policies, but also adopted various contingency measures based on changes in the passenger and cargo markets to reduce the substantial impact bring about by the epidemic. In the future, EVA Airways will continue to pay close attention to market changes, strengthen operational management, strive for cost-effectiveness, and stabilize financial conditions to prepare for the recovery of the market in the post-pandemic era.

Chairman Lin, Bou-Shiu

II.Company Profile

Date of Incorporation: April, 07, 1989

Location: No. 376, Sec. 1, Hsin-Nan Rd., Luchu Dist., Taoyuan City

Tel: 03-351-5151

Taipei Branch Office: 1F, No. 117, Sec. 2, Chang An E. Rd., Zhongshan Dist., Taipei Tel: 02-8500-2345

Major Milestones

1989~1996

EVA was founded on March 8, 1989 by Group Chairman Y. F. Chang and registered on April 7, 1989. The Company immediately prepared for flight operation. The authorized capital was NT$ 10 billion and the paid-up capital was NT$2.5 billion.
First Flight was launched on July 1, 1991.

1997~2001

The Company’s stocks were listed for sale in OTC.
The Company moved into new terminal and provided services to customers, after the opening of terminal 2 of Taoyuan International Airport.
EVA secured approval to transfer its stocks listing from OTC and moved its shares to the Taiwan Stocks Exchange (TWSE).

2002~2006

EVA took delivery of its first A330-200 aircraft and introduced new generation of business class, Premium Laurel Class.
EVA Europe Cargo Center was established.
EVA made a successful record in Taiwan to assist Taiwan Semiconductor Manufacturing Company Ltd. (TSMC) transport the 8-inch wafer fab from Taipei to Shanghai.
EVA took delivery of the first 777-300ER aircraft (B-16701) in Boeing Company in Seattle, U.S.
EVA opened Southern China Cargo Center in Hong Kong, enabling it to acquire market information, integrate regional cargo goods and discuss regional cooperation plans with local forwarders, which make EVA move air freight shipments in and out of the region, prepare business plan, sell and discover customers more efficiently and quickly.

2007~2011

Recognized 2007 “Best Wines on the Wing” by Global Traveler, a famous travel magazine of U.S.
EVA received 2007 The Richard Teller Crane Founder’s Award from the 60[th] annual International Air Safety Summit (IASS) held in Seoul for “its corporate leadership in aviation safety programs and its superb safety records.” In the five years since the coveted award was established, EVA was the first Asian airline and only the second airline among all recipients to receive it.
EVA ranked 1[st] as the 2008 “Best Ideal Brand of International Airline” for the second year from the surveys of Taiwanese consumers, Management Magazine.
Wanderlust, a leading travel magazine U.K., recognized EVA Silver Award of 2008 “Best Airline”.
EVA ranked 2[nd] “Best White” and 5[th] “Best Red” of 2007 Cellars in the Sky Awards, published by Business Traveller, a worldwide famous travel magazine.
Air Cargo World, a famous cargo magazine, ranked EVA 6[th] of 2008 “Air Cargo Excellence Award”. EVA was the second Asian airline to win the prize and surpassed most of famous airlines that were mainly in charge of cargo business.
EVA was recognized “White Gold Medal” among the Reputation Brand investigation of Reader’s Digest magazine.
EVA and UNI Air provided cross-strait charter flights services since July 4, 2008.
EVA ranked 1[st] of “Best Premium Economy Class” in the 2008 Airlines services Rating of SKYTRAX.
Joined IATA as e-freight airline with the e-AWB service became a milestone of EVA.
EVA recognized as “World’s Best 10 Airlines” by Travel & Leisure, a leading traveling magazine of U.S.
Selected as “Top 100 Brands” by Ministry of Economic Affairs (MOEA).
EVA was awarded Travel Weekly’s 2011 Magellan Award Gold winner for international economy class.
Certificated Authorized Economic Operator (AEO) by Customs Administration, Ministry of Finance.

2012~2016

EVA Sky Jet Center was available to provide services which makes the service function in Taipei Songshan Airport more complete.
EVA started 777-300ER aircraft renovation. The Business Class will be placed by fully-flat beds and named as “Royal Laurel Class”.

EVA recognized as “The World’s Best Airline” from CommonWealth Magazine’s 2012 Golden Service Awards survey.
EVA was awarded CAA’s 2012 “Golden Flyer Award” for International and CrossStrait Route Group.
Became a Star Alliance member since 2013.
EVA received “Best Business Class White” and “Best Business Class Sparkling” of Business Traveller’s Cellar in the Sky Awards 2013.
EVA acquired general aviation permission and became the first airline company that provided periodical flights and business jets services.
EVA was recognized as 2014 Top 10 “The World’s Best Long-Haul Airlines” by The Telegraph, U.K. leading media, annual reader’s select.
EVA received “The World’s Top Ten Best Airlines” and “Best Airline Cabin Cleanliness” in SKYTRAX’s 2015 World Airline Awards.
EVA signed agreements with the Boeing Company to introduce twenty four 787 Dreamliners and two 777-300ERs.
EVA was recognized as Top 10 “World’s Safest Airlines” by AirlineRating.com.
SKYTRAX announced EVA as “5-Star Airline”.
SKYTRAX ranked EVA the 8[th] of “World Best Airline”, “Best Transpacific Airline”, “Best Business Class Comfort Amenities” as well as the 3[rd] “World’s Most Loved Airlines” in 2016.

2017

EVA was awarded CAA’s 2016 “Golden Flyer Award” for International and CrossStrait Route Group.
The Infinity Lounge in Taoyuan Airport was rewarded as 2016 “Top 10 First and Business Class Airline Lounges” by SKYTRAX.
Business Traveller awarded EVA the Gold Medal of 2016 “Best Business Class Cellar” and “Best First Class Sparkling”.
EVA ranked the world’s safest airlines on the annual index reported by Germany’s AERO International Magazines for fifteen consecutive years.
TripAdvisor honored EVA “Top 10 Major Airlines in Asia Pacific” and “Best Airline- Taiwan”.
SKYTRAX announced EVA as the “5-Star Airline”, 2017 “Best Airline Cabin Cleanliness”, “ Best Business Class Comfort Amenities” and ranked 6[th] among “The World’s Top Ten Best Airlines”.
EVA was listed 10[th ] of 2017 “The World’s Best International Airlines” on the Travel + Leisure Magazine.
EVA and UNI Air launched new flights between Songshan to Tianjin, Hangzhou and Chongqing.

The first 777 freighter B-16781 was delivered in Boeing Company in Seattle, U.S.A.

2018

EVA Air won the Gold Medal for 2017 “Best Business Class Sparkling” by leading magazine Business Traveller.
EVA started code share flights with Juneyao Air and provided flight services between Taoyuan-Pudong and Kaohsiung-Pudong.
TripAdvisor recognized EVA “Top 10 Major Airlines in Asia Pacific”, “Best Business Class”, “Best Premium Economy Classes”, “Travelers’ Choice Major Airlines in Asia” and 5[th] of “World’s Top-10 Best Airlines”.
EVA was the only company that had been awarded the top 5% of the corporate governance evaluation by Taiwan Stock Exchange among the TWSE/TPEx Listed Companies for three consecutive years.
EVA launched direct flight service between Taipei-Chiang Mai.
SKYTRAX announced EVA as the “5-Star Airline”, 2018 “The World’s Best Airport Services” and ranked 5[th] among “The World’s Top Ten Best Airlines”.
EVA had codeshare flights with Copa Airlines to provide flight services between Taoyuan-Los Angeles-Panama City, Taoyuan-San Francisco-Panama City, Taoyuan-Chicago-Panama City and Taoyuan-New York-Panama City.
AirlineRatings.com recognized the “World’s Top-10 Best International Airlines” and “Best Long-Haul Airline in Asia Pacific.
EVA was awarded as Top 50 Taiwan Corporate Sustainability Report Awards.

2019

TripAdvisor recognized EVA “Best Airline in Asia”, “Best Business Class in Asia”, “Best Premium Economy Class in Asia” and 3[rd] of “World’s Best Airlines”.
EVA recognized as “The Best Business Class Onboard Amenities Kit (Georg Jensen)”, “The Best Business Class Onboard Amenities Kit (Salvatore Ferragamo)”, “The Best Premium Economy Class Onboard Amenities Kit (Sport b.)”, “The Best Economy Class Onboard Textiles” by Onboard Hospitality, a transportation magazine of U.K. PAX International, a Canadian professional aviation magazine, awarded EVA “Asia Best Economy Class Amenity Kit (Sport b.)”. The world-renowned magazine, TravelPlus, awarded EVA “The Best Premium Economy Class Amenity Bag (FURLA)”.
EVA launched direct flights between Taipei to Nagoya, Aomori, Matsuyama, and Da Nang.
SKYTRAX announced EVA as the “5-Star Airline” for four consecutive years, 2019 “World's Best Airline Cabin Cleanliness” and “World's Best Economy Class

Catering” and ranked 6[th] among “The World’s Top Ten Best Airlines”.

EVA was awarded the “Five Star Global Airline” and “Passenger Choice AwardBest Overall In Eastern Asia” by APEX.
AirlineRatings.com recognized EVA the 8[th] of “World’s Top-20 Airlines” and “World’s Safest Airlines” for six consecutive years.
EVA was awarded the Taiwan Corporate Sustainability Report Platinum Award.

2020

AirlineRatings.com recognized EVA the 3[rd] of “World’s Top-20 Safest Airlines” for seven consecutive years.
EVA was recognized the 9[th] of “World’s Safest Airlines” by AERO International, a magazine in Germany.
EVA was listed 4[th ] of 2020 “The World’s Best International Airlines” on the Travel + Leisure Magazine.
TripAdvisor recognized EVA “World’s Top-10 Best Airlines”, “World’s Best Business Class”, “Best Airline in Asia”, “Best Business Class in Asia” and “Best Premium Economy Class in Asia”.
EVA was awarded “Corporate Sustainability Report – Transportation Platinum Award” and “Corporate Comprehensive Performance – Taiwan TOP50 Corporate Sustainability Award”.
EVA was recognized ESG A class for two consecutive years by MSCI.
EVA took part in U.S. Biometric Exit Program and took the lead in launching the facial recognition system at San Francisco International Airport to speed up boarding process.

2021

EVA Air ranked 9[th] among “The World’s Top-20 Safest Airlines” by AERO International, a magazine in Germany.
AirlineRatings.com recognized EVA the 6[th] of “World’s Top-20 Safest Airlines”, “World’s Top Twenty COVID-19 Compliant Airlines” with “Seven Star Certification for COVID-19 Epidemic Prevention”.
EVA Air is actively participating in the development of various health digital verification platforms and joining Singapore Changi Airport in a pilot program that uses a digital platform to verify passengers’ Polymerase Chain Reaction (PCR). EVA Air is evaluating introduction of digital systems on other routes based on trial outcomes to accelerate the confirmation of passenger health information.

III.Corporate Governance Report

The excellent corporate governance is the basis of corporate sustainable operation. By following the idea, the Company is devoted to maintaining shareholders’ interests, enhancing the functionality of Board of Directors and strengthening the correctness and instantaneity of information disclosure to make sure the efficiency and transparency of corporate operation.

The Company adopts electronic voting for Annual General Shareholders Meeting. Shareholders could participate in voting by electronic way. The shareholders rights are protected and the activism of shareholders are implemented well. Besides, the Company also provides Chinese and English shareholder meeting agenda and annual report for investors’ reference to ensure all investors could receive equal information.

Based on the principle of integrity in management, the Company continues to promote corporate governance. Its outstanding performance has been recognized in the 7[th] Corporate Governance Evaluation Award for TWSE-listed and TPEx-listed Companies of year 2020, ranking in the top five percent of all listed companies. In 2020, the Company was also awarded “Corporate Sustainability Report--Transportation Platinum Award” and “Corporate Comprehensive Performance--Taiwan TOP50 Corporate Sustainability Award”, thus evidencing the Company's excellent performance in corporate governance and corporate social responsibility.

The Company’s Board of Directors is composed of nine directors, including three independent directors (one of them shall be an Independent Director Undertaking Public Welfare). The tenure of independent directors is not over nine years in order to make sure the independence and transparency of the operation of Board of Directors. The members of Board of Directors have professional knowledge and diverse background, such as transportation management, accounting, laws, technology, environmental protection and risk management. The independent directors provide professional and multi-dimensional opinions by their experiences. Considering gender equality, there is one female director in the Board, which takes 11.11% among all the directors.

The Remuneration Committee is composed of three independent directors and subordinated under Board of Directors. The Committee periodically reviews the remuneration policies of directors and managers and stipulates a reasonable remuneration for them according to their devotion on company operation. In addition, to completely carry out corporate governance policies to conform with the spirit of sustainable operation, the Company set up Audit Committee. The Committee is composed of the entire independent directors. The main function is to supervise fair presentation of the financial reports, the appointment, independence, and performance of CPAs, the effective implementation of the internal control system and the risks management of the Company.

The Auditing Div. is also subordinated under Board of Directors to build, implement and maintain the appropriateness and effectiveness of internal control system, improve operational efficiency and ensure that all the operation follows the related laws by auditing.

==> picture [26 x 139] intentionally omitted <==

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3.1 Organization 3.1.1 Organizational Chart
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	dent Directors rman Auditing Div. Vice President (In charge of Corporate Safety, Security & Sustainability Div. and Occupational Safety & Health Div.)	dent Directors rman Auditing Div. Vice President (In charge of Corporate Safety, Security & Sustainability Div. and Occupational Safety & Health Div.)	dent Directors rman Auditing Div. Vice President (In charge of Corporate Safety, Security & Sustainability Div. and Occupational Safety & Health Div.)		Executive Vice	Legal & Insurance ~~D~~iv.	Legal & Insurance ~~D~~iv.	Legal & Insurance ~~D~~iv.
					~~President~~
					Executive Vice	~~P~~ublic Relations Div.
					~~President~~
						Corporate Safety, Security ~~S~~ustainability Div.	&
						Occupational Safety & He~~a~~lth Div.
				p y Corporate Planning ~~D~~iv. Executive Vice President		p y
					Executive Vice	Corporate Planning ~~D~~iv.
					President
								Operation Management Dept.

								Digital And Information Planning Dept.
				Passenger
								~~Reven~~ue Management Dept.
				~~Management Div.~~ Passenger Business				Reservation & Tariff Management Dept.
								~~Busine~~ss Dept.

						Passenger Business		~~Taichu~~ng Office
				~~Div.~~ ~~Customer Service Div~~ Executive Vice		~~Div.~~
								~~Kaohs~~iung Office
								~~Custom~~er Relations Dept.
				~~.~~ President ~~Caro Div~~ Executive Vice				Reservation & Ticketing ~~Dept.~~
								~~Cargo~~Management Dept.

Shareholders	Directors rman	dent	Vice President				~~Busine~~ss Dept.
				~~g .~~ President	President	~~g .~~
								~~Cargo~~Operation Dept.
								Loyalty Marketing ~~Dept.~~
	Board of Chai	Presi	Chief Executive	Executive Vice ~~Fliht Oerations Div~~
								~~Flight~~Control Dept.


				President ~~g p .~~ ~~Cbi C Di~~
				~~an rew v.~~ ~~Cabin Service Div~~ Executive Vice
					Executive Vice	~~Cabin Service Div~~		~~Produc~~t Marketing Dept.
				~~.~~ President Executive Vice Engineering &	President	~~.~~
								Cabin Supply Provision ~~Dept.~~
								~~Qualit~~y Assurance Dept.

					Executive Vice	Engineering &		Maintenance Administration Dept.
				President Maintenance Div. Airort Di Executive Vice	President	Maintenance Div.
								~~Engine~~ering Dept.
								~~Taoyu~~an Airport Office

					Executive Vice	Airort Di		Song~~s~~han Airport Office
				p v. President	President	p v.
								~~Kaohs~~iung Airport Office
								~~Sky Je~~t Center
				Executive Vice C Di
								~~Softwa~~re Designing Dept. I
								~~Softwa~~re Designing Dept. II
				~~F~~oreign Branches President omputer v.				~~Softwa~~re Designing Dept. III
								~~System~~Management Dept.
						~~F~~oreign Branches

3.1.2 Major Corporate Functions

According to the Articles of Incorporation, the Company shall have seven to nine (7~9) Directors. The Directors shall be elected at the shareholders’ Meeting and they are selected due to their competence and disposing capacity. They shall have a three-year term of office. The Directors shall constitute the Board of Directors, which is responsible for executing business of the Company. The Chairman shall be elected at a meeting attended by at least two-thirds (2/3) of the Directors and by a simple majority vote of the Directors present at the meeting and may also elect a Vice Chairman in the same manner. The Chairman represents the Company to deal with all business.

To complete corporate governance and strengthen the ability of the Board of Directors, the Company sets up Remuneration Committee and Audit Committee subordinated under the Board of Directors. The Remuneration Committee is responsible to formulate and regularly review the Directors and managers remuneration policy and the reasonable remuneration of management team according to their contribution. The Audit Committee mainly supervise if the financial statements of the Company is reasonable expressed, the election, dismissal, independence of CPA and internal control effectiveness of the Company.

The Company also set up one President who is responsible to handle company business by following the order from the Board. The appointment and dismissal of the President shall executed at a meeting attended by at least half (1/2) of the Directors and by a simple majority vote of the Directors.

Department	Functions
Auditing Div.	Responsible for the inspection and evaluation of internal control to promote operating performance.
Legal & Insurance Div.	Responsible for aviation insurance affairs, contracts review, legal consultation, litigation and non-contentious matters.
Public Relations Div.	Responsible for media relations, press releases, advertising, planning PR activities and corporate image marketing.
Information Security Management Div.	Responsible for the planning and management of information security and privacy protection strategy, risk assessment and treatment, regulatory compliance and key performance indicator.
Human Resources Div.	Responsible for human resources management, recruiting, execution of general training programs, employee assistance and care as well as union affairs.
General Affairs Dept.	Responsible for the building maintenance, dormitory operations, receptions for visiting,employee cafeteria operations and so on.

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Department Functions
Responsible for arranging employee’s regular health examinations, follow-
Clinic Div. up of abnormal health results, health promotion, general medical treatment
and consultation, in-flight medical supplies and equipment maintenance.
Responsible for financial statements, tax processing, funds management,
Finance Div. recording and auditing operation revenue, providing operating analysis data
and so on.
Responsible for handling corporate governance affairs such as board
Corporate Governance Dept.
meetings, shareholders’ meetings affairs.
Responsible for setting up corporate safety, security and sustainability
related policies; Establishing safety, and security management systems;
Corporate Safety, Security & Conducting flight and ground staff safety and security training;
Sustainability Div. Responsible for emergency response and accident or incident investigation
of EVA operations; Responsible for the implementation of corporate
sustainability, environment and energy management program.
Occupational Safety & Responsible for the planning and implementation of occupational safety
Health Div. and health management.
Responsible for developing the Company's strategies covering fleet and
network planning, route performance analysis, overseas branch
Corporate Planning Div.
administration, fuel procurement, investment and affiliates coordination,
alliances and international affairs etc.
Responsible for the worldwide station operation managements, planning
Operation Management Dept.
and managing the Star Alliance and concerning projects.
Responsible for the planning and management of passenger and cargo
Digital And Information
service systems, data science, customer experience, e-commerce, social
Planning Dept.
media, and Star Alliance digital services.
Responsible for the worldwide passenger revenue management, pricing
Passenger Management Div.
strategy development and concerning matters.
Responsible for passenger sales-related management and concerning
Passenger Business Div.
matters for Taiwan.
Responsible for reservations and ticketing, service quality checks, EVA Air
Customer Service Div.
members and customer care.
Responsible for the worldwide freight revenue management, capacity
Cargo Div.
management, pricing and marketing strategy development.
Responsible for planning rewards approaches for EVA Air members,
newly-negotiating cross-industry cooperation, contracting and maintaining
Loyalty Marketing Dept.
with Star Alliance airlines, and participating in the implementation of
various Star Alliance members’ projects.
Responsible for the pilots’ recruitment, scheduling, management and
training, flight dispatch, analyzing aircraft performances and fuel
Flight Operations Div.
consumption of routes, formulating operating manual for aircraft and flight
simulator equipment management.
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Department Functions
Responsible for the flight attendants’ recruitment, scheduling, management
Cabin Crew Div.
and training, formulating standard operating procedures, etc.
Responsible for the development, procurement, marketing, warehousing of
cabin service supplies, in-flight duty-free products, duty-free preorder
Cabin Service Div.
products, home delivery shopping products and LOGO products, as well as
sky catering management, shopping website management, etc.
Responsible for the aircraft engineering technologies, maintenance
Engineering & Maintenance
program planning and control, fleets airworthiness monitoring, the audit of
Div.
aircraft spare part purchase and repair, and so on.
Responsible for the passenger immigration related affairs and airlines
Airport Div.
dispatch.
Responsible for the hosting, maintenance and ground handling affairs of
Sky Jet Center
business jets.
Responsible for the design and maintenance of computer programs, the
Computer Div. procurement of computer equipment and maintenance and the consulting
of operation computer system.
Responsible for the branch’s development and promotion of passenger and
Foreign Branches
freight related businesses overseas.
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Other Managers, Directors or Supervisors Related by Marriage or Within Second-degree kinship of Each Other	Relation	-	-	-	-
	Name	- - - -	Chairman, Evergreen Steel Corp. Bachelor of Computer Science and Information Engineering, Tamkang University Chairman: Hsiang-Li Investment Corp. Director: Evergreen Sky Catering Corp., UNI Airways Corp., Evergreen Air Cargo Services Corp., Evergreen Airline Services Corp., Evergreen Aviation Technologies Corp., GE EvergreenEngine Services Corp., Trade-Van Information Services Co. - -	- - - -	-
	Title				-
Concurrent Positions in Other Companies					Chairman: EverFun Travel Services Corp.
Education & Experience	(Note 3)				Chairman, Uni Airways Corporation Director & President, EVA Airways Corp. Bachelor of Diplomacy, National Chengchi University
SharesHeld by Third Parties	(%)	0.00	0.00	0.00	0.00
	Number	0	0	0	0
Shares Held by Spouses & Dependents	(%)	-	0.00	-	0.00
	Number	1989.03.31 (Note 5) 776,541,111 16.00 776,541,111 15.44 -	1993.04.30 (Note 6) 0 0.00 350,029 0.00 21,911	1989.03.31 (Note 5) 776,541,111 16.00 776,541,111 15.44 -	0
Present Shareholdings (Note 11)	(%)				0.00
	Number				439
Shareholding When Elected (Note 11)	(%)				0.00
	Number				0
Date of Initial Election, Appoint- ment (Note 2)					2017.06.26 (Note 7)
Tenure		3 Years	3 Years	3 Years	2.4 Years
Date of Election (Inaugu- ration)		2020.05.27	2020.05.27	2020.05.27	2021.02.01
Gender		-	Male	-	Male
Name		Evergreen Marine Corp. (Taiwan) Ltd.	Representative: Lin, Bou-Shiu	Evergreen Marine Corp. (Taiwan) Ltd.	Representative: Chen, Hsien- Hung
Nationality		Chairman R.O.C. R.O.C.		Director R.O.C.	R.O.C.
Title (Note 1)

Other Managers, Directors or Supervisors Related by Marriage or Within Second-degree kinship of Each Other	Relation	-	-
	Name	- - - -	-
	Title		-
Concurrent Positions in Other Companies			Chairman: Evergreen International Corp. Evergreen (Shanghai) Hotel Limited Director: Evergreen Marine Corp. (Taiwan) Ltd., Evergreen International Storage &Transport Corp., Taiwan High Speed Rail Corp., Evergreen Steel Corp., Evergreen Security Corp., Shun An Enterprise Corp., Charng Yang Development Corp.,Evergreen Marine (Singapore) Pte. Ltd., Greencompass Marine S.A., Gaining Enterprise S.A., Evergreen Insurance Co., Ltd. Supervisor: Ever Reward Logistics Corp., Evergreen Air Cargo Services Corp., Evergreen Airline Services Corp., Hsin Yung Enterprise Corp., Ever Ecove Corp. Director and Manager: Evergreen International S.A.
Education & Experience	(Note 3)		Vice Group Chairman, Evergreen Group Keelung Girls’ Senior High School
SharesHeld by Third Parties	(%)	0.00	0.00
	Number	0	0
Shares Held by Spouses & Dependents	(%)	-	0.00
	Number	1993.04.30 (Note 8) 549,262,304 11.32 549,262,304 10.92 -	0
Present Shareholdings (Note 11)	(%)		0.00
	Number		105,942
Shareholding When Elected (Note 11)	(%)		0.00
	Number		0
Date of Initial Election, Appoint- ment (Note 2)			1992.05.02 (Note 9)
Tenure		3 Years	3 Years
Date of Election (Inaugu- ration)		2020.05.27	2020.05.27
Gender		-	Female
Name		Evergreen International Corp.	Representative: Ko, Lee-Ching
Nationality		Director R.O.C.	R.O.C.
Title (Note 1)

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r
- -
Relation
- -
Name
of Each Other
- -
Other Managers, Directors or Within Second-degree kinship Title
Supervisors Related by Marriage o
-
Concurrent Positions in Other Companies
Director and President: Evergreen International Corp. Director: Evergreen Marine Corp. (Taiwan) Ltd., Evergreen International Storage &Transport Corp., Central Reinsurance Corp., Evergreen Sky Catering Corp., UNI Airways Corp., Evergreen Security Corp., Shun An Enterprise Corp., Taipei Port Container Terminal Corp., Evergreen Aviation Technologies Corp., Ever Ecove Corp., Super Max Engineering Enterprise Corp., Evergreen (Shanghai) Hotel Limited, Colon Container Terminal S.A., Evergreen Container Terminal (Thailand) Ltd., Evergreen Insurance Co. Ltd., Evergreen International Hotel Property (Bangkok) Co., Ltd.
-
(Note 3)
Education & Experience Executive Vice President, Legal Department of Evergreen International Corp. Master of Maritime Law, National Taiwan Ocean University
(%) 0.00 0.00
Held by
0 0
Third Parties
Shares Number
(%) 0.00 -
0 -
Spouses & Dependents
Shares Held by Number
(%) 0.00 0.00
Present (Note 11) 16,731 100,000
Shareholdings Number
(%) 0.00 0.00
0
(Note 11) 100,000
Shareholding When Elected Number
Date of Initial Election, Appoint- ment (Note 2)
2011.06.10 2020.05.27
Tenure 3 Years 3 Years
Date of Election (Inaugu- ration) 2020.05.27 2020.05.27
-
Male
Gender
Name
Representative: Tai, Jiin- Chyuan Evergreen Logistics Corp.
R.O.C. R.O.C.
Nationality
Title (Note 1) Director Director
----- End of picture text -----

Other Managers, Directors or Supervisors Related by Marriage or Within Second-degree kinship of Each Other	Relation	-	-
	Name	Executive Vice President, Passenger Management Division of EVA Airways Corp. Bachelor of International Trade, Chinese Cultural University President: EVA Airways Corp. Director: Evergreen Sky Catering Corp., Evergreen Air Cargo Services Corp., Evergreen Airline Services Corp., Evergreen Aviation Technologies Corp., Hsiang-Li Investment Corp. - -	-
	Title		-
Concurrent Positions in Other Companies			Executive Vice President: Corporate Planning Div., EVA Airways Corp.
Education & Experience	(Note 3)		Senior Vice President, Corporate PlanningDivision of EVA Airways Corp. Master of Marine Biology, National Sun Yat-Sen University
SharesHeld by Third Parties	(%)	0.00	0.00
	Number	0	0
Shares Held by Spouses & Dependents	(%)	0.00	0.00
	Number	2018.01.01 0 0.00 102,763 0.00 0	6,725
Present Shareholdings (Note 11)	(%)		0.00
	Number		95,560
Shareholding When Elected (Note 11)	(%)		0.00
	Number		0
Date of Initial Election, Appoint- ment (Note 2)			2020.05.27
Tenure		3 Years	3 Years
Date of Election (Inaugu- ration)		2020.05.27	2020.05.27
Gender		Male	Male
Name		Representative: Sun, Chia- Ming	Representative: Liao, Chi-Wei
Nationality		R.O.C.	R.O.C.
Title (Note 1)

Other Managers, Directors or Supervisors Related by Marriage or Within Second-degree kinship of Each Other	Relation	-
	Name	-
	Title	-
Concurrent Positions in Other Companies		Independent Director: Far Eastern Department Stores, Ltd. (FEDS) Director: KD Holding Corp.
Education & Experience	(Note 3)	Minister of Transportation and Communications, Minister of Foreign Affairs, Minister of the Environmental Protection Administration, Representative, Taipei Representative Office in the U.K., Legislator, Legislative Yuan (Parliament), Professor and Dean, College of Engineering, Tamkang University Ph. D. Aeronautics and Astronautics, New York University, U. S. A. B.S. Mechanical Engineering, National Taiwan University
SharesHeld by Third Parties	(%)	0.00
	Number	0
Shares Held by Spouses & Dependents	(%)	0.00
	Number	0
Present Shareholdings (Note 11)	(%)	0.00
	Number	0
Shareholding When Elected (Note 11)	(%)	0.00
	Number	0
Date of Initial Election, Appoint- ment (Note 2)		2014.06.17
Tenure		3 Years
Date of Election (Inaugu- ration)		2020.05.27
Gender		Male
Name		Chien, You- Hsin
Nationality		R.O.C.
Title (Note 1)		Independent Director Undertaking Public Welfare

Other Managers, Directors or Supervisors Related by Marriage or Within Second-degree kinship of Each Other	Relation	-	-
	Name	Managing Partner of YMH Company, CPAs Master Department of Accounting, National Taiwan University Bachelor of Transportation & Communication Management Science,National Cheng Kung University Managing Partner of YMH Company, CPAs Director: YMH International Co., Ltd., YMH Risk Management Consultant Ltd. - -	-
	Title		-
Concurrent Positions in Other Companies			Chairman: Protech Systems Co., Ltd. Independent Director: Marketech International Corp. Director: Chenbro Micom Co., Ltd., CPC Corp.
Education & Experience	(Note 3)		Chairman, Protech Systems Co., Ltd. Master of International Business, National Taiwan University
SharesHeld by Third Parties	(%)	0.00	0.00
	Number	0	0
Shares Held by Spouses & Dependents	(%)	0.00	0.00
	Number	2014.06.17 0 0.00 0 0.00 0	0
Present Shareholdings (Note 11)	(%)		0.00
	Number		0
Shareholding When Elected (Note 11)	(%)		0.00
	Number		0
Date of Initial Election, Appoint- ment (Note 2)			2017.06.26
Tenure		3 Years	3 Years
Date of Election (Inaugu- ration)		2020.05.27	2020.05.27
Gender		Male	Male
Name		Hsu , Shun- Hsiung	Wu , Chung- Pao
Nationality		Independent Director R.O.C.	R.O.C.
Title (Note 1)			Independent Director

Government & Supervision	 						  	
Risk Management
Environmental Protection
Technology									
Law
Finance Accounting								
Transportation Management									
Business Management									
Gender	Male	Female	Male	Male	Male	Male	Male	Male	Male
Name	Lin, Bou-Shiu	Ko, Lee-Ching	Tai, Jiin-Chyuan	Chen, Hsien-Hung	Sun, Chia-Ming	Liao,Chi-Wei	Chien, You-Hsin	Hsu, Shun-Hsiung	Wu, Chung-Pao
Title	Chairman	Director	Director	Director	Director	Director	Independent Director Undertaking Public Welfare	Independent Director	Independent Director

Chart 1: Major Shareholders of the Institutional Shareholders

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April 30, 2021
Name of Institutional Shareholder Major Shareholders of Institutional Shareholder
(Note 1) (Note 2)
Evergreen International Corp. Chang Yung-Fa Foundation (28.86%)
Sheng Shi Corporation (18.00%)
Chang, Kuo-Hua (12.90%)
Chang, Kuo-Ming (12.17%)
Lee, Yu-Mei (7.14%)
Chen, Hui-Chu (5.81%)
Chang Yung-Fa Charity Foundation (5.00%)
Chang, Yung-Fa (5.00%)
Yang, Mei-Chen (4.60%)
Scept Corporation (0.50%)
Evergreen Marine Corp. (Taiwan) Ltd. Evergreen International S.A. (Panama) (7.43%)
Chang, Kuo-Hua (6.06%)
Evergreen International Corp. (4.98%)
Chang, Yung-Fa (3.43%)
Chang, Kuo-Ming (2.22%)
New Labor Pension Fund (1.22%)
Bank SinoPac as Custodian ALLY HOLDING LTD.
Investment Account (0.98%)
J.P. Morgan Securities PLC (0.93%)
Yang, Mei-Chen (0.90%)
Chang, Kuo-Cheng (0.89%)
Round The World S.A. (81.00%)
Evergreen Logistics Corp.
Evergreen International Corp. (19.00%)
----- End of picture text -----

Note 1: If the directors and supervisors are institutional shareholders, please disclose the name of institute.

Note 2: The major shareholders of the institutional shareholder (for those holding more than 10% shares) and its shareholdings percentage should be disclosed. If the major shareholders of the institutional shareholders are institute, please fill in chart 2.

Note 3: If the institutional shareholder is not company organization. The major shareholders of institutional shareholder that should be disclosed are the donors and its donation ratio.
Note 4: Information is provided by institutional shareholders, Department of Commerce MOEA or Market Observation Post System (MOPS).

Chart 2: Major Shareholders of the Company’s Major Institutional Shareholders

April 30, 2021

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Name of Institutional Major Shareholders of Institutional
Legal Entity (Note 1)
Shareholders (Note 2) Shareholders (Note 3)
Evergreen International Chang Yung-Fa Chang ,Yung-Fa
Corp. Foundation Chang, Shu-Hua
(Note 6) Chang, Kuo-Hua
Chang, Kuo-Ming
Chang, Kuo-Cheng
Evergreen International Corp.
Evergreen Marine Corp. (Taiwan) Ltd.
Everglory Transport Corp.
Evergreen Investment Corp.
Eversafty Container Terminal Corp.
Evermaster Industrial Corp.
Evergenius Computer Information Corp.
Everlaural Trading Corp. Ltd.
Uniglory Marine Corp.
Sheng Shi Corporation Chang, Kuo-Cheng (92.44%)
Tseng, Chiung-Hui (7.56%)
Chang Yung-Fa Charity Chang, Yung-Fa (33.33%)
Foundation (Note 7) Chang, Kuo-Hua (33.33%)
Cheng, Shen-Chih (33.33%)
Scept Corporation Yang, Mei-Chen (97.31%)
Chang, Sheng-En (2.69%)
Evergreen International Chang, Yung-Fa (20%)
S.A. (Panama) Chang, Kuo-Hua (20%)
Chang, Kuo-Ming (20%)
Chang, Kuo-Cheng (20%)
Evergreen Marine
Pieca Corp. (20%)
Corp. (Taiwan) Ltd.
Chang Yung-Fa Foundation (28.86%)
Evergreen International Sheng Shi Corporation (18.00%)
Corp. Chang, Kuo-Hua (12.90%)
Chang, Kuo-Ming (12.17%)
----- End of picture text -----

Legal Entity (Note 1)	Name of Institutional Shareholders(Note 2) Major Shareholders of Institutional Shareholders(Note 3)	Name of Institutional Shareholders(Note 2) Major Shareholders of Institutional Shareholders(Note 3)
Evergreen Marine	Evergreen International Corp. Lee, Yu-Mei (7.14%) Chen, Hui-Chu (5.81%) Chang Yung-Fa Charity Foundation (5.00%) Chang, Yung-Fa (5.00%) Yang, Mei-Chen (4.60%) Scept Corporation (0.50%)
Corp. (Taiwan) Ltd.	New Pension Labor Fund N/A
	Bank SinoPac as Custodian ALLY HOLDING LTD. Investment Account N/A
	J.P. Morgan Securities PLC N/A
Evergreen Logistics Corp.	Round The World S.A. Evergreen International S.A. (Panama) (100.00%)
	Evergreen International Corp.	Chang Yung-Fa Foundation (28.86%) Sheng Shi Corporation (18.00%) Chang, Kuo-Hua (12.90%) Chang, Kuo-Ming (12.17%) Lee, Yu-Mei (7.14%) Chen, Hui-Chu (5.81%) Chang Yung-Fa Charity Foundation (5.00%) Chang, Yung-Fa (5.00%) Yang, Mei-Chen (4.60%) Scept Corporation(0.50%)

Note 1: Name of the institutional shareholders of chart 1.

Note 2: Name of the major shareholder of institutional shareholders of chart 1.

Note 3: The major shareholders of the institutional shareholder (for those holding more than 10% shares) and its shareholdings percentage should be disclosed.
Note 4: If an institutional shareholder is not organized as a company, the major shareholders of institutional shareholder that should be disclosed are the donors and its donation ratio.
Note 5: Information is provided by institutional shareholders, Department of Commerce MOEA or Market Observation Post System (MOPS).
Note 6: The endowers are the endowers listed in the Charter of Endowment of Chang Yung-Fa Foundation.
Note 7: The endowers are the endowers listed in the Charter of Endowment of Chang Yung-Fa Charity Foundation and their endowment as a percentage of endowment property endowed by endowers when Chang Yung-Fa Charity Foundation was established.

Professional Qualifications and independence Analysis of Directors

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April 30, 2021
Meet One of the Following Professional Qualification
Criteria Requirements, Together with at Least Five Years Work Independence Criteria(Note)
Experience
An Instructor or A Judge, Public Have Work
Higher Position in a Prosecutor, Attorney, Experience in Number of
Department of Certified Public the Areas of Other Public
Commerce, Law, Accountant, or Other Commerce, Companies in
Finance, Professional or Law, Which the
Accounting, or Technical Specialist Finance, or Individual is
Other Academic Who has Passed a Accounting, Concurrently
1 2 3 4 5 6 7 8 9 10 11 12
Department Related National Examination or Otherwise Serving as an
to the Business and been Awarded a Necessary for Independent
Needs of the Certificate in a the Business Director
Company in a Public Profession Necessary of the
or Private Junior for the Business of the Company
Name College, College or Company
University
Lin, Bou-Shiu     0
Ko, Lee-Ching          0
Tai, Jiin-Chyuan      0
Chen, Hsien-Hung            0
Sun, Chia-Ming    0
Liao, Chi-wei           0
Chien, You-Hsin    1
Hsu, Shun-Hsiung               0
Wu, Chung-Pao   1
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Note: Please tick the corresponding boxes that apply to the directors or supervisors during the two years prior to being elected or during the term of office.
Not an employee of the Company or any of its affiliates.
Not a director or supervisor of the Company or any of its affiliates. The same does not apply, however, in cases where the person is an independent director appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, the Company and its parent or subsidiary or a subsidiary of the same parent.
Not a natural-person shareholder who holds shares, together with those held by the person's spouse, minor children, or held by the person under others' names, in an aggregate of 1% or more of the total number of issued shares of the Company or ranking in the top 10 in holdings.
Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of a managerial officer under subparagraph 1 or any of the persons in the preceding two subparagraphs.
Not a director, supervisor, or employee of a corporate shareholder that directly holds 5% or more of the total number of issued shares of the Company, or that ranks among the top 5 in shareholdings, or that designates its representative to serve as a director or supervisor of the Company under Article 27, paragraph 1 or 2 of the Company Act. The same does not apply, however, in cases where the person is an independent director appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, the Company and its parent or subsidiary or a subsidiary of the same parent.
If a majority of the Company's director seats or voting shares and those of any other company are controlled by the same person: Not a director, supervisor, or employee of that other company. The same does not apply, however, in cases where the person is an independent director appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, the Company and its parent or subsidiary or a subsidiary of the same parent.
If the chairperson, general manager, or person holding an equivalent position of the Company and a person in any of those positions at another company or institution are the same person or are spouses: Not a director (or governor), supervisor, or employee of that other company or institution. The same does not apply, however, in cases where the person is an independent director appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, the Company and its parent or subsidiary or a subsidiary of the same parent.
Not a director, supervisor, officer, or shareholder holding 5% or more of the shares, of a specified company or institution that has a

financial or business relationship with the Company. The same does not apply, however, in cases where a specified company or institution holds 20% or more and no more than 50% of the total number of issued shares of the Company and the person is an independent director appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, the Company and its parent or subsidiary or a subsidiary of the same parent.

Not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that, provides auditing services to the company or any affiliate of the company, or that provides commercial, legal, financial, accounting or related services to the company or any affiliate of the company for which the provider in the past 2 years has received cumulative compensation exceeding NT$500,000, or a spouse thereof; provided, this restriction does not apply to a member of the remuneration committee, public tender offer review committee, or special committee for merger/consolidation and acquisition, who exercises powers pursuant to the Act or to the Business Mergers and Acquisitions Act or related laws or regulations.
Not having a marital relationship, or a relative within the second degree of kinship to any other director of the Company.
Not being a person of any conditions defined in Article 30 of the Company Act.
Not a governmental, juridical person or its representative as defined in Article 27 of the Company Act.

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34
- - - - - - -
Rem -ark
- - - - - - -
Relation
- - - - - - -
APR 30, 2021
Name
Kinship
- - - - - - -
Managers who are Spouses or Within Two Degrees of Title
,
- - - -
Other Position
Director: Evergreen Sky Catering Corp. Evergreen Air Cargo Services Corp., Evergreen Airline Services Corp., Evergreen Aviation Technologies Corp., Hsiang-Li Investment Corp. Executive Vice President, Public Relations Dept., Evergreen International Corp. Director: Hsiang-Li Investment Corp. Kaohsiung Airport Catering Services Ltd. Supervisor: Evergreen Sky Catering Corp., Ever Fun Travel Services Corp., Evergreen Aviation Technologies Corp., GE Evergreen Engine Services Corp.
Experience (Education) Bachelor of International Trade, Chinese Cultural University Master of Aviation Safety, University of Central Missouri Master of Business Administration, University of Central Missouri Master of the Law of the Sea, National Taiwan Ocean University Legal Affairs (Senior Vice President), Group Management Head Office Department of Tourism, World College of Journalism Department of International Trade, Tamsui Institute of Business Administration Bachelor of Accounting, Chinese Cultural University Master of Marine Biology, National Sun Yat-Sen University President (Junior Vice President), EZFLY.COM Corp.
0 0 0 0 0 0 0
%
0 0 0 0 0 0 0
by Third Parties
Shares Held Shares
0 0 0 0 0 0 0
%
0 0 0 0 0 918 6,725
Shares Held by Spouse & Dependents Shares
%
0.002 0.007 0.000 0.001 0.000 0.002 0.002
Present Shares 102,763 371,452 14,417 44,453 12,271 87,005 95,560
Shareholdings
Date
Effective 2018.01.01 2016.03.11 2019.01.01 2019.06.19 2019.01.01 2011.01.01 2016.03.22
Gender Male Male Male Male Male Male Male
Name
Sun,Chia-Ming Hsu, Hui-Sen Chen, Yao-Min Tsai, Ta-Wei Liao, Chi-Wei
Ho, Ching-Sheng Hsiao, Chin-Lung
R.O.C. R.O.C. R.O.C. R.O.C. R.O.C. R.O.C. R.O.C.
Nationality
Title
President Chief Executive Vice President Executive Vice President, Legal & Insurance Div. Executive Vice President, Public Relations Div. Executive Vice President, Human Resources Div. Executive Vice President, Finance Div. (Financial Officer) Executive Vice President, Corporate Planning Div.
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- - - - - - - - - - -
Rem -ark
- - - - - - - - - - -
Relation
- - - - - - - - - - -
Name
Kinship
- - - - - - - - - - -
Managers who are Spouses or Within Two Degrees of Title
- - - - - - - - - - -
Other Position
Experience (Education)
Bachelor of Business Administration, Fu Jen University Junior Vice President, Evergreen Aviation Technologies Corp. Bachelor of Animal Science and Biotechnology, Tunghai University Bachelor of Maritime Science, Tamkang University Bachelor of Business Management, Tatung University Senior Vice President, UNI Airways Corp. Bachelor of Naval Architecture and Marine Engineering, National Cheng Kung University Executive Vice President, Evergreen Aviation Technologies Corp. Bachelor of Industrial Management, National Taiwan Institute of Technology Bachelor of Computer Science, Feng Chia University Deputy Junior Vice President, Evergreen IT Corp. Department of Mechanical Engineering, Hsin-Pu Junior College of Industry Bachelor of German Language and Literature, Fu Jen University Secretary (Junior Vice President), Group Management Head Office Bachelor of Accounting, Tunghai University Deputy Senior Vice President, Evergreen Aviation Technologies Corp. Department of Tourism, World College of Journalism
0 0 0 0 0 0 0 0 0 0 0
%
0 0 0 0 0 0 0 0 0 0
0
by Third Parties
Shares Held Shares
0 0 0 0 0 0 0 0 0 0 0
%
0 4,119 0 0 3,195 0 0 0 0 0 0
Shares Held by Spouse & Dependents Shares
%
0.000 0.000 0.001 0.004 0.001 0.002 0.004 0.000 0.001 0.000 0.000
0 0 0
Present Shares 24,421 40,554 186,938 38,941 117,712 215,178 30,588 14,422
Shareholdings
Date
Effective 2018.01.01 2019.01.01 2011.01.01 2014.01.01 2013.04.01 2017.02.01 2007.01.01 2016.01.01 2019.01.01 2018.01.01 2007.01.01
Gender Female Male Male Male Male Male Male Male Female Male Male
Name Hsiung Tsang Ming Shianng
Lu, Yu-Chuan Chuang, Shih- Chen, Yeou-Yuh Chang, Jang- Huang, Sheh- Yeh, Shih-Chung Fang, Gwo- Chen, Chi-Hung Chou, Yu-Chuan Lee, Yi-Chung Soong, Allen
R.O.C. R.O.C. R.O.C. R.O.C. R.O.C. R.O.C R.O.C. R.O.C. R.O.C. R.O.C. R.O.C.
Nationality
Title
Executive Vice President, Customer Service Div. Executive Vice President, Cargo Div. Executive Vice President, Flight Operations Div. Executive Vice President, Cabin Service Div. Executive Vice President, Engineering & Maintenance Div. Executive Vice President, Airport Div. Executive Vice President, Computer Div. Executive Vice President, America Head Office Secretary (Senior Vice President) Senior Vice President, Auditing Div. Senior Vice President, General Affairs Dept.
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- - - - - - - - - - - -
Rem -ark
- - - - - - - - - - - -
Relation
- - - - - - - - - - - -
Name
Kinship
- - - - - - - - - - - -
Managers who are Spouses or Within Two Degrees of Title
- - - - - - - - - - -
Other Position
Senior Vice President, Corporate Governance Dept., Evergreen International Corp.
Experience (Education)
Bachelor of Economics, National Taiwan University Bachelor of Banking and Finance, Tamkang University Bachelor of Law, Soochow University Bachelor of Foreign Languages and Literature, National Tsing Hua University Deputy Junior Vice President, Evergreen Aviation Technologies Corp. Bachelor of International Trade, Fu Jen University Bachelor of Mechanical Engineering, Feng Chia University Bachelor of Western Language and Literature, National Chengchi University Department of Marine Engineering, Kaohsiung Institute of Marine Technology Bachelor of Sociology, Fu Jen University Bachelor of Mechanical Engineering, Tamkang University Department of Banking and Insurance, Taipei College of Business Public Relations (Junior Vice President), Group Management Head Office Department of Radio & Television, World College of Journalism
0 0 0 0 0 0 0 0 0 0 0 0
%
0 0 0 0 0 0 0 0 0 0 0 0
by Third Parties
Shares Held Shares
% 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 10,860 21,733 0 368 0 0 17,000 0 0
Shares Held by Spouse & Dependents Shares
%
0.000 0.001 0.000 0.001 0.001 0.000 0.000 0.000 0.001 0.001 0.001 0.000
Present 22,088 62,780 0 42,198 54,991 3,843 0 4,996 64,532 58,000 52,056 352
Shares
Shareholdings
Date
Effective 2015.01.01 2015.01.01 2016.04.27 2017.01.01 2018.01.01 2020.01.01 2018.01.01 2016.01.01 2020.01.01 2016.01.01 2018.01.01 2013.01.01
Gender Female Female Female Male Male Male Male Male Female Male Female Female
Name Hsing
Chiang, Chin-Lan Ho, Li-Cheng Hsieh, Shu-Hui Chiang, Wei-Du Su, Wei-Jen Chiu, Chung-Yu Pan, Hsin-Hsiu Wang, Chen- Wu, Su-Shin Lee, Cheng-Chieh Hsu, Shu-Ching Yang, Hsiu-Huey
R.O.C. R.O.C. R.O.C. R.O.C. R.O.C. R.O.C. R.O.C. R.O.C. R.O.C. R.O.C. R.O.C. R.O.C.
Nationality
Title
Senior Vice President, Finance Div. Finance Dept. (Accounting Officer) Senior Vice President, Finance Div. Revenue Audit Dept. Senior Vice President, Corporate Governance Dept. (Governance Officer) Senior Vice President, Corporate Planning Div. Senior Vice President, Corporate Planning Div. Senior Vice President, Digital And Information Planning Dept. Senior Vice President, Passenger Management Div. Senior Vice President, Passenger Business Div. Senior Vice President, Customer Service Div. Reservation & Ticketing Dept. Senior Vice President, Flight Operations Div. Senior Vice President, Cabin Crew Div. Cabin Crew Administration Dept. Senior Vice President, Cabin Crew Div. Cabin Crew Scheduling Dept.
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- - - - - - - - - - - -
Rem -ark
- - - - - - - - - - - -
Relation
- - - - - - - - - - - -
Name
Kinship
- - - - - - - - - - - -
Managers who are Spouses or Within Two Degrees of Title
- - - - - - - - - - -
Other Position
Electrical Engineering ,
Experience (Education)
Bachelor of Psychology, National Taiwan University Master of Graduate Institute of Human Resource Management, National Central University Bachelor of National Taiwan Institute of Technology Manager, Evergreen Aviation Technologies Corp. Bachelor of International Business, Soochow University Department of Tourism, World College of Journalism Station Manager (Senior Vice President), UNI Airways Corp. Bachelor of Business Administration, National Chung Hsing University Master of Information Management, National Taiwan University Senior Engineer, Evergreen E- Services Corp. Master of Transportation and Communication Management Science, National Cheng Kung University Bachelor of English Language and Literature, Soochow University Bachelor of Forestry, National Chung Hsing University Department of Tourism, Ming Chuan Junior Women's Commercial College Junior Vice President, UNI Airways Corp. Bachelor of Physics, Tunghai University
0 0 0 0 0 0 0 0 0 0 0 0
%
0 0 0 0 0 0 0 0 0 0 0 0
by Third Parties
Shares Held Shares
0 0 0 0 0 0 0 0 0 0 0 0
%
0 0 0 0 0 93 0 0 1,000 0 0 434
Shares Held by Spouse & Dependents Shares
%
0.001 0.002 0.001 0.001 0.001 0.000 0.000 0.001 0.001 0.000 0.001 0.000
0
Present 37,739 76,965 52,128 40,878 57,588 16,236 29,218 54,179 14,417 71,815 14,727
Shares
Shareholdings
Date
Effective 2020.01.01 2011.01.01 2018.07.01 2017.01.01 2019.01.01 2018.01.01 2011.01.01 2018.01.01 2018.01.01 2018.01.01 2018.01.01 2017.01.01
Gender Male Female Male Male Male Male Male Male Female Male Female Male
Name
Hsu, Ping Liu, Ying
Liu, Wen-Jang Yu, Chia-Chieh Chen, Shen-Chi Chen, Chia-Chuan Hou, Hsien-Yu Chung, Kai-Cheng Lin, Shu-Fen Chen, Shih-Ming Fung, Mei-Lie Chang, Yu-Heng
R.O.C. R.O.C. R.O.C. R.O.C. R.O.C. R.O.C. R.O.C. R.O.C. R.O.C R.O.C. R.O.C. R.O.C.
Nationality
Title
Senior Vice President, Cabin Crew Div. Cabin Crew Standard & Training Dept. Senior Vice President, Cabin Service Div. Catering & Cabin Supply Dept. Senior Vice President, Engineering & Maintenance Div. Engineering Dept. Senior Vice President, Airport Div. Taoyuan Airport Office Senior Vice President, Airport Div. Songshan Airport Office Senior Vice President, Computer Div. Senior Vice President, Computer Div. Senior Vice President, America Head Office Deputy Senior Vice President, Corporate Planning Div. Deputy Senior Vice President, Corporate Planning Div. Deputy Senior Vice President, Operation Management Dept. Deputy Senior Vice President, Operation Management Dept.
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38
- - - - - - - - - - - -
Rem -ark
- - - - - - - - - - - -
Relation
- - - - - - - - - - - -
Name
Kinship
- - - - - - - - - - - -
Managers who are Spouses or Within Two Degrees of Title
- - - - - - - - - - - -
Other Position
Experience (Education) Bachelor of Journalism, Chinese Cultural University Bachelor of Accounting, Chinese Cultural University Bachelor of International Trade, Tunghai University Bachelor of Spanish, Tamkang University Bachelor of Information Engineering and Computer Science, Feng Chia University Bachelor of Economics, Fu Jen University Bachelor of Foreign Languages, Christ’s College Taipei Bachelor of International Business, Tamkang University Secretary (Deputy Manager), Evergreen Sky Catering Corp. Bachelor of Aeronautical Engineering, Feng Chia University Junior Vice President, Evergreen Aviation Technologies Corp. Department of Tourism, Hsing Wu College of Commerce Bachelor of Electrical Engineering, Tamkang University Bachelor of Banking, Feng Chia University
0 0 0 0 0 0 0 0 0 0 0 0
%
0 0 0 0 0 0 0 0 0 0 0 0
by Third Parties
Shares Held Shares
0 0 0 0 0 0 0 0 0 0 0 0
%
0 968 0 6,230 0 0 0 0 4,422 5,219 0 0
Shares Held by Spouse & Dependents Shares
%
0.000 0.001 0.001 0.000 0.001 0.001 0.000 0.000 0.001 0.001 0.000 0.001
281
Present 20,587 70,626 38,000 15,311 46,282 74,773 14,417 22,620 27,720 41,793 63,487
Shares
Shareholdings
Date
Effective 2015.09.01 2017.01.01 2014.01.01 2017.01.01 2019.01.01 2013.01.01 2017.01.01 2018.01.01 2019.01.01 2013.01.01 2018.01.01 2018.01.01
Gender Male Male Male Female Male Male Male Female Male Female Male Male
Name Chiang Hung Cheng Hsiung
Tseng, Wen- Liu, Hsin-Cheng Chang, Ming- Liu, Ying-Chun Yeh, Wu-Han Kuo, Ming- Wang, Pei-Chi Lee, Chia-Fang Lin, Wen-Ji Wu, Shu-Ping Huang, Chun- Wang, Hwa-Tsai
R.O.C. R.O.C. R.O.C. R.O.C. R.O.C. R.O.C. R.O.C. R.O.C. R.O.C. R.O.C. R.O.C. R.O.C.
Nationality
Title
Deputy Senior Vice President, Passenger Management Div. Revenue Management Dept. Deputy Senior Vice President, Passenger Management Div. Reservation & Tariff Management Dept. Deputy Senior Vice President, Cargo Div. Business Dept. Deputy Senior Vice President, Loyalty Marketing Dept. Deputy Senior Vice President, Corporate Safety, Security & Sustainability Div. Deputy Senior Vice President, Flight Operations Div. Training Equipment Dept. Deputy Senior Vice President, Cabin Service Div. Product Marketing Dept. Deputy Senior Vice President, Cabin Service Div. Cabin Supply Provision Dept. Deputy Senior Vice President, Engineering & Maintenance Div. Quality Assurance Dept. Deputy Senior Vice President, Airport Div. Taoyuan Airport Office Deputy Senior Vice President, Airport Div. Taoyuan Airport Office Deputy Senior Vice President, Airport Div. Kaohsiung Airport Office
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- - - - - -
Rem -ark
- - - - - -
Relation
- - - - - -
Name
Kinship
- - - - - -
Managers who are Spouses or Within Two Degrees of Title
- - - - - -
Other Position
Hsin Institute of
Experience (Education)
Bachelor of Traffic Engineering and Management, Feng Chia University Master of Transportation and Logistics Management, National Chiao Tung University Representative in China (Manager), Group Management Head Office Bachelor of Business Administration, National Taiwan University Department of Electrical Engineering, Ming- Technology & Commerce Master of Transportation Engineering and Management, Institute of Civil Engineering, National Yang Ming Chiao Tung University Bachelor of Fine Art, University of Texas at Austin
0 0 0 0 0 0
%
0 0 0 0 0 0
by Third Parties
Shares Held Shares
0 0 0 0 0 0
%
0 10,735 0 0 0 0
Shares Held by Spouse & Dependents Shares
%
0.000 0.001 0.000 0.001 0.000 0.000
Present 5,149 38,871 127 26,545 14,417 263
Shares
Shareholdings
Date
Effective 2019.01.01 2019.01.01 2014.01.01 2017.08.01 2016.01.01 2019.01.01
Gender Male Male Male Male Male Female
Name Shyang
Lee, Kang Liang, Wen-Long Wang, Yuan- Chen, Shui-Feng Chen, Yu-Hou Yeh, Vanessa
R.O.C. R.O.C. R.O.C. R.O.C. R.O.C. U.S.A
Nationality
Title
Office Chief (Deputy Senior Vice President), Sky Jet Center General Manager (Deputy Senior Vice President), Beijing Office General Manager (Deputy Senior Vice President), U.K. Branch General Manager (Deputy Senior Vice President), Hong Kong Branch General Manager (Deputy Senior Vice President), Thailand Branch Deputy Senior Vice President, America Head Office
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Compensation	from an Invested Company Other than the	Company’s Subsidiaries (Note 9)	Company’s Subsidiaries (Note 9)	Director Evergreen Logistics Corp. Representative`：`Sun, Chia-Ming - - - - - 1,500 48 48 0.00% (0.05%) 4,146 4,146 - - - - - - (0.12%) (0.17%) -
Ratio of Total Compensation	(A+B+C+D+E +F+G) to Net Income (%) (Note 8)	Consolidated Subsidiaries of EVA (Note 7)
		EVA
Relevant Remuneration Received by Directors Who are Also Employees	Employees’ Compensation (G) (Note 6)	Consolidated Subsidiaries of EVA(Note 7)	Cash Stock Cash Stock
		EVA
	Severance Pay (F)	Consolidated Subsidiaries of EVA (Note 7)
		EVA
	Salary, Bonuses, Allowances (E) (Note 5)	Consolidated Subsidiaries of EVA (Note 7)
		EVA
Ratio of Total	Remuneration (A+B+C+D) to Net Income (%) (Note 8)	Consolidated Subsidiaries of EVA (Note 7)
		EVA
Remuneration	Allowances (D (Note 4)	Consolidated Subsidiaries of EVA (Note 7)
		EVA
	Remuneration to Directors (C) (Note 3)	Consolidated Subsidiaries of EVA (Note 7)
		EVA
	Severance Pay (B)	Consolidated Subsidiaries of EVA (Note 7)
		EVA
	Base Compensation (A) (Note 2)	Consolidated Subsidiaries of EVA ( Note 7)
		EVA
	Name
	Title
				40

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- - - - - -
than the (Note 9)
Company’s Subsidiaries
Compensation from an Invested Company Other
Unit: NT$ thousands (0.17%) (0.11%) (0.12%) (0.12%) (0.10%) (1.07%)
of EVA (Note 5)
As of December 31, 2020 Consolidated Subsidiaries
(Note 8)
EVA (0.12%) (0.11%) (0.12%) (0.10%) (0.10%) (1.07%)
Ratio of total compensation
(A+B+C+D) to net income(%)
- - - - - -
Stock
- - - - - -
Consolidated Subsidiaries of EVA (Note 5) Cash
- - - - - -
(Note 4)
Stock
- - - - - -
EVA
Employees’ Compensation (D)
Cash
2,190 590 301 930 466 5,233
of EVA (Note 5)
Consolidated Subsidiaries
(Note 3)
690 590 301 430 466 5,233
EVA
Bonuses and Allowances (C)
- 131 157 247 274 1,679
of EVA (Note 5)
Consolidated Subsidiaries
- 131 157 247 274
Severance Pay (B) 1,679
EVA
3,504 3,055 3,557 2,756 2,730 28,903
of EVA (Note 5)
Consolidated Subsidiaries
Salary (A) (Note 2) 3,504 3,055 3,557 2,756 2,730
28,903
EVA
Name
Sun, Chia-Ming Ho, Ching-Sheng Chen, Chi-Hung Tsai, Ta-Wei Liao, Chi-Wei Hsu, Hui-Sen Chen, Yao-Min Hsiao, Chin-Lung Li, Shyh-Liang Lu, Yu-Chuan Chuang, Shih-Hsiung Chen, Yeou-Yuh Chang, Jang-Tsang Huang, Sheh-Ming Yeh, Shih-Chung Fang, Gwo-Shianng Kuo, Chun-Yi
Title
President Chief Executive Vice President Executive Vice President
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Name of President and Executive Vice President
Range of Remuneration Consolidated
EVA (Note 6)
Subsidiaries of EVA (Note 7)(E)
Under NT$ 1,000,000 - -
Huang, Sheh-Ming Huang, Sheh-Ming
NT$1,000,000 ~ NT$1,999,999
Kuo, Chun-Yi Kuo, Chun-Yi
Hsu, Hui-Sen Hsu, Hui-Sen
Chen, Yao-Min Chen, Yao-Min
Hsiao, Chin-Lung Hsiao, Chin-Lung
Li, Shyh-Liang Li, Shyh-Liang
Lu, Yu-Chuan Lu, Yu-Chuan
NT$2,000,000 ~ NT$3,499,999
Chuang, Shih-Hsiung Chuang, Shih-Hsiung
Chen, Yeou-Yuh Chen, Yeou-Yuh
Chang, Jang-Tsang Chang, Jang-Tsang
Yeh, Shih-Chung Yeh, Shih-Chung
Fang, Gwo-Shianng Fang, Gwo-Shianng
NT$3,500,000 ~ NT$4,999,999 - -
NT$5,000,000 ~ NT$9,999,999 - -
NT$10,000,000 ~ NT$14,999,999 - -
NT$15,000,000 ~ NT$29,999,999 - -
NT$30,000,000 ~ NT$49,999,999 - -
NT$50,000,000 ~ NT$99,999,999 - -
NT$100,000,000 or above - -
Total 12 12
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Note 1: If the President and Executive Vice Presidents are also the directors of the Company, please fill in chart 3.3.1 Note 2: Salary received of President and Executive Vice Presidents.

Note 3: Includes employees’ stock options, bonus, subsidy, transportation allowance and remunerations received from consolidated subsidiaries of EVA.

Note 4: The employees’ compensation of Executive Vice Presidents have been approved by Board of Directors.

Note 5: Includes the total amount received from EVA and its consolidated subsidiaries

Note 6: The name of the President and Executive Vice President is disclosed according to their total remuneration received from the Company. Note 7: The name of the President and Executive Vice President is disclosed according to their total remuneration received from the Company and its subsidiaries.

Note 8: Net income is the profit after tax of the parent-company-only financial statements.

Note 9: The President and Executive Vice Presidents received the compensation from other invested companies, which are not subsidiaries.

3.3.3 Employees’ Compensation of the Management Team

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As of December 31, 2020 /Unit: NT$ thousands
Employees’ Employees’ Ratio of Total
Title Name Compensation Compensation Total Amount to Net
- in Stock - in Cash Income (%)
Chief Executive Vice President Ho, Ching-Sheng
Executive Vice President Hsu, Hui-Sen
Executive Vice President Chen, Yao-Min
Executive Vice President Hsiao, Chin-Lung
Executive Vice President
Tsai, Ta-Wei
(Financial Officer)
Executive Vice President Liao, Chi-Wei
Executive Vice President Li, Shyh-Liang
Executive Vice President Lu, Yu-Chuan
Executive Vice President Chuang, Shih-Hsiung
Executive Vice President Chen, Yeou-Yuh
Executive Vice President Chang, Jang-Tsang
Executive Vice President Huang, Sheh-Ming
Executive Vice President Yeh, Shih-Chung
Executive Vice President Fang, Gwo-Shianng
Executive Vice President Kuo, Chun-Yi
Executive
Executive Vice President Chen, Chi-Hung 0 0 0 0
Officers
Senior Vice President Chou, Yu-Chuan
Senior Vice President Lee, Yi-Chung
Senior Vice President Soong, Allen
Senior Vice President
Chiang, Chin-Lan
(Accounting Officer)
Senior Vice President Ho, Li-Cheng
Senior Vice President
Hsieh, Shu-Hui
(Governance Officer)
Senior Vice President Chiang, Wei-Du
Senior Vice President Su, Wei-Jen
Senior Vice President Chiu, Chung-Yu
Senior Vice President Pan, Hsin-Hsiu
Senior Vice President Wang, Chen-Hsing
Senior Vice President Wu, Su-Shin
Senior Vice President Lee, Cheng-Chieh
Senior Vice President Hsu, Ping
Senior Vice President Hsiu, Shu-Ching
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Employees’ Employees’ Ratio of Total
Title Name Compensation Compensation Total Amount to Net
- in Stock - in Cash Income (%)
Senior Vice President Yang, Hsiu-Huey
Senior Vice President Liu, Ying
Senior Vice President Tao, Shin-Chien
Senior Vice President Yeh, Ching-Far
Senior Vice President Liu, Wen-Jang
Senior Vice President Yu, Chia-Chieh
Senior Vice President Chen, Shen-Chi
Senior Vice President Chen, Chia-Chuan
Senior Vice President Hou, Hsien-Yu
Senior Vice President Chung, Kai-Cheng
Deputy Senior Vice President Lin, Shu-Fen
Deputy Senior Vice President Chen, Shih-Ming
Deputy Senior Vice President Fung, Mei-Lie
Deputy Senior Vice President Chang, Yu-Heng
Deputy Senior Vice President Tseng, Wen-Chiang
Executive Deputy Senior Vice President Liu, Hsin-Cheng
0 0 0 0
Officers Deputy Senior Vice President Lee, Chia-Fang
Deputy Senior Vice President Chang, Ming-Hung
Deputy Senior Vice President Liu, Ying-Chun
Deputy Senior Vice President Yeh, Wu-Han
Deputy Senior Vice President Kuo, Ming-Cheng
Deputy Senior Vice President Wang, Pei-Chi
Deputy Senior Vice President Lin, Wen-Ji
Deputy Senior Vice President Wu, Shu-Ping
Deputy Senior Vice President Wang, Hwa-Tsai
Deputy Senior Vice President Huang, Chun-Hsiung
Deputy Senior Vice President Lee, Kang
Deputy Senior Vice President Wang, Yuan-Shyang
Deputy Senior Vice President Liang, Wen-Long
Deputy Senior Vice President Chen, Shui-Feng
Deputy Senior Vice President Chen, Yu-Hou
Deputy Senior Vice President Yeh, Vanessa
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Note 1: The title and the name of management should be disclosed separately. The amount of employees’ compensation could be disclosed by summary amount.
Note 2: The employees’ compensation (including stocks and cash) should resolved by Board of Directors. If the compensation amount cannot be predicted, the estimated distribution amount could be calculated by the percentage of the actual distribution amount of last year. Net income is the profits after tax of the parent-company-only financial report of last year (if the Company adopts TIFRS).
Note 3: Managements team includes
a. President or equal position
b. Executive Vice Presidents or equal position
c. Senior Vice Presidents and Deputy Senior Vice Presidents or equal position
d. Finance Officer
e. Accounting Officer
f. The Person who is in charge of the company operating business or has the right to sign papers.
Note 4: If the Directors, Presidents or Executive Vice Presidents have received employees’ compensation (including stocks or cash), the name should be disclosed in the above chart.

3.3.4 Comparison of Remuneration for Directors, Supervisors, Presidents and Executive Vice Presidents in the Most Recent Two Fiscal Years and Remuneration Policy for Directors, Supervisors, Presidents and Executive Vice Presidents

The ratio of total remuneration paid by the Company and by all companies included in the consolidated financial statements for the last two fiscal years to directors, supervisors, presidents and executive vice presidents of the Company, to the net income of the parentcompany-only financial statements.

Title	EVA Consolidated Subsidiaries of EVA	EVA Consolidated Subsidiaries of EVA	EVA Consolidated Subsidiaries of EVA	EVA Consolidated Subsidiaries of EVA
	2019 2020 2019 2020
Directors	0.61% (0.51%) 0.79% (0.64%)
Presidents and Executive Vice Presidents	1.67%	(1.63%)	1.78%	(1.69%)

Remuneration policies, standards and combinations, procedures for determining remuneration, and their relevance to business performance and future risks:
According to the “Articles of Incorporation” and the “Payment Regulation of Directors” of the Company, if the Company makes profit in a fiscal year, the Company shall set aside no more than 2% of the profit for directors’ remuneration; and shall distribute the remuneration based on the individual director’s level of participation in and the value of contribution to the Company’s operations. In addition, the Company may pay reasonable compensation to the director based on the level of the individual director’s participation in and contribution value to the Company’ operations as well as taking into account of normal

standard in the same industry.

The individual director’s level of participation in and the value of contribution to the Company’s operation mentioned above shall be determined based on his/her personal performance and the evaluation results of the performance of the Director (including Board attendance and training status, the level of participation in the operations of the Company, the interaction status with the management team, etc.).

Article 26 of the “Articles of Incorporation” of the Company stipulates that if the Company makes profit in a fiscal year, the Company shall set aside no less than 1% of the profit for employees’ compensation. Managerial remuneration is handled in accordance with the “Payment Regulation of Managers” of the Company. Managerial remuneration includes fixed remuneration and variable remuneration. Fixed remuneration includes salary and allowances. The job title is determined according to the Company’s organizational structure, business activity and nature of work, and the fixed remuneration standard for each position is formulated taking internal and external factors into account as well; Variable remuneration includes year-end bonus and employees’ compensation. The manager’s yearend bonus is determined based on the performance. The evaluation items include the work performance, leadership and control, adaptability, creativity, knowledge and experience, planning skills and cost concepts, etc. The bonus amount is determined after being reviewed by the Remuneration Committee of the Company and submitted to the Board of Directors for approval.

3.4 Implementation of Corporate Governance

3.4.1 Board of Directors

From January 1, 2020 to May 27, 2020 before the re-election of all directors at the shareholders’ meeting, a total 4 times (A) were held. From May 27, 2020 to December 31, 2020, a total 4 times (A) were held. The attendance of directors was as follows.

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Attendance
Title Name Attendance in By Rate (%) Remarks
(Note 1) Person (B) Proxy 【 B/A 】
(Note 2)
Newly elected directors at the Annual General Shareholders' Meeting on May 27, 2020
Evergreen Marine Corp.
Re-elected
(Taiwan) Ltd.
Chairman 4 0 100% Election Date:
Representative:
2020/05/27
Lin, Bou-Shiu
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Chairman	Evergreen Marine Corp. (Taiwan) Ltd. Representative: Lin, Bou-Shiu	4	0	100%	Re-elected Election Date: 2020/05/27
	Evergreen Marine Corp.				Newly elected
Director	(Taiwan) Ltd. Representative:	4	0	100%	Election Date:
	Chang, Kuo-Hua				2020/05/27

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Attendance
Title Name Attendance in By Rate (%) Remarks
(Note 1) Person (B) Proxy 【 B/A 】
(Note 2)
Evergreen International Corp.
Director Representative: 4 0 100%
Ko, Lee-Ching
Evergreen International Corp. Re-elected
Director Representative: 4 0 100% Election Date:
Tai, Jiin-Chyuan 2020/05/27
Evergreen Logistics Corp.
Director Representative: 4 0 100%
Sun, Chia-Ming
Newly elected
Evergreen Logistics Corp.
Director Representative: 4 0 100% Election Date:
Liao, Chi-Wei 2020/05/27
Independent
Director
Undertaking Chien, You-Hsin 4 0 100%
Public
Welfare
Re-elected
Independent Election Date:
Hsu, Shun-Hsiung 4 0 100%
Director
2020/05/27
Independent
Wu, Chung-Pao 4 0 100%
Director
Former directors (Before the election at the Annual General Shareholders' Meeting on May 27, 2020)
Evergreen International Corp. Required
Chairman Representative: 4 0 100% Numbers of
Lin, Bou-Shiu Attendance: 4
Dismissal
Date:
Evergreen International Corp. 2020/05/27
Director Representative: 0 0 0%
Required
Chang, Kuo-Cheng
Numbers of
Attendance: 4
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Title	Name (Note 1)	Attendance in Person (B)	Attendance Rate (%) 【B/A】 (Note 2)	Remarks
Director	Evergreen Marine Corp. (Taiwan) Ltd. Representative: Ko,Lee-Ching	4	100%	Required Numbers of Attendance: 4
Director	Chang Yung-Fa Charity Foundation Representative: Tai, Jiin-Chyuan	4	100%
Director	Chang Yung-Fa Charity Foundation Representative: Sun, Chia-Ming	4	100%
Director	Evergreen Marine Corp. (Taiwan) Ltd. Representative: Wu, Kuang-Hui	4	100%	Dismissal Date: 2020/05/27 Required Numbers of Attendance: 4
Independent Director	Chien, You-Hsin	4	100%	Required Numbers of Attendance: 4
Independent Director	Hsu, Shun-Hsiung	4	100%
Independent Director	Wu, Chung-Pao	4	100%

Other mentionable items:

Please illustrate the dates of the Board Meetings, period, agenda and all independent directors’ opinions and the Company’s responses if one of following situation occurred during the Board Meetings:
(1)The items listed in Article 14-3 of Securities and Exchange Act: Not applicable as the Company has established the Audit Committee. Please refer to page 96 to 103 for the items listed in Article 14-5 of Securities and Exchange Act (Resolutions of the Board of Directors, the Audit Committee and the Remuneration Committee).
(2)Except for the proposal mentioned above, other literally recorded resolutions which are opposed or have qualified opinion by independent directors: None.

If the directors have personal interest conflicts to the proposal and are required for recusal, please specify the name of the directors, proposal, reason and the resolution: Please refer to page 96 to 103 for more information.

2. If the directors have personal interest conflicts to the proposal and are required for recusal, please specify the name of the directors, proposal, reason and the resolution: Please refer to page 96 to 103 for more information. 3. The 2020 Self-evaluation of theperformance of the Board of Directors: Evaluation Cycle Once a year Evaluation Period From Jan 1, 2020 to Dec 31, 2020 Evaluation Scope The Board, the Board members and the functional committees. Evaluation Method Internal self-evaluation of the Board, the Board members, and the functional committees were conducted bythe wayof fillingoutquestionnaire from Directors. Evaluation Indexes 1. Self-evaluation of performance of the Board: Participation in the operation of the company, the quality of the board of directors' decision making, Composition and structure of the board of directors, Election and continuing education of the directors, and Internal control. 2. Self-evaluation of performance of Board members (for themselves): Alignment of the goals and missions of the company, Awareness of the duties of a director, Participation in the operation of the company, Management of internal relationship and communication, the director's professionalism and continuing education, and Internal control. 3. Self-evaluation of performance of the functional committees: Participation in the operation of the company, Awareness of the duties of the functional committee, the quality of decisions made by the functional committee, Makeup of the functional committee and election of its members, and Internal control. Evaluation Results (Full score 3) 1. Self-evaluation of performance of the Board: Good, the average score is 2.97. 2. Self-evaluation of performance of Board members (for themselves): Good, the average score is 2.97. 3. Self-evaluation of performance of the functional committees: Excellent, the average score is 3. 4. The evaluation to strengthen the functionality of Board of Directors in recent years(e.g. establish Audit Committee or enhance information transparency): (1) The Company has purchased liability insurance for directors in order to disperse the risk of legal responsibility and improve the ability of corporate governance. (2) To enhance the professional ability of directors as well as implement corporate governance, the Company has invited lecturers for directors to attend training courses in 2020 and 2021. (3) The Companywas ranked in top5% amongall listed companies of the 7th Corporate Governance	2. If the directors have personal interest conflicts to the proposal and are required for recusal, please specify the name of the directors, proposal, reason and the resolution: Please refer to page 96 to 103 for more information. 3. The 2020 Self-evaluation of theperformance of the Board of Directors: Evaluation Cycle Once a year Evaluation Period From Jan 1, 2020 to Dec 31, 2020 Evaluation Scope The Board, the Board members and the functional committees. Evaluation Method Internal self-evaluation of the Board, the Board members, and the functional committees were conducted bythe wayof fillingoutquestionnaire from Directors. Evaluation Indexes 1. Self-evaluation of performance of the Board: Participation in the operation of the company, the quality of the board of directors' decision making, Composition and structure of the board of directors, Election and continuing education of the directors, and Internal control. 2. Self-evaluation of performance of Board members (for themselves): Alignment of the goals and missions of the company, Awareness of the duties of a director, Participation in the operation of the company, Management of internal relationship and communication, the director's professionalism and continuing education, and Internal control. 3. Self-evaluation of performance of the functional committees: Participation in the operation of the company, Awareness of the duties of the functional committee, the quality of decisions made by the functional committee, Makeup of the functional committee and election of its members, and Internal control. Evaluation Results (Full score 3) 1. Self-evaluation of performance of the Board: Good, the average score is 2.97. 2. Self-evaluation of performance of Board members (for themselves): Good, the average score is 2.97. 3. Self-evaluation of performance of the functional committees: Excellent, the average score is 3. 4. The evaluation to strengthen the functionality of Board of Directors in recent years(e.g. establish Audit Committee or enhance information transparency): (1) The Company has purchased liability insurance for directors in order to disperse the risk of legal responsibility and improve the ability of corporate governance. (2) To enhance the professional ability of directors as well as implement corporate governance, the Company has invited lecturers for directors to attend training courses in 2020 and 2021. (3) The Companywas ranked in top5% amongall listed companies of the 7th Corporate Governance	2. If the directors have personal interest conflicts to the proposal and are required for recusal, please specify the name of the directors, proposal, reason and the resolution: Please refer to page 96 to 103 for more information. 3. The 2020 Self-evaluation of theperformance of the Board of Directors: Evaluation Cycle Once a year Evaluation Period From Jan 1, 2020 to Dec 31, 2020 Evaluation Scope The Board, the Board members and the functional committees. Evaluation Method Internal self-evaluation of the Board, the Board members, and the functional committees were conducted bythe wayof fillingoutquestionnaire from Directors. Evaluation Indexes 1. Self-evaluation of performance of the Board: Participation in the operation of the company, the quality of the board of directors' decision making, Composition and structure of the board of directors, Election and continuing education of the directors, and Internal control. 2. Self-evaluation of performance of Board members (for themselves): Alignment of the goals and missions of the company, Awareness of the duties of a director, Participation in the operation of the company, Management of internal relationship and communication, the director's professionalism and continuing education, and Internal control. 3. Self-evaluation of performance of the functional committees: Participation in the operation of the company, Awareness of the duties of the functional committee, the quality of decisions made by the functional committee, Makeup of the functional committee and election of its members, and Internal control. Evaluation Results (Full score 3) 1. Self-evaluation of performance of the Board: Good, the average score is 2.97. 2. Self-evaluation of performance of Board members (for themselves): Good, the average score is 2.97. 3. Self-evaluation of performance of the functional committees: Excellent, the average score is 3. 4. The evaluation to strengthen the functionality of Board of Directors in recent years(e.g. establish Audit Committee or enhance information transparency): (1) The Company has purchased liability insurance for directors in order to disperse the risk of legal responsibility and improve the ability of corporate governance. (2) To enhance the professional ability of directors as well as implement corporate governance, the Company has invited lecturers for directors to attend training courses in 2020 and 2021. (3) The Companywas ranked in top5% amongall listed companies of the 7th Corporate Governance
	3.	The 2020 Self-evaluation of theperformance of the Board of Directors: Evaluation Cycle Once a year Evaluation Period From Jan 1, 2020 to Dec 31, 2020 Evaluation Scope The Board, the Board members and the functional committees. Evaluation Method Internal self-evaluation of the Board, the Board members, and the functional committees were conducted bythe wayof fillingoutquestionnaire from Directors. Evaluation Indexes 1. Self-evaluation of performance of the Board: Participation in the operation of the company, the quality of the board of directors' decision making, Composition and structure of the board of directors, Election and continuing education of the directors, and Internal control. 2. Self-evaluation of performance of Board members (for themselves): Alignment of the goals and missions of the company, Awareness of the duties of a director, Participation in the operation of the company, Management of internal relationship and communication, the director's professionalism and continuing education, and Internal control. 3. Self-evaluation of performance of the functional committees: Participation in the operation of the company, Awareness of the duties of the functional committee, the quality of decisions made by the functional committee, Makeup of the functional committee and election of its members, and Internal control. Evaluation Results (Full score 3) 1. Self-evaluation of performance of the Board: Good, the average score is 2.97. 2. Self-evaluation of performance of Board members (for themselves): Good, the average score is 2.97. 3. Self-evaluation of performance of the functional committees: Excellent, the average score is 3. 4. The evaluation to strengthen the functionality of Board of Directors in recent years(e.g. establish Audit Committee or enhance information transparency): (1) The Company has purchased liability insurance for directors in order to disperse the risk of legal responsibility and improve the ability of corporate governance. (2) To enhance the professional ability of directors as well as implement corporate governance, the Company has invited lecturers for directors to attend training courses in 2020 and 2021. (3) The Companywas ranked in top5% amongall listed companies of the 7th Corporate Governance

Evaluation, which illustrated the Company had excellent performance during operation.

(4) To enhance the information transparency, the Company voluntarily publishes important dissolutions of Board Meetings and establishes corporate governance page, social responsibility page, stakeholders’ interest page and investors page on company website.
(5) In order to implement corporate governance, the Company formulated the "Shareholding Measures for Managers Serving as Directors" on March 19, 2020. The Measures ensure that the interests of managers serving as directors are in line with the Company's long-term operating performance and the interests of the overall shareholders.
(6) The Company has 3 independent directors, and it has stipulated the “Rules Governing the Duties of Independent Directors”. To enhance the functionality of Board of Directors, the Company has established the Audit Committee.
Note 1: For directors and supervisors who are legal entities, both the names of the legal entity and the representative should be disclosed.
Note 2: (1) If any of the directors resigns before the end of the year, it is required to specify the date of his/her resignation in the remarks column. The actual attendance rate (%) should be calculated by the actual number of meetings he/she attended during his/her term at the Board of the Directors.
(2) If there is any re-election of the Board before the end of the year, both the information of current and former directors should be filled in the table, and the status and the re-election date should also be specified in the remarks column. The actual attendance rate (%) should be calculated by the actual number of meetings he/she attended during his/her term at the Board of the Directors.

3.4.2 Annual Tasks and Implementation Status of the Audit Committee

A.The Audit Committee of the Company is composed of three independent directors, whose major duties are to supervise and review the financial reports, accounting and internal control system, the major asset transactions, endorsements and guarantees, and the offering or issuance of securities.
B.Annual Tasks of the Audit Committee in 2020:
(A)Review financial reports:

The Company’s annual business report, financial reports, and surplus distribution proposals were all reviewed by the Audit Committee and submitted to the Board for discussion. After being approved by the Board, the proposals were presented to the annual general meeting of shareholders for acknowledgement.

(B)Assess the effectiveness of internal control system:
The self-assessment of internal control systems and the implementation of the Company are completed by the internal units every year. And the audit unit reports the audit results to Audit Committee on a regular basis and submits the amendment of internal control system and internal control system statement to Audit Committee for confirmation. Besides, the Audit Committee and the audit unit have at least 4 closed-door communication meetings every year to enable the Committee to understand the financial status, operational effectiveness, risk management, information security, the compliance with regulations, and to evaluate the effectiveness of internal control system of the Company.

(C) Appoint the Company’s Certified Public Accountants.
- The Audit Committee annually assesses the professionalism, independence, and the reasonableness of fees of CPAs. The proposal of appointing Mr. Tang Chia-Chien and Mr. Su Yen-Ta, the CPAs of Klynveld Peat Marwick Goerdele (hereinafter referred to as “KPMG”), as the Company’s CPAs for 2020 was reviewed by Audit Committee on the 2[nd] meeting of 2020 and approved by Board Meeting. Besides, CPAs have at least 4 closed-door communication meetings with the Audit Committee every year to communicate matters related to financial reports.
C. A total of 7 (A) meetings of the Audit Committee were held in 2020. The attendance of the members was as follows.

Title	Name	Attendance in Person (B)	By Proxy	Attendance Rate (%) 【B/A】	Remarks
Convener	Chien, You-Hsin	7	0	100%	Re-elected Election Date: 2020/05/27
Committee Member	Hsu, Shun-Hsiung	7	0	100%
Committee Member	Wu, Chung-Pao	7	0	100%
Other mentionable items: 1. If any of the following circumstances occurs, the dates of meetings, sessions, contents of motion, resolutions of the Audit Committee and the Company’s response to the Audit Committee’s opinion should be specified: (1) The items listed in Article 14-5 of Securities and Exchange Act: Please refer to page 96 to 103. (2) Except for the proposal mentioned above, other resolutions which are not approved by Audit Committee but are approved by two-third of directors: None. 2. If there are independent directors’ avoidance of motions in conflict of interest, the directors’ names, contents of motion, causes for avoidance and voting should be specified: Please refer to page 96 to 103. 3. Communications between the independent directors, the Company's Chief Internal Auditor and CPAs (e.g. the items, methods and results of audits of corporate finance or operations, etc.) (1) The Communications between the independent directors and the Company's chief internal auditor: A. Communication method The independent directors and the chief internal auditor have at least four closed-door communication meetings every year. The independent directors and the chief internal auditor had seven closed-door communication meetings in 2020, to report the results of execution of internal audit and operation of internal control.

B. The summaries of communication in 2020:

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The Company’s
NO. Date Communication Content
Response
Reviewing the internal auditor’s reports Submitted to Board of
1 Feb. 7
completed during Nov. to Dec. 2019. Directors meeting.
1. Submitted to Board of
1. Reviewing the internal auditor’s reports Directors meeting.
completed during Jan. to Feb. 2020. 2. After being approved,
2 Mar. 18 2. Reviewing and approving amendments to the proposal was
“Internal Control System” and submitted to Board of
“Implementation Rules for Internal Audits”. Directors meeting for a
resolution.
After being approved,
Reviewing and approving amendments to the proposal was
3 Apr. 14 “Internal Control System” and “Implementation submitted to Board of
Rules for Internal Audits”. Directors meeting for a
resolution.
Reviewing the internal auditor’s reports Submitted to Board
4 May 12
completed during Mar. to Apr. 2020. meeting.
Reviewing the internal auditor’s reports Submitted to Board
5 Aug. 10
completed during Apr. to Jun. 2020. meeting.
Reviewing the internal auditor’s reports Submitted to Board
6 Nov. 9
completed during Jul. to Sep. 2020. meeting.
1. Reviewing the internal auditor’s reports
Submitted to Board
7 Dec. 25 completed during Sep. to Nov. 2020.
meeting.
2. 2021 Risk and Auditing.
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(2) The Communications between the Independent Directors and CPAs:

A. Communication method

The independent directors and CPAs have at least four closed-door communication meetings every year. In the case of emergency, the meeting may be convened at any time. The independent directors and CPAs had four closed-door communication meetings in 2020, to report the financial situation and the audit results of the Company and its subsidiaries, and to explain about materially adjusting journal entries and the influence of legislation amendment on accounts.

B. The independent directors and CPAs had fully communicated, the summaries of communication in 2020:

NO.	Date	Communication Content	The Company’s Response
1	Mar. 18	1. CPAs review 2019 Financial Statement, explain Key Audit Matters (KAMs) and the important legislation amendment. 2. CPAs begin the discussion based on the problems that raised by the attendee.	None
2	May 12	1. CPAs review 2020 Q1 Financial Statement and explain the important legislation amendment. 2. CPAs begin the discussion based on the problems that raised by the attendee.	None
3	Aug. 10	1. CPAs review 2020 Q2 Financial Statement and explain the important legislation amendment. 2. CPAs begin the discussion based on the problems that raised by the attendee.	None
4	Nov. 9	3. CPAs review 2020 Q3 Financial Statement, explain Key Audit Matters (KAMs) and the important legislation amendment. 4. CPAs begin the discussion based on the problems that raised bythe attendee.	None

3.4.3 Corporate Governance Implementation Status and Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”

		Implementation Status Deviations from “the Crrat Grnan	Implementation Status Deviations from “the Crrat Grnan

	Yes No	opoe ovece Best-Practice Principles for TWSE/TPEx Listed Abstract Illustration
Evaluation Item

		Companies” and Reasons
1. Does the Company establish and disclose the Corporate Governance Best-Practice Principles based on “Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies”? V		The Board of Directors has approved “Corporate Governance Best-Practice Principles”, which can be found on both the Company’s website (URL: https://www.evaair.com/en- global/corporate-governance/)and Market Observation Post System (MOPS). None
2. Shareholding Structure & Shareholders’ Rights: (1) Does the Company establish an internal operating procedure to deal with shareholders’ suggestions, doubts, disputes and litigations, and implement based on the procedure? (2) Does the Company possess the list of its major shareholders as well as the ultimate owners of those shares? (3) Does the Company establish and execute the risk management and firewall system within its conglomerate structure? (4) Does the Company establish internal rules against insiders trading with undisclosed information?	V V V V	Shareholders’ Affairs Section is in charge of handling the issue following internal control operation procedure. Responsibility is assigned to relevant departments. The Company has established risk control measures within internal control operation procedure. The Board of Directors hasestablished “Procedures for Handling Material Inside Information” and “Insider Trading Prevention Management” within internal control operation procedure to prevent the trading of stock by insiders. To enable the directors and managers	None None None None

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Deviations from “the
Implementation Status
Corporate Governance
Evaluation Item Best-Practice Principles
Yes No Abstract Illustration for TWSE/TPEx Listed
Companies” and Reasons
of the Company to fully understand
the relevant rules and penalties of
“internal trading” in time. The
Company provides the directors and
managers with the Q&A on insider
trading prohibition monthly, and also
forwards the information of insider
trading prevention from time to time.
In addition, the in-service course for
directors held on October 7, 2020 also
covered “Insider Trading Prevention”
related content, such as the reasons
behind insider trading, case examples
and criminal liability. The Company
promotes the code of ethics and
corporate ethics when new employees
arrive, and posts relevant provisions
on the employee website portal. In
addition, on October 26, 2020, the
Company conducted an online training
course on “Ethical Behavior,
Management Integrity & Insider
Trading Prevention” for all employees.
The Company expects its employees to
uphold the spirit of ethics and integrity
in their daily duties and decision-
making, and work together to actively
prevent dishonest behaviors.
3. Composition and
Responsibilities of the Board
of Directors:
(1) Does the Board develop and V 1. According to the Company’s None
implement a diversified “Corporate Governance Best-
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policy for the composition of its members? (2) Does the Company voluntarily establish other functional committees in addition to the Remuneration Committee and the Audit Committee? (3) Does the Company establish a standard to measure the performance of the Board annually, report the results of the performance evaluation to the Board, and use it as a reference for individual directors'	V	V	Practice Principles” paragraph 3 of Article 20, the composition of the Board of Directors shall be determined by taking diversity into consideration. As perParagraph 4 of Article 20, the Board members shall have professional knowledge, skill and ability. Please refer to Table 1 for the information of diversity of the Company’s Board of Directors. 2. Gender equality in the board members’ composition is also deeply concerned by the Company, and the goal of female rate in board members is at least 10%. The current board of directors consists of 9 directors and 1 of whom is a female, which accounts for 11.11% of the board. The Company doesn’t voluntarily establish other functional committees. 1. The Company established the “Regulations Governing the Board Performance Evaluation”, which is disclosed on the Company’s official website and the Market Observation Post System (MOPS). 2. The Company shall conduct an internal boardperformance	The Company has established Remuneration Committee and Audit Committee. Board of Directors executes authority according to laws, Articles of Incorporation, resolutions of Shareholders’ Meeting and the principle of corporate governance. None

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remuneration and nomination? (4) Does the Company regularly evaluate the independence of CPAs?	V		evaluation at least once a year. In addition, the Company’s board performance evaluation may be conducted by an external independent professional institution or a panel of external experts and scholars at least once every three years. 3. The 2020 evaluation results of the performance of the Board of Directors (please refer to Table 2) was reported to the board meeting dated Mar 22, 2021. 4. The annual Evaluationresults of the performance of the Board of Directors are also the basis for individual director’s remuneration and nomination of directors. 1. The assigned accountants are not directors, supervisors, executive officers, employees or shareholders of the Company or its affiliated companies and have been confirmed as non-stakeholders, which meets with the regulation of independent judgment of government. (Please refer to Table 3 for the CPAs independence evaluation.) 2. The Company annually evaluates the specialization and independence of CPAs. Also, the CPAs have completed independent report for the appointed auditing affair. The assignment and remuneration for CPAs of 2021 financial and tax certification have been approved by Board of Directors on Feb. 19, 2021.	None

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4. Does the TWSE/TPEx Listed Companies have an adequate number of corporate governance personnel with appropriate qualifications and appoint a chief corporate governance officer to deal with corporate governance business (including but not limited to provide directors and supervisors necessary information, assist directors and supervisors with legal compliance, hold Board Meeting or Annual General Meeting, company registration and change registration of company and Minutes of Board of Directors meeting and Annual General Meeting preparation) ?	V		1. The most senior officer of Corporate Governance Department, Hsieh, Shu-Hui, who was appointed as the chief corporate governance officer of the Company by the resolution of the board meeting dated May 10, 2019. The sufficient professional corporate governance personnel has been allocated to protect shareholders' rights and strengthen the board functions. The chief corporate governance officer of the Company, who has been conducted stock affairs, shareholders’ meeting and Board meeting affairs for at least 3 years, is eligible for corporate governance affairs. 2. The main duties of the chief corporate governance officer of the Company are as follows: (1) To handle matters relating to board meetings and shareholders meetings according to laws. (2) To produce minutes of board meetings and shareholders meetings. (3) To assist in onboarding and continuous development of directors. (4) To furnish information required for business execution by directors. (5) To assist Directors with legal compliance. 3.The business development in 2020 are as follows:	None

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(1)To furnish Directors with relevant information and regulations to perform their duty and hold the Directors training courses: a. To furnish Directors with the latest regulations of corporate governance irregularly. b. To furnish Directors with the information to perform their duties and maintain smooth communication between Directors and departments. c. To arrange at least four closeddoor communication meetings to enable independent directors to communicate face-to-face with the chief internal auditor and CPAs, and to deeply understand the Company’s audit and financial status. d. To hold two Directors training courses.(3 hours each time) (2)To handle matters relating to board meetings and shareholders meetings according to laws: a. To notify the meeting agendas to each director at least seven days in advance, provide the materials, remind the director not to participate in discussion or voting on the agenda item if he/she is an interested party with it, and distribute the minutes to each director within 20 days after the meeting. b. To assist to announce the material information after board meeting, ensure the

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Deviations from “the
Implementation Status
Corporate Governance
Evaluation Item Best-Practice Principles
Yes No Abstract Illustration for TWSE/TPEx Listed
Companies” and Reasons
legality and correctness of
material information to protect
information equivalence of
investor transaction.
c.To register the date of the
shareholders’ meeting in
accordance with laws, and
produce meeting notices,
handbooks and minutes within
the legal period.
(3)Chief corporate governance
officer training records in 2020
please refer to Table 4.
5. Does the Company establish V The Company provides stakeholders None
a communication channel section on the website (URL: https://
and build a designated www.evaair.com/zh-tw/stakeholder-
section on its website for interest/) to facilitate communication
stakeholders (including but channel between investors, suppliers,
not limited to shareholders, customers and employees. The
employees, customers and Company also reports
suppliers), as well as handle “Communication with stakeholders” to
all the issues they care for in the board of directors once a year.
terms of corporate social
responsibilities?
6. Does the Company appoint a V The Company does not assign any Whereas Shareholders’
professional shareholder agency to be in charge of its Affairs is managed by the
service agency to deal with shareholder affairs. Company itself, the
shareholder affairs? matters related to
convening of the
shareholders’ meeting are
handled in accordance with
regulations and Articles of
Incorporation to ensure its
lawfulness, effectiveness
and safeness.
7. Information Disclosure:
(1) Does the Company have a V 1. The Company has set up a corporate None
corporate website to disclose website(URL:https://www.evaair.co
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Deviations from “the
Implementation Status
Corporate Governance
Evaluation Item Best-Practice Principles
Yes No Abstract Illustration for TWSE/TPEx Listed
Companies” and Reasons
both financial standings and m) and designated appropriate
the status of corporate people to monitor and keep it up-to-
governance? date with current information.
2. Corporate governance status:
The Company has disclosed
“Articles of Incorporation”,
important operating procedures and
the resolutions adopted during
Board Meetings on website. (URL:
-
https://www.evaair.com/en
-
global/corporate governance)
(2) Does the Company have V The Company has established an None
other information disclosure English website and spokesperson
channels (e.g. building an system for gathering and disclosing
English website, appointing information. Investor conference
designated people to handle information of the Company held or
information collection and been invited to over the years is
disclosure, creating a disclosed on the Company’s website.
spokesman system,
webcasting investor
conferences)?
(3) Does the Company V The Company follows relevant laws Though the Company
announce and report the and regulations to announce and report didn’t announce and report
annual financial statements the annual financial statements on time the annual financial
within two months after the after the end of the fiscal year, and statement within two
end of the fiscal year, and announce and report the first, second, months after the end of the
announce and report the and third quarter financial statements fiscal year, the quarterly
first, second, and third as well as the operating status of each financial statements and
quarter financial statements month before the prescribed deadline. the monthly operating
as well as the operating Please see https://emops.twse.com. situation are announced
status of each month before tw/server-java/t58query. and reported within the
the prescribed deadline? prescribed time limit in
accordance with the law.
8. Is there any other important
information to facilitate a
better understanding of the
Company’s corporate
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governance practices ? (1) Employee rights and employee wellness (2) Investor relations (3) Supplier relations and rights of stakeholders (4) Directors training records (5) The implementation of risk management policies and risk evaluation measures (6) Implementation of customer policies	V V V V V V		Please refer to Chapter 5 “Labor Relations” for more information. The Company has set up “Investor Relations” on website (URL: https://www.evaair.com/en-global /investor-relations/legal-notice/) which provides investors reference about operation and financial information. Please refer to Chapter 3 “Corporate Social Responsibility” for more information. The status of the continuing training of directors: Please refer to MOPS for complete information of the continuing training of the Company’s directors. Please refer to Chapter 7 “Analysis of Risk Management” for more information. In 2020, the aviation industry was severely impacted by the COVID-19 epidemic, plummeting the number of passengers taking flights. Epidemic prevention continued to be the top priority for passenger and flight services. The “EVA Air Online Customer Satisfaction Survey” was suspended in the period from March 27, 2020 to December 31, 2020. Nevertheless, 85,502 questionnaires were sent out to member passengers who are willing to receive the survey from January1, 2020 to March 26,	None None None None None None

	Implementation Status Deviations from “the Crrat Grnan
	opoe ovece Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons Yes No Abstract Illustration
Evaluation Item

(7) Purchasing insurance for directors	V 2020, and 11,532 responses were collected, with a response rate of 13.49%. The overall passenger service satisfaction level for the survey was 4.44 (5-point Likert Scale), which has reached the target value of 4.36. The Company has purchased liability insurance for its directors since 2015. None
9. Please specify the Company’s measures for the evaluation results published by Corporate Governance Center of Taiwan Stock Exchange Corporation which should be improved: (1) The 2020 annual general shareholders’ meeting of Company was held on May 27. (2) The directors of the Company have completed the training in accordance with the “Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies” in 2020,and the Companywill encourage directors to continue education.

Please specify the Company’s measures for the evaluation results published by Corporate Governance Center of Taiwan Stock Exchange Corporation which should be improved:

(1) The 2020 annual general shareholders’ meeting of Company was held on May 27. (2) The directors of the Company have completed the training in accordance with the “Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies” in 2020, and the Company will encourage directors to continue education.

Table 1: Board Diversity Policy

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Business Transportation Finance Environmental Risk Government
Title Name Gender Law Technology
Management Management Accounting Protection Management & Supervision
Lin, Bou-
Chairman Male    
Shiu
Ko, Lee-
Director Female   
Ching
Tai, Jiin-
Director Male   
Chyuan
Chen,
Director Hsien- Male  
Hung
Sun,
Director Chia- Male   
Ming
Liao,
Director Male   
Chi-Wei
Independent
Director Chien,
Male     
Undertaking You-Hsin
Public Welfare
Hsu,
Independent
Shun- Male    
Director
Hsiung
Wu,
Independent
Chung- Male   
Director
Pao
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Table 2: The Evaluation Results of Board of Directors of 2020

Self-evaluation of performance of the Board Self-evaluation of performance of Board members (for themselves) Self-evaluation of performance of the functional committees	Self-evaluation of performance of the Board Self-evaluation of performance of Board members (for themselves) Self-evaluation of performance of the functional committees	Self-evaluation of performance of the Board Self-evaluation of performance of Board members (for themselves) Self-evaluation of performance of the functional committees	Self-evaluation of performance of the Board Self-evaluation of performance of Board members (for themselves) Self-evaluation of performance of the functional committees
Average score (Full score: 3) 2.97 2.97 3
Evaluation Results	Good	Good	Excellent

Table 3: CPA Independence Evaluation

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Statement of
Statement of
The Company’s CPA
No. Item CPA
Evaluation Tang,
Su, Yen-Ta
Chia-Chien
CPA and their family do not have any direct or
1. indirect significant finance benefit of the Conformity Conformity Conformity
Company.
CPA or their family have no business relation
between the Company’s directors, supervisors and
2. Conformity Conformity Conformity
managers that might affect the independence of
CPA.
CPA are not one of the Company’s directors,
supervisors, managers or any important positions
3. Conformity Conformity Conformity
now or during the last two years. Also, CPA do not
promise to take the positions mentioned above.
During auditing period, the family of CPA are not
4. the directors, supervisors, managers or any Conformity Conformity Conformity
important positions of the Company.
During auditing period, CPA and the Company’s
directors, supervisors or managers have no direct
blood relative, direct relatives by marriage,
collateral blood relatives in 2 [nd ] degree.(Or during
5. auditing period, the close relatives of CPA is being Conformity Conformity Conformity
the Company’s directors, supervisors, managers or
any other important positions that might affect
auditing but the violence of independence has been
diminished to an acceptable level)
The CPA do not accept the gifts from the
Company, the directors, supervisors, managers or
6. Conformity Conformity Conformity
main shareholders. (The value of the gift is not
over the standard of normal social etiquette.)
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Table 4: Chief corporate governance officer training records in 2020

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Training
Date Professional Organization Training sessions
hours
Issues that Directors and Supervisors
Taiwan Corporate Governance Need to Consider in Risk Management,
Jun. 23, 2020 1 Hour
Association Corporate Sustainability and ESG after
the Impact of the Epidemic
Artificial Intelligence in Taiwan-
Taiwan Corporate Governance
Jul. 31, 2020 Opportunities and Challenges of 3 Hours
Association
Industrial Transformation
Taiwan Corporate Governance Corporate Governance Blueprint 3.0 and
Oct. 7, 2020 3 Hours
Association Responsibilities of Board of Directors
Fubon Property & Casualty, Directors
Taiwan Corporate Governance
Oct. 23, 2020 and Supervisors Responsibility and Risk 3 Hours
Association
Management Seminar
2020 Corporate Governance and
Taiwan Stock Exchange
Oct. 23, 2020 Corporate Integrity Directors and 3 Hours
Corporation
Supervisors Promotion Conference
Under the current environment, the
Taiwan Corporate Governance
Dec. 31, 2020 strategy of enterprises to make good use 1 Hour
Association
of the capital market
Total Training hours in 2020 14 Hours
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3.4.4 Composition, Responsibilities and Operations of the Remuneration Committee

A. Professional Qualifications and Independence Analysis of Remuneration Committee Members

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Meets One of the Following Professional
Qualification Requirements, Together with at Least Independence Criteria (Note2)
Criteria
Five Years’ Work Experience
An instructor or A judge, public Has work
higher position prosecutor, experience in Number of
in a department attorney, Certified the areas of Other Public
of commerce, Public commerce, Companies
law, finance, Accountant, or law, finance, in Which the
Title accounting, or other professional or Individual is
other academic or technical accounting, Concurrently Note
(Note1) department specialist who has or otherwise Serving as
1 2 3 4 5 6 7 8 9 10
related to the passed a national necessary for an
business needs examination and the business Remuneratio
of the Company been awarded a of the n Committee
in a public or certificate in a Company Member
private junior profession
college, college necessary for the
Name
or university business of the
Company
Independent
Chien, You-Hsin    1
Director
Independent
Hsu, Shun-Hsiung    0
Director
Independent
Wu, Chung-Pao   1
Director
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Note 1: Please fill in the blank with director, independent director or others.

Note 2: Please tick the corresponding boxes that apply to a member during the two years prior to being elected or during the term(s) of office.
Not an employee of the Company or any of its affiliates.
Not a director or supervisor of the Company or any of its affiliates. The same does not apply, however, in cases where the person is an independent director appointed in accordance with the Act or the laws and the regulations of the local country by, and concurrently serving as such at, the Company and its parent or subsidiary or a subsidiary of the same parent.
Not a natural-person shareholder who holds shares, together with those held by the person's spouse, minor children, or held by the person under others' names, in an aggregate of 1% or more of the total number of issued shares of the Company or ranking in the top 10 in holdings.
Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of a managerial officer under subparagraph 1 or any of the persons in the preceding two subparagraphs.
Not a director, supervisor, or employee of a corporate shareholder that directly holds 5% or more of the total number of issued shares of the Company, or that ranks among the top 5 in shareholdings, or that designates its representative to serve as a director or supervisor of the Company under Article 27, paragraph 1 or 2 of the Company Act. The same does not apply, however, in cases where the person is an independent director appointed in accordance with the Act or the laws and the regulations of the local country by, and concurrently serving as such at, the Company and its parent or subsidiary or a subsidiary of the same parent.
If a majority of the Company's director seats or voting shares and those of any other company are controlled by the same person: Not a director, supervisor, or employee of that other company. The same does not apply, however, in cases where the person is an independent director appointed in accordance with the Act or the laws and the regulations of the local country by, and concurrently serving as such at, the Company and its parent or subsidiary or a subsidiary of the same parent.
If the chairperson, general manager, or person holding an equivalent position of the Company and a person in any of those positions at another company or institution are the same person or are spouses: Not a director (or governor), supervisor, or employee of that other company or institution. The same does not apply, however, in cases where the person is an independent director appointed in accordance with the Act or the laws and the regulations of the local country by, and concurrently serving as such at, the Company and its parent or subsidiary or a subsidiary of the same parent.
Not a director, supervisor, officer, or shareholder holding 5% or more of the shares, of a specified company or institution that has a financial or business relationship with the Company. The same does not apply, however, in cases where a specified company or institution holds 20% or more and no more than 50% of the total number of issued shares of the Company and the person is an independent director appointed in accordance with the Act or the laws and the regulations of the local country by, and concurrently serving as such at, the Company and its parent or subsidiary or a subsidiary of the same parent.
Not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership,

company, or institution that, provides auditing services to the company or any affiliate of the company, or that provides commercial, legal, financial, accounting or related services to the company or any affiliate of the company for which the provider in the past 2 years has received cumulative compensation exceeding NT$500,000, or a spouse thereof; provided, this restriction does not apply to a member of the remuneration committee, public tender offer review committee, or special committee for merger/consolidation and acquisition, who exercises powers pursuant to the Act or to the Business Mergers and Acquisitions Act or related laws or regulations.

Not being a person of any conditions defined in Article 30 of the Company Act.

B. The duties of the Remuneration Committee are as follows:

Establish and periodically review the performance evaluation and remuneration policy, system, standards, and structure for directors and managers.
Periodically evaluate and establish the remuneration of directors and managers.
C. Attendance of Members at Remuneration Committee Meetings
The Remuneration Committee is composed of three independent directors.
Concerning the re-election of all directors at the shareholders’ meeting of 2020, the Company appointed the forth remuneration Committee on May 27, 2020. The term of office of current Remuneration Committee is from May 27, 2020 to May 26, 2023.
A total of 3 (A) meetings were held in 2020. Please refer to page 96 to page 103 for resolutions made by the Remuneration Committee (Resolutions of the Board of Directors, the Audit Committee and the Remuneration Committee) and the attendance of Committee member is as follows:

Title	Name	Attendance in Person(B)	By Proxy	Attendance Rate (%)【B/A】	Remarks
Convener	Chien, You-Hsin	3	0	100%	Re-elected Election Date: 2020/05/27
Committee Member	Hsu, Shun-Hsiung	3	0	100%
Committee Member	Wu, Chung-Pao	3	0	100%
Other mentionable items: 1. If the Board of Directors decline to adopt or modify a recommendation of the remuneration committee, it should specify the date of the meeting, session, content of the motion, resolution by the Board of Directors, and the Company’s response to the remuneration committee’s opinion (eg. the remuneration passed by the Board of Directors exceed the recommendation of the remuneration committee, the circumstances and cause for the difference shall be specified): None. 2. Resolutions of the remuneration committee objected to by members or subject to a qualified opinion and recorded or declared in writing, the date of the meeting, session, content of the motion, all members’ opinions and the response to members’ opinion should be specified: None.

Note:

(1) If any of the Remuneration Committee members has resigned before the end of the year, the date of his/her resignation should be stated in the remarks column. The actual attendance rate (%) should be based on the number of committee meetings held during his/her tenure and the actual number of his/her attendance.

(2) If any of the Remuneration Committee members has been re-elected before the end of the year, both the information of current and former members should be filled in the table, and the status and the re-election date should also be specified in the remarks column. The actual attendance rate (%) should be based on the number of committee meetings held during his/her tenure and the actual number of his/her attendance.

3.4.5 Corporate Social Responsibility and Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies”

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1. Does the company evaluate the risk of environmental, social and corporate governance issues related to the Company's operation in accordance with the materiality principle, and formulate relevant risk management policies or strategies? (Note 1)	V		The Company refer to global standards and guidelines, such as GRI (Global Reporting Initiative), UNGC (United Nation Global Impact), SDGs (UN Sustainable Development Goals), ISO 26000, TCFD (Task Force in Climate- Related Financial Disclosures), CDP (Carbon Disclosure Project) and DJSI (Dow Jones Sustainability Index) to establish EVA Air’s analytical procedures for material issues. The CSR report discloses important strategies, response measures, performance indicators, goals and actual implementation results. Details can be found on the Company’s Corporate Social Responsibility Report of 2019 (page 110-116). In addition, the operation of risk management was reported in the Board of Directors meeting on December 25, 2020, and the “Risk Management Policy and Procedures” were approved. The Board of Directors is the highest supervisory unit for risk management. The “Corporate Sustainability Committee” is responsible for implementing risk management related businesses, integrating and supervising the implementation and improvement of risk management policies as well as controls carried out byvarious	None

			Implementation Status	Deviations from “the
				Corporate Social
				Responsibility Best-
Evaluation Item				Practice Principles for
	Yes	No	Abstract Explanation
				TWSE/TPEx Listed

				Companies” and
				Reasons
			responsible departments, and reporting regularly the operational status to the Board of Directors every year. There are five major categories of risks: strategic risk, operational risk, financial risk, environmental risk, and other risks. Each responsible unit shall identify the potential risk factors and assessment methods for risk management, propose the mitigation and response plans, and report regularly the risks as well as response plans to the Corporate SustainabilityCommittee.
2. Does the Company establish exclusively (or concurrently) dedicated first-line managers authorized by the board to be in charge of proposing the corporate social responsibility policies and reporting to the board?	V		In 2014, the Company established the “Corporate Social Responsibility Committee” as a specialized unit responsible for executing corporate social responsibility. In 2020, it was renamed as “Corporate Sustainability Committee”, the CSC, to strengthen the implementation of corporate sustainable operations. The President serves as the Chairman of the Committee. Each sub- committees have general discussions in the aspects of economics, environment and society and are responsible for formulating and implementing CSR policies, regulations, plans and management. The CSC report relevant business implementations to the Board of Directors every year in accordance with the Corporate Social Responsibility Best Practice Principles. Reported the implementation of 2020 CSR operations	None

			Implementation Status	Deviations from “the
				Corporate Social
				Responsibility Best-
Evaluation Item				Practice Principles for
	Yes	No	Abstract Explanation
				TWSE/TPEx Listed

				Companies” and
				Reasons
			and the focus of the 2021 operation plans to the Board of Directors on December 25, 2020. The CSC is divided in to six sub- committees: “Operation Management”, “Supply Chain”, “Environment Management”, “Community Engagement”, “Employment Welfare” and “Service Quality”. For the organizational chart of the Corporate Sustainability Committee, please refer to notes table 2.
3. Environmental Issues (1) Does the Company establish proper environmental management systems based on the characteristics of their industries?	V		The Company's environmental management organization and system: 1. The Company established the “Environment Promotion Sub- Committee” in 2015. It is the highest decision-making and supervision unit for environmental management policies. It controls and plans environmental and energy management guidelines and policies in four key dimensions: fuel conservation, environment, energy and carbon management. It promotes various action plans and aircraft fuel- conservation and carbon-reduction measures to reduce greenhouse gas emissions and noise pollution from apron operations. The Committee convenes regularly every quarter to discuss the implementation status of the various responsibility units and theirperformance achievement to	None

			Implementation Status	Deviations from “the
				Corporate Social
				Responsibility Best-
Evaluation Item				Practice Principles for
	Yes	No	Abstract Explanation
				TWSE/TPEx Listed

				Companies” and
				Reasons
(2) Does the Company endeavor to utilize all resources more efficiently and use renewable materials which have low impact on the environment?	V		ensure the effectiveness of the Company's operating guidelines and policies in environmental and energy management. 2. In order to ensure the effectiveness of the Company's environment and energy management systems and to accord with domestic and international regulations, EVA Air has obtained certification to the ISO 50001 Energy Management System on Dec. 2, 2015 and ISO 14001 Environmental Management System on Jan. 4, 2016; and has obtained the recertification every three years in accordance with the specifications. The validity of the certificate is Dec. 1, 2021 and Jan. 3, 2022 respectively. The Company has completed a third party verification of GHG emission data with ISO 14064-1 principles every year since 2016. Please refer to “Environmental Protection Expenditure” page 144 of this Annual Report for details. The Company’s enhancement of all resources more efficiently and use of renewable materials are described as follows: 1. Fuel conservation measures and plans: (1)The various fuel conservation measures at EVA Air are planned and executed by the "Environment Promotion Sub-Committee" to	None

			Implementation Status	Deviations from “the
				Corporate Social
				Responsibility Best-
Evaluation Item				Practice Principles for
	Yes	No	Abstract Explanation
				TWSE/TPEx Listed

				Companies” and
				Reasons
			analyze the fuel efficiency of various aircraft models. Meanwhile, the fuel conservation plans involve topics such as weight reduction of aircraft, flight operations and aircraft maintenance (please refer to note 3). The fuel conservation measures and plans implement the carbon reduction strategy of the International Air Transport Association (IATA) and respond to the government's demand for energy conservation and carbon reduction to reduce greenhouse gas emissions. (2)The Company continually modernize the fleets through introducing latest environment friendly aircraft — Boeing 787 Dreamliner. For the illumination device, fluorescent tubes are replaced with LEDs, which will reduce half of the electricity consumption. Moreover, with the latest GEnx engine made by GE, the Dreamliner is able to reduce 20% of aviation fuel consumption and Green House Gas emission compared with the previous wide- body aircraft. 2. The enhancement of the environment and energy efficiency: (1) In order to improve the efficiency of energyresource use,the

			Implementation Status	Deviations from “the
				Corporate Social
				Responsibility Best-
Evaluation Item				Practice Principles for
	Yes	No	Abstract Explanation
				TWSE/TPEx Listed

				Companies” and
				Reasons
			Company introduced e-Formula Optimization Management (e- FOM) in June 2019 to effectively monitor, analyze and control the energy consumption of air- conditioning systems through the use of the smart system. The accuracy of information digitizing can be improved with the e-FOM technology; moreover, the introduction of Big Data statistical analysis and Genetic Algorithm reinforce the intelligent management to reduce human error and manage human resource. The e-FOM was launched in January 2020. Taking the largest energy-consuming equipment in Nankan Park, the air conditioning system, as the calculation basis, with the intelligent control of the e-FOM system, the average monthly air-conditioning energy saving was 18% in 2020, which is equivalent to an average monthly energy saving of 4.5% in Nankan Park. The cumulative energy saving was 746,249 degrees. (2)The Company continually conduct paperless operation. Each fleet is equipped with an electronic flight bag (EFB). All documents of flight operations are digitalized, which helps discard the inconvenience

			Implementation Status	Deviations from “the
				Corporate Social
				Responsibility Best-
Evaluation Item				Practice Principles for
	Yes	No	Abstract Explanation
				TWSE/TPEx Listed

				Companies” and
				Reasons
			and waste from traditional administrative operations. Meanwhile, electronic tickets are fully adopted. The Company encourages passenger using e- boarding passes for check-in operation to reduce paper consumption. Freight operations are conducted in accordance with the paperless operation standard for import/export freight transport of the International Air Transportation Association (IATA). The Company launched the e-tag baggage check- in service, the first in Asia and the second around the world. Baggage check-in and operations can be done through smart devices. This largely reduces the use of papers and waste. (3)The office area has adopted energy- saving LED light in place of conventional fluorescent lamp and install infrared sensors for the low usage lighting area to reduce energy consumption. Besides, the Company appropriately adjust the water flow of the faucet in the public restroom and prioritizes purchased products with water-saving label. Moreover, the equipment of recycling rain and water from air-conditioning condensed water is installed to makegood use of theprecious

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Implementation Status Deviations from “the
Corporate Social
Responsibility Best-
Evaluation Item Practice Principles for
Yes No Abstract Explanation
TWSE/TPEx Listed
Companies” and
Reasons
water resources. The Company also
installed a power recovery system
on freight elevators to reduce
electricity expenditure.
3. Purchase environment friendly raw
materials:
The inflight magazines, paper towels,
boarding pass and the office papers
are all products made from papers of
sustainable forestry certified by FSC.
As of 2020, fabric recycling bags
used on aircraft have been replaced
with environmentally friendly
materials that are fully biodegradable.
The Company purchases environment
friendly office products in accordance
with the environmental and energy
management system to reduce the
impact of company operations on the
environment.
(3) Does the Company V The Company implemented the four None
evaluate its present and main core elements of TCFD
future potential risks and disclosures, which identify and control
opportunities to the high risk factors caused by climate
climate change and take change and extreme climates, and
corresponding measures expend risk monitoring to all
on climate issues? environmental aspects. Details can be
found on the Company’s Corporate
Social Responsibility Report of 2019
(page 81-83).
(4) Does the Company V 1. GHG emission inventory check and None
calculate the greenhouse reduce:
gas emission, water (1)The Company has launched various
consumption and total plans for conducting inventory
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weight of waste in the past two years, and establish policies for energy conservation and carbon reduction, greenhouse gas and water consumption reduction or other waste management?			check of GHG emissions since 2011, and has completed a third party verification of GHG emission data in accordance with ISO 14064- 1 every year since 2016. The quantified data mainly include aviation fuel, automobile gasoline and diesel fuels, and each office’s total power consumption. As of 2020, the ISO14064 : 2018 version has been adopted to expand the inventory of other indirect GHG emission sources (please refer to note 4). (2)The Company’s Environment Promotion Sub-Committee not only continues to monitor domestic regulation standards and the development of reduction target, but also actively takes part in various international GHG emission reduction plans, and fully supports the aviationindustry's common goal of carbon reduction. Moreover, the Company has established carbon reduction management measures based on the IATA's four-pillar strategy: technology, operation, basic infrastructure and economic measures. 2.Water Consumption Management: The Company continuously supervise the consumption of water (please refer to note 5). In additional to the original rainwater recycling system in Nankan Park,a new condensate recycling

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system was added to increase water resource reuse efficiency. The procurement of kitchen and restroom equipment for each office building primarily favors products with water efficiency labels; most restrooms have IR automatic sensor water faucets installed, and the faucets’ outgoing water settings are adjusted; the company carries out periodical promotional activities to raise the awareness of water conservation among employees, so as to achieve optimal utilization of water resources. 3.Waste Management: Since the implementation of ISO 14001, the long-term collection and tracking of the quantity of the waste, hazardous industrial waste, and recycled resources (please refer to note 6) has helped our self-management and eliminated the abnormal production of waste. In regards to waste management and reduction, the waste produced at operating locations in Taiwan and other work areas are sorted and stored at the storage sites installed according to legal requirements. Categories such as recycle, reuse, and industrial waste, etc., are recycled and disposed by commissioned treatment and disposal companies through legal and professional means, and have never been involved in international waste transport and treatment incidents. The Company has always upheld the 3R

	Implementation Status Deviations from “the	Implementation Status Deviations from “the	Implementation Status Deviations from “the
	Corporate Social Responsibility Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons Yes No Abstract Explanation
Evaluation Item

	principle: "Reduce, Reuse, Recycle" in its waste management practice. The Company tracks the GHG emissions, water and waste consumption every year. Please refer to the Company’s Corporate Social Responsibility Report of 2019 (page 78-80 andpage 84)for more details.
4. Social Issues (1) Does the Company formulate appropriate management policies and procedures according to relevant regulations and the International Bill of Human Rights?	V	In compliance with the International Bill of Human Rights , “UN Universal Declaration of Human Rights” and the fundamental conventions of the “International Labor Organization”, and relevant rules and various labor-related laws and regulations, the Company set up working rules and employee management regulations as the basis of its management. For the employment worldwide, the Company strictly follows the statutory labor laws and regulations of respective areas or countries, and never hires child labor or forces compulsory labor. The Company provides a diversified and equal working environment as well as an equitable salary system. There is no differential treatment or discrimination resulting from the issues of gender, ethnicity, nationality, physical conditions, religion, political affiliation, marital status, etc. To protect gender equality in employment, eliminate gender discrimination andprevent sexual	None

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harassment, the Company has announced the matters regarding “the prevention of sexual harassment at work sites” on its internal website. The Company continued to offer courses related to the Act of Gender Equality in Employment and sexual harassment prevention in 2020, in which female labor and maternal health protection added to the content of the courses, aiming to actively promoting gender equality and sexual harassment prevention. If sexual discrimination or harassment happened, the employee may fill out the “Employee sexual harassment complaint form” and “Sexual harassment complaint form” or file the compliant through the sexual discrimination and harassment complaint hotline or email in accordance with the “Measures of Prevention, Correction, Complaint and Punishment of Sexual Harassment in EVA Airways” to promptly report the incident to the head of the HR division. In order to establish a friendly workplace, the Company has a reporting channel for wrongful workplace harm. If employees have suffered from threat, bullying or being ostracized, they may file the compliant through the 134 complaint hotline or email to promptly report the incident.

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(2) Does the Company formulate and implement reasonable employee welfare measures, including remuneration, leave and other benefits, and appropriately reflect business performance or results in employee remuneration? (3) Does the Company provide a healthy and safe working environment and organize training on health and safety for its employees on a regular basis?	V V		In addition to an employee leave system in accordance with the law, The Company also provide many benefits. To enhance employee welfare, the “Employee Welfare Committee” was established for organizing employee benefits-related matters. The Company’s adoption of remuneration policies based on characteristics of each position, living costs, company management performance, and remuneration provided by competitors. The Company takes reasonable factors such as fulfilling social responsibility into consideration. Details can be found on the Company’s Corporate Social Responsibility Report of 2019 (page 59-62). The Company offers the occupational safety and health education and training for all newly arrived employees, and provides retraining for all employees every year. In March 2015, Taiwan Occupational Safety and Health Management System (TOSHMS) was introduced into the Company. At the end of 2018, the Company acquired TOSHMS as well as Occupational Health and Safety Management System (ISO 45001)verification. It was the first company to achieve TOSHMS and ISO 45001 verification in Taiwan airline industry. Recently, the Company immensely improved the work environment of employees, guaranteeing	None None

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(4) Does the Company provide its employees with career development and training sessions? (5)As for the customer health and safety, customer privacy, marketing and labeling of the Company’ goods and services, does the Company comply with relevant regulations and international standards, and formulate relevant consumer rights policies and complaint procedure?	V V		employees’ safety and health. The Company provides employees with well-packaged career development training. Details can be found on the Company’s Corporate Social Responsibility Report of 2019 (page 66- 68). The customer health and safety, customer privacy, sales and labeling of products and service provided by the Company all follow local law and international regulation such as the Commodity Labeling Act, Taiwan’s Civil Aeronautics Administration (CAA), US Federal Aviation Administration (FAA), US Department of Homeland Security (DHS), European Union (EU) and General Data Protection Regulation (GDPR). Relevant consumer rights policies and complaint procedure can refer to the “Corporate Social Responsibility Best Practice Principles”, “Information Security Policy” and “Privacy Policy”. In addition, the Company attaches great importance to customer experience and provides consumers with multiple feedback channels; these include branch/office counters and service telephones around the world, Company website (including customer comment mailbox,Stakeholder Interest area), and postal mail for opinions. Cases are handled with systematic management,and the	None None

			Implementation Status	Deviations from “the
				Corporate Social
				Responsibility Best-
Evaluation Item				Practice Principles for
	Yes	No	Abstract Explanation
				TWSE/TPEx Listed

				Companies” and
				Reasons
(6) Does the Company formulate the supplier management policy that requires the supplier to follow relevant regulations onissues such as environmental protection, occupational safety and health or labor rights, and their implementation?	V		responses to customers will be given after investigation and follow-up. The Company has formulated the “Supplier Code of Conduct” and issued it to all suppliers. The relevant specifications have included topics such as environmental protection, occupational safety and health, or labor rights, and implemented a “Sustainability Assessment Questionnaire” to understand supplier’s situation on related issues. In addition, new supplier selection and evaluation are also included as part of the ESG scores.	None
5. Does the company refer to general international standards orguidelines for compiling the Company non-financial information report, such as corporate social responsibility report? Did the previous released report obtain the assurance of the third- partycertification unit?	V		The Company’s 2019 Corporate Social Responsibility Report accords with GRI Standards Core Option and high assurance standard of AA1000 AS (2008) Type II of SGS.	None

	Implementation Status Deviations from “the
	Corporate Social Responsibility Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons Yes No Abstract Explanation
Evaluation Item

6. If the Company has established the Corporate Social Responsibility Principles based on “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies”,please describe any discrepancy between the Principles and their implementation: In order to fulfill its corporate social responsibilities and implement its sustainable business philosophy, the Company has formulated the “Corporate Social Responsibility Best Practice Principles” and the “Corporate Sustainability Policy” in accordance with the “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies”, thus declaring the Company’s expectations of and commitment to economic (including corporate governance), social and environmental (ESG) issues. Moreover, the Company followed “Corporate Governance”, “Sustainable Environment Development”, “Society Public Interest Protection” and “Enforcement of Corporate Social Responsibility Information Disclosure” etc. to implement Corporate Social Responsibility. The actual operation does not vary from the principles. Please refer to the Company’s Corporate Social Responsibility Website for more details.
7.Other important information to facilitate better understanding of the Company’s Corporate Social Responsibility Practices: The Company has participated in “Taiwan Corporate Sustainability Awards” (TCSA) held by Taiwan Institute for Sustainable Energy (TAISE) for the six consecutive years. In 2020, the Company was awarded “Corporate Sustainability Report - Transportation Platinum Award” and for the first time “Corporate Comprehensive Performance - Taiwan TOP50 Corporate Sustainability Award”.

7.Other important information to facilitate better understanding of the Company’s Corporate Social Responsibility Practices:

Note 1: The materiality principle refers to those who have a significant influence on the company's investors and other stakeholders on environmental, social and corporate governance issues.

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Note 3:

Topic	Fuel-savingmeasures and actionplans
Aircraft weight reduction	1.Electronic flight bag (EFB) isused by the entire fleet to greatly reduce the amount of paper manuals and documents on board. 2.Use light-weight unit load device (ULD). 3.Without affecting the quality of service, unnecessary cabin equipment or service supplies will be removed. The amountof water and service supplies on board will be adjusted flexibly according to the estimated number of passengers. 4.When purchasing a new aircraft or repainting an existing aircraft, a layer of mica paint is eliminated to reduce the weight of the aircraft.
Improvement of operation efficiency	1. Next generation of flight planning system isintroduced, which can calculate the optimal flight route, cruise altitude, and fuel requiredbased on the flight rules and restrictions of each flight information region (FIR) to improve flight efficiency. 2. Optimize the alternate selection at planning. 3.The cargo loading iscarefully planned to optimize the aircraft's center of gravity and improve fuel efficiency. 4.Continue to refine the fuel policy and the flight plan fuel calculationbased on the flight big data analysis results. 5.Promote the use of tow truck (or tug) power and groundsupporting equipment power as well as pre-conditioned airequipment to replace the use of APU (auxiliary power unit) when performing ground operations at each stations. 6.Under safe conditions and the permission of air traffic control (ATC), encourage flight crews to perform continuous descent operation in which is a practice to let aircraft continuously descent without intermediate level off and then descent. Flight crew can delay extending landing configuration in a good time or uselow drag approach configuration. After the aircraft has landed, use only single engine to taxi the aircraft to the aircraft stand.
Aircraft maintenance	1.The aircraft fuselage and engine are washed periodically. The washing operation not only removes contamination on the surface of the aircraft to reduce the drag, but also lowers the engine exhaust gastemperature to improve the engine performance. 2. Contract with engine manufacturer for engine overhaul service andperiodically check the smoothnessof the flight control surface to improve the overall fuel efficiencyof the aircraft.

Note 4:

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GHG Emissions (Unit: ton CO2e) 2019 2020
Aircraft Direct emission 6,115,529 4,309,738
Direct emission 873 1,245
Ground Operation Indirect emission 14,178 12,755
Other indirect emission - 6,180
Total 6,130,580 4,329,918
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Note 5:

Note 5:	Note 5:	Note 5:
Total Water Consumption (Unit: m3) 2019 2020
Tap Water 159,498 157,270
Recycled Water	3,532	4,207

Note 6:

Note 6:	Note 6:	Note 6:
Waste Production and Recycled Quantity at Nankan Park(Unit: kg) 2019 2020
General Waste 207,020 195,350
Hazardous Industrial Waste (Note) 77 85
Recycled	57,303	46,452

Note: All the hazardous commercial waste is medical waste.

3.4.6 Ethical Corporate Management and Deviations from the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies”

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1. Establishment of ethical corporate management policies and programs (1) Does the Company formulate its ethical corporate management policies approved by the Board of Directors and declare the policies and procedures in its guidelines and external documents, as well as the commitment from its board and senior management to implement the policies? (2) Does the Company establish a risk assessment mechanism for unethical conduct to regularly analyze and assess operating activities that pose a higher risk of unethical conduct within its business scope, as well as develop preventive plans based on such analysis and assessment which at least includes preventive measures against activities stated in Article 2, Paragraph 7 of the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies?	V V		The Company has formulated “ECM Best- Practice Principles” approved by the Board of Directors and declared the principles on its internal and external corporate website. It can be used by the staffs for reference and self-examination. In order to promote ethical behavior in business, the Company disclosed ideas of ethical management and fair trade in its Corporate Social Responsible Report. The Company has incorporated procedures for ethical management and guidelines for conduct in “ECM Best- Practice Principles” to prevent unethical behavior in higher risk operating activities stipulated by “ECM Best-Practice Principles for TWSE/TPEx Listed Companies” Article 7 Paragraph 2.	None None

	Implementation Status Deviations from “the	Implementation Status Deviations from “the	Implementation Status Deviations from “the
	Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons Yes No Abstract Illustration
Evaluation Item

(3) Does the Company clearly state relevant procedures, guidelines of conduct, punishment for violation, rules of appeal on policies of preventing unethical conduct which are committed to implement and reviewed periodically?	V The Company has formulated “ECM Best- Practice Principles”, “Codes of Ethical Conduct” as well as concerning code of conduct and appeal process for implementation purpose. To assist the Company’s ethical corporate management policy, the Company has set “Antitrust Policy and Guidelines” that are implemented in internal management and external business activities. None
2. Fulfill operations integrity policy (1) Does the Company evaluate business partners’ ethical records and include ethics- related clauses in business contracts? (2) Does the Company establish a dedicated unit supervised by the Board to be in charge of corporate integrity, and regularly (at least once a year) report the development and implementation, under supervision, of ethical	V V	The Company engages in commercial activities in a fair and transparent manner. Prior to any commercial dealings, the Company takes into account legality of its agents, suppliers, clients or other trading counterparties, and if any unethical conduct was involved. It is advisable to avoid doing any business with any party with any record of unethical conduct. Contract contents are based on “ECM Best-Practice Principles” and contained the provision for termination at the time the trading counterparties get involved in any unethical conduct. Human Resources Div. is in charge of promoting ethical corporate management and rendering the report to the Board of Directors annually.	None None

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management policies and preventive measures to the Board of Directors? (3) Does the Company establish policies to prevent conflicts of interest and provide appropriate communication channels, and implement it? (4) Has the Company established effective systems for both accounting and internal control to facilitate ethical corporate management, and are they audited, after formulating relevant audit plans based on the assessment results of the risk of unethical conduct, by either internal auditors or CPA on a regular basis? (5) Does the Company regularly hold internal and external educational trainings on operational integrity?	V V V		Following “Codes of Ethical Conduct”, the Company demanded that the staffs shall avoid conflict of interest and automatically explain whether or not there is any latent conflict of interest. The Company has set up regulations governing appeal and channels for declaration. The Company has established accounting system, internal control system and internal audit implementation rules. It is audited by internal and external auditors (including ISO verification organization and CPA) regularly to fully implement ethical corporate management. All new employees are informed of “Codes of Ethical Conduct”and corporate ethics and participate in orientation. Guidelines can be found on the corporate website. In 2020, 7 new ground staffs in Taiwan (total 7man hours) participated in the education and training courses related to ethical management, including Morals and the Corporate Spirit, Codes of Ethical Conduct and Ethical Corporate Management Best Practice Principles, and Antitrust Law Compliance Guidelines.	None None None

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Implementation Status Deviations from “the
Ethical Corporate
Management Best-
Evaluation Item Practice Principles
Yes No Abstract Illustration
for TWSE/TPEx
Listed Companies”
and Reasons
3. Operation of the integrity
channel
(1) Does the Company establish V The Company has formulated regulations None
both a reward/punishment according to “ECM Best-Practice
system and an integrity Principles” governing appeal and clearly
hotline? Can the accused be states its impeachment policy, system and
reached by an appropriate the ad hoc person.
person for follow-up?
(2) Does the Company establish V The Company has established None
standard operating procedures standardized investigation process,
for investigation, follow-up follow-up measures after investigation,
measures after investigation, and impeacher protection policy based on
and confidential reporting on “ECM Best-Practice Principles”.
investigating accusation cases?
(3) Does the Company provide V Following “ECM Best-Practice None
proper whistleblower Principles”, the Company protects
protection? whistleblower from any improper
treatment due to the impeachment case.
4. Strengthening information
disclosure
(1)Does the Company disclose its V The Company discloses its “ECM Best- None
ethical corporate management Practice Principles” on its corporate
policies and the results of its website. The results of our implementation
implementation on the are disclosed in Market Observation Post
Company’s website and System and Corporate Social
MOPS? Responsibility Report.
5. If the Company has established the ethical corporate management policies based on the Ethical Corporate
Management Best-Practice Principles for TWSE/TPEx Listed Companies, please describe any discrepancy
between the policies and their implementation: None
6. Other important information to facilitate a better understanding of the Company’s ethical corporate
management policies (e.g., review and amend its policies): None
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3.4.7 Information disclosure of the Company’s principles for ethical management:

Details can be found on https://mops.twse.com.tw, https://www.evaair.com and https://stock.evergreen.com.tw.

3.4.8 Important information in understanding corporate governance management:

The Company was ranked in top 5% among all listed companies of the 7th Corporate Governance Evaluation, which demonstrates the excellent performance of the Company in corporate governance implementation.
The status of management level attending corporate governance related continuing education/training:

Name	Professional Organization	Training sessions and hours
President Sun, Chia-Ming	Taiwan Corporate Governance Association	Artificial Intelligence in Taiwan- Opportunities and Challenges of Industrial Transformation (3 Hours)
	Taiwan Corporate Governance Association	Corporate Governance Blueprint 3.0 and Responsibilities of Board of Directors (3 Hours)
Executive Vice President (Financial Officer) Tsai, Ta-Wei	Taiwan Corporate Governance Association	Artificial Intelligence in Taiwan- Opportunities and Challenges of Industrial Transformation (3 Hours)
	Taiwan Corporate Governance Association	Corporate Governance Blueprint 3.0 and Responsibilities of Board of Directors (3 Hours)

The Company and personnel relevant to the transparency of financial information obtain the licenses designated by professional organization or the competent authorities as follows:
(1) Internal Auditor:

Name	Professional Organization	Training Sessions and Hours
Lee, Yi-Chung (Chief Internal Auditor)	The Institute of Internal Auditors-Chinese Taiwan	1. Audit of subsidiaries in practice (6 hours) 2. How auditors respond accordingly to legal risk of enterprise operation and management(6 hours)

The status of internal auditors that acquired certification designated by government authority:

(A) CIA (Certified Internal Auditor): 3 auditors
(B) CCSA (Certification in Control Self-Assessment): 1 auditor
(C) ISO9001 Leading Auditor: 7 auditors
(D) Auditing Test of Corporate Internal Control Basic Capacity held by Securities and Futures Institute: 1 auditor
(E) CFE(Certified Fraud Examiner): 1 auditor

(2)Accounting Officer:

Name	Professional Organization Training sessions and hours	Professional Organization Training sessions and hours
Chiang, Chin-Lan	Accounting Research and Development Foundation Accounting Supervisor Continuing Education Course (Financial Accounting Standards, Corporate Governance, Ethics and Legal Responsibility) (12 hours)
	Taiwan Corporate Governance Association Artificial Intelligence in Taiwan-Opportunities and Challenges of Industrial Transformation (3 Hours)
	Taiwan Corporate Governance Association	Corporate Governance Blueprint 3.0 and Responsibilities of Board of Directors (3 Hours)

3.4.9 Internal Control System Execution Status:

EVA Airways Corporation Internal Control System Statement

Date: March 22, 2021 Based on the findings of a self-assessment, EVA Airways Corporation (EVA) states the following with regard to its internal control system during the year 2020:

EVA’s Board of Directors and management are responsible for establishing, implementing, and maintaining an adequate internal control system. Our internal control is a process designed to provide reasonable assurance over effectiveness and efficiency of our operations (including profit, performance, and safeguard of asset security), reliability, timeliness, transparency, and regulatory compliance of our reporting, and compliance with applicable laws, regulations, and bylaw.
An internal control system has inherent limitations. No matter how perfectly designed, an effective internal control system can provide only reasonable assurance of accomplishing its stated objectives. Moreover, the effectiveness of an internal control system may be subject to changes due to extenuating circumstances beyond our control. Nevertheless, our internal control system contains self-monitoring mechanisms, and EVA takes immediate remedial actions in response to any identified deficiencies.
EVA evaluates the design and operating effectiveness of its internal control system based on the criteria provided in the Regulations Governing the Establishment of Internal Control Systems by Public Companies (herein below, the Regulations). The criteria adopted by the Regulations identify five constituent elements of managerial internal control: (1) control environment, (2) risk assessment, (3) control activities, (4) information and communication, and (5) monitoring activities. Each element contains detailed items. Aforementioned items please refer to the Regulations.
EVA has evaluated the design and operating effectiveness of its internal control system according to the aforesaid Regulations.
Based on the findings of such evaluation, EVA believes that, on December 31, 2020, it has maintained, in all material respects, an effective internal control system (that includes the supervision and management of our subsidiaries), to provide reasonable assurance over our operational effectiveness and efficiency, reliability, timeliness, transparency and regulatory compliance of reporting, and compliance with applicable laws, regulations and bylaw.
This statement is an integral part of EVA’s annual report for the year 2018 and prospectus, and will be made public. Any falsehood, concealment, or other illegality in the content made public will entail legal liability under Articles 20, 32, 171, and 174 of the Securities and Exchange Act.
This statement was passed by the Board of Directors in their meeting held on March 22, 2021, with none of the nine attending directors expressing dissenting opinions, and the remainder all affirming the content of this Statement.

If the Company designated CPA to audit internal control system, CPA audit report should be disclosed: Not applicable

3.4.10 For the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, disclose any sanctions imposed in accordance with the law upon the company or its internal personnel, any sanctions imposed by the company upon its internal personnel for violations of internal control system provisions, principal deficiencies, and the state of any efforts to make improvements: Penalty content: The Ministry of Transportation and Communications imposed a statutory fine of NTD1 Million on the Company based on Special Act for Prevention, Relief and Revitalization Measures for Severe Pneumonia with Novel Pathogens.

Principal Deficiencies: The Company’s former New Zealand pilot didn’t wear a mask in the cockpit and refused to follow reminders from other crew, which caused cluster infection of two other crew members. Meanwhile, the former pilot did not comply with the epidemic prevention regulations and did not cooperate with the epidemic investigation.

Improvement Status: In addition to issuing announcements to remind and require crew members to comply with relevant epidemic prevention regulations, the Company requires all captains and pursers to fill in the inspection forms for the epidemic prevention operation of the flight. After that the management department will check and archive the forms for CAA inspection.

3.4.11 Major Resolutions of Shareholders’ Meeting and Board Meetings

Major Shareholders’ Meeting Resolutions

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Date of Meeting Summary of Important Proposals Execution
1. To approve 2019 earnings The cash dividend was distributed on Oct 6,
distribution: 2020.
Cash dividends to common
shareholders: NTD 0.25 per
share, with total NTD
1,213,392,373.
2. To amend “Articles of The amended “Articles of Incorporation” was
May 27, 2020 Incorporation”. approved by Commerce Department, Ministry
of Economic Affairs (No.10901101830) and
the related actions on behalf of the Company
have been conducted in accordance with
revised Articles of Incorporation.
3. To amend “Procedures for The related actions on behalf of the Company
Directors Election”. were conducted in accordance with revised
“Procedures for Directors Election ”.
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Date of Meeting	Summary of Important Proposals Execution	Summary of Important Proposals Execution
	4. To elect nine directors (including 3 independent directors, one of them is the independent director undertaking public welfare) according to Articles of Incorporation. The election has been approved by Commerce Department, Ministry of Economic Affairs (No.10901101830) and the new directors have been performing business in accordance with Articles of Incorporation and related laws.
	5. To release the restrictions of competitive activities of newly elected directors in 2020 shareholders’ meeting	The related actions were executed according to this resolution.

2. Major Board of Director, Audit Committee, and Remuneration Committee Meeting’s Resolutions

Date of Board of Director Meeting Major Proposals The date and resolution of Audit Committee or Remuneration Committee The Company’s response to the opinions of Audit Committee or Remuneration Committee	Date of Board of Director Meeting Major Proposals The date and resolution of Audit Committee or Remuneration Committee The Company’s response to the opinions of Audit Committee or Remuneration Committee	Date of Board of Director Meeting Major Proposals The date and resolution of Audit Committee or Remuneration Committee The Company’s response to the opinions of Audit Committee or Remuneration Committee	Date of Board of Director Meeting Major Proposals The date and resolution of Audit Committee or Remuneration Committee The Company’s response to the opinions of Audit Committee or Remuneration Committee
Feb. 7, 2020 (The 1st meeting of 2020) 1. To make proposal on 2020 Annual General Shareholders’ Meeting to elect new directors. 2. To make proposal on 2020 Annual General Shareholders’ Meeting to release the restriction of competitive activities of newly elected directors. 3. To convene 2020 Annual General Shareholders’ Meeting. None None
Mar. 19, 2020 (The 2nd meeting of 2020)	1. To approve 2019 Business Report. 2. To approve 2019 Parent-Company-Only Financial Statement and Consolidated Financial Statement. 3. To approve the earnings distribution of 2019. 4. To approve the “2019 Internal Control System Statement”. 5. To amend “Internal Control System” and “Internal Audit Implementation Rules”. 6. To appoint the Company’s certified public accountants and determine their remuneration. 7. To amend the “Audit Committee Charter”.	Approved unanimously by Audit Committee members on the 2ndmeeting of 2020 dated Mar. 18, 2020	None

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The Company’s
The date and response to the
Date of
resolution of Audit opinions of
Board of
Major Proposals Committee or Audit
Director
Remuneration Committee or
Meeting
Committee Remuneration
Committee
Approved
8. To approve 2019 employees’ compensation. unanimously by
Remuneration
9. To approve 2019 directors’ remuneration.
Committee
10. To amend the “Remuneration Committee Charter”. None
members on the
11. To establish the “Stock Ownership Guidelines for
1 [st] meeting of
Senior Managers who hold Director Positions”. 2020 dated Mar.
18, 2020
12. To amend “2020 Internal Audit Plan”.
13. To approve 2020 Operation Plan.
14. To change bank account authorized person of the
Company’s Philippine Branch.
15. To amend the “Articles of Incorporation”.
16. To amend the “Regulations for Electing Directors”.
17. To amend the “Rules of Procedure for Board of
Directors Meetings”.
18. To amend the “Corporate Governance Best Practice
- -
Principles”.
19. To amend the “Corporate Social Responsibility
Best Practice Principles”.
20. To amend the “Organizational Principle of
Corporate Social Responsibility Committee”.
21. To approve 2019 Modern Slavery Act Statement.
22. To amend the agenda of 2020 Annual General
Shareholders’ Meeting.
Approved
Apr 14, unanimously by
2020 Audit Committee
1. To amend “Internal Control System” and “Internal
(The 3 [rd ] members on the None
Audit Implementation Rules”.
meeting of 3rd meeting of
2020) 2020 dated Apr
14, 2020
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Date of Board of Director Meeting	Major Proposals	The date and resolution of Audit Committee or Remuneration Committee	The Company’s response to the opinions of Audit Committee or Remuneration Committee
	2. To amend “Code of Integrity Management” and “Integrity Management Operating Procedures and Behavior Guide”. 3. To change the address of Italy Branch. 4. To nominate 9 directors (including 3 independent directors, one of them is the independent director undertaking public welfare)as candidates.	-	-
May 13, 2020 (The 4th meeting of 2020)	To resolve the issuance of the 4thdomestic unsecured convertible bond.	Approved unanimously by Audit Committee members on the 4thmeeting of 2020 dated May 12,2020	None
May 27, 2020 (The 5th meeting of 2020)	1. To re-elect the chairman. 2. To appoint the members of the 4thRemuneration Committee.	-	-
Aug. 10, 2020 (The 6th meeting of 2020)	1. Continue to lease two ATR72-600 aircraft to UNI Airways Corp. Recusal of Directors and voting situation of Board of Directors  Chairman Lin, Bou-Shiu and Director Tai, Jiin- Chyuan also sit on the Board of “UNI Airways Corp.”  Except for directors who recused themselves from the discussion and resolution, all 7 attendance directors agreed and approved the proposal. 2. To adjust the schedule of delivering 15 new aircraft and change the model of the seven 787-10 among these aircraft. 3. To amend the “Table of Authority Limit of Acquiring and Disposing of Assets & Other Financial Matters”.	Approved unanimously by Audit Committee members on the 5thmeeting of 2020 dated Aug. 10, 2020	None

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The Company’s
The date and response to the
Date of
resolution of Audit opinions of
Board of
Major Proposals Committee or Audit
Director
Remuneration Committee or
Meeting
Committee Remuneration
Committee
4. To amend the “Payment Regulation of Managers
Compensation”.
5. To amend the “Payment Regulation of Directors
Compensation”.
6. To resolve the transportation fee of directors other
than independent directors for attending the board
meeting.
7. To resolve the transportation fee of independent
directors for attending functional committee
meetings.
Recusal of Directors and voting situation of Board
of Directors Approved
 Independent director Chien, You-Hsin, unanimously by
Independent director Hsu, Shun-Hsiung, Remuneration
Independent director Wu, Chung-Pao have Committee
None
direct personal interest conflict to the members on the
proposal. 2 [nd] meeting of
 Except for the directors who recused themselves 2020 dated Aug.
from the discussion and resolution, all 6 10, 2020
attendance directors agreed and approved the
proposal.
8. To approve 2020 Chairman’s compensation.
Recusal of Directors and voting situation of Board
of Directors
 Chairman Lin, Bou-Shiu has direct personal
interest conflicts to the proposal.
 Except for the director who recused himself
from the discussion and resolution, all 8
attendance directors agreed and approved the
proposal.
9. To change bank account authorized person of the
Company’s Philippine Branch. - -
----- End of picture text -----

Date of Board of Director Meeting		Major Proposals	The date and resolution of Audit Committee or Remuneration Committee	The Company’s response to the opinions of Audit Committee or Remuneration Committee
Nov. 9, 2020 (The 7th meeting of 2020)	1.	To Ratify the purchase of a GE90 backup engine and signed a GEnx backup engine supplement contract.	Approved unanimously by Audit Committee members on the 6thmeeting of 2020 dated Nov. 9,2020	None
	2.	To change the representative of the Company’s Korea Branch.	-	-
Dec. 25, 2020 (The 8th meeting of 2020)	1.	To formulate “The Policy and Procedure of Risk Management.	Approved unanimously by Audit Committee members on the 7thmeeting of 2020 dated Dec. 25,2020	None
	2. 3. 4.	To approve the 2020 bonus for management. Recusal of Directors and voting situation of Board of Directors  Director Sun, Chia-Ming and director Liao, Chi- Wei have direct personal interest conflicts to the proposal.  Except for the directors who recused themselves from the discussion and resolution, all 7 attendance directors agreed and approved the proposal. To approve 2021 compensation for management. Recusal of Directors and voting situation of Board of Directors  Director Sun, Chia-Ming and director Liao, Chi- Wei have direct personal interest conflicts to the proposal.  Except for the director who recused himself from the discussion and resolution, all 7 attendance directors agreed and approved the proposal. To approve the 2020 Chairman’s bonus.	Approved unanimously by Remuneration Committee members on the 3rdmeeting of 2020 dated Dec. 25, 2020	None

100

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The Company’s
The date and response to the
Date of
resolution of Audit opinions of
Board of
Major Proposals Committee or Audit
Director
Remuneration Committee or
Meeting
Committee Remuneration
Committee
Recusal of Directors and voting situation of Board
of Directors
 Chairman Lin, Bou-Shiu has direct personal
interest conflicts to the proposal.
 Except for the director who recused himself
from the discussion and resolution, all 8
attendance directors agreed and approved the
proposal.
5. To approve 2021 Chairman’s compensation.
Recusal of Directors and voting situation of Board
of Directors
 Chairman Lin, Bou-Shiu has direct personal
interest conflicts to the proposal.
 Except for the director who recused himself
from the discussion and resolution, all 8
attendance directors agreed and approved the
proposal.
6. To Amend “The regulation of evaluation of
directors”.
7. To amend “2021 Internal Audit Plan”.
8. To amend the “Corporate Governance Best Practice
Principles”.
9. To approve 2021 Operation Plan and budget.
1. To appoint the Company’s certified public
Approved
accountants and determine their remuneration.
unanimously by
2. To amend the “Audit Committee Charter”.
Audit Committee
Feb. 19, members on the None
2021
1 [st ] meeting of
(The 1 [st] 2021 dated Feb.
meeting of
19, 2021
2021)
3. To Amend “The regulation of evaluation of Approved
directors”. unanimously by None
Remuneration
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101

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----- Start of picture text -----

The Company’s
The date and response to the
Date of
resolution of Audit opinions of
Board of
Major Proposals Committee or Audit
Director
Remuneration Committee or
Meeting
Committee Remuneration
Committee
Committee
members on the
1 [st] meeting of
2021 dated Feb.
19, 2021
4. To amend the “Rules of Procedure for Board of
Directors Meetings”, the “Corporate Governance
Best Practice Principles” and “The Standard - -
Operating Procedures for Handling Directors
Requests”.
1. To approve 2020 Business Report.
2. To approve 2020 Parent-Company-Only Financial
Statement and Consolidated Financial Statement.
Approved
3. To approve the earnings distribution of 2020.
unanimously by
4. To approve the “2020 Internal Control System Audit Committee
Statement”. members on the None
5. To amend “Internal Control System” and “Internal 2 [nd ] meeting of
2021 dated Mar.
Audit Implementation Rules”.
19, 2021
6. To make proposal on 2021 Annual General
Shareholders’ Meeting to release the Evergreen
Mar. 22,
2021 Aviation Technologies Corporation stock.
(The 2 [nd ] 7. To approve not setting aside the 2020 Employees’ Approved
meeting of Compensation and Directors’ Remuneration. unanimously by
2021) Remuneration
Committee
None
members on the
2 [nd] meeting of
2021 dated Mar.
19, 2021
8. To approve the capital increase record date of
common stocks transferred from the 3 [rd] Domestic
Unsecured Convertible Bond. - -
9. To change the representative of the Company’s
Macau Branch.
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102

Date of Board of Director Meeting	Major Proposals	The date and resolution of Audit Committee or Remuneration Committee	The Company’s response to the opinions of Audit Committee or Remuneration Committee
	10. To amend “Rules and Procedures of Shareholders’ Meeting”. 11. To approve 2020 Modern Slavery Act Statement. 12. To convene 2021 Annual General Shareholders’ Meeting.

3.4.12 Major Issues of Record or Written Statements Made by Any Director or Supervisor Dissenting to Important Resolutions Passed by the Board of Director: None

3.4.13 Resignation or Dismissal of the Company’s Key Individuals: None

Note: The Company’s key individuals refer to the chairman, president, heads of accounting, finance, internal audit, governance and R&D.

3.5 Information Regarding the Company’s Audit Fee and Independence 3.5.1 Audit Fee

Unit: NT$ thousands

			Non-audit Fee	Non-audit Fee	Non-audit Fee	Non-audit Fee
Accounting	Name of	Audit						Period Covered
Firm	CPA	Fee	System of	Company	Human	Others		by CPA’s Audit	Remarks
							Subtotal
			Design	Registration	Resource	(Note 2)

KPMG	Tang Chia- Chien	7,960	0	0	0	2,054	2,054	01 Jan~ 31 Dec, 2020	revenue audit for sky jet center, tax consult, transfer pricing report, BEPS Country-by-Country Report, certification of dual-status business entities direct deduction method
	Su, Yen- Ta

Note 1: If the Company changes CPA or accounting firm, the audit period should be displayed separately and remarks the reason for replacement. The audit fees and non-audit fees should be displayed accordingly.
Note 2: The item of non-audit fee should be displayed separately. If the amount of non-audit fee of others is over 25% of total non-audit fee, please remarks the audit items.
3.5.2 If The Company Changes Accounting Firm and The Audit Fees Charged by The New Firm Is Less Than That of The Pervious Accounting Firm, Please Disclose The Audit Fees Charged by The Two Accounting Firms and The Reason: None
3.5.3 Audit Fees Decreases 10% of That Of Previous Year, The Decreased Audit Fees, Decreased Percentage and Reason Should Be Disclosed: None

103

3.6 Replacement of CPA: None

3.7 Audit Independence

The Company’s Chairman, Chief Executive Officer, Chief Finance Officer, and managers in charge of its finance and accounting operations did not hold any positions in the Company’s independent auditing firm or its affiliates during 2020.

3.8 Changes in Shareholding of Directors, Managers and Major Shareholders and Information of Stock Transfer or Stock Pledge:

3.8.1 Changes in Shareholding of Directors, Mangers and Major Shareholders


		2020		As of April 30, 2021

					Pledged
			Pledged
Title	Name	Holding		Holding	Holding
			Holding
		Increase	Increase	Increase	Increase
		(Decrease)		(Decrease)
			(Decrease)		(Decrease)

Chairman	Evergreen Marine Corp. (Taiwan) Ltd.	0	0	0	0
	Representative: Lin, Bou-Shiu	0	0	0	0
Director	Evergreen International Corp.	0	0	0	0
	Representative: Ko, Lee-Ching	0	0	0	0
	Representative: Tai, Jiin-Chyuan	0	0	0	0
Director	Evergreen Marine Corp. (Taiwan) Ltd.	0	0	0	0
	Representative: Chen, Hsien-Hung	0	0	0	0
Director	Evergreen Logistics Corp.	0	0	0	0
	Representative: Sun, Chia-Ming	0	0	0	0
	Representative: Liao, Chi-Wei	26,000	0	0	0
Independent Director	Chien, You-Hsin	0	0	0	0
	Hsu, Shun-Hsiung	0	0	0	0
	Wu, Chung-Pao	0	0	0	0
Major Shareholder	Evergreen Marine Corp. (Taiwan) Ltd.	0	0	0	0
Major Shareholder	Evergreen International Corp.	0	0	0	0
President	Sun, Chia-Ming	0	0	0	0
Chief Executive Vice President	Ho, Ching-Sheng	0	0	0	0

104

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2020 As of April 30, 2021
Pledged Pledged
Name Holding Holding
Title Holding Holding
Increase Increase
Increase Increase
(Decrease) (Decrease)
(Decrease) (Decrease)
Executive Vice
Hsu, Hui-Sen 0 0 0 0
President
Executive Vice
Chen, Yao-Min 0 0 0 0
President
Executive Vice
Hsiao, Chin-Lung (2,000) 0 (8,000) 0
President
Executive Vice
President Tsai, Ta-Wei 0 0 0 0
(Finance Officer)
Executive Vice
Liao, Chi-Wei 26,000 0 0 0
President
Executive Vice
Lu, Yu-Chuan 0 0 0 0
President
Executive Vice
Chuang, Shih-Hsiung 0 0 (27,000) 0
President
Executive Vice
Chen, Yeou-Yuh 0 0 (13,000) 0
President
Executive Vice
Chang, Jang-Tsang 0 0 0 0
President
Executive Vice
Huang, Sheh-Ming 0 0 0 0
President
Executive Vice
Yeh, Shih-Chung 0 0 0 0
President
Executive Vice
Fang, Gwo-Shianng 0 0 0 0
President
Executive Vice
Chen, Chi-Hung 0 0 0 0
President
Senior Vice President Chou, Yu-Chuan 0 0 (27,000) 0
Senior Vice President Lee, Yi-Chung 0 0 0 0
Senior Vice President Soong, Allen 0 0 0 0
Senior Vice President
(Accounting Officer) [Chiang, Chin-Lan ] 0 0 (48,000) 0
Senior Vice President Ho, Li-Cheng 0 0 0 0
Senior Vice President
(Corporate Hsieh, Shu-Hui 0 0 0 0
Governance Officer)
Senior Vice President Chiang, Wei-Du 0 0 0 0
Senior Vice President Su, Wei-Jen 0 0 0 0
Senior Vice President Chiu, Chung-Yu 0 0 (54,000) 0
Senior Vice President Pan, Hsin-Hsiu 0 0 (14,997) 0
Senior Vice President Wang, Chen-Hsing 0 0 (36,000) 0
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105

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2020 As of April 30, 2021
Pledged Pledged
Name Holding Holding
Title Holding Holding
Increase Increase
Increase Increase
(Decrease) (Decrease)
(Decrease) (Decrease)
Senior Vice President Wu, Su-Shin 0 0 0 0
Senior Vice President Lee, Cheng-Chieh 18 0 0 0
Senior Vice President Hsu, Shu-Ching 0 0 0 0
Senior Vice President Yang, Hsiu-Huey 0 0 0 0
Senior Vice President Hsu, Ping 0 0 (20,000) 0
Senior Vice President Liu, Ying 0 0 0 0
Senior Vice President Liu, Wen-Jang 0 0 0 0
Senior Vice President Yu, Chia-Chieh (9,000) 0 (8,000) 0
Senior Vice President Chen, Shen-Chi 0 0 0 0
Senior Vice President Chen, Chia-Chuan 0 0 (20,000) 0
Senior Vice President Hou, Hsien-Yu (15,972) 0 0 0
Senior Vice President Chung, Kai-Cheng 0 0 0 0
Deputy Senior Vice
Lin, Shu-Fen 0 0 0 0
President
Deputy Senior Vice
Chen, Shih-Ming 0 0 0 0
President
Deputy Senior Vice
Fung, Mei-Lie 0 0 (10,000) 0
President
Deputy Senior Vice
Chang, Yu-Heng 0 0 0 0
President
Deputy Senior Vice
Tseng, Wen-Chiang 0 0 0 0
President
Deputy Senior Vice
Liu, Hsin-Cheng 0 0 0 0
President
Deputy Senior Vice
Chang, Ming-Hung 106,210 0 (130,000) 0
President
Deputy Senior Vice
Liu, Ying-Chun 0 0 0 0
President
Deputy Senior Vice
Yen, Wu-Han 0 0 0 0
President
Deputy Senior Vice
Kuo, Ming-Cheng (20,000) 0 0 0
President
Deputy Senior Vice
Wang, Pei-Chi 0 0 0 0
President
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106

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Note: The major shareholders that holds more than 10% shares of the Company should be disclosed separately.

3.8.2 Information of Stock Transfer: NIL

3.8.3 Information of Stock Pledged: NIL

107

3.9 Relationship Among the Top Ten Shareholders

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Shares Held by Shares Held Name and Relationship Between the Company’s
Present
Spouses & by Third Top Ten Shareholders, or Spouses or Relatives
Name Shareholdings No
Dependents Parties Within Two Degrees (Note 3)
(Note 1) -te
Shares % Shares % Shares % Title (or Name) Relationship
Evergreen Evergreen Marine Corp.
International (Taiwan) Ltd. is the director
Storage & of Evergreen International -
Transport Corp. Storage & Transport Corp.
Major shareholders of
Evergreen Evergreen
Evergreen Marine Corp.
Marine Corp. 776,541,111 15.44 - 0 0 International -
(Taiwan) Ltd. reinvest the
(Taiwan) Ltd. Corp. company
Evergreen Steel Director of Evergreen Marine
-
Corp. Corp. (Taiwan) Ltd.
Director of Evergreen Marine
Ko, Lee-Ching -
Corp. (Taiwan) Ltd.
Evergreen
Representative: International
0 0.00 0 0.00 0 0 Director -
Chang, Yen-I Storage &
Transport Corp.
Evergreen Major shareholders of
Marine Corp. Evergreen International Corp. -
(Taiwan) Ltd. reinvest the company
Evergreen Evergreen International Corp.
International is the director of Evergreen
Evergreen Storage & International Storage & -
International 549,262,304 10.92 - 0 0 Transport Corp. Transport Corp.
Corp.
Evergreen International Corp.
Evergreen Steel
is the director of Evergreen -
Corp.
Steel Corp.
Chang, Kuo- Major shareholder of
Ming Evergreen International Corp. -
Evergreen
Marine Corp. Director -
(Taiwan) Ltd.
Evergreen Steel
Representative: Director -
105,942 0.00 0 0.00 0 0 Corp.
Ko, Lee-Ching
Evergreen
International
Director -
Storage &
Transport Corp.
Falcon
Investment 482,801,482 9.60 - 0 0 - - -
Services Ltd.
Evergreen Evergreen Steel Corp. is the
Marine Corp. director of Evergreen Marine -
(Taiwan) Ltd. Corp. (Taiwan) Ltd.
Evergreen Steel Evergreen
221,496,763 4.40 - 0 0 Director of Evergreen Steel
Corp. International -
Corp.
Corp.
Director of Evergreen Steel
Ko, Lee-Ching -
Corp.
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108

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Shares Held by Shares Held Name and Relationship Between the Company’s
Present
Spouses & by Third Top Ten Shareholders, or Spouses or Relatives
Name Shareholdings No
Dependents Parties Within Two Degrees (Note 3)
(Note 1) -te
Shares % Shares % Shares % Title (or Name) Relationship
Representative:
166,519 0.00 0 0.00 0 0 - - -
Lin, Keng-Li
Chang, Kuo-
Ming
Chang, Yung-Fa 131,970,122 2.62 0 0.00 0 0 Within two degrees kinship -
Chang, Kuo-
Cheng
Chang, Yung-Fa
Chang, Kuo-
92,460,183 1.84 0 0.00 0 0 Chang, Kuo- Within two degrees kinship -
Cheng
Ming
New Labor
63,252,887 1.26 - 0 0 - - -
Pension Fund
Cathay Life
Insurance Co., 61,438,000 1.22 - 0 0 - - -
Ltd.
Representative:
0 0.00 0 0.00 0 0 - - -
Huang, Tiao-Kuei
Evergreen
International Major shareholder -
Corp.
Chang, Kuo-Ming 55,968,382 1.11 25,375,098 0.50 0 0
Chang, Yung-Fa
Chang, Kuo- Within two degrees kinship -
Cheng
Evergreen Marine Corp
Evergreen
(Taiwan) Ltd. is the director
Marine Corp. -
of Evergreen International
(Taiwan) Ltd.
Storage & Transport Corp.
Evergreen
Evergreen International Corp.
International Evergreen
48,957,013 0.97 - 0 0 is the director of Evergreen
Storage & International -
International Storage &
Transport Corp. Corp.
Transport Corp.
Director of Evergreen
Ko, Lee-Ching International Storage & -
Transport Corp.
Representative:
0 0.00 0 0.00 0 0 - - -
Chen, Yih-Jong
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Note 1: All the top 10 shareholders should be disclosed. If any of them is an institute shareholder, the name of the institute and its representatives should be disclosed separately.

Note 2: Shareholding percentage is calculated by the shares owned by the shareholders himself/ herself, spouse and dependents or by third parties separately.

Note 3:The relationship of the shareholders (including institute and natural person) should be disclosed according to Regulations Governing Information to be Published in Annual Reports of Public Companies.

109

3.10 Ownership of Shares in Affiliated Enterprises

As of Dec 31, 2020

Unit: Shares/ %

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Direct or Indirect
Ownership
Ownership by Directors, Total Ownership
Affiliated by the Company
Supervisors, Managers
Enterprises
Shares % Shares % Shares %
Sky Castle Investment Ltd. 5,500,000 100.00 0 0 5,500,000 100.00
Evergreen Airways Service Stock Stock Stock
99.00 0 99.00
(Macau) Ltd. Unissued Unissued Unissued
PT Perdana Andalan Air
40,800 51.00 0 0 40,800 51.00
Service
EVA Flight Training
10,000,000 100.00 0 0 10,000,000 100.00
Academy
Evergreen Aviation
280,189,241 79.42 0 0 280,189,241 79.42
Technologies Corp.
Evergreen Airline Services
36,183,106 56.33 12,999,827 20.24 49,182,933 76.57
Corp.
Evergreen Sky Catering Corp. 76,557,790 49.80 38,432,625 25.00 114,990,415 74.80
Evergreen Air Cargo Services
72,750,000 60.625 16,049,392 13.37 88,799,392 74.00
Corp.
Hsiang-Li Investment Corp. 2,680,000 100.00 0 0 2,680,000 100.00
Evergreen Security Corp. 6,336,000 31.25 13,929,200 68.70 20,265,200 99.95
EverFun Travel Services
5,505,000 26.48 5,000 0.02 5,510,000 26.50
Corp.
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Note: The affiliated enterprises are invested by equity method.

110

IV. Capital Overview

4.1 Capital and Shares

4.1.1 Source of Capital

A. Issued Shares

Unit: thousand shares; NT$ thousands

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Authorized Capital Paid-in Capital Remark
Par
Month/ Capital Approval Date and
Value
Year Sources of Capital Increased by Document No. by
(NT$) Shares Amount Shares Amount (NT$ thousands) Assets Other Ministry of
than Cash Economic Affairs
Corporate Bond Apr 11, 2008.
Mar,
10 4,000,000 40,000,000 3,906,815 39,068,150 Conversion - Jing-Shou-Shang Zi
2008
318,356 No. 09701085730
Corporate Bond Jun 30, 2008.
Apr,
10 4,000,000 40,000,000 3,942,677 39,426,773 Conversion - Jing-Shou-Shang Zi
2008
358,623 No. 09701154430
Jul 24, 2009.
Jul, 10 4,000,000 40,000,000 2,262,677 22,626,773 Capital Reduction - Jing-Shou-Shang Zi
2009 16,800,000
No. 09801165370
Oct 12, 2009
Sep, Cash Subscription
10 4,000,000 40,000,000 2,962,677 29,626,773 - Jing-Shou-Shang Zi
2009 7,000,000
No. 09801233470
Capitalization of Oct 20, 2011
Sep,
10 4,000,000 40,000,000 3,258,945 32,589,450 Retained Earnings - Jing-Shou-Shang Zi
2011
2,962,677 No. 10001239600
Mar 06, 2015
Feb, 10 4,000,000 40,000,000 3,858,945 38,589,450 Cash Subscription - Jing-Shou-Shang Zi
2015 6,000,000
No. 10401028870
Capitalization of Sep 29, 2016
Aug,
10 4,500,000 45,000,000 4,051,892 40,518,923 Retained Earnings - Jing-Shou-Shang Zi
2016
1,929,473 No. 10501233140
Capitalization of Sep 13, 2017
Sep, 10 4,500,000 45,000,000 4,173,449 41,734,490 Retained Earnings - Jing-Shou-Shang Zi
2017
1,215,567 No. 10601131380
Capitalization of Oct 01, 2018
Sep,
10 4,500,000 45,000,000 4,382,121 43,821,215 Retained Earnings - Jing-Shou-Shang Zi
2018
2,086,725 No. 10701123880
Feb 22, 2019
Jan, Cash Subscription
10 5,500,000 55,000,000 4,682,121 46,821,215 - Jing-Shou-Shang Zi
2019 3,000,000
No. 10801015500
Corporate Bond Apr 24, 2019
Mar,
10 5,500,000 55,000,000 4,687,087 46,870,877 Conversion - Jing-Shou-Shang Zi
2019
49,662 No. 10801047840
Corporate Bond Jun 04, 2019
May,
10 5,500,000 55,000,000 4,712,950 47,129,507 Conversion - Jing-Shou-Shang Zi
2019
258,630 No. 10801062800
Capitalization of Oct 04, 2019
Sep, 10 7,000,000 70,000,000 4,853,569 48,535,695 Retained Earnings - Jing-Shou-Shang Zi
2019
1,406,188 No. 10801136110
Corporate Bond Apr 16, 2021
Mar,
2021 10 7,000,000 70,000,000 4,923,498 49,234,980 Conversion - Jing-Shou-Shang Zi
699,285 No. 11001062140
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111

B. Type of Stock

Unit: thousand shares

		Authorized Capital
Sh T				Rk
are ype	Issued Shares	Un-issued Shares	TotalShares	emars

Common Stock	4,923,498	2,076,502	7,000,000	Shares of TWSE Listed Companies

Note: Shares approved by Ministry of Economic Affairs.

4.1.2 Status of Shareholders

As of APR 20, 2021

(Shareholders’ meeting book closure date)

Forein	Forein	Forein	Forein	Forein	Forein	Forein
Item Government Agencies Financial Institutions Other Juridical Persons Domestic Natural Persons g Institutions & Total
Natural Persons
Number of Shareholders 5 28 279 225,350 1,024 226,686
Shareholding (shares) 92,136,172 115,032,054 1,775,204,375 2,032,539,250 1,015,309,024 5,030,220,875
Percentage (%)	1.83	2.29	35.29	40.41	20.18	100

4.1.3 Shareholding Distribution Status

Common Shares

As of APR 20, 2021

(Shareholders’ meeting book closure date)

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Number of Shareholding
Class of Shareholding (Unit: Share) Shareholders (Shares) Percentage (%)
1 ~ 999 51,253 13,895,753 0.28
1,000 ~ 5,000 121,024 267,880,147 5.33
5,001 ~ 10,000 25,860 206,461,615 4.10
10,001 ~ 15,000 8,885 111,691,327 2.22
15,001 ~ 20,000 5,879 108,915,462 2.17
20,001 ~ 30,000 4,950 126,505,631 2.51
30,001 ~ 50,000 3,962 160,140,497 3.19
50,001 ~ 100,000 2,761 201,219,046 4.00
100,001 ~ 200,000 1,143 162,393,204 3.23
200,001 ~ 400,000 478 135,862,265 2.70
400,001 ~ 600,000 162 79,774,126 1.59
600,001 ~ 800,000 69 48,307,557 0.96
800,001 ~ 1,000,000 63 57,554,347 1.14
1,000,001 or over 197 3,349,619,898 66.58
Total 226,686 5,030,220,875 100.00
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112

4.1.4 List of Major Shareholders

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As of APR 20, 2021
(Shareholders’ meeting book closure date)
Shareholding
Number of Shares Percentage (%)
Shareholder’s name
Evergreen Marine Corp. (Taiwan) Ltd. 776,541,111 15.44
Evergreen International Corp. 549,262,304 10.92
Falcon Investment Services Ltd. 482,801,482 9.60
Evergreen Steel Corp. 221,496,763 4.40
Chang, Yung-Fa 131,970,122 2.62
Chang, Kuo-Cheng 92,460,183 1.84
New Labor Pension Fund 63,252,887 1.26
Cathay Life Insurance Co., Ltd. 61,438,000 1.22
Chang, Kuo-Ming 55,968,382 1.11
Evergreen International Storage & Transport Corp. 48,957,013 0.97
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4.1.5 The Last Two Years Market Price, Net Worth, Earnings, and Dividends per Share

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Unit: NT$
2019 2020 2021
Items (Distributed in (Distributed in (As of APR 30)
2020) 2021) (Note 8)
Market Price per Share (Note 1)
Highest Market Price 15.95 14.60 20.95
Lowest Market Price 13.50 7.56 11.90
Average Market Price 14.72 11.82 16.43
Net Worth per Share
Before Distribution 14.68 14.59 (Note 10)
After Distribution (Note 2) 14.43 14.59 -
Earnings per Share
Weighted Average Shares (thousands) 4,826,530 4,853,569 4,911,761
Earnings per Share 0.83 (0.69) (Note 10)
Adjusted Earnings per Share (Note 3) 0.83 (Note 9) (0.69) -
Dividends per Share
Cash Dividends 0.25 - -
Stock Dividends
Dividends from Retained Earnings - (Note 9) - -
Dividends from Capital Surplus - (Note 9) - -
Accumulated Undistributed - -
(Note 9) -
Dividends(Note 4)
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Return on Investment	Return on Investment	Return on Investment	Return on Investment
Price / Earnings Ratio 17.63 (16.64) -
Adjusted Price / Earnings Ratio(Note 5) 17.63 (Note 9) (16.64) -
Price / Dividend Ratio(Note 6) 58.52 - -
Cash Dividend Yield Rate(Note 7)	1.71%	-	-

If the Company uses earnings or capital surplus to increase capital, the adjusted market price per share and cash dividends should be recalculated accordingly.

Note 1: The highest market price and lowest market price should be listed. The average price is calculated by total transaction value and total transaction volume of each year.
Note 2: Net worth per share is based on the distribution amount resolved by annual general shareholders’ meeting and the shares issued at the end of the financial year.
Note 3: If the Company distributes stock dividends, the earnings per shares should be adjusted and disclosed as well.
Note 4: If the conditions of the issue of equity securities regulated the undistributed dividends can be accumulated until profit year, the undistributed dividends should be disclosed.
Note 5: Price / Earnings Ratio = Average Market Price / Earnings per Share
Note 6: Price / Dividend Ratio = Average Market Price / Cash Dividends per Share
Note 7: Cash Dividend Yield Rate = Cash Dividends per Share / Average Market Price
Note 8: Net Worth per share and Earnings per share reviewed by CPA should be disclosed. The other items should be disclosed until the printing date of this annual report.
Note 9: The 2020 earnings distribution is pending for shareholders’ approval.
Note 10: The Company’s financial statements as of March 31, 2021 haven’t been reviewed by CPA.

4.1.6 Dividend Policy and Implementation Status

A. Dividend Policy

If the Company reports a surplus at the year end, after clearing taxes, the Company shall first offset accumulated losses (if any), then set aside 10% of the balance as the statutory surplus reserve, and set aside or reverse special surplus reserve per the provisions. After that, the Board of Directors shall propose a surplus distribution plan of the balance plus the retained earnings accrued from prior years, submit the distribution plan to the Shareholders’ Meeting for approval, and then distribute it. The dividends can be distributed wholly or partly in cash only after a resolution has been adopted by a majority vote at a meeting of the Board of Directors attended by two-thirds of the total number of directors; and in addition thereto a report of such distribution shall be submitted to the Shareholders’ Meeting.

The dividends shall be distributed in the combination of cash and stocks, provided that cash dividends shall not be less than 10% of the total amount of dividends.

B. Proposed Distribution of Dividend

It has been decided by the meeting of the Board of Directors on March 22, 2021, that the Company will not distribute dividends for 2020 and a report of such distribution will be submitted to the Annual General Shareholders’ Meeting in 2021.

4.1.7 Impact of Stock Dividends issuance on the Company’s Business Performance and

Earnings per Share: Not applicable

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4.1.8 Employees’ Compensation and Directors’ Remuneration

A. According to the Article 26 of the Company’s Articles of Incorporation, if the Company makes profit in a fiscal year, employees’ compensation, no less than 1% of the profit, and directors’ remuneration, no more than 2% of the profit, shall be set aside. However, in case the Company has accumulated losses, the Company shall reserve an amount to offset accumulated losses beforehand. The employees’ compensation and the directors’ remuneration shall be set aside afterwards according to the principles mentioned above. The employees’ compensation shall be distributed in the form of stock or cash; while the directors’ remuneration shall be distributed only in the form of cash.
The profit in item 1 refers to profit before tax without deducting employees’ compensation and directors’ remuneration.

The amount of employees’ compensation and directors’ remuneration as well as the payment method of employees’ compensation shall be determined by a resolution adopted by a majority vote at a Board of Directors’ Meeting attended by two-thirds or more of the directors and be reported at a shareholders’ meeting.

B. The basis for estimating the amount of employees’ compensation and directors’ remuneration, for calculating the number of shares to be distributed as employees’ compensation, and the accounting treatment of the discrepancy, if any, between the actual distributed amount and the estimated figure, for the current period: The Company does not estimate employees’ compensation and directors’ remuneration for the current period.
C. Appropriation for Employees’ Compensation and Directors’ Remuneration:
a. If company distributes employees’ compensation in the form of cash or stock and directors’ remuneration, the discrepancy, reason and how it is treated should be disclosed if the amounts distributed vary from the amounts recognized:

The Board of Directors resolved not to distribute 2020 employees’ compensation and directors’ remuneration on March 22, 2021 and the amount does not vary from the amount recognized.

b. The amount of employees’ compensation distributed in stocks, and the size of that amount as a percentage of the sum of the after-tax net income stated in the parent company only financial reports or individual financial reports for the current period and total employees’ compensation: Not applicable
D. The Distribution Status of Employees’ Compensation and Directors’ Remuneration of previous year (including distributed shares, amount and stock price) and, if the amounts distributed vary from the amounts recognized, additionally the discrepancy, reason and how it is treated:
The Company distributed directors’ remuneration of NT$9,500,000 and employees’ compensation of NT$170,475,000 of year 2019. The employees’ compensation actual distributed amount is less than the estimated amount by NT$113,650,000 due to the resolution adjustment of the Board of Directors. The Company has made adjustment accounting entry in profit or loss in 2020 as changes in accounting estimates.

4.1.9 Buyback of Treasury Stock: None

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4.2 Corporate Bond

4.2.1 Outstanding Corporate Bond

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----- Start of picture text -----

19 [th] Domestic Secured 3 [rd] Domestic Unsecured
Corporate bond type
Corporate Bond Convertible Bond
Issue date December 29, 2016 October 27, 2017
Denomination NT$1,000,000 NT$100,000
Issuing and transaction location Republic of China Republic of China
Issue price Par Issue by 100.2% of par value
Total price NT$8,500,000,000 NT$7,000,000,000
Coupon rate 1.07% p.a. 0% p.a.
Tenor 5 years Maturity: Dec. 29, 2021 5 years Maturity: Oct. 27, 2022
Bank of Taiwan
Hua Nan Commercial Bank
Mega International Commercial
Bank Co., Ltd.
Guarantee agency None
Chang Hwa Bank
Taiwan Cooperation Bank
The Shanghai Commercial &
Savings Bank, Ltd.
Consignee Cathay United Bank Mega International Commercial
Underwriting institution Capital Securities Corp., etc. KGI Securities Co., Ltd.
Kuo, Hui-Chi Peng, Yi-Chen
Certified lawyer (True Honesty International Lawyer (Handsome Attorneys-at-Law)
Offices)
Chen, Ya-Ling Chen, Ya-Ling
CPA Wang, Chin-Sun Wang, Chin-Sun
(KPMG) (KPMG)
Repayment of 50% of the principal in According to the offering of EVA 3 [rd]
Repayment method the fourth year and the remaining Domestic Unsecured Convertible
50% in the fifth year. Bond Article 10, 18 and 19.
Outstanding principal NT$4,250,000,000 NT$214,000,000
Please refer to the Procedures for
Terms of redemption or Issuance and Conversion of 3 [rd ]
None
advance repayment Domestic Unsecured Convertible
Bond.
Restrictive clause None None
Name of credit rating agency,
rating date, rating of corporate None None
bonds
As of the printing
date of this annual
Other
report, converted
rights Not applicable NT$470,000,000
amount of
attached
(exchanged or
subscribed)
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116

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ordinary shares,
GDRs or other
securities
Issuance and
Please refer to the Procedures for
conversion
Issuance and Conversion of 3 [rd ]
(exchange or Not applicable
Domestic Unsecured Convertible
subscription)
Bond.
method
Issuance and conversion, Impact on existing shareholders’
exchange or subscription equity is limited if all bonds are
No dilution and impact on existing
method, issuing condition converted into common shares at
shareholders’ equity
dilution, and impact on NT$13.4 per share, with a maximum
existing shareholders’ equity equity dilution of 0.32%.
Transfer agent Not applicable Not applicable
4 [th] Domestic Unsecured
Corporate bond type
Convertible Bond
Issue date October 21, 2020
Denomination NT$100,000
Issuing and transaction location Republic of China
Issue price Issue by 100% of par value
Total price NT$3,000,000,000
Coupon rate 0% p.a.
Tenor 5 years Maturity: Oct. 21, 2025
Guarantee agency None
Consignee Cathay United Bank
Underwriting institution KGI Securities Co., Ltd.
Peng, Yi-Chen
Certified lawyer
(Handsome Attorneys-at-Law)
Tang Chia-Chien
CPA Su, Yen- Ta
(KPMG)
According to the offering of EVA 4 [th] Domestic Unsecured Convertible Bond
Repayment method
Article 10, 18 and 19.
Outstanding principal NT$1,037,300,000
Terms of redemption or Please refer to the Procedures for Issuance and Conversion of 4 [th ] Domestic
advance repayment Unsecured Convertible Bond.
Restrictive clause None
Name of credit rating agency,
rating date, rating of corporate None
bonds
Other As of the printing
NT$1,962,700,000
rights date of this annual
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117

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attached report, converted
amount of
(exchanged or
subscribed) ordinary
shares, GDRs or
other securities
Issuance and
conversion Please refer to the Procedures for Issuance and Conversion of 4 [th ] Domestic
(exchange or Unsecured Convertible Bond.
subscription) method
Issuance and conversion,
exchange or subscription Impact on existing shareholders’ equity is limited if all bonds are converted
method, issuing condition into common shares at NT$11.2 per share, with a maximum equity dilution
dilution, and impact on existing of 1.81%.
shareholders’ equity
Transfer agent Not applicable
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4.2.2 Corporate Bond Under Processing: None

4.2.3 Convertible Bond

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----- Start of picture text -----

3 [rd] Domestic Unsecured Convertible 4 [th] Domestic Unsecured Convertible
Corporate bond type
Bond Bond
Year As of Apr. 30, As of Apr. 30,
2020 2020
Item 2021 2021
Market price of Highest 110.6 150 127 181
the convertible Lowest 93.35 102.25 101.05 111
bond Average 100.67 121.05 107.52 137.03
Convertible price 13.4 11.2
Issue Date: 2017/10/27 Issue Date: 2020/10/21
Issue date and conversion
Conversion price at issuance: Conversion price at issuance:
price at issuance
NT$ 15.5/ per share NT$ 11.2/ per share
Conversion methods Issuing of new stocks Issuing of new stocks
----- End of picture text -----

4.3 Preferred Stock: None

4.4 Global Depository Receipts: None

4.5 Employee Stock Options: None

4.6 New Restricted Employee Shares: None

4.7 Status of New Shares Issuance in Connection with Mergers and Acquisitions: None

4.8 Financing Plans and Implementation:

As of April 30, 2021, the use of funds raised from all previously securities issuance was carried out according to

the planned progress and was in line with the expected benefits.

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V. Operational Highlights

5.1 Business Activities

5.1.1 Business Scope

A. Main areas of business operations

The business activities of the Company and its subsidiaries are

civil aviation transportation and general aviation business
maintenance, manufacture and sales of aircraft, engine and parts
ground service at airports
catering service
air cargo entrepot
to carry out any business which is not forbidden or restricted by the applicable laws and regulations, excluding those requiring licensing.
B. Revenue distribution

Unit: NT$ thousands

Item Passenger	Item Passenger	Item Passenger	Cargo		Other		Total
Year	Amount	%	Amount	%	Amount	%	Amount	%

2020	24,505,345	28%	50,018,381	56%	14,525,050	16%	89,048,776	100%
2019	100,623,028	56%	25,379,299	14%	55,272,931	30%	181,275,258	100%

C. The business activities provided by EVA and its subsidiaries
Passenger services: international air transportation of passenger, periodically and nonperiodically charter flights.
Cargo services: transportation of international freight, express, mail and parcel.
Sky shop services: in-flight duty free sales.
Maintenance services: maintenance, manufacture and sales of aircraft, engine and parts.
Ground services: providing luggage and freight loading and unloading service, aircraft cleanness and aircraft ground-infrastructure support.
Catering services: providing in-flight meals for airlines.
Air cargo entrepot services: providing import, export and transit cargo storage, container stuffing and stripping.
Training services: pilot training.

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D. New services planned to be developed
(1) Improved ticket cancellation/change functions on official website.
(A) The Amadeus Digital API (ATC refund) for ticket cancellation online can automatically calculate the refund value and display it on the refund page. This allows passengers to decide whether to continue with their ticket cancellation, reduces the labor cost of having ticketing agents manually calculate the refund value, and increases customer satisfaction.
(B) The Dynamic Waiver function introduced on the official website for ticket changes allows passengers to change their flight number/date according to the situation (such as typhoon) without charges before their flight departs. This eliminates the labor cost of front-line staff manually making changes to the tickets, and increases customer satisfaction.
(2) EVA Mobile App personalized itinerary management optimization improves user satisfaction. The homepage automatically displays the itinerary or boarding pass within 2 days, which reduces the inconvenience of repeated login to check reservation record (PNR).
(3) Official website/mobile APP “New Check-in Reservation Function”
At present, online check-in and mobile check-in are available 48 hours before flight departure. Passengers who have already purchased their tickets will be able to make advance reservation to check-in, which gives passengers more flexibility in their check-in time. The system will then automatically send the passengers their boarding pass.
(4) Baggage Reporting System
Passengers who have left the airport can report online if their checked luggage is damaged or lost, and airport operators will contact the passengers. This will save passengers time spent on trying to locate the airport phone number or contacting the airline.
(5) Star Alliance develops “Digital Service Platform” and launches “Travel Information Hub”

The information sharing on the Star Alliance “Digital Service Platform” allows passengers to enjoy seamless services when taking cross-airline flights. The Company has launched services such as baggage tracking, free inter-airline seat selection and membership card number verification. Other functions such as digital assistance for flight transfer, flight abnormality notification, paid inter-airline seat selection, additional services and dynamic use of mileage are also being assessed. In response to the pandemic, Star Alliance has launched the “Travel Information Hub” to allow travelers to easily enquire the health and hygiene safety measures of member

120

airlines and information about epidemic prevention at major airports in the Star Alliance flight network.

(6) Additional services expected to be launched
In order to increase the Company’s additional revenue, strengthen the richness of the global information website, and provide passengers with the convenient experience of one-stop shopping, the Company is planning to follow the practices of other airlines in the industry to provide additional travel insurance services during the ticket purchase process.
(7) New meal selection service on official website/mobile APP
(A) In order to enhance the meal service of Premium Economy Class, the “Premium Economy Class Online Meal Selection Service” has been added to the official website/mobile APP.
(B) In order to provide passengers with diversified options and increase the Company’s ancillary revenue, it is planning to launch the “Prepaid Premium Meal” service in the itinerary management function on its official website and mobile APP.
(8) Expanding air cargo business opportunities in the cold chain market
The Company’s cold chain freight services (EVA Pharmacare) covers the major import and export regions of temperature control products in Europe, Asia and the Americas. It specializes in the delivery of seasonal influenza vaccines, biotech medical drugs, high-end ingredient and related products that require special and precise temperature control. In 2020, the demand for cold chain products continued to grow, and the cargo volume increased by 15% compared with 2019. In the future, global cold chain products will continue to be a potential market for air cargo, and the scope of product sales will continue to expand. The Company has earned certification from the Center of Excellence for Independent Validators (CEIV) Pharma certification of the International Air Transport Association (IATA) in March 2021, and will further provide instant and reliable temperature-controlled freight services that are committed to customer safety. In order to meet the needs of vaccine delivery, EVA Air has cooperated with professional temperature-controlled cabinet manufacturers to provide customers with various low-temperature cargo delivery solutions that meet the service requirements of safe delivery.

5.1.2 Industry Overview

A. Current status and development of the industry

The severe COVID-19 pandemic crisis has deeply impacted the aviation industry. The International Air Transport Association (IATA) estimates that with the reopening of borders and related testing requirement, and the raise in vaccination rates, aviation industry performance in 2021 will improve compared with the performance in 2020.

121

Although loss will continue, the financial structure of airlines will improve significantly. When some borders reopen in 2021, total revenue will increase by 23%, from US$372 billion to US$458 billion. Compared with the previous year, revenue passenger kilometers (RPK) will grow by 26%, increasing from 1.8 billion persons in 2020 to 2.4 billion persons in 2021.

Compared with the economic downturn as a result of the pandemic in 2020, the outlook for 2021 is slightly optimistic. GDP is expected to grow by 4.9%, which is a reversal of the -4.2% in 2020. Global trade growth is estimated to rebound from -9.2% in 2020 to 7.2%. Although aviation industry performance in 2021 will be better than in 2020, the path to recovery will be slow and weak. It is estimated that passenger traffic will not return to the level of 2019 until 2024 at the earliest. The global aviation industry is expected to lose about US$47.7 billion in 2021, which is a significant decrease of US$78.7 billion compared with the hit bottom loss of US$126.4 billion in 2020. In the long run, IATA believes that the progress made as a result of the vaccines is encouraging. The public has not lost their willingness to travel. Even small-scale de-quarantine measures will bring about a rapid and strong market response.

In 2020, the global air cargo capacity was significantly reduced due to the sharp reduction in passenger flights. However, after airlines began using passenger planes for cargo transportation to maintain their operations, cargo capacity has rebounded. According to IATA data, the largest single-month reduction in capacity in 2020 was 40.9% in April. By December, reduction has decreased to 20.6%, and as of December, the cumulative annual reduction in capacity was 24.1%. In terms of cargo volume, it decreased significantly in the second quarter of the early stage of the pandemic, but the degree of impact declined with each month. As of December, the cumulative annual volume decrease was 11.8%. On the whole, freight market supply and demand changed significantly in 2020. The decline in supply was greater than the decline in demand, which pushed up freight rates.

Regarding the outlook for cargo market supply and demand in 2021, IATA estimates that the transportation volume in 2021 will return to the level of 2019. In terms of cargo capacity, before passenger market recovers significantly and passenger aircraft belly hold increases substantially, hold supply from Asia to Europe and the United States will remain inadequate for meeting demand, and freight rates are expected to remain on the relatively high end.

B. Relevance of the Upstream, Midstream and Downstream Industry

The major services provided by the air transport service industry are mainly passenger and cargo transportation, which rely on the support of, and cooperation between, the upstream, midstream, and downstream industries to realize the provision of complete, integrated services and to satisfy customers’ needs. The correlations among the up-, mid-, and down-stream industries of EVA Air are shown below:

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----- Start of picture text -----

Upstream Midstream Downstream
Aircraft manufacturing General public
/refitting factories
Aircraft engine manufacturing Travel agencies
Airline Industry
Ground handling equipment Air forwarder industry
manufacturing
Aircraft lease industry Courier industry
Aircraft
Petroleum maintenance Sky catering Ground Passenger/
industry industry service Cargo
transportation
----- End of picture text -----

Upstream Industries:

Aircraft Manufacturing Industry and Refitting Factories: EVA Air purchases its fleets from internationally renowned commercial aircraft manufacturers, including Boeing in the United States and Airbus in France.

Aircraft Engine Manufacturing Industry: Aircraft engines are critically important aircraft components, which affect the flight range and flight efficiency. Currently, the world’s major aircraft engine manufacturers are GE, Pratt & Whitney, Rolls-Royce, and so on. The aviation transport operators select their engine suppliers mainly according to factors such as aircraft model requirements, maintenance costs, standardization of maintenance operation and maintenance technology availability.

Ground Handling Equipment Manufacturing Industry: Tractors and related equipment required for the apron operation are all classified as ground handling equipment.

Aircraft Lease Industry: Arrangement of aircraft procurement and leasing is in accordance with our financial planning. Aircraft lease operators are upstream industry of the aviation transport industry.

123

Midstream Industries:

Petroleum Industry: Aircraft fuel accounts for quite a large proportion of the operating costs of airlines, and the international oil price is easily affected by the international situation, policies of oil producers, exchange rate fluctuations, etc., which make the control of fuel cost more difficult. To stabilize fuel costs, besides signing long-term contracts with major fuel suppliers throughout the world for greater discounts, EVA Air also utilizes futures as an instrument for hedging.

Aircraft Maintenance Industry: Aircraft’s periodic/non-periodic (emergency or special condition) checks, maintenance and repairs are inextricably associated with flight quality and safety. In its initial launch, EVA Air has already heavily invested in building a modern jumbo wide-body aircraft maintenance center, followed by establishing Evergreen Aviation Technologies Corp., which has already acquired numerous maintenance accreditations from 14 countries, including those of FAA, EASA and ISO-AS9100 QA. Besides, the alliance cooperation with GE is beneficial to build the capability and higher level technology for aircraft maintenance and engine overhaul, which can provide a greater guarantee for the flight safety of EVA Air.

Sky Catering Industry: In-flight meal services are a crucial aspect affecting aviation service quality. To ensure the quality of the in-flight foods, EVA Air commissions its consolidated subsidiary Evergreen Sky Catering Corp. to manage the catering operation (self-run) for the Taipei Station. As for other stations, EVA Air prudently selects qualified local sky catering suppliers to provide in-flight foods.

Ground Service Industry: The ground services at airports include flight check-in, the apron operation for guiding aircraft in and out of the airport, baggage, cargo, mail services, building-up freight into containers and onto pallets, as well as aircraft loading and unloading operations. Currently, for domestic stations in Taiwan, EVA Air mostly commissions its subsidiary Evergreen Airline Services Corp. (EGAS) for the ground handling services to ensure the operation quality. As for foreign stations, EVA Air consigns varying ground handling services to its international industry partners or foreign airports’ professional ground agencies.

Passenger/Cargo Transport Industry: Taking quality into account, EVA Air commissions Evergreen International Storage & Transport Corp. to handle the shuttle transport operation for its crew members to commute between our office and airport.

Downstream Industries:

General public: Due to the development of the economy and trade as well as the increase in personal income, the opportunity for the general public to go abroad for business or sightseeing has greatly increased, and with the convenience of the Internet, the general public comprises direct customers that EVA Air actively strives to serve.

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Travel agencies: EVA Air continues to work with travel agencies for co-marketing, promotes and popularizes products through travel agencies to the general public and companies. Charter flights are formed according to market demand.

Air forwarder industry: The scope of the business includes import freight transport, export freight transport, transit freight transport, air container inland transport and customs declaration business, which is the transshipment operator of air cargo on the land side. Recently EVA Air has also directly undertaken chartered transport services of international exhibition goods, which not only benefits revenue growth, but also enhances international popularity and market competitiveness.

Courier industry: Mutual combination of courier service companies and air transportation services can provide more convenient services.

C. Development trends of products

(1) Development of global alliance

Due to the constraint of air traffic right and market scale, also to share the resources and reduce operational costs, airlines usually join strategic alliance to increase the overall competitiveness and to expand the code-shared network by code-sharing or frequent flyer plan. Currently, we have code-shared alliance with 20 airlines including United Airlines, All Nippon Airways, Air Canada, Air China, Asiana Airlines and Singapore Airlines. We will continue to seek the opportunities to cooperate with Star Alliance member airlines in the future.

Three major global alliances in airline industry already consists two-thirds of total available seat kilometers (ASK).

	Three Major Alliances
Star Alliance	One World	Sky Team

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Star Alliance One World Sky Team
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All Nippon Airways, Air Canada, Air China, Asiana Airlines and Singapore Airlines. We will continue to seek the opportunities to cooperate with Star Alliance member airlines in the future. Three major global alliances in airline industry already consists two-thirds of total available seat kilometers (ASK).	All Nippon Airways, Air Canada, Air China, Asiana Airlines and Singapore Airlines. We will continue to seek the opportunities to cooperate with Star Alliance member airlines in the future. Three major global alliances in airline industry already consists two-thirds of total available seat kilometers (ASK).	All Nippon Airways, Air Canada, Air China, Asiana Airlines and Singapore Airlines. We will continue to seek the opportunities to cooperate with Star Alliance member airlines in the future. Three major global alliances in airline industry already consists two-thirds of total available seat kilometers (ASK).
Three Major Alliances
Star Alliance One World Sky Team
Aegean Airlines Air Canada Air China Air India Air New Zealand ANA Asiana Airlines Austrian Airlines Avianca Brussels Airlines Copa Airlines Croatia Airlines EGYPTAIR Ethiopian Airlines	American Airlines British Airways Cathay Pacific Finnair Iberia Japan Airlines LATAM Malaysia Airlines Qantas Qatar Airways Royal Jordanian S7 Airlines SriLankan Airlines	Aeroflot Aerolíneas Argentinas Aeromexico Air Europa Air France Alitalia China Airlines China Eastern Czech Airlines Delta Air Lines Garuda Indonesia Kenya Airways KLM Royal Dutch Airlines Korean Air

125

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----- Start of picture text -----

Star Alliance One World Sky Team
----- End of picture text -----

Star Alliance One World Sky Team	Star Alliance One World Sky Team	Star Alliance One World Sky Team

EVA Air LOT Polish Airlines Lufthansa Scandinavian Airlines Shenzhen Airlines Singapore Airlines South African Airways SWISS TAP Air Portugal THAI Airways Turkish Airlines United Airlines		Middle East Airlines Saudia TAROM Vietnam Airlines XiamenAir

Data Sources: Official Websites of Star Alliance, One World and Sky Team.

(2) Open sky policy of airline industry

As countries gradually exempt visas for foreigners and increase interactions between cities, open sky policy is the long-term trend of the international airline market. So far, the United States has carried out the open sky policy thoroughly while there still have a certain control to ensure a free competition market and protect consumer’s interests. Due to the spillover effect of U.S. policy and effects from cross demand, EU and other countries tend to follow this trend. At present, Taiwan sky is not fully open, but will gradually alleviate the operators’ restrictions along with the global trend. In recent years, budget and foreign airlines continue to expand capacity to Taiwan market. It becomes evident that competition intensifies while airline market tends to be free and open.

(3) Automated non-contact services to reduce contact during air travel.

With the spread of the severe COVID-19 pandemic, border controls in various countries have stagnated travel demand. The International Air Transport Association (IATA), the Airports Council International (ACI) and three major aviation alliances have called for rapid screening to replace quarantine, reconstructing airport quarantine procedures, allowing exemptions from existing quarantine control, and relaxing border control measures to restore passenger confidence in air travel. Contactless air travel needs improvement, including the application of digital services while check-in, border control, boarding and inspection. IATA has also released the key design elements of the IATA Travel Pass to provide information on the virus testing regulations of different governments and vaccine-related information. In the future, it can be integrated with contactless travel applications to improve convenience and biosecurity.

126

(4) Diversified air cargo structure

The composition of air cargo sources is diversified. In addition to consumer electronics, machinery, equipment, apparels, footwear and raw materials, the prosperity of e- commerce has also driven the growth of cargo volume. In addition, biotech products that are small in size but high in value, and time-sensitive goods with high yield are also important cargo sources for air freight.

D. Product competition situation

According to statistics of CAA, the Company is on the top of the list among international airlines by passenger loading factor and gradually increasing the market share. Please refer to the Statistics of Passenger and Cargo Volume of International Airlines in Taiwan.

Statistics of Passenger & Cargo Traffic Volume of International Airlines in Taiwan

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----- Start of picture text -----

2020
Passenger Operation Cargo Operation
Name of Airline
Number of Seat Passenger Tons of Percentage
PLF (%)
Flights Capacity Capacity Cargo (%)
China Airlines 14,411 4,060,655 2,187,962 53.9 1,023,097 71.2
EVA Air 15,486 4,467,523 2,301,003 51.5 634,026 87.7
Tigerair Taiwan 3,236 583,610 344,602 59.0 322 64.0
Mandarin Airlines 1,354 227,122 125,795 55.4 6,279 23.0
UNI Air 737 174,867 95,866 54.8 5,097 24.8
STARLUX Airlines 834 156,792 34,985 22.3 1,637 69.2
Other Foreign Carriers 28,658 6,799,373 3,657,005 53.8 716,612 N/A
Total 64,716 16,469,942 8,747,218 53.1 2,387,070 N/A
----- End of picture text -----

Data source: Monthly Digest of Statistics, December 2020, CAA. The number of passengers includes transit passengers.

127

5.1.3. Research and Development

A . The amount invested and product successfully developed by the Company in recent year and by the printed date of annual report.

The Company has invested NT$135 million on the development of following research product.

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----- Start of picture text -----

Research Product Explanation
In response to the trend of mobile technologies and to meet the diverse
needs of passengers, EVA Airways has completed the renovation of our
Renovation of EVA
official website. We created an optimal cross-device visual interface for
official website
our passengers to enjoy their traveling experience at every moment of their
journey with these delicate and well-designed digital services.
To comply with the New Distribution Capability (NDC) standard
Establishing the system promoted by the International Air Transport Association (IATA) in recent
with new distribution years, EVA Airways has established the NDC function that integrates with
capability (NDC) the passenger reservation system to provide customers with instant and
diversified high-quality products and services.
Since the cross-industry cooperation partners of the Infinity MileageLands
of EVA Airways continue to increase, including hotel/car rental, banking
Constructing the module and insurance businesses, to speed up the preparation time for the
for the cross-industry cooperation between the parties involved and shorten the development
cooperation membership time for adjusting the program of each new cooperation project, a cross-
platform industry cooperation platform module was constructed in 2020 to set
business rules based on the Rule Engine approach. Once the platform
module is online, cooperation between the two parties can be carried out.
EVA Airways has improved its capability of information security
governance and cyber defense conducted in 2020. Focused on reinforce
security control mechanism and the protection of payment card
Enhancing Information
transaction-related applications and the cardholder data. Meanwhile, the
Security Governance
company has enhanced the resilient information security practice, to aim
precisely prevent and predict, immediately detect, and quickly respond
to a security incident before, during, and after the incident.
In response to the growth of e-commerce and mail order demand and to
get a hold on the real-time air freight rates as well as the changes in mail
Development of the
volume, EVA Airways has completed the development of the freight and
freight and mailbag rate
mailbag rate management system, which can flexibly and efficiently
management system
adjust the flight cabin and airmail rates, improving management efficiency
to maximize the profit.
----- End of picture text -----

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Research Product	Explanation
Revising the website for freight services	In response to the development trend of mobile technologies and to meet the diverse needs of air freight forwarders, EVA Airways has completed the revision of its website forfreight services, which is designed based on user experience. The website incorporated traffic data analysis and utilized customer experience to create an optimized cross-device visual interface, providing air freight forwarders instant, convenient and comprehensive digital services.
Flight record big data analysis and development project	To effectively predict the in-flight fuel, formulate fuel strategy, monitor changes in aircraft performance, analyze the best route, improve crew training, and gaininsight into flight safety factors, the QAR datalake and the QAR big data analysis platform were completed in this project. Under the optimization of system performance and maintenance costs, the voyage history can be completely retained, and the QAR big data storage capacity was expanded. The big data analysis technology is effectively used to successfully promote the development of aircraft-related business.
Implementation of a new generation core network	To improve the overall network service, qualityand management, EVA Airways completed the implementation of a new generation core network. The new network is design with the goal of achieving centralized network management, optimized cable management, enhanced network redundancy and stability and also network security, while proving high- speed network service.
Implementation of a new generation global wireless network platform	EVA Airways designed and implemented the next generation intelligent wireless management platform, built with multiple wirelessnetwork redundancy, as well as integrating multiple wireless software and hardware management solutions, in order to improve the internal and guest wireless network needs of the company, while achieving the goal of improving centralized management, and wireless network stability and security.

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B . Future Research Plan

(1) In 2021, the Company is estimated to invest NT$ 151 million on following research item.

Research Product Explanation Estimated Completion Time	Research Product Explanation Estimated Completion Time	Research Product Explanation Estimated Completion Time
Revision of duty-free pre-orderwebsite and APP Due to the fierce competition among e-commerce platforms, a revision project will be implemented to develop a new shopping website that has responsive web pages for duty-free pre-orders in order to optimize the cross-device shopping experience. At the same time, more diversified and flexible promotion plans will be added and coordinated with marketing strategies to enhance competitiveness and increase revenue. MAR, 2022 20% Completion
Revision of travel industry management system TheCompany plans to revise travel agency management system. By optimizing the business process and improving system automation, the efficiency of travel agency related management operations can be enhanced. In addition, user experience-oriented designs will be adopted to construct the best and intuitive visual experience and operation methods to provide travel agency industry players with real-time and convenient digital services. SEP, 2021 35% Completion
Collaboration projects with online shopping malls Inorder to provide Infinity MileageLands members with more flexibility in accruing and redeeming miles, the Company will be collaborating with online shopping malls. Member travelers can accrue membership miles when they shop products from the malls. They can also purchase EVA Air membership miles and extend the validity period of their miles in the malls. At the same time, member miles can be exchanged for accommodation and accommodation mileage accrual. Through such collaboration, member travelers can moreconveniently use their accrued miles, thereby increasing member stickiness. NOV, 2021 20% Completion
Enhancing Cyber Defense Capabilities	In 2021, based on the IT Roadmap for Cybersecurity, EVA Airways will continue to enhance its cyber defense capabilities indepth and enforcement, includes increase penetration testing and vulnerability assessment depth of important systems like passenger and cargo official websites, strengthen security by enhance endpoint local privilege access management and auditprocess,enhance file	DEC, 2021 15% Completion

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Research Product	Explanation	Estimated Completion Time
	access control scope, and integrating the authorization management mechanisms of applications, etc. In order to keep improving robust protection and resilience cyber security framework to ensure adequate business continuity.
Strengthening of freight rate management system	Continue to strengthen the new generation of freight management system, add air-consolidated freight management functions, and complete systemized services for freight. The revision willstrengthen the bank margin control function, integrate the unified control of air mail freight information and improve the overall efficiency of freight management, thereby creating maximum revenue benefit.	DEC, 2021 30% Completion
Development of cold chain cost control system	In response to the increasing demand for cold-chain goods (such as high-value medicines, vaccines, biotech products, high-end food materials and semiconductor wafers), the Company plans to develop a system for managing the cost of leasing cabinets in order to improve operating efficiency and ensure revenue effectiveness.	DEC, 2021 10% Completion
Revision of cargo handling fee system	The revision will strengthen the cargo handling fee management system, improve operationalconvenience, integrate and simplify the operation process, strengthen the articulation and management review mechanism, strengthen abnormality control, improve the quality and efficiency of cargo handling fee control, and effectively control costs.	JUL, 2022 5% Completion
Development of a new generation of passenger/cargo operation revenueaccounting system	In order to provide a faster and more convenient service for passenger/freight fee audit operation, the Company is developing a new generation of revenue accounting system. In addition to replacing the mainframe system, it will adopt an open platform technology architecture to provide a friendly operation interface. At the same time, it will optimize business processes to improve the efficiency of passenger/cargo revenue auditing.	DEC, 2021 84% Completion

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Research Product	Explanation	Estimated Completion Time
Flight maintenance record integration and mobile development	In order to improve the quality of aircraft maintenance, the Company plans to build a flight maintenance record management platform. Theplatform will allow the maintenance flight/cabin logs to be recorded by mobile devices, thereby providing real-time reports of aircraft status and speeding up the processing of maintenance issues.	JUN, 2022 10% Completion
Implementation of a new generation Hyper-Converged Infrastructure server platform for information systems	EVA Airways designed and implemented the next generation server platform for information systems using Hyper- Converged Infrastructure servers, which provides multiple highlyavailable and redundant virtual machine resource pools. This new platform provides high performance and stability servers to all information systems within the company, furthermore the platform integrates overall resource and network security management, which achieves the goal of centralized resource and security management.	DEC, 2022 40% Completion

(2) Key Reasons for Successful Research In The Future:

A. Fully support of management team

B. Strictly execute research projects management
C. Well control project budgets
D. Control and verify new technology
E. Great support from in charge departments
F. Fully understand of research projects

5.1.4 Long-term and Short-term Business Strategies

A. Short-term strategies

(1) Optimize fleet scheduling and increase airline revenue.

Affected by the severe COVID-19, air freight demand has increased significantly. In addition to cargo in cabin (CIC) flights, the cabin seats of thirteen 777-300ER passenger aircraft will be completely removed to expand cargo floor space and improve overall benefits in cargo operations.

(2) Maintain skeleton flight services and strengthen hub and spoke network.

Specialize in business routes and concentrate flight days to facilitate itinerary connections

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for passengers when connecting flights are open. Priority will be given to resuming additional flights for business and family visit routes. Along with market recovery, gradually increase tourist routes to grasp business opportunities from retaliatory rebound after the pandemic.

(3) Expand passenger transport capacity

In the future, as the pandemic eases, plan to gradually add new routes that hold potential, such as the Taoyuan- Penang, the Taoyuan- Clark routes. In addition, the Taoyuan- Milan route, which has been delayed due to the pandemic, will also be scheduled to be open based on the pandemic control situation.

(4) Increase the utilization of the 787 fleet

In coordination with the use of the 777 fleet for cargo operation, the 787 fleet will be used for long haul flights. In addition, the new 787 will be deployed in the Songshan Airport to increase the capacity of high-efficiency routes.

(5) Flexibly adjust fare products and optimize fare structure

Flexibly adjust direct flight fares according to market demand and passenger source structure, and market them as up fare products. For transits through Taipei, flexibly adjust up fare products and Standard fare products according to market demand. If undertaking special customer sources such as foreign workers and sea man, provide fare products according to actual needs.

(6) Enhancing customer loyalty by protecting the benefits of FFP members

Appropriately extend the validity period of card status, mileage and reward tickets according to the pandemic situation. Launch mileage redemption discount for the domestic routes of UNI Air and full mileage redemption for EVA Sky Shop home delivery to diversify channels for redeeming miles.

(7) Rolling out flights-to-nowhere, blocked extra seats, blocked zones, blocked cabins and charters programs launched by the Civil Aeronautics Administration.

In response to the Civil Aeronautics Administration’s special international flight policies for same airport arrival and departure and airports on Taiwan’s main island during the pandemic, a total of 38 flights were flown. EVA Air will continue to promote and actively contact tourism bureaus of various countries to collaborate on launching this special flight program between August 2020 and January 2021. In addition, in response to changes in the air travel needs of passengers due to the pandemic, blocked extra seats, blocked zones, blocked cabins and charters services are provided to give business owners

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and travelers independent and private spaces during their flight and safer options for flying.

(8) Simplify the service process, reduce contact and use disposable inflight service items

Simplify meal service throughout the cabin, reduce the supply of special meals, do not actively provide hot and cold drinks, pillows or blankets, and cancel the provision of towelettes, tablecloths, newspapers and magazines, wine list, rice crackers and prelanding sweets in order to reduce contact. Use disposable products for earphones, head cushions, napkins and other in-flight items.

(9) Flexibly adjust cargo operation routes

Flexibly adjust cargo operation destination, flight frequency and aircraft types according to changes in the pandemic situation and market demand. In addition, increase and decrease shifts to fully utilize fleet capacity and improve overall operational efficiency.

(10) Improve freight capacity and focus on Company revenue

Use passenger aircraft resources to implement various freight transportation capacity improvement plans, strive for freight revenue, and focus on the Company’s revenue.

(11) Enhance the use of e-commerce in cargo transportation in response to the trend of digital development

EVA Air developed a new web core system for freight, introducing new internet technology, collecting demand and consolidating development by phase. By introducing newly developed tools and functions, we are able to consolidate and optimize the framework, and to accelerate the process of operation, providing customers with better service.

B. Long-term plan

(1)Adjust fleet size properly

In response to the severe COVID-19 pandemic, the global air passenger and cargo market demand has undergone drastic changes. In 2020, an agreement was reached with Boeing to postpone the delivery of an entire fleet of new 787-10 aircraft. In addition, of the undelivered 787-10 aircraft, adjustments were made to deliver four 787-9 passenger planes and three 777F cargo planes instead.

(2)Guarantee flight safety

EVA Air is dedicated to improving flight safety. The Company invests a considerable

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amount to acquire resources including equipment and safety classes to train our staffs and make sure the quality of flight safety.

(3)Reduce energy consumption and carbon footprints

Implement Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) recognized by the ICAO. Follow the sustainability project of the IATA; implement solutions such as waste reduction, recycling, carbon offsetting, resource conservation, etc.

5.2 Market and Sales Overview

5.2.1 Market Analysis

A. Main Sales (Service) Regions and Key Performance Indicators (KPI)

Passenger Operations:

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2019 2020
Item
No. of RPK Revenue No. of RPK Revenue
Region
Passenger (Million) (NT$ Million) Passenger (Million) (NT$ Million)
America 2,239,229 24,623 39,386 562,229 6,168 12,009
Europe 886,722 7,040 11,516 194,168 1,542 2,849
Asia 9,589,358 16,264 48,628 1,544,263 2,803 9,318
Oceania 111,996 756 1,093 29,365 198 329
Total 12,827,305 48,683 100,623 2,330,025 10,711 24,505
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Note: RPK (Revenue Passenger Kilometers) = The number of revenue passengers carried multiplied by the distance travelled in kilometers.

Cargo Operations:

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----- Start of picture text -----

2019 2020
Item
Cargo Carried FTK Revenue Cargo Carried FTK Revenue
Region
(Tons) (Million) (NT$ Million) (Tons) (Million) (NT$ Million)
America 207,081 2,373 16,079 242,290 2,763 31,462
Europe 43,233 442 2,660 37,060 363 4,336
Asia 356,766 606 6,548 414,680 697 13,593
Oceania 3,331 23 92 9,674 65 627
Total 610,411 3,444 25,379 703,704 3,888 50,018
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Note: FTK (Freight Tonne Kilometers) = The weight of cargo in tons multiplied by the distance travelled in kilometers.

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B. Market Share of Taiwan on International Routes in the Last Two Years

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Year
2019 2020
Item
EVA Air 57,419 15,486
Number of Flights Taiwan 306,264 64,716
Market Share (%) 18.75 23.93
Number of EVA Air 12,861,068 2,301,003
Passengers Taiwan 59,277,753 8,747,218
Market Share (%) 21.70 26.31
EVA Air 546,608 634,026
Tons of Cargo Taiwan 2,266,521 2,387,070
Market Share (%) 24.12 26.56
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Data Source: Monthly Digest of Statistics, December 2019 and December 2020, CAA.

Passenger & Cargo Market Share of Taiwanese Airlines on International Routes in the Last Two Years

Unit: %

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----- Start of picture text -----

2019 2020
Year
Passenger Cargo Passenger Cargo
Airline
China Airlines 23.45 37.37 25.01 42.86
EVA Airways 21.70 24.12 26.31 26.56
Mandarin Airlines 2.17 0.64 1.44 0.26
Tigerair Taiwan 4.70 0.04 3.94 0.01
UNI Airways 1.43 0.56 1.10 0.21
STARLUX Airlines - - 0.40 0.07
----- End of picture text -----

Data Source: Monthly Digest of Statistics, December 2019 and December 2020, CAA.

C. Market supply & demand and growth in the future

Since the outbreak of the severe COVID-19, various countries have resorted to exit control measures, leading to a cliff-like decline in demand for passenger transport. Fortunately, the advent of vaccines is the light at the end of the pandemic tunnel. As vaccination is being successfully implemented in various countries, the air passenger transport market is expected to gradually recover. The expected flight resumption for the Company’s main operating routes are explained as follows:

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(1) Passenger Routes

Due to the impact of the pandemic, passenger flights in the first and second quarters were mainly planned according to cargo demand in order to retain basic services in regional skeleton flight and maintain the hub of air network structures. It is estimated that as vaccines in various countries are being successively put into use, resumption in the third and fourth quarters will be flexibly adjusted according to the quarantine regulations of each country and market demand. Flight capacity will be carefully planned and gradually restored to grasp business opportunities from post pandemic rebound.

(2) Air cargo Routes

The North American Routes are the Company’s main source of cargo revenues, accounting for 63%. Freighter revenue accounted for 75%. Freighters offer 16 flights per week to 4 destinations in Los Angeles, Chicago, Dallas and Atlanta in the United States while wide-bodied passenger aircraft provide cargo services with belly hold to 8 destinations in Los Angeles, San Francisco, Seattle, New York, Houston, Chicago, Vancouver and Toronto. Although impact by the pandemic, the AFTK between Asia and North America increases by 8.8% due to the maximized utilization of freighter and the increase of the capacity of passenger aircraft carrying cargo. The Company plans to introduce three 777 freighter from the fourth quarter of 2021 to densify existing routes and meet market needs.

D. Competitive Niche

(1) Excellent flight safety record

Since the inauguration of its maiden flight, the Company has adhered to Evergreen Group’s decades of experience in international transport, and has provided passengers with most appropriate and comfortable transport services with the business philosophy of flight safety and convenience, etc. “Flight Safety” is our promise to customers and the most important target and responsibility for our staff to accomplish. To achieve the business objectives of “Safe, Punctual Flights, Friendly, Professional Services, and Efficient, Innovative Operations”, we committed to establishing the flight safety standard operating procedures, implementing the work discipline, strengthening the organizational functions, and shaping the safety awareness to build the high-quality safety culture. It also ensures the safety of passengers and aircraft by performing the organizational functions and implementing the safety management system.

By adhering to the philosophy of “we aim to assure your safety whenever you are airborne” and “we never compromise safety in the air or on the ground”, EVA Air is ranked among the best by local and overseas civil aviation authorities and external certification companies in flight safety inspection with a perfect flight safety record and has created a

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number of perfect records of “Zero Defect”. With excellent flight safety performance, EVA Air has ranked among one of the “World’s Safest Airlines” by German civil aviation magazine, AERO International, for consecutive years. In accordance with the latest airline safety ratings published by the world-renowned professional aviation rating website AirlineRatings.com, EVA Air has been selected as one “The World’s 20 Safest Airlines” for 8 consecutive years and was awarded the third place. At the same time, EVA Air has also earned the 6th position among the World top-20 airlines 2021.

As EVA Air has been making constant effort and investment to maintain the safety of flight, its safety performance has been recognized once and again in the industry at home and abroad. EVA Air’s commitment to flight safety never change, and will set higher standards for itself in order to provide its passengers with peaceful and comfortable flight services.

(2) Balanced development of passenger and cargo in response to market changes

Due to the impact of the pandemic, passenger flights in the first and second quarters were mainly planned according to cargo demand in order to retain basic services in regional backbone routes and maintain the hub of air network structures. It is estimated that as vaccines in various countries are being successively put into use, resumption in the third and fourth quarters will be flexibly adjusted according to the quarantine regulations of each country and market demand. Flight capacity will be carefully planned and gradually restored to grasp business opportunities from post pandemic rebound.

(3) The layout of the original aviation network is complete, which will help the market recover in the post-epidemic era

The Company’s original flight destinations cover more than 60 cities across the four continents of Europe, the United States, Asia and Australia to form a complete passenger and cargo flight network. As a result of the pandemic, flights have been significantly reduced to only skeleton flights. However, relying on the resources of the original destinations, by gradually resuming flights after the pandemic, the Company will provide dense air network services to quickly restore market competitiveness and meet consumer needs.

(4) The new generation of a brand new fleet

The new generation of the main aircraft model - 787 Dreamliner of EVA Air has been delivered in the second half of 2018 and has delivered 10 by the end of 2020. 787 passenger planes adopt the world's top aerospace science and technology, and are equipped with the latest generation of GEnx engines. Compared with the old type widebody aircraft, 20% of fuel consumption and pollution emissions are saved through the extensive use of lightweight composite materials and the latest technology. Thus, the

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operating efficiency is improved effectively. The brand new cabin design also greatly improves the comfort of passengers.

The main aircraft type in the Company’s freighter fleet is the Boeing 777F freighter. It has a maximum cargo load of 102 metric tons and is equipped with GE90-115B engines from the GE Aviation Group, which are the same engines as the Company’s 777-300ER passenger aircraft. In addition to reducing maintenance costs, the 777F freighter also has excellent environmental protection and energy saving performance. Compared with the previous generation Boeing 747-400 freighter, it can reduce fuel consumption and greenhouse gas emissions by about 25%. The Company will introduce 3 more 777F freighter in 2021 to increase the size of the fleet to 8 aircraft, thereby effectively increasing cargo capacity.

E. Favorable & Unfavorable Factors in Prospects and Countermeasures
Favorable Factors
(1) Infrastructures such as global airport terminal equipment, runway capacity, departure time slots and airspace usage for various countries are unable to meet the development speed of the aviation industry. However, the impact of the pandemic has alleviated this saturation problem, making it a conducive time to re-plan post pandemic air network.
(2) The International Air Transport Association (IATA) estimates that in 2021, cargo volume will return to the level of 2019. Before the passenger transportation market recovers significantly and the belly hold of passenger aircraft increases significantly, the hold supply from Asia to Europe and the United States is still inadequate for coping with demand, and freight rates are expected to remain on the high end.
(3) With the impact of global industrial chain migration, some product production lines have moved back to Taiwan, which helps activate Taiwan's air export.
(4) Due to the impact of the pandemic, stay-at-home economy has become more vigorous, leading to the continuous growth of cross-border e-commerce. In addition to changing the pattern of traditional air cargo market, it has also added to the growth momentum of air freight demand.
(5) Air cargo is playing a more active logistics role in global economy and trade. Improvement in cold chain freight efficiency will support the normal delivery of vaccines and medical products.

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`■` Unfavorable Factors

(1) In April 2021, the International Air Transport Association (IATA) pointed out that although the overall aviation industry has reduced operating costs in 2020 as a result of decline in oil prices, its revenue has fallen by 56% and it has incurred a net loss of approximately US$126.4 billion. It is estimated that in 2021, the net loss can be reduced by 62% to US$47.7 billion. However, passenger traffic is not expected to return to the pre-pandemic level of 2019 until 2024.
(2) In April 2021, the International Monetary Fund (IMF) pointed out that global economic growth rate for 2021 is expected to be 6%. However, this forecast remains greatly uncertain and will depend on unpredictable public health and economic factors. These factors include the pandemic path, sluggish demand, and the impact of financial market fluctuations on global capital flows. In addition, the ongoing impact of the pandemic, the scale and effectiveness of policies, as well as the allocation of resources and advance in vaccines and drugs are also influencing factors.
(3) National restrictions on travel bans and quarantine days for immigration will continue to delay the recovery of the tourism industry.
(4) The price of aviation fuel has rebounded after hitting bottom. Coupled with the intensifying impact of abnormal climate, flight operation costs have increased.
(5) The pandemic is continuing to impact the global tourism industry. Vaccination takes time, and freight transport is expected to continue to support aviation industry operations for the next 1 to 2 years.

`■` Countermeasures

(1) Based on pandemic development and passenger and cargo demand, readjust fleet planning and the layout of the aviation network, and re-examine the post pandemic market to grasp business opportunities from rebound after the pandemic.
(2) In response to changes in the air travel needs of passengers due to the pandemic, introduce fare for blocked extra seats, blocked zones, blocked cabins and charters services. Provide diversified pricing to give business owners and travelers independent and private spaces during their flight and safer options for flying.
(3) Lead industries to spearhead programs such as flights to nowhere, and subsequently launch a series of festival and corporate charter flights to satisfy travelers' desire to go abroad.

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(4) From time to time, organize captain, flight attendant and in-flight gourmet meal production experience camps to further the Group’s brand image and expand nonindustry revenue through these interactive experience with passengers.
(5) Improve airport automation services to reduce contact opportunities and restore passenger confidence in flying.
(6) Make preliminary preparations to fulfill the delivery conditions and equipment requirements for cold chain goods such as vaccines and fresh food in order to meet the ever-increasing market demand.
(7) Maximize the utilization rate of the 5 freighters and make full use of the resources of passenger flights to carry cargo.
(8) Introduce three 777 freighters to further improve cargo capacity.
(9) Carefully evaluate the feasibility of changing passenger aircraft to freighters in response to potential market demand.

5.2.2 Production Procedures of Main Products

Major products and their main uses

Major Products Main Uses	Major Products Main Uses
Passenger Services International Air Transport, scheduled, non-scheduled and charter flights.
Cargo Services International cargo, express, mail and parcel transportation.
Others Services	In-flight duty free sales and aircraft maintenance services.

2. Major production of main products

The Group mainly focus on air transport related industries. Therefore, there is no major production process.

5.2.3 Supply Status of Main Materials

The Group mainly focus on air transportation service and maintenance of airframe, engine and aircraft parts. Aviation fuel is the main material for operation. We not only sign fuel contracts with world-renowned fuel suppliers to insure steady fuel supply, but also adopt appropriate hedging strategies corresponding to fuel price trend. Our maintenance business mainly includes materials required for airframes.

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5.2.4 Major Suppliers in the Last Two Calendar Years

Major customers: The Group provide air transport service to the public.
Major suppliers: Formosa Petrochemical Corp., CPC Corp., etc.

Major Suppliers in the Last Two Calendar Years

Unit: NT$ thousands

==> picture [517 x 285] intentionally omitted <==

----- Start of picture text -----

2019 2020
Item Relationship Relationship
Company Company
Amount (%) with EVA Amount (%) with EVA
Name Name
AIR AIR
GE Engine Formosa
1 Services 11,218,427 13.65 None Petrochemical 4,409,312 15.95 None
Distribution Corp.
Formosa
2 Petrochemical 10,653,915 12.96 None CPC Corp. 4,050,313 14.65 None
Corp.
GE Engine
3. - - - - 3,996,115 14.45 None
Services Inc.
Others 60,337,991 73.39 Others 15,195,476 54.95
Net Total 82,210,333 100.00 Net Total 27,651,216 100.00
----- End of picture text -----

Note: The table above listed the names of suppliers with more than 10% of the total purchases in the recent two years and their purchase amounts and proportions. However, if the name of the suppliers or the transaction object must not be disclosed due to the contractual agreement, and the transaction object is an individual and non-related person, the Company is allowed to use a code name.

Analysis of deviation:

Fuel is the Company’s primary operating costs. Among our fuel suppliers, Formosa Petrochemical Corp. and CPC Corp. are main domestic suppliers. Affected by the severe epidemic in 2020, the number of passenger flights decreased, and the international fuel price fell in 2020, resulting in a reduction in fuel costs.
In the fourth quarter of 2019, Evergreen Aviation Technologies Corp., a consolidated subsidiary, transferred its engine business to GE Evergreen Engine Services Corp., resulting in a reduction in maintenance costs.

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5.2.5 Production in the Last Two Years

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----- Start of picture text -----

Year
2019 2020 Change rate
Capacity and Traffic
Available Seat Kilometers (ASK) 59,672,883 20,826,436 -65.10%
Revenue Passenger Kilometers (RPK) 48,682,624 10,710,890 -78.00%
Passenger Load Factor (%) 81.58% 51.43% -30.15pp
Available Freight Tonne Kilometers (AFTK) 4,402,373 4,432,436 0.68%
Freight Tonne Kilometers (FTK) 3,443,624 3,888,174 12.91%
Cargo Load Factor (%) 78.22% 87.72% 9.50pp
Available Tonne Kilometers (ATK) 9,772,932 6,306,815 -35.47%
Revenue Tonne Kilometers (RTK) 7,825,060 4,852,155 -37.99%
Overall Load Factor (%) 80.07% 76.94% -3.13pp
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5.2.6 Sales in the Last Two Years

Unit: NT$ thousands

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----- Start of picture text -----

2019 2020
Year
Sales Quantity Amount Quantity Amount
Passenger 12,827,305 100,623,028 2,330,205 24,505,345
Cargo(Tons) 610,411 25,379,299 703,704 50,018,381
Others - 55,272,931 - 14,525,050
Total - 181,275,258 - 89,048,776
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5.3 Human Resources

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----- Start of picture text -----

Year 2019 2020 As of APR 30, 2021
Pilot 1,512 1,530 1,533
Number of Crew 4,528 4,533 4,007
Employees Others 13,640 12,090 11,778
Total 19,680 18,153 17,318
Average Age 35.4 36.9 37.4
Average Years of Service 8.5 9.7 9.9
Ph.D. 0.1 0.1 0.1
Masters 4.9 5.2 5.3
Education
Bachelor’s Degree 79.5 79.9 80.1
%
Senior High School 13.2 12.9 12.6
Below Senior High School 2.3 1.9 1.9
----- End of picture text -----

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5.4 Environmental Protection Expenditure

5.4.1 The loss or penalty caused by environmental pollution during the latest year

and up to the printed date of this annual report:

On August 1, 2018, the Environmental Protection Administration of the Executive Yuan dispatched personnel to conduct an environmental impact assessment and supervision of the aircraft maintenance plant expansion plan of the consolidated subsidiary, Evergreen Aviation Technologies Corp (EGAT). The inspection found that environmental monitoring was not implemented during a part of the period, which is a violation of Article 17 of the Environment Impact Assessment Act. The penalty for the violation is NT$1.35 million and 8 hours of environmental seminars. The content of the violation, the date of the sanction, the sanction number and the corresponding measures are as follows:

The content of the violation: The development unit shall implement the contents in accordance with the environmental impact statement and the content and the review conclusions contained in the assessment report.

The date of sanction: August 25, 2020

The sanction number: Executive Yuan Environmental Protection Administration Execution of the Sanction of Environment Impact Assessment Act Violation Case Number 1090062897.

The corresponding measures: EGAT will conduct environmental monitoring in accordance with regulations during the expansion of its plant.

5.4.2 Countermeasures and Improvements

Strengthen the energy management, restrain the load of electricity and use of fuel to reduce CO2 emission.
2.Continually build improving management mechanism and good working environment. (1) The waste produced from building is stored as required by law into recycling, reusable waste, and industrial waste and collected by Environment Protection Administration (EPA) approved recyclers or waste companies. The relevant department periodically follow and audit to make sure the final procedure is legitimate.
(2) The consolidated subsidiary EGAT commits to provide a safe, healthy and environmental-friendly working environment for employees. All employees, top executives as well as grassroots staffs, have taken aggressive action in the environment protection during daily maintenance operations. EGAT will continue to reduce water consumption and all energy resources and properly control in the disposal and recycle of waste materials, in order to keep the promise of a safe,

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healthy working environment.

(3) The consolidated subsidiary Evergreen Airline Services Corp. (EGAS)
EGAS has equipped with sewage disposal facilities in Changxing Park and Factory Office Building in order to comply with the sewage emission standards regulated by EPA and spare no effort to protect the environment.
In response to the government's green energy policy, the Changxing Park and Factory Office Building are equipped with Solar Power Generation System to achieve the effect of saving and reducing carbon emissions.
(4) The consolidated subsidiary Evergreen Sky Catering Corp.(EGSC)
EGSC has established Wastewater Treatment System and rinsing machines in Unit II facility to comply with the Water Pollution Control Act and Air Pollution Control Act regulated by EPA, so as to carry out our obligation in environment protection.
The establishment of Water Chiller Unit with constant frequency control can automatically adjust the load, improve the air conditioning efficiency, achieve energy conservation, and use environmental refrigerant to reduce the impact on the environment.
The usage of Liquefied Natural Gas (LNG) in steam boiler installations can reduce nitrogen oxide emissions and depletion of ozone layer.
In response to the government’s green energy policy, EGSC installed “Solar Power Generation System” on the top floor of the Unit I facility. The total power generation in the year of 2020 was 305,336 degrees. The “Solar Power Generation System” of the Unit II facility has been completed in the first half 2020 and the total power generation in the year of 2020 was 369,552 degrees.
Airport Noise Management
In compliance with the airport noise abatement regulations and silent living environment policy, ICAO and FAA FAR promulgates strict noise standard for all new aircraft models. Contemporary aircraft boast more silent takeoff and landing performance through optimized airframe and engine system designs. Actually, most of EVA fleets like 787-9/-10, 777-300ER/F, A330-200/300, A321-200 have got stricter noise standards of Chapter 4 by ICAO Annex 16 and Stage 4 by 14 CFR part 36, Appendix B. EVA complies with designated airport noise abatement procedures for flight operations to let the noise impact on surroundings reduce to minimum and achieve the goal of silent residence.
Introduction of ISO 14001 Environment Management System and ISO 50001 Energy Management System
In order to ensure the effectiveness of the Company's environment and energy management systems and to accord with domestic and international regulations, the

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Company has obtained certification of the ISO 50001 Energy Management System on 2 December, 2015 and ISO 14001 Environmental Management System on 4 January, 2016; and has obtained the recertification every three years. The validity period of the certificate is 1 December, 2021 and 3 January, 2022 respectively. EVA Air continuously promotes environmental protection plans and identifies risks and opportunities based on systematic administration and organized operation; and continuously achieves toward becoming a sustainable and green corporation.

Introduction of e-Formula Optimization Management, e-FOM

In order to strengthen the Company’s environmental protection efforts and improve the efficiency of energy resource use, the e-FOM was introduced in June 2019 to effectively monitor, analyze and control the energy consumption of air-conditioning systems. The e-FOM technology increases the accuracy of information digitization, introduces big data statistical analysis functions and uses genetic algorithms to enhance smart management, thereby reducing human error and the need for management human resources. Through system performance monitoring data, the system learns and adjusts various parameters to allow it to run in optimum performance areas, thus greatly reducing energy consumption. The e-FOM was officially launched in January 2020. Conservation calculations are based on the airconditioning system in Nankan Park, which is the highest energy-consuming facility. To reduce the energy consumption of air-conditioning, the smart overall control optimized the ice water air-conditioning and cooling water systems, both of which have the highest energy consumption. Results show that the average monthly airconditioning energy saving in 2020 was 18%, which is equivalent to an average monthly energy saving of 4.5% in Nankan Park, and the cumulative energy saving was 746,249 kWh.

GHG Emission Inventory Check and Reduce
(1) GHG emission inventory check according to ISO 14064-1 principles
- In order to control the emission of GHG, the Company has been conducting voluntary inventory check of GHG emissions since 2011, and has completed a third party verification of GHG emission data with ISO 14064-1 principles every year since 2016. The quantified data mainly include aviation fuel, automobile gasoline and diesel fuels, and each office’s total power consumption. As of 2020, the ISO14064: 2018 version has been adopted, adding indirect GHG emission check, to expand the inventory of other indirect GHG emission sources. In regard to the GHG emission of 2019 and 2020, please refer to “Corporate Governance Operation” page 87 of this Annual Report for details.
(2) The Operation of CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation)

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In 2018, EVA Air has formulated and submitted EMP to Civil Aeronautics Administration (CAA) to comply with Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), proposing by International Civil Aviation Organization (ICAO). From 2019, the Airline is required to monitor fuel consumption based on the EMP and submit the carbon emission report (ER) to the Civil Aviation Administration after verification by a third party for international carbon offsetting and mitigation in the future.

(3) The Operation of EU ETS (EU Emission Trading Scheme)
EVA Air continues to monitor our aircraft’s Greenhouse Gas emissions within EU to comply with the European Union Emission Trading Scheme (EU ETS); and submits Annual Emission Data to UK supervised institution for carbon offsetting. After UK left EU, the Company will be under the jurisdiction of the Netherlands and declare to the country from 2021.
(4) Fuel conservation measures

With the expansion of routes and the increase of business scale, EVA Air has made various fuel conservation measures. These measures are executed by the “Environment Promotion Sub-Committee” to analyze the fuel efficiency of various aircraft types. Meanwhile, the fuel conservation plans involve topics such as weight reduction of aircraft, flight operations and aircraft maintenance in order to implement the carbon reduction strategy of the International Air Transport Association (IATA) and respond to the government's demand for energy conservation and carbon reduction to reduce greenhouse gas emissions.

Besides, the Company continually modernize the fleets through introducing latest environment friendly aircraft — Boeing 787 Dreamliner. For the illumination device, fluorescent tubes are replaced with LEDs, which will reduce half of the electricity consumption. Moreover, with the latest GEnx engine made by GE, the Dreamliner is able to reduce 20% of aviation fuel consumption and Green House Gas emission compared with the previous wide-body aircraft.

The “Environment Promotion Sub-Committee” of EVA Air
In 2015, EVA Air formed the “Environment Promotion Sub-Committee”, which is the highest decision-making supervisory unit for environment management policy. The committee control and plan relevant guidelines and policies from the four major aspects of fuel conservation, environment, energy and carbon rights, and promote various plans and aircraft fuel-conservation measures to reduce greenhouse gas emissions and noise of the apron operation. It convenes at quarterly meetings to discuss the status and achievement performance of all responsible duties, ensures the effectiveness of the Company's environment and energy management guidelines and policies, effectively reduces the adverse global impact of GHG emissions, and

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establishes EVA Air’s positive image in the international community as a sustainable and green corporation.

8. Risks and Opportunities of Climate Change

EVA implements the four main core elements of TCFD (Task Force on ClimateRelated Financial Disclosures), which identify and control high risk factors caused by climate change and extreme climates, and expand risk monitoring to all environmental aspects. EVA Air adopts active and advance projection safety management methods to prevent potential hazards from environmental risks, and regularly reviews operation procedures to list adverse weather operations in the flight crew manual. Moreover, we fully grasp various hazard information through educational trainings, comprehensive information and adopting risk manage procedures. In addition to the elimination or reduction of the impact brought by climate change, EVA Air identifies opportunities for the company’s operations resulting from climate change. We actively establish strategies and management measures to properly and timely pursue any development opportunities with potential short, mid-, or long-term benefits to the Company’s business.

5.4.3 Restriction of Hazardous Substances (RoHS) information

The Company is air transportation industry, which is not applicable to RoHS regulations.

5.4.4 The Expenditure on Environmental Protection of Year 2020 and 2021

Unit: NT$ thousands

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2021
Item / Year 2020
(Estimated)
Cleaning fee of litter 37,881 38,157
Aircraft noise prevention charge 98,507 128,190
EU carbon emissions fee 136 171
Expenses for development the environmental
21,119 3,492
and energy management system program
Disposal fee of polluted water 7,334 8,405
Pollution prevention facility 0 0
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5.5 Labor Relations

5.5.1 Employee benefits, implementation status of further education, training, and retirement system, labor-management negotiation, and protection of various employees’ rights.

Employee Benefits
(1) The Employee Welfare Committee of EVA Air was established on 30 October, 1997. The Company and employees, with a registration certificate No. 225031 issued by the Taoyuan City Government, set aside welfare funds to handle and process the following welfare businesses pursuant to the Employee Welfare Fund Act:
- (A) Marriage subsidy
- (B) Funeral subsidy
- (C) Injury and sickness consolation cash benefit
- (D) Festival vouchers or gifts
- (E) Free language courses subsidies
- (F) Recreation and fitness facilities
- (G) Funds and subsidies for each department to hold cultural and recreational activities
(2) The Company provides lunch and overtime meal allowance for all employees, in addition, breakfast and evening meal allowance for shift personnel.
(3) The Company provides laundry service of uniforms and other accessories.
(4) The Company provides commute buses for all employees as well as transport allowance for shift personnel.
(5) The Company provides wedding cash gift, burial subsidies, injury or sickness benefits, settlement subsidy for international job transfer, and subsidy for domestic job transfer.
(6) The Company gives year-end bonus and employee compensation based on its operation performance every year.
(7) The Company sets up Clinic Div. to provide medical interview and medicine prescription by doctors, in addition, regularly arrange free health check.
(8) The Company covers workers by Labor Insurance, National Health Insurance, group accident insurance, hospitalization and injury medical insurance for those on overseas business trips, and provides group term life insurance preferential premium rate.
(9) The Company offers psychological consultation for employees, and individual services for those in need.
(10)The Company provide massage service to relieve the tension and fatigue from work of employees.
Implementation Status of Further Education, Training, and Retirement System
(1) Ground Staff Training

Since it was founded, the Company has been continuously endeavored to

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improve employees’ quality, management capability and professional knowledge to achieve higher business performance. Entire training programs were standardized and divided into three categories: functional training, annual training and international civil aviation organization training.

(A) Functional Training
Training courses held by each division for request of employees’ profession according to its responsibilities includes departmental functional training, management training, and general training to advance soft skill.
(B) Annual Training
In order to improve employees’ professional knowledge, skills, and service attitude so as to provide high-quality services for passengers, the Company provides professional training for operational characteristics of ground staff, including Reservation & Ticketing Course, Passenger and Cargo Service Course, Load & Balance Course, Baggage Course, and also Dangerous Goods Course, etc.
(C) International Civil Aviation Organization Training
Depending on the requirement for ground staff developing needs, employees will be assigned to attend relevant training programs organized by international civil aviation organization, such as IATA (International Aviation Transportation Association) and Star Alliance, or aircraft manufacturing company.

(D) Statistics of Ground Staff Completing Training Course in 2020

Number of Trainees	Total Training Hours	Total Training Expenditure (NT$thousands)
45,875	103,410	2,758

(2) Cabin Crew Training

Each new-hired cabin crew trainee must receive basic ground training for three months. The courses mainly focus on the operation of all sorts of emergency equipment on an aircraft, countermeasures during emergency situation, as well as learning the techniques and professional knowledge of all service procedures. The cabin crew trainee must pass the evaluation of the ground courses to be qualified for operating duty.

For the cabin crew, EVA provides the following trainings, and the 2020 training performance statistics are as follows:

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Courses	Completed Counts	Training Hours (perperson)
Initial Ground Subject Training	267	464
Recurrent Training	3,760	24
A330 Transition Training	34	22
A330 Transition Training (from narrow to broad)	90	28.5
A321 Transition Training	73	16
787 Transition Training	1,316	24
777 Transition Training (from narrow to broad)	49	32
CA Enhanced Training	38	48
CA Advanced Training	354	16

(3) Flight Crew Training

For the flight crew, EVA provides the following trainings, and the 2020 training performance statistics are as follows:

Types of Training	Completed Counts	Training Hours(Per Person)
Initial New Hire	31	234
Transition Training-simulator phase	117	136
On–type Upgrade (SFO to PIC)	7	31
Upgrade (FO to SFO)	84	8
Requalification Training	60	26
Recurrent Simulator training	2,353	6
Annual Ground School	1,284	29
CRM-Joint Emergency Training	924	8

(4) Retirement System

The Company has established an employee retirement plan, in accordance with the Labor Standards Act and the Labor Pension Act, covering full-time employees in ROC.

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  - (A) Employees who are applicable to the pension regulations of the Labor Standards Act Labor pension funds appropriated in accordance with the Labor Standards Act are generally coordinated and managed by the Bureau of Labor Funds, Ministry of Labor. Each employee receives 2 bases for each full service year from year 1 to year 15, and 1 base for each additional year thereafter, subject to a maximum of 45 bases. Payments of retirement benefits are based on the employee’s average monthly salary for the last six months before retirement and the number of bases accumulated by the employee according to his/her years of service.

  - (B) Employees who are applicable to the Labor Pension Act In accordance with the Labor Pension Act, enacted from July 1, 2005, labor pension appropriated monthly by the Company is 6% of the worker’s monthly wages.

Protection of Various Employees’ Rights:
(1) Continue to reinforce the operation of personnel system:
- Attempting to attract and retain talent, and increase their competitiveness, the Company continues to strengthen integration of corporate structure, rationalize the manpower allocation, review personnel system and duty allowances, smooth promotion channels, and nurture international talents.
(2) Signing of Collective Agreement:
- (A) The Company and the Taoyuan Union of Pilots (TUP) reached consensus on core issues and signed a preliminary agreement to not strike for a year on 30 August, 2018. During the negotiation, the TUP agreed to hold off the exercise of the disputed act. The rest of unresolved issues were settled by the end of 2018 therefore TUP agreed that they will not stage another strike until 31 August, 2022.
- (B) The Company and the Taoyuan Flight Attendants Unions (TFAU) reached consensus and signed an agreement on 6 July, 2019 to define stable future labor-management relations. Meanwhile both sides agreed that the TFAU will not stage another strike within three years and that future strikes should spare domestic flights.
(3) Keep Labor-Management Communication Unimpeded:
- (A) The Company maintains every communication channel well to garner consensus and effectively enhances every employee’s cohesiveness, for instance, regularly holding management meeting, department meeting, and interview with employees, conveying the Company’s future development, operation strategy and objective, significant information and measures, and innovations so that employees can fully understand operation status and give their feedback and opinions to have good labor-management interactions.
- (B) The Company continues to communicate and negotiate with unions,

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for various issues raised by the union, the company will respond specifically and adjust the feasible countermeasures in a timely manner.

5.5.2 Until the printing date of the annual report, the actual or estimated losses caused by labor disputes and the countermeasures:

The loss due to civil action is estimated about NT$ 18.8 million, and it will not have great impact on shareholders’ equity and stock prices of the Company.
After the labor inspection, the total amount of fines imposed by the labor authority is about NT $ 0.9 million. The details are as follows:

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Disposition Disposition
Violated Article Violated Article Content
Date Number
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Disposition Date Disposition Number Violated Article Violated Article Content	Disposition Date Disposition Number Violated Article Violated Article Content	Disposition Date Disposition Number Violated Article Violated Article Content	Disposition Date Disposition Number Violated Article Violated Article Content

Feb. 27, 2020	Taoyuan Labor Inspection No.1090038461	Labor Standards Act Article 38 Paragraph 2	A worker who has worked continually for the same employer or business entity for a certain period of time shall be granted annual paid leaves on an annual basis based on the following conditions: 1. Three days for service of six months or more but less than one year. 2. Seven days for service of one year or more but less than two years. 3. Ten days for service of two years or more but less than three years. 4. Fourteen days for service ofthree years or more but less than five years. 5. Fifteen days for service of five years or more but less than ten years. 6. One additional day for each year of service over ten years up to a maximum of thirty days. Annual paid leaves from the precedingparagraph are to be arranged by workers. The employer, however, in the light of urgent needs of the business operation or personal factors of workers, may consult and make adjustments with workers.

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Disposition Disposition
Violated Article Violated Article Content
Date Number
When an employer has a necessity to have his/her
employee to perform the work besides regular
working hours, he/she, with the consent of a labor
union, or if there is no labor union exists in a business
entity, with the approval of a labor-management
conference, may extend the working hours.
The extension of working hours referred to in the
Kaohsiung Labor Labor Standards Act preceding paragraph, combined with the regular
Apr. 27,
Mediation Article 32 working hours shall not exceed twelve hours a day;
2020
No.10933354700 Paragraph 2 the total number of overtime shall not exceed forty-
six hours a month; however, the extension of
working hours, with the consent of a labor union, or
if there is no labor union exists in a business entity,
with the approval of a labor-management
conference, shall not exceed fifty-four hours a month
and one hundred and thirty-eight hours every three
months.
A female worker may apply to be transferred to less
Taoyuan Labor
Mar. 24, Labor Standards Act strenuous work during her pregnancy. The employer
Inspection
2021 Article 51 shall neither reject her application nor reduce her
No.1100061476
wage.
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Response measures: Besides labor conferences, there are multiple channels for employees to reflect all kinds of problems related to work such as caring interviews, interactive meetings, welfare committee etc. To protect employees’ rights and interests, the Company established labor complaint handling regulation. Employees may reflect problems through the appealing channel and the Company will communicate with the employee properly to achieve consensus. The complaints are mostly about training compensation and employment disputes, the Company will enhance the communication about employment conditions to prevent disputes.

5.5.3 Codes of Conduct or Ethics for Employees and Protection Measures for Working Environment and Personnel Safety

Codes of Conduct or Ethics for Employees
Service principles for employees standardized by the Company’s Management Rules.
(1) Comply with the Company’s regulations and work procedures, devote to

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work, and obey managers’ orders, commands, and supervision.

(2) Sign in (out) within the prescribed time, unless there is special case stated and approved.
(3) Leave working position only when all document files are put in order after work.
(4) Be scrupulous in separating business from personal matters, discreet in word and deed, honest, and incorruptible. Protect the honor of the Company, get rid of all bad habits, show respect to colleagues and get along well with each other.
(5) Hold firm to own position, decentralize responsibilities, and stay intensive connection with related departments to make concerted efforts in finishing works undertaken for execution of business.
(6) Pay attention to the workplace neatness, aesthetic, and safety at all times.
(7) Be modest and courteous toward customers, must not treat them with frivolousness, arrogance, perfunctoriness or disregard.
(8) Avoid using business phone for personal purposes, and make calls short.
(9) Before bringing out public property, obtain a release pass from a department manager and accept examination of security officer.

The Company has formulated “Codes of Ethical Conduct” and “Ethical Corporate Management Best-Practice Principles”. The former standardizes the ways employees carry out their daily actions with ethics, and makes the Company’s ethical criterion understood and adhered by all stakeholders. The latter revealed that the Company upholds the business philosophy of honest, transparent and responsible, bases on ethics, and establishes a sound corporate governance system and risk control mechanism so as to create a business environment for sustainable development.

Protection Measures for Working Environment and Personnel Safety
(1) Located at office park in Nankan Village and with convenient communications, broad area and elegant environment, the Company provides employees many recreation and fitness facilities such as indoor heated swimming pool, gym, aerobics classroom, table tennis room, and badminton court for recreations or activities with colleagues.
(2) For the sake of employees’ safety, the Company implements not only Labor Insurance and National Health Insurance, but also accident and injury insurance, medical insurance and so forth for those on overseas business trips and overseas dispatch.
(3) The Company sets up Clinic Div. to regularly arrange health check, medical consultation and interview, and the rest to ensure employees’ health.

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(4) The Company sets up Occupational Safety & Health Div. to draw up working regulations about occupational safety and health, convene a meeting of occupational safety and health once a quarter, and investigate and compile statistics of occupational accidents.
(5) The Company executes inspection of fire security and public facilities on a regular time schedule to safeguard environment safety.
(6) The Company organizes occupational safety and health educational training, fire-fighting lectures, and practical training for all new employees.

5.6 Important Contracts

A. Leasing Contracts & Purchasing Contracts

As of APR 30, 2021

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Contract Restric
Counterparty Contract Period Major Contents
Type -tions
ACG Acquisition BR2012-10B LLC 2012.10~2022.10 A321-200 (B-16201) -
ACG Acquisition BR2012-10A LLC 2012.12~2022.12 A321-200 (B-16202) -
ACG Acquisition BR2012-11 LLC 2012.12~2022.12 A321-200 (B-16203) -
FGL Aircraft Ireland Ltd. 2016.09~2023.02 A321-200 (B-16205) -
Blackbird Capital II Leasing Ltd. 2021.03~2023.10 A321-200 (B-16206) -
Jin Shan Ireland Co. Ltd. 2014.10~2023.11 A321-200 (B-16207) -
Jin Shan Ireland Co. Ltd. 2014.10~2024.03 A321-200 (B-16208) -
Laf Leasing Ireland 2 Ltd. 2017.08~2024.03 A321-200 (B-16209) -
Zhuoshui Aviation Leasing Ltd. 2016.06~2024.05 A321-200 (B-16210) -
Jackson Square Aviation Ireland Ltd. 2016.09~2024.07 A321-200 (B-16211) -
Leasing
Contract Jackson Square Aviation Ireland Ltd. 2016.09~2024.09 A321-200 (B-16212) -
Einn Volant Aircraft Leasing Ireland 1 -
2018.03~2024.10 A321-200 (B-16213)
Ltd.
BOC Aviation Ltd. 2015.03~2025.03 A321-200 (B-16215) -
BOC Aviation Ltd. 2015.04~2025.04 A321-200 (B-16216) -
BOC Aviation Ltd. 2015.05~2025.05 A321-200 (B-16217) -
BOC Aviation Ltd. 2015.06~2025.06 A321-200 (B-16218) -
BOC Aviation Ltd. 2015.07~2025.07 A321-200 (B-16219) -
BOC Aviation Ltd. 2015.08~2025.08 A321-200 (B-16220) -
BOC Aviation Ltd. 2016.01~2026.01 A321-200 (B-16221) -
BOC Aviation Ltd. 2016.02~2026.02 A321-200 (B-16222) -
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Contract Restric
Counterparty Contract Period Major Contents
Type -tions
BOC Aviation Ltd. 2016.04~2026.04 A321-200 (B-16223) -
BOC Aviation Ltd. 2016.05~2026.05 A321-200 (B-16225) -
BOC Aviation Ltd. 2016.09~2026.09 A321-200 (B-16226) -
BOC Aviation Ltd. 2016.10~2026.10 A321-200 (B-16227) -
-
CIT Aerospace International 2011.10~2023.10 A330-300 (B-16331)
-
CIT Aerospace International 2011.11~2023.11 A330-300 (B-16332)
CIT Aerospace International 2011.12~2023.12 A330-300 (B-16333) -
Avation Taiwan Leasing III Pte. Ltd. 2017.12~2027.11 A330-300 (B-16335) -
WILMINGTON TRUST SP
-
2018.11~2027.12 A330-300 (B-16336)
SERVICES (DUBLIN) LIMITED
OAS Aviation (UK) Limited 2018.09~2029.01 A330-300 (B-16337) -
Dadu Aviation Leasing Ltd. 2018.05~2029.03 A330-300 (B-16338) -
-
BOC Aviation Ltd. 2017.06~2029.06 A330-300 (B-16339)
-
BOC Aviation Ltd. 2017.10~2029.10 A330-300 (B-16340)
-
KV Aviation UK Ltd. 2016.11~2024.06 777-300ER (B-16703)
-
Sprite Aviation Netherlands No.1 B.V. 2018.05~2026.07 777-300ER (B-16712)
Leasing ALC B773 44554, LLC 2015.11~2028.06 777-300ER (B-16725) -
Contract
-
ALC B773 44552, LLC 2016.01~2028.02 777-300ER (B-16726)
-
Pegasus Jet Leasing 2 Ltd. 2019.11~2028.07 777-300ER (B-16728)
-
ALC B773 61601, LLC 2016.09~2028.09 777-300ER (B-16729)
-
Celestial Aviation Trading 2 Ltd. 2016.09~2028.09 777-300ER (B-16730)
-
Celestial Aviation Trading 44 Ltd. 2016.09~2028.09 777-300ER (B-16731)
-
Celestial Aviation Trading 43 Ltd. 2016.10~2028.10 777-300ER (B-16732)
-
ALC B773 61600, LLC 2017.01~2029.02 777-300ER (B-16733)
-
BOC Aviation Ltd. 2017.03~2029.03 777-300ER (B-16735)
-
Celestial Aviation Trading 56 Ltd. 2017.03~2029.03 777-300ER (B-16736)
-
BOC Aviation Ltd. 2017.04~2029.04 777-300ER (B-16737)
-
Celestial Aviation Trading 68 Ltd. 2017.06~2029.06 777-300ER (B-16738)
ALC B879 72018,LLC 2018.09~2030.10 787-9 (B-17881) -
ALC B879 102018,LLC 2018.10~2030.11 787-9 (B-17882) -
-
ALC B879 22019, LLC 2019.02~2031.03 787-9 (B-17883)
ALC B879 42019,LLC 2019.05~2031.06 787-9 (B-17885) -
ALC B8710 62019,LLC 2019.07~2031.08 787-10 (B-17802) -
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Contract Restric
Counterparty Contract Period Major Contents
Type -tions
ALC B8710 12020,LLC 2020.02~2032.03 787-10 (B-17806) -
UNI Airways Corp. 2018.01~2022.09 A321-200 (B-16201) -
UNI Airways Corp. 2018.01~2022.09 A321-200 (B-16202) -
UNI Airways Corp. 2018.01~2022.09 A321-200 (B-16203) -
UNI Airways Corp. 2017.09~2024.03 A321-200 (B-16209) -
UNI Airways Corp. 2017.09~2024.05 A321-200 (B-16210) -
UNI Airways Corp. 2018.01~2022.09 A330-300 (B-16340) -
UNI Airways Corp. 2018.01~2022.09 777-300ER (B-16707) -
Leasing
Contract UNI Airways Corp. 2016.08~2021.08 ATR72-600 (B-17016) -
UNI Airways Corp. 2016.09~2021.08 ATR72-600 (B-17017) -
UNI Airways Corp. 2019.01~2030.09 787-9 (B-17881) -
Taoyuan Airport Corp. 2020.01~2022.12 Land and House Lease -
Taoyuan Airport Corp. 2015.07~2025.07 Land and House Lease -
CAA Taipei Station 2020.01~2022.12 Land and House Lease -
CAA Taipei Station 2012.03~2022.02 Land and House Lease -
2014.10~written Bonded Warehouse and
-
Evergreen Aviation Technologies Corp. notice of termination Open Platform
Purchasing THE BOEING COMPANY Contract Signing Date 787-10 、 787-9 、 777F -
2015.11
Contract
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B. Loan Contract

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----- Start of picture text -----

As of APR 30, 2021
Contract Restric
Company Institution Loan period Type of Loans
Type -tions
Hua Nan Commercial Bank 2014.05~2026.05 -
Bank of Taiwan 2014.06~2026.06 -
Mega International Commercial Bank 2015.03~2027.03 -
EVA Chang Hwa Commercial Bank 2015.09~2027.09 Secured Loans -
Loan
Airways (Aircraft Type ：
Contracts Hua Nan Commercial Bank 2015.10~2027.10 -
Corp. 777-300ER)
Bank of Taiwan 2016.08~2028.08 -
Cathay United Bank 2017.09~2029.09 -
Mega International Commercial Bank 2017.12~2029.12 -
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Contract Restric
Company Institution Loan period Type of Loans
Type -tions
Sunny Bank 2020.07~2024.07 -
Bank of Taiwan 2020.12~2025.12 -
Mega International Commercial Bank 2021.02~2026.02 -
Land Bank of Taiwan 2021.03~2026.03 -
E.SUN Bank 2018.02~2030.02 -
Bank of Taiwan 2018.06~2030.06 -
Secured Loans
Chang Hwa Commercial Bank 2018.12~2030.12 (Aircraft Type ： -
Taiwan Business Bank 2019.01~2031.01 777F) -
Bank of Taiwan 2019.06~2031.06 -
Bank of Taiwan 2019.08~2031.08 -
Secured Loans
Yuanta Commercial Bank 2019.09~2031.09 -
(Aircraft Type ：
Hua Nan Commercial Bank 2019.12~2031.12 787-10) -
Chang Hwa Commercial Bank 2020.11~2032.11 -
Bank of Taiwan 2020.09~2027.09 Secured Loans -
Land &
EVA
KGI Bank 2020.12~2027.12 -
Loan Buildings
Airways
Contracts
Chang Hwa Commercial Bank 2017.05~2022.05 -
Corp.
Bank SinoPac 2017.06~2022.06 -
Taiwan Business Bank 2017.06~2022.06 -
Mega International Commercial Bank 2017.08~2022.08 -
Cathay United Bank 2017.09~2022.09 -
Land Bank of Taiwan 2018.01~2022.01 -
Far Eastern International Bank 2018.03~2023.03 -
Bank of Taiwan 2018.08~2023.08 Unsecured -
Loans
Bank SinoPac 2018.09~2023.09 -
CTBC Bank 2018.11~2021.11 -
Yuanta Commercial Bank 2018.11~2021.11 -
Bank of Kaohsiung 2018.11~2023.11 -
KGI Bank 2018.12~2021.09 -
The Export-Import Bank of the
2019.03~2022.03 -
Republic of China
Sunny Bank 2019.03~2022.03 -
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Contract Restric
Company Institution Loan period Type of Loans
Type -tions
Taipei Fubon Bank 2019.07~2022.07 -
Agricultural Bank of Taiwan 2019.07~2024.07 -
DBS Bank 2019.11~2022.11 -
Bank of Communications 2019.11~2022.11 -
Bank of China 2019.12~2022.12 -
Chang Hwa Commercial Bank 2020.01~2025.01 -
First Commercial Bank 2020.03~2023.03 -
O-Bank 2020.03~2025.03 -
EVA
Loan Bank of Taiwan, etc. Syndicated Loan 2020.06~2022.06 Unsecured -
Airways
Contracts Loans
Corp. Bank of Taiwan, etc. Syndicated Loan 2020.09~2022.06 -
The Export-Import Bank of the
2020.09~2023.09 -
Republic of China
Hua Nan Commercial Bank 2020.09~2025.09 -
Bank of Taiwan, etc. Syndicated Loan 2020.10~2022.06 -
Entie Commercial Bank 2020.12~2023.12 -
Bank of Taiwan 2020.12~2025.12
Land Bank of Taiwan 2021.03~2026.03 -
Mega International Commercial Bank 2021.03~2026.03 -
Bank of Taiwan 2015.07~2030.07 -
Secured Loans
Taiwan Cooperative Bank 2016.01~2031.01 -
Plant &
KGI Bank 2018.12~2023.12 Facilities -
Hua Nan Commercial Bank 2019.10~2034.10
-
Chang Hwa Commercial Bank 2017.09~2022.09 -
Evergreen Chang Hwa Commercial Bank 2019.06~2024.06 -
Aviation
Loan Shanghai Bank 2018.12~2022.06 -
Technolo-
Contracts
gies Yuanta Commercial Bank 2019.01~2021.10 -
Corp. Bank SinoPac 2018.07~2023.07 Unsecured -
The Export-Import Bank of the Loans
2020.09~2025.09 -
Republic of China
Sunny Bank 2020.09~2023.09 -
Cathay United Bank 2017.12~2022.12 -
O-Bank 2019.12~2022.12 -
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160

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Contract Restric
Company Institution Loan period Type of Loans
Type -tions
E.SUN Bank 2019.09~2022.09 -
Hua Nan Commercial Bank
2017.07~2022.07 -
Mega International Commercial Bank 2018.01~2023.01 -
Far Eastern International Bank 2020.04~2023.04 -
Bank of Taiwan 2018.09~2023.04 -
Evergreen
Aviation
Loan Bank of Taiwan 2020.02~2025.02 Unsecured -
Technolo-
Contracts Bank of Kaohsiung 2018.12~2023.09 Loans -
gies
Corp. Taiwan Cooperative Bank 2018.03~2023.03 -
Agricutural Bank of Taiwan 2019.06~2024.06 -
Cathay United Bank 2021.02~2024.02 -
KGI Bank 2021.02~2024.02 -
Yuanta Commercial Bank 2021.04~2024.04 -
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161

VI. Financial Information

6.1 Five-Year Financial Summary

6.1.1 Condensed Balance Sheets – Based on IFRS (Consolidated)

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Unit: NT$ thousands
Item 2016 2017 2018 2019 2020 2021.03.31
Current Assets 69,375,363 69,002,340 75,996,433 77,199,776 55,932,512 56,978,568
Property, Plant and
125,481,847 135,017,379 143,960,512 138,646,890 133,221,419 130,446,881
Equipment
Intangible Assets 2,170,781 2,078,673 2,123,769 1,977,277 1,700,564 1,637,940
Other Assets 20,635,413 22,108,836 19,113,189 138,427,751 138,712,760 136,765,729
Total Assets 217,663,404 228,207,228 241,193,903 356,251,694 329,567,255 325,829,118
Before
62,284,933 60,428,208 60,922,876 82,441,715 45,433,155 46,469,783
Current Distribution
Liabilities After
-
63,095,312 61,262,897 63,266,523 83,655,107 (Note1)45,433,155
Distribution
Non-current Liabilities 96,042,190 103,569,512 110,151,292 195,667,963 207,474,571 203,902,456
Before
158,327,123 163,997,720 171,074,168 278,109,678 252,907,726 250,372,239
Total Distribution
Liabilities After
-
159,137,502 164,832,409 173,417,815 279,323,070 (Note1)252,907,726
Distribution
Equity Attributable to
53,328,195 58,007,723 63,582,269 71,252,182 70,797,388 69,594,577
Owners of Parent
Common Stock 40,518,923 41,734,490 43,821,215 48,535,695 48,535,695 49,234,980
Capital Collected In - - - -
230,642 373,482
Advance
Capital Surplus 6,237,027 6,639,940 6,751,945 7,849,700 7,985,673 8,055,150
Before
5,702,366 8,672,249 12,344,382 12,117,248 7,827,138 5,629,712
Retained Distribution
Earnings After -
3,676,420 5,750,835 8,594,547 10,903,856 (Note1)7,827,138
Distribution
Other Equity 869,879 961,044 434,085 2,749,539 6,448,882 6,301,253
- - - - - -
Treasury Stock
Non-controlling
6,008,086 6,201,785 6,537,466 6,889,834 5,862,141 5,862,302
Interests
Before
59,336,281 64,209,508 70,119,735 78,142,016 76,659,529 75,456,879
Total Distribution
Equity After -
58,525,902 63,374,819 67,776,088 76,928,624 (Note1)76,659,529
Distribution
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Note 1: As of the publication date of this annual report, the Board of Directors dated March 22, 2021 resolved not to distribute cash dividends of 2020 while the 2020 earnings distribution is pending for shareholder’s approval.

Note 2: Above annual information was based on the audited consolidated financial statements. Until the printing date of annual report, the consolidated financial statements as of March 31, 2021 haven’t been reviewed by independent auditors.

162

6.1.2 Condensed Statements of Comprehensive Income – Based on IFRS (Consolidated)

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Unit: NT$ thousands (Except EPS: NT$)
Item 2016 2017 2018 2019 2020 2021.03.31
Operating Revenue 144,679,665 163,561,731 179,907,332 181,275,258 89,048,776 19,678,810
Gross Profit 19,076,651 21,193,928 22,117,690 22,827,135 8,557,105 499,014
Operating Income (Loss) 7,129,934 8,694,914 8,889,128 9,442,727 (827,124) (1,761,598)
Non-operating Income and
(1,833,011) (718,794) 266,803 (3,384,378) (3,491,812) (648,473)
Expenses
Profit (Loss) Before Tax 5,296,923 7,976,120 9,155,931 6,058,349 (4,318,936) (2,410,071)
Profit (Loss) 3,953,667 6,310,934 7,214,513 4,851,875 (3,276,719) (2,199,185)
Other Comprehensive Income
2,084,356 (769,683) (543,495) 1,800,103 4,020,120 (145,709)
(Loss), Net of Tax
Comprehensive Income
6,038,023 5,541,251 6,671,018 6,651,978 743,401 (2,344,894)
(Loss)
Profit or Loss Attributable to :
Owners of Parent 3,476,004 5,752,067 6,552,827 3,982,467 (3,361,639) (2,197,426)
Non-controlling Interests 477,663 558,867 661,686 869,408 84,920 (1,759)
Comprehensive Income or Loss Attributable to:
Owners of Parent 5,627,064 5,086,994 6,059,260 5,838,155 622,625 (2,345,055)
Non-controlling Interests 410,959 454,257 611,758 813,823 120,776 161
Basic Earnings (Loss) per
0.77 1.27 1.45 0.83 (0.69) (0.45)
Share (Note 2)
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Note 1: Above annual information was based on the audited consolidated financial statements. Until the printing date of annual report, the consolidated financial statements as of March 31, 2021 haven’t been reviewed by independent auditors.

Note 2: The earnings (losses) per share have been trace-back adjusted by stock dividends.

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6.1.3 Condensed Balance Sheets – Based on IFRS (The Company)

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Unit: NT$ thousands
Item 2016 2017 2018 2019 2020
Current Assets 49,522,632 47,038,484 50,987,932 52,700,839 41,203,094
Property, Plant and Equipment 112,986,912 119,481,891 125,704,145 120,612,684 115,493,154
Intangible Assets 493,089 493,403 600,856 642,155 547,836
Other Assets 32,747,101 34,132,290 32,994,484 147,907,655 144,992,825
Total Assets 195,749,734 201,146,068 210,287,417 321,863,333 302,236,909
Before Distribution 56,772,787 53,213,768 53,593,885 73,188,121 41,251,262
Current Liabilities
After Distribution 57,583,166 54,048,457 55,937,532 74,401,513 (Note 1)41,251,262
Non-current Liabilities 85,648,752 89,924,577 93,111,263 177,423,030 190,188,259
Before Distribution 142,421,539 143,138,345 146,705,148 250,611,151 231,439,521
Total Liabilities
After Distribution 143,231,918 143,973,034 149,048,795 251,824,543 (Note 1)231,439,521
Common Stock 40,518,923 41,734,490 43,821,215 48,535,695 48,535,695
- - - -
Capital Collected In Advance 230,642
Capital Surplus 6,237,027 6,639,940 6,751,945 7,849,700 7,985,673
Before Distribution 5,702,366 8,672,249 12,344,382 12,117,248 7,827,138
Retained Earnings
After Distribution 3,676,420 5,750,835 8,594,547 10,903,856 (Note1)7,827,138
Other Equity 869,879 961,044 434,085 2,749,539 6,448,882
- - - - -
Treasury Stock
Before Distribution 53,328,195 58,007,723 63,582,269 71,252,182 70,797,388
Total Equity
After Distribution 52,517,816 57,173,034 61,238,622 70,038,790 (Note1)70,797,388
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6.1.4 Condensed Statements of Comprehensive Income -Based on IFRS (The Company)

Unit: NT$ thousands (Except: EPS NT$)

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Item 2016 2017 2018 2019 2020
Operating Revenue 115,495,819 125,314,160 135,620,650 135,621,151 79,602,529
Gross Profit 15,883,488 17,451,228 17,989,483 18,143,869 6,513,825
Operating Income (Loss) 4,961,439 5,942,518 5,995,142 6,116,866 (1,854,164)
Non-operating Income and Expenses (593,405) 943,415 1,672,375 (1,588,738) (2,562,120)
Profit (Loss) before Tax 4,368,034 6,885,933 7,667,517 4,528,128 (4,416,284)
Profit (Loss) 3,476,004 5,752,067 6,552,827 3,982,467 (3,361,639)
Other Comprehensive Income (Loss), Net
of Tax 2,151,060 (665,073) (493,567) 1,855,688 3,984,264
Comprehensive Income (Loss) 5,627,064 5,086,994 6,059,260 5,838,155 622,625
Basic Earnings (Loss) per Share (Note 2) 0.77 1.27 1.45 0.83 (0.69)
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Note 1: Above information was based on the audited parent-company-only financial statements. Note 2: The earnings (losses) per share have been trace-back adjusted by stock dividends.

6.1.5 Auditors’ Opinions from 2016 to 2020

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Year CPA Audit Opinion
2016 Chen, Ya-Ling ； Wang, Chin-Sun
2017 Chen, Ya-Ling ； Wang, Chin-Sun
2018 Chen, Ya-Ling ； Su, Yen-Ta An Unqualified Opinion
2019 Tang, Chia-Chien ； Su, Yen-Ta
2020 Tang, Chia-Chien ； Su, Yen-Ta
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165

6.2 Five-Year Financial Analysis

A. Financial Analysis – Based on IFRS (Consolidated)

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Item 2016 2017 2018 2019 2020 2021.03.31
Financial Debt-Asset Ratio 72.74 71.86 70.93 78.07 76.74 76.84
Structure
Ratio of Long-Term Capital To Property,
(%) Plant And Equipment 123.83 124.26 125.22 197.49 213.28 214.16
Current Ratio 111.38 114.19 124.74 93.64 123.11 122.61
Solvency
Quick Ratio 94.07 95.81 114.23 87.34 112.67 112.78
(%)
Interest Coverage Ratio 450.50 682.78 847.01 246.38 16.69 (168.11)
- - - - - -
Receivables Turnover Rate (Times)(Note1)
- - - - - -
Average Collection Days for Receivables
- - - - - -
Inventory Turnover Rate (Times)(Note1)
Operating - - - - - -
Payables Turnover Rate (Times)(Note1)
Ability - - - - - -
Average Days for Sale (Note1)
Property, Plant and Equipment Turnover Rate
1.21 1.26 1.29 1.28 0.66 0.15
(Times)
Total Assets Turnover Rate (Times) 0.70 0.73 0.77 0.61 0.26 0.06
Return on Assets (%) 2.64 3.58 3.76 3.07 0.22 (0.42)
Return on Equity (%) 6.93 10.22 10.74 6.55 (4.23) (2.89)
Ratio of Income Before Tax to Paid-In Capital
Profitability (%) (Note 7) 13.07 19.11 20.89 12.48 (8.90) (4.90)
Profit Margin before Tax (%) 2.73 3.86 4.01 2.68 (3.68) (11.18)
Earnings (Loss) Per Share (NT$) (Note 3) 0.77 1.27 1.45 0.83 (0.69) (0.45)
Cash Flows Ratio 33.97 29.21 39.54 45.07 11.82 9.20
Cash Flow
Cash Flow Adequacy Ratio 113.29 95.77 91.52 105.76 100.62 100.94
(%)
Cash Flow Reinvestment Ratio 8.61 7.09 9.39 15.87 1.69 1.73
Operating Leverage 7.38 6.66 6.59 6.02 (53.32) (5.82)
Leveraging
Financial Leverage 1.34 1.30 1.29 2.34 0.14 0.63
Analysis of variation of 2020 vs. 2019 over 20%:
1. Current ratio, quick ratio: The amount of current liabilities in 2020 decreased that result in the increase of current ratio and
quick ratio.
2. Property, plant and equipment turnover rate and total assets turnover rate: The operating revenue decreased in 2020 that
result in decrease of the turnover rate.
3. Interest coverage ratio and profitability: The profit loss in 2020 result in the large variation of the ratio.
4. Cash flows ratio and cash flow reinvestment ratio: The cash flows from operating activities decreased in 2020 that result
in the variation of the ratio.
5. Leveraging: The operating loss in 2020 that result in the large variation of leverage.
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Note 2: The earnings (losses) per share have been trace-back adjusted by stock dividends.

166

B. Financial Analysis – Based on IFRS (The Company)

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Item 2016 2017 2018 2019 2020
Debt-Asset Ratio 72.76 71.16 69.76 77.86 76.58
Financial
Structure
Ratio of Long-Term Capital To Property, Plant
(%) 123.00 123.81 124.65 206.18 225.97
And Equipment
Current Ratio 87.23 88.40 95.14 72.01 99.88
Solvency
Quick Ratio 81.83 83.38 90.21 67.86 93.64
(%)
Interest Coverage Ratio 427.73 675.11 864.00 221.70 9.31
- - - - -
Receivables Turnover Rate (Times)(Note1)
- - - - -
Average Collection Days for Receivables (Note1)
- - - - -
Inventory Turnover Rate (Times)(Note1)
- - - - -
Operating Payables Turnover Rate (Times)(Note1)
Ability - - - - -
Average Days for Sale (Note1)
Property, Plant and Equipment Turnover Rate
1.06 1.08 1.11 1.10 0.67
(Times)
Total Assets Turnover Rate (Times) 0.62 0.63 0.66 0.51 0.26
Return on Assets (%) 2.60 3.67 3.88 3.03 0.15
Return on Equity (%) 6.80 10.33 10.78 5.91 (4.73)
Ratio of Income Before Tax to Paid-In Capital
Profitability 10.78 16.50 17.50 9.33 (9.10)
(%) (Note 7)
Profit Margin before Tax (%) 3.01 4.59 4.83 2.94 (4.22)
Earnings (Loss) Per Share (NT$) (Note 2) 0.77 1.27 1.45 0.83 (0.69)
Cash Flow Ratio 31.21 29.96 39.15 40.77 (7.69)
Cash Flow
Cash Flow Adequacy Ratio 114.52 98.00 95.17 106.06 90.63
(%)
Cash Flow Reinvestment Ratio 8.09 7.37 9.54 14.78 (2.06)
Operating Leverage 8.69 7.99 7.94 7.88 (19.79)
Leveraging
Financial Leverage 1.49 1.45 1.43 6.03 0.28
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Analysis of variation of 2020 vs. 2019 over 20%:

Current ratio, quick ratio: The amount of current liabilities in 2020 decreased that result in the increase of current ratio and quick ratio.
Property, plant and equipment turnover rate and total assets turnover rate: The operating revenue decreased in 2020 that result in decrease of the turnover rate.
Interest coverage ratio and profitability: The profit loss in 2020 result in the large variation of the ratio.
Cash flows ratio and cash flow reinvestment ratio: The net cash outflow used in operating activities in 2020 caused the large variation of the ratio.
Leveraging: The operating loss in 2020 that result in the large variation of leverage.

Note 1: Above information was based on the audited parent-company-only financial statements.

Note 2: The earnings (losses) per share have been trace-back adjusted by stock dividends.

167

Note 1: Not applicable due to industry characteristics.

Note 2: A company that is listed on the TWSE or traded at the place of business of a securities firm
shall include in its analysis, the then current financial data up to and until the quarter immediately preceding the printing date of the annual report’ publication date.

Note 3: The calculations of the above financial ratios utilize the formulas listed below.

Financial structure
(1) Debt-asset ratio = total liabilities / total assets
(2) Ratio of long‐term capital to property, plant and equipment = (total equity + non‐current liabilities) / net worth of property, plant and equipment
Solvency
(1) Current ratio = current assets / current liabilities
(2) Quick ratio = (current assets – inventory – prepaid expenses) / current liabilities
(3) Interest coverage ratio = income before income tax and interest expenses / current interest expenses
Operating ability
(1) Receivables (including accounts receivable and notes receivable arising from business operations) turnover rate = net sales / average receivables (including accounts receivable and notes receivable arising from business operations) for each period
(2) Average collection days for receivables = 365 / receivables turnover rate
(3) Inventory turnover rate = cost of sales / average inventory
(4) Payables (including accounts payable and notes payable arising from business operations) turnover rate = cost of sale / average payables (including accounts payable and notes payable arising from business operations) for each period
(5) Average days of sale = 365 / inventory turnover rate
(6) Property, plant and equipment turnover rate = net sales / average net worth of property, plant and equipment
(7) Total asset turnover rate = net sales / average total assets
Profitability
(1) Return on assets = [net income + interest expenses X (1- tax rate)] / average total assets
(2) Return on equity = net income / average total equity
(3) Profit margin before tax = net income / net sales
(4) Earnings per share = (profit and loss attributable to owners of the parent – dividends on preferred shares) / weighted average number of issued shares (Note 4)
Cash flow
(1) Cash flow ratio = net cash flows from operating activities / current liabilities
(2) Net cash flow adequacy ratio = Net cash flow from operating activities for the most recent five years / (capital expenditures + inventory increase + cash dividend)
(3) Cash Flow Reinvestment Ratio = (net cash flows from operating activities – cash dividends) / (gross property, plant and equipment value + long‐term investments + other non‐current assets

168

working capital) (Note 5)
Leverage
(1) Operating Leverage = (net operating revenue – variable operating costs and expenses) / operating income (Note 6)
(2) Financial Leverage = operating income / (operating income – interest expenses)
Note 4: When the above formula for calculation of earnings per share is used during measurement, give special attention to the following matters:
Measurement should be based on the weighted average number of common shares, not the number of issued shares at year end.
In any case where there is a cash capital increase or treasury stock transaction, the period of time in circulation shall be considered in calculating the weighted average number of shares.
In the case of capital increase out of earnings or capital surplus, the calculation of earnings per share for the past fiscal year and the fiscal half-year shall be retrospectively adjusted based on the capital increase ratio, without the need to consider the issuance period for the capital increase.
If the preferred shares are non-convertible cumulative preferred shares, the dividend of the current year (whether issued or not) shall be subtracted from the net profit after tax, or added to the net loss after tax. In the case of non-cumulative preferred shares, if there is net profit after tax, dividend on preferred shares shall be subtracted from the net profit after tax; if there is loss, then no adjustment need be made.
Note 5: Give special attention to the following matters when carrying out cash flow analysis:
Net cash flow from operating activities means net cash in-flows from operating activities listed in the statement of cash flows.
Capital expenditures means the amounts of cash out-flows for annual capital investment.
Inventory increase will only be entered when the ending balance is larger than the beginning balance. An inventory decrease at year end will be deemed zero for calculation.
Cash dividend includes cash dividends from both common shares and preferred shares.
Gross property, plant and equipment means the total value of property, plant and equipment prior to the subtraction of accumulated depreciation.
Note 6: Issuers shall separate operating costs and operating expenses by their nature into fixed and variable categories. When estimations or subjective judgments are involved, give special attention to their reasonableness and to maintain consistency.
Note 7: In the case of a company whose shares have no par value or have a par value other than NT$10, for the calculation of the above-mentioned paid-in capital ratio, the ratio of equity attributable to owners of the parent as stated in the balance sheet shall be substituted.

169

6.3 Audit Committees’ Report for the Most Recent Year

To: 2021 Annual General Shareholders’ Meeting EVA Airways Corporation (EVA)

The Board of Directors has prepared the Company’s 2020 business report, financial report and proposal for distribution of earnings. The CPA firm of KPMG, Taiwan has audited the financial report and issued the audit report. The above business report, financial report, and proposal for distribution of earnings have been reviewed and determined to be correct and accurate by the Audit Committee members of EVA. In accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, we hereby submit this report.

EVA Airways Corporation

Convener of the Audit Committee: Hsu, Shun-Hsiung March 22, 2021

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

Please refer to page 189 to 289 Appendix 1.

6.5 The Parent-Company-Only Financial Statements for the Years Ended December 31, 2020 and 2019 and Independent Auditors’ Report

Please refer to page 290 to 390 Appendix 2.

6.6 If the Company or its affiliates have experienced financial difficulties in the most recent fiscal year or during the current fiscal year up to the printing date of the annual report, the annual report shall explain how said difficulties will affect the Company's financial situation: None

170

VII. Review of Financial Conditions, Financial Performance, and Risk

Management

7.1 Analysis of Financial Status (Consolidated)

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Unit: NT$ thousands
Year
Difference
2020 2019
Item
Amount %
Current Assets 55,932,512 77,199,776 (21,267,264) (27.55)
Property, Plant and Equipment 133,221,419 138,646,890 (5,425,471) (3.91)
Intangible Assets 1,700,564 1,977,277 (276,713) (13.99)
Other Assets 138,712,760 138,427,751 285,009 0.21
Total Assets 329,567,255 356,251,694 (26,684,439) (7.49)
Current Liabilities 45,433,155 82,441,715 (37,008,560) (44.89)
Non-current Liabilities 207,474,571 195,667,963 11,806,608 6.03
Total Liabilities 252,907,726 278,109,678 (25,201,952) (9.06)
Equity Attributable to Owners of Parent 70,797,388 71,252,182 (454,794) (0.64)
- -
Capital Stock 48,535,695 48,535,695
Capital Surplus 7,985,673 7,849,700 135,973 1.73
Retained Earnings 7,827,138 12,117,248 (4,290,110) (35.40)
Other Equity 6,448,882 2,749,539 3,699,343 134.54
Non-controlling Interests 5,862,141 6,889,834 (1,027,693) (14.92)
Total Equity 76,659,529 78,142,016 (1,482,487) (1.90)
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Analysis of deviation:

(1) Current assets and current liabilities:

Due to COVID-19, the passenger demand fall sharply and a drastic decline in passenger revenue. Cargo was affected by the suspension of a large number of passenger flights, leading to imbalanced supply and demand for cargo capacity and boost in cargo volume and rate. Nevertheless, the increase in cargo revenue still unable to make up for the loss in passenger revenue, making the overall revenue to drop substantially. Cash, account receivable and liabilities decrease as well.

(2) Retained earnings: Mainly due to the profit losses in 2020 affected by COVID-19.
(3) Other equity: Mainly due to the unrealized profits on hedging instruments.

Future response action: The above deviation has no significant impact on the Company and its subsidiaries.

171

7.2 Analysis of Financial Performance (Consolidated)

Unit: NT$ thousands

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Increase
Year Change
2020 2019 (Decrease)
Item (%)
Amount
Operating Revenue 89,048,776 181,275,258 (92,226,482) (50.88)
Operating Cost (80,491,671) 158,448,123 (238,939,794) (150.80)
Gross Profit 8,557,105 22,827,135 (14,270,030) (62.51)
Operating Expenses (9,384,229) 13,384,408 (22,768,637) (170.11)
Operating Income(Loss) (827,124) 9,442,727 (10,269,851) (108.76)
Non-operating Income and Expenses (3,491,812) (3,384,378) (107,434) (3.17)
Profit(Loss) before Tax (4,318,936) 6,058,349 (10,377,285) (171.29)
Income Tax Benefit (Expenses) 1,042,217 (1,206,474) 2,248,691 186.39
Profit(Loss) (3,276,719) 4,851,875 (8,128,594) (167.54)
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Analysis of deviation:

(1) The decrease of operating revenue, operating cost and operating expenses: Mainly due to the impact of the COVID-19 pandemic in 2020.
(2) The decrease of gross profit, profit before tax, income tax expenses and profit: Mainly due to the profit decreased in 2020.

7.3 Analysis of Cash Flow (Consolidated)

7.3.1 Cash Flow Analysis for the Current Year

Unit: NT$ thousands

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Increase
Year Change
2020 2019 (Decrease)
Item Amount (%)
Cash and cash equivalents at the beginning
51,534,519 48,278,874 3,255,645 6.74
of year
Net cash flows from (used in) operating
activities 5,370,613 37,154,031 (31,783,418) (85.55)
Net cash flows from (used in) investing
activities (12,263,897) (22,092,562) 9,828,665 44.49
Net cash flows from (used in) financing
activities (3,759,438) (11,798,054) 8,038,616 68.14
Exchange rate adjustments (12,607) (7,770) (4,837) (62.25)
Cash and cash equivalents at the end of year 40,869,190 51,534,519 (10,665,329) (20.70)
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172

Analysis of deviation:

A. Operating activities: Mainly due to the impact of the COVID-19 pandemic in 2020, unearned revenue from flight tickets dramatically decreased.
B. Investing activities: Mainly due to the acquisition of aircraft and prepayments for equipment decreased.
C. Financing activities: Mainly due to the long-term borrowings increased in 2020.
D. Exchange rate adjustments: Mainly due to the exchange rate fluctuation.

Remedy Measures of Inadequate Liquidity: Not required.

7.3.2 Cash Flow Analysis for the Coming Year

Unit: NT$ thousands

Cash and Cash Equivalents at Estimated Net Cash Flow from Estimated Cash Outflow Cash Surplus	Cash and Cash Equivalents at Estimated Net Cash Flow from Estimated Cash Outflow Cash Surplus	Cash and Cash Equivalents at Estimated Net Cash Flow from Estimated Cash Outflow Cash Surplus	Cash and Cash Equivalents at Estimated Net Cash Flow from Estimated Cash Outflow Cash Surplus
				Preparation for
				Liquidity	Shortfall
Beginning of Year (1) Operating Activities (2) (3) (1)+(2)-(3)				Investment	Financing
				Plans	Plans
40,869,190	9,702,998	11,312,085	39,260,103	-	-

Analysis of cash flow deviation of year 2021:

A. Operating activities: The estimated net cash generated by operating activities.
B. Investing activities: Primarily for purchase of aircraft and business facilities.
C. Financing activities: The cash flow used in financing activities mainly for redemption of bank borrowings.

Leverage of Cash Deficit: Not applicable

7.4 Major Capital Expenditure Items (The Parent-Company-Only)

A. In November 2015, the Company entered into aircraft purchase contracts with Boeing Company for eighteen Boeing 787-10 aircraft. In August 2020, the Company made amendments to the contracts and changed seven Boeing 787-10 aircraft (not yet delivered) into four Boeing 787-9 aircraft and three Boeing 777 freighters at a price of US$6.44 billion. As of December 31, 2020, fourteen Boeing aircraft had not yet been delivered by Boeing Company. The Company has partially prepaid the price of $13.92 billion.
B. In November 2015, the Company entered into engine purchase contracts with General Electric Company for five Boeing 787 engines. In September 2020, the Company made amendments to the contracts and changed one Boeing 787 engine (not yet delivered) into one Boeing 777 engine at a price of US$139.11 million. As of December 31, 2020, two Boeing engines had not yet been delivered by General Electric Company. The Company has partially prepaid the price of $353.48 million.

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7.5 Investment Policy in the Last Year, Main Causes for Profits or Losses, Improvement Plans and the Investment Plans for the Coming Year

The Company’s reinvestment mainly focus on the development of aviation-related industries to make sure the service quality of airline industry and seek the best interests of the company and shareholders. The Company reported investment income of NT$796.31 million in 2020.

The Company and its subsidiaries invest in aviation-related industries, including traveling agency, ground handling services, air cargo terminals, maintenance, manufacturing of aircraft, engine and parts etc. For the year 2020, the Company and its subsidiaries reported investment income of NT$172.66 million.

7.6 The evaluation of risks by the Company in recent year and by the printed date of annual report.

A. Effects of changes in interest rates, foreign exchange rates and inflation on corporate finance, and future response measures:
As for interest rate, the Company and its subsidiaries periodically and flexibility evaluate the account receivable and account payable of each foreign currency as well as financing interest rate. By issuing fixed rate corporate bond, acquiring fixed rate loan and buying fixed interest rate swap to make sure the interest rate will not fluctuate by time. If the interest rate increases (decreases) by 1% with all other factors that remain constant, the profit of the Company and its subsidiaries of year 2020 will change NT$1.07 billion.
As for exchange rate, the Company and its subsidiaries operating revenue are mainly from international transportation income. Those foreign income is sufficient to pay foreign liabilities that spontaneously avoid exchange rate risks. For the other short-term demand of USD resulted from time difference, the Company operates derivative products according to foreign exchange rate market trends to minimize the risks. A strengthening (weakening ) of 1% of the TWD against USD, EUR, JPY, CNY and HKD as of December 31, 2020 with all other factors remaining constant, the Company and its subsidiaries’ financial assets or liabilities affected by exchange rate fluctuation would have changed the profit by NT$53.35 million.
B. Policies, main causes of gain or loss and future response measures with respect to high-risk, high-leveraged investments, lending or endorsement guarantees, and derivatives transactions:
(1) The Company does not engage in any high-risk or high-leveraged investments.

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(2) The Company does not provide any lending or endorsement guarantees. The related procedures are based on the Company’s policy “Procedure for Funds Lending, Endorsement and Guarantee”.
(3) The Company chooses derivative products, such as fuel swap, option agreement and forward exchange contracts, to avoid market risks. Each transaction is followed the Company’s “Procedures for Transaction of Derivative Products” to evaluate risks and performance so as to reach the goal of risk management control.
C. Future research & development projects and estimated budget:
(1) Revision of duty-free pre-order website and APP
(2) Revision of travel industry management system
(3) Collaboration projects with online shopping malls
(4) Enhancing Cyber Defense Capabilities
(5) Strengthening of freight rate management system
(6) Development of cold chain cost control system
(7) Revision of cargo handling fee system
(8) Development of a new generation of passenger/ cargo operation revenue accounting system
(9) Flight maintenance record integration and mobile development
(10) Implementation of a new generation Hyper-Converged Infrastructure server platform for information systems

It is budgeted to spend NT$151 million for the projects.

D. Effects of and response to changes in policies and regulations relating to corporate finance and sales: None
E. Effects of and response to changes in technology and the industry relating to corporate finance and sales: None
F. The impact of changes in corporate image on corporate risk management, and the Company’s response measures: None
G. Expected benefits from, risks relating to and response to merger and acquisition plans: None
H. Expected benefits from, risks relating to and response to factory expansion plans: None
I. Risks relating to and response to excessive concentration of purchasing sources and excessive customer concentration:
The Company has no related risks to excessive concentration of purchasing sources and excessive customer concentration.
J. Effects of risks relating to and response to large share transfers or changes in shareholdings by directors or shareholders with shareholdings of over 10%: None

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K. Effects of risks relating to and response to the changes in management rights: None
L. Litigation or non-litigation matters: None
M.Other major risks and responses:
(1) The evaluation of market risks and responses:
- In response to the increasing threat of terrorism worldwide and to comply with the requirement of International Civil Aviation Organization (ICAO) for safety inspection of all air freight by June 30, 2021, action has taken to closely cooperate with the cargo logistic industry on safety inspection enhancement as well as to facilitate the development on air freight safety inspection system.
(2) The evaluation of credit risks and responses:
- Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments on the contract obligations. The Company manages the credit risk by evaluating each customer’s financial situation and requiring them to provide collaterals. Moreover, the Company only trades with financial institutions and entities with well credit quality to ensure the low credit risk of accounts receivable or investments.
(3) The evaluation of liquidity risks and responses:
- With the principle of steady operation and healthy financial status, the Company periodically arranges short-term and long-term operating funds and applies for financing from financial institutions. Meanwhile, depending on market conditions, the Company evaluates to have cash subscription, issue domestic ordinary corporate bond and convertible bond for the major capital expenditure and redeem loans to improve the financial structure. Therefore, the Company’s assets and operating funds are sufficient to execute all contracts.
(4) The evaluation of operating risks and responses:
- EVA Safety Promotion Committee (SPC) is the highest safety strategy and policy review committee. The supervisory responsibilities are ensuring the safety of company operation together with the oversight of the implementation of Safety Management System and managing major enterprise risk, including the most significant operational emerging risks that are expected to have a long term impact on the Company.

SPC adopts the proactive & predictive methodology and take “Data Driven”, “Evidence Based” & “Systematic Approach” on hazard identification and risk management in order to mitigate the risk exposure to ensure that every flight meets our passengers’ expectation on safety assurance.

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(5)Assessment on and response strategies for emerging risks:

With the increasing regulatory requirements of global aviation authorities, climate change, information security, political influence, the rapid development of emerging technologies, etc., the risks faced by enterprises are accompanied by uncertainties. Furthermore, “emerging risks” are undoubtedly one of the important issues that require airlines to be cautious with the assessment, which needs further identification, analysis, and formulation of response measures in order to respond to new forms of potential risks as soon as possible as well as to reduce the impact on operations. With reference to the “The Global Risks Report” published by the World Economic Forum (WEF) at the beginning of each year, the Corporate Sustainability Committee (CSC) incorporates identified emerging risks into risk management, conducts investigations on risk factors aimed at each department in the first quarter of each year, integrates risk mitigating actions formulated by related departments, and regularly reports the results to the Board of Directors.

a. Emerging risk identification process

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Step 1 Step 2 Step 3 Step 4
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a. Emergingrisk identificationprocess	a. Emergingrisk identificationprocess	a. Emergingrisk identificationprocess	a. Emergingrisk identificationprocess
Step1 Step2 Step3 Step4

Initiate emerging risk assessment procedures	Identify emerging risks by each sub- committee	Identify and screen emerging risks by the CSC	Report to the Board of Directors and formulate mitigating actions

b. Emerging risk identification results

Name	Pandemic	Cyber Attack
Category	Societal	Technological
Description	The COVID-19 pandemic has made countries around the world to implement strict border control measures, severely impacting the tourism industry.	With the advancement of technology, the operation of business relies heavily on Internet and network systems to perform their work. If they are attacked by hackers, huge losses will be resulted.
Impact on Our Operations	The closure of borders by various countries has led to restrictions on business and tourism activities, and reduced willingness to fly by the general public. Airlines need to modify service procedures and evaluate the introduction of new	The Company holds a large number of passenger data, and the procedures and operations require network connections to perform. Failure to properly protect them will cause substantial losses and even the interruption of operations.

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Name Pandemic Cyber Attack
types of aircraft using antibacterial
materials in the future that will
increase costs accordingly. Long-term
grounding of aircraft as well as the
decreased workload of personnel
resulting in decreased familiarity will
affect the overall operational risk.
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Name Pandemic Cyber Attack	Name Pandemic Cyber Attack	Name Pandemic Cyber Attack
types of aircraft using antibacterial materials in the future that will increase costs accordingly. Long-term grounding of aircraft as well as the decreased workload of personnel resulting in decreased familiarity will affect the overall operational risk.

Our Mitigating Actions	1. During the pandemic, the Company has implemented pandemic prevention and disinfection operations for every flight. In addition, in order to prevent, control and reduce the risk of bacteria spreading on the aircraft, aircraft manufacturers have begun to conduct research and development as well as the testing of antibacterial materials. The Company will continue to pay attention to the relevant research and development results aimed at antibacterial materials for cabins and introduce them timely so as to provide passengers with a more secure flight environment. 2. Depending on the development of the pandemic, the Company has flexibly implemented various work methods, such as work from home or remote office, streamlined work processes, systematized the businesses to ensure the effective operation of the key business, and adjusted the organization and manpower to mobilize support and transfer manpower in front-line units to other departments for learning cross-field functions. 3. It is to enhance functional training	1. The Company has passed ISO 27001 Information Security Management System Certification. To ensure the confidentiality, integrity, availability and legality of information assets, avoid internal and external deliberate or accidental threats, and take into account the Company’s development needs, EVA Air has formulated the “Information Security Policy”to cover areas such as organization and personnel management, information asset classification and personal data management procedures, audit supervision and risk assessment, regulatory compliance and other information security requirements, entity and environmental security, access control and system development/maintenance, technical vulnerability and operational record management, awareness advocacy and education & training, information security incident response and continuous operation management. 2. The new-generation aircraft uses IP technology in avionics systems to upload or download data to the aircraft wirelessly. The operation of EVA Air’s fleet is conducted in accordance with the regulations and

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Name Pandemic Cyber Attack
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Name Pandemic Cyber Attack	Name Pandemic Cyber Attack	Name Pandemic Cyber Attack

	for the air and ground handling departments, make good use of diversified online learning channels, and hold cross- departmental seminars to strengthen the basic functions and professional skills of all employees so as to benefit the career planning of employees and to cultivate all-round talents as well. 4. With regard to the low utilization rate of the Company’s A321 fleet due to the pandemic and according to the aircraft maintenance requirements of the Airbus manufacturing plant, for aircraft that has been suspended from flying for a long time, in addition to carrying out daily aircraft maintenance management and inspections, the additional Special Work Order checks and operations shall be performed every 7 days to optimize the aircraft system and maintain the airworthiness of the aircraft so as to ensure that when the pandemic subsides, the fleet capacity can be swiftlyrestored.	authorizations of the Civil Aeronautics Administration (CAA), MOTC. EVA Air formulates policies, standard operating procedures, training requirements and guidelines, and conducts SMS (Safety Management System) assessments for possible aircraft cybersecurity threats. It established a comprehensive aircraft cybersecurity plan to reduce cybersecurity risks to a controllable level, ensuring the continued airworthiness of the aircraft.

(6)The evaluation of information risks and responses:

a. Information Security Organization

In view of the increasing frequency of global data breaches and much stricter regulations for information security. To reinforce the structure of EVA’s information and cybersecurity, a dedicated unit ISD (Information Security Management Division) has been established. ISD is the unit in charge of planning and governance of information security, privacy protection strategy, regulatory compliance, risk assessment and treatment, performance management, incident response, awareness advocacy and training.

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b. Information Security Policy

EVA Air formulate Information Security Policy, establish information security risk assessment and management process which comply with the ISO 27001 Information Security Management System based on the company's business needs to ensure the confidentiality, integrity, availability and legality of information assets, and to avoid internal or external intentional or accidental threats. It’s applicable to all personnel of the company, business related vendors with its employees, temporary employees, visitors, etc.

The scope of information security management includes:

     - Information security organization, personnel safety and management, information security supervision and audit mechanisms, compliance with regulations and other information security requirements.

     - System development and maintenance, technical vulnerability management, access control, communication and operational management, event logging and evidence preservation.

     - Incident prevention, reporting, response and drill.

     - Physical and environmental security management, sustainability management, risk assessment management.

     - Management procedures for the collection, processing and use of personal data, asset classification and control.

     - Information security awareness advocacy and training program.

  - c. The Evaluation of Information Risks and Responses

     - In order to ensure the confidentiality, integrity, and availability of information assets, the Company will conduct risk assessment at least once per annum, or launch necessary risk assessment upon internal or external issues identified and the needs and expectations of interested parties, to effectively implement information security risk control mechanisms.

N. Risk Management Teams and Units-In-Charge
In order to improve and implement the risk management mechanism, the Company has established the “Risk Management Policy and Procedures” to carry out risk management aimed at uncertain factors that may threaten the Company's operations, improve the efficiency in division of labor in risk management, and ensure the achievement of the Company’s operational goals.

The Board of Directors is the highest supervisory unit for risk management, and continues to supervise the effective operation of the risk management mechanism in accordance with the overall operational strategy and operational environment. The Company understands the mutual influence of risk factors, and the

180

“Corporate Sustainability Committee” is to be responsible for implementing risk management related matters, integrating and supervising the implementation of risk management policies as well as the implementation and improvement progress of risk control by various competent departments, and reporting the operational status to the Board of Directors on a regular basis every year. In addition, it is to implement the confirmation, evaluation, management and disclosure of risk categories for economic (including corporate governance), environmental, social risks, and other dimensions of risk that may be faced in the operational process in accordance with the principle of materiality. For the subcommittee of “Operation Management”, “Supply Chain”, “Environment Management”, “Community Engagement”, “Employment Welfare” and “Service Quality” subordinate to the Committee, each of the competent units is to identify its possible risk factor and assessment methods to implement risk management, propose the mitigation and response plan, and report the risk and response plan to the Corporate Sustainability Committee on a regular basis. The risk categories faced by the Company include the five major categories as follows:

Risk Categories	Description
Strategic Risk	Include the risks that may affect the Company due to changes of dimensions in the international political and economic situation, trends in industrial development, competition among the same trade or different industries,brand image,intellectual capital,etc.
Operational Risk	Include possible impact on operations, such as market changes, flight safety, information security, labor relations, legal compliance, supply chain management,and other risks that maycause companylosses.
Financial Risk	Foreign exchange risk, investment risk, capital risk, liquidity risk, credit risk,hedgingoperations,etc.,that maycausepossible losses.
Environmental Risk	Include risks related to issues of greenhouse gas emission management, carbon rights management, energy management and others derived from the theme of coping with climate change and natural disasters, as well as risks of the need to conform to international and local environmental protection laws and regulations or environmental assessment requirements,etc.
Other Risks	Refer to various risks that are not included in the items mentioned above, but risks, such as long-term emerging risks; major external, uncontrollable or non-man-made hazards, will cause the Company to incur significant losses. In addition, appropriate risk control and handling procedures for other risks shall be established based on the characteristics of the risks and the level of impact.

7.7 Other Important Items: None

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VIII. Special Disclosure

8.1 Summary of Affiliated Companies

8.1.1 Basic Information of Affiliated Companies

A. Affilated Companies Chart (As of Dec 31, 2020)

Evergreen Aviation Technologies Corp.79.42% Numbers of the Shares held ： 280,189,241 Evergreen Airline Services Corp. 56.33% Numbers of the Shares held ： 36,183,106 Evergreen Sky Catering Corp. 49.80% Numbers of the Shares held ： 76,557,790 Evergreen Air Cargo Services Corp. 60.625% Numbers of the Shares held ： 72,750,000 Hsiang-Li Investment Corp. 100.00% Numbers of the Shares held ： 2,680,000 Sky Castle Investment Ltd..100.00% Numbers of the Shares held ： 5,500,000 Evergreen Airways Service (Macau) Ltd. 99.00% The shares are not issued. PT Perdana Andalan Air Service 51.00% Numbers of the Shares held ： 40,800 EVA Flight Training Academy 100.00% Numbers of the Shares held ： 10,000,000

182

B. Basic Information of Affiliated Companies

As of DEC 31, 2020

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----- Start of picture text -----

Date
Company Location Capital Principal Activities
Founded
Maintenance, manufacturing,
Evergreen Aviation
Nov.10.1997 Taiwan NT$3.5 billion procession and sale of aircraft
Technologies Corp.
engine and parts
Evergreen Airline
Oct.17.1990 Taiwan NT$642.3 million Ground handling
Services Corp.
Evergreen Sky
Oct.20.1993 Taiwan NT$1.5 billion Airline catering
Catering Corp.
Evergreen Air Cargo
Mar.03.2000 Taiwan NT$1.2 billion Cargo terminal operation
Services Corp.
Hsiang-Li Investment
Jan.18.2001 Taiwan NT$26.8 million
Investment Corp. business
Sky Castle Investment
Feb.02.2005 Samoa US$5.5 million
Investment Ltd. business
Evergreen Airways Investment
Dec.05.1994 Macau US$12,488
Service (Macau) Ltd. business
PT Perdana Andalan
May.01.1991 Indonesia IDR1.6 billion Travel business
Air Service
EVA Flight The United
Feb.11.2013 US$30 million Flight training academy
Training Academy States
----- End of picture text -----

Note: The affiliates listed above are mean companies in which the Company has invested and has 50% or higher voting

share, or the means to control, either directly or through a subsidiary company.

C. The industries covered by the business operated by the affiliates overall:

The main businesses engaged by the Company and the affiliates are set out as below:

EVA Airways Corp.: Periodically and non-periodically international air transportation of passenger and cargo.

Evergreen Aviation Technologies Corp.: Maintenance, manufacturing, procession and sale of aircraft, engine and parts.

Evergreen Airline Services Corp.: Ground service at airport.

Evergreen Sky Catering Corp.: In-flight meals in sky catering and the sales of food.

Evergreen Air Cargo Services Corp.: Air cargo entrepot.

183

D. The Directors, Supervisors and President of Affiliated Companies

As of DEC 31, 2020 Unit: Shares, %

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Shares Holding
Company Title Name and Representative
Shares %
EVA Airways Corp. 280,189,241 79.42%
Chairman
Representative：Huang, Nan-Horang -- --
EVA Airways Corp. 280,189,241 79.42%
Director
Representative：Lin, Bou-Shiu -- --
EVA Airways Corp. 280,189,241 79.42%
Director
Representative：Tai, Jiin-Chyuan -- --
EVA Airways Corp. 280,189,241 79.42%
Evergreen Director
Aviation Representative：Sun, Chia-Ming -- --
Technologies EVA Airways Corp. 280,189,241 79.42%
Corp. Director
Representative：Kuo, Sheng-Yih -- --
EVA Airways Corp. 280,189,241 79.42%
Director
Representative：Lee, Wei-Chang -- --
UNI Airways Corp. 72,617,721 20.58%
Supervisor
Representative：Tsai, Ta-Wei -- --
-- --
President Kuo, Sheng-Yih
-- --
President Lee, Wei-Chang
EVA Airways Corp. 36,183,106 56.33%
Chairman
Representative：Chang, Ming-Yuh -- --
EVA Airways Corp. 36,183,106 56.33%
Director
Representative：Lin, Bou-Shiu 153,598 0.24%
EVA Airways Corp. 36,183,106 56.33%
Director
Representative：Sun, Chia-Ming -- --
Evergreen Airline
EVA Airways Corp. 36,183,106 56.33%
Services Corp. Director
Representative：Lin, Ta-Yuan -- --
SATS Ltd. 12,846,229 20.00%
Director
Representative：Kuah Boon Kiam -- --
Evergreen International Corp. 12,846,229 20.00%
Supervisor
Representative：Ko, Lee-Ching -- --
-- --
President Lin, Ta-Yuan
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184

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----- Start of picture text -----

Shares Holding
Company Title Name and Representative
Shares %
EVA Airways Corp. 76,557,790 49.80%
Chairman
Representative：Kou, Jin-Cheng -- --
EVA Airways Corp. 76,557,790 49.80%
Director
Representative：Lin, Bou-Shiu -- --
EVA Airways Corp. 76,557,790 49.80%
Director
Representative：Sun, Chia-Ming -- --
EVA Airways Corp. 76,557,790 49.80%
Director
Representative：Tai, Jiin-Chyuan -- --
EVA Airways Corp. 76,557,790 49.80%
Evergreen Sky Director Representative：Tsai, Ming-Fang -- --
Catering Corp.
SATS Ltd. 38,432,625 25.00%
Director
Representative：Tan Chuan Lye -- --
SATS Ltd. 38,432,625 25.00%
Director
Representative：Cheah Chi Choy -- --
Evergreen International Corp. 38,432,625 25.00%
Supervisor
Representative：Ku Lai, Mei-Hsueh -- --
Evergreen International Corp. 38,432,625 25.00%
Supervisor
Representative：Tsai, Ta-Wei -- --
-- --
President Tsai, Ming-Fang
EVA Airways Corp. 72,750,000 60.625%
Chairman
Representative：Li, Shyh-Liang -- --
EVA Airways Corp. 72,750,000 60.625%
Director
Representative：Lin, Bou-Shiu -- --
EVA Airways Corp. 72,750,000 60.625%
Director
Representative：Sun, Chia-Ming -- --
Evergreen Air
Cargo Services EVA Airways Corp. 72,750,000 60.625%
Director
Corp. Representative：Lin, Tsung-Yen -- --
SATS Ltd. 30,000,000 25.00%
Director
Representative：Kuah Boon Kiam -- --
Evergreen International Corp. 13,649,392 11.37%
Supervisor
Representative：Ko, Lee-Ching -- --
-- --
President Lin, Tsung-Yen
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Shares Holding
Company Title Name and Representative
Shares %
EVA Airways Corp. 2,680,000 100%
Chairman
Representative：Lin, Bou-Shiu -- --
EVA Airways Corp. 2,680,000 100%
Director
Representative：Sun, Chia-Ming -- --
Hsiang-Li
Investment Corp. EVA Airways Corp. 2,680,000 100%
Director
Representative：Tsai, Ta-Wei -- --
EVA Airways Corp. 2,680,000 100%
Supervisor
Representative：Wu, Kuang-Hui -- --
EVA Airways Corp. 5,500,000 100%
Director
Sky Castle Representative：Lin, Bou-Shiu -- --
Investment Ltd.
EVA Airways Corp. 5,500,000 100%
Director
Representative：Sun, Chia-Ming -- --
EVA Airways Corp. -- 99.00%
Evergreen Director
Airways Service Representative：Lin, Bou-Shiu -- --
(Macau) Ltd. Director Sun, Chia-Ming -- --
Chairman Mohamad Feriansyah Permadi 6,272 7.84%
EVA Airways Corp. 40,800 51.00%
Director
Representative：Lin, Bou-Shiu -- --
PT Perdana
EVA Airways Corp. 40,800 51.00%
Andalan Air Director
Service Representative：Sun, Chia-Ming -- --
EVA Airways Corp. 40,800 51.00%
Supervisor
Representative：Tsai, Ta-Wei -- --
Supervisor Gunadi Widjaja 32,928 41.16%
EVA Airways Corp. 10,000,000 100.00%
Chairman
Representative：Lin, Bou-Shiu -- --
EVA Flight EVA Airways Corp. 10,000,000 100.00%
Training Director
Representative：Sun, Chia-Ming -- --
Academy
EVA Airways Corp. 10,000,000 100.00%
Director
Representative：Tsai, Ta-Wei -- --
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E. The Operating Overviews of Affiliated Companies

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As of DEC 31, 2020
Unit: NT$ thousands
Operating
Total Total Total Operating Profit EPS
Company Capital Income
Assets Liabilities Equity Revenue (Loss) (Dollars)
(Loss)
Evergreen Aviation
Technologies 3,528,069 23,836,846 13,884,752 9,952,094 10,687,878 1,484,231 1,173,028 1.85
Corp.
Evergreen Airline
642,312 6,246,633 4,701,362 1,545,271 1,817,500 (167,238) (66,898) (1.04)
Services Corp.
Evergreen Sky
1,537,305 6,858,436 2,644,482 4,213,954 881,524 (563,188) (424,530) (2.76)
Catering Corp.
Evergreen Air
Cargo Services 1,200,000 3,663,961 1,103,966 2,559,995 1,430,435 285,612 225,453 1.88
Corp.
Hsiang-Li
26,800 71,801 579 71,222 2,466 2,141 2,204 0.82
Investment Corp.
Sky Castle
179,173 369,549 502 369,047 22,378 21,796 21,807 3.96
Investment Ltd.
Evergreen Airways
Service (Macau) 327 101,149 623 100,526 (22,332) (22,983) (22,100) -
Ltd.
PT Perdana
Andalan Air 5,280 63,402 33,256 30,146 10,987 (8,895) (5,830) (72.88)
Service
EVA Flight
932,050 668,358 7,194 661,164 99,946 (21,236) (18,119) (1.81)
Training Academy
----- End of picture text -----

8.1.2 Affiliated Companies Consolidated Financial Statements

Information required to be disclosed regarding affiliated companies consolidated financial statements is included in Appendix 1 Consolidated Financial Statements. The Company will no longer prepare a separate consolidated financial statement of affiliated companies.

8.1.3 Relationship Report

EVA Airways Corp. is not the subsidiary of any company, so a relationship report is not required.

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8.2 Private Placement Securities in the Most Recent Years: None.

8.3 Shares in the Company Held or Disposed by Subsidiaries in the Most Recent Years: None.

8.4 Other Supplementary Information to be Disclosed: None.

8.5 Until the Printing Date of the Annual Report, the Items That Have Great Impact on the Company’s Shareholders’ Interests or Stock Prices Which Related to Securities and Exchange Act Article 36 Paragraph 3 Section 2:

COVID-19 outbreak since early 2020 has brought about additional uncertainties in the Company’s operating environment at each destination around the globe and has impacted the Company’s operations, including cancellation or restriction of flights. Facing the impact of the pandemic, the Company continuously reviews its flight status, implements flight suspensions and raises the daily utilization rates of its freighters, in order to maximize its operating revenue. Meanwhile, the Company simplified its service and selling process, reduced personnel cost, postponed unnecessary capital expenditures, as well as performed other cost-controlling activities. The Company has applied for operating and interest subsidies from the government. As of the end of April 2021, the Company and its affiliates have received a government bailout loan amounting to $ 22.47 billion. In addition, the Company has also acquired additional loans from banks, and will promptly raise fund from capital market, in order to meet the future demand of working capital.

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Stock Code:2618

EVA AIRWAYS CORP. AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors’ Report For the Years Ended December 31, 2020 and 2019

Address: No. 376, Sec. 1, Hsin-nan Road, Luchu Dist., Taoyuan City, Taiwan Telephone: 886-3-351-5151

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Contents
1. Cover Page
2. Table of Contents
3. Representation Letter
4. Independent Auditors’ Report
5. Consolidated Balance Sheets
6. Consolidated Statements of Comprehensive Income
7. Consolidated Statements of Changes in Equity
8. Consolidated Statements of Cash Flows
9. Notes to the Consolidated Financial Statements
(1)
Company history
(2)
Approval date and procedures of the consolidated financial statements
(3)
New standards, amendments and interpretations adopted
(4)
Summary of significant accounting 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 contingent liabilities and unrecognized commitments
(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

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190

Representation Letter

The entities that are required to be included in the combined financial statements of EVA Airways Corp. and subsidiaries as of and for the year ended December 31, 2020 under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports, and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with International Financial Reporting Standards No. 10 endorsed by the Financial Supervisory Commission, "Consolidated Financial Statements." In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, EVA Airways Corp. and subsidiaries do not prepare a separate set of combined financial statements.

Company name: EVA AIRWAYS CORP.

Chairman: Bou-Shiu Lin Date: March 22, 2021

191

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KPMG

台北市110615信義路5段7號68樓(台北101大樓) Telephone 電話 + 886 2 8101 6666 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, Fax 傳真 + 886 2 8101 6667 Xinyi Road, Taipei City 110615, Taiwan (R.O.C.) Internet 網址 home.kpmg/tw

Independent Auditors’ Report

To the Board of Directors of EVA Airways Corp.:

Opinion

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

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

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“ the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. 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 consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

－
1. Contract liabilities mileage redemption revenue

Please refer to note 4(q) “Revenue recognition”, note 5 “Significant accounting assumptions and judgments, and major sources of estimation uncertainty”, and note 6(x) “Revenue from contracts with customers” of the consolidated financial statements.

Description of key audit matter:

The member who joins the “Infinity MileageLands” (“the Program”) can earn mileage by flying any of the EVA Airways Corp.’ s flights or through other consumption. Contract liabilities will be converted into revenues when the member actually redeems the mileage or it is expected that the right is probable not to be redeemed.

KPMG, a Taiwan partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

192

The Group maintains information technology systems in order to calculate its mileage redemption revenue. And the Group also uses the systems to estimate the unit fair value of the mileage. Therefore, the cut off test － of contract liabilities mileage redemption revenue is one of the key judgmental areas for our audit.

How the matter was addressed in our audit:

Our principal audit procedures included: testing the design and implementation of the relevant controls over the mileage redemption revenue systems related to the Program; engaging the internal specialist to assess the quantity of the mileage, fair value of the redemption of the Program and the historical redemption probability of the Program to examine the unit fair value of the mileage for verifying the accuracy of recognition of the － contract liabilities mileage redemption revenue.

Impairment of long-term non-financial assets

Please refer to note 4(n) “Impairment of non-financial assets ”, note 5 “Significant accounting assumptions and judgments, and major sources of estimation uncertainty”, and note 6(k) “Property, plant and equipment” of the consolidated financial statements.

Description of key audit matter:

The Group periodically assesses for any indication of impairment on its long-term non-financial assets. If any indication thereof exists with long-term non-financial assets, the Group should estimate the recoverable amount for the assets’ cash-generating unit. The calculation for the assets’ cash-generating unit involved several assumptions and estimations made by the management. Therefore, the impairment test of long-term non-financial assets is one of the key judgmental areas for our audit.

How the matter was addressed in our audit:

Our principal audit procedures included: Assessing the method used in measuring the recoverable amount, which is provided by the management of the Group, including evaluating the appropriateness of assumption and estimation on major parameters, such as the forecast of cash flow and discount rate; comparing with the historical accuracy of judgments, including inspecting the amount of forecast of cash flow in prior year and with reference to actual cash flow to evaluate the appropriateness of the assumptions, as well as performing the sensitivity analysis on major assumption.

Other Matter

EVA Airways Corp. has prepared its parent-company-only financial statements as of and for the years ended December 31, 2020 and 2019, on which we have issued an unmodified opinion.

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

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

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

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

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Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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 auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

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

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

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

We also provide those charged with governance with 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.

194

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

The engagement partners on the audit resulting in this independent auditors’ report are Chia-Chien Tang and Yen-Ta Su.

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KPMG

Taipei, Taiwan (Republic of China) March 22, 2021

Notes to Readers

The accompanying consolidated 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 consolidated financial statements are those generally accepted and applied in the Republic of China.

195

2020.12.31 2019.12.31 Assets Amount % Amount % Current assets: 1100 Cash and cash equivalents (note 6(a)) $ 40,869,190 13 51,534,519 15 1110 Financial assets at fair value through profit or loss－current (note 6(b)) 1,978,251 1 961,356 - 1136 Financial assets at amortized cost－current (note 6(b)) 807,013 - - - 1139 Financial assets for hedging－current (note 6(c)) - - 37,428 - 1140 Contract assets－current (note 6(x)) 446,438 - 345,016 - 1150 Notes receivable, net (note 6(d)) 8,624 - 843,311 - 1160 Notes receivable－related parties (notes 6(d) and 7) 840 - 188,403 - 1170 Accounts receivable, net (note 6(d)) 6,262,730 2 17,194,658 5 1180 Accounts receivable－related parties (notes 6(d) and 7) 407,075 - 489,293 - 130x Inventories (note 6(f)) 3,255,164 1 3,352,358 1 1460 Non-current assets or disposal group classified as held for sale, net (notes 6(g) and 6(m)) 852,175 - 1,233,824 1 1470 Other current assets (notes 6(e), 6(o) and 7) 1,045,012 - 1,019,610 - Total current assets 55,932,512 17 77,199,776 22 Non-current assets: 1510 Financial assets at fair value through profit or loss－non-current (notes 6(b) and 6(p)) 2,793 - - - 1517 Financial assets at fair value through other comprehensive income －non-current (note 6(b)) 3,044,794 1 2,646,323 1 1550 Investments accounted for using equity method (notes 6(h), 6(i) and 7) 2,145,944 1 2,055,220 1 1600 Property, plant and equipment (notes 6(k), 6(m), 7, 8, and 9) 133,221,419 40 138,646,890 39 1755 Right-of-use assets (notes 6(k), 6(l), 6(r), and 7) 110,740,847 34 116,946,873 33 1780 Intangible assets (note 6(n)) 1,700,564 - 1,977,277 - 1840 Deferred tax assets (note 6(t)) 5,776,712 2 4,697,601 1 1900 Other non-current assets (notes 6(c), 6(o), 7, 8 and 9) 17,001,670 5 12,081,734 3 Total non-current assets 273,634,743 83 279,051,918 78 Total assets $ 329,567,255 100 356,251,694 100 2020.12.31 2019.12.31 Liabilities and Equity Amount % Amount % Current liabilities: 2100 Short-term borrowings (notes 6(p) and 8) $ 80,000 - 150,000 - 2120 Financial liabilities at fair value through profit or loss －current (notes 6(b) and 6(p)) - - 3,274 - 2126 Financial liabilities for hedging－current (notes 6(c), 6(q) and 7) 11,564,988 4 11,558,692 3 2130 Contract liabilities－current (note 6(x)) 4,649,328 1 19,958,937 6 2170 Notes and accounts payable 2,916,119 1 9,620,809 3 2180 Accounts payable－related parties (note 7) 97,393 - 105,230 - 2200 Other payables (notes 6(y), 7 and 9) 5,332,122 2 9,666,770 3 2230 Current tax liabilities 709,799 - 910,148 - 2260 Liabilities related to non-current assets or disposal group classified as held for sale (note 6(g)) 1,142 - 140,810 - 2280 Lease liabilities－current (notes 6(q) and 7) 362,101 - 387,924 - 2320 Current portion of long-term liabilities (notes 6(p) and 8) 19,148,239 6 24,867,998 7 2399 Other current liabilities (note 6(r)) 571,924 - 5,071,123 1 Total current liabilities 45,433,155 14 82,441,715 23 Non-current liabilities: 2511 Financial liabilities for hedging－non-current (notes 6(c), 6(q) and 7) 77,067,827 23 86,744,021 24 2527 Contract liabilities－non-current (note 6(x)) 2,517,482 1 3,220,551 1 2530 Bonds payable (note 6(p)) 3,082,941 1 4,250,000 1 2540 Long-term borrowings (notes 6(p) and 8) 92,696,123 28 70,616,943 20 2570 Deferred tax liabilities (note 6(t)) 1,624,345 1 638,563 - 2580 Lease liabilities－non-current (notes 6(q) and 7) 4,458,004 1 4,851,030 1 2640 Net defined benefit liabilities－non-current (note 6(s)) 3,580,418 1 4,905,439 2 2670 Other non-current liabilities (note 6(r)) 22,447,431 7 20,441,416 6 Total non-current liabilities 207,474,571 63 195,667,963 55 Total liabilities 252,907,726 77 278,109,678 78 Equity (notes 6(b), 6(c), 6(i), 6(p), 6(s), 6(t), 6(u) and 6(v)): 3110 Ordinary share 48,535,695 15 48,535,695 14 3200 Capital surplus 7,985,673 2 7,849,700 2 3300 Retained earnings 7,827,138 2 12,117,248 3 3400 Other equity interest 6,448,882 2 2,749,539 1 Total equity attributable to owners of parent 70,797,388 21 71,252,182 20 36XX Non-controlling interests (notes 6(j) and 6(u)) 5,862,141 2 6,889,834 2 Total equity 76,659,529 23 78,142,016 22 Total liabilities and equity $ 329,567,255 100 356,251,694 100	23	24 1 1 20 - 1 2 6	55	78	14 2 3 1	20	2	22	100

196

EVA AIRWAYS CORP. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, except Earnings Per Share)

4000
Operating revenue (notes 6(x) and 7)
5000
Operating costs (notes 6(c), 6(e), 6(f), 6(k), 6(l), 6(n), 6(q), 6(s), 6(y), 7 and 9)
5900
Gross profit from operations
6000
Operating expenses (notes 6(d), 6(e), 6(k), 6(l), 6(n), 6(q), 6(s), 6(y) and 7)
6900
Net operating income (loss)
Non-operating income and expenses (notes 6(c), 6(e), 6(h), 6(q), 6(r), 6(z) and 7):
7010
Other income
7020
Other gains and losses
7050
Finance costs
7060
Shares of profit of associates accounted for using equity method
Total non-operating income and expenses
7900
Profit (loss) before tax
7950
Income tax benefit (expenses) (note 6(t))
Profit (loss)
8300
Other comprehensive income (notes 6(c), 6(h), 6(s), 6(t) and 6(u)):
8310
Components of other comprehensive income that will not be reclassified to profit or
loss:
8311
Remeasurements of defined benefit plans
8316
Unrealized gains (losses) from investments in equity instruments measured at fair value
through other comprehensive income
8317
Gains (losses) on hedging instruments that will not be reclassified to profit or loss
8320
Share of other comprehensive income of associates accounted for using equity method,
components of other comprehensive income that will not be reclassified to profit or
loss
8349
Income tax benefit (expenses) related to components of other comprehensive income that
will not be reclassified to profit or loss
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
8368
Gains (losses) on hedging instruments
8370
Share of other comprehensive income of associates accounted for using equity
method, components of other comprehensive income that will be reclassified to
profit or loss
8399
Income tax benefit (expenses) related to components of other comprehensive income that
will be reclassified to profit or loss
Components of other comprehensive income that will be reclassified to profit or
loss
8300
Other comprehensive income, net of tax
8500
Total comprehensive income
Profit (loss), attributable to:
8610
Owners of parent
8620
Non-controlling interests
Comprehensive income attributable to:
8710
Owners of parent
8720
Non-controlling interests
Earnings per share (note 6(w))
9750
Basic earnings per share (in New Taiwan Dollars)
9850
Diluted earnings per share (in New Taiwan Dollars)

2020

See accompanying notes to consolidated financial statements.

197

													Total equity	70,119,735		-	(2,343,647)	-		90,713	3,757	4,851,875	1,800,103	6,651,978	3,719,020	361,915	(461,455)		-	78,142,016		-	(1,213,392)	135,973	(3,276,719)	4,020,120	743,401	(1,148,469)	76,659,529
											Non-	controlling	interests	6,537,466		-	-	-		-	-	869,408	(55,585)	813,823	-	-	(461,455)		-	6,889,834		-	-	-	84,920	35,856	120,776	(1,148,469)	5,862,141
											Total equity	attributable to	owners of parent	63,582,269		-	(2,343,647)	-		90,713	3,757	3,982,467	1,855,688	5,838,155	3,719,020	361,915	-		-	71,252,182		-	(1,213,392)	135,973	(3,361,639)	3,984,264	622,625	-	70,797,388
													Total	434,085		-	-	-		-	-	-	2,315,443	2,315,443	-	-	-		11	2,749,539		-	-	-	-	3,699,343	3,699,343	-	6,448,882
					Other equity interest	Unrealized gains	(losses) on	financial assets	measured at fair	value through	other Gains (losses)	comprehensive on hedging	income instruments	547,201 (109,356)		- -	- -	- -		- -	- -	- -	175,283 2,179,173	175,283 2,179,173	- -	- -	- -		11 -	722,495 2,069,817		- -	- -	- -	- -	390,804 3,379,012	390,804 3,379,012	- -	1,113,299 5,448,829
EVA AIRWAYS CORP. AND SUBSIDIARIES	Consolidated Statements of Changes in Equity	For the years ended December 31, 2020 and 2019	(Expressed in Thousands of New Taiwan Dollars)	Attributable to owners of parent	Retained earnings				Exchange	differences on	Unappropriated translation of	Capital Legal retained foreign financial	surplus reserve earnings Total statements	6,751,945 1,566,450 10,777,932 12,344,382 (3,760)		- 655,282 (655,282) - -	- - (2,343,647) (2,343,647) -	- - (1,406,188) (1,406,188) -		90,713 - - - -	3,757 - - - -	- - 3,982,467 3,982,467 -	- - (459,755) (459,755) (39,013)	- - 3,522,712 3,522,712 (39,013)	900,000 - - - -	103,285 - - - -	- - - - -		- - (11) (11) -	7,849,700 2,221,732 9,895,516 12,117,248 (42,773)		- 352,270 (352,270) - -	- - (1,213,392) (1,213,392) -	135,973 - - - -	- - (3,361,639) (3,361,639) -	- - 284,921 284,921 (70,473)	- - (3,076,718) (3,076,718) (70,473)	- - - - -	7,985,673 2,574,002 5,253,136 7,827,138 (113,246)
											Advance	receipts for	share capital	230,642		-	-	-		-	-	-	-	-	(180,980)	(49,662)	-		-	-		-	-	-	-	-	-	-	-
												Ordinary	share	43,821,215		-	-	1,406,188		-	-	-	-	-	3,000,000	308,292	-		-	48,535,695		-	-	-	-	-	-	-	48,535,695
														$																									$
														Balance on January 1, 2019	Appropriation of prior year’s earnings:	Legal reserve appropriated	Cash dividends of ordinary share	Stock dividends of ordinary share	Difference between consideration and carrying amount of	subsidiaries acquired or disposed	Changes in equity of associates accounted for using equity method	Profit	Other comprehensive income	Total comprehensive income	Issue of shares	Conversion of convertible bonds	Changes in non-controlling interests	Disposal of investments in equity instruments designated at fair value	through other comprehensive income	Balance on December 31, 2019	Appropriation of prior year’s earnings:	Legal reserve appropriated	Cash dividends of ordinary share	Due to recognition of equity component of convertible bonds issued	Profit (loss)	Other comprehensive income	Total comprehensive income	Changes in non-controlling interests	Balance on December 31, 2020

198

EVA AIRWAYS CORP. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Profit (loss) before tax Adjustments: Adjustments to reconcile profit (loss): Expected credit loss (gain) Depreciation expense Amortization expense Net gains on financial assets or liabilities at fair value through profit or loss Interest expense Interest income Dividend income Shares of profit of associates accounted for using equity method Gains on disposal of property, plant and equipment Gains on disposal of non-current assets classified as held for sale Unrealized foreign exchange gains Others Total adjustments to reconcile profit Changes in operating assets and liabilities: Changes in operating assets: Contract assets Notes receivable, net Notes receivable－related parties Accounts receivable, net Accounts receivable－related parties Inventories Other current assets Total changes in operating assets Changes in operating liabilities: Contract liabilities Notes and accounts payable Accounts payable－related parties Other payables Other current liabilities Net defined benefit liabilities－non-current Other non-current liabilities Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash inflow generated from operations Income taxes paid Net cash flows from operating activities		2020 (4,318,936) (25,341) 27,359,872 428,093 (22,741) 5,027,804 (284,912) (139,645) (172,656) (35,446) (141,369) (1,261,623) (165,776) 30,566,260 (101,422) 834,687 187,563 10,957,413 81,191 66,052 116,521 12,142,005 (16,012,570) (6,704,679) (7,242) (4,374,187) (4,614,217) (918,308) 33,071 (32,598,132) (20,456,127) 10,110,133 5,791,197 (420,584) 5,370,613	2019 6,058,349 21,014 26,671,354 443,418 (7,774) 5,398,838 (839,836) (146,759) (134,791) (1,132,468) - (201,367) (285,021) 29,786,608 3,505,780 90,419 (188,403) (8,781,214) 6,220,133 1,486,541 124,417 2,457,673 1,952,938 (676,124) 21,101 69,480 25,803 (893,861) 61,285 560,622 3,018,295 32,804,903 38,863,252 (1,709,221) 37,154,031
	$

See accompanying notes to consolidated financial statements.

199

EVA AIRWAYS CORP. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (continued)

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) investing activities: Acquisition of financial assets at fair value through other comprehensive income Acquisition of financial assets at amortized cost Acquisition of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or loss Acquisition of investments accounted for using equity method Proceeds from disposal of non-current assets classified as held for sale Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Decrease in other non-current assets Increase in prepayments for business facilities Interest received Dividends received Net cash flows used in investing activities Cash flows from (used in) financing activities: Increase in short-term borrowings Decrease in short-term borrowings Proceeds from issuance of bonds payable Repayments of bonds payable Proceeds from long-term borrowings Repayments of long-term borrowings Payments of lease liabilities Decrease in other non-current liabilities Cash dividends paid Proceeds from issuing shares Interest paid Changes in non-controlling interests Net cash flows used in financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year	2020 $ - (814,278) (2,600,000) 1,590,178 - 997,407 (4,755,272) 107,233 (151,380) 74,506 (7,196,106) 307,858 175,957 (12,263,897) 1,930,000 (2,000,000) 2,995,016 (10,566,000) 44,482,198 (21,801,032) (12,109,670) (84,027) (1,213,392) - (4,247,328) (1,145,203) (3,759,438) (12,607) (10,665,329) 51,534,519 $ 40,869,190	2019 (67,890) - (1,630,000) 1,442,876 (1,997,424) - (15,585,412) 3,161,490 (294,746) 48,835 (8,373,543) 845,088 358,164 (22,092,562) 1,232,072 (1,082,072) - - 27,580,300 (23,350,643) (12,508,129) (22,462) (2,343,647) 3,719,020 (4,650,298) (372,195) (11,798,054) (7,770) 3,255,645 48,278,874 51,534,519

See accompanying notes to consolidated financial statements.

200

EVA AIRWAYS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

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

(1) Company history

EVA Airways Corp. (the “Company”) was incorporated on April 7, 1989, as a corporation limited by shares under special permission of the Republic of China (R.O.C.) Ministry of Transportation and Communications. The address of the Company’ s registered office is No. 376, Sec. 1, Hsin-nan Road, Luchu Dist., Taoyuan City, Taiwan.

The business activities of the Company and its subsidiaries (together referred to as the “ Group” and individually as Group “entities”) are

(a) civil aviation transportation and general aviation business;
(b) maintenance of aircraft, engine and parts, and manufacture of aircraft parts;
(c) ground service at airports;
(d) catering service;
(e) air cargo entrepot;
(f) to carry out any business which is not forbidden or restricted by the applicable laws and regulations, excluding those requiring licensing.

The details are disclosed in note 14.

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

The consolidated financial statements were authorized by the Company’s Board of Directors as of March 22, 2021.

(3) New standards, amendments and interpretations adopted:

(a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. (“FSC”) which have already been adopted.

The details of impact on the Group’s adoption of the new amendments beginning January 1, 2020 are as follows:

(i) Amendments to IFRS 16 “COVID-19-Related Rent Concessions”

As a practical expedient, a lessee may elect not to assess whether a rent concession that meets certain conditions is a lease modification, rather any changes in lease liability are recognized in profit or loss. The amendments have been endorsed by the FSC in July 2020, earlier application from January 1, 2020 is permitted. Related accounting policy is explained in note 4(m).

(Continued)

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EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group has elected to apply the practical expedient for all rent concessions that meet the criteria beginning January 1, 2020, with early adoption. No adjustment was made upon the initial application of the amendments. The amounts recognized in profit or loss for the year ended December 31, 2020 was $262,925.

(ii) Other amendments

The following new amendments, effective January 1, 2020, do not have a significant impact on the Group’s consolidated financial statements:

●Amendments to IFRS 3 “Definition of a Business”
●Amendments to IFRS 9, IAS 39 and IFRS 7 “Interest Rate Benchmark Reform”
●Amendments to IAS 1 and IAS 8 “Definition of Material”
(b) The impact of IFRS issued by the FSC but not yet effective

The Group assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2021, would not have a significant impact on its consolidated financial statements:

●Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9”
●Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform － Phase 2”
(c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

The following new and amended standards, which may be relevant to the Group, 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 Amendments to IAS 1 The amendments aim to promote consistency January 1, 2023 “Classification of Liabilities as in applying the requirements by helping Current or Non-current” companies determine whether, in the statement of balance sheet, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current. The amendments include clarifying the classification requirements for debt a company might settle by converting it into equity.

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

(Continued)

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EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group 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 consolidated 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
－
●Amendments to IAS 16 “Property, Plant and Equipment Proceeds before Intended Use”
－
●Amendments to IAS 37 “Onerous Contracts Cost of Fulfilling a Contract”
●Annual Improvements to IFRS Standards 2018-2020
●Amendments to IFRS 3 “Reference to the Conceptual Framework”
●Amendments to IAS 1 “Disclosure of Accounting Policies”
●Amendments to IAS 8 “Definition of Accounting Estimates”

(4) Summary of significant accounting policies

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

(a) Statement of compliance

These consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as “the Regulations” ) and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations endorsed and issued into effect by the Financial Supervisory Commission, R.O.C. (hereinafter referred to as “IFRSs endorsed by FSC”).

(b) Basis of preparation
(i) Basis of measurement

The consolidated financial statements have been prepared on a historical cost basis except for the following material items in the balance sheets:

1) Financial instruments at fair value through profit or loss are measured at fair value;
2) Financial assets at fair value through other comprehensive income are measured at fair value;
3) Hedging financial instruments are measured at fair value; and
4) The net defined benefit liabilities are recognized as the present value of the defined benefit obligation, less, the fair value of plan assets.
(ii) Functional and presentation currency

The functional currency of each Group entity is determined based on the primary economic environment in which the entity operates. The consolidated financial statements are presented in New Taiwan Dollar, which is the Company’s functional currency. All financial information presented in TWD has been rounded to the nearest thousand.

(Continued)

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EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(c) Basis of consolidation
(i) Principle of preparation of the consolidated financial statements

The consolidated financial statements comprise the Company and subsidiaries. Subsidiaries are entities controlled by the Group. The Group ‘controls’ an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. Intragroup balances and transactions, and any unrealized income and expenses arising from Intragroup transactions are eliminated in preparing the consolidated financial statements. The Group attributes the profit or loss and each component of other comprehensive income to the owners of the parent and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Group.

Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Any difference between the amount by which the noncontrolling interests are adjusted and the fair value of the consideration paid or received will be recognized directly in equity, and the Group will attribute it to the owners of the parent.

(ii) List of subsidiaries in the consolidated financial statements

Name of Investor	Name of Investee	Principal activity Maintenance of aircraft, engine and parts, and manufacture of aircraft parts Ground service at airport Catering service Air cargo entrepot Investing business Investing business Investing business Traveling agency Flight training	Shareholding percentage 2020.12.31 2019.12.31 Note % 79.42 % 79.42 - % 56.33 % 56.33 - % 49.80 % 49.80 Note % 60.625 % 60.625 - % 100.00 % 100.00 - % 100.00 % 100.00 - % 99.00 % 99.00 - % 51.00 % 51.00 - % 100.00 % 100.00 -
			2020.12.31 % 79.42 % 56.33 % 49.80 % 60.625 % 100.00 % 100.00 % 99.00 % 51.00 % 100.00
The Company The Company The Company The Company The Company The Company The Company The Company The Company	Evergreen Aviation Technologies Corp. Evergreen Airline Services Corp. Evergreen Sky Catering Corp. Evergreen Air Cargo Services Corp. Hsiang Li Investment Corp. Sky Castle Investment Ltd. Evergreen Airways Service (Macau) Ltd. PT Perdana Andalan Air Service EVA Flight Training Academy

Note: The Company did not own more than half of the voting rights of the subsidiaries directly or indirectly. However, the Company has the right to appoint more than half of directors of board of directors of the subsidiaries and has control over the board of directors, these subsidiaries are deemed to be a subsidiary of the Company.

(iii) Subsidiaries excluded the consolidated financial statements: None.

(Continued)

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EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(d) Foreign currency

(i) Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of the Group at the exchange rates of the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate of that date. The foreign currency gains or losses on monetary items is the difference between the amortized cost in the functional currency at the beginning of the year adjusted for the effective interest and the payments during the period, and the amortized cost in foreign currency translated at the exchange rate at the reporting date.

Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate of the date the fair value was determined. Non-monetary items in a foreign currency that are measured based on historical cost are translated using the exchange rate at the date of transactions.

Foreign currency differences arising from retranslation are recognized in profit or loss, except for the following differences which are recognized in other comprehensive income that arise from the retranslation：

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 to New Taiwan Dollars (which was expressed in reporting currency) at the exchange rates of the reporting date. The income and expenses of foreign operations are translated to New Taiwan Dollars (which was expressed in reporting currency) at average rate. Foreign currency 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 Group disposes of any part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interest. When the Group disposes of only part of investment in an associate of joint venture that includes a foreign operation while retaining significant or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely predicted in the foreseeable future, the foreign currency gains and losses arising from such items are considered as a part of investment in the foreign operation and are recognized in other comprehensive income.

(Continued)

205

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

An asset is classified as current under one of the following criteria, and all other assets are classified as non-current.

(i) It expects to realize the asset, or intends to sell or consume it, in its normal operating cycle;
(ii) It holds the asset primarily for the purpose of trading;
(iii) It expects to realize the asset within twelve months after the reporting date; or
(iv) The asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date.

A liability is classified as current under one of the following criteria, and all other liabilities are classified as non-current.

(i) It expects to settle the liability in its normal operating cycle;
(ii) It holds the liability primarily for the purpose of trading;
(iii) The liability is due to be settled within twelve months after the reporting date; or
(iv) The Group does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issuance of equity instruments that do not affect its classification.
(f) Cash and cash equivalents

Cash comprises cash on hand and cash in bank. Cash equivalents are subject to an insignificant risk of changes in their fair value, and are used by the Group in the management of its short-term commitments. Time deposits, in conformity with the aforementioned definition, that are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes, and that are subject to an insignificant risk of changes in their fair value are recognized as cash equivalents.

(g) Financial instruments
(i) Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. Financial assets are classified into the following categories: measured at amortized cost, fair value through other comprehensive income (FVOCI) and fair value through profit or loss (FVTPL).

The Group shall reclassify all affected financial assets only when it changes its business model for managing its financial assets.

(Continued)

206

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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.

A financial asset measured at amortized cost is initially recognized at fair value, plus any directly attributable transaction costs. These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses, and impairment loss, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

2)
Fair value through other comprehensive income (FVOCI)

A debt investment is measured at FVOCI 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 achieved by both collecting contractual cash flows and selling financial assets; 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.

On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment’s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

A financial asset measured at FVOCI is initially recognized at fair value, plus any directly attributable transaction costs. These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses, and impairment losses, deriving from debt investments are recognized in profit or loss; whereas dividends deriving from equity investments are recognized as income in profit or loss, unless the dividend income clearly represents a recovery of part of the cost of the investment. Other net gains and losses of financial assets measured at FVOCI are recognized in OCI. On derecognition, gains and losses accumulated in OCI of debt investments are reclassified to profit or loss. However, gains and losses accumulated in OCI of equity investments are reclassified to retained earnings instead of profit or loss.

Dividend income derived from equity investments is recognized on the date that the Group’s right to receive payment is established.

(Continued)

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EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

3) Fair value through profit or loss (FVTPL)

All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL. On initial recognition, the Group may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Financial assets in this category are measured at fair value at initial recognition. Attributable transaction costs are recognized in profit or loss as incurred. Subsequent changes that are measured at fair value, which take into account any dividend and interest income, are recognized in profit or loss.

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.

4) Impairment of financial assets

The Group recognizes loss allowances for expected credit losses on financial assets measured at amortized cost (including cash and cash equivalents, notes and accounts receivable, other receivables, refundable deposits and other financial assets) and contract assets.

The Group measures loss allowances at an amount equal to lifetime expected credit losses (ECLs), except for the following which are measured as 12-month ECLs:

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 ECLs.

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 months 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 Group is exposed to credit risk.

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

(Continued)

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EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.

The Group considers a financial asset to be in default when the financial asset is more than 365 days past due or the borrower is unlikely to pay its credit obligations to the Group in full.

ECLs 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 Group in accordance with the contract and the cash flows that the Group expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

At each reporting date, the Group assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘ creditimpaired’ 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 asset 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 60 days 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.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at FVOCI, the loss allowance is recognized in other comprehensive income instead of reducing the carrying amount of the asset. The Group recognizes the amount of expected credit losses (or reversal) in profit or loss, as an impairment gain or loss.

The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Group determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due.

(Continued)

209

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

5) Derecognition of financial assets

Financial assets are derecognized when the contractual rights to the cash flows from the assets expire, or when the Group transfers substantially all the risks and rewards of ownership of the financial assets or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Group 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 Group 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.

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.

Compound financial instruments issued by the Group comprise convertible bonds that can be converted to share capital at the option of the holder when the number of shares to be issued is fixed.

The liability component of a compound financial instrument is recognized initially at the fair value of a similar liability that does not have any equity conversion option. The equity component is recognized initially 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 re-measured subsequent to initial recognition.

Interest and gain or loss related to the financial liabilities are recognized in profit or loss, and are included in non-operating income and expenses.

On conversion, the financial liability is reclassified to equity, and no gain or loss is recognized.

(Continued)

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EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

2) Financial liabilities at fair value through profit or loss

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, and included in other gains or losses under non-operating income and expenses.

3) Other financial liabilities

Financial liabilities not classified as held-for-trading or designated as at FVTPL, which comprise short-term and long-term borrowings, and trade payables and other payables, shall be measured at fair value plus any directly attributable transaction cost at the time of initial recognition. Subsequent to initial recognition, they are measured at amortized cost calculated using the effective interest method. Interest expense not capitalized as capital cost is recognized in profit or loss, and is under non-operating income and expenses.

4) Derecognition of financial liabilities

The Group derecognizes a financial liability when its contractual obligation has been discharged or cancelled or has expired.

The difference between the carrying amount of a financial liability removed and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss, and is included in other gains and losses under non-operating income and expenses.

5) Offsetting of financial assets and liabilities

The Group presents financial assets and liabilities on a net basis when the Group has the legally enforceable rights to offset and intends to settle such financial assets and liabilities on a net basis or to realize the assets and settle the liabilities simultaneously.

(iii) Derivative financial instruments and hedge accounting

The Group holds derivative financial instruments to hedge its foreign currency, interest rate and fuel price exposures. Derivatives are initially measured at fair value. Any attributable transaction 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.

(Continued)

211

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group designates its hedging instruments, including derivatives, embedded derivatives, and non-derivative instruments for a hedge of a foreign currency risk, as a fair value hedge, cash flow hedge, or hedge of a net investment in a foreign operation. Foreign exchange risks of firm commitments are treated as fair value hedges. For a hedge of foreign currency risk with a highly probable forecast transaction, the foreign currency risk component of a non-derivative financial asset or a non-derivative financial liability may be designated as a hedging instrument provided.

An initial designated hedging relationships, the Group documents the risk management objectives and strategy for undertaking the hedge. The Group also documents the economic relationship between the hedged item and the hedging instrument, including whether the changes in cash flows of the hedged items and hedging instrument are expected to offset each other.

When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive income and － accumulated in “other equity gains (losses) on hedging instruments”. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in profit or loss.

When the hedged item is recognized in profit or loss, the amount accumulated in equity and retained in other comprehensive income is reclassified to profit or loss in the same period or in the periods during which the hedged item affects the profit or loss, and is presented in the same accounting item with the hedged item recognized in the statement of comprehensive income. However, for a cash flow hedge of a forecast transaction recognized as a nonfinancial asset or － liability, the amount accumulated in “other equity gains (losses) on hedging instruments” and retained in other comprehensive income is reclassified as the initial cost of the nonfinancial asset or liability.

The Group 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.

(h) Inventories

Inventories are measured at the lower of cost or net realizable value. The cost of inventories is based on 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.

(Continued)

212

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Non-current assets or disposal group classified as held for sale

Non-current assets or disposal groups comprising assets and liabilities that are highly probable to be recovered primarily through sale rather than through continuing use, are reclassified as held for sale. Immediately before classification as held for sale , the assets, or components of a disposal group, are remeasured in accordance with the Group’s accounting policies. Thereafter, generally, the assets or disposal groups are measured at the lower of their carrying amount or fair value less costs to sell.

Once classified as held for sale, property, plant and equipment and investment property are no longer depreciated.

(j) Investment in associates

Associates are those entities in which the Group has significant influence, but not control or joint control, over their financial and operating policies.

Investments in associates are accounted for using the equity method and are recognized initially at cost. The cost of the investment includes transaction costs. The carrying amount of the investment in associates includes goodwill arising from the acquisition less any accumulated impairment losses.

The consolidated financial statements include the Group’ s share of the profit or loss and other comprehensive income of equity-accounted investees, after adjustments to align the accounting policies with those of the Group, from the date on which significant influence commences until the date on which significant influence ceases. The Group recognizes any changes of its proportionate share in the investee within capital surplus, when an associate’s equity changes due to reasons other than profit and loss or comprehensive income, which did not result in changes in actual significant influence.

Unrealized profits resulting from transactions between the Group and an associate are eliminated to the extent of the Group’ s interests in the associate. Unrealized losses on transactions with an associate are eliminated in the same way, except to the extent that the underlying asset is impaired.

When the Group’s share of losses of an associate equals or exceeds its interests in an associate, it discontinues recognizing its share of further losses. Additional losses are provided for, and a liability is recognized, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.

(k) Investment property

Investment property is the property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business use in the production or supply of goods or services or for administrative purposes. Investment property is measured at cost on initial recognition. Subsequent to initial recognition, investment properties are measured at initial acquisition cost less any subsequent accumulated depreciation. Depreciation methods, useful lives and residual values are in accordance with the policy of property, plant and equipment. Cost includes expenditure that is directly attributable to the acquisition of the investment property and any other costs directly attributable to bringing the investment property to a working condition for its intended use, and capitalized borrowing costs.

When the use of an investment property changes such that it is reclassified as property, plant and equipment, its book value at the date of reclassification becomes its cost for subsequent accounting.

(Continued)

213

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is directly attributed to the acquisition of the asset. Cost also includes transfers from equity of any gain or loss on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item shall be depreciated separately, unless the useful life and the depreciation method of the significant part of an item of property, plant and equipment are the same as the useful life and depreciation method of another significant part of that same item.

The gain or loss arising from the disposal of an item of property, plant and equipment shall be determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item, and it shall be recognized as other gains and losses.

(ii) Major inspection and overhaul cost

Major inspection and overhaul expenditures of self-owned and leased aircraft are capitalized as costs of aircraft and leased assets by components, and are depreciated using the straight-line method over the estimated useful life of the overhaul. Costs of designated inspections to be performed at the end of the lease term of leased aircraft are estimated and depreciated using the straight-line method over the lease term.

(iii) Subsequent cost

Subsequent expenditure is capitalized only when it is probable that the future economic benefits associated with the expenditure will flow to the Group. The carrying amount of those parts that are replaced is derecognized. Ongoing repairs and maintenance are expensed as incurred.

(iv) Depreciation

The depreciable amount of an asset is determined after deducting its residual value, and it shall be allocated on a systematic basis over the asset’ s useful life. Items of property, plant and equipment with the same useful life may be grouped in determining the depreciation charge. The remainder of the items may be depreciated separately. The depreciation charge for each period shall be recognized in profit or loss.

The estimated useful lives for the current and comparative years of significant items of property, plant and equipment are as follows:

1) Land has unlimited useful life and therefore is not depreciated.
2) Building and structures:

Main Buildings 10 to 55 years Others 4 to 35 years

(Continued)

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EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

3) Machinery and equipment:

Electro-mechanical equipment 2 to 18 years Others 1 to 18 years 4) Aircraft: Airframes 15 to 18 years Aircraft cabins 12 years Engines 15 to 18 years

5) Leased improvements are depreciated over the shorter of the lease term or the estimated useful life.

Depreciation methods, useful lives, and residual values are reviewed at each fiscal year-end date. If expectations differ from the previous estimates, the change is accounted for as a change in an accounting estimate.

A property is reclassified to investment property at its carrying amount when the use of the property changes from owner-occupied to investment purpose.

(m) Leases

(i) Identifying a lease

At inception of a contract, the Group 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. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:

1) the contract involves the use of an identified asset – this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified; and
2) the Group has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and
3) the Group has the right to direct the use of the asset:
The Group has the right to direct the use of the asset when it has the decision-making rights that are most relevant to changing how and for what purpose the asset is used.
In rare cases where the decision on how, and for what purpose, the asset is used is predetermined, the Group has the right to direct the use of an asset if either:

(Continued)

215

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

－ the Group has the right to operate its asset throughout the period of use, without the supplier having the right to change those operating instructions; or
－ the Group designed the asset in a way that predetermines how, and for what purpose, it will be used throughout the period of use.

At inception or on reassessment of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices. In addition, the Group has elected not to separate its non-lease components and lease accounts, but instead combine them as a single lease component by classifying their underlying assets.

(ii) As a leasee

The Group 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 Group’s incremental borrowing rate. Generally, the Group 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.

The lease liability is measured 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;
－ there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee;

(Continued)

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EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

－ there is a change in the assessment on whether it will have the option to exercise a purchase of the underlying asset;
－ there is a change in the assessment on lease term as to whether it will be extended or terminated; and
－
the modifications of the lease underlying asset, scope or other terms.

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

The Group has elected not to recognize right-of-use assets and lease liabilities for short-term leases and leases of low-value assets. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

For sale-and-leaseback transactions, the Group applies the requirements for determining when a performance obligation is satisfied in IFRS 15 to determine whether the transfer of an asset is accounted for as a sale of the asset. If the transfer of an asset satisfies the requirement of IFRS 15 to be accounted for as a sale of the asset, the Group measures the right-of-use asset arising from the leaseback at the proportion of the previous carrying amount of the asset that relates to the right of use retained. Accordingly, the Group recognizes only the amount of any gain or loss that relates to the rights transferred to the buyer-lessor. If the transfer of an asset does not satisfy the requirement of IFRS 15 to be accounted for as a sale of the asset, the Group will continue to recognize the transferred asset and shall recognize the financial liability equal to the transfer proceeds.

As a practical expedient, the Group elects not to assess whether all rent concessions that meets all the following conditions are lease modifications or not:

－
the rent concessions occurring as a direct consequence of the COVID-19 pandemic;
－ the change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change;
－ any reduction in lease payments affects only payments originally due on or before June 30, 2021; and
－
there is no substantive change to other terms and conditions of the lease.

(Continued)

217

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

In accordance with the practical expedient, the effect of the change in the lease liability is reflected in profit or loss in the period in which the event or condition that triggers the rent concession occurs.

(iii) As a lessor

When the Group 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 Group 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 Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, the Group applies IFRS 15 to allocate the consideration in the contract.

The Group recognizes lease payments received under operating leases as income over the lease term as part of income.

(n) Impairment of non-financial assets

The Group measures whether impairment occurred in non-financial assets (except for inventories and deferred tax assets), at each reporting date, and estimates their recoverable amount. If it is not possible to determine the recoverable amount (fair value less costs to sell and value in use) for an individual asset, then the Group will have to determine the recoverable amount for the asset’s cashgenerating unit.

The recoverable amount for an individual asset or a cash-generating unit is the higher of its fair value less costs to sell and its value in use. If, and only if, the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset shall be reduced to its recoverable amount. That reduction is an impairment loss. An impairment loss shall be recognized immediately in profit or loss.

The Group should assess at each reporting date whether there is any indication that an impairment loss recognized in prior periods for an asset other than goodwill may no longer exist or may have decreased. If any such indication exists, the entity shall estimate the recoverable amount of that asset. An impairment loss recognized in prior periods for an asset other than goodwill shall be reversed if, and only if, there has been a change in the estimates used to determine the asset’ s recoverable amount since the last impairment loss was recognized. If this is the case, the carrying amount of the asset shall be increased to its recoverable amount. That increase is a reversal of previously recognized impairment loss. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount net of depreciation or amortization that would have been determined if no impairment loss had been recognized.

(Continued)

218

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(o) Provision

A provision is recognized if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance costs.

The estimated recovery costs are incurred through the lease of aircraft. The Group’ s restoration obligations are based on necessary maintenance expenses under the lease contracts of the aircraft, in which the Group expects all of the maintenance expenses to be reimbursed when the Group returns back all its rented aircraft. The amounts are estimated by gauging the maintenance experiences of similar types of aircraft, the actual maintenance expenses in the past, and the historical information on the usage of the aircraft.

(p) Intangible assets

The Group entered into contracts with the government to provide public service in infrastructure. The Group is obliged to construct the public sector asset and provide operation service for 30 years since the public sector asset was contracted. At the end of the operating period, the public sector asset should be returned to the government for no incremental consideration. Based on the IFRIC 12 "Service Concession Arrangements", the Group allocates the consideration received by reference to the relative fair values of the construction and operation services delivered. Subsequently, the Group recognizes and measures revenue in accordance with IFRS 15 "Revenue from Contracts with Customers". The fair value of the services is determined as intangible assets or financial assets, by the nature of the consideration given by the grantor to the operator and by reference to the contract terms.

Intangible assets that are acquired by the Group are measured at cost less accumulated amortization and any accumulated impairment losses. Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates.

The amortization amount is the cost of an asset less its residual value. Amortization is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill and intangible assets with indefinite useful lives, from the date that they are available for use. The estimated useful lives were as follows:

(i) Operating concession: 30 years
(ii) Computer software: 2 to 5 years

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

(Continued)

219

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(q) Revenue recognition

(i) Revenue from contracts with customers

Revenue is measured based on the consideration to which the Group expects to be entitled in exchange for transferring goods or services to a customer. The Group 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 Group’s main types of revenue are explained below.

1) Aviation transportation revenue

Ticket sales for passengers and cargo are recorded as unearned revenue. They are included in contract liabilities-current, and recognized as revenue when service is provided.

2) Customer loyalty program

The Group has a customer loyalty program, whereby, customers are awarded rights of accumulating mileages during their flights, and the fair value of the consideration received or receivable in respect of initial sale is allocated between the rights of accumulated mileages and the other components of the sale. The amount allocated to rights of accumulated mileages is estimated by the fair value of the redeemable part of the customer loyalty program and by reference to past experience of probability of redemption. Thus, the corresponding fair value is estimated and deferred, and service revenues will not be recognized until the rights have been redeemed and obligations are fulfilled. Also, contract liabilities will be converted into revenues when it is expected that the rights are probable not to be redeemed.

3) Maintenance services

The Group provides maintenance services. Revenue from providing services is recognized in the accounting period in which the services are rendered. 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 work performed incurred to date as a proportion of the total estimated work of the transaction.

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 Group exceed the payment, a contract asset is recognized. If the payments exceed the services rendered, a contract liability is recognized.

If the contract includes an hourly fee, revenue is recognized in the amount to which the Group has a right to invoice. Customers are invoiced on a monthly basis and consideration is payable when invoiced.

(Continued)

220

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

4) Sale of goods

The Group 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 utility of the product, 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 Group has objective evidence that all criteria for acceptance have been satisfied.

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

5) Financing components

The Group 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 Group 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 Group recognizes as an asset the incremental costs of obtaining a contract with a customer if the Group expects to recover those costs. The incremental costs of obtaining a contract are those costs that the Group 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 Group 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 fulfill 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 Group recognizes an asset from the costs incurred to fulfil a contract only if those costs meet all of the following criteria:

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

(Continued)

221

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated 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 Group cannot distinguish whether the costs relate to unsatisfied performance obligations or to satisfied performance obligations (or partially satisfied performance obligations), the Group recognizes these costs as expenses when incurred.

(r) Government grants

The Group recognizes an unconditional government grant related COVID-19 as reduction of expenses when the grant becomes receivable. Grants that compensate the Group for expenses or losses incurred are recognized in profit or loss in the periods in which the expenses or losses are recognized.

(s) Employee benefits

(i) Defined contribution plans

Obligations for contributions to defined contribution pension plans are recognized as an employee benefit expense in profit or loss in the periods during which services are rendered by employees.

(ii) Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Group’s net obligation in respect of the defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. The fair value of any plan assets is deducted. The discount rate is the yield at the reporting date on market yields of government bonds that have maturity dates approximating the terms of the Group’ s obligations and that are denominated in the same currency in which the benefits are expected to be paid.

The calculation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to the Group, the recognized asset is limited to the total of the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements that apply to any plan in the Group. An economic benefit is available to the Group if it is realizable during the life of the plan, or on settlement of the plan liabilities.

When the benefits of a plan are improved the expense of the increased benefit relating to past service by employees is recognized immediately in profit or loss.

Remeasurements of the net defined benefit liability (asset), which comprise (1) actuarial gains and losses, (2) the return on plan assets (excluding interest) and (3) the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income. The Group recognizes the amounts in retained earnings.

(Continued)

222

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group recognizes gains or losses on the curtailment or settlement of a defined benefit plan when the curtailment or settlement occurs. The gain or loss on curtailment or settlement comprises any resulting change in the fair value of plan assets, any change in the present value of the defined benefit obligation.

(iii) Short-term employee benefits

Short-term employee benefit obligations are accrued when the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee. A liability is recognized when the obligation can be estimated reliably.

(t) Share-based payment

The grant-date fair value of share-based payment awards granted to employees is recognized as employee expenses, with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the awards. The amount recognized as an expense is adjusted to reflect the number of awards whose related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized as an expense 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 board of directors authorized the Chairman of the Company to set up the exercise price.

(u) Income taxes

Income tax expenses include both 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 shall be recognized in profit or loss.

Current taxes include tax payables and tax deduction receivables on taxable gains (losses) for the year calculated using the statutory tax rate on the reporting date or the actual legislative tax rate, as well as tax adjustments related to prior years.

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 shall not be recognized for the exceptions below:

(i) Assets and liabilities that are initially recognized but are not related to a business combination and have no effect on net income or taxable gains (losses) during the transaction.
(ii) Temporary differences arising from equity investments in subsidiaries or joint ventures where there is a high probability that such temporary differences will not reverse.
(iii) Initial recognition of goodwill.

(Continued)

223

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Deferred tax assets and liabilities shall be measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates that have been enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities may be offset against each other if the following criteria are met:

(i) The Group has the legal right to settle tax assets and liabilities on a net basis; and
(ii) the taxing of deferred tax assets and liabilities fulfills one of the scenarios below:
1) levied by the same taxing authority; or
2) levied by different taxing authorities, but where each such authority intends to settle tax assets and liabilities (where such amounts are significant) on a net basis every year of the period of expected asset realization or debt liquidation, or where the timing of asset realization and debt liquidation is matched.

A deferred tax asset should be 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 profit will be available against which the unused tax losses, unused tax credits, and deductible temporary differences can be utilized. Such unused tax losses, unused tax credits, and deductible temporary differences shall also be re-evaluated at each reporting date, and adjusted based on the probability that future taxable profit will be available against which the unused tax losses, unused tax credits, and deductible temporary differences can be utilized.

(v) Earnings per share (EPS)

The Group discloses the Company’s basic and diluted earnings per share attributable to ordinary equity holders of the Company. The calculation of basic earnings per share is based on the profit or loss attributable to the ordinary equity holders of the Company divided by the weighted-average number of ordinary shares outstanding. The calculation of diluted earnings per share is based on the profit or loss attributable to ordinary equity holders of the Company, divided by the weightedaverage number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares, such as convertible bonds and employee compensation.

(w) Operating segment

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Group). Operating results of the operating segment are regularly reviewed by the Group’s chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance. Each operating segment consists of standalone financial information.

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

The preparation of the consolidated financial statements in conformity with the Regulations and the IFRSs endorsed by the FSC requires management to make judgments, estimates, and assumptions 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.

(Continued)

224

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Management continues to monitor the accounting estimates and assumptions. Management recognizes any changes in the accounting estimates during the period and the impact of the changes in the accounting estimates in the next year.

There is no information about critical judgments in the consolidated financial statements.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next year is as follow. Those assumptions and estimations have been updated to reflect the impact of COVID-19 pandemic:

－
(a) Contract liabilities mileage redemption revenue

For the rights of accumulated mileages that are estimated by using the fair value of the redeemable part of the customer loyalty program and, the reference to past experience of probability of redemption; please refer to note 4(q) for further details on related matter. Changes in fair value per － mileage or redemption rate may have a material impact on the contract liabilities mileage － redemption revenue. Also, contract liabilities mileage redemption revenue will be converted into revenues when the member actually redeems the mileage or it is expected that the rights are probable － not to be redeemed; please refer to note 6(x) for estimation of contract liabilities mileage redemption revenue.

(b) Impairment of long-term non-financial assets

During the process of impairment assessment, the Group relies on subjective judgment to determine the individual cash flows of a specific group of assets, useful lives and estimates future gains and losses according to the usage of assets and business characteristics; please refer to note 4(n) for further details on related matter. Alteration of estimates from any change in economic conditions or business strategy may lead to impairment loss in the future; please refer to note 6(k) for further description of the key assumptions used to determine the recoverable amount.

The accounting policy and disclosure of the Group include measuring the financial assets and financial liabilities at fair value. The accounting department of the Group uses information of external information to make the evaluation result agreeable to the market status and to ensure that the data resources are independent, reliable and consistent with the other resources. The accounting department of the Group regularly revises the evaluation models and the input parameters, makes retrospective review and makes essential adjustments to ensure that the evaluation results is reasonable.

When measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

– Level 1: quoted prices (unadjusted) in active markets for identical 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 asset or liability that are not based on observable market data (unobservable inputs).

(Continued)

225

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Further information about the assumptions made in measuring fair values is included in notes 6(g), 6(m) and 6(aa).

(6) Explanation of significant accounts

(a) Cash and cash equivalents

Cash on hand Cash in bank Short-term notes	2020.12.31 $ 83,400 40,785,790 - $ 40,869,190	2019.12.31
		85,221 51,349,298 100,000
		51,534,519

Refer to note 6(aa) for the interest rate risk and sensitivity analysis of the financial assets and liabilities of the Group.

(b) Financial assets and liabilities
(i) Financial assets and liabilities at fair value through profit or loss

Financial assets mandatorily measured at fair value through profit or loss: Money market funds Convertible bonds with embedded derivatives Financial liabilities mandatorily measured at fair value through profit or loss: Convertible bonds with embedded derivatives	2020.12.31 $ 1,978,251 2,793 $ 1,981,044 2020.12.31 $ -	2019.12.31
		961,356 -
		961,356
		2019.12.31
	$	3,274

The derivative financial instruments arose from the issuance of convertible bonds of the Group were stated in note 6(p).

－
(ii) Financial assets at amortized cost current

Time deposits over three months		2020.12.31 807,013	2019.12.31
	$		-

(Continued)

226

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

Equity investments at fair value through other comprehensive income: Publicly traded stocks Non-publicly traded stocks	2020.12.31 $ 1,316,591 1,728,203 $ 3,044,794	2019.12.31 1,076,109 1,570,214 2,646,323

The Group designated the investments shown above as equity securities as at fair value through other comprehensive income because these equity securities represent those investments that the Group intends to hold for long-term for strategic purposes.

For the year ended December 31, 2019, the Group acquired the shares of UNI Airways Corp. from other related parties amounting to $67,890. There was no such transaction for the year ended December 31, 2020.

For the year ended December 31, 2019, the Group has sold its equity securities as at fair value through other comprehensive income. The shares sold had a fair value of $50. And the Group recognized a loss of $11, which was accounted for as other equity. The loss has been transferred to retained earnings. There was no such transaction for the year ended December 31, 2020.

(iv) For credit risk and market risk, please refer to note 6(aa).

(v) The aforementioned financial assets were not pledged.

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

Cash flow hedge:

Financial assets for hedging: Fuel option agreements Financial liabilities for hedging: Forward exchange contracts Foreign currency component of non-derivative lease liabilities Total Current Non-current
	$

(Continued)

227

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Fuel option agreements

The Group needs fuel for operating. However, cash flow risk will occur if the future cash flows for fuel fluctuate due to the floating market prices. The Group evaluates the risk as significant, and thus, hedges the risk by signing fuel option agreements. The cash flow hedged items and derivative financial hedging instruments were as follows:

Hedged item	Hedging instrument	Fair value of assigned hedging instrument 2020.12.31 2019.12.31 $ - 37,428	Period when Period when cash flows are profit or loss expected to occur is affected 2020 2020
		2020.12.31 $ -
Floating price of fuel	Option agreements

(ii) Forward exchange contracts

The Group’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 Group were as follows:

Forward exchange purchased		2019.12.31	2019.12.31
	Contract Amount (in thousands) USD$ 31,000	Currency TWD to USD	Maturity dates Average strike price 2020/04/01~2020/10/05 USD29.7~30.7
	USD$

There was no such transaction as of December 31, 2020.

(iii) The foreign currency component of non-derivative lease liabilities

The Group uses the foreign currency component of lease liabilities to hedge foreign currency risk on the cash inflow from operating revenue with a highly probable forecast transaction. As of December 31, 2020 and 2019, the cash flow hedged items and non-derivative financial hedging instruments were as follows:

Hedged item Foreign currency of operating revenue	Hedging instrument	Lease liabilities of assigned hedging instrument 2020.12.31 2019.12.31 $ 88,632,815 98,291,070	Period when cash flows are expected to occur Period when profit or loss is affected 2020~2032 2020~2032
		2020.12.31 $ 88,632,815
	Foreign currency of lease liabilities

(Continued)

228

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iv) The details arising from cash flow hedges for the years ended December 31, 2020 and 2019, were as follows:

Account Item	2020 $ 4,223,765 $ 1,523,195 $ 21,902 $ (561,963) $ 2,574	2019 2,723,966 (19,066) (42,721) 92,735 -
Recognized in other comprehensive income during the period Reclassification from equity to increase (decrease) in operating costs for the period Reclassification from equity to other non-current assets for the period Reclassification from equity to exchange losses (gains) for the period Ineffective portion of forward exchange hedge recognized in profit or loss

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

(d) Notes and accounts receivable

Notes receivable (including related parties) Accounts receivable (including related parties) Less: allowance for impairment	2020.12.31 $ 9,464 6,885,217 (215,412) $ 6,679,269	2019.12.31 1,031,714 17,925,514 (241,563) 18,715,665

The Group 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 accounts receivable have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward-looking information. The loss allowance provision was determined as follows:

2020.12.31	2020.12.31
Notes and accounts receivable (including related parties) carrying amount $ 6,729,207 95,708 26,681 24,467 18,618 $ 6,894,681	Weighted- average loss rate 1.04% 82.65% 88.00% 100% 100%	Loss allowance provision
		69,745 79,102 23,480 24,467 18,618
		215,412

(Continued)

229

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

2019.12.31	2019.12.31
Notes and accounts receivable (including related parties) carrying amount $ 18,657,239 233,332 39,050 9,466 18,141 $ 18,957,228	Weighted- average loss rate 0.08% 69.89% 97.70% 83.99% 100%	Loss allowance provision
		14,238 163,081 38,153 7,950 18,141
		241,563

The movements in the allowance for notes and accounts receivable were as follow:

Balance on January 1 Impairment losses recognized (reversed) Amounts written off Balance on December 31	2020 $ 241,563 (25,486) (665) $ 215,412	2019
		221,845 21,014 (1,296)
		241,563

The aforementioned notes and accounts receivable were not pledged. Other credit risk information please refer to note 6(aa).

(e) Other receivables

Other receivables－related parties Others Less: allowance for impairment	2020.12.31 $ 241,094 168,876 (145) $ 409,825	2019.12.31
		294,096 139,143 -
		433,239

For the year ended December 31, 2020, the Group was awarded government grants amounting to $1,708,635 due to COVID-19 pandemic. The grants that compensated the Group for expenses or losses incurred were recognized in profit or loss in the periods in which the expenses or losses were recognized. As of December 31, 2020, the receivables related to the abovementioned grant amounted to $138,840. There was no such transaction for the year ended December 31, 2019.

The movements in the allowance for other receivables were as follow:

Balance on January 1 Impairment losses recognized Amounts written off Balance on December 31	2020	2020
	$ - 145 - $ 145
		145

(Continued)

230

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

There was no change on the movements in the allowance for other receivables for the year ended December 31, 2019.

The aforementioned other receivables were not pledged. Other credit risk information please refer to note 6(aa).

(f) Inventories
(i) The components were as follows:

Aircraft spare parts Consumables for use and merchandise for in-flight sales Fuel for aircraft and others	2020.12.31 $ 453,564 1,143,990 1,657,610 $ 3,255,164	2019.12.31
		563,428 1,270,042 1,518,888
		3,352,358

(ii) Except for cost of goods sold and inventories recognized as expenses, the gains or losses which were recognized as operating costs were as follows:

Losses on (gains on reversal) valuation of inventories and obsolescence Unallocated fixed manufacturing overhead Losses (gains) on inventory count Proceeds from disposal of scraps Total	2020 $ (685,868) 269,532 24 (1,828) $ (418,140)	2019
		(454,559) 266,829 45 (7,827)
		(195,512)

As of December 31, 2020 and 2019, these inventories were not pledged.

(g) Non-current assets or disposal group classified as held for sale

A part of the office building in Los Angeles was presented as non-current assets or disposal group classified as held for sale following the expectation of the Group’s management to sell part of the building. The efforts to sell the disposal group have commenced, and sales are expected in 2020 to 2021. As of December 31, 2020 and 2019, the non-current assets or disposal group classified as held for sale comprised assets amounting to $852,175 and $1,233,824, respectively, and liabilities amounting to $1,142 and $140,810, respectively. The details were as follows:

Property, plant and equipment Other payables		2020.12.31 852,175 1,142	2019.12.31
	$ $		1,233,824
			140,810

As of December 31, 2020 and 2019, the non-recurring fair value measurements for non-current assets or disposal group classified as held for sale of $1,012,756 and $1,511,710, respectively (before costs to sell amounted to $52,373 and $78,050, respectively) have been categorized as a Level 2 fair value based on the observable inputs with settled deals.

(Continued)

231

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(h) Investments accounted for using equity method

A summary of the Group’ s financial information for investments accounted for using the equity method at the reporting date is as follows:

Associates

	2020.12.31 2,145,944	2019.12.31
$		2,055,220

(i) Associate which is material to the Group consisted of the followings:

Name of the associate	Nature of relationship with the Group	Principal place of business or country of incorporation of the associate	The proportion of shareholding and voting rights
			2020.12.31 2019.12.31 % 49.00 % 49.00
GE Evergreen Engine Services Corp. (note)	Maintenance, manufacturing, and sales of aircraft, engine and engine components	Taiwan

Note: In December 2019, the Group acquired the shares of GE Evergreen Engine Services Corp. in cash amounting to $1,942,363. The Group’s shareholding percentage in GE Evergreen Engine Services Corp. has increased from 19.9% to 49%. Therefore, it became an associate which is material to the Group.

The summarized financial information of the abovementioned associate which is material to the Group is as follows. The financial information has been prepared in accordance with the IFRS endorsed by the FSC. The amounts included in the IFRS financial statements of the associate have been adjusted to reflect the adjustments made by the entity when using the equity method, such as fair value adjustments made at the time of acquisition and adjustments for differences in accounting policies.

The summarized financial information of GE Evergreen Engine Services Corp. was listed as follows:

Current assets Non-current assets Current liabilities Non-current liabilities Net assets Net assets attributable to the Group	2020.12.31 $ 4,396,851 3,108,528 2,642,077 502,424 $ 4,360,878 $ 2,136,830	2019.12.31
		2,124,562 2,867,427 598,647 228,388
		4,164,954
		2,040,827

(Continued)

232

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Operating revenues
Profit (loss)
Other comprehensive income
Comprehensive income
Comprehensive income attributable to the Group
Share of net assets of the associate as of January 1
Comprehensive income attributable to the Group
Increase
Additional capital surplus from disproportionate investment
Dividends received from the associate
Share of net assets of the associate as of December 31
Less: downstream transaction unrealized gain
Carrying amount of the associate equity as of December 31

(ii) The Group’s financial information for investments accounted for using the equity method that are individually insignificant was as follows:

are individually insignificant was as follows:
Carrying amount of individually insignificant associates’ equity Attributable to the Group: Profit (loss) Other comprehensive income Comprehensive income
	$

In 2019, the Group gradually acquired the shares of EverFun Travel Service Corp. (hereinafter referred to as EverFun) in cash. The Group’s shareholding percentage in EverFun has been increased from 0.05% to 26.48%. Therefore, the Group has significant influence on EverFun.

(iii) The aforementioned investments accounted for using equity method were not pledged.

(i) Changes in a parent’s ownership interest in subsidiaries

On August 13, 2018, a resolution was approved during the two separate board meetings of the Company’s subsidiaries, Evergreen Aviation Technologies Corp. (hereinafter referred to as EGAT) and Evergreen Aviation Precision Corp. (hereinafter referred to as EGAP) to merge EGAT and EGAP, with EGAT being the surviving company, and EGAP, the dissolved entity. The merger date was set on February 28, 2019.

(Continued)

233

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

In first quarter of 2019, the Company disposed of equity share of EGAP to EGAT with a carrying amount of $415,426. And the Company acquired 9,512 thousand shares of EGAT with a fair value of $506,139. Besides, due to the merger of subsidiaries, the Company recognized capital surplus of difference between acquiring subsidiary’s equity and carrying amount amounting to $90,713. Since the aforementioned merger date, the Company’s shareholding percentage in EGAT has decreased from 80.00% to 79.42%. There was no such transaction for the year ended December 31, 2020.

On November 18, 2020, a resolution was approved during the board meeting of EGAT for a capital reduction of 300,000 thousand shares amounting to $3,000,000, wherein EGAT would refund cash to its shareholders thereafter. The Company received the amount of $2,382,515 in cash according to the shareholding percentage on December 10, 2020 (the date of capital reduction) of EGAT. There was no such transaction for the year ended December 31, 2019.

(j) Subsidiaries with material non-controlling interests

The subsidiaries that have non-controlling interests which are material to the Group were listed as follows:

Name of the subsidiary Evergreen Sky Catering Corp. Evergreen Aviation Technologies Corp.	Principal place of business or country of incorporation of the subsidiary Taiwan Taiwan	The proportion of ownership interests and voting rights held by non-controlling interests 2020.12.31 2019.12.31 % 50.2 % 50.2 % 20.58 % 20.58

The summarized financial information of the abovementioned subsidiaries is as follows. The financial information has been prepared in accordance with the IFRS endorsed by the FSC. The amounts included in the IFRS financial statements of the associate have been adjusted to reflect the adjustments made by the entity when using the equity method, such as fair value adjustments made at the time of acquisition and adjustments for differences in accounting policies. The amounts in the summarized financial information shall be the amounts before the inter-company eliminations.

(i) The summarized financial information of Evergreen Sky Catering Corp. was listed as follows:

Current assets Non-current assets Current liabilities Non-current liabilities Net assets Carrying amounts of non-controlling interests Operating revenues Profit (loss) Other comprehensive income Comprehensive income Profit (loss) attributable to non-controlling interests Comprehensive income attributable to non-controlling interests	2020.12.31 $ 1,127,503 5,730,933 445,882 2,198,600 $ 4,213,954 $ 2,115,405 2020 $ 881,524 $ (424,530) 11,588 $ (412,942) $ (213,114) $ (207,297)	2019.12.31
		1,042,871 5,830,540 692,961 1,480,349
		4,700,101
		2,359,450
		2019
		3,576,706
		614,861 (11,768)
		603,093
		308,660
		302,753

(Continued)

234

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Cash flows from (used in) operating activities Cash flows used in investing activities Cash flows from (used in) financing activities Net increase (decrease) in cash and cash equivalents Dividend paid for non-controlling interests	2020 $ (30,850) (74,288) 681,610 $ 576,472 $ 36,749	2019 854,022 (420,629) (668,456) (235,063) 66,816

(ii) The summarized financial information of Evergreen Aviation Technologies Corp. was listed as follows:

Current assets Non-current assets Current liabilities Non-current liabilities Net assets Carrying amounts of non-controlling interests Operating revenues Profit Other comprehensive income Comprehensive income Profit attributable to non-controlling interests Comprehensive income attributable to non-controlling interests Cash flows from operating activities Cash flows used in investing activities Cash flows used in financing activities Net increase (decrease) in cash and cash equivalents Dividend paid for non-controlling interests	2020.12.31 $ 10,960,088 12,876,758 3,456,975 10,427,777 $ 9,952,094 $ 2,048,141 2020 $ 10,687,878 $ 1,173,028 (75,590) $ 1,097,438 $ 241,409 $ 225,853 2020 $ 7,919,957 (710,319) (7,685,655) $ (476,017) $ 403,043	2019.12.31 22,152,488 13,024,072 9,037,773 12,325,710 13,813,077 2,842,731 2019 46,679,694 1,981,718 (31,068) 1,950,650 407,838 401,444 2019 5,622,138 (597,031) (3,244,568) 1,780,539 210,522

(Continued)

235

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(k) Property, plant and equipment

The movements in cost and accumulated depreciation of property, plant and equipment were as follows:

Cost: Beginning balance as of January 1, 2020 Additions Disposals Reclassification (Note) Effect of exchange rate changes Balance as of December 31, 2020 Beginning balance as of January 1, 2019 Additions Disposals Reclassification (Note) Effect of exchange rate changes Balance as of December 31, 2019 Accumulated depreciation: Beginning balance as of January 1, 2020 Depreciation expense Disposals Reclassification (Note) Effect of exchange rate changes Balance as of December 31, 2020 Beginning balance as of January 1, 2019 Depreciation expense Disposals Reclassification (Note) Effect of exchange rate changes Balance as of December 31, 2019 Carrying amounts: Balance as of December 31, 2020 Balance as of December 31, 2019 Balance as of January 1, 2019	Land $ 5,444,102 - - (55,852) - $ 5,388,250 $ 5,525,424 - - (81,322) - $ 5,444,102 $ - - - - - $ - $ - - - - - $ - $ 5,388,250 $ 5,444,102 $ 5,525,424	Building and structures 23,070,177 154,535 (263,397) 608,809 (19,102) 23,551,022 21,500,306 322,356 (1,121,286) 2,379,000 (10,199) 23,070,177 8,097,172 818,127 (263,397) - (2,366) 8,649,536 7,956,414 822,574 (680,861) - (955) 8,097,172 14,901,486 14,973,005 13,543,892	Machinery and equipment 30,622,782 1,014,396 (1,196,077) 727,076 (8,112) 31,160,065 30,441,456 918,461 (2,125,659) 1,391,918 (3,394) 30,622,782 16,062,774 2,193,888 (1,124,290) (7,792) (3,792) 17,120,788 15,656,673 2,274,331 (1,752,149) (114,776) (1,305) 16,062,774 14,039,277 14,560,008 14,784,783	Leased improvements 1,729,011 6,398 (80,173) 18,714 - 1,673,950 30,790,131 7,854 (133,761) (28,935,213) - 1,729,011 986,822 180,613 (80,173) (121) - 1,087,141 10,355,237 266,812 (133,690) (9,501,537) - 986,822 586,809 742,189 20,434,894	Aircraft 141,170,870 3,136,511 - 1,242,531 - 145,549,912 122,341,091 13,544,812 (4,291,171) 9,576,138 - 141,170,870 39,167,828 8,647,397 - - - 47,815,225 35,144,634 7,711,331 (3,688,137) - - 39,167,828 97,734,687 102,003,042 87,196,457	Unfinished construction 924,544 466,278 - (818,520) (1,392) 570,910 2,475,062 695,065 - (2,245,027) (556) 924,544 - - - - - - - - - - - - 570,910 924,544 2,475,062	Total 202,961,486 4,778,118 (1,539,647) 1,722,758 (28,606)
							207,894,109
							213,073,470 15,488,548 (7,671,877) (17,914,506) (14,149)
							202,961,486
							64,314,596 11,840,025 (1,467,860) (7,913) (6,158)
							74,672,690
							69,112,958 11,075,048 (6,254,837) (9,616,313) (2,260)
							64,314,596
							133,221,419
							138,646,890
							143,960,512

Note: Reclassifications are mainly the transfers of property, plant and equipment to operating costs, operating expenses, right-of-use assets, investment property, non-current assets classified as held for sale, and the inventories as well as prepayments for business facilities being reclassified to property, plant and equipment.

(Continued)

236

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Leased aircraft

The estimated recovery costs incurred by leasing aircraft are recognized as right-of-use assets, please refer to note 6(l). The related restoration obligations are recognized as other current liabilities and other non-current liabilities and are amortized using interest method. Refer to note 6(r) for the movements of restoration obligations.

(ii) In 2015, the consolidated subsidiary, Evergreen Aviation Technologies Corp., (hereinafter refer to as EGAT), purchased a piece of agricultural land on Puxin, Dayuan Dist., Taoyuan City for car park lot amounting to $60,558. The purchase was in the name of EGAT’s director. The Group has implemented adequate safeguard procedures for the agricultural land mentioned above.
(iii) Impairment test

According to IAS 36 “ Impairment of assets” , the Group periodically assesses for any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. When evaluating the recoverable amount of the CGU, the pre-tax discount rate is used to estimate the future cash flow. After performing the impairment test, the recoverable amount for the CGU turned out to be higher than its carry amounts. Therefore, there was no impairment loss to be recognized at December 31, 2020.

The recoverable amounts of CGU were evaluated, and the critical assumptions used for this evaluation were as follows:

1) The cash flow period of twelve years, which was estimated on the basis of previous experience, actual operating result and management-approved financial budget.
2) The estimated operating revenue, operating cost, and operating expenses based on the future operation plan, taking into consideration the changes and business competitions within the industry.
3) The estimate discount rate of 3.28%.
(iv) Pledge

As of December 31, 2020 and 2019, the Group’s property, plant and equipment were used as pledge for long-term borrowings and lines of credit, and they are disclosed in note 8.

(v) For the years ended December 31, 2020 and 2019, the Group capitalized the interest expenses amounting to $125,913 and $143,302, respectively. The ranges of the monthly interest rate used for capitalization calculation were 0.07%~0.11% and 0.10%~0.13%, respectively.

(Continued)

237

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(l) Right-of-use assets

The movements in the Group’s leases on land, building and structures, as well as aircraft, were as follow:

Cost: Beginning balance as of January 1, 2020 Additions Decrease Effect of exchange rate changes Balance as of December 31, 2020 Beginning balance as of January 1, 2019 Effects of retrospective application Balance as of January 1, 2019 after adjustments Additions Decrease Reclassified to property, plant and equipment Balance as of December 31, 2019 Accumulated depreciation: Beginning balance as of January 1, 2020 Depreciation expense Decrease Effect of exchange rate changes Balance as of December 31, 2020 Beginning balance as of January 1, 2019 Effects of retrospective application Balance as of January 1, 2019 after adjustments Depreciation expense Decrease Reclassified to property, plant and equipment Balance as of December 31, 2019 Carrying amount: Balance as of December 31, 2020 Balance as of December 31, 2019 Balance as of January 1, 2019	Land $ 4,973,028 3,420 (47,750) - $ 4,928,698 $ - 4,956,476 4,956,476 21,643 (5,091) - $ 4,973,028 $ 247,506 233,344 - - $ 480,850 $ - - - 247,506 - - $ 247,506 $ 4,447,848 $ 4,725,522 $ -	Building and structures 1,309,624 331,742 (81,104) - 1,560,262 - 1,211,524 1,211,524 122,856 (24,756) - 1,309,624 429,956 456,709 (75,291) - 811,374 - - - 451,107 (21,151) - 429,956 748,888 879,668 -	Aircraft 131,719,814 9,009,567 - - 140,729,381 - 125,681,063 125,681,063 13,652,892 (365,782) (7,248,359) 131,719,814 20,441,125 14,797,505 - - 35,238,630 - 9,247,050 9,247,050 14,867,209 (138,850) (3,534,284) 20,441,125 105,490,751 111,278,689 -	Machinery and equipment 92,342 24,939 (11,538) - 105,743 - 61,933 61,933 34,131 (3,722) - 92,342 29,348 32,289 (9,254) - 52,383 - - - 30,484 (1,136) - 29,348 53,360 62,994 -	Total 138,094,808 9,369,668 (140,392) - 147,324,084 - 131,910,996 131,910,996 13,831,522 (399,351) (7,248,359) 138,094,808 21,147,935 15,519,847 (84,545) - 36,583,237 - 9,247,050 9,247,050 15,596,306 (161,137) (3,534,284) 21,147,935 110,740,847 116,946,873 -

(Continued)

238

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(m) Investment property

The movements in cost of investment property were as follows:

Cost: Balance as of January 1, 2019 Reclassification from property, plant and equipment Reclassification to investment property －building and structures Reclassification to non-current assets classified as held for sale Balance as of December 31, 2019 Carrying amounts: Balance as of December 31, 2019 Balance as of January 1, 2019 Fair value: Balance as of December 31, 2019 Balance as of January 1, 2019	Land $ 56,381 81,322 - (137,703) $ - $ - $ 56,381	Building and structures - - 1,096,121 (1,096,121) - - -	Unfinished construction 126,673 969,448 (1,096,121) - - - 126,673 $ $	Total 183,054 1,050,770 - (1,233,824) - - 183,054 - 592,137

The fair value of investment properties was based on a valuation by a qualified independent appraiser who has recent valuation experience in the location and category of the investment property being valued. The Group’ s management also assessed the settled deals by using the valuation method. The inputs of levels of fair value hierarchy in determining the fair value is classified to Level 3.

The investment property was not pledged. There was no such transaction for the year ended December 31, 2020.

(n) Intangible assets

The movements in cost and accumulated amortization of intangible assets were as follows:

Cost: Beginning balance as of January 1, 2020 Additions Disposals Balance as of December 31, 2020 Beginning balance as of January 1, 2019 Additions Reclassification Disposals Balance as of December 31, 2019	Operating concession $ 3,423,792 - - $ 3,423,792 $ 3,423,792 - - - $ 3,423,792	Computer software 1,427,405 151,380 (261,365) 1,317,420 1,371,114 294,746 2,180 (240,635) 1,427,405	Total 4,851,197 151,380 (261,365) 4,741,212 4,794,906 294,746 2,180 (240,635) 4,851,197

(Continued)

239

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Accumulated amortization: Beginning balance as of January 1, 2020 Amortization expense Disposals Balance as of December 31, 2020 Beginning balance as of January 1, 2019 Amortization expense Disposals Balance as of December 31, 2019 Carrying amounts: Balance as of December 31, 2020 Balance as of December 31, 2019 Balance as of January 1, 2019	Operating concession $ 2,204,082 134,296 - $ 2,338,378 $ 2,069,786 134,296 - $ 2,204,082 $ 1,085,414 $ 1,219,710 $ 1,354,006	Computer software 669,838 293,797 (261,365) 702,270 601,351 309,122 (240,635) 669,838 615,150 757,567 769,763	Total
			2,873,920 428,093 (261,365
			3,040,648
			2,671,137 443,418 (240,635
			2,873,920
			1,700,564
			1,977,277
			2,123,769

(i) Amortization

For the years ended December 31, 2020 and 2019, the amortization of intangible assets is included under operating costs and operating expenses in the consolidated statements of comprehensive income.

(ii) Pledge

The aforementioned intangible assets were not pledged.

(o) Other current assets and other non-current assets

The details of the Group’s other current assets were as follows:

Prepaid expense Other receivables (including related parties) Others Total	2020.12.31 $ 465,343 409,825 169,844 $ 1,045,012	2019.12.31
		348,765 433,239 237,606
		1,019,610

The details of the Group’s other non-current assets were as follows:

Prepayments for business facilities Refundable deposits Pledged time deposits Others Total	2020.12.31 $ 15,533,781 1,058,089 401,972 7,828 $ 17,001,670	2019.12.31
		10,539,207 1,451,823 86,467 4,237
		12,081,734

(Continued)

240

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(p) Short-term borrowings, long-term borrowings and bonds payable

The details, conditions and terms of the Group’s short-term borrowings, long-term borrowings and bonds payable were as follows:

Secured short-term loans Secured bonds payable Unsecured convertible bonds Subtotal Less: Current portion (included Total Unsecured loans Secured loans Subtotal Less: Current portion Total		2020.12.31

		2019.12.31	2019.12.31
	Currency	Interest rate	Maturity date		Amount
Unsecured short-term loans	TWD	0.98%	2020/06/20	$	50,000
Secured short-term loans	TWD	1.15%	2020/03/17		100,000
Subtotal				$	150,000
Secured bonds payable	TWD	1.07%	2020/12/29~2021/12/29	$	8,500,000
Unsecured convertible bonds	TWD	-	2022/10/27		6,325,180
Subtotal					14,825,180
Less: Current portion (included	in current portion	of long-term liabilities)			(10,575,180)
Total				$	4,250,000
Unsecured loans	TWD	1.12%~2.01%	2020/01/21~2024/11/14	$	25,222,304
Secured loans	TWD	1.15%~1.52%	2020/01/14~2034/10/31		59,687,457
Subtotal					84,909,761
Less: Current portion					(14,292,818)
Total				$	70,616,943

(Continued)

241

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The details of convertible bonds were as follows:

2020.12.31
Total convertible bonds issued
$ 10,000,000
Less: Unamortized discounted bonds payable
(149,959)
Cumulative converted amount
(451,100)
Cumulative put amount
(6,316,000)
Convertible bonds issued balance
$
3,082,941
Embedded derivatives－put/call options (included in financial assets
/(liabilities) at fair value through profit or loss)
$
2,793
Equity components－conversion options (included in capital surplus
－share options)
$
512,921

2019.12.31
7,000,000
(223,720)
(451,100)
-
6,325,180
(3,274)
376,948

The equity instruments and liability instruments were included in the abovementioned convertible bonds. The equity instruments were recognized in capital surplus. The liability instruments were measured at an initial effective rate 1.23% and 1.04%, respectively. Please refer to note 6(z) for the － valuation loss/profit of embedded derivatives put/call options, which were recognized in net gains/losses on financial assets and liabilities at fair value through profit or loss, and the related interest expenses for the convertible bonds.

On October 27, 2017, the Company issued the third unsecured domestic convertible bonds amounting to $7,000,000. The major terms are as follows:

(i) Total issue amount: TWD 7,000,000
(ii) Issue price: At par value 100.2%.
(iii) Maturity date: Five years, with the maturity date on October 27, 2022.
(iv) Coupon rate: 0%.
(v) Conversion target: Ordinary shares of the Company.
(vi) Conversion price: The price determination day was October 19, 2017; the conversion price shall be the simple arithmetical average closing price of the ordinary shares of the Company for either one, three or five business days before the pricing date (exclusive), multiplied by the premium ratio of 104.24% (rounded off to the 1st decimal place). If the ex-dividend or the ex-rights date happens before the pricing date, the closing price which was adopted to calculate the conversion price should be adjusted for the distribution of stock dividends or cash dividends; and if the ex-dividend or the ex-rights date happens between the conversion price determination date and the actual issuance date, the conversion price should be modified by the conversion price adjustment formula. As of December 31, 2020 and 2019, the conversion price was $13.4 and $13.7 per share, respectively. In addition, corporate bonds with a face value of $451,100 and $451,100 respectively has been converted to 30,829 and 30,829 thousand shares of ordinary share, respectively.

(Continued)

242

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(vii) Conversion period: The bondholder can convert its bonds into shares at any time between 3 months after the issuance date and the day before the maturity day, except for the following:
1) The closing period in accordance with the applicable laws;
2) The period that starts from the fifteen business days prior to the date of record for determination wherein the shareholders are entitled to receive the distributions or rights to subscribe for new shares in a capital increase for cash, and ends on the date of record for the distribution of the rights/benefits;
3) The period starts from the date of record of the capital decrease and ends one day prior to the reissuance of the trading of shares after the capital decrease.
(viii) Repurchase at the option of the bondholders (put option of the bondholders): Bondholders have the option to notify the Company of their request for bond redemption within 40 days prior to the third anniversary of the issuance date, and the Company should redeem the bonds at 100% of the par value within 5 business days following such date. As of October 27, 2020, the bondholders exercised the put option, wherein the Company paid the amount of $6,316,000 to the bondholders who actually exercised the put option.
(ix) Redemption at the option of the Company (call option of the Company): If the closing price of shares for each of 30 consecutive trading days is at least 130% of the conversion price between the 3 months after the share issuance date and the 40th day before the maturity date, the Company may redeem all the outstanding bonds at their principal amount. If the amount outstanding of bonds is less than 10% of the principal amount between the 3 months after the share issuance date and the 40th day before the maturity date, the Company may redeem the outstanding bonds at their principal amount.

On October 21, 2020, the Company issued the fourth unsecured domestic convertible bonds amounting to $3,000,000. The major terms are as follows:

(i) Total issue amount: TWD3,000,000
(ii) Issue price: At par value
(iii) Maturity date: Five years, with the maturity date on October 21, 2025.
(iv) Coupon rate: 0%.
(v) Conversion target: Ordinary shares of the Company.
(vi) Conversion price: The price determination day was October 13, 2020; the conversion price shall be the simple arithmetical average closing price of the ordinary shares of the Company for either one, three or five business days before the pricing date (exclusive), multiplied by the premium ratio of 104% (rounded off to the 1st decimal place). If the ex-dividend or the exrights date happens before the pricing date, the closing price which was adopted to calculate the conversion price should be adjusted for the distribution of stock dividends or cash dividends; and if the ex-dividend or the ex-rights date happens between the conversion price determination date and the actual issuance date, the conversion price should be modified by the conversion price adjustment formula. As of December 31, 2020, the conversion price was $11.2.

(Continued)

243

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(vii) Conversion period: The bondholder can convert its bonds into shares at any time between 3 months after the issuance date and the day before the maturity day, except for the following:
1) The closing period in accordance with the applicable laws;
2) The period that starts from the fifteen business days prior to the date of record for determination wherein the shareholders are entitled to receive the distributions or rights to subscribe for new shares in a capital increase for cash, and ends on the date of record for the distribution of the rights/benefits;
3) The period starts from the date of record of the capital decrease and ends one day prior to the reissuance of the trading of shares after the capital decrease.
4) The period from the date of the suspension of the conversion in respect of the change of par value of the Issuer's shares to one day prior to the first trading date of shares reissued after the change of par value.
(viii) Repurchase at the option of the bondholders (put option of the bondholders): Bondholders have the option to notify the Company of their request for bond redemption within 40 days prior to the third anniversary of the issuance date, and the Company should redeem the bonds at 100.75% of the par value within 5 business days following such date.
(ix) Redemption at the option of the Company (call option of the Company): If the closing price of shares for each of 30 consecutive trading days is at least 130% of the conversion price between the 3 months after the share issuance date and the 40th day before the maturity date, the Company may redeem all the outstanding bonds at their principal amount. If the amount outstanding of bonds is less than 10% of the principal amount between the 3 months after the share issuance date and the 40th day before the maturity date, the Company may redeem the outstanding bonds at their principal amount.

As of December 31, 2020, the details of the future repayment periods and amounts of the Group’s long-term borrowings and bonds payable were as follows:

Year due		Amount
2021.1.1~2021.12.31	$	19,148,239
2022.1.1~2025.12.31		70,552,896
2026.1.1 and thereafter		25,226,168
	$	114,927,303

Information on the Group’s exposure to interest rate risk and liquidity risk is disclosed in note 6(aa).

(i) Pledge for borrowings

The pledge for borrowings is disclosed in note 8.

(ii) Unused lines of credit

As of December 31, 2020 and 2019, the unused credit lines for short-term and long-term borrowings amounted to $9,992,218 and $8,304,161, respectively.

(Continued)

244

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Guarantee from the government for loans

In accordance with “ Regulations on Relief and Revitalization Measures for Industries and Enterprises Affected by Severe Pneumonia with Novel Pathogens” endorsed by the Ministry of Transportation and Communications, the Group applied to financial institutions for project loans amounting to $22,470,000, which was guaranteed by the government. As of December 31, 2020, the credit lines that have been used amounted to $21,215,000. The guarantee loans shall be repaid within two years from the initial withdrawal.

(q) Lease liabilities

The components of lease liabilities were as follow:

Financial liabilities for hedging－current Financial liabilities for hedging－non-current Lease liabilities－current Lease liabilities－non-current		2020.12.31 11,564,988 77,067,827 362,101 4,458,004	2019.12.31
	$ $ $ $		11,547,049
			86,744,021
			387,924
			4,851,030

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

The amounts recognized in profit or loss were as follows:

Interest on lease liabilities $ Variable lease payments not included in the measurement of lease liabilities $ Revenue of subleasing right-of-use assets $ Expenses relating to short-term leases $ Expenses relating to leases of low-value assets, excluding short- term leases of low-value assets $ COVID-19-related rent concessions $		2020 3,168,075 12,042 64 153,506 6,419 262,925	2019
			3,412,528
			14,354
			35
			193,475
			9,680
			-

The amounts recognized in the statement of cash flows were as follows:

Total cash outflow for leases		2020 15,411,843	2019
	$		16,093,978

The Group leases land, building and structures as well as aircraft for its office space and operating needs. The leases of building and structures typically run for a period of 1 to 10 years, and of aircraft for 12 years. The Group’ s lease contracts include an option to renew the lease for an additional period of the same duration after the end of the contract term or extension options. These leases are negotiated and monitored by the local management, and accordingly, contain a wide range of different terms and conditions. The extension options held are exercisable only by the Group and not by the lessors, in which the leases are not reasonably certain to be used as an optional extended lease term. Payments associated with the optional period are not included within lease liabilities.

(Continued)

245

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group also leases its offices and vehicles equipment with lease terms ranging from 1 to 5 years. These leases are short-term leases or leases of low-value items. The Group has elected not to recognize its right-of-use assets and lease liabilities for these leases.

(r) Restoration obligations

The movements of the restoration obligations were as follows:

Beginning balance as of January 1 Additions Decreases Effect of exchange rate changes Balance as of December 31	2020 $ 19,807,987 3,060,238 (265,678) (702,264) $ 21,900,283	2019 19,576,977 1,080,789 (555,677) (294,102) 19,807,987

(s) Employee benefits

(i) Defined benefit plans

The movements in the present value of the defined benefit obligations and the fair value of plan assets were as follows:

Total present value of defined benefit obligations Fair value of plan assets Recognized liabilities of net defined benefit obligations	2020.12.31 $ 12,470,749 (8,890,331) $ 3,580,418	2019.12.31 13,006,048 (8,100,609) 4,905,439

The Group makes defined benefit plan contributions to the pension fund account at Bank of Taiwan that provides pensions for employees upon retirement. The plans (covered by the Labor Standards Act) entitle a retired employee to receive retirement payment calculated by the units based on years of service and average salary for the six months prior to retirement.

1) Composition of plan assets

The Group allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, Ministry of Labor. Minimum earnings on such funds shall be no less than the earnings attainable from two-year time deposits with interest rates offered by local banks.

(Continued)

246

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group’ s labor pension reserve account balance in Bank of Taiwan amounted to $8,616,426 as of December 31, 2020. The utilization of the labor pension fund assets, including the asset allocation and yield of the fund. Please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

2) Movements in present value of the defined benefit obligations

The movements in present value of the defined benefit obligations were as follows:

Defined benefit obligations as of January 1 Benefits paid by the plan Current service costs and interest Net remeasurements of defined benefit liabilities －Experience adjustments －Actuarial losses (gains) arising from changes in demographic assumptions －Actuarial losses (gains) arising from changes in financial assumptions Effect of movement in exchange rates Gain on curtailment Defined benefit obligations as of December 31	2020 $ 13,006,048 (733,462) 369,861 (550,469) 8,797 371,171 (1,197) - $ 12,470,749	2019 12,473,444 (499,955) 390,034 610,351 8,832 255,456 502 (232,616) 13,006,048

3) Movements in the fair value of the defined benefit plan assets

The movements in the fair value of the defined benefit plan assets were as follows:

Fair value of plan assets as of January 1 Contributions from plan participants Benefits paid by the plan Expected return on plan assets Net remeasurements of defined benefit liabilities －Return on plan assets (excluding the amounts included in net interest expense) Fair value of plan assets as of December 31	2020 $ 8,100,609 1,134,602 (659,662) 79,767 235,015 $ 8,890,331	2019 7,306,609 917,658 (440,913) 84,146 233,109 8,100,609

(Continued)

247

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

4) Expenses recognized in profit or loss

The expenses recognized in profit or loss were as follows:

Current services costs Net interest on the net defined benefit liabilities Operating costs Operating expenses	2020 $ 245,116 44,978 $ 290,094 $ 231,566 58,528 $ 290,094	2019
		250,644 55,244
		305,888
		239,518 66,370
		305,888

5) The remeasurements of the net defined benefit liabilities recognized in other comprehensive income (before tax)

The Group’ s remeasurements of the net defined benefit liabilities recognized in other comprehensive income were as follows:

Accumulated losses as of January 1 Gains (losses) recognized during the period Accumulated losses as of December 31	2020 $ (6,186,557) 405,516 $ (5,781,041)	2019
		(5,545,027) (641,530)
		(6,186,557)

6) Actuarial assumptions

The rate applied in calculating the present value of defined benefit obligations at the reporting date was as follows:

Discount rate Future salary increases	2020.12.31 2019.12.31 0.42%~7% 0.75%~7.78% 1.04%~8% 1.53%~8%

The Group expects to make contributions of $774,395 to the defined benefit plans in the next year starting from December 31, 2020.

The weighted average of the defined benefit plans is 10.60~19.04 years.

(Continued)

248

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

7) Sensitivity analysis

The changes in main actuarial assumptions might have an impact on the present value of the defined benefit obligations:

Discount rate (0.25%) Future salary increases (0.25%)	Effects to the defined	benefit obligations
	Favorable 2020.12.31 2019.12.31 289,160 318,155 274,530 303,437	Unfavorable
	2020.12.31 289,160 274,530	2020.12.31 2019.12.31 299,672 329,256 282,849 312,165

There is no change in other assumptions when performing the abovementioned sensitivity analysis. In practice, assumptions may be interactive with each other. The method used on sensitivity analysis is consistent with the calculation on the net defined benefit liabilities.

The method and assumptions used on current sensitivity analysis are the same as those of the prior year.

(ii) Defined contribution plans

The domestic entities of the Group set aside 6% of each employee’ s monthly wages to contribute to the labor pension personal accounts at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. The domestic Group entities set aside a fixed amount to contribute to the Bureau of Labor Insurance without the payment of additional legal or constructive obligations.

The foreign entities of the Group are in accordance with local regulations.

The Group set aside $749,355 and $780,618 as pension costs under the defined contribution plans for the years ended December 31, 2020 and 2019, respectively.

(t) Income tax

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

Current tax benefit (expenses) Deferred tax benefit (expenses) Income tax benefit (expenses)	2020 $ 24,042 1,018,175 $ 1,042,217	2019 (1,694,588) 488,114
		(1,206,474)

(Continued)

249

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

2020
Components of other comprehensive income that will not be
reclassified to profit or loss:
Remeasurements of defined benefit plans
$ (79,662)
Unrealized gains or losses from investments in
equity instruments measured at fair value through
other comprehensive income
(431)
Gains or losses on hedging instruments
(2,329)
$
(82,422)
Components of other comprehensive income that will be
reclassified to profit or loss:
Gains or losses on hedging instruments
$
(842,424)

2019
127,783
9
2,290
130,082
(547,083)

Reconciliations of income tax benefit (expenses) and profit (loss) before tax were as follows:

Profit (loss) before tax Income tax using the Company’s domestic tax rate Exempt income Changes in unrecognized deductible temporary differences Unavailable tax deduction Undistributed earnings additional tax Others Total

(iii) Deferred tax assets and liabilities

1) Unrecognized deferred tax assets and liabilities

The Group’s unrecognized deferred tax assets were as follows:

Unrecognized deferred tax assets: Investment loss of foreign operations accounted for using equity method Restoration obligations Others Total	2020.12.31 $ 41,935 109,892 1,490 $ 153,317	2019.12.31
		38,311 332,516 46,648
		417,475

(Continued)

250

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

According to the R.O.C Income Tax Act., the net loss as assessed by the tax authorities can be carry forward for use as a deduction from taxable income over a period of ten years. As of December 31, 2020, the Group’ s loss carry-forward recognized and unrecognized as deferred tax assets and the expiry year were as follows:

Filing year 2020		Recognized un-deducted loss 6,868,793	Unrecognized un-deducted loss -	Total Expiry year 6,868,793 2030
	$

The Group has no unrecognized deferred tax liabilities as of December 31, 2020 and 2019.

2) Recognized deferred tax assets and liabilities

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

Deferred tax assets: Beginning balance as of January 1, 2020 Recognized in profit or loss Recognized in other comprehensive income Balance as of December 31, 2020 Beginning balance as of January 1, 2019 Recognized in profit or loss Recognized in other comprehensive income Balance as of December 31, 2019	Loss carryforwards $ - 1,373,759 - $ 1,373,759 $ - - - $ -	Loss on valuation of inventories 507,007 (148,165) - 358,842 801,961 (294,954) - 507,007	Defined benefit plans 1,047,623 (180,872) (79,663) 787,088 1,043,806 (123,966) 127,783 1,047,623	Restoration obligations	Mileage revenue 808,832 (74,614) - 734,218 730,581 78,251 - 808,832	Others 868,220 (447,015) - 421,205 678,973 216,586 (27,339) 868,220	Total 4,697,601 1,158,774 (79,663)
				1,465,919 635,681 - 2,101,600 830,763 635,156 - 1,465,919
							5,776,712
							4,086,084 511,073 100,444
							4,697,601

Deferred tax liabilities: Beginning balance as of January 1, 2020 Recognized in profit or loss Recognized in other comprehensive income Balance as of December 31, 2020 Beginning balance as of January 1, 2019 Recognized in profit or loss Recognized in other comprehensive income Balance as of December 31, 2019	Unrealized foreign exchange gains $ 547,780 160,313 849,910 $ 1,558,003 $ 2,882 32,601 512,297 $ 547,780	Investment gains of foreign operations accounted for using equity method 78,055 (15,297) - 62,758 77,300 755 - 78,055	Others 12,728 (4,417) (4,727) 3,584 17,977 (10,397) 5,148 12,728	Total
				638,563 140,599 845,183
				1,624,345
				98,159 22,959 517,445
				638,563

(iv) The Company’s income tax returns for the years through 2018 were assessed by the local tax authorities.

(u) Capital and other equity

As of December 31, 2020 and 2019, the numbers of authorized ordinary shares of both 7,000,000 thousand shares had a par value of $10 per share. The total value of the authorized ordinary shares amounted to both $70,000,000, of which $48,535,695, were issued.

(Continued)

251

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Ordinary shares

The appropriation of 2018 earnings that was approved at the shareholders’ meeting on June 24, 2019, in which the Company issued 140,619 thousand shares, had a par value of $10 per share, with a total value of $1,406,188. The date of capital increase was set on September 13, 2019, and all related registration procedures have been completed.

A resolution was passed during the Board of Directors’ meeting held on August 13, 2018 for the issuance of ordinary shares for cash. Subsequently, a resolution was passed for the issuance of 300,000 thousand ordinary shares, with par value of $10 per share, amounting to $3,000,000. The date of capital increase was set on January 24, 2019, and all related registration procedures have been completed.

For the year ended December 31, 2019, convertible bonds issued by the Company amounting to $258,630, were converted into 25,863 thousand shares of ordinary shares, and all related registration procedure has been completed. There was no such transaction for the year ended December 31, 2020.

(ii) Capital surplus

The details of capital surplus were as follows:

2020.12.31
Cash subscription in excess of par value of shares
$ 5,118,825
Stock options granted to employees
697,600
Additional paid-in capital from bond conversion
1,561,585
Additional paid-in capital from conversion option
512,921
Changes in equity of associates accounted for using equity
method
3,757
Difference between actual acquiring subsidiary’s equity and
carrying amount
90,985
$
7,985,673

2019.12.31

5,118,825
697,600
1,561,585
376,948
3,757
90,985

7,849,700

In accordance with R.O.C. Company Act, realized capital surplus can only be reclassified as share capital or distributed as cash dividends after offsetting losses. The aforementioned capital surplus included share premiums and donation gains. In accordance with the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, the amount of capital surplus to be reclassified under share capital shall not exceed 10% of the actual share capital amount.

(Continued)

252

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Retained earnings

According to the Company’s Articles of Incorporation, if the Company reports a surplus at the year end, after clearing taxes, the Company shall first offset accumulated losses (if any), then set aside 10% of the balance as the statutory surplus reserve, and set aside or reverse special surplus reserve per the provisions. After that, the Board of Directors shall propose a surplus distribution plan of the balance plus the retained earnings accrued from prior years, submit the distribution plan to the shareholders’ meeting for approval, and then distribute it. The dividends can be distributed wholly or partly in cash only after a resolution has been adopted by a majority vote at a meeting of the board of directors attended by two-thirds of the total number of directors; and in addition thereto a report of such distribution shall be submitted to the shareholders’ meeting.

The dividends shall be distributed in the combination of cash and stocks, provided that cash dividends shall not be less than 10% of the total amount of dividends.

1) Legal reserve

If a company has no accumulated deficit, it may, as per Article 240 and 241 of the Company Act, distribute its legal reserve, in whole or in part, for the portion in excess of 25% of the paid-in capital, by issuing new shares or cash to its original shareholders in proportion to the number of shares being held by each of them. The distribution can be paid in cash after a resolution has been adopted by a majority vote at a meeting of the board of directors attended by two-thirds of the total number of directors; and in addition thereto, a report of such distribution shall be submitted to the shareholders’ meeting for approval.

2) Special reserve

In accordance with Decree No. 1010012865 issued by the FSC on April 6, 2012, a portion of current-period earnings and undistributed prior-period earnings shall be reclassified as a special earnings reserve during earnings distribution. The amount to be reclassified should be equal to the current-period total net reduction of other equity. Similarly, a portion of undistributed prior-period earnings shall be reclassified as a special earnings reserve (which does not qualify for earnings distribution) to account for cumulative changes to other shareholders’ equity pertaining to prior periods. Amounts of subsequent reversals pertaining to the net reduction of other equity shall qualify for additional distributions.

3) Earnings distribution

The appropriation of 2019 earnings was approved at the Board meeting on March 19, 2020. The cash dividends were amounting to $1,213,392.

The appropriation of 2018 earnings was approved at the shareholders’ meeting on June 24, 2019. The cash dividends and stock dividends were amounting to $2,343,647 and $1,406,188, respectively.

(Continued)

253

EVA AIRWAYS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(iv) Other equity interest (net of taxes)

Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income	Gains (losses) on hedging instruments	Total 2,745,672 (38,997) (41,874) 398,102 2,590,446 788,566
722,495 - - 390,804 - - 1,113,299 547,201 - - 175,283 11 - - 722,495	2,069,817 - - - 2,590,446 788,566
	5,448,829	6,441,915
		429,869 (35,663 (3,182) 175,464 11 2,154,415 24,758
		2,745,672

(v) Share-based payment

(i) As of December 31, 2019, the Group’s share-based payment transaction was as follow:

Type Grant date Cash-settled share- based payment plan (reserved for employees to subscribe) 2018.11.28	Number of shares granted (thousand shares) 30,000	Contract term (year) Vesting Conditions - Immediately vested

There was no such transaction for the year ended December 31, 2020.

(Continued)

254

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) The information related to the employee stock option plan was as follows:

		Number of options
		(thousand shares)
2018 Cash-settled share-based
payment plan			Exercise price
(reserved for employees to subscribe)		2019		(in dollars)
Outstanding number as of January 1		27,352	$	13
Number of shares exercised		(15,985)		13
Number of shares abandoned		(11,367)		13
Outstanding number as of December 31		-
Fair value per share at grant date (in dollars)	$	3.05

(iii) The Group adopted the Black-Sholes model to calculate the fair value of the abovementioned employee shares of stock at the grant date. The assumptions adopted in this valuation model were as follows:

Fair value per share on grant date Exercise price Expected volatility Expected life Dividend yield Risk-free interest rate	Cash-settled share-based payment plan (reserved for employees to subscribe)
	16.05 13 % 17.6291 days 51 - % 0.97

(w) Earnings per share (“EPS”)

The calculation of earnings per share is based on the profit (loss) attributable to the ordinary equity holders of the Company. The Group’s earnings per share were calculated as follows:

Basic earnings per share: Loss attributable to ordinary equity holders Diluted earnings per share: Loss attributable to ordinary equity holders		2020	Earnings per share (in dollars) (0.69) (0.69)
	Amount net of tax $ (3,361,639) $ (3,361,639)	Weighted-average number of shares outstanding during the period (thousand shares) 4,853,569 $ 4,853,569 $
	$ $

(Continued)

255

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	2019
Amount net of tax $ 3,982,467 $ 3,982,467 $ - 60,970 $ 4,043,437	Weighted-average number of shares outstanding during the period (thousand shares) 4,826,530 $ 4,826,530 23,939 478,022 5,328,491 $	Earnings per share (in dollars)
		0.83
		0.76

As of December 31, 2020, 4,249 thousand shares of employee compensation and 70,074 thousand shares of conversion of all convertible bonds have an anti-dilutive effect, and hence they are not included in the calculation of the weighted average number of shares (diluted).

(x) Revenue from contracts with customers

(i) Disaggregation of revenue

		2020	2020
Aviation transportation segment	Aircraft maintenance and manufacture segment 1,651,820 2,001,380 628,659 3,554,764 89,830 7,926,453 - 6,916,601 1,009,852 7,926,453	Catering segment 196,239 1,878 - 412 - 198,529 - - 198,529 198,529	Air cargo services segment 1,055,373 - - - - 1,055,373 - 967,139 88,234 1,055,373	Other segments 327,071 - - 297 - 327,368 - 304,941 22,427 327,368	Total
$ 22,370,517 39,013,200 3,096,538 14,615,024 445,774 $ 79,541,053 $ 74,523,726 - 5,017,327 $ 79,541,053					25,601,020 41,016,458 3,725,197 18,170,497 535,604
					89,048,776
					74,523,726 8,188,681 6,336,369
					89,048,776

(Continued)

256

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

2019 Aviation transportation segment Aircraft maintenance and manufacture segment Catering segment Air cargo services segment Other segments Total Primary geographical markets: Taiwan $ 54,750,653 1,580,436 779,865 1,180,616 580,261 58,871,831 Asia 40,469,352 3,870,395 7,137 - 57 44,346,941 Europe 5,641,840 349,943 - - - 5,991,783 North America 33,959,524 37,335,426 668 - - 71,295,618 Others 637,419 131,666 - - - 769,085 $ 135,458,788 43,267,866 787,670 1,180,616 580,318 181,275,258 Major products / services lines: Aviation transportation revenue $ 126,002,327 - - - - 126,002,327 Services revenue - 40,425,435 - 1,092,511 570,694 42,088,640 Others 9,456,461 2,842,431 787,670 88,105 9,624 13,184,291 $ 135,458,788 43,267,866 787,670 1,180,616 580,318 181,275,258 Contract balances 2020.12.31 2019.12.31 2019.1.1 Contract assets-maintenance services $ 446,438 345,016 3,850,796 Contract liabilities-tickets services, customer loyalty program and others $ 7,166,810 23,179,488 21,226,604	Aviation transportation segment			2019	2019
					Air cargo services segment Other segments Total 1,180,616 580,261 58,871,831 - 57 44,346,941 - - 5,991,783 - - 71,295,618 - - 769,085 1,180,616 580,318 181,275,258 - - 126,002,327 1,092,511 570,694 42,088,640 88,105 9,624 13,184,291 1,180,616 580,318 181,275,258 2019.12.31 2019.1.1 345,016 3,850,796 23,179,488 21,226,604		Total
							58,871,831 44,346,941 5,991,783 71,295,618 769,085
							181,275,258
							126,002,327 42,088,640 13,184,291
							181,275,258

(ii) Contract balances

The amount of revenue recognized for the years ended December 31, 2020 and 2019 that was included in the contract liability balance at the beginning of the period was $11,255,232 and $15,459,505, respectively.

The contract liabilities primarily relate to deferred recognition of revenue relating to ticket services and customer loyalty programs, for which revenue is recognized when the ticket sales for passengers and award points are redeemed or when they expire.

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. Other significant changes during the period are as follows:

Changes in an estimate of the transaction price		2020 Contract liabilities (266,496)	2019 Contract liabilities (149,905)
	$

(Continued)

257

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii)Transaction price allocated to the remaining performance obligations

As of December 31, 2020 and 2019, the amounts allocated to the customer loyalty program were $3,671,091 and $4,044,162, respectively. These will be recognized as revenue as the customer loyalty program points are redeemed or when they expire, which are expected to occur over the next three years.

The contract of maintenance services has an original expected duration of less than one year, thus the Group 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.

All consideration from contracts with customers is included in the transaction price presented above.

(y) Remuneration to employees and directors

According to the Company’s Articles of Incorporation, once the Company incurs profit in a fiscal year, a minimum of 1% will be distributed as employees’remuneration and a maximum of 2% will be allotted for directors’ remuneration. However, if the Company has accumulated losses, the earnings shall first be offset against any deficit.

The definition of annual earnings, as described in the above-mentioned paragraph, is the Company’s profit before tax, excluding the amount of the employees’ remuneration, and the directors’ remuneration.

For the years ended December 31, 2020 and 2019, the Company accrued and recognized its employees’ remuneration of $0 and $284,125, respectively, and the directors’ remuneration of $0 and $9,500, respectively. These remunerations were included in the operating costs and operating expenses.

The differences between the actual distributed amounts as determined by the Board of Directors and those recognized in the financial statements, if any, shall be accounted for as changes in accounting estimates and recognized in profit or loss in the following year.

For the year ended December 31, 2020, the Company ’s actual distributed amounts and recognized amounts of its employees’ remuneration and directors’ remuneration were both $0. There was a decrease of $113,650 between the actual amounts of remuneration to employees, and directors distributed for the year 2019 determined by the Board of Directors and the estimated amounts mainly due to the adjustment of the Board of Directors’ resolution. The differences shall be accounted for as changes in accounting estimates and recognized in profit or loss for the year 2020. The related information can be found on Market Observation Post System website.

(Continued)

258

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(z) Non-operating income and expenses

(i) Other income

Dividend income Interest income Interest income from bank deposits Other interest Total interest income Others Other gains and losses Gains (losses) on disposal of property, plant and equipment Foreign exchange gains (losses) Gains (losses) on financial assets (liabilities) at fair value through profit or loss Losses on financial liabilities measured at amortized cost Gains on disposal of non-current assets classified as held for sale Others gains and losses Finance costs Interest expense Bank borrowings Bonds Payable Lease liabilities Others Less: capitalized interest	2020 $ 137,178 277,397 7,515 284,912 24,682 $ 446,772 2020 $ 35,446 721,344 22,741 (153,800) 141,369 149,464 $ 916,564 2020 $ 920,871 161,101 3,168,076 903,669 (125,913) $ 5,027,804	2019 144,234 837,550 2,286 839,836 24,079 1,008,149 2019 1,132,468 (468,824) 7,774 - - 200,102 871,520 2019 1,046,011 169,745 3,412,528 913,856 (143,302) 5,398,838

(ii) Other gains and losses

(iii) Finance costs

(aa) Financial instruments
(i) Credit risk

1) Credit risk exposure

The maximum exposure to credit risk is mainly from the carrying amount of financial assets and contract assets.

(Continued)

259

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

2) Circumstances of concentration of credit risk

Accounts receivable were due from many customers and regional distributions were decentralized. Therefore, there was no concentration of credit risk. In order to reduce the credit risk of accounts receivable, the Group continually evaluates each customer’ s financial situation and requires customers to be a member of IATA clearing house. Otherwise, the customer will have to provide bank guarantees or collaterals.

3) Credit risk of receivables

For credit risk exposure of notes and accounts receivable, please refer to note 6(d). Other financial assets at amortized cost includes other receivables and time deposits. For the details on loss allowance, please refer to notes 6(b), 6(e) and 6(o).

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 losses. Regarding how the financial instruments are considered to have low credit risk, please refer to note 4(f).

(ii) Liquidity risk

The followings were the contractual maturities of financial liabilities, including estimated interest payments:

Carrying amount As of December 31, 2020 Non-derivative financial liabilities Short-term and long-term borrowings (including current portion of long-term liabilities) $ 107,674,362 Bonds payable 7,332,941 Lease liabilities and financial liabilities for hedging 93,452,920 Notes and accounts payable (including related parties) 3,013,512 Other payables (including related parties) 5,332,122 Liabilities related to non-current assets or disposal group classified as held for sale 1,142 Total $ 216,806,999 As of December 31, 2019 Non-derivative financial liabilities Short-term and long-term borrowings (including current portion of long-term liabilities) $ 85,059,761 Bonds payable 14,825,180 Lease liabilities and financial liabilities for hedging 103,530,024 Notes and accounts payable (including related parties) 9,726,039 Other payables (including related parties) 7,703,853 Liabilities related to non-current assets or disposal group classified as held for sale 140,810 Subtotal 220,985,667 Derivative financial liabilities Convertible bonds with embedded derivatives 3,274 Forward exchange contracts for hedge purposes: Outflow 11,643 Inflow - Subtotal 11,643 Total $ 221,000,584	Contractual cash flows 111,524,341 7,528,375 102,740,724 3,013,512 5,332,122 1,142 230,140,216 89,240,025 15,185,325 118,608,016 9,726,039 7,703,853 140,810 240,604,068 - 938,273 (926,630) 11,643 240,615,711	Within 1 year 16,071,174 4,295,475 14,134,937 3,013,512 5,332,122 1,142 42,848,362 15,423,170 10,889,850 15,153,947 9,726,039 7,703,853 140,810 59,037,669 - 938,273 (926,630) 11,643 59,049,312	1-5 years 69,591,490 3,232,900 51,132,020 - - - 123,956,410 46,419,583 4,295,475 55,875,042 - - - 106,590,100 - - - - 106,590,100	Over 5 years
				25,861,677 - 37,473,767 - - -
				63,335,444
				27,397,272 - 47,579,027 - - -
				74,976,299
				-
				- -
				-
				74,976,299

(Continued)

260

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group is not expecting that the cash flows including the maturity analysis could occur significantly earlier or at significantly different amounts.

(iii) Currency risk

1) Exposure to currency risk

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

F	inancial assets Monetary items USD EUR JPY HKD CNY Non-monetary items		2020.12.31		2019.12.31
		Foreign Currency $ 652,045 3,251 639,451 221,429 279,418 $ 39,668 72,820 7,687,425 22,540 $ 3,606,929 5,866 1,414,638 36,069 141,168	Exchange rate TWD USD/TWD= 28.48 18,570,244 EUR/TWD= 35.02 113,849 JPY/TWD= 0.2763 176,680 HKD/TWD= 3.6730 813,307 CNY/TWD= 4.3770 1,223,012 $ 20,897,092 USD/TWD= 28.48 1,129,732 USD/CNY= 6.5067 367,466 IDR/TWD= 0.0020 15,375 USD/MOP= 7.9864 80,377 $ 1,592,950 USD/TWD= 28.48 102,725,325 EUR/TWD= 35.02 205,437 JPY/TWD= 0.2763 390,864 HKD/TWD= 3.6730 132,482 CNY/TWD= 4.3770 617,892 $ 104,072,000	TWD	Exchange rate TWD USD/TWD= 29.98 33,783,853 EUR/TWD= 33.59 141,594 JPY/TWD= 0.2760 452,559 HKD/TWD= 3.8490 640,033 CNY/TWD= 4.3050 617,301 $ 35,635,340 USD/TWD= 29.98 1,256,691 USD/CNY= 6.9640 342,280 IDR/TWD= 0.0022 20,027 USD/MOP= 8.0216 130,927 $ 1,749,925 USD/TWD= 29.98 117,897,391 EUR/TWD= 33.59 350,594 JPY/TWD= 0.2760 591,297 HKD/TWD= 3.8490 94,050 CNY/TWD= 4.3050 810,866 $ 119,744,198	TWD
				18,570,244 113,849 176,680 813,307 1,223,012		33,783,853 141,594 452,559 640,033 617,301
F
	USD CNY IDR MOP inancial liabilities Monetary items USD EUR JPY HKD CNY

2) Sensitivity analysis

The Group’s monetary items exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, financial assets at amortized cost, notes and accounts receivable (including related parties), refundable deposits (included in other non-current assets), notes and accounts payable (including related parties), other payables (including related parties), lease liabilities and restoration obligations (included in other current liabilities and other non-current liabilities) that are denominated in foreign currency. A strengthening (weakening) of 1% of the TWD against the USD, EUR, JPY, HKD and CNY as of December 31, 2020 and 2019, would have changed the profit (loss) before tax by $53,354 and $140,957 and the equity by $885,103 and $982,046 due to cash flow hedges, respectively. The analysis assumes that all other variables remain constant. The analysis is performed on the same basis for 2020 and 2019.

(Continued)

261

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Due to the variety of the Group’s functional currency, the Group discloses its exchange gains and losses of monetary items collectively. For the years ended December 31, 2020 and 2019, the Group’ s foreign exchange gains (losses), net (including realized and unrealized of monetary items) amounted to $721,344 and $(468,824), respectively.

(iv) Interest rate risk

The interest rate exposure of the Group’ s financial liabilities are illustrated in note 6(aa) liquidity risk.

The following sensitivity analysis is based on the exposure to interest rate risk of the nonderivative financial instruments on the reporting date. For variable-rate instruments, the sensitivity analysis assumes the variable-rate liabilities are outstanding for the whole year on the reporting date. The Group’ s internal department reported the increases/decreases in the interest rates and the exposure to changes in interest rates by 1% to the Group’ s key management so as to allow key management to assess the reasonableness of the changes in the interest rates.

If the interest rate increases (decreases) by 1% with all other variable factors that remain constant, the profit (loss) before tax of the Group would have changed $1,070,944 and $850,098 for the years ended December 31, 2020 and 2019, respectively due to the Group’s floating-interest borrowings.

(v) Other market price risk

If the price of the equity securities changes, and it is on the same basis for both years and assumes that all other variables remain the same, the impact on comprehensive income will be as follows:

Price of the equity securities at the reporting date		2020	2019	2019
		Other Comprehensive Income, net of tax 151,972 (151,972)	Other Comprehensive Income, net of tax 132,070 (132,070)	Profit (losses)
increase 5% decrease 5%	$ $			-
				-

(vi) Fair value

1) Categories and fair values of financial instruments

The fair value of financial assets and liabilities at fair value through profit or loss, financial instruments used for hedging, and financial assets at fair value through other comprehensive income is measured on a recurring basis. The carrying amount and fair value of the Group’ 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:

(Continued)

262

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	2020.12.31	2020.12.31
Level 1 1,978,251 - 1,978,251 1,316,591 - 1,316,591 - - - - - 3,294,842 - - - - - - - - -	Fair value
	Level 2 - 2,793 2,793 - - - - - - - - 2,793 - 107,676,299 7,389,131 - - - - 115,065,430 115,065,430 2019.12.31	Level 3 - - - - 1,728,203 1,728,203 - - - - - 1,728,203 - - - - - - - - -	Total 1,978,251 2,793
			1,981,044
			1,316,591 1,728,203
			3,044,794
			- - - -
			-
			5,025,838
			-
			107,676,299 7,389,131 - - - -
			115,065,430
			115,065,430

Level 1 961,356 - 1,076,109 - 1,076,109	Fair value
	Level 2 - 37,428 - - -	Level 3 - - - 1,570,214 1,570,214	Total 961,356
			37,428
			1,076,109 1,570,214
			2,646,323

(Continued)

263

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	2019.12.31	2019.12.31
Level 1 - - - - 2,037,465 - - - - - - - - - - -	Fair value
	Level 2 - - - - 37,428 3,274 11,643 - 85,060,168 14,892,652 - - - - 99,952,820 99,967,737	Level 3 - - - - 1,570,214 - - - - - - - - - - -	Total - - -
			-
			3,645,107
			3,274
			11,643
			-
			85,060,168 14,892,652 - - - -
			99,952,820
			99,967,737

2) Valuation techniques and assumptions used in fair value determination

a) Non-derivative financial instruments

The fair value of financial instruments traded in an active market is based on the quoted market prices. The quotations, which is published by the main exchange center or that which was deemed to be a public bond by the Treasury Bureau of Central Bank, is included in the fair value of the listed securities instruments and the debt instruments in active markets with open bid.

A financial instrument is regarded as being quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm’ s-length basis. Whether transactions are taking place ‘regularly’ is a matter of judgment and depends on the facts and circumstances of the market for the instrument. Quoted market prices may not be indicative of the fair value of an instrument if the activity in the market is infrequent, the market is not well-established, only small volumes are traded, or bid-ask spreads are very wide. Determining whether a market is active involves judgment.

(Continued)

264

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

For financial instruments traded in active markets, their fair values are listed below by types and attributes:

The stocks of publicly traded companies are financial assets which are traded in active markets under standard terms and conditions. The fair value of the abovementioned stocks is based on quoted market prices.

Measurements of fair value of financial instruments without an active market are based on a valuation technique. Fair value measured by a valuation technique can be extrapolated from the fair value of similar financial instruments, the discounted cash flow method, or other valuation technique.

For financial instruments not traded in active markets, their fair values are listed below by types and attributes:

Equity instruments with no quoted market prices: the Group takes the quote market prices and the price-book ratios of similar publicly traded companies into consideration by using the market comparison approach. The estimates had been adjusted by the depreciation from lack of market liquidity.
b) 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 and option pricing models. Fair value of forward currency is usually determined by the forward currency exchange rate.

3) Transfers between Level 1 and Level 2

For the years ended December 31, 2020 and 2019, the fair value hierarchy levels of financial instruments were not transferred.

4) Movements in fair value measurements of financial assets in Level 3

The following table shows the reconciliation from the beginning balance to the ending balances for fair value measurements in Level 3 of the fair value hierarchy:

Balance as of January 1, 2020 Total gains or losses: Recognized in other comprehensive income Balance as of December 31, 2020	Fair value through other comprehensive income	Fair value through other comprehensive income
	Unquoted equity instruments
	$ 1,570,214 157,989 $ 1,728,203
		1,728,203

(Continued)

265

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Balance as of January 1, 2019 Total gains or losses: Recognized in other comprehensive income Purchased Disposed Balance as of December 31, 2019	Fair value through other comprehensive income
	Unquoted equity instruments
	$ 1,469,255 33,069 67,951 (61) $ 1,570,214

The amounts of total gains or losses for the periods were recognized in unrealized gains (losses) from financial assets measured at fair value through other comprehensive income. As of December 31, 2020 and 2019, the assets which were still held by the Group were as follows:

Other comprehensive income (including in unrealized gains (losses) on financial assets measured at fair value through other comprehensive income)	2020 2019 $ 157,989 33,069

5) Quantitative information about the significant unobservable inputs used in the fair value measurements categorized within Level 3

The Group classified a partial of its financial assets at fair value through other comprehensive income investment in equity securities that do not have a quoted market price in an active market as Level 3 of the fair value hierarchy.

Most of the fair value measurements categorized within Level 3 use the significant unobservable inputs. The significant unobservable inputs are independent to each other.

The significant unobservable inputs were as follows:

Items

Financial assets at fair value through other comprehensive income

Valuation
techniques
Market approach—
relevant information
generated by publicly
companies

Significant unobservable inputs
Relationship between significant
unobservable inputs and fair
value
�
Price-book ratio (as of December
31, 2020 and 2019 were
0.80~3.46 and 0.80~2.62,
respectively)
�
Market liquidity discount rate (as
of December 31, 2020 and 2019
were 80%of market price)
�
The higher the price-book ratio,
the higher the fair value
�
The higher the market liquidity
discount rate, the lower the fair
value

(Continued)

266

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

6) Sensitivity analysis for fair value measurements categorized within Level 3 of the fair value hierarchy

The fair value measurements of the Group’ s financial instruments are reasonable. However, changes in the use of valuation models or valuation variables may affect the estimations. As of December 31, 2020 and 2019, for fair value measurements in Level 3, a fluctuation in the valuation variable by 5% would have the following effects:

Inputs Price-book ratio Market liquidity discount rate	Increase (decrease) 5% 5%	Effects of changes in fair value on other comprehensive income Favorable Unfavorable 2020.12.31 2019.12.31 2020.12.31 2019.12.31 87,822 77,308 (84,196) (78,850) 87,822 77,308 (84,196) (78,850)
		Favorable 2020.12.31 2019.12.31 87,822 77,308 87,822 77,308
		2020.12.31 87,822 87,822

The favorable and unfavorable effects represent the changes in fair value, and fair value is based on a variety of unobservable inputs calculated using a valuation technique. The analysis above only reflects the effects of changes in a single input, and it does not include the inter-relationships with another input.

(ab) Management of financial risk
(i) The Group is exposed to the nature and extent of the risks arising from financial instruments as below:
- 1) Credit risk
- 2) Liquidity risk
- 3) Market risk

Detailed information about exposure risk arising from the aforementioned risk and the Group’s objective, policies and process for managing risks have been stated below. Further quantitative disclosures have been disclosed as notes to the consolidated financial statements.

(ii) Risk management framework

The Group’s Board of Directors has responsibility for the oversight of the risk management framework. The Group’ s inter-department management and committee, which consists of managers from all departments, is responsible for monitoring the Group’s risk management policies and reports regularly to the Board of Directors on its activities.

The Group’s risk management policies are established to identify and analyze the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. The inter-department management and committee are reviewed regularly to reflect change in market conditions and the Group’s activities. The Group, 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.

(Continued)

267

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group’s supervisors and Audit Committee oversee how management monitors compliance with the Group’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risk faced by the Group. The Group’ s supervisors and Audit Committee are assisted in its oversight role by the internal auditor. The internal auditor reviews the risk controls and procedures, and reports the results on a regular or irregular basis to the supervisors and Audit Committee.

(iii) Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to financial instruments fails to meet its contractual obligations and arises principally from the Group’s receivables from customers and investments in securities.

1) Notes and accounts receivable

The Group’ s exposure to credit risk is influenced mainly by the individual characteristic of each customer. In accordance with the Group’ s credit policy, each customer is analyzed individually for creditworthiness, and is required to be a member of IATA clearing house. Otherwise, the customer will have to provide bank guarantees or collaterals before its credit terms and credit limit are offered. Credit limit is offered to each customer as the limit of transactions and is reviewed regularly.

The transaction amount of the majority of the Group’ s customers is not significant, leading to an insignificant influence of loss from credit risk arising from single customer on the Group. The Group set up the forward-looking “expected credit loss” model to reflect the estimated impairment loss of notes and accounts receivable.

2) Investments

The credit risk exposure in the bank deposits, fixed income investments and other equity instruments are measured and monitored by the Group’s finance department. Since the Group’ s transactions are with external parties with good credit standing, highly rated financial institutions, publicly traded stock companies and unlisted companies with good reputation, there are no non-compliance issues and therefore no significant credit risk.

3) Guarantees

As of December 31, 2020, the Group did not provide endorsements and guarantees.

(iv) Liquidity risk

Liquidity risk is a risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity risk is to ensure, as far as possible, that it always has sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

(Continued)

268

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group’s finance department monitors the needs for cash flows, and plans optional return from investments of idle capital. The Group aims to maintain the level of its cash and cash equivalents at an amount to cope with expected cash outflows on operation, including meeting its financial obligations. This excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

(v) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices that will affect the Group’ s income or the value of its holdings of financial instruments. 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 Group is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than the respective functional currencies of the Group, primarily the TWD and USD. The currencies used in these transactions are principally denominated in TWD, CNY, EUR, USD, and JPY.

The Group hedges its cash and cash equivalents, trade receivables from sales, trade payables to purchase and leases payments for aircraft denominated in a foreign currency. When necessary, the Group uses forward exchange contracts to hedge its currency risk. The financial department proactively collects information of currency to monitor the trend of currency rate and keeps connection with the foreign currency department of banks to collect the market information for securing the currency risk.

The Group determines the existence of an economic relationship between the hedging instruments and hedged item based on the currency, amount and timing of their respective cash flows. The Group 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. For hedging foreign currency risk on the cash flow of aviation transportation with a highly probable forecast transaction, the foreign currency risk component of a non-derivative financial asset or a non-derivative financial liability may be designated as a hedging instrument provided.

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

the effect of the counterparty and the Group’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.

(Continued)

269

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

2) Interest rate risk

The Group adopts a policy of ensuring that its exposure to changes in interest rates on borrowings is on a fixed-rate basis, taking into account assets with exposure to changes in interest rates. This is achieved partly by entering into fixed-rate instruments and partly by borrowing at a floating rate and using interest rate swaps as hedges of variability in cash flows attributable to movements in interest rates.

The Group determines the existence of an economic relationship between the hedging instrument and hedged item based on the reference interest rates, tenors, reprising dates and maturities and the notional or par amounts. The Group assesses whether the derivative designated in each hedging relationship is expected to be 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 Group’s own credit risk on the fair value of the swaps which is not reflected in the change in the fair value of the hedged cash flows attributable to the change in interest rates; and
differences in reprising dates between the swaps and the borrowings.

3) Other market price risk

The Group is exposed to equity price risk due to the investments in equity securities. This is a strategic investment and is not held for trading. The management of the Group monitors the combination of equity securities and open-market funds in its investment portfolio based on cash flow requirements. Material investments within the portfolio are managed on an individual basis, and all buy-and-sell decisions are approved by the Board of Directors.

(ac) Capital management

The Board of Directors’ policy is to maintain a strong capital base to maintain the confidence of investors, creditors, and the market and to sustain future development of the business. The Board of Directors monitors the level of dividends to ordinary equity holders as well as future operation of the business.

The capital structure of the Group consists of net debt and equity. The net debt from the balance sheet is derived from the total borrowings less cash and cash equivalents. The total capital includes equity (ordinary share, capital surplus, retained earnings, other equity and non-controlling interests) and net debt.

As of December 31, 2020, there were no changes in the Group’s approach to capital management.

(Continued)

270

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ad) Financing activities not affecting current cash flow

The Group’ s financing activities which did not affect the current cash flow in the years ended December 31, 2020 and 2019, were as follows:

Non-cash changes Interest expense Foreign exchange movement Other 2020.12.31 - - - 80,000 70,518 - 8,227 7,332,941 3,435 - - 107,594,362 3,168,075 (561,963) 2,556,660 93,452,920 3,242,028 (561,963) 2,564,887 208,460,223 Non-cash changes Cash flows Interest expense Foreign exchange movement Other 150,000 - - - - 78,795 - (361,538) 4,229,657 7,702 - - (15,876,469) 3,412,528 128,125 8,803,921 (11,496,812) 3,499,025 128,125 8,442,383	Non-cash changes Interest expense Foreign exchange movement Other 2020.12.31 - - - 80,000 70,518 - 8,227 7,332,941 3,435 - - 107,594,362 3,168,075 (561,963) 2,556,660 93,452,920 3,242,028 (561,963) 2,564,887 208,460,223 Non-cash changes Cash flows Interest expense Foreign exchange movement Other 150,000 - - - - 78,795 - (361,538) 4,229,657 7,702 - - (15,876,469) 3,412,528 128,125 8,803,921 (11,496,812) 3,499,025 128,125 8,442,383	Non-cash changes Interest expense Foreign exchange movement Other 2020.12.31 - - - 80,000 70,518 - 8,227 7,332,941 3,435 - - 107,594,362 3,168,075 (561,963) 2,556,660 93,452,920 3,242,028 (561,963) 2,564,887 208,460,223 Non-cash changes Cash flows Interest expense Foreign exchange movement Other 150,000 - - - - 78,795 - (361,538) 4,229,657 7,702 - - (15,876,469) 3,412,528 128,125 8,803,921 (11,496,812) 3,499,025 128,125 8,442,383	2019.12.31 150,000 14,825,180 84,909,761 103,530,024
Interest expense - 70,518 3,435 3,168,075 3,242,028 Cash flows 150,000 - 4,229,657 (15,876,469) (11,496,812)
	Interest expense - 78,795 7,702 3,412,528 3,499,025	Foreign exchange movement - - - 128,125 128,125
			203,414,965

(7) Related-party transactions

(a) Names and relationship of related parties

The followings are entities that have transactions with the Group during the periods covered in the consolidated financial statements.

Names of related parties Relationship with the Group Evergreen International S.A. The Company’s shareholder’s major shareholder Evergreen International Corp. The Company’s shareholder Evergreen Marine Corp. (Taiwan) Ltd. The Company’s shareholder Evergreen International Storage & Transport Corp. The Company’s shareholder Evergreen Logistics Corp. The Company’s shareholder UNI Airways Corp. The Company’s shareholder’s equity investment Ever Accord Construction Corp. The Company’s shareholder’s equity investment Evergreen Steel Corp. The Company’s shareholder’s equity investment

(Continued)

271

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Names of related parties	Relationship with the Group
Evergreen Shipping Agency (Europe) GMBH SP.	The Company’s shareholder’s equity investment
Z.O.O.
Ever Shine (Shenzhen) Enterprise Management	The Company’s shareholder’s equity investment
Consulting Co., Ltd.
Ever Shine (Shanghai) Enterprise Management	The Company’s shareholder’s equity investment
Consulting Co., Ltd.
Evergreen Shipping Agency (Japan) Corporation	The Company’s shareholder’s major shareholder’s
	equity investment
EverFun Travel Services Corp. (Note)	The Company’s equity investment
Evergreen Insurance Company Limited	The Company’s shareholder’s equity investment
Evergreen Security Corp.	The Company’s equity investment
GE Evergreen Engine Services Corp.	The consolidated subsidiary’s equity investment
SATS Ltd.	The consolidated subsidiary’s shareholder
SATS Catering Private Limited	The consolidated subsidiary’s shareholder’s equity
	investment
SATS Airport Services Pte. Ltd.	The consolidated subsidiary’s shareholder’s equity
	investment
Chang Yung-Fa Foundation	The Company’s shareholder’s major shareholder
Chang Yung-Fa Charity Foundation	The Company’s shareholder’s major shareholder
Arport Air Cargo Terminal (Xiamen) Co., Ltd.	The consolidated subsidiary’s equity investment

Note: The Group subscribed for its new shares contribution in April 2019, and has significant influence over its financial and operating policies. Please refer to note 6(h).

(b) Significant transactions with related parties
(i) Operating revenue

Significant sales to related parties of the Group were as follows:

Significant sales to related parties of the Group were as follows:
Associates Other related parties	2020 $ 631,293 2,424,456 $ 3,055,749	2019
		1,139,451 3,443,396
		4,582,847

Related parties leased aircraft from the Group. The rental is charged by actual flight hours and recorded under operating revenue.

The Group provided maintenance and other services to related parties. The transactions with related parties that were made have no significant differences from those of the non-related parties.

(Continued)

272

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group provided aviation transportation services. The transportation services and ticket prices provided to related party, which is travel agency, were the same as those provided to general travel agencies. The Group received collateralized notes for receivables from aforementioned related party. No expected credit loss was required after the assessment by the management.

The prices for sales to related parties are not materially different from those of the third-parties sales. The payment terms are usually within 1~3 months, which do not materially differ from those of third-party transactions. Besides aforementioned collateralized notes, receivables from related parties were uncollateralized, and no expected credit loss was required after the assessment by the management.

(ii) Operating costs

Significant operating costs from transactions with related parties were as follows:

Associates Other related parties	2020 $ 136,011 464,872 $ 600,883	2019
		155,500 703,672
		859,172

The prices for purchases from related parties transactions are not materially different from those of the third-party vendors. The payment terms are usually within 1~3 months, which do not materially differ from those of third-party transactions.

(iii) Operating expenses

Significant operating expenses from transactions with related parties were as follows:

Associates Other related parties	2020 $ 121,751 184,755 $ 306,506	2019 155,841 282,495 438,336

The prices for related parties transactions are not materially different from those of the thirdparty vendors. The payment terms are usually within 1~3 months, which do not materially differ from those of third-party transactions.

(iv) Property transaction

1) Purchases of property, plant and equipment

The prices of property, plant and equipment purchased from related parties were summarized as follows:

Associates Other related parties	2020 $ 5,760 64,521 $ 70,281	2019
		47,119 138,559
		185,678

(Continued)

273

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

2) Disposals of property, plant and equipment

The disposals of property, plant and equipment to related parties were summarized as follows:

follows:
Associates Other related parties Associates: GE Evergreen Engine Service Corp.		2020
		Disposal price $ 4,555 3,438 $ 7,993 2019	Gain from disposal
			369 419
			788

	Disposal price $ 1,922,041	Gain from disposal Deferred gains (Note) 636,961 611,982
	$		611,982

Note: The deferred gains were included in investments accounted for using the equity method.

In December 2019, the Group sold the buildings, which are located in No. 87 and No. 110, Zhongzheng Section, Dayuan Dist., Taoyuan City, as well as machinery and other equipment to GE Evergreen Engine Services Corp.. The total disposal price was $1,922,041, which comprised buildings of 26,284.40 square meters as well as machinery and other equipment, with disposal price of $1,293,722 and $628,319, respectively. As of December 31, 2019, all of the payments have been received. All related registration procedures have been completed as of January 15, 2020. The disposal price of the abovementioned buildings as well as machinery and other equipment was based on the valuation report from a professional institute.

(v) Construction commitment

In February 2017, EGAT, the consolidated subsidiary, entered into a contract with Ever Accord Construction Corp. amounting to $786,058 for the purpose of the construction of its engine factory. The amount of contract price was corrected to $813,750 due to changes of construction design in February 2020. As of December 31, 2020 and 2019, EGAT has partially paid the price of $813,750 and $746,755, respectively.

In October 2019, EGAT, the consolidated subsidiary, entered into a contract with Ever Accord Construction Corp. amounting to $370,700 for the purpose of the construction of its component repair shop. The amount of contract price was corrected to $634,719 due to the electromechanical system demand in May 2020. As of December 31, 2020 and 2019, EGAT has partially paid the price of $415,411 and $31,880, respectively.

(Continued)

274

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(vi) Leases

The Group rented its offices from other related enterprise. For the years ended December 31, 2020 and 2019, the Group recognized the amount of $2,034 and $1,763, respectively, as interest expense. As of December 31, 2020 and 2019, the balance of lease liabilities amounted to $62,574 and $52,104, respectively.

(vii) Receivables from related parties

Receivables from related parties of the Group were as follows:

Account	Class of related parties EverFun Travel Service Corp. $ Associates Other related parties Associates Other related parties UNI Airways Corp. Evergreen Insurance Company Limited Other related parties $	2020.12.31 840 121,032 286,043 407,915 20,347 138,204 82,470 73 241,094 649,009	2019.12.31
Notes receivable Accounts receivable Accounts receivable Subtotal Other receivables Other receivables Other receivables Other receivables Subtotal Total			188,403 4,441 484,852
			677,696
			14,451 278,706 685 254
			294,096
			971,792

(viii) Payables to related parties

Payables to related parties of the Group were as follows:

Account	Class of related parties Associates Other related parties Associates Other related parties	2020.12.31 $ 18,002 79,391 97,393 15,093 48,921 64,014 $ 161,407	2019.12.31
Accounts payable Accounts payable Subtotal Other payables Other payables Subtotal Total			13,870 91,360
			105,230
			16,327 89,330
			105,657
			210,887

Key management personnel compensation comprised the following:

Short-term employee benefits Post-employment benefits	2020	2019 172,078 11,757 183,835
	$ 134,142 9,139 $ 143,281

(Continued)

275

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(8) Pledged assets

The carrying amounts of the pledged assets were as follows:

Pledged assets	Object	2020.12.31 $ 90,533,967 401,972 $ 90,935,939	2019.12.31
Property, plant, and equipment Time deposits－included in other non-current assets	Short-term and long-term borrowings Letters of credit, and contract performance guarantees		96,425,138 86,467
			96,511,605

(9) Significant contingent liabilities and unrecognized commitments

(a) Significant contingent liabilities: None.
(b) Significant commitments:
(i) In November 2015, the Company entered into aircraft purchase contracts with Boeing Company for eighteen Boeing 787-10 aircraft. In August 2020, the Company made amendments to the contracts and changed seven Boeing 787-10 aircraft (not yet delivered) into four Boeing 787-9 aircraft and three Boeing 777 freighters at a price of US$6,444,000. As of December 31, 2020, fourteen Boeing aircraft had not yet been delivered by Boeing Company. The Company has partially prepaid the price of $13,918,948, which was included in other noncurrent assets.
(ii) In November 2015, the Company entered into engine purchase contracts with General Electric Company for five Boeing 787 engines. In September 2020, the Company made amendments to the contracts and changed one Boeing 787 engine (not yet delivered) into one Boeing 777 engine at a price of US$139,110. As of December 31, 2020, two Boeing engines had not yet been delivered by General Electric Company. The Company has partially prepaid the price of $353,483, which was included in other non-current assets.

(iii) Unused letters of credit for the Group were as follows:

Unused letters of credit		2020.12.31 2,363,681	2019.12.31
	$		2,598,100

(iv) The consolidated subsidiary, Evergreen Air Cargo Services Corp. (hereinafter referred to as －
EGAC), entered into a contract Contract of Building and Operating Phase II Air Cargo －
Terminal with Civil Aeronautics Administration, Ministry of Transportation and Communications (hereinafter referred to as CAA) in 1999 to obtain the right to build and operate phase II of air cargo terminal at Taoyuan International Airport (hereinafter referred to as terminal) during the concession period and to run the business of warehousing of air cargo. Some details of this contract are as follows:

(Continued)

276

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

1) Concession period
a) Building period is less than 3 years starting from the date (i.e. April 1, 2000) when CAA delivered the terminal land to EGAC.
b) Operating period is 30 years starting from the initial date of operation (i.e. February 26, 2002) approved by CAA.
2) Right to build and operate
a) EGAC should complete building terminal and acquire necessary licenses to start operation after obtaining approval from CAA. EGAC has acquired the right to operate since the date of approval of operation and is not allowed to transfer the running of all the business to third-party. However, the running of part of the business can be transferred to third-party if CAA approves.
b) EGAC acquired an air cargo entrepot license issued by CAA on February 26, 2002 to obtain the right to operate terminal and start operations officially.
3) Royalty

EGAC should pay CAA royalties with the amount of a certain percentage (originally set at 6.00% before being adjusted to 6.10% on July 1, 2005 and adjusted subsequently to 6.00% in October 2008 until December 2023) of operating revenue, plus business tax, for each two-month period during the operating period. At the end of each accounting year, the adjustments will be made based on the differences between the amount of royalties EGAC has to pay, which is calculated as the total revenue (inclusive of operating revenue and non-operating income but exclusive of rental income from subletting operating facilities to Fedex) disclosed in the financial statements audited by the certified public accountants and multiplied by the aforementioned percentage, and adjusted by the amount of royalties EGAC has already paid during the same period. EGAC has to make up for the difference if the amount of royalties EGAC has to pay is more than those already paid; the difference will be deducted from the amount EGAC has to pay in the following period if the situation is the opposite.

4) Transfer of assets at the end of concession period

At the end of concession period, the lease agreement of the land is terminated and the land has to be returned to the government. EGAC is allowed to transfer with remuneration to the government the operating assets, in their status quo at the end of concession period, whose addition has been approved by CAA during the 5-year period before the expiration of concession period. The operating assets (in their status quo at the end of concession period, and acquired prior to the 5-year period before the expiration of concession period) have to be transferred without remuneration to the government, unless otherwise agreed. The transferred object consists of all the operating assets as well as other assets necessary to operations which were acquired by building and operating in accordance with the concession contract during the concession period.

(Continued)

277

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

5) Taoyuan International Airport of Civil Aeronautics Administration of the Ministry of transportation and Communications had been reorganized into Taoyuan International Airport Corporation (hereinafter refer to as TIAC) on November 1, 2010. The contracts that EGAC signed with CAA had been received by TIAC since the establishment. The royalty, penalty, and the commercial paper of land rent of the counterparty had been changed to TIAC. For the year ended December 31, 2020, the estimated royalty amounted to $82,710, which was recorded as operating costs.

Besides, as of December 31, 2020, the promissory notes for the performance of the concession contract issued by EGAC amounted to $769,153.

(10) Losses due to major disasters: None.

(11) Subsequent events: None.

(12) Other

(a) A summary of personnel expenses, depreciation and amortization expenses, by function, is as follows:

By function By item	2020	2020	2020	2019	2019	2019
	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Personnel expenses Salaries Labor and health insurance Pension Remuneration of directors Others Depreciation (Note) Amortization	11,057,076 925,544 739,234 - 2,066,529 25,992,131 144,971	4,687,594 369,812 300,215 33,566 512,893 1,088,487 283,122	15,744,670 1,295,356 1,039,449 33,566 2,579,422 27,080,618 428,093	14,409,116 1,022,781 759,022 - 4,349,143 25,461,646 148,165	6,111,484 393,219 327,484 55,524 612,992 1,141,831 295,253	20,520,600 1,416,000 1,086,506 55,524 4,962,135 26,603,477 443,418

Note: For the years ended December 31, 2020 and 2019, the depreciation expenses recognized were $27,359,872 and $26,671,354, respectively, less deferred gains of $16,329 and $67,877, respectively, and subsidy and rent concession of $262,925 and $0, respectively.
(b) COVID-19 outbreak since early 2020 has brought about additional uncertainties in the Group’ s operating environment at each destinations around the globe and has impacted the Group’ s operations, including cancellation or restriction of flights. Facing the impact of the pandemic, the Group continuously reviews its flight status, implements flight suspensions and raises the daily utilization rates of its freighters, in order to maximize its operating revenue. Meanwhile, the Group simplified its service and selling process, reduced personnel cost, postponed unnecessary capital expenditures, as well as performed other cost-controlling activities. The Group has applied for operating and interest subsidies from the government. Notably, the Group has received a government bailout loan amounting to $22.47 billion. In addition, the Group has also acquired additional loans from banks, and will promptly raise fund from capital market, in order to meet the future demand of working capital.

(Continued)

278

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(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 Group for the year ended December 31, 2020:

(i) Financings provided: None.
(ii) Guarantee and Endorsement provided: None.
(iii) Marketable securities held (excluding investments in subsidiaries, associates and joint ventures): Please see Table 1 attached.
(iv) Accumulated buying/selling of the same marketable securities for which the dollar amount at least $300 million or 20% of paid-in capital: Please see Table 2 attached.
(v) Acquisition of real estate for which the dollar amount at least $300 million or 20% of paid-in capital: None.
(vi) Disposition of real estate for which the dollar amount at least $300 million or 20% of paid-in capital: None.
(vii) Total purchases from or sales to related parties with the dollar amount at least $100 million or 20% of paid-in capital: Please see Table 3 attached.
(viii) Accounts receivable from related parties for which the dollar amount at least $100 million or 20% of paid-in capital: Please see Table 4 attached.
(ix) Derivative transactions: Please refer to note 6(c) for related information.
(x) Business relationships and significant inter-company transactions: Please see Table 5 attached.
(b) Information on investees:

The followings are the information on investees for the years ended December 31, 2020 (excluding investees in Mainland China): Please see Table 6 attached.

(c) Information on investment in Mainland China : Please see Table 7 attached.
(d) Major shareholders:

(in shares)

		(in shares)
Shareholding Shareholder’s Name	Shares	Percentage
Evergreen Marine Corp. (Taiwan) Ltd.	776,541,111	% 16.00
Evergreen International Corp.	549,262,304	% 11.32
Falcon Investment Services Ltd.	512,027,482	% 10.55

(Continued)

279

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(14) Segment information

(a) General information

The Group has four reportable segments: aviation transportation segment, the aircraft maintenance, manufacture segment and the catering segment as well as the air cargo services segment. Aviation transportation segment is involved in aviation transportation of passengers and cargo. The aircraft maintenance and manufacture segment is involved in maintenance and manufacture of aircraft, engine, and aircraft parts. Catering segment is involved in catering services. Air cargo services segment is involved in air cargo terminal operation.

Other operating segments are mainly involved in ground handling services, travel agency, investment, and flight training. For the years ended December 31, 2020 and 2019, the above segments do not meet the quantitative thresholds to be reportable.

(b) Profit or loss data of the reportable segments, assets and liabilities of the reportable segments, the basis of measurement and the related eliminations.

The Group allocates its resources and evaluates performance based on the internal management report, including profit which is reviewed by chief operating decision maker. The reportable amount is the same as that in the report used by the chief operating decision maker.

The accounting policies of operating segments are the same as those described in note 4 “significant accounting policies”.

The Group treats intersegment sales and transfers as third-party transactions, which are measured at market price.

The Group’s operating segment information and reconciliation are as follows:

Other segments 327,414 1,603,531 8,300	Reconciliation and elimination	Total 89,048,776 - 284,912
	(46) (5,484,489) - (5,484,535) 62 (18,637) (800,050) 16,799 (13,482,020) - (14,549,789) (908,510)
1,939,245		89,333,688
		(5,027,804)
		27,508,712
		172,656
		(827,124)
		2,145,944
		12,102,758
		329,567,255
		252,907,726

280

EVA AIRWAYS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Other segments 716,169 2,804,725 13,956	Reconciliation and elimination	Total 181,275,258 - 839,836
	(135,851) (9,541,020) - (9,676,871) 122 (18,633) (2,099,415) (117,539) (16,877,937) - (18,836,343) (1,787,350)
3,534,850		182,115,094
		(5,398,838)
		27,046,895
		134,791
		9,442,727
		2,055,220
		24,253,702
		356,251,694
		278,109,678

(i) Information about the products and services

Since the reportable segments of the Group are presented by the products, services and revenue from external customers that are disclosed therefore, information about the products and services will not be disclosed in this paragraph.

(ii) Geographical information

In presenting information on the basis of geography, segment revenue is based on the geographical location of customers and segment assets that are based on the geographical location of the assets. For the information on revenue from external customers for the years ended December 31, 2020 and 2019, please refer note 6(x).

Non-current assets:

Geography Taiwan Asia Others	2020.12.31 $ 259,381,431 427,927 1,391,424 $ 261,200,782	2019.12.31
		266,002,803 430,852 1,676,592
		268,110,247

Non-current assets include property, plant and equipment, right-of-use assets, intangible assets, and other non-current assets, excluding financial instruments and deferred tax assets.

(iii) Information about revenue from major customers

The Group is involved in international aviation transportation with its major customers being the masses.

281

	Notes
Highest Shareholding in the Period or Capital Contribution		45,187,711	12,995,958 2,564,182 18,300,904 3,666,549 13,974,385 17,099,807 13,205,637 16,222,774
December31, 2020	Fair value	675,556	200,573 461,168 100,059 50,033 200,119 96,283 92,249 102,211 1,978,251
	Percentage of ownership	-	- - - - - - - -
	Book value	675,556	200,573 461,168 100,059 50,033 200,119 96,283 92,249 102,211 1,978,251
	Shares/Units	45,187,711	12,995,958 2,564,182 6,086,687 3,666,549 13,974,385 7,611,392 5,477,678 7,453,782
	Financial Statement Account	Financial assets at fair value through profit or loss－current	Financial assets at fair value through profit or loss－current Financial assets at fair value through profit or loss－current Financial assets at fair value through profit or loss－current Financial assets at fair value through profit or loss－current Financial assets at fair value through profit or loss－current Financial assets at fair value through profit or loss－current Financial assets at fair value through profit or loss－current Financial assets at fair value through profit or loss－current
	Relationship with the Company	None	None None None None None None None None
	Marketable Securities Type and Name	Jih Sun Money Market Fund	FSITC Taiwan Money Market Fund FSITC Money Market Fund Yuanta De-Li Money Market Fund Taishin 1699 Money Market Fund Taishin Ta-Chong Money Market Fund Mega Diamond Money Market Fund UPAMC James Bond Money Market Fund Eastspring Investments Well Pool Money Market Fund
	Held Company Name	The Company	〃〃〃〃〃 Evergreen Air Cargo Services Corp. 〃〃

282

	Notes
Highest Shareholding in the Period or Capital Contribution		231,580	8,502,418 35,203,008 37,606,277 38,201,625 1,000,000 1 557,349 158,800 2,740,542 500
December31, 2020	Fair value	19,702	429,372 799,109 470,830 1,194,565 34,800 7,069 22,684 3,216 62,210 1,237 3,044,794
	Percentage of ownership	2.11	5.67 5.96 9.98 9.56 10.00 4.55 0.01 0.01 0.46 0.0207
	Book value	19,702	429,372 799,109 470,830 1,194,565 34,800 7,069 22,684 3,216 62,210 1,237 3,044,794
	Shares/Units	231,580	8,502,418 35,203,008 37,606,277 38,201,625 1,000,000 1 557,349 158,800 2,740,542 500
	Financial Statement Account	Financial assets at fair value through other comprehensive income－non-current	Financial assets at fair value through other comprehensive income－non-current Financial assets at fair value through other comprehensive income－non-current Financial assets at fair value through other comprehensive income－non-current Financial assets at fair value through other comprehensive income－non-current Financial assets at fair value through other comprehensive income－non-current Financial assets at fair value through other comprehensive income－non-current Financial assets at fair value through other comprehensive income－non-current Financial assets at fair value through other comprehensive income－non-current Financial assets at fair value through other comprehensive income－non-current Financial assets at fair value through other comprehensive income－non-current
	Relationship with the Company	None	None None The Company's shareholder's equity investment The Company's shareholder's equity investment None None The Company's shareholder's shareholder The Company's shareholder's shareholder None None
	Marketable Securities Type and Name	Shares of Everest Investment Holdings Ltd.	Shares of Trade-Van Information Services Co. Shares of Central Reinsurance Corporation Shares of UNI Airways Corp. Shares of Evergreen Steel Corp. Shares of Chung Hwa Express Corp. Star Alliance Services Gmbh Shares of Evergreen Marine Corp. (Taiwan) Ltd. Shares of Evergreen International Storage & Transport Corp. Shares of Central Reinsurance Corporation Shares of Air Macau Co., Ltd.
	Held Company Name	The Company	〃〃〃〃〃〃 Evergreen Airline Services Corp. 〃 Hsiang Li Investment Corp. Evergreen Airways Service (Macau) Ltd.

283

EndingBalance	Amount	461,168	100,059 7,744,694 96,283 92,249 102,211
	Shares/ Units	2,564,182	6,086,687 280,189,241 7,611,392 5,477,678 7,453,782
Disposal	Gain/ Loss on Disposal	23	152 - 860 1,038 873
	Book value	19,977	300,000 2,382,515 339,166 498,962 429,127
	Amount	20,000	300,152 2,382,515 340,025 500,000 430,000
	Shares/ Units	111,409	18,300,904 238,251,455 26,925,845 29,727,106 31,409,301
Acquisition	Amount	480,000	400,000 - 285,000 425,000 390,000
	Shares/ Units	2,675,591	24,387,591 - 22,572,601 25,271,487 28,495,051
BeginningBalance	Amount	-	- 10,799,290 150,619 166,663 141,590
	Shares/ Units	-	- 518,440,696 11,964,636 9,933,297 10,368,032
	Relationship with the Company	None	None Subsidiary None None None
	Counter-party	First Securities Investment Trust Co., Ltd. Yuanta Securities Investment Trust Co., Ltd. Evergreen Aviation Technologies Corp. Mega International Investment Trust Co., Ltd. Uni-President Assets Management Corp. Eastspring Securities Investment Trust Co. Ltd
	Financial Statement Account	Financial assets at fair value through profit or loss－current－fund	Financial assets at fair value through profit or loss－current－fund Investments accounted for using equity method Financial assets at fair value thorugh profit or loss－current－fund Financial assets at fair value through profit or loss－current－fund Financial assets at fair value through profit or loss－current－fund
	Marketable Securities Type and Name	FSITC Money Market Fund	Yuanta De-Li Money Market Fund Evergreen Aviation Technologies Corp. Mega Diamond Money Market Fund UPAMC James Bond Money Market Fund Eastspring Investments Well Pool Money Market Fund
	Company Name	The Company	〃〃 Evergreen Air Cargo Services Corp. 〃〃

284

	Notes		(Note) (Note) (Note) (Note) (Note) (Note) (Note) (Note)
Notes/AccountsReceivable (Payable)	Percentage of Total Accounts/ Notes Receivable (Payable)	1.97	- 6.71 1.34 14.19 2.29 - 80.75 9.98 31.70 7.74 8.58 64.00 54.23
	Balance	109,055	- (223,287) (44,549) (471,879) (76,154) - 233,052 28,788 472,541 115,380 127,848 56,138 79,964
AbnormalTransaction	Payment Terms
	Unit Price	-	- - - - - - - - - - - - -
Transaction Details	Payment Terms	60 days	60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 120 days 60 days 60 days 60 days
	Percentage of Total Purchases/Sales	1.93	0.31 1.93 0.92 3.76 0.50 0.15 77.50 10.21 25.82 5.69 3.10 75.99 25.79
	Amount	1,539,966	248,573 1,408,566 669,866 2,749,774 368,922 106,490 1,408,566 185,533 2,759,968 607,620 331,286 669,866 368,922
	Purchases/Sales	Sales	Sales Purchases Purchases Purchases Purchases Purchases Sales Sales Sales Sales Sales Sales Sales
	Relationship	The company's shareholder's equity investment	The company’s shareholder The company's subsidiary The company's subsidiary The company's subsidiary The company's subsidiary The company's shareholder's equity investment Parent company The company's shareholder's equity investment Parent company The company's equity investment The company's shareholder Parent company Parent company
	Related Party	UNI Airways Corp.	Evergreen Logistics Corp. Evergreen Airline Services Corp. Evergreen Sky Catering Corp. Evergreen Aviation Technologies Corp. Evergreen Air Cargo Services Corp. Evergreen Insurance Company Ltd. The Company UNI Airways Corp. The Company GE Evergreen Engine Services Corp. UNI Airways Corp. The Company The Company
	Company Name	The Company	〃〃〃〃〃〃 Evergreen Airline Services Corp. 〃 Evergreen Aviation Technologies Corp. 〃〃 Evergreen Sky Catering Corp. Evergreen Air Cargo Services Corp.

285

Allowances for Impairment Loss	Allowances for Impairment Loss	-	- - - -
Amounts Received in Subsequent Period		247,083	248,195 473,565 135,709 128,024
Past - due Receivables from Related Party	Action taken
	Amount	-	- - - -
Turnover Rate		(Note 1)	4.00 (Note 2) 4.87 (Note 2) 8.09 2.78
Balance of Receivables from Related Party		247,083	248,195 473,565 135,709 128,024
Relationship		The Company's shareholder's equity investment	Parent company Parent company The Company's equity investment The company's shareholder
Related Party		UNI Airways Corp.	The Company The Company GE Evergreen Engine Services Corp. UNI Airways Corp.
Company Name		The Company	Evergreen Airline Services Corp. Evergreen Aviation Technologies Corp. 〃〃

286

Percentage of the Consolidated Net Revenue or Total Assets	3.09	0.75 1.58 0.41 0.14 0.07
Transaction Terms	as general transactions	as general transactions as general transactions as general transactions as general transactions as general transactions
Amount	2,749,774	669,866 1,408,566 368,922 471,879 223,287
Financial Statements Item	Operating costs	Operating costs Operating costs Operating costs Accounts payable－related parties Accounts payable－related parties
Nature of Relationship	1	1 1 1 1 1
Company Name	Evergreen Aviation Technologies Corp.	Evergreen Sky Catering Corp. Evergreen Airline Services Corp. Evergreen Air Cargo Services Corp. Evergreen Aviation Technologies Corp. Evergreen Airline Services Corp.
Trader	The Company	〃〃〃〃〃
Number	0	0 0 0 0 0

287

	Notes	(Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 2) (Note 2) (Note 3) (Note 3)	(Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 2) (Note 2) (Note 3) (Note 3)
	Share of Profit (Losses) of Investee	21,807 (21,879) (2,973) (18,119) 931,478 (37,687) (211,416) 136,681 2,204 11,070 (14,859) 176,399 (22,332)
	Net Income (Losses) of Investee	21,807 (22,100) (5,830) (18,119) 1,173,028 (66,898) (424,530) 225,453 2,204 36,918 (56,112) 289,933 (111,685)
Highest Shareholding in the Period or Capital Contribution		5,500,000 None 40,800 10,000,000 518,440,696 36,183,106 76,557,790 72,750,000 2,680,000 6,336,000 5,505,000 203,284,545 None
Ending Balance	Book Value	369,047 99,521 15,375 661,164 7,744,694 870,451 2,098,549 1,551,997 71,222 114,257 41,650 1,542,194 80,377
	Ratio of Shares	% 100.00	% 99.00 % 51.00 % 100.00 % 79.42 % 56.33 % 49.80 % 60.625 % 100.00 % 31.25 % 26.48 % 49.00 % 20.00
	Shares	5,500,000 None 40,800 10,000,000 280,189,241 36,183,106 76,557,790 72,750,000 2,680,000 6,336,000 5,505,000 203,284,545 None
Initial Investment Amount	December 31, 2019	179,173 327 5,086 932,050 3,200,450 111,180 498,000 740,348 448,280 25,000 55,061 2,032,845 8,032
	December 31, 2020	179,173 327 5,086 932,050 - 111,181 498,000 740,348 448,280 25,000 55,061 2,032,845 8,032
	Main Businesses and Products	Investment business	Investment business Traveling agency Flight training school Maintenance, manufacturing, processing and sales of aircraft, engine and parts Aviation ground service The provision of in-flight meals in sky catering and the sales of food Air cargo entrepot Investment business Security services Traveling agency Maintenance, manufacturing, and sales of aircraft, engine and engine components Ground handling
	Location	Maystar Chambers, P.O. Box 3269, Apia, Samoa 398 Alameda Dr. Carlos D' Assumpcao.Edif CNAC 3 Andar K-M Macau 10/F, Gedung Mega Plaza Jl. H.R Rasuna Said Kav. C-3 Jakarta 12920 Indonesia 3745 Whitehead Street Mather, CA, 95655, USA No.6 Hangzhan S.Rd., Dayuan Dist., Taiwan Taoyuan Int'L Airport, Taoyuan City, Taiwan No.608 Harng-Jann N.Rd.,Taiwan Taoyuan Int'L Airport, Dayuan Dist., Taoyuan City, Taiwan No.3, Hangqin N. Rd.,Dayuan Dist., Taoyuan City, Taiwan No.8-1, Hang-Chin N. Rd.,Dayuan Dist., Taoyuan City, Taiwan 1F,No. 117,Sec. 2,Chang An E. Rd., Taipei 104 Taiwan 4-5F., No. 111, Songjiang Rd., Zhongshan Dist., Taipei City 104, Taiwan 3F., No. 100,Sec. 2, Chang An E. Rd., Zhongshan Dist., Taipei City 104, Taiwan(R.O.C) No.8 Harng-Jann S.Rd.,Taiwan Taoyuan Int'L Airport, Dayuan Dist., Taoyuan City, Taiwan Airport Logistic Business Center Room 52 Macau International Airport Avenida do Aeroporto, Taipa, Macau
	Name of investee	Sky Castle Investment Ltd.	Evergreen Airways Service (Macau) Ltd. PT Perdana Andalan Air Service EVA Flight Training Academy Evergreen Aviation Technologies Corp. Evergreen Airline Services Corp. Evergreen Sky Catering Corp. Evergreen Air Cargo Services Corp. Hsiang Li Investment Corp. Evergreen Security Corp. EverFun Travel Services Corp. GE Evergreen Engine Services Corp. Menzies Macau Airport Services Ltd.
	Name of investor	The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company Evergreen Aviation Technologies Corp. Evergreen Airways Service (Macau) Ltd.

288

Accumulated	Accumulated Accumulated Highest Inward	Total Amount of Outflow of Investment Flows Outflow of Net Shareholding Direct/Indirect Carrying Remittance of	Paid-in Capital Method of Investment from Investment from Income in the Period Shareholding Share of Amount as of Earnings as of	(CNY in Investment Taiwan as of Taiwan as of (Losses) or Capital (%) by the Profits/Losses December 31, December 31,	Investee Company Main Business and Products Thousands) (Note 1) January 1, 2020 Outflow Inflow December 31, 2020 of investee Contribution Company (Note 2) 2020 2020	Arport Air Cargo Forwarding and storage of air cargo CNY 254,480 2 138,784 - - 138,784 91,458 14.00% 14.00 % 12,804 242,444 106,670	Terminal (Xiamen) Co., Ltd.	Arport Air Cargo Forwarding and storage of air cargo, CNY 14,000 2 61,418 - - 61,418 68,382 14.00% 14.00 % 9,574 125,022 58,498	Service (Xiamen) Co., Ltd. truck freight transportation, other	transportation auxiliary industry	(Note 1) Ways to Invest in Mainland China:	1.Investment in Mainland China companies by remittance through a third region.	2.Investment in Mainland China companies through a company invested and established in a third region.	3.Investment in Mainland China companies through an existing company established in a third region.	4.Direct investment in Mainland China.	5.Other methods of investing in Mainland China. EX：Entrusted investment.	(Note 2) The financial statements of the investee company were audited by the global accounting firm in a cooperation with R.O.C. accounting firm.	The Company recognized share of profit of associates accounted for using equity method by how many shares the Company holds.	(Note 3) The investment in Shanghai Airlines Cargo Intl.Co., Ltd was authorized by the Investment Commission. The amount of investment was $748,721 (USD23,361 thousand dollars).	Shanghai Airlines Cargo Intl.Co., Ltd has completed liquidation process in July, 2014.	(Note 4) The investment in China Cargo Airlines Co., Ltd was authorized by the Investment Commission. The amount of investment was $1,453,728 (USD50,337 thousand dollars).	China Cargo Airlines Co.,Ltd has completed shares transfer in January, 2016	2. Limitation on investment in Mainland China:	Accumulated Outward Remittance for Investment Investment Amounts Authorized by	in Mainland China as of December 31, 2020 Investment Commission, MOEA (Note) Upper Limit on the Amount of Investment	(USD in Thousands) (USD in Thousands) Stipulated by Investment Commission, MOEA	NTD 2,402,651 NTD 2,456,862 45,995,717	(USD 79,781 ) (USD 80,562 )	Note：Investment amounts in Mainland China were translated to TWD at the exchange rates of the dates of the remittance; investment amounts authorized by Investment Commission, MOEA were translated to	TWD at the exchange rates of the dates of the authorization.	3. Significant transactions：None.

289

Stock Code:2618

EVA AIRWAYS CORP.

Parent-Company-Only Financial Statements

With Independent Auditors� Report For the Years Ended December 31, 2020 and 2019

Address: No. 376, Sec. 1, Hsin-nan Road, Luchu Dist., Taoyuan City, Taiwan Telephone: 886-3-351-5151

290

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 significant accounting 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 contingent liabilities and unrecognized commitments
(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. List of major account titles

Page

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) Telephone + 886 2 8101 6666 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, Fax + 886 2 8101 6667 Xinyi Road, Taipei City 110615, Taiwan (R.O.C.) Internet home.kpmg/tw

Independent Auditors� Report

To the Board of Directors of EVA Airways Corp.:

Opinion

We have audited the parent-company-only financial statements of EVA Airways Corp. (�the Company�), which comprise the balance sheets as of December 31, 2020 and 2019, the statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the financial statements, including a summary of significant 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, 2020 and 2019, 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 Auditing and Certification of Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors� Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (�the Code�), and we have fulfilled our other ethical responsibilities in accordance with the Code. 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.

Contract liabilities mileage redemption revenue

Please refer to note 4(q) �Revenue recognition�, note 5 �Significant accounting assumptions and judgments, and major sources of estimation uncertainty�, and note 6(w) �Revenue from contracts with customers� of the financial statements.

Description of key audit matter:

The member who joins the �Infinity MileageLands� (�the Program�) can earn mileage by flying any of the Company�s flights or through other consumption. Contract liabilities will be converted into revenues when the member actually redeems the mileage or it is expected that the right is probable not to be redeemed.

292

The Company maintains information technology systems in order to calculate its mileage redemption revenue. And the Company also uses the systems to estimate the unit fair value of the mileage. Therefore, the cut off test of contract liabilities mileage redemption revenue is one of the key judgmental areas for our audit.

How the matter was addressed in our audit:

Impairment of long-term non-financial assets

Please refer to note 4(n) �Impairment of non-financial assets �, note 5 �Significant accounting assumptions and judgments, and major sources of estimation uncertainty�, and note 6(j) �Property, plant and equipment� of the financial statements.

Description of key audit matter:

The Company periodically assesses for any indication of impairment on its long-term non-financial assets. If any indication thereof exists with long-term non-financial assets, the Company should estimate the recoverable amount for the assets� cash-generating unit. The calculation for the assets� cash-generating unit involved several assumptions and estimations made by the management. Therefore, the impairment test of long-term non-financial assets is one of the key judgmental areas for our audit.

How the matter was addressed in our audit:

Our principal audit procedures included: Assessing the method used in measuring the recoverable amount, which is provided by the management of the Company, including evaluating the appropriateness of assumption and estimation on major parameters, such as the forecast of cash flow and discount rate; comparing with the historical accuracy of judgments, including inspecting the amount of forecast of cash flow in prior year and with reference to actual cash flow to evaluate the appropriateness of the assumptions, as well as performing the sensitivity analysis on major assumption.

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.

293

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

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 auditors� report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the 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 the financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion of the Company.

294

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 Chia-Chien Tang and Yen-Ta Su.

==> picture [100 x 40] intentionally omitted <==

KPMG

Taipei, Taiwan (Republic of China) March 22, 2021

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.

295

2020.12.31 2019.12.31 Assets Amount % Amount % Current assets: 1100 Cash and cash equivalents (note 6(a)) $ 31,075,156 11 41,856,135 13 1110 Financial assets at fair value through profit or loss current (note 6(b)) 1,687,508 1 502,455 - 1139 Financial assets for hedging current (note 6(c)) - - 37,428 - 1150 Notes receivable, net (note 6(d)) 473 - 842,287 - 1160 Notes receivable related parties (notes 6(d) and 7) 840 - 188,403 - 1170 Accounts receivable, net (note 6(d)) 5,411,920 2 5,515,785 2 1180 Accounts receivable related parties (notes 6(d) and 7) 116,671 - 323,922 - 130x Inventories (note 6(f)) 1,307,117 - 1,427,891 1 1460 Non-current assets or disposal group classified as held for sale, net (notes 6(g) and 6(l)) 852,175 - 1,233,824 - 1470 Other current assets (notes 6(e), 6(n) and 7) 751,234 - 772,709 - Total current assets 41,203,094 14 52,700,839 16 Non-current assets: 1510 Financial assets at fair value through profit or loss non-current (notes 6(b) and 6(o)) 2,793 - - - 1517 Financial assets at fair value through other comprehensive income non-current (note 6(b)) 2,955,447 1 2,581,505 1 1550 Investments accounted for using equity method (notes 6(h) and 6(i)) 13,637,927 5 17,048,090 5 1600 Property, plant and equipment (notes 6(j), 6(k), 6(l), 6(o), 7, 8 and 9) 115,493,154 38 120,612,684 38 1755 Right-of-use assets (notes 6(j), 6(k), 6(q) and 7) 106,547,708 35 112,467,687 35 1780 Intangible assets (note 6(m)) 547,836 - 642,155 - 1840 Deferred tax assets (note 6(s)) 4,890,891 2 3,960,637 1 1900 Other non-current assets (notes 6(c), 6(n), 7, 8 and 9) 16,958,059 5 11,849,736 4 Total non-current assets 261,033,815 86 269,162,494 84 Total assets $ 302,236,909 100 321,863,333 100 2020.12.31 2019.12.31 Liabilities and Equity Amount % Amount % Current liabilities: 2120 Financial liabilities at fair value through profit or loss current (notes 6(b) and 6(o)) $ - - 3,274 - 2126 Financial liabilities for hedging current (notes 6(c), 6(p) and 7) 11,564,988 4 11,558,692 4 2130 Contract liabilities current (note 6(w)) 4,510,802 2 19,820,043 6 2170 Notes and accounts payable 2,490,358 1 4,727,977 1 2180 Accounts payable related parties (note 7) 835,267 - 1,681,507 1 2200 Other payables (notes 6(x) and 7) 4,300,632 1 7,953,863 2 2230 Current tax liabilities 433,564 - 755,149 - 2260 Liabilities related to non-current assets or disposal group classified as held for sale (note 6(g)) 1,142 - 140,810 - 2280 Lease liabilities current (notes 6(p) and 7) 164,820 - 172,500 - 2320 Current portion of long-term liabilities (notes 6(o) and 8) 16,437,386 6 21,431,599 7 2399 Other current liabilities (note 6(q)) 512,303 - 4,942,707 2 Total current liabilities 41,251,262 14 73,188,121 23 Non-current liabilities: 2511 Financial liabilities for hedging non-current (notes 6(c), 6(p) and 7) 77,067,827 26 86,744,021 27 2527 Contract liabilities non-current (note 6(w)) 2,517,482 1 3,220,551 1 2530 Bonds payable (note 6(o)) 3,082,941 1 4,250,000 1 2540 Long-term borrowings (notes 6(o) and 8) 80,075,379 26 57,511,755 18 2570 Deferred tax liabilities (note 6(s)) 1,624,345 1 634,146 - 2580 Lease liabilities non-current (notes 6(p) and 7) 417,564 - 547,793 - 2640 Net defined benefit liabilities non-current (note 6(r)) 3,001,003 1 4,104,856 1 2670 Other non-current liabilities (note 6(q)) 22,401,718 7 20,409,908 7 Total non-current liabilities 190,188,259 63 177,423,030 55 Total liabilities 231,439,521 77 250,611,151 78 Equity (notes 6(b), 6(c), 6(i), 6(o), 6(r), 6(s), 6(t) and 6(u)): 3110 Ordinary share 48,535,695 16 48,535,695 15 3200 Capital surplus 7,985,673 3 7,849,700 2 3300 Retained earnings 7,827,138 2 12,117,248 4 3400 Other equity interest 6,448,882 2 2,749,539 1 Total equity 70,797,388 23 71,252,182 22 Total liabilities and equity $ 302,236,909 100 321,863,333 100	23	27 1 1 18 - - 1 7	55	78	15 2 4 1	22	100

296

EVA AIRWAYS CORP.

Statements of Comprehensive Income

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, except Earnings Per Share)

2020
Amount
%
4000
Operating revenue (notes 6(w) and 7)
$ 79,602,529
100
5000
Operating costs (notes 6(c), 6(e), 6(f), 6(j), 6(k), 6(m), 6(p), 6(r), 6(x) and 7)
(73,088,704)
(92)
5900
Gross profit from operations
6,513,825
8
6000
Operating expenses (notes 6(d), 6(e), 6(j), 6(k), 6(m), 6(p), 6(r), 6(x) and 7)
(8,367,989)
(10)
6900
Net operating income (loss)
(1,854,164)
(2)
Non-operating income and expenses (notes 6(c), 6(e), 6(h), 6(p), 6(y) and 7):
7010
Other income
345,924
1
7020
Other gains and losses
1,084,895
1
7050
Finance costs
(4,789,246)
(6)
7375
Share of profit of subsidiaries and associates accounted for using equity method
796,307
1
Total non-operating income and expenses
(2,562,120)
(3)
7900
Profit (loss) before tax
(4,416,284)
(5)
7950
Income tax benefit (expenses) (note 6(s))
1,054,645
1
Profit (loss)
(3,361,639)
(4)
8300
Other comprehensive income (notes 6(c), 6(h), 6(r) , 6(s) and 6(t)):
8310
Components of other comprehensive income that will not be reclassified to profit or loss:
8311
Remeasurements of defined benefit plans
312,233
-
8316
Unrealized gains (losses) from investments in equity instruments measured at fair value
through other comprehensive income
373,942
1
8317
Gains (losses) on hedging instrument that will not be reclassified to profit or loss
11,643
-
8330
Share of other comprehensive income of subsidiaries and associates accounted for using
equity method, components of other comprehensive income that will not be reclassified to
profit or loss
52,428
-
8349
Income tax benefit (expenses) related to components of other comprehensive income that will
not be reclassified to profit or loss
(65,207)
-
Total components of other comprehensive income that will not be reclassified to profit
or loss
685,039
1
8360
Components of other comprehensive income that will be reclassified to profit or loss:
8361
Exchange differences on translation of foreign financial statements
(37,217)
-
8368
Gains (losses) on hedging instrument
4,212,122
5
8380
Share of other comprehensive income of subsidiaries and associates accounted for using
equity method, components of other comprehensive income that will be reclassified to profit
or loss
(33,256)
-
8399
Income tax benefit (expenses) related to components of other comprehensive income that will
be reclassified to profit or loss
(842,424)
(1)
Total components of other comprehensive income that will be reclassified to profit or
loss
3,299,225
4
8300
Other comprehensive income, net of tax
3,984,264
5
8500
Total comprehensive income
$
622,625
1
Earnings per share (note 6(v))
9750
Basic earnings per share (in New Taiwan Dollars)
$
(0.69)
9850
Diluted earnings per share (in New Taiwan Dollars)
$
(0.69)

2019
Amount
%
135,621,151
100
(117,477,282)
(87)
18,143,869
13
(12,027,003)
(9)
6,116,866
4
800,315
1
469,232
-
(5,101,704)
(4)
2,243,419
2
(1,588,738)
(1)
4,528,128
3
(545,661)
-
3,982,467
3
(461,849)
-
167,319
-
(11,451)
-
(82,321)
-
94,669
-
(293,633)
-
(36,486)
-
2,735,417
1
(2,527)
-
(547,083)
-
2,149,321
1
1,855,688
1
5,838,155
4
0.83
0.76

See accompanying notes to parent-company-only financial statements.

297

								Total equity	63,582,269		-	(2,343,647)	-		90,713		3,757	3,982,467	1,855,688	5,838,155	3,719,020	361,915		-	71,252,182		-	(1,213,392)		135,973	(3,361,639)	3,984,264	622,625	70,797,388
								Total	434,085		-	-	-		-		-	-	2,315,443	2,315,443	-	-		11	2,749,539		-	-		-	-	3,699,343	3,699,343	6,448,882
Other equity interest	Unrealized gains	(losses) on	financial assets	measured at fair	value through	other Gains (losses)	comprehensive on hedging	income instruments	547,201 (109,356)		- -	- -	- -		- -		- -	- -	175,283 2,179,173	175,283 2,179,173	- -	- -		11 -	722,495 2,069,817		- -	- -		- -	- -	390,804 3,379,012	390,804 3,379,012	1,113,299 5,448,829
			Exchange	differences on	translation of	foreign	financial	statements	(3,760)		-	-	-		-		-	-	(39,013)	(39,013)	-	-		-	(42,773)		-	-		-	-	(70,473)	(70,473)	(113,246)
								Total	12,344,382		-	(2,343,647)	(1,406,188)		-		-	3,982,467	(459,755)	3,522,712	-	-		(11)	12,117,248		-	(1,213,392)		-	(3,361,639)	284,921	(3,076,718)	7,827,138
Retained earnings						Unappropriated	retained	earnings	10,777,932		(655,282)	(2,343,647)	(1,406,188)		-		-	3,982,467	(459,755)	3,522,712	-	-		(11)	9,895,516		(352,270)	(1,213,392)		-	(3,361,639)	284,921	(3,076,718)	5,253,136
							Legal	reserve	1,566,450		655,282	-	-		-		-	-	-	-	-	-		-	2,221,732		352,270	-		-	-	-	-	2,574,002
							Capital	surplus	6,751,945		-	-	-		90,713		3,757	-	-	-	900,000	103,285		-	7,849,700		-	-		135,973	-	-	-	7,985,673
						Advance	receipts for	share capital	230,642		-	-	-		-		-	-	-	-	(180,980)	(49,662)		-	-		-	-		-	-	-	-	-
							Ordinary	share	43,821,215		-	-	1,406,188		-		-	-	-	-	3,000,000	308,292		-	48,535,695		-	-		-	-	-	-	48,535,695
									$																									$
									Balance on January 1, 2019	Appropriation of prior year�s earnings:	Legal reserve appropriated	Cash dividends of ordinary share	Stock dividends of ordinary share	Difference between consideration and carrying amount of	subsidiaries acquired or disposed	Changes in equity of associates accounted for using equity	method	Profit	Other comprehensive income	Total comprehensive income	Issue of shares	Conversion of convertible bonds	Disposal of investments in equity instruments designated at fair	value through other comprehensive income	Balance on December 31, 2019	Appropriation of prior year�s earnings:	Legal reserve appropriated	Cash dividends of ordinary share	Due to recognition of equity component of convertible bonds	issued	Loss	Other comprehensive income	Total comprehensive income	Balance on December 31, 2020

298

EVA AIRWAYS CORP.

Statements of Cash Flows

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Profit (loss) before tax Adjustments: Adjustments to reconcile profit: Expected credit loss (gain) Depreciation expense Amortization expense Net gains on financial assets or liabilities at fair value through profit or loss Interest expense Interest income Dividend income Shares of profit of subsidiaries and associates accounted for using equity method Gains on disposal of property, plant and equipment Gains on disposal of non-current assets classified as held for sale Unrealized foreign exchange gains Others Total adjustments to reconcile profit Changes in operating assets and liabilities: Changes in operating assets: Notes receivable, net Notes receivable related parties Accounts receivable, net Accounts receivable related parties Inventories Other current assets Total changes in operating assets Changes in operating liabilities: Contract liabilities Notes and accounts payable Accounts payable related parties Other payables Other current liabilities Net defined benefit liabilities non-current Other non-current liabilities Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash inflow (outflow) generated from operations Income taxes paid Net cash flows from (used in) operating activities		2020 (4,416,284) (30,000) 25,763,420 240,530 (20,873) 4,789,246 (208,793) (137,131) (796,307) (39,699) (141,369) (1,261,623) (68,465) 28,088,936 841,814 187,563 133,865 207,251 91,968 162,743 1,625,204 (16,012,310) (2,237,619) (846,240) (3,695,984) (4,545,862) (791,619) 19,857 (28,109,777) (26,484,573) 1,604,363 (2,811,921) (358,902) (3,170,823)	2019 4,528,128 (9,000) 25,004,434 237,627 (6,106) 5,101,704 (656,137) (144,178) (2,243,419) (494,796) - (201,367) (300,507) 26,288,255 91,056 (188,403) 671,529 (50,172) 47,359 (59,519) 511,850 1,930,370 (2,007,383) (119,165) (200,656) 56,124 (531,937) 61,721 (810,926) (299,076) 25,989,179 30,517,307 (681,401) 29,835,906
	$

See accompanying notes to parent-company-only financial statements.

299

EVA AIRWAYS CORP.

Statements of Cash Flows (continued)

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) investing activities: Acquisition of financial assets at fair value through other comprehensive income Acquisition of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or loss Acquisition of investments accounted for using equity method Proceeds from capital reduction of investments accounted for using equity method Proceeds from disposal of non-current assets classified as held for sale Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Decrease in other non-current assets Increase in prepayments for business facilities Interest received Dividends received Net cash flows used in investing activities Cash flows from (used in) financing activities: Increase in short-term borrowings Decrease in short-term borrowings Proceeds from issuance of bonds payable Repayments of bonds payable Proceeds from long-term borrowings Repayments of long-term borrowings Payments of lease liabilities Decrease in other non-current liabilities Cash dividends paid Proceeds from issuing shares Interest paid Net cash flows used in financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year	2020 $ - (1,500,000) 320,152 (1) 2,382,515 997,407 (4,046,860) 91,146 (146,211) 76,219 (7,003,851) 231,745 1,954,840 (6,642,899) 1,000,000 (1,000,000) 2,995,016 (10,566,000) 38,273,000 (14,381,470) (11,982,299) (86,235) (1,213,392) - (4,005,877) (967,257) (10,780,979) 41,856,135 $ 31,075,156	2019 (67,890) (1,000,000) 1,002,826 (55,061) - - (14,222,781) 1,229,149 (278,926) 17,475 (7,821,723) 656,549 1,266,300 (19,274,082) 462,072 (462,072) - - 22,829,700 (16,190,171) (12,282,912) (24,823) (2,343,647) 3,719,020 (4,343,556) (8,636,389) 1,925,435 39,930,700 41,856,135

See accompanying notes to parent-company-only financial statements.

300

EVA AIRWAYS CORP.

Notes to the Parent-Company-Only Financial Statements

For the years ended December 31, 2020 and 2019

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

(1) Company history

EVA Airways Corp (the � Company�) was incorporated on April 7, 1989, as a corporation limited by shares under special permission of the Republic of China (R.O.C.) Ministry of Transportation and Communications. The address of the Company�s registered office is No. 376, Sec. 1, Hsin-nan Road, Luchu Dist., Taoyuan City, Taiwan.

The Company�s business activities are

(a) civil aviation transportation and general aviation business;
(b) to carry out any business which is not forbidden or restricted by the applicable laws and regulations, excluding those requiring licensing.

(2) Approval date and procedures of the financial statements

The parent-company-only financial statements were authorized by the Company�s Board of Directors as of March 22, 2021.

(3) New standards, amendments and interpretations adopted

(a) The impact of the International Financial Reporting Standards (�IFRSs�) endorsed by the Financial Supervisory Commission, R.O.C. (�FSC�) which have already been adopted.

The details of impact on the Company�s adoption of the new amendments beginning January 1, 2020 are as follows:

(i) Amendments to IFRS 16 �COVID-19-Related Rent Concessions�

The Company has elected to apply the practical expedient for all rent concessions that meet the criteria beginning January 1, 2020, with early adoption. No adjustment was made upon the initial application of the amendments. The amounts recognized in profit or loss for the year ended December 31, 2020 was $145,556.

(Continued)

301

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

(ii) Other amendments

The following new amendments, effective January 1, 2020, do not have a significant impact on the Company�s parent-company-only financial statements:

Amendments to IFRS 3 �Definition of a Business�
Amendments to IFRS 9, IAS 39 and IFRS 7 �Interest Rate Benchmark Reform�
Amendments to IAS 1 and IAS 8 �Definition of Material�
(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, 2021, would not have a significant impact on its parent-company-only financial statements:

Amendments to IFRS 4 �Extension of the Temporary Exemption from Applying IFRS 9�
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 �Interest Rate Benchmark Reform Phase 2�
(c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

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
Interpretations
Amendments to IAS 1
�Classification of Liabilities as
Current or Non-current�

Content of amendment
Effective date per
IASB
The amendments aim to promote consistency
in applying the requirements by helping
companies
determine
whether,
in
the
statement of balance sheet, debt and other
liabilities with an uncertain settlement date
should be classified as current (due or
potentially due to be settled within one year)
or non-current.
The amendments include clarifying the
classification
requirements
for
debt
a
company might settle by converting it into
equity.
January 1, 2023

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

(Continued)

302

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

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 parent-company-only 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
Amendments to IAS 16 �Property, Plant and Equipment Proceeds before Intended Use�
Amendments to IAS 37 �Onerous Contracts Cost of Fulfilling a Contract�
Annual Improvements to IFRS Standards 2018-2020
Amendments to IFRS 3 �Reference to the Conceptual Framework�
Amendments to IAS 1 �Disclosure of Accounting Policies�
Amendments to IAS 8 �Definition of Accounting Estimates�

(4) Summary of significant accounting policies

The significant accounting policies have been applied consistently to all periods presented in these financial statements, except when otherwise indicated. The significant accounting policies presented in the parent-company-only financial statements are summarized as follows:

(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

The parent-company-only financial statements have been prepared on a historical cost basis except for the following material items in the balance sheets:

1) Financial instruments at fair value through profit or loss are measured at fair value;
2) Financial assets at fair value through other comprehensive income are measured at fair value;
3) Hedging financial instruments are measured at fair value; and
4) The net defined benefit liabilities are recognized as the present value of the defined benefit obligation, less, the fair value of plan assets.
(ii) Functional and presentation currency

The functional currency of the Company is determined based on the primary economic environment in which the entity operates. The parent-company-only financial statements are presented in New Taiwan Dollar, which is the Company�s functional currency. All financial information presented in TWD has been rounded to the nearest thousand.

(Continued)

303

EVA AIRWAYS CORP.

Notes to the Parent-Company-Only Financial Statements

(c) Foreign currency

(i) Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of the Company at the exchange rates of the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate of that date. The foreign currency gains or losses on monetary items is the difference between the amortized cost in the functional currency at the beginning of the year adjusted for the effective interest and the payments during the period, and the amortized cost in foreign currency translated at the exchange rate at the reporting date.

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

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 any part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to noncontrolling interest. When the Company disposes of only part of investment in an associate of joint venture that includes a foreign operation while retaining significant or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

(Continued)

304

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

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

An asset is classified as current under one of the following criteria, and all other assets are classified as non-current.

(i) It expects to realize the asset, or intends to sell or consume it, in its normal operating cycle;
(ii) It holds the asset primarily for the purpose of trading;
(iii) It expects to realize the asset within twelve months after the reporting date; or
(iv) The asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date.

A liability is classified as current under one of the following criteria, and all other liabilities are classified as non-current.

(i) It expects to settle the liability in its normal operating cycle;
(ii) It holds the liability primarily for the purpose of trading;
(iii) The liability is due to be settled within twelve months after the reporting date; or
(iv) The Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issuance of equity instruments that do not affect its classification.
(e) Cash and cash equivalents

Cash comprises cash on hand and cash in bank. Cash equivalents are subject to an insignificant risk of changes in their fair value, and are used by the Company in the management of its short-term commitments. Time deposits, in conformity with the aforementioned definition, that are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes, and that are subject to an insignificant risk of changes in their fair value are recognized as cash equivalents.

(f) Financial instruments
(i) Financial assets

The Company shall reclassify all affected financial assets only when it changes its business model for managing its financial assets.

(Continued)

305

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

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.

2) Fair value through other comprehensive income (FVOCI)

A debt investment is measured at FVOCI 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 achieved by both collecting contractual cash flows and selling financial assets; 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.

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment�s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

Dividend income derived from equity investments is recognized on the date that the Company�s right to receive payment is established.

(Continued)

306

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

3) Fair value through profit or loss (FVTPL)

All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL. On initial recognition, the Company may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.

4) Impairment of financial assets

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

The Company measures loss allowances at an amount equal to lifetime expected credit losses (ECLs), except for the following which are measured as 12-month ECLs:

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 is always measured at an amount equal to lifetime ECLs.

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

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

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

(Continued)

307

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.

The Company considers a financial asset to be in default when the financial asset is more than 365 days past due or the borrower is unlikely to pay its credit obligations to the Company in full.

ECLs 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). ECLs are discounted at the effective interest rate of the financial asset.

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 asset 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 60 days 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.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at FVOCI, the loss allowance is recognized in other comprehensive income instead of reducing the carrying amount of the asset. The Company recognizes the amount of expected credit losses (or reversal) in profit or loss, as an impairment gain or loss.

The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-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.

(Continued)

308

EVA AIRWAYS CORP.

Notes to the Parent-Company-Only Financial Statements

5) Derecognition of financial assets

Financial assets are derecognized when the contractual rights to the cash flows from the assets expire, or when the Company transfers substantially all the risks and rewards of ownership of the financial assets 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.

Compound financial instruments issued by the Company comprise convertible bonds that can be converted to share capital at the option of the holder when the number of shares to be issued is fixed.

Interest and gain or loss related to the financial liabilities are recognized in profit or loss, and are included in non-operating income and expenses.

On conversion, the financial liability is reclassified to equity, and no gain or loss is recognized.

(Continued)

309

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

2) Financial liabilities at fair value through profit or loss

3) Other financial liabilities

4) Derecognition of financial liabilities

The Company derecognizes a financial liability when its contractual obligation has been discharged or cancelled or has expired.

5) Offsetting of financial assets and liabilities

The Company presents financial assets and liabilities on a net basis when the Company has the legally enforceable rights to offset and intends to settle such financial assets and liabilities on a net basis or to realize the assets and settle the liabilities simultaneously.

(iii) Derivative financial instruments and hedge accounting

The Company holds derivative financial instruments to hedge its foreign currency, interest rate and fuel price exposures. Derivatives are initially measured at fair value. Any attributable transaction 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.

(Continued)

310

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

The Company designates its hedging instruments, including derivatives, embedded derivatives, and non-derivative instruments for a hedge of a foreign currency risk, as a fair value hedge, cash flow hedge, or hedge of a net investment in a foreign operation. Foreign exchange risks of firm commitments are treated as fair value hedges. For a hedge of foreign currency risk with a highly probable forecast transaction, the foreign currency risk component of a non-derivative financial asset or a non-derivative financial liability may be designated as a hedging instrument provided.

An initial designated hedging relationships, the Company documents the risk management objectives 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 items and hedging instrument are expected to offset each other.

When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive income and accumulated in �other equity gains (losses) on hedging instruments�. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in profit or loss.

When the hedged item is recognized in profit or loss, the amount accumulated in equity and retained in other comprehensive income is reclassified to profit or loss in the same period or in the periods during which the hedged item affects the profit or loss, and is presented in the same accounting item with the hedged item recognized in the statement of comprehensive income. However, for a cash flow hedge of a forecast transaction recognized as a nonfinancial asset or liability, the amount accumulated in �other equity gains (losses) on hedging instruments� and retained in other comprehensive income is reclassified as the initial cost of the nonfinancial asset or liability.

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.

(g) Inventories

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

(h) Non-current assets or disposal group classified as held for sale

Non-current assets or disposal groups comprising assets and liabilities that are highly probable to be recovered primarily through sale rather than through continuing use, are reclassified as held for sale. Immediately before classification as held for sale , the assets, or components of a disposal group, are remeasured in accordance with the Company�s accounting policies. Thereafter, generally, the assets or disposal groups are measured at the lower of their carrying amount or fair value less costs to sell.

Once classified as held for sale, property, plant and equipment and investment property are no longer depreciated.

(Continued)

311

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

(i) Investment in associates

Associates are those entities in which the Company has significant influence, but not control or joint control, over their financial and operating policies.

The financial statements include the Company�s share of the profit or loss and other comprehensive income of equity-accounted investees, after adjustments to align the accounting policies with those of the Company, from the date on which significant influence commences until the date on which significant influence ceases. The Company recognizes any changes of its proportionate share in the investee within capital surplus, when an associate�s equity changes due to reasons other than profit and loss or comprehensive income, which did not result in changes in actual significant influence.

Unrealized profits resulting from transactions between the Company and an associate are eliminated to the extent of the Company�s interests in the associate. Unrealized losses on transactions with an associate are eliminated in the same way, except to the extent that the underlying asset is impaired.

When the Company�s share of losses of an associate equals or exceeds its interests in an associate, it discontinues recognizing its share of further losses. Additional losses are provided for, and a liability is recognized, only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate.

(j) 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 recognize 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.

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

(k) Investment property

(Continued)

312

EVA AIRWAYS CORP.

Notes to the Parent-Company-Only Financial Statements

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

(ii) Major inspection and overhaul cost

(iii) Subsequent cost

Subsequent expenditure is capitalized only when it is probable that the future economic benefits associated with the expenditure will flow to the Company. The carrying amount of those parts that are replaced is derecognized. Ongoing repairs and maintenance are expensed as incurred.

(iv) Depreciation

The depreciable amount of an asset is determined after deducting its residual value, and it shall be allocated on a systematic basis over the asset�s useful life. Items of property, plant and equipment with the same useful life may be grouped in determining the depreciation charge. The remainder of the items may be depreciated separately. The depreciation charge for each period shall be recognized in profit or loss.

The estimated useful lives for the current and comparative years of significant items of property, plant and equipment are as follows:

1) Land has unlimited useful life and therefore is not depreciated.
2) Building and structures:

Main Buildings 20 to 55 years Others 5 to 15 years

(Continued)

313

EVA AIRWAYS CORP.

Notes to the Parent-Company-Only Financial Statements

3) Machinery and equipment:

Electro-mechanical equipment 3 to 18 years Others 1 to 18 years 4) Aircraft: Airframes 15 to 18 years Aircraft cabins 12 years Engines 15 to 18 years

5) Leased improvements are depreciated over the shorter of the lease term or the estimated useful life.

A property is reclassified to investment property at its carrying amount when the use of the property changes from owner-occupied to investment purpose.

(m) Leases
(i) Identifying a lease

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. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:

1) the contract involves the use of an identified asset � this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified; and
2) the Company has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and
3) the Company has the right to direct the use of the asset:
The Company has the right to direct the use of the asset when it has the decisionmaking rights that are most relevant to changing how and for what purpose the asset is used.
In rare cases where the decision on how, and for what purpose, the asset is used is predetermined, the Company has the right to direct the use of an asset if either:

(Continued)

314

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

the Company has the right to operate its asset throughout the period of use, without the supplier having the right to change those operating instructions; or

the Company designed the asset in a way that predetermines how, and for what purpose, it will be used throughout the period of use.

At inception or on reassessment of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices. In addition, the Company has elected not to separate its non-lease components and lease accounts, but instead combine them as a single lease component by classifying their underlying assets.

(ii) As a leasee

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 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.

The lease liability is measured 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;

there is a change in the Company�s estimate of the amount expected to be payable under a residual value guarantee;
there is a change in the assessment on whether it will have the option to exercise a purchase of the underlying asset;

(Continued)

315

EVA AIRWAYS CORP.

Notes to the Parent-Company-Only Financial Statements

there is a change in the assessment on lease term as to whether it will be extended or terminated; and

the modifications of the lease underlying asset, scope or other terms.

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 property and lease liabilities as a separate line item respectively in the statement of financial position.

The Company has elected not to recognize right-of-use assets and lease liabilities for shortterm leases and leases of low-value assets. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

For sale-and-leaseback transactions, the Company applies the requirements for determining when a performance obligation is satisfied in IFRS 15 to determine whether the transfer of an asset is accounted for as a sale of the asset. If the transfer of an asset satisfies the requirement of IFRS 15 to be accounted for as a sale of the asset, the Company measures the right-of-use asset arising from the leaseback at the proportion of the previous carrying amount of the asset that relates to the right of use retained. Accordingly, the Company recognizes only the amount of any gain or loss that relates to the rights transferred to the buyer-lessor. If the transfer of an asset does not satisfy the requirement of IFRS 15 to be accounted for as a sale of the asset, the Company will continue to recognize the transferred asset and shall recognize the financial liability equal to the transfer proceeds.

As a practical expedient, the Company elects not to assess all rent concessions that meets all the following conditions are lease modifications or not:

the rent concessions occurring as a direct consequence of the COVID-19 pandemic;

the change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change;
any reduction in lease payments affects only payments originally due on or before June 30, 2021; and

there is no substantive change to other terms and conditions of the lease.

(Continued)

316

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

(iii) 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.

When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Company applies the exemption described above, then it classifies the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, the Company applies IFRS 15 to allocate the consideration in the contract.

The Company recognizes lease payments received under operating leases as income over the lease term as part of income.

(n) Impairment of non-financial assets

The Company measures whether impairment occurred in non-financial assets (except for inventories and deferred tax assets), at each reporting date, and estimates their recoverable amount. If it is not possible to determine the recoverable amount (fair value less costs to sell and value in use) for an individual asset, then the Company will have to determine the recoverable amount for the asset�s cash-generating unit.

The Company should assess at each reporting date whether there is any indication that an impairment loss recognized in prior periods for an asset other than goodwill may no longer exist or may have decreased. If any such indication exists, the entity shall estimate the recoverable amount of that asset. An impairment loss recognized in prior periods for an asset other than goodwill shall be reversed if, and only if, there has been a change in the estimates used to determine the asset�s recoverable amount since the last impairment loss was recognized. If this is the case, the carrying amount of the asset shall be increased to its recoverable amount. That increase is a reversal of previously recognized impairment loss. An impairment loss is reversed only to the extent that the asset�s carrying amount does not exceed the carrying amount net of depreciation or amortization that would have been determined if no impairment loss had been recognized.

(Continued)

317

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

(o) Provision

A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance costs.

The estimated recovery costs are incurred through the lease of aircraft. The Company�s restoration obligations are based on necessary maintenance expenses under the lease contracts of the aircraft, in which the Company expects all of the maintenance expenses to be reimbursed when the Company returns back all its rented aircraft. The amounts are estimated by gauging the maintenance experiences of similar types of aircraft, the actual maintenance expenses in the past, and the historical information on the usage of the aircraft.

(p) Intangible assets

Intangible assets that are acquired by the Company are measured at cost less accumulated amortization and any accumulated impairment losses. Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates.

The amortization amount is the cost of an asset less its residual value. Amortization is recognized in profit or loss on a straight-line basis over the estimated useful lives of 3~5 years of intangible assets, other than goodwill and intangible assets with indefinite useful lives, from the date that they are available for use.

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

(q) 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) Aviation transportation revenue

Ticket sales for passengers and cargo are recorded as unearned revenue. They are included in contract liabilities-current, and recognized as revenue when service is provided.

(Continued)

318

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

2) Customer loyalty program

The Company has a customer loyalty program, whereby, customers are awarded rights of accumulating mileages during their flights, and the fair value of the consideration received or receivable in respect of initial sale is allocated between the rights of accumulated mileages and the other components of the sale. The amount allocated to rights of accumulated mileages is estimated by the fair value of the redeemable part of the customer loyalty program and by reference to past experience of probability of redemption. Thus, the corresponding fair value is estimated and deferred, and service revenues will not be recognized until the rights have been redeemed and obligations are fulfilled. Also, contract liabilities will be converted into revenues when it is expected that the rights are probable not to be redeemed.

3) 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 utility of the product, 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.

Accounts receivable are 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.

4) 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.

(r) Government grants

The Company recognizes an unconditional government grant related COVID-19 as reduction of expenses when the grant becomes receivable. Grants that compensate the Company for expenses or losses incurred are recognized in profit or loss in the periods in which the expenses or losses are recognized.

(s) Employee benefits

(i) Defined contribution plans

Obligations for contributions to defined contribution pension plans are recognized as an employee benefit expense in profit or loss in the periods during which services are rendered by employees.

(Continued)

319

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

(ii) Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Company�s net obligation in respect of the defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. The fair value of any plan assets is deducted. The discount rate is the yield at the reporting date on market yields of government bonds that have maturity dates approximating the terms of the Company�s obligations and that are denominated in the same currency in which the benefits are expected to be paid.

The calculation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to the Company, the recognized asset is limited to the total of the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements that apply to any plan in the Company. An economic benefit is available to the Company if it is realizable during the life of the plan, or on settlement of the plan liabilities.

When the benefits of a plan are improved the expense of the increased benefit relating to past service by employees is recognized immediately in profit or loss.

The Company recognizes gains or losses on the curtailment or settlement of a defined benefit plan when the curtailment or settlement occurs. The gain or loss on curtailment or settlement comprises any resulting change in the fair value of plan assets, any change in the present value of the defined benefit obligation.

(iii) Short-term employee benefits

Short-term employee benefit obligations are accrued when the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee. A liability is recognized when the obligation can be estimated reliably.

(t) Share-based payment

(Continued)

320

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

Grant date of a share-based payment award is the date which the board of directors authorized the Chairman of the Company to set up the exercise price.

(u) Income taxes

(i) Assets and liabilities that are initially recognized but are not related to a business combination and have no effect on net income or taxable gains (losses) during the transaction.
(ii) Temporary differences arising from equity investments in subsidiaries or joint ventures where there is a high probability that such temporary differences will not reverse.
(iii) Initial recognition of goodwill.

Deferred tax assets and liabilities may be offset against each other if the following criteria are met:

(i) The Company has the legal right to settle tax assets and liabilities on a net basis; and
(ii) the taxing of deferred tax assets and liabilities fulfills one of the scenarios below:
1) levied by the same taxing authority; or
2) levied by different taxing authorities, but where each such authority intends to settle tax assets and liabilities (where such amounts are significant) on a net basis every year of the period of expected asset realization or debt liquidation, or where the timing of asset realization and debt liquidation is matched.

(Continued)

321

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

(v) Earnings per share (EPS)

The Company discloses the Company�s basic and diluted earnings per share attributable to ordinary equity holders of the Company. The calculation of basic earnings per share is based on the profit or loss attributable to the ordinary equity holders of the Company divided by the weighted-average number of ordinary shares outstanding. The calculation of diluted earnings per share is based on the profit or loss attributable to ordinary equity holders of the Company, divided by the weightedaverage number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares, such as convertible bonds and employee compensation.

(w) Operating segment

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-companyonly financial statements.

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

The preparation of the parent-company-only financial statements based on the Regulations requires management to make judgments, estimates and assumptions 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.

There is no information about critical judgments in the parent-company-only financial statements.

(a) Contract liabilities mileage redemption revenue

For the rights of accumulated mileages that are estimated by using the fair value of the redeemable part of the customer loyalty program and, the reference to past experience of probability of redemption; please refer to note 4(q) for further details on related matter. Changes in fair value per mileage or redemption rate may have a material impact on the contract liabilities mileage redemption revenue. Also, contract liabilities mileage redemption revenue will be converted into revenues when the member actually redeems the mileage or it is expected that the rights are probable not to be redeemed; please refer to note 6(w) for estimation of contract liabilities mileage redemption revenue.

(b) Impairment of long-term non-financial assets

During the process of impairment assessment, the Company relies on subjective judgment to determine the individual cash flows of a specific group of assets, useful lives and estimates future gains and losses according to the usage of assets and business characteristics; please refer to note 4(n) for further details on related matter. Alteration of estimates from any change in economic conditions or business strategy may lead to impairment loss in the future; please refer to note 6(j) for further description of the key assumptions used to determine the recoverable amount.

(Continued)

322

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

The accounting policy and disclosure of the Company include measuring the financial assets and financial liabilities at fair value. The accounting department of the Company uses information of external information to make the evaluation result agreeable to the market status and to ensure that the data resources are independent, reliable and consistent with the other resources. The accounting department of the Company regularly revises the evaluation models and the input parameters, makes retrospective review and makes essential adjustments to ensure that the evaluation results is reasonable.

When measuring the fair value of an asset or a liability, the Company uses market observable data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

�Level 1: quoted prices (unadjusted) in active markets for identical 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 asset or liability that are not based on observable market data (unobservable inputs).

The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Further information about the assumptions made in measuring fair values is included in notes 6(g), 6(l) and 6(z).

(6) Explanation of significant accounts

(a) Cash and cash equivalents

Cash and cash equivalents
Cash on hand Cash in bank	2020.12.31 $ 81,063 30,994,093 $ 31,075,156	2019.12.31
		82,178 41,773,957
		41,856,135

Refer to note 6(z) for the interest rate risk and sensitivity analysis of the financial assets and liabilities of the Company.

(b) Financial assets and liabilities
(i) Financial assets and liabilities at fair value through profit or loss

Financial assets mandatorily measured at fair value through profit or loss: Money market funds Convertible bonds with embedded derivatives	2020.12.31 $ 1,687,508 2,793 $ 1,690,301	2019.12.31
		502,455 -
		502,455

(Continued)

323

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

Financial liabilities mandatorily measured at fair value through profit or loss: Convertible bonds with embedded derivatives	2020.12.31 $ -	2019.12.31 3,274

The derivative financial instruments arose from the issuance of convertible bonds of the Company were stated in note 6(o).

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

Equity investments at fair value through other comprehensive income: Publicly traded stocks Non-publicly traded stocks	2020.12.31 $ 1,228,481 1,726,966 $ 2,955,447	2019.12.31
		1,012,519 1,568,986
		2,581,505

The Company designated the investments shown above as equity securities as at fair value through other comprehensive income because these equity securities represent those investments that the Company intends to hold for long-term for strategic purposes.

For the year ended December 31, 2019, the Company acquired the shares of UNI Airways Corp. from other related parties amounting to $67,890. There was no such transaction for the year ended December 31, 2020.

For the year ended December 31, 2019, the Company has sold its equity securities as at fair value through other comprehensive income. The shares sold had a fair value of $50. And the Company recognized a loss of $11, which was accounted for as other equity. The loss has been transferred to retained earnings. There was no such transaction for the year ended December 31, 2020.

(iii) For credit risk and market risk, please refer to note 6(z).

(iv) The aforementioned financial assets were not pledged.
(c) Financial instruments used for hedging

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

Cash flow hedge:

Financial assets for hedging: Fuel option agreements	2020.12.31 $ -	2019.12.31
		37,428

(Continued)

324

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

Financial liabilities for hedging: Forward exchange contracts Foreign currency component of non-derivative lease liabilities Total Current Non-current	2020.12.31 $ - 88,632,815 $ 88,632,815 $ 11,564,988 77,067,827 $ 88,632,815	2019.12.31
		11,643 98,291,070
		98,302,713 11,558,692 86,744,021
		98,302,713

(i) Fuel option agreements

The Company needs fuel for operating. However, cash flow risk will occur if the future cash flows for fuel fluctuate due to the floating market prices. The Company evaluates the risk as significant, and thus, hedges the risk by signing fuel option agreements. The cash flow hedged items and derivative financial hedging instruments were as follows:

Hedged item Hedging instrument Floating price of fuel Option agreements	Fair value of assigned hedging instrument 2020.12.31 2019.12.31 $ - 37,428	Period when cash flows Period when profit are expected to occur or loss is affected 2020 2020
	2020.12.31 $ -

(ii) 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:

2019.12.31

Forward exchange purchased	Contract Amount (in thousands) USD$ 31,000	Currency TWD to USD	Maturity dates Average strike price 2020/4/1-2020/10/5 USD29.7~30.7

There was no such transaction as of December 31, 2020.

(iii) The foreign currency component of non-derivative lease liabilities

The Company uses the foreign currency component of lease liabilities to hedge foreign currency risk on the cash inflow from operating revenue with a highly probable forecast transaction. As of December 31, 2020 and 2019, the cash flow hedged items and nonderivative financial hedging instruments were as follows:

Hedged item Foreign currency of operating revenue	Hedging instrument	Lease liabilities of assigned hedging instrument 2020.12.31 2019.12.31 $ 88,632,815 98,291,070	Period when cash flows are expected to occur Period when profit or loss is affected 2020~2032 2020~2032
		2020.12.31 $ 88,632,815
	Foreign currency of lease liabilities

(Continued)

325

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

(iv) The details arising from cash flow hedges for the years ended December 31, 2020 and 2019, were as follows:

Account Item		2020 2019
Recognized in other comprehensive income during the period	$	4,223,765 2,723,966
Reclassification from equity to increase (decrease) in operating costs
for the period $ Reclassification from equity to other non-current assets for the period $ Reclassification from equity to exchange losses (gains) for the period $ Ineffective portion of forward exchange hedge recognized in profit or loss $		1,523,195 (19,066) 21,902 (42,721) (561,963) 92,735 2,574 -

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

(d) Notes and accounts receivable

Notes receivable (including related parties) Accounts receivable (including related parties) Less: allowance for impairment	2020.12.31 $ 1,313 5,583,167 (54,576) $ 5,529,904	2019.12.31 1,030,690 5,924,948 (85,241) 6,870,397

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 accounts receivables have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward-looking information. The loss allowance provision was determined as follows:

Not overdue Overdue within 30 days Overdue 31~60 days Overdue over 60 days but less than one year Overdue more than one year	2020.12.31	2020.12.31
	Notes and accounts receivable (including related parties) carrying amount $ 5,555,301 4,060 - 7,266 17,853 $ 5,584,480	Weighted- average loss rate 0.46% 100% - 100% 100%	Loss allowance provision 25,397 4,060 - 7,266 17,853
			54,576

(Continued)

326

EVA AIRWAYS CORP.

Notes to the Parent-Company-Only Financial Statements

2019.12.31	2019.12.31
Notes and accounts receivable (including related parties) carrying amount $ 6,884,635 45,111 1,089 6,667 18,136 $ 6,955,638	Weighted- average loss rate 0.21% 100% 100% 100% 100%	Loss allowance provision
		14,238 45,111 1,089 6,667 18,136
		85,241

The movements in the allowance for notes and accounts receivable were as follow:

Balance on January 1 Impairment losses recognized (reversed) Amounts written off Balance on December 31	2020 $ 85,241 (30,000) (665) $ 54,576	2019
		95,537 (9,000) (1,296)
		85,241

The aforementioned notes and accounts receivable were not pledged. Other credit risk information please refer to note 6(z).

(e) Other receivables

Other receivables related parties Others Less: allowance for impairment	2020.12.31 $ 226,715 108,086 - $ 334,801	2019.12.31 334,404 99,138 - 433,542

For the year ended December 31, 2020, the Company was awarded government grants amounting to $1,025,826 due to COVID-19 pandemic. The grants that compensated the Company for expenses or losses incurred were recognized in profit or loss in the periods in which the expenses or losses were recognized. As of December 31, 2020, the receivables related to the abovementioned grant amounted to $67,040. There was no such transaction for the year ended December 31, 2019.

The aforementioned other receivables were not pledged. Other credit risk information please refer to note 6(z).

There is no change on the movement in the allowance for other receivables for the years ended December 31, 2020 and 2019.

(Continued)

327

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

(f) Inventories

(i) The components were as follows:

2020.12.31 Aircraft spare parts $ 144,243 Consumables for use and merchandise for in-flight sales 1,143,990 Fuel for aircraft and others 18,884 $ 1,307,117	2019.12.31 111,651 1,270,042 46,198
	1,427,891

(ii) Except for cost of goods sold and inventories recognized as expenses, the gains or losses which were recognized as operating costs were as follows:

Losses on (gain on reversal) valuation of inventories and obsolescence	2020 $ (166,259)	2019 (1,721)

As of December 31, 2020 and 2019, these inventories were not pledged.

(g) Non-current assets or disposal group classified as held for sale

A part of the office building in Los Angeles was presented as non-current assets or disposal group classified as held for sale following the expectation of the Company�s management to sell part of the building. The efforts to sell the disposal group have commenced, and sales are expected in 2020 to 2021. As of December 31, 2020 and 2019, the non-current assets or disposal group classified as held for sale comprised assets amounting to $852,175 and $1,233,824, respectively, and liabilities amounting to $1,142 and $140,810, respectively. The details were as follows:

Property, plant and equipment Other payables	2020.12.31 $ 852,175 $ 1,142	2019.12.31
		1,233,824 140,810

(h) Investments accounted for using equity method

The components were as follows:

Subsidiaries Associates	2020.12.31 $ 13,482,020 155,907 $ 13,637,927	2019.12.31
		16,877,937 170,153
		17,048,090

(Continued)

328

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

(i) Subsidiaries

Please see the consolidated financial statements for the year ended December 31, 2020.

(ii) Associates

Summary of financial information for the individually insignificant investments in associates accounted for using equity method was as follows. The aforementioned financial information was included in the parent-company-only financial statements of the Company.

Attributable to the Company: Profit (loss) Other comprehensive income Comprehensive income	2020 $ (3,788) 2,215 $ (1,573)	2019 8,153 (1,942) 6,211

In 2019, the Company gradually acquired the shares of EverFun Travel Service Corp. (hereinafter referred to as EverFun) in cash. The Company�s shareholding percentage in EverFun has been increased from 0.05% to 26.48%. Therefore, the Company has significant influence on EverFun.

(iii) Pledged

As of December 31, 2020 and 2019, the investments accounted for using equity method were not pledged.

(i) Changes in a parent�s ownership interest in subsidiaries

On August 13, 2018, a resolution was approved during the two separate board meetings of the Company�s subsidiaries, Evergreen Aviation Technologies Corp. (hereinafter referred to as EGAT) and Evergreen Aviation Precision Corp. (hereinafter referred to as EGAP) to merge EGAT and EGAP, with EGAT being the surviving company, and EGAP, the dissolved entity. The merger date was set on February 28, 2019.

In first quarter of 2019, the Company disposed of equity share of EGAP to EGAT with a carrying amount of $415,426. And the Company acquired 9,512 thousand shares of EGAT with a fair value of $506,139. Besides, due to the merger of subsidiaries, the Company recognized capital surplus of difference between acquiring subsidiary�s equity and carrying amount amounting to $90,713. Since the aforementioned merger date, the Company�s shareholding percentage in EGAT has decreased from 80.00% to 79.42%. There was no such transaction for the year ended December 31, 2020.

(Continued)

329

EVA AIRWAYS CORP.

Notes to the Parent-Company-Only Financial Statements

(j) Property, plant and equipment

The movements in cost and accumulated depreciation of property, plant and equipment were as follows:

Cost: Beginning balance as of January 1, 2020 Additions Disposals Reclassification (Note) Balance as of December 31, 2020 Beginning balance as of January 1, 2019 Additions Disposals Reclassification (Note) Balance as of December 31, 2019 Accumulated depreciation: Beginning balance as of January 1, 2020 Depreciation expense Disposals Reclassification (Note) Balance as of December 31, 2020 Beginning balance as of January 1, 2019 Depreciation expense Disposals Reclassification (Note) Balance as of December 31, 2019 Carrying amounts: Balance as of December 31, 2020 Balance as of December 31, 2019 Balance as of January 1, 2019	Land $ 2,928,537 - - (55,852) $ 2,872,685 $ 3,009,859 - - (81,322) $ 2,928,537 $ - - - - $ - $ - - - - $ - $ 2,872,685 $ 2,928,537 $ 3,009,859	Building and structures 7,349,285 39,891 - 608,809 7,997,985 7,374,353 - - (25,068) 7,349,285 3,248,501 250,483 - - 3,498,984 3,007,688 240,813 - - 3,248,501 4,499,001 4,100,784 4,366,665	Machinery and equipment 19,958,880 879,298 (1,011,770) 353,214 20,179,622 19,417,246 607,023 (711,125) 645,736 19,958,880 9,933,133 1,410,441 (960,323) (5,800) 10,377,451 9,159,494 1,449,245 (579,806) (95,800) 9,933,133 9,802,171 10,025,747 10,257,752	Leased improvements	Aircraft 141,170,870 3,136,511 - 1,242,531 145,549,912 122,341,091 13,544,812 (4,291,171) 9,576,138 141,170,870 39,167,828 8,647,397 - - 47,815,225 35,144,633 7,711,332 (3,688,137) - 39,167,828 97,734,687 102,003,042 87,196,458	Unfinished construction 815,865 2,655 - (818,520) - 442,687 150,265 - 222,913 815,865 - - - - - - - - - - - 815,865 442,687	Total 173,929,615 4,063,258 (1,091,825) 1,348,726
				1,706,178 4,903 (80,055) 18,544 1,649,570 30,747,228 6,191 (112,028) (28,935,213) 1,706,178 967,469 177,667 (80,055) (121) 1,064,960 10,316,504 264,529 (112,028) (9,501,536) 967,469 584,610 738,709 20,430,724
							178,249,774 183,332,464 14,308,291 (5,114,324) (18,596,816)
							173,929,615 53,316,931 10,485,988 (1,040,378) (5,921)
							62,756,620 57,628,319 9,665,919 (4,379,971) (9,597,336)
							53,316,931 115,493,154 120,612,684 125,704,145

(i) Leased aircraft

The estimated recovery costs incurred by leasing aircraft are recognized as right-of-use assets, please refer to note 6(k). The related restoration obligations are recognized as other current liabilities and other non-current liabilities and are amortized using interest method. Refer to note 6(q) for the movements of restoration obligations.

(Continued)

330

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

(ii) Impairment test

According to IAS 36 �Impairment of assets�, the Company periodically assesses for any indication of impairment. If any such indication exists, then the asset�s recoverable amount is estimated. When evaluating the recoverable amount of the CGU, the pre-tax discount rate is used to estimate the future cash flow. After performing the impairment test, the recoverable amount for the CGU turned out to be higher than its carry amounts. Therefore, there is no impairment loss to be recognized at December 31, 2020.

The recoverable amounts of CGU were evaluated, and the critical assumptions used for this evaluation were as follows:

1) The cash flow period of twelve years, which was estimated on the basis of previous experience, actual operating result and management-approved financial budget.
2) The estimated operating revenue, operating costs, and operating expenses based on the future operation plan, taking into consideration the changes and business competitions within the industry.
3) The estimate discount rate of 3.28%.
(iii) Pledge

As of December 31, 2020 and 2019, the Company�s property, plant and equipment were used as pledge for long-term borrowings and lines of credit, and they are disclosed in note 8.

(iv) For the years ended December 31, 2020 and 2019, the Company capitalized the interest expenses amounted to $123,111 and $137,157, respectively. The ranges of the monthly interest rate used for capitalization calculation were 0.07%~0.10% and 0.10% 0.11%, respectively.
(k) Right-of-use assets

The movements in the Company�s leases on land, building and structures, as well as aircraft, were as follow:

Cost: Beginning balance as of January 1, 2020 Additions Decrease Balance as of December 31, 2020 Beginning balance as of January 1, 2019 Effects of retrospective application Balance as of January 1, 2019 after adjustments Additions Decrease Reclassification to property, plant and equipment Balance as of December 31, 2019	Land $ 382,335 - - $ 382,335 $ - 372,064 372,064 10,271 - - $ 382,335	Building and structures 1,186,803 328,431 (79,748) 1,435,486 - 1,088,703 1,088,703 122,856 (24,756) - 1,186,803	Aircraft 131,719,814 9,009,567 - 140,729,381 - 125,681,063 125,681,063 13,652,892 (365,782) (7,248,359) 131,719,814	Machinery and equipment 68,879 24,940 (4,971) 88,848 - 47,248 47,248 25,353 (3,722) - 68,879	Total 133,357,831 9,362,938 (84,719) 142,636,050 - 127,189,078 127,189,078 13,811,372 (394,260) (7,248,359) 133,357,831

(Continued)

331

EVA AIRWAYS CORP.

Notes to the Parent-Company-Only Financial Statements

Accumulated depreciation: Beginning balance as of January 1, 2020 Depreciation expense Decrease Balance as of December 31, 2020 Beginning balance as of January 1, 2019 Effects of retrospective application Balance as of January 1, 2019 after adjustments Depreciation expense Decrease Reclassification to property, plant and equipment Balance as of December 31, 2019 Carrying amount: Balance as of December 31, 2020 Balance as of December 31, 2019 Balance as of January 1, 2019	Land $ 23,897 26,938 - $ 50,835 $ - - - 23,897 - - $ 23,897 $ 331,500 $ 358,438 $ -	Building and structures 401,494 425,416 (74,612) 752,298 - - - 422,645 (21,151) - 401,494 683,188 785,309 -	Aircraft 20,441,125 14,797,505 - 35,238,630 - 9,247,050 9,247,050 14,867,209 (138,850) (3,534,284) 20,441,125 105,490,751 111,278,689 -	Machinery and equipment 23,628 27,573 (4,622) 46,579 - - - 24,764 (1,136) - 23,628 42,269 45,251 -	Total 20,890,144 15,277,432 (79,234) 36,088,342 - 9,247,050 9,247,050 15,338,515 (161,137) (3,534,284) 20,890,144 106,547,708 112,467,687 -

(l) Investment property

The movements in cost of investment property were as follows:

Land Cost: Beginning balance as of January 1, 2019 $ 56,381 Reclassification from property, plant and equipment 81,322 Reclassification to investment property building and structures - Reclassification to non-current assets classified as held for sale (137,703) Balance as of December 31, 2019 $ - Carrying amounts: Balance as of December 31, 2019 $ - Balance as of January 1, 2019 $ 56,381 Fair value: Balance as of December 31, 2019 Balance as of January 1, 2019	Building and structures - - 1,096,121 (1,096,121) - - -	Unfinished construction Total 126,673 183,054 969,448 1,050,770 (1,096,121) - - (1,233,824) - - - - 126,673 183,054 $ - $ 592,137

The fair value of investment properties was based on a valuation by a qualified independent appraiser who has recent valuation experience in the location and category of the investment property being valued. The Company�s management also assessed the settled deals by using the valuation method. The inputs of levels of fair value hierarchy in determining the fair value is classified to Level 3.

(Continued)

332

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

The investment property was not pledged. There was no such transaction for the year ended December 31, 2020.

(m) Intangible assets

The movements in cost and accumulated amortization of intangible assets were as follows:

Cost:
Beginning balance as of January 1, 2020
Additions
Disposals
Balance as of December 31, 2020
Beginning balance as of January 1, 2019
Additions
Disposals
Balance as of December 31, 2019
Accumulated amortization:
Beginning balance as of January 1, 2020
Amortization expense
Disposals
Balance as of December 31, 2020
Beginning balance as of January 1, 2019
Amortization expense
Disposals
Balance as of December 31, 2019
Carrying amounts:
Balance as of December 31, 2020
Balance as of December 31, 2019
Balance as of January 1, 2019

Computer
software
$ 1,094,113
146,211
(173,120)
$
1,067,204
$ 1,037,507
278,926
(222,320)
$
1,094,113
$ 451,958
240,530
(173,120)
$
519,368
$ 436,651
237,627
(222,320)
$
451,958
$
547,836
$
642,155
$
600,856

(i) Amortization

For the years ended December 31, 2020 and 2019, the amortization of intangible assets is included under operating costs and operating expenses in the statements of comprehensive income.

(Continued)

333

EVA AIRWAYS CORP.

Notes to the Parent-Company-Only Financial Statements

(ii) Pledge

The aforementioned intangible assets were not pledged.

(n) Other current assets and other non-current assets

The details of the Company�s other current assets were as follows:

2020.12.31 Prepaid expense $ 355,490 Other receivables (including related parties) 334,801 Others 60,943 Total $ 751,234 The details of the Company�s other non-current assets were as follows: 2020.12.31 Prepayments for business facilities $ 15,512,012 Refundable deposits 1,053,257 Pledged time deposits 392,790 Total $ 16,958,059	2019.12.31
	234,459 433,542 104,708
	772,709 2019.12.31
	10,327,469 1,444,373 77,894
	11,849,736

(o) Long-term borrowings and bonds payable

The details, conditions and terms of the Company�s long-term borrowings and bonds payable were as follows:

as follows:
			2020.12.31
	Currency	Interest rate	Maturity date		Amount
Secured bonds payable	TWD	1.07%	2021/12/29	$	4,250,000
Unsecured convertible bonds	TWD	-	2022/10/27~2025/10/21		3,082,941
Subtotal					7,332,941
Less: Current portion (included in current portion		of long-term liabilities)			(4,250,000)
Total				$	3,082,941
Unsecured loans	TWD	0.90%~1.27%	2021/01/26~2025/12/21	$	35,306,667
Secured loans	TWD	0.97%~1.37%	2021/02/03~2032/11/24		56,956,098
Subtotal					92,262,765
Less: Current portion					(12,187,386)
Total				$	80,075,379

(Continued)

334

EVA AIRWAYS CORP.

Notes to the Parent-Company-Only Financial Statements

		2019.12.31	2019.12.31
	Currency	Interest rate	Maturity date		Amount
Secured bonds payable	TWD	1.07%	2020/12/29~2021/12/29	$	8,500,000
Unsecured convertible bonds	TWD	-	2022/10/27		6,325,180
Subtotal					14,825,180
Less: Current portion (included	in current portion	of long-term liabilities)			(10,575,180)
Total				$	4,250,000
Unsecured loans	TWD	1.12%~2.01%	2020/05/28~2024/07/23	$	13,953,333
Secured loans	TWD	1.15%~1.52%	2020/05/20~2031/12/27		54,414,841
Subtotal					68,368,174
Less: Current portion					(10,856,419)
Total				$	57,511,755

The details of convertible bonds were as follows:

2020.12.31
Total convertible bonds issued
$ 10,000,000
Less: Unamortized discounted bonds payable
(149,959)
Cumulative converted amount
(451,100)
Cumulative put amount
(6,316,000)
Convertible bonds issued balance
$
3,082,941
Embedded derivatives
put/call options (included in financial
assets/(liabilities) at fair value through profit or loss)
$
2,793
Equity components
conversion options (included in capital
surplus
share options)
$
512,921

2019.12.31
7,000,000
(223,720)
(451,100)
-
6,325,180
(3,274)
376,948

The equity instruments and liability instruments were included in the abovementioned convertible bonds. The equity instruments were recognized in capital surplus. The liability instruments were measured at an initial effective rate 1.23% and 1.04%, respectively. Please refer to note 6(y) for the valuation loss/profit of embedded derivatives put/call options, which were recognized in net gains/losses on financial assets and liabilities at fair value through profit or loss, and the related interest expenses for the convertible bonds.

On October 27, 2017, the Company issued the third unsecured domestic convertible bonds amounting to $7,000,000. The major terms are as follows:

(i) Total issue amount: TWD7,000,000
(ii) Issue price: At par value 100.2%.
(iii) Maturity date: Five years, with the maturity date on October 27, 2022.
(iv) Coupon rate: 0%.
(v) Conversion target: Ordinary shares of the Company.

(Continued)

335

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

(vi) Conversion price: The price determination day was October 19, 2017; the conversion price shall be the simple arithmetical average closing price of the ordinary shares of the Company for either one, three or five business days before the pricing date (exclusive), multiplied by the premium ratio of 104.24% (rounded off to the 1st decimal place). If the ex-dividend or the exrights date happens before the pricing date, the closing price which was adopted to calculate the conversion price should be adjusted for the distribution of stock dividends or cash dividends; and if the ex-dividend or the ex-rights date happens between the conversion price determination date and the actual issuance date, the conversion price should be modified by the conversion price adjustment formula. As of December 31, 2020 and 2019, the conversion price was $13.4 and $13.7 per share, respectively. In addition, corporate bonds with a face value of $451,100 and $451,100, respectively has been converted to 30,829 and 30,829 thousand shares of ordinary share, respectively.
(vii) Conversion period: The bondholder can convert its bonds into shares at any time between 3 months after the issuance date and the day before the maturity day, except for the following:
1) The closing period in accordance with the applicable laws;
2) The period that starts from the fifteen business days prior to the date of record for determination wherein the shareholders are entitled to receive the distributions or rights to subscribe for new shares in a capital increase for cash, and ends on the date of record for the distribution of the rights/benefits;
3) The period starts from the date of record of the capital decrease and ends one day prior to the reissuance of the trading of shares after the capital decrease.
(viii) Repurchase at the option of the bondholders (put option of the bondholders): Bondholders have the option to notify the Company of their request for bond redemption within 40 days prior to the third anniversary of the issuance date, and the Company should redeem the bonds at 100% of the par value within 5 business days following such date. As of October 27, 2020, the bondholders exercised the put option, wherein the Company paid the amount of $6,316,000 to the bondholders who actually exercised the put option.
(ix) Redemption at the option of the Company (call option of the Company): If the closing price of shares for each of 30 consecutive trading days is at least 130% of the conversion price between the 3 months after the share issuance date and the 40th day before the maturity date, the Company may redeem all the outstanding bonds at their principal amount. If the amount outstanding of bonds is less than 10% of the principal amount between the 3 months after the share issuance date and the 40th day before the maturity date, the Company may redeem the outstanding bonds at their principal amount.

On October 21, 2020, the Company issued the fourth unsecured domestic convertible bonds amounting to $3,000,000. The major terms are as follows:

(i) Total issue amount: TWD3,000,000
(ii) Issue price: At par value
(iii) Maturity date: Five years, with the maturity date on October 21, 2025.
(iv) Coupon rate: 0%.

(Continued)

336

EVA AIRWAYS CORP.

Notes to the Parent-Company-Only Financial Statements

(v) Conversion target: Ordinary shares of the Company.
(vi) Conversion price: The price determination day was October 13, 2020; the conversion price shall be the simple arithmetical average closing price of the ordinary shares of the Company for either one, three or five business days before the pricing date (exclusive), multiplied by the premium ratio of 104% (rounded off to the 1st decimal place). If the ex-dividend or the exrights date happens before the pricing date, the closing price which was adopted to calculate the conversion price should be adjusted for the distribution of stock dividends or cash dividends; and if the ex-dividend or the ex-rights date happens between the conversion price determination date and the actual issuance date, the conversion price should be modified by the conversion price adjustment formula. As of December 31, 2020, the conversion price was $11.2.
(vii) Conversion period: The bondholder can convert its bonds into shares at any time between 3 months after the issuance date and the day before the maturity day, except for the following:
1) The closing period in accordance with the applicable laws;
2) The period that starts from the fifteen business days prior to the date of record for determination wherein the shareholders are entitled to receive the distributions or rights to subscribe for new shares in a capital increase for cash, and ends on the date of record for the distribution of the rights/benefits;
3) The period starts from the date of record of the capital decrease and ends one day prior to the reissuance of the trading of shares after the capital decrease.
4) The period from the date of the suspension of the conversion in respect of the change of par value of the Issuer's shares to one day prior to the first trading date of shares reissued after the change of par value.
(viii) Repurchase at the option of the bondholders (put option of the bondholders): Bondholders have the option to notify the Company of their request for bond redemption within 40 days prior to the third anniversary of the issuance date, and the Company should redeem the bonds at 100.75% of the par value within 5 business days following such date.
(ix) Redemption at the option of the Company (call option of the Company): If the closing price of shares for each of 30 consecutive trading days is at least 130% of the conversion price between the 3 months after the share issuance date and the 40th day before the maturity date, the Company may redeem all the outstanding bonds at their principal amount. If the amount outstanding of bonds is less than 10% of the principal amount between the 3 months after the share issuance date and the 40th day before the maturity date, the Company may redeem the outstanding bonds at their principal amount.

(Continued)

337

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

As of December 31, 2020, the details of the future repayment periods and amounts of the Company�s long-term borrowings and bonds payable were as follows:

Year due		Amount
2021.1.1~2021.12.31	$	16,437,386
2022.1.1~2025.12.31		59,789,820
2026.1.1 and thereafter		23,368,500
	$	99,595,706

Information on the Company�s exposure to interest rate risk and liquidity risk is disclosed in note 6(z).

(i) Pledge for borrowings

The pledge for borrowings is disclosed in note 8.

(ii) Unused lines of credit

As of December 31, 2020 and 2019 the unused credit lines for short-term and long-term borrowings amounted to $5,193,027 and $4,516,397, respectively.

(iii) Guarantee from the government for loans

In accordance with �Regulations on Relief and Revitalization Measures for Industries and Enterprises Affected by Severe Pneumonia with Novel Pathogens� endorsed by the Ministry of Transportation and Communications, the Company applied to financial institutions for project loans amounting to $20,000,000, which was guaranteed by the government. As of December 31, 2020, all credit lines have been used. The guarantee loans shall be repaid within two years from the initial withdrawal.

(p) Lease liabilities

The components of lease liabilities were as follow:

Financial liabilities for hedging current Financial liabilities for hedging non-current Lease liabilities current Lease liabilities non-current	2020.12.31 $ 11,564,988 $ 77,067,827 $ 164,820 $ 417,564	2019.12.31
		11,547,049 86,744,021 172,500 547,793

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

(Continued)

338

EVA AIRWAYS CORP.

Notes to the Parent-Company-Only Financial Statements

The amounts recognized in profit or loss were as follows:

2020
Interest on lease liabilities
$
3,107,395
Variable lease payments not included in the measurement of
lease liabilities
$
12,042
Expenses relating to short-term leases
$
94,697
Expenses relating to leases of low-value assets, excluding
short-term leases of low-value assets
$
995
COVID-19-related rent concessions
$
145,556
The amounts recognized in the statement of cash flows were as follows:
2020
Total cash outflow for leases
$
15,160,279

2019

3,349,752
14,354
104,887
857
-
2019

15,710,384

The Company leases land, building and structures as well as aircraft for its office space and operating needs. The leases of building and structures typically run for a period of 1 to 10 years, and of aircraft for 12 years. The Company�s lease contracts include an option to renew the lease for an additional period of the same duration after the end of the contract term or extension options. These leases are negotiated and monitored by the local management, and accordingly, contain a wide range of different terms and conditions. The extension options held are exercisable only by the Company and not by the lessors, in which the leases are not reasonably certain to be used as an optional extended lease term. Payments associated with the optional period are not included within lease liabilities.

The Company also leases its offices and vehicles equipment with lease terms ranging from 1 to 5 years. These leases are short-term leases or leases of low-value items. The Company has elected not to recognize its right-of-use assets and lease liabilities for these leases.

(q) Restoration obligations

The movements of the restoration obligations were as follows:

Beginning balance as of January 1 $ Additions Decreases Effect of exchange rate changes Balance as of December 31 $	2020 19,807,987 3,060,238 (265,678) (702,264) 21,900,283	2019 19,576,977 1,080,789 (555,677) (294,102) 19,807,987

(Continued)

339

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

(r) Employee benefits

(i) Defined benefit plans

The movements in the present value of the defined benefit obligations and the fair value of plan assets were as follows:

Total present value of defined benefit obligations Fair value of plan assets Recognized liabilities of net defined benefit obligations	2020.12.31 $ 8,742,471 (5,741,468) $ 3,001,003	2019.12.31 9,150,217 (5,045,361) 4,104,856

The Company makes defined benefit plan contributions to the pension fund account at Bank of Taiwan that provides pensions for employees upon retirement. The plans (covered by the Labor Standards Act) entitle a retired employee to receive retirement payment calculated by the units based on years of service and average salary for the six months prior to retirement.

1) Composition of plan assets

The Company allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, Ministry of Labor. Minimum earnings on such funds shall be no less than the earnings attainable from two-year time deposits with interest rates offered by local banks.

The Company�s labor pension reserve account balance in Bank of Taiwan amounted to $5,667,966 as of December 31, 2020. The utilization of the labor pension fund assets, including the asset allocation and yield of the fund. Please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

2) Movements in present value of the defined benefit obligations

The movements in present value of the defined benefit obligations were as follows:

Defined benefit obligations as of January 1 Benefits paid by the plan Current service costs and interest Net remeasurements of defined benefit liabilities Experience adjustments Actuarial losses (gains) arising from changes in financial assumptions Defined benefit obligations as of December 31	2020 $ 9,150,217 (517,050) 278,840 (441,670) 272,134 $ 8,742,471	2019 8,584,178 (315,930) 281,214 449,266 151,489 9,150,217

(Continued)

340

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

3) Movements in the fair value of the defined benefit plan assets

The movements in the fair value of the defined benefit plan assets were as follows:

Fair value of plan assets as of January 1 Contributions from plan participants Benefits paid by the plan Expected return on plan assets Net remeasurements of defined benefit liabilities Return on plan assets (excluding the amounts included in net interest expense) Fair value of plan assets as of December 31	2020 $ 5,045,361 968,698 (467,295) 52,007 142,697 $ 5,741,468	2019 4,399,666 725,263 (270,031) 51,557 138,906
		5,045,361

4) Expenses recognized in profit or loss

The expenses recognized in profit or loss were as follows:

Current services costs Net interest on the net defined benefit liabilities Operating costs Operating expenses	2020 $ 189,367 37,466 $ 226,833 $ 178,059 48,774 $ 226,833	2019 186,373 43,284
		229,657 173,751 55,906
		229,657

5) The remeasurements of the net defined benefit liabilities recognized in other comprehensive income (before tax)

The Company�s remeasurements of the net defined benefit liabilities recognized in other comprehensive income were as follows:

Accumulated losses as of January 1 Gains (losses) recognized during the period Accumulated losses as of December 31	2020 $ (4,470,667) 312,233 $ (4,158,434)	2019 (4,008,818) (461,849)
		(4,470,667)

6) Actuarial assumptions

The rate applied in calculating the present value of defined benefit obligations at the reporting date was as follows:

Discount rate Future salary increases	2020.12.31 2019.12.31 0.625% 1% 1.04%~4.25% 1.53%~5.11%

(Continued)

341

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

The Company expects to make contributions of $638,936 to the defined benefit plans in the next year starting from December 31, 2020.

The weighted average of the defined benefit plans is 12.52 years.

7)

Sensitivity analysis

The changes in main actuarial assumptions might have an impact on the present value of the defined benefit obligations:

Discount rate (0.25%) Future salary increases (0.25%)	Effects to the defined	benefit obligations
	Favorable 2020.12.31 2019.12.31 188,165 210,390 177,195 199,200	Unfavorable
	2020.12.31 188,165 177,195	2020.12.31 2019.12.31 194,690 217,982 182,279 205,207

The method and assumptions used on current sensitivity analysis are the same as those of the prior year.

(ii) Defined contribution plans

The Company set aside 6% of each employee�s monthly wages to contribute to the labor pension personal accounts at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. The Company set aside a fixed amount to contribute to the Bureau of Labor Insurance without the payment of additional legal or constructive obligations.

The Company set aside $489,739 and $502,345 as pension costs under the defined contribution plans in 2020 and 2019, respectively. Payment was made to the Bureau of Labor Insurance.

(s) Income tax

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

Current tax benefit (expenses) Deferred tax benefit (expenses) Income tax benefit (expenses)	2020 $ 206,959 847,686 $ 1,054,645	2019
		(1,102,400) 556,739
		(545,661)

(Continued)

342

EVA AIRWAYS CORP.

Notes to the Parent-Company-Only Financial Statements

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

2020
Components of other comprehensive income that will
not be reclassified to profit or loss:
Remeasurements of defined benefit plans
$ (62,447)
Unrealized gains or losses from investments in
equity instruments measured at fair value
through other comprehensive income
(431)
Gains or losses on hedging instruments
(2,329)
$
(65,207)
Components of other comprehensive income that will be
reclassified to profit or loss:
Gains or losses on hedging instruments
$
(842,424)

2019
92,370
9
2,290
94,669
(547,083)

Reconciliations of income tax benefit (expenses) and profit (loss) before tax were as follows:

Profit (loss) before tax Income tax using the Company�s domestic tax rate Exempt income Changes in unrecognized deductible temporary differences Unavailable tax deduction Others Total	2020 $ (4,416,284) $ 883,257 397,102 219,000 (389,183) (55,531) $ 1,054,645	2019 4,528,128 (905,626) 461,636 170,112 - (271,783) (545,661)

(iii) Deferred tax assets and liabilities

1) Unrecognized deferred tax assets and liabilities

The Company�s unrecognized deferred tax assets were as follows:

Unrecognized deferred tax assets: Investment loss of foreign operations accounted for using equity method Restoration obligations Total	2020.12.31 $ 41,935 109,892 $ 151,827	2019.12.31
		38,311 332,516
		370,827

(Continued)

343

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

According to the R.O.C Income Tax Act., the net loss as assessed by the tax authorities can be carry forward for use as a deduction from taxable income over a period of ten years. As of December 31, 2020, the Company�s loss carry-forward recognized and unrecognized as deferred tax assets and the expiry year were as follows:

Filing year 2020	Recognized un-deducted loss $ 5,503,160	Unrecognized un-deducted loss -	Total Expiry year 5,503,160 2030

The Company has no unrecognized deferred tax liabilities as of December 31, 2020 and 2019.

2) Recognized deferred tax assets and liabilities

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

Loss carryforwards Deferred tax assets: Beginning balance as of January 1, 2020 $ - Recognized in profit or loss 1,100,632 Recognized in other comprehensive income - Balance as of December 31, 2020 $ 1,100,632 Beginning balance as of January 1, 2019 $ - Recognized in profit or loss - Recognized in other comprehensive income - Balance as of December 31, 2019 $ -	Loss carryforwards	Loss on valuation of inventories	Defined benefit plans	Restoration obligations	Mileage revenue	Expense payable	Others	Total
		190,773 (61,029) - 129,744 391,632 (200,859) - 190,773	836,439 (156,513) (62,447) 617,479 850,457 (106,388) 92,370 836,439	1,465,919 635,681 - 2,101,600 830,763 635,156 - 1,465,919	808,832 (74,614) - 734,218 730,581 78,251 - 808,832	198,618 (174,480) - 24,138 116,453 82,165 - 198,618	460,056 (276,976) - 183,080 385,625 101,770 (27,339) 460,056	3,960,637 992,701 (62,447) 4,890,891 3,305,511 590,095 65,031 3,960,637

Deferred tax liabilities: Beginning balance as of January 1, 2020 Recognized in profit or loss Recognized in other comprehensive income Balance as of December 31, 2020 Beginning balance as of January 1, 2019 Recognized in profit or loss Recognized in other comprehensive income Balance as of December 31, 2019	Unrealized foreign exchange gains $ 547,780 160,313 849,910 $ 1,558,003 $ 2,882 32,601 512,297 $ 547,780	Investment gains of foreign operations accounted for using equity method 78,055 (15,298) - 62,757 77,300 755 - 78,055	Others 8,311 - (4,726) 3,585 3,163 - 5,148 8,311	Total
				634,146 145,015 845,184
				1,624,345 83,345 33,356 517,445
				634,146

(iv) The Company�s income tax returns for the years through 2018 were assessed by the local tax authorities.

(Continued)

344

EVA AIRWAYS CORP.

Notes to the Parent-Company-Only Financial Statements

(t) Capital and other equity

(i) Ordinary shares

The appropriation of 2018 earnings that was approved at the shareholders� meeting on June 24, 2019, in which the Company issued 140,619 thousand shares, had a par value of $10 per share, with a total value of $1,406,188. The date of capital increase was set on September 13, 2019, and all related registration procedure has been completed.

A resolution was passed during the Board of Directors� meeting held on August 13, 2018 for the issuance of ordinary shares for cash. Subsequently, a resolution was passed for the issuance of 300,000 thousand ordinary shares, with par value of $10 per share, amounting to $3,000,000. The date of capital increase was set on January 24, 2019, and all related registration procedures have been completed.

For the year ended December 31, 2019, convertible bonds issued by the Company amounting to $258,630, were converted 25,863 thousand shares of ordinary shares, and all related registration procedure has been completed. There was no such transaction for the year ended December 31, 2020.

(ii) Capital surplus

The details of capital surplus were as follows:

Cash subscription in excess of par value of shares Stock options granted to employees Additional paid-in capital from bond conversion Additional paid-in capital from conversion option Changes in equity of associates accounted for using equity method Difference between actual acquiring subsidiary�s equity and carrying amount	2020.12.31 $ 5,118,825 697,600 1,561,585 512,921 3,757 90,985 $ 7,985,673	2019.12.31
		5,118,825 697,600 1,561,585 376,948 3,757 90,985
		7,849,700

(Continued)

345

EVA AIRWAYS CORP.

Notes to the Parent-Company-Only Financial Statements

(iii) Retained earnings

According to the Company�s Articles of Incorporation, if the Company reports a surplus at the year end, after clearing taxes, the Company shall first offset accumulated losses (if any), then set aside 10% of the balance as the statutory surplus reserve, and set aside or reverse special surplus reserve per the provisions. After that, the Board of Directors shall propose a surplus distribution plan of the balance plus the retained earnings accrued from prior years, submit the distribution plan to the shareholders� meeting for approval, and then distribute it. The dividends can be distributed wholly or partly in cash only after a resolution has been adopted by a majority vote at a meeting of the board of directors attended by two-thirds of the total number of directors; and in addition thereto a report of such distribution shall be submitted to the shareholders� meeting.

The dividends shall be distributed in the combination of cash and stocks, provided that cash dividends shall not be less than 10% of the total amount of dividends.

1) Legal reserve

2) Special reserve

In accordance with Decree No. 1010012865 issued by the FSC on April 6, 2012, a portion of current-period earnings and undistributed prior-period earnings shall be reclassified as a special earnings reserve during earnings distribution. The amount to be reclassified should be equal to the current-period total net reduction of other equity. Similarly, a portion of undistributed prior-period earnings shall be reclassified as a special earnings reserve (which does not qualify for earnings distribution) to account for cumulative changes to other shareholders� equity pertaining to prior periods. Amounts of subsequent reversals pertaining to the net reduction of other equity shall qualify for additional distributions.

3) Earnings distribution

The appropriation of 2019 earnings was approved at the Board meeting on March 19, 2020. The cash dividends were amounting to $1,213,392.

The appropriation of 2018 earnings was approved at the shareholders� meeting on June 24, 2019. The cash dividends and stock dividends were amounting to $2,343,647 and $1,406,188, respectively.

(Continued)

346

EVA AIRWAYS CORP.

Notes to the Parent-Company-Only Financial Statements

(iv) Other equity interest (net of taxes)

Exchange differences on translation of foreign financial statements Balance as of January 1, 2020 $ (42,773) Exchange differences on translation of foreign financial statements (37,217) Exchange differences on associates accounted for using equity method (33,256) Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income - Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income, subsidiaries accounted for using equity method - Changes in fair value of hedging instrument - Changes in fair value of hedging instrument reclassified to profit or loss/ other non-current assets - Balance as of December 31, 2020 $ (113,246) Balance as of January 1, 2019 $ (3,760) Exchange differences on translation of foreign financial statements (36,486) Exchange differences on associates accounted for using equity method (2,527) Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income - Disposal of investments in equity instruments designated at fair value through other comprehensive income reclassified to retained earning - Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income, subsidiaries accounted for using equity method - Changes in fair value of hedging instrument - Changes in fair value of hedging instrument reclassified to profit or loss/ other non-current assets - Balance as of December 31, 2019 $ (42,773)	Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income	Gains (losses) on hedging instruments 2,069,817 - - - - 2,590,446 788,566 5,448,829 (109,356) - - - - - 2,154,415 24,758 2,069,817	Total 2,749,539 (37,217) (33,256) 373,511 17,293 2,590,446 788,566
	722,495 - - 373,511 17,293 - - 1,113,299 547,201 - - 167,328 11 7,955 - - 722,495
			6,448,882 434,085 (36,486) (2,527) 167,328 11 7,955 2,154,415 24,758 2,749,539

(Continued)

347

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

(u) Share-based payment

(i) As of December 31, 2019, the Company�s share-based payment transaction was as follow:

Type Grant date Cash-settled share- based payment plan (reserved for employees to subscribe) 2018.11.28	Number of shares granted (thousand shares) 30,000	Contract term (year) Vesting Conditions - Immediately vested

There was no such transaction for the year ended December 31, 2020.

(ii) The information related to the employee stock option plan was as follows:

	Number of options
	(thousand shares)
2018 Cash-settled share-based
payment plan			Exercise price
(reserved for employees to subscribe)	2019		(in dollars)
Outstanding number as of January 1	27,352		$	13
Number of shares exercised	(15,985)			13
Number of shares abandoned	(11,367)			13
Outstanding number as of December 31	-
Fair value per share at grant date (in dollars)$		3.05

(iii) The Company adopted the Black-Sholes model to calculate the fair value of the abovementioned employee shares of stock at the grant date. The assumptions adopted in this valuation model were as follows:

Fair value per share on grant date Exercise price Expected volatility Expected life Dividend yield Risk-free interest rate	Cash-settled share-based payment plan (reserved for employees to subscribe)
	16.05 13 % 17.6291 days 51 - % 0.97

(Continued)

348

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

(v) Earnings per share (�EPS�)

The calculation of earnings per share is based on the profit (loss) attributable to the ordinary equity holders of the Company. The Company�s earnings per share were calculated as follows:

Basic earnings per share: Loss attributable to ordinary equity holders Diluted earnings per share: Loss attributable to ordinary equity holders Basic earnings per share: Profit attributable to ordinary equity holders Diluted earnings per share: Profit attributable to ordinary equity holders Effect of the potentially dilutive ordinary shares Effect of employee compensation Effect of conversion of convertible bonds Profit attributable to ordinary equity holders after adjusting the potential dilutive ordinary shares		2020 Weighted-average number of shares outstanding during the period (thousand shares) Earnings per share (in dollars) 4,853,569 $ (0.69) 4,853,569 $ (0.69) 2019 Weighted-average number of shares outstanding during the period (thousand shares) Earnings per share (in dollars) 4,826,530 $ 0.83 4,826,530 23,939 478,022 5,328,491 $ 0.76
	Amount net of tax $ (3,361,639) $ (3,361,639)
	Amount net of tax $ 3,982,467 $ 3,982,467 $ - 60,970 $ 4,043,437

(Continued)

349

EVA AIRWAYS CORP.

Notes to the Parent-Company-Only Financial Statements

(w) Revenue from contracts with customers

(i) Disaggregation of revenue Primary geographical markets: Taiwan Asia Europe North America Others Major products / services lines: Aviation transportation revenue Others (ii) Contract balances Contract liabilities-tickets services, customer loyalty program and others	$ $ $ $ 2020.12.31 $ 7,028,284		2020 22,431,993 39,013,200 3,096,538 14,615,024 445,774 79,602,529 74,523,726 5,078,803 79,602,529 2019.12.31 23,040,594	2019
				54,913,004 40,469,352 5,641,840 33,959,536 637,419
				135,621,151 126,002,327 9,618,824
				135,621,151 2019.1.1 21,110,224

The amount of revenue recognized for the years ended December 31, 2020 and 2019 that was included in the contract liability balance at the beginning of the period were $11,194,108 and $15,343,125, respectively.

The major change in the balance of contract liabilities is the difference between the time frame in the performance obligation to be satisfied and the payment to be received. Other significant changes during the period are as follows:

Changes in an estimate of the transaction price

(Continued)

350

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

(iii)Transaction price allocated to the remaining performance obligations

All consideration from contracts with customers is included in the transaction price presented above.

(x) Remuneration to employees and directors

According to the Company�s Articles of Incorporation, once the Company incurs profit in a fiscal year, a minimum of 1% will be distributed as employees� remuneration and a maximum of 2% will be allotted for directors� remuneration. However, if the Company has accumulated losses, the earnings shall first be offset against any deficit.

The definition of annual earnings, as described in the above-mentioned paragraph, is the Company�s profit before tax, excluding the amount of the employees�remuneration, and the directors� remuneration.

For the years ended December 31, 2020 and 2019, the Company accrued and recognized its employees� remuneration of $0 and $284,125, respectively, and the directors� remuneration of $0 and $9,500, respectively. These remunerations were included in the operating costs and operating expenses.

For the year ended December 31, 2020, the Company�s actual distributed amounts and recognized amounts of its employees� remuneration and directors� remuneration were both $0. There was a decrease of $113,650 between the actual amounts of remuneration to employees, and directors distributed for the year 2019 determined by the Board of Directors and the estimated amounts mainly due to the adjustment of the Board of Directors� resolution. The differences shall be accounted for as changes in accounting estimates and recognized in profit or loss for the year 2020. The related information can be found on Market Observation Post System website.

(y) Non-operating income and expenses
(i) Other income

Dividend income Interest income Interest income from bank deposits Other interest Total interest income	2020 $ 137,131 208,185 608 208,793 $ 345,924	2019
		144,178 655,499 638
		656,137
		800,315

(Continued)

351

EVA AIRWAYS CORP.

Notes to the Parent-Company-Only Financial Statements

(ii) Other gains and losses

Gains (losses) on disposal of property, plant and equipment Foreign exchange gains (losses) Gains (losses) on financial assets (liabilities) at fair value through profit or loss Losses on financial liabilities measured at amortized cost Gains on disposal of non-current assets classified as held for sale Others gains and losses Finance costs Interest expense Bank borrowings Bonds Payable Lease liabilities Others Less: capitalized interest	2020 $ 39,699 893,725 20,873 (153,800) 141,369 143,029 $ 1,084,895 2020 $ 742,651 161,101 3,107,395 901,210 (123,111) $ 4,789,246	2019 494,796 (181,235) 6,106 - - 149,565 469,232 2019 805,711 169,745 3,349,752 913,653 (137,157) 5,101,704

(iii) Finance costs

(z) Financial instruments

(i) Credit risk
1) Credit risk exposure

The maximum exposure to credit risk is mainly from the carrying amount of financial assets.

2) Circumstances of concentration of credit risk

Accounts receivable were due from many customers and regional distributions were decentralized. Therefore, there was no concentration of credit risk. In order to reduce the credit risk of accounts receivable, the Company continually evaluates each customer�s financial situation and requires customers to be a member of IATA clearing house. Otherwise, the customer will have to provide bank guarantees or collaterals.

(Continued)

352

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

3) Credit risk of receivables

(ii) Liquidity risk

The following were the contractual maturities of financial liabilities, including estimated interest payments:

Carrying amount As of December 31, 2020 Non-derivative financial liabilities Long-term borrowings (including current portion of long-term liabilities) $ 92,262,765 Bonds payable 7,332,941 Lease liabilities and financial liabilities for hedging 89,215,199 Notes and accounts payable (including related parties) 3,325,625 Other payables (including related parties) 4,300,632 Liabilities related to non-current assets or disposal group classified as held for sale 1,142 Total $ 196,438,304 As of December 31, 2019 Non-derivative financial liabilities Long-term borrowings (including current portion of long-term liabilities) $ 68,368,174 Bonds payable 14,825,180 Lease liabilities and financial liabilities for hedging 99,011,363 Accounts payable (including related parties) 6,409,484 Other payables (including related parties) 6,534,057 Liabilities related to non-current assets or disposal group classified as held for sale 140,810 Subtotal 195,289,068 Derivative financial liabilities Convertible bonds with embedded derivatives 3,274 Forward exchange contracts for hedge purposes: Outflow 11,643 Inflow - Subtotal 11,643 Total $ 195,303,985	Contractual cash flows 95,670,927 7,528,375 97,673,508 3,325,625 4,300,632 1,142 208,500,209 71,932,598 15,185,325 113,189,380 6,409,484 6,534,057 140,810 213,391,654 - 938,273 (926,630) 11,643 213,403,297	Within 1 year 13,135,221 4,295,475 13,880,134 3,325,625 4,300,632 1,142 38,938,229 11,642,875 10,889,850 14,877,913 6,409,484 6,534,057 140,810 50,494,989 - 938,273 (926,630) 11,643 50,506,632	1-5 years 58,580,998 3,232,900 50,137,458 - - - 111,951,356 35,294,889 4,295,475 54,837,015 - - - 94,427,379 - - - - 94,427,379	Over 5 years
				23,954,708 - 33,655,916 - - -
				57,610,624 24,994,834 - 43,474,452 - - -
				68,469,286
				-
				- -
				-
				68,469,286

The Company is not expecting that the cash flows including the maturity analysis could occur significantly earlier or at significantly different amounts.

(Continued)

353

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

(iii) Currency risk

1) Exposure to currency risk

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

	2020.12.31		2019.12.31
Foreign Currency $ 517,860 3,249 639,281 221,429 279,418 $ 39,668 7,687,425 $ 3,602,897 5,855 1,414,638 36,069 141,168	Exchange rate TWD 28.48 14,748,657 35.02 113,770 0.2763 176,633 3.6730 813,307 4.3770 1,223,012 $ 17,075,379 28.48 1,129,732 0.0020 15,375 $ 1,145,107 28.48 102,610,508 35.02 205,040 0.2763 390,864 3.6730 132,482 4.3770 617,892 $ 103,956,786	TWD	Exchange rate TWD 29.98 18,064,621 33.59 138,414 0.2760 452,512 3.8490 640,033 4.3050 617,301 $ 19,912,881 29.98 1,256,691 0.0022 20,027 $ 1,276,718 29.98 113,865,297 33.59 349,505 0.2760 591,130 3.8490 94,050 4.3050 810,866 $ 115,710,848	TWD
		14,748,657 113,770 176,633 813,307 1,223,012		18,064,621 138,414 452,512 640,033 617,301

2) Sensitivity analysis

The Company�s monetary items exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, notes receivable and accounts receivable (including related parties), refundable deposits (included in other non-current assets), accounts payable (including related parties), other payables (including related parties), lease liabilities and restoration obligations (included in other current liabilities and other non-current liabilities) that are denominated in foreign currency. A strengthening (weakening) of 1% of the TWD against the USD, EUR, JPY, HKD and CNY as of December 31, 2020 and 2019, would have changed the profit (loss) before tax by $16,289 and $24,067, and the equity by $885,103 and $982,046 due to cash flow hedges, respectively. The analysis assumes that all other variables remain constant. The analysis is performed on the same basis for 2020 and 2019.

(Continued)

354

EVA AIRWAYS CORP.

Notes to the Parent-Company-Only Financial Statements

Due to the variety of the Company�s functional currency, the Company discloses its exchange gains and losses of monetary items collectively. For the years ended December 31, 2020 and 2019, the Company�s foreign exchange gains (losses), net (including realized and unrealized of monetary items) amounted to $893,725 and $(181,235), respectively.

(iv) Interest rate risk

The interest rate exposure of the Company�s financial liabilities are illustrated in note 6(z) liquidity risk.

The following sensitivity analysis is based on the exposure to interest rate risk of the nonderivative financial instruments on the reporting date. For variable-rate instruments, the sensitivity analysis assumes the variable-rate liabilities are outstanding for the whole year on the reporting date. The Company�s internal department reported the increases/decreases in the interest rates and the exposure to changes in interest rates by 1% to the Company�s key management so as to allow key management to assess the reasonableness of the changes in the interest rates.

If the interest rate increases (decreases) by 1% with all other variable factors that remain constant, the profit (loss) before tax of the Company would have changed $917,628 and $683,182 for the years ended December 31, 2020 and 2019, respectively due to the Company�s floating-interest borrowings.

(v) Other market price risk

If the price of the equity securities changes, and it is on the same basis for both years and assumes that all other variables remain the same, the impact on comprehensive income will be as follows:

Price of the equity securities at the reporting date	2020	Profit (losses) - -	2019	2019
	Other Comprehensive Income, net of tax $ 147,505 $ (147,505)		Other Comprehensive Income, net of tax 128,829 (128,829)	Profit (losses)
increase 5% decrease 5%				- -

(vi) Fair value
1) Categories and fair values of financial instruments

The fair value of financial assets and liabilities at fair value through profit or loss, financial instruments used for hedging, and financial assets at fair value through other comprehensive income is measured on a recurring basis. 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:

(Continued)

355

EVA AIRWAYS CORP.

Notes to the Parent-Company-Only Financial Statements

	2020.12.31	2020.12.31
Level 1 1,687,508 - 1,687,508 1,228,481 - 1,228,481 - - - - 2,915,989 - - - - - - - - -	Fair value
	Level 2 - 2,793 2,793 - - - - - - - 2,793 - 92,264,702 7,389,131 - - - - 99,653,833 99,653,833 2019.12.31	Level 3 - - - - 1,726,966 1,726,966 - - - - 1,726,966 - - - - - - - - -	Total 1,687,508 2,793
			1,690,301
			1,228,481 1,726,966
			2,955,447
			- - -
			-
			4,645,748 -
			92,264,702 7,389,131 - - - -
			99,653,833
			99,653,833
Level 1 502,455 - 1,012,519 - 1,012,519 - - - - 1,514,974 - - -	Fair value
	Level 2 - 37,428 - - - - - - - 37,428 3,274 11,643 -	Level 3 - - - 1,568,986 1,568,986 - - - - 1,568,986 - - -	Total 502,455
			37,428
			1,012,519 1,568,986
			2,581,505
			- - -
			-
			3,121,388 3,274
			11,643
			-

(Continued)

356

EVA AIRWAYS CORP.

Notes to the Parent-Company-Only Financial Statements

	2019.12.31	2019.12.31
Level 1 - - - - - - - -	Fair value
	Level 2 68,368,582 14,892,652 - - - - 83,261,234 83,276,151	Level 3 - - - - - - - -	Total 68,368,582 14,892,652 - - - -
			83,261,234
			83,276,151

2) Valuation techniques and assumptions used in fair value determination

a) Non-derivative financial instruments

A financial instrument is regarded as being quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm�s-length basis. Whether transactions are taking place �regularly� is a matter of judgment and depends on the facts and circumstances of the market for the instrument. Quoted market prices may not be indicative of the fair value of an instrument if the activity in the market is infrequent, the market is not well-established, only small volumes are traded, or bid-ask spreads are very wide. Determining whether a market is active involves judgment.

For financial instruments traded in active markets, their fair values are listed below by types and attributes:

The stocks of publicly traded companies are financial assets which are traded in active markets under standard terms and conditions. The fair value of the abovementioned stocks is based on quoted market prices.

(Continued)

357

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

For financial instruments not traded in active markets, their fair values are listed below by types and attributes:

Equity instruments with no quoted market prices: the Company takes the quote market prices and the price-book ratios of similar publicly traded companies into consideration by using the market comparison approach. The estimates had been adjusted by the depreciation from lack of market liquidity.

b) Derivative financial instruments

3) Transfers between Level 1 and Level 2

For the years ended December 31, 2020 and 2019, the fair value hierarchy levels of financial instruments were not transferred.

4) Movements in fair value measurements of financial assets in Level 3

The following table shows the reconciliation from the beginning balance to the ending balances for fair value measurements in Level 3 of the fair value hierarchy:

Balance as of January 1, 2020 Total gains or losses: Recognized in other comprehensive income Balance as of December 31, 2020 Balance as of January 1, 2019 Total gains or losses: Recognized in other comprehensive income Purchased Disposed Balance as of December 31, 2019	Fair value through other comprehensive income Unquoted equity instruments $ 1,568,986 157,980 $ 1,726,966 $ 1,468,045 33,051 67,951 (61) $ 1,568,986

(Continued)

358

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

Other comprehensive income (including in unrealized gains (losses) on financial assets measured at fair value through other comprehensive income)	2020 2019 $ 157,980 33,051

5) Quantitative information about the significant unobservable inputs used in the fair value measurements categorized within Level 3

The Company classified a partial of its financial assets at fair value through other comprehensive income investment in equity securities that do not have a quoted market price in an active market as Level 3 of the fair value hierarchy.

Most of the fair value measurements categorized within Level 3 use the significant unobservable inputs. The significant unobservable inputs are independent to each other.

The significant unobservable inputs were as follows:

Items Financial assets at fair value through other comprehensive income	Valuation techniques Market approach� relevant information generated by publicly companies	Significant unobservable inputs Relationship between significant unobservable inputs and fair value Price-book ratio (as of December 31, 2020 and 2019 were 0.80~3.46 and 0.80~2.62, respectively) Market liquidity discount rate (as of December 31, 2020 and 2019 were 80% of market price) The higher the price-book ratio, the higher the fair value The higher the market liquidity discount rate, the lower the fair value

6) Sensitivity analysis for fair value measurements categorized within Level 3 of the fair value hierarchy

The fair value measurements of the Company�s financial instruments are reasonable. However, changes in the use of valuation models or valuation variables may affect the estimations. As of December 31, 2020 and 2019, for fair value measurements in Level 3, a fluctuation in the valuation variable by 5% would have the following effects:

Inputs Price-book ratio Market liquidity discount rate	Increase (decrease) 5% 5%	Effects of changes in fair value on other comprehensive income	Effects of changes in fair value on other comprehensive income
		Favorable 2020.12.31 2019.12.31 87,822 77,308 87,822 77,308	Unfavorable
		2020.12.31 87,822 87,822	2020.12.31 2019.12.31 (84,196) (78,850 (84,196) (78,850

(Continued)

359

EVA AIRWAYS CORP.

Notes to the Parent-Company-Only Financial Statements

(aa) Management of financial risk
(i) The Company is exposed to the nature and extent of the risks arising from financial instruments as below:
- 1) Credit risk
- 2) Liquidity risk
- 3) Market risk

Detailed information about exposure risk arising from the aforementioned risk and the Company�s objective, policies and process for managing risks have been stated below. Further quantitative disclosures have been disclosed as notes to the financial statements.

(ii) Risk management framework

The Company�s Board of Directors has responsibility for the oversight of the risk management framework. The Company�s inter-department management and committee, which consists of managers from all departments, is responsible for monitoring the Company�s risk management policies and reports regularly to the Board of Directors on its activities.

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. The inter-department management and committee are reviewed regularly to reflect change 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�s 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 risk faced by the Company. The Company�s Audit Committee is assisted in its oversight role by the internal auditor. The internal auditor reviews the risk controls and procedures, and reports the results on a regular or irregular basis to the Audit Committee.

(iii) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to financial instruments fails to meet its contractual obligations and arises principally from the Company�s receivables from customers and investments in securities.

1) Notes and accounts receivable

The Company�s exposure to credit risk is influenced mainly by the individual characteristic of each customer. In accordance with the Company�s credit policy, each customer is analyzed individually for creditworthiness, and is required to be a member of IATA clearing house. Otherwise, the customer will have to provide bank guarantees or collaterals before its credit terms and credit limit are offered. Credit limit is offered to each customer as the limit of transactions and is reviewed regularly.

(Continued)

360

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

The transaction amount of the majority of the Company�s customers is not significant, leading to an insignificant influence of loss from credit risk arising from single customer on the Company. The Company set up the forward-looking �expected credit loss� model to reflect the estimated impairment loss of notes and accounts receivable.

2) Investments

The credit risk exposure in the bank deposits, fixed income investments and other equity instruments are measured and monitored by the Company�s finance department. Since the Company�s transactions are with external parties with good credit standing, highly rated financial institutions, publicly traded stock companies and unlisted companies with good reputation, there are no non-compliance issues and therefore no significant credit risk.

3) Guarantees

As of December 31, 2020, the Company did not provide endorsements and guarantees.

(iv) Liquidity risk

Liquidity risk is a risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company approach to managing liquidity risk is to ensure, as far as possible, that it always has sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company�s reputation.

The Company�s finance department monitors the needs for cash flows, and plans optional return from investments of idle capital. The Company aims to maintain the level of its cash and cash equivalents at an amount to cope with expected cash outflows on operation, including meeting its financial obligations. This excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

(v) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices that will affect the Company�s income or the value of its holdings of financial instruments. 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, purchases and borrowings that are denominated in a currency other than the respective functional currencies of the Company, primarily the TWD. The currencies used in these transactions are principally denominated in TWD, CNY, EUR, USD, and JPY.

(Continued)

361

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

The Company hedges its cash and cash equivalents, trade receivables from sales, trade payables to purchase and leases payments for aircraft denominated in a foreign currency. When necessary, the Company uses forward exchange contracts to hedge its currency risk. The financial department proactively collects information of currency to monitor the trend of currency rate and keeps connection with the foreign currency department of banks to collect the market information for securing the currency risk.

The Company determines the existence of an economic relationship between the hedging instruments 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. For hedging foreign currency risk on the cash flow of aviation transportation with a highly probable forecast transaction, the foreign currency risk component of a non-derivative financial asset or a non-derivative financial liability may be designated as a hedging instrument provided.

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 Company adopts a policy of ensuring that its exposure to changes in interest rates on borrowings is on a fixed-rate basis, taking into account assets with exposure to changes in interest rates. This is achieved partly by entering into fixed-rate instruments and partly by borrowing at a floating rate and using interest rate swaps as hedges of variability in cash flows attributable to movements in interest rates.

The Company determines the existence of an economic relationship between the hedging instrument and hedged item based on the reference interest rates, tenors, reprising dates and maturities and the notional or par amounts. The Company assesses whether the derivative designated in each hedging relationship is expected to be 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 swaps which is not reflected in the change in the fair value of the hedged cash flows attributable to the change in interest rates; and

differences in reprising dates between the swaps and the borrowings.

(Continued)

362

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

3) Other market price risk

The Company is exposed to equity price risk due to the investments in equity securities. This is a strategic investment and is not held for trading. The management of the Company monitors the combination of equity securities and open-market funds in its investment portfolio based on cash flow requirements. Material investments within the portfolio are managed on an individual basis, and all buy-and-sell decisions are approved by the Board of Directors.

(ab) Capital management

The Board of Directors� policy is to maintain a strong capital base to maintain the confidence of investors, creditors, and the market and to sustain future development of the business. The Board of Directors monitors the level of dividends to ordinary equity holders as well as future operation of the business.

The capital structure of the Company consists of net debt and equity. The net debt from the balance sheet is derived from the total borrowings less cash and cash equivalents. The total capital includes equity (ordinary share, capital surplus, retained earnings and other equity) and net debt.

As of December 31, 2020, there were no changes in the Company�s approach to capital management.

(ac) Financing activities not affecting current cash flow

The Company�s financing activities which did not affect the current cash flow in the years ended December 31, 2020 and 2019, were as follows:

on-cash changes	Other 8,227 - 2,710,949 2,719,176 on-cash changes	2019.12.31 14,825,180 68,368,174 99,011,363
Foreign exchange movement - - (561,963) (561,963) N Interest expense 78,795 7,678 3,349,752 3,436,225
	Foreign exchange movement - - 128,125 128,125
		182,204,717

(Continued)

363

EVA AIRWAYS CORP.

Notes to the Parent-Company-Only Financial Statements

(7) Related-party transactions

(a) Names and relationship of related parties

The followings are the Company�s subsidiaries and entities that have transactions with the Company during the periods covered in the financial statements.

Names of related parties	Relationship with the Company
Evergreen Aviation Technologies Corp. (Note 1)	The Company�s subsidiary
Evergreen Airline Services Corp.	The Company�s subsidiary
Evergreen Sky Catering Corp.	The Company�s subsidiary
Evergreen Air Cargo Services Corp.	The Company�s subsidiary
Evergreen Aviation Precision Corp. (Note 1)	The Company�s subsidiary
Hsiang Li Investment Corp.	The Company�s subsidiary
Sky Castle Investment Ltd.	The Company�s subsidiary
Evergreen Airways Service (Macau) Ltd.	The Company�s subsidiary
PT Perdana Andalan Air Service	The Company�s subsidiary
EVA Flight Training Academy	The Company�s subsidiary
Evergreen International S.A.	The Company�s shareholder�s major shareholder
Evergreen International Corp.	The Company�s shareholder
Evergreen Marine Corp. (Taiwan) Ltd.	The Company�s shareholder
Evergreen International Storage & Transport Corp.	The Company�s shareholder
Evergreen Logistics Corp.	The Company�s shareholder
UNI Airways Corp.	The Company�s shareholder�s equity investment
Ever Accord Construction Corp.	The Company�s shareholder�s equity investment
Evergreen Steel Corp.	The Company�s shareholder�s equity investment
Evergreen Shipping Agency (Europe) GMBH SP.	The Company�s shareholder�s equity investment
Z.O.O.
Ever Shine (Shenzhen) Enterprise Management	The Company�s shareholder�s equity investment
Consulting Co., Ltd.
Ever Shine (Shanghai) Enterprise Management	The Company�s shareholder�s equity investment
Consulting Co., Ltd.
Evergreen Shipping Agency (Japan) Corporation	The Company�s shareholder�s major
	shareholder�s equity investment
Evergreen Insurance Co. Ltd.	The Company�s shareholder�s equity investment
GE Evergreen Engine Services Corp.	The Consolidated subsidiary�s equity investment
Evergreen Security Corp.	The Company�s equity investment
EverFun Travel Services Corp. (Note 2)	The Company�s equity investment
Chang Yung-Fa Foundation	The Company�s shareholder
Chang Yung-Fa Charity Foundation	The Company�s shareholder
Arport Air Cargo Terminal (Xiamen) Co., Ltd.	The Consolidated subsidiary�s equity investment

(Continued)

364

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

Note 1: On August 13, 2018, a resolution was approved during the two separate board meetings of Evergreen Aviation Technologies Corp. (EGAT) and Evergreen Aviation Precision Corp. (EGAP) to merge EGAT and EGAP, with EGAT being the surviving company, and EGAP, the dissolved entity. The merger date was set on February 28, 2019. Please refer to note 6(i).

Note 2: The Company subscribed for its new shares contribution in April 2019, and has significant influence over its financial and operating policies. Please refer to note 6(h).

(b) Significant transactions with related parties
(i) Operating revenue

Significant sales to related parties of the Company were as follows:

Significant sales to related parties of the Company were	as follows:
Subsidiaries Associates Other related parties	2020 $ 61,475 7,069 1,799,539 $ 1,868,083	2019
		162,363 6,626 2,665,734
		2,834,723

Related parties leased aircraft from the Company. The rental is charged by actual flight hours and recorded under operating revenue.

The Company provided aviation transportation services. The transportation services and ticket prices provided to related party, which is travel agency, were the same as those provided to

general travel agencies. The Company received collateralized notes for receivables from aforementioned related party. No expected credit loss was required after the assessment by the management.

The prices for sales to related parties are not materially different from those of the third-parties sales. The payment terms are within 1~3 months, which do not materially differ from those of third-party transactions. Besides aforementioned collateralized notes, receivables from related parties were uncollateralized, and no expected credit loss was required after the assessment by the management.

(ii) Operating costs

Significant operating costs from transactions with related parties were as follows:

Subsidiaries Associates Other related parties	2020 $ 5,149,343 24,230 309,599 $ 5,483,172	2019
		9,002,598 41,366 546,579
		9,590,543

(Continued)

365

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

The prices for purchases from related parties transactions are not materially different from those of the third-party vendors. The payment terms are within 1~3 months, which do not materially differ from those of third-party transactions.

(iii) Operating expenses

Significant operating expenses from transactions with related parties were as follows:

Subsidiaries Associates Other related parties	2020 $ 149,217 100,702 170,913 $ 420,832	2019
		190,955 134,681 269,034
		594,670

The prices for related parties transactions are not materially different from those of the thirdparty vendors. The payment terms are within 1~3 months, which do not materially differ from those of third-party transactions.

(iv) Property transaction

For the years ended December 31, 2020 and 2019, the Company purchased equipment from its related parties amounting to $15,191 and $59,943, respectively.

For the years ended December 31, 2020 and 2019, the disposals of equipment to related parties were summarized as follows:

Subsidiaries	2020 Disposal price Gain (loss) from disposal $ 1,596 914	2019	2019
	Disposal price $ 1,596	Disposal price 740	Gain (loss) from disposal
			712

(v) Leases

The Company rented its offices from other related enterprise. For the years ended December 31, 2020 and 2019, the Company recognized the amount of $2,046 and $1,802, respectively, as interest expense. As of December 31, 2020 and 2019, the balance of lease liabilities amounted to $65,590 and $53,651, respectively.

(Continued)

366

EVA AIRWAYS CORP.

Notes to the Parent-Company-Only Financial Statements

(vi) Receivables from related parties

Receivables from related parties of the Company were as follows:

Account Class of related parties Notes receivables EverFun Travel Services Corp. Accounts receivable Subsidiaries Accounts receivable Associates Accounts receivable Other related parties Subtotal Other receivables Subsidiaries Other receivables Associates Other related parties Other receivables UNI Airways Corp. Other receivables Evergreen Insurance Company Limited Other receivables Other related parties Subtotal Total	2020.12.31 $ 840 3,827 2,209 110,635 117,511 6,173 - 138,028 82,470 44 226,715 $ 344,226	2019.12.31 188,403 16,329 4,243 303,350
		512,325
		55,228 102 278,336 685 53
		334,404
		846,729

(vii) Payables to related parties

Payables to related parties of the Company were as follows:

Account Accounts payable Accounts payable Accounts payable Accounts payable Subtotal Other payables Other payables Other payables Subtotal Total	Class of related parties	2020.12.31 $ 471,879 346,787 6,397 10,204 835,267 51,199 12,388 46,175 109,762 $ 945,029	2019.12.31
	Subsidiaries Evergreen Aviation Technologies Corp. Other Subsidiaries Associates Other related parties Subsidiaries Associates Other related parties		652,079 962,503 4,444 62,481
			1,681,507
			73,956 13,053 85,490
			172,499
			1,854,006

(Continued)

367

EVA AIRWAYS CORP.

Notes to the Parent-Company-Only Financial Statements

Key management personnel compensation comprised the following:

Short-term employee benefits Post-employment benefits	2020 $ 61,165 3,148 $ 64,313	2019
		81,786 2,787
		84,573

(8) Pledged assets

The carrying amounts of the pledged assets were as follows:

The carrying amounts of the pledged assets were as follows:	ts were as follows:
Pledged assets Object Property, plant, and equipment Long-term borrowings Time deposit included in other non-current assets Letters of credit and contract performance guarantees	Object	2020.12.31 $ 80,117,104 392,790 $ 80,509,894	2019.12.31
			85,367,003 77,894
			85,444,897

(9) Significant contingent liabilities and unrecognized commitments

(a) Significant contingent liabilities: None.
(b) Significant commitments:
(i) In November 2015, the Company entered into aircraft purchase contracts with Boeing Company for eighteen Boeing 787-10 aircraft. In August 2020, the Company made amendments to the contracts and changed seven Boeing 787-10 aircraft (not yet delivered) into four Boeing 787-9 aircraft and three Boeing 777 freighters at a price of US$6,444,000. As of December 31, 2020, fourteen Boeing aircraft had not yet been delivered by Boeing Company. The Company has partially prepaid the price of $13,918,948, which was included in other noncurrent assets.
(ii) In November 2015, the Company entered into engine purchase contracts with General Electric Company for five Boeing 787 engines. In September 2020, the Company made amendments to the contracts and changed one Boeing 787 engine (not yet delivered) into one Boeing 777 engine at a price of US$139,110. As of December 31, 2020, two Boeing engines had not yet been delivered by General Electric Company. The Company has partially prepaid the price of $353,483, which was included in other non-current assets.
(iii) Unused letters of credit for the Company were as follows:

Unused letters of credit	2020.12.31 $ 2,216,261	2019.12.31
		2,375,736

(Continued)

368

EVA AIRWAYS CORP. Notes to the Parent-Company-Only Financial Statements

(10) Losses due to major disasters: None.

(11) Subsequent events: None.

(12) Other

(a) A summary of personnel expenses, depreciation and amortization expenses, by function, is as follows:

follows:
By function By item	2020			2019
	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Personnel expenses Salaries Labor and health insurance Pension Remuneration of directors Others Depreciation (Note) Amortization	6,936,025 447,590 452,176 - 1,651,465 24,742,607 -	4,247,404 327,241 264,396 9,682 463,185 858,929 240,530	11,183,429 774,831 716,572 9,682 2,114,650 25,601,536 240,530	8,469,141 472,991 435,891 - 3,734,874 24,046,844 -	5,577,838 340,154 296,111 19,463 559,770 889,713 237,627	14,046,979 813,145 732,002 19,463 4,294,644 24,936,557 237,627

Note: For the years ended December 31, 2020 and 2019, the depreciation expenses recognized were $25,763,420 and $25,004,434, respectively, less deferred gains of $16,328 and $67,877, respectively, and subsidy and rent concession of $145,556 and $0, respectively.
(b) COVID-19 outbreak since early 2020 has brought about additional uncertainties in the Company�s operating environment at each destination around the globe and has impacted the Company�s operations, including cancellation or restriction of flights. Facing the impact of the pandemic, the Company continuously reviews its flight status, implements flight suspensions and raises the daily utilization rates of its freighters, in order to maximize its operating revenue. Meanwhile, the Company simplified its service and selling process, reduced personnel cost, postponed unnecessary capital expenditures, as well as performed other cost-controlling activities. The Company has applied for operating and interest subsidies from the government. Notably, the Company has received a government bailout loan amounting to $20 billion. In addition, the Company has also acquired additional loans from banks, and will promptly raise fund from capital market, in order to meet the future demand of working capital.
(c) As of December 31, 2020 and 2019, the additional information for employee numbers and employee benefits were as follows:

Employee numbers Directors numbers without serving concurrently as employee Average employee benefits Average employee salaries Average adjustment rate of employee salaries Supervisor�s remuneration

(Continued)

369

EVA AIRWAYS CORP.

Notes to the Parent-Company-Only Financial Statements

(d) The information of the Company�s salary and remuneration policy (including directors, managers and employees) are as follow:
(i) The principle of remuneration policy

The Company�s remuneration policy is determined by the natures of each position, the Company�s operating performance, industry average, economic variables, government regulations as well as future operating risks, and is formulated based on the principles of fairness, reasonableness, balance, and incentives. There is no issue on age, gender, race, religion, political stance, marital status, union affiliation etc.

(ii) Remuneration policy

The Company determines the job title based on the organizational structure, business categories and job natures. It considers internal and external factors according to each position, except for the positions of chairman and vice chairman, to set upper and lower limits as the salary assessment standard for each position.

(iii) Remuneration portfolios of directors and managers

The directors� remuneration is stipulated according to the Company�s articles of incorporation, authorizing the Board of Directors to determine the remuneration by its participation and contribution, as well as that of other company�s data. The remuneration of managers is handled in accordance with the "Payment Regulation of Managers" of the Company. The remuneration of directors and managers are stipulated by Remuneration Committee of the Company and should be approved by Board of Directors. The bonus would be considered and distributed based on the operation results of the Company and each individual performance.

(iv) Remuneration composition of employees

Fixed remuneration :

The employees�fixed remuneration, including salary and allowances, is based on the Company�s salary structure standard for each position; also, the employees salary raise will be based on their working performance assessment and the Company�s overall annual salary policy.

Variable remuneration :

1) Year-end bonus : In order to motivate employees, year-end bonus is distributed based on each year�s operating performance and employee contribution.
2) Employee remuneration : According to the Company�s articles of incorporation, if the Company incurs profit in a fiscal year, the earnings shall first be used to offset against any deficit, then, a portion of the remainder, if any, will be distributed as employee remuneration.

(Continued)

370

EVA AIRWAYS CORP.

Notes to the Parent-Company-Only Financial Statements

(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, 2020:

(i) Financings provided: None.
(ii) Guarantee and Endorsement provided: None.
(iii) Marketable securities held (excluding investments in subsidiaries, associates and joint ventures): Please see Table 1 attached.
(iv) Accumulated buying/selling of the same marketable securities for which the dollar amount at least $300 million or 20% of paid-in capital: Please see Table 2 attached.
(v) Acquisition of real estate for which the dollar amount at least $300 million or 20% of paid-in capital: None.
(vi) Disposition of real estate for which the dollar amount at least $300 million or 20% of paid-in capital: None.
(vii) Total purchases from or sales to related parties with the dollar amount at least $100 million or 20% of paid-in capital: Please see Table 3 attached.
(viii) Accounts receivable from related parties for which the dollar amount at least $100 million or 20% of paid-in capital: Please see Table 4 attached.
(ix) Derivative transactions: Please refer to note 6(c) for related information.
(b) Information on investees:

The followings are the information on investees for the year ended December 31, 2020 (excluding investees in Mainland China): Please see Table 5 attached.

(c) Information on investment in Mainland China : Please see Table 6 attached.
(d) Major shareholders:

(in shares)

Shareholding Shareholder�s Name	Shares	Percentage
Evergreen Marine Corp.(Taiwan)Ltd.	776,541,111	% 16.00
Evergreen International Corp.	549,262,304	% 11.32
Falcon Investment Services Ltd.	512,027,482	% 10.55

(14) Segment information

Please refer to the consolidated financial statements for the year ended December 31, 2020.

(Continued)

371

==> picture [294 x 712] intentionally omitted <==

----- Start of picture text -----

Notes
675,556 200,573 461,168 100,059 50,033 200,119 96,283 92,249 102,211 1,978,251 19,702 429,372 799,109 470,830 1,194,565 34,800 7,069 22,684 3,216 62,210 1,237 3,044,794
Fair value
ownership - - - - - - - - - 2.11 5.67 5.96 9.98 9.56 10.00 4.55 0.01 0.01 0.46 0.0207
31, 2020r Percentage of
Decembe Book value 675,556 200,573 461,168 100,059 50,033 200,119 96,283 92,249 102,211 1,978,251 19,702 429,372 799,109 470,830 1,194,565 34,800 7,069 22,684 3,216 62,210 1,237 3,044,794
Shares/Units 45,187,711 12,995,958 2,564,182 6,086,687 3,666,549 13,974,385 7,611,392 5,477,678 7,453,782 231,580 8,502,418 35,203,008 37,606,277 38,201,625 1,000,000 1 557,349 158,800 2,740,542 500
non-current non-current non-current non-current non-current non-current non-current non-current non-current non-current non-current
current current current current current current current current current
Financial Statement Account
Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income
None None None None None None None None None None None None None None None None
Relationship
with the Company
The Company's shareholder's equity investment The Company's shareholder's equity investment The Company's shareholder's shareholder The Company's shareholder's shareholder
Type and Name
Marketable Securities
Jih Sun Money Market Fund FSITC Taiwan Money Market Fund FSITC Money Market Fund Yuanta De-Li Money Market Fund Taishin 1699 Money Market Fund Taishin Ta-Chong Money Market Fund Mega Diamond Money Market Fund UPAMC James Bond Money Market Fund Eastspring Investments Well Pool Money Market Fund Shares of Everest Investment Holdings Ltd. Shares of Trade-Van Information Services Co. Shares of Central Reinsurance Corporation Shares of UNI Airways Corp. Shares of Evergreen Steel Corp. Shares of Chung Hwa Express Corp. Star Alliance Services Gmbh Shares of Evergreen Marine Corp.(Taiwan) Ltd. Shares of Evergreen International Storage & Transport Corp. Shares of Central Reinsurance Corporation Shares of Air Macau Co., Ltd.
Held Company Name The Company Evergreen Air Cargo Services Corp. The Company Evergreen Airline Services Corp. Hsiang Li Investment Corp. Evergreen Airways Service (Macau) Ltd.
----- End of picture text -----

372

EndingBalance	Amount	461,168	100,059 7,744,694 96,283 92,249 102,211
	Shares/ Units	2,564,182	6,086,687 280,189,241 7,611,392 5,477,678 7,453,782
Disposal	Gain/ Loss on Disposal	23	152 - 860 1,038 873
	Book value	19,977	300,000 2,382,515 339,166 498,962 429,127
	Amount	20,000	300,152 2,382,515 340,025 500,000 430,000
	Shares/ Units	111,409	18,300,904 238,251,455 26,925,845 29,727,106 31,409,301
Acquisition	Amount	480,000	400,000 - 285,000 425,000 390,000
	Shares/ Units	2,675,591	24,387,591 - 22,572,601 25,271,487 28,495,051
BeginningBalance	Amount	-	- 10,799,290 150,619 166,663 141,590
	Shares/ Units	-	- 518,440,696 11,964,636 9,933,297 10,368,032
Relationship with the Company		None	None Subsidiary None None None
Counter-party		First Securities Investment Trust Co., Ltd. Yuanta Securities Investment Trust Co., Ltd. Evergreen Aviation Technologies Corp. Mega International Investment Trust Co., Ltd. Uni-President Assets Management Corp. Eastspring Securities Investment Trust Co. Ltd
Financial Statement Account		Financial assets at fair value through profit or loss current fund Financial assets at fair value through profit or loss current fund Investments accounted for using equity method Financial assets at fair value thorugh profit or loss current fund Financial assets at fair value through profit or loss current fund Financial assets at fair value through profit or loss current fund
Marketable Securities Type and Name		FSITC Money Market Fund	Yuanta De-Li Money Market Fund Evergreen Aviation Technologies Corp. Mega Diamond Money Market Fund UPAMC James Bond Money Market Fund Eastspring Investments Well Pool Money Market Fund
Company Name		The Company	Evergreen Air Cargo Services Corp.

373

	Notes
Notes/AccountsReceivable (Payable)	Percentage of Total Accounts/ Notes Receivable (Payable)	1.97	- 6.71 1.34 14.19 2.29 - 80.75 9.98 31.70 7.74 8.58 64.00 54.23
	Balance	109,055	- (223,287) (44,549) (471,879) (76,154) - 233,052 28,788 472,541 115,380 127,848 56,138 79,964
AbnormalTransaction	Payment Terms
	Unit Price	-	- - - - - - - - - - - - -
Transaction Details	Payment Terms	60 days	60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 120 days 60 days 60 days 60 days
	Percentage of Total Purchases/Sales	1.93	0.31 1.93 0.92 3.76 0.50 0.15 77.50 10.21 25.82 5.69 3.10 75.99 25.79
	Amount	1,539,966	248,573 1,408,566 669,866 2,749,774 368,922 106,490 1,408,566 185,533 2,759,968 607,620 331,286 669,866 368,922
	Purchases/Sales	Sales	Sales Purchases Purchases Purchases Purchases Purchases Sales Sales Sales Sales Sales Sales Sales
	Relationship	The company's shareholder's equity investment	The company�s shareholder The company's subsidiary The company's subsidiary The company's subsidiary The company's subsidiary The company's shareholder's equity investment Parent company The company's shareholder's equity investment Parent company The company's equity investment The company's shareholder Parent company Parent company
	Related Party	UNI Airways Corp.	Evergreen Logistics Corp. Evergreen Airline Services Corp. Evergreen Sky Catering Corp. Evergreen Aviation Technologies Corp. Evergreen Air Cargo Services Corp. Evergreen Insurance Company Ltd. The Company UNI Airways Corp. The Company GE Evergreen Engine Services Corp. UNI Airways Corp. The Company The Company
	Company Name	The Company	Evergreen Airline Services Corp. Evergreen Aviation Technologies Corp. Evergreen Sky Catering Corp. Evergreen Air Cargo Services Corp.

374

Allowances for Impairment Loss	Allowances for Impairment Loss	-	- - - -
Amounts Received in Subsequent Period		247,083	248,195 473,565 135,709 128,024
Past - due Receivables from Related Party	Action taken
	Amount	-	- - - -
Turnover Rate		(Note 1)	4.00 4.87 8.09 2.78
Balance of Receivables from Related Party		247,083	248,195 473,565 135,709 128,024
Relationship		The Company's shareholder's equity investment	Parent company Parent company The Company's equity investment The company's shareholder
Related Party		UNI Airways Corp.	The Company The Company GE Evergreen Engine Services Corp. UNI Airways Corp.
Company Name		The Company	Evergreen Airline Services Corp. Evergreen Aviation Technologies Corp.

375

Notes	Notes	(Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 2) (Note 2) (Note 3) (Note 3)	(Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 2) (Note 2) (Note 3) (Note 3)
Share of Profit (Losses) of Investee		21,807 (21,879) (2,973) (18,119) 931,478 (37,687) (211,416) 136,681 2,204 11,070 (14,859) 176,399 (22,332)
Net Income (Losses) of Investee		21,807 (22,100) (5,830) (18,119) 1,173,028 (66,898) (424,530) 225,453 2,204 36,918 (56,112) 289,933 (111,685)
Ending Balance	Book Value	369,047 99,521 15,375 661,164 7,744,694 870,451 2,098,549 1,551,997 71,222 114,257 41,650 1,542,194 80,377
	Ratio of Shares	% 100.00	% 99.00 % 51.00 % 100.00 % 79.42 % 56.33 % 49.80 % 60.625 % 100.00 % 31.25 % 26.48 % 49.00 % 20.00
	Shares	5,500,000 None 40,800 10,000,000 280,189,241 36,183,106 76,557,790 72,750,000 2,680,000 6,336,000 5,505,000 203,284,545 None
Initial Investment Amount	December 31, 2019	179,173 327 5,086 932,050 3,200,450 111,180 498,000 740,348 448,280 25,000 55,061 2,032,845 8,032
	December 31, 2020	179,173 327 5,086 932,050 - 111,181 498,000 740,348 448,280 25,000 55,061 2,032,845 8,032
Main Businesses and Products		Investment business	Investment business Traveling agency Flight training school Maintenance, manufacturing, processing and sales of aircraft, engine and parts Aviation ground service The provision of in-flight meals in sky catering and the sales of food Air cargo entrepot Investment business Security services Traveling agency Maintenance, manufacturing, and sales of aircraft, engine and engine components Ground handling
Location		Maystar Chambers, P.O. Box 3269, Apia, Samoa 398 Alameda Dr. Carlos D' Assumpcao.Edif CNAC 3 Andar K-M Macau 10/F, Gedung Mega Plaza Jl. H.R Rasuna Said Kav. C-3 Jakarta 12920 Indonesia 3745 Whitehead Street Mather, CA, 95655, USA No.6 Hangzhan S.Rd., Dayuan Dist., Taiwan Taoyuan Int'L Airport, Taoyuan City, Taiwan No.608 Harng-Jann N.Rd.,Taiwan Taoyuan Int'L Airport, Dayuan Dist., Taoyuan City, Taiwan No.3, Hangqin N. Rd.,Dayuan Dist., Taoyuan City, Taiwan No.8-1, Hang-Chin N. Rd.,Dayuan Dist., Taoyuan City, Taiwan 1F,No. 117,Sec. 2,Chang An E. Rd., Taipei 104 Taiwan 4-5F., No. 111, Songjiang Rd., Zhongshan Dist., Taipei City 104, Taiwan 3F., No. 100,Sec. 2, Chang An E. Rd., Zhongshan Dist., Taipei City 104, Taiwan(R.O.C) No.8 Harng-Jann S.Rd.,Taiwan Taoyuan Int'L Airport, Dayuan Dist., Taoyuan City, Taiwan Airport Logistic Business Center Room 52 Macau International Airport Avenida do Aeroporto, Taipa, Macau
Name of investee		Sky Castle Investment Ltd.	Evergreen Airways Service (Macau) Ltd. PT Perdana Andalan Air Service EVA Flight Training Academy Evergreen Aviation Technologies Corp. Evergreen Airline Services Corp. Evergreen Sky Catering Corp. Evergreen Air Cargo Services Corp. Hsiang Li Investment Corp. Evergreen Security Corp. EverFun Travel Services Corp. GE Evergreen Engine Services Corp. Menzies Macau Airport Services Ltd.
Name of investor		The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company Evergreen Aviation Technologies Corp. Evergreen Airways Service (Macau) Ltd.

376

	Accumulated	Inward	Remittance of	Earnings as of	December 31, 2020	106,670		58,498
	Accumulated Accumulated	Total Amount of Outflow of Investment Flows Outflow of Net Direct/Indirect Carrying	Paid-in Capital Method of Investment from Investment from Income Shareholding Share of Amount as of	(CNY in Investment Taiwan as of Taiwan as of (Losses) (%) by the Profits/Losses December 31,	Investee Company Main Business and Products Thousands) (Note 1) January 1, 2020 Outflow Inflow December 31, 2020 of Investee Company (Note 2) 2020	Arport Air Cargo Forwarding and storage of air cargo CNY 254,480 2 138,784 - - 138,784 91,458 14.00 % 12,804 242,444	Terminal (Xiamen) Co., Ltd.	Arport Air Cargo Forwarding and storage of air cargo, CNY 14,000 2 61,418 - - 61,418 68,382 14.00 % 9,574 125,022	Service (Xiamen) Co., Ltd. truck freight transportation, other	transportation auxiliary industry	(Note 1) Ways to Invest in Mainland China:	1.Investment in Mainland China companies by remittance through a third region.	2.Investment in Mainland China companies through a company invested and established in a third region.	3.Investment in Mainland China companies through an existing company established in a third region.	4.Direct investment in Mainland China.	5.Other methods of investing in Mainland China. EX Entrusted investment.	(Note 2) The financial statements of the investee company were audited by the global accounting firm in a cooperation with R.O.C. accounting firm.	The Company recognized share of profit of associates accounted for using equity method by how many shares the Company holds.	(Note 3) The investment in Shanghai Airlines Cargo Intl.Co., Ltd was authorized by the Investment Commission. The amount of investment was $748,721 (USD23,361 thousand dollars).	Shanghai Airlines Cargo Intl.Co., Ltd has completed liquidation process in July, 2014.	(Note 4) The investment in China Cargo Airlines Co., Ltd was authorized by the Investment Commission. The amount of investment was $1,453,728 (USD50,337 thousand dollars).	China Cargo Airlines Co.,Ltd has completed shares transfer in January, 2016	2. Limitation on investment in Mainland China:	Accumulated Outward Remittance for Investment Investment Amounts Authorized by	in Mainland China as of December 31, 2020 Investment Commission, MOEA (Note) Upper Limit on the Amount of Investment	(USD in Thousands) (USD in Thousands) Stipulated by Investment Commission, MOEA	NTD 2,402,651 NTD 2,456,862 45,995,717	(USD 79,781 ) (USD 80,562 )	Note Investment amounts in Mainland China were translated to TWD at the exchange rates of the dates of the remittance;	investment amounts authorized by Investment Commission, MOEA were translated to TWD at the exchange rates of the dates of the authorization.	3. Significant transactions None.

377

EVA AIRWAYS CORP.

Statement of cash and cash equivalents

December 31, 2020

(Expressed in Thousands of New Taiwan Dollars)

		Amount
Cash on hand	$	9
Petty cash		81,054
Demand deposit		2,951,030
Check deposit		103,607
Time deposit (Note)		27,939,456
Total	$	31,075,156

Note: the period of time deposit was 1~3 months; the range of interest rate was 0.27%~2.91%.

Statement of financial assets at fair value through profit or loss current and non-current

(Expressed in Thousands of New Taiwan Dollars/Units)

(1) Money Market Fund

		Book Value		Fair value	Fair value
Units 45,188 12,996 2,564 6,087 3,667 13,974	Unit price (dollar)	Acquisition cost $ 670,416 200,000 460,023 100,000 50,000 200,000 $ 1,680,439	Gains on valuation 5,140 573 1,145 59 33 119 7,069	Unit price (dollar) 14.95 15.43 179.85 16.44 13.65 14.32	Total amount 675,556 200,573 461,168 100,059 50,033 200,119
	14.84 15.39 179.40 16.43 13.64 14.31
					1,687,508

(2) Others

Name of financial instruments Convertible bonds with embedded derivatives	Amount
	$ 2,793

378

EVA AIRWAYS CORP.

Statement of notes receivable

December 31, 2020

(Expressed in Thousands of New Taiwan Dollars)


A Company	$	213
B Company		132
C Company		95
Others (Note 1)		33
Total	$	473

Note 1: The amount of individual client included in others did not exceed 5% of the account balance.

Statement of accounts receivable

Item		Amount
Others (Note 1)	$	5,466,496
Less: allowance for impairment		(54,576)
Total	$	5,411,920

Note 1: The amount of individual client included in others did not exceed 5% of the account balance.

379

EVA AIRWAYS CORP.

Statement of inventories

December 31, 2020

(Expressed in Thousands of New Taiwan Dollars)

Item Aircraft spare parts Consumables for use and merchandise for in-flight sales Fuel for aircraft and others Subtotal Less: Loss on valuation of inventories	Cost $ 1,213,519 1,226,656 18,884 2,459,059 (1,151,942) $ 1,307,117		Net realizable value
			353,133 1,143,990 18,884 1,516,007

Statement of other current assets

Items Prepaid expenses: Tax overpaid retained for offsetting the future tax payable Prepaid tax Others Subtotal Other current assets others: Receivables for payment on behalf of others Others Subtotal Other receivables: Other receivable related parties Others Subtotal Total	Amount
	$ 40,916 204,892 109,682 355,490 $ 40,824 20,119 60,943 $ 226,715 108,086 334,801 $ 751,234

380

						Collateral	None	None	None	None	None	None	None
					Ending balance	Share Fair value	Note 1 19,702	8,502 429,372	35,203 799,109	37,606 470,830	38,202 1,194,565	1,000 34,800	- 7,069	2,955,447
Unrealized gains	(losses) from	financial assets	measured at fair	value through other	comprehensive	income	1,947	115,633	100,329	16,269	137,526	2,030	208	373,942
					Decrease	Share Amount	- -	- -	- -	- -	- -	- -	- -	-
					Addition	Share Amount	- -	- -	- -	1,095 -	- -	- -	- -	-
					Beginning balance	Share Fair value	Note 1 $ 17,755	8,502 313,739	35,203 698,780	36,511 454,561	38,202 1,057,039	1,000 32,770	- 6,861	$ 2,581,505
						Description	Everest Investment Holdings Ltd.	Trade-Van Information Services Co.	Central Reinsurance Corporation	UNI Airways Corp.	Evergreen Steel Corp.	Chung Hwa Express Corp.	Star Alliance Services Gmbh
				Name of	financial	instrument	Share	Share	Share	Share	Share	Share	Share

381

Exchange	differences on	translation of Unrealized Market price or	investee�s gains (losses) Remeasurements Ending balance net assets value	Name Beginning balance Addition Decrease financial on financial Capital of the net defined Share Unit	Shares Amount Shares Amount Shares Amount statement instrument surplus benefit plans Amount holdings (%) Shares price Amount Collateral	Sky Castle Investment. Ltd. 5,500 $ 344,524 - 21,807 - - 2,716 - - - 369,047 100 5,500 - 369,047 None	Evergreen Airways Service (Macau) Ltd. No issue 197,798 - - - (95,320) (3,026) 69 - - 99,521 99 No issue - 99,521 None	PT Perdana Andalan Air Service 41 20,027 - - - (2,973) (1,821) - - 142 15,375 51 41 - 15,375 None	EVA Flight Training Academy 10,000 714,369 - - - (18,119) (35,086) - - - 661,164 100 10,000 - 661,164 None	Evergreen Aviation Technologies Corp. (Note 1) 518,441 10,799,290 - 943,274 (238,252) (3,937,837) (33,256) - - (26,777) 7,744,694 79.42 280,189 - 7,903,953 None	Evergreen Airline Services Corp. 34,460 865,796 1,723 1 - (44,578) - 9,413 - 39,819 870,451 56.33 36,183 - 870,451 None	Evergreen Sky Catering Corp. 72,912 2,340,651 3,646 - - (247,872) - - - 5,770 2,098,549 49.8 76,558 - 2,098,549 None	Evergreen Air Cargo Services Corp. 72,750 1,532,300 - 136,681 - (130,950) - - - 13,966 1,551,997 60.625 72,750 - 1,551,997 None	Hsiang Li Investment Corp. 2,680 63,182 - 2,204 - (1,975) - 7,811 - - 71,222 100 2,680 - 71,222 None	Evergreen Security Corp. 6,336 114,172 - 11,070 - (12,672) - - - 1,687 114,257 31.25 6,336 - 114,257 None	EverFun Travel Service Corp. 5,505 55,981 - - - (14,859) - - - 528 41,650 26.48 5,505 - 41,650 None	Total $ 17,048,090 1,115,037 (4,507,155) (70,473) 17,293 - 35,135 13,637,927		Note 1: On November 18, 2020, a resolution was approved during the board meeting of EGAT for capital reduction of 300,000 thousand shares with a total value of $3,000,000 and EGAT refunded cash to shareholders thereafter. The Company received $2,382,515 in cash according to the	shareholding percentage on December 10, 2020 (the date of capital reduction) in EGAT.

382

EVA AIRWAYS CORP.

Statement of notes payable

December 31, 2020

(Expressed in Thousands of New Taiwan Dollars)

Item D Company Statement of accounts payable	Amount
	$ 858

Item E Company Others (Note 1) Total	Amount
	$ 287,586 2,201,914 $ 2,489,500

Note 1: The amount of individual vendor included in others did not exceed 5% of the account balance.

383

EVA AIRWAYS CORP.

Statement of other payables

December 31, 2020

(Expressed in Thousands of New Taiwan Dollars)

Item Accrued expenses: Airport fee payable Salary and wage payable Other maintenance payable Commission payable Ground service fee payable Others (Note 1) Total	Amount
	$ 602,741 659,548 1,051,853 258,028 240,269 1,488,193 $ 4,300,632

Note 1: The amount of each item in others did not exceed 5% of the account balance.

Statement of contract liablities current and

other current liabilities

Item Contract liablities current: Deferred ticket services, customer loyalty program and others Other current liabilities: Payables for receipts on behalf of others Restoration obligations Others Total	Amount
	$ 4,510,802 $ 151,654 211,146 149,503 $ 512,303

384

Balance		2020.12.31	500,000	1,250,000	500,000	500,000	1,000,000	500,000	227,734	2,855,207	7,332,941	(4,250,000)	3,082,941
			$										$
		Total issue	1,000,000	2,500,000	1,000,000	1,000,000	2,000,000	1,000,000	7,000,000	3,000,000
Description		Issue Date Repayment method	2016/12 Loan principal repay half on the 4th and 5th year respectively.	2016/12 Loan principal repay half on the 4th and 5th year respectively.	2016/12 Loan principal repay half on the 4th and 5th year respectively.	2016/12 Loan principal repay half on the 4th and 5th year respectively.	2016/12 Loan principal repay half on the 4th and 5th year respectively.	2016/12 Loan principal repay half on the 4th and 5th year respectively.	2017/10 Loan principal repay on the 5th year at expiry date.	2020/10 Loan principal repay on the 5th year at expiry date.
	Annual	interest rate	% 1.07	% 1.07	% 1.07	% 1.07	% 1.07	% 1.07
		Guarantee bank	The Shanghai Commercial & Savings Bank, Ltd.	Bank of Taiwan	Mega International Commercial Bank	Taiwan Cooperative Bank	Hua Nan Commercial Bank	Chang Hwa Commercial Bank
			The 19th unsecured bond						The third convertible bond	The fourth convertible bond	Subtotal	Less: Current portion

385

EVA AIRWAYS CORP.

Statement of long-term borrowings (1)

December 31, 2020

(Expressed in Thousands of New Taiwan Dollars)

Item Bank Mortgage loan: Land construction mortgage loan Bank of Taiwan Land construction mortgage loan KGI Bank Subtotal Aircraft mortgage loan Taiwan Cooperative Bank (Note 1) Aircraft mortgage loan Hua Nan Commercial Bank Aircraft mortgage loan Bank of Taiwan Aircraft mortgage loan Mega International Commercial Bank Aircraft mortgage loan Chang Hwa Commercial Bank Aircraft mortgage loan Hua Nan Commercial Bank Aircraft mortgage loan Bank of Taiwan Aircraft mortgage loan Cathay United Bank Aircraft mortgage loan Mega International Commercial Bank Aircraft mortgage loan E.SUN Bank Aircraft mortgage loan Bank of Taiwan Aircraft mortgage loan Chang Hwa Commercial Bank Aircraft mortgage loan Taiwan Business Bank Aircraft mortgage loan Bank of Taiwan Aircraft mortgage loan Bank of Taiwan Aircraft mortgage loan Yuanta Commercial Bank Aircraft mortgage loan Hua Nan Commercial Bank Aircraft mortgage loan Sunny Bank Aircraft mortgage loan Chang Hwa Commercial Bank Aircraft mortgage loan Bank of Taiwan Subtotal	Interest 1.10%~1.10% 1.08%~1.08% 0.98%~1.17% 1.18%~1.37% 1.12%~1.31% 1.18%~1.37% 1.18%~1.37% 1.18%~1.37% 1.12%~1.31% 1.02%~1.21% 1.03%~1.22% 0.97%~1.16% 1.10%~1.29% 1.08%~1.27% 1.03%~1.23% 0.99%~1.19% 1.00%~1.19% 0.99%~1.19% 1.00%~1.19% 1.10%~1.10% 1.08%~1.08% 1.15%~1.15%	Period 2020/09/26~2027/09/26 2020/12/31~2027/12/31 2009/02/03~2021/02/03 2014/05/21~2026/05/21 2014/06/25~2026/06/25 2015/03/27~2027/03/27 2015/09/30~2027/09/30 2015/10/27~2027/10/27 2016/08/30-~2028/08/30 2017/09/22~2029/09/22 2017/12/28~2029/12/28 2018/02/23~2030/02/23 2018/06/29~2030/06/29 2018/12/11~2030/12/11 2019/01/30~2031/01/30 2019/06/25~2031/06/25 2019/08/15~2031/08/15 2019/09/25~2031/09/25 2019/12/27~2031/12/27 2020/07/29~2024/07/28 2020/11/24~2032/11/24 2020/12/17~2025/12/17	Amount	Amount
			$ 5,250,000 1,800,000 7,050,000 233,166 1,900,250 1,826,917 1,618,627 2,283,167 2,309,417 3,274,000 2,387,025 2,381,250 3,166,667 2,960,042 3,427,500 3,500,000 3,475,237 2,985,583 3,249,583 3,204,667 1,000,000 3,323,000 1,400,000 49,906,098
				7,050,000
				233,166 1,900,250 1,826,917 1,618,627 2,283,167 2,309,417 3,274,000 2,387,025 2,381,250 3,166,667 2,960,042 3,427,500 3,500,000 3,475,237 2,985,583 3,249,583 3,204,667 1,000,000 3,323,000 1,400,000
				49,906,098

Note 1: Syndicated Loan by Taiwan Cooperative Bank and other 10 banks.

386

EVA AIRWAYS CORP.

Statement of long-term borrowings (2)

December 31, 2020

(Expressed in Thousands of New Taiwan Dollars)

Item Bank Medium and long- term credit loan Chang Hwa Commercial Bank Taiwan Business Bank Bank SinoPac Mega International Commercial Bank Cathay United Bank Land Bank of Taiwan Taishin International Bank Far Eastern Int�l Bank Bank of Taiwan Bank SinoPac Yuanta Commercial Bank Bank of Kaohsiung CTBC Bank KGI Bank The Export-Import Bank of Republic of China Sunny Bank Taipei Fubon Bank Agricultural Bank of Taiwan DBS Bank (Taiwan) Ltd. Bank of Communications Bank of China Chang Hwa Comercial Bank O-Bank First Commercial Bank Bank of Taiwan and other bank group (Note 1) Hua Nan Commercial Bank The Export-Import Bank of Republic of China Bank of Taiwan and other bank group (Note 1) Bank of Taiwan and other bank group (Note 1) EnTie Commercial Bank Bank of Taiwan Subtotal Total Less: Current portion Total	Interest 1.08%~1.27% 1.03%~1.22% 0.98%~1.17% 1.03%~1.22% 0.98%~1.17% 1.05%~1.25% 0.97%~1.26% 1.12%~1.22% 1.03%~1.22% 0.98%~1.17% 1.04%~1.24% 1.08%~1.27% 0.98%~1.17% 0.98%~1.17% 0.96%~1.16% 0.91%~1.16% 0.93%~1.13% 0.96%~1.15% 0.93%~1.12% 0.93%~1.13% 0.98%~1.17% 1.03%~1.22% 0.96%~1.16% 0.94%~0.94% 1.16%~1.16% 1.18%~1.18% 1.14%~1.14% 1.16%~1.16% 1.16%~1.16% 0.90%~0.90% 1.20%~1.20%	Period 2017/05/26~2022/05/26 2017/06/07~2022/06/07 2017/06/29~2022/06/29 2017/08/25~2022/08/25 2017/09/19~2022/09/19 2018/01/12~2022/01/12 2018/01/26~2021/01/26 2018/03/30~2023/03/30 2018/08/14~2023/08/14 2018/09/28~2023/09/28 2018/11/05~2021/11/05 2018/11/09~2023/11/09 2018/11/28~2021/11/28 2018/12/12~2021/09/12 2019/03/21~2022/03/21 2019/03/28~2022/03/28 2019/07/04~2022/07/04 2019/07/23~2024/07/23 2019/11/18~2022/11/18 2019/11/22~2022/11/22 2019/12/05~2022/12/05 2020/01/30~2025/01/30 2020/03/13~2025/03/13 2020/03/23~2023/03/23 2020/06/30~2022/06/30 2020/09/18~2025/09/18 2020/09/21~2023/09/21 2020/09/30~2022/06/30 2020/10/23~2022/06/30 2020/12/10~2021/06/08 2020/12/21~2025/12/21	Amount $ 750,000 300,000 187,500 400,000 250,000 156,250 1,000,000 312,500 600,000 343,750 500,000 330,000 480,000 400,000 300,000 800,000 306,667 500,000 500,000 1,200,000 400,000 1,000,000 540,000 750,000 10,000,000 1,000,000 500,000 6,000,000 4,000,000 500,000 1,000,000 35,306,667 92,262,765 (12,187,386) $ 80,075,379

Note 1: Syndicated Loan by Bank of Taiwan and other 9 banks.

387

EVA AIRWAYS CORP.

Statement of contract liabilities non-current and

other non-current liabilities

December 31, 2020

(Expressed in Thousands of New Taiwan Dollars)

Item Contract liabilities non-current: Customer loyalty program Other non-current liabilities: Restoration obligations Others Total	Amount
	$ 2,517,482 $ 21,689,137 712,581 $ 22,401,718

Statement of lease liabilities

Item Land Building and structures Aircraft Machinery and equipment Total	Lease term 2 to 18 years 1 to 10 years 2 to 12 years 1 to 5 years	Discount rate Ending balance 1.15%~1.21% $ 341,377 1.15%~3.30% 665,377 1.25%~3.32% 88,166,228 1.15%~3.30% 42,217 $ 89,215,199

Note: The statement of lease liabilities were disclosed in note 6(p).

388

EVA AIRWAYS CORP.

Statement of operating revenue

For the year ended December 31, 2020

(Expressed in Thousands of New Taiwan Dollars)

Item Operating revenue: Revenue from passenger services Revenue from cargo services Others Total	Amount
	$ 24,505,345 50,018,381 5,078,803 $ 79,602,529

Statement of operating costs

Item Cost of air freight services Airport and transportation operating costs Traveler service costs Maintenance costs Others Total	Amount
	$ 49,521,505 8,926,624 5,610,193 8,299,641 730,741 $ 73,088,704

389

EVA AIRWAYS CORP.

Statement of operating expenses

For the year ended December 31, 2020

(Expressed in Thousands of New Taiwan Dollars)

Item Salary expense Depreciation expense Insurance expense Others (Note 1) Total	Amount
	$ 4,247,404 858,929 465,901 2,795,755 $ 8,367,989

Note 1: The amount of each item in others does not exceed 5% of the account balance.

Financial assets and liabilities at fair value through profit or loss were disclosed in note 6(b).

Financial assets and liabilities for hedging were disclosed in note 6(c).

Notes receivable related parties, accounts receivable related parties, other receivables related parties, accounts payable related parties and other payables related parties were disclosed in notes 6(d), 6(e) ,7 and 13.

Non-current assets or disposal group classified as held for sale, net and liabilities related to non-current assets or disposal group classified as held for sale were disclosed in note 6(g).

Statement of changes in property, plant and equipment was disclosed in note 6(j).

Statement of changes in right-of-use assets was disclosed in note 6(k).

Statement of changes in intangible assets was disclosed in note 6(m).

Other current assets and other non-current assets were disclosed in note 6(n).

Statement of changes in restoration obligations was disclosed in note 6(q).

Statement of deferred tax assets and liabilities was disclosed in note 6(s).

Statement of net defined benefit liabilities non-current was disclosed in note 6(r).

Statement of other income was disclosed in note 6(y).

Statement of other gains and losses was disclosed in note 6(y).

Statement of finance costs was disclosed in note 6(y).

390

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AI assistant

EVAAIR — Annual Report 2020

52172_rns_2021-08-04_3607a6fc-8fb7-46e8-8839-8331d9d24a09.pdf

EVA Airways Corporation

Spokesman

Deputy Spokesman

Shareholder Services

Auditors

Contents

Contents

I. Letter to Shareholders

2020 Results

 Passenger revenue was NT$24.5 billion, a decrease of NT$76.1 billion compared with 2019 or an annual drop of 76%

 Cargo revenue was NT$50 billion, an increase of NT$24.6 billion compared with 2019 or an annual increase of 97%

 Optimize fleet composition, with a total of 87 aircraft

 Create diversified income and strive for cost-effectiveness

 Affiliated companies

Results vs. Projections

Analysis of Financial Results and Profitability

Profitability analysis (consolidated):

Research and Development

2021 Preview

Operating Objectives

Operational Adjustments In Response To The COVID-19 Pandemic

Passenger Business:

Cargo Business:

Future Development Strategies and Important Marketing Policies

Impact of External Competition, Legal Issues and Overall Operating Environment

External Competition

Legal Environment

Overall Operating Environment

II.Company Profile

Major Milestones

1989~1996

1997~2001

2002~2006

2007~2011

2012~2016

2017

2018

2019

2020

2021

III.Corporate Governance Report

3.1.2 Major Corporate Functions

Chart 1: Major Shareholders of the Institutional Shareholders

Chart 2: Major Shareholders of the Company’s Major Institutional Shareholders

Professional Qualifications and independence Analysis of Directors

3.3.3 Employees’ Compensation of the Management Team

3.3.4 Comparison of Remuneration for Directors, Supervisors, Presidents and Executive Vice Presidents in the Most Recent Two Fiscal Years and Remuneration Policy for Directors, Supervisors, Presidents and Executive Vice Presidents

3.4 Implementation of Corporate Governance

3.4.1 Board of Directors

Other mentionable items:

3.4.2 Annual Tasks and Implementation Status of the Audit Committee

A. Communication method

3.4.3 Corporate Governance Implementation Status and Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”

Table 1: Board Diversity Policy

3.4.4 Composition, Responsibilities and Operations of the Remuneration Committee

A. Professional Qualifications and Independence Analysis of Remuneration Committee Members

B. The duties of the Remuneration Committee are as follows:

3.4.5 Corporate Social Responsibility and Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies”

Note 5:

Note 6:

3.4.6 Ethical Corporate Management and Deviations from the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies”

3.4.7 Information disclosure of the Company’s principles for ethical management:

3.4.8 Important information in understanding corporate governance management:

(2)Accounting Officer:

3.4.9 Internal Control System Execution Status:

EVA Airways Corporation Internal Control System Statement

3.4.11 Major Resolutions of Shareholders’ Meeting and Board Meetings

2. Major Board of Director, Audit Committee, and Remuneration Committee Meeting’s Resolutions

3.4.13 Resignation or Dismissal of the Company’s Key Individuals: None

3.5 Information Regarding the Company’s Audit Fee and Independence 3.5.1 Audit Fee

3.6 Replacement of CPA: None

3.7 Audit Independence

3.8 Changes in Shareholding of Directors, Managers and Major Shareholders and Information of Stock Transfer or Stock Pledge:

3.8.1 Changes in Shareholding of Directors, Mangers and Major Shareholders

3.8.2 Information of Stock Transfer: NIL

3.8.3 Information of Stock Pledged: NIL

3.9 Relationship Among the Top Ten Shareholders

EVAAIR Annual Report 2020

`■` Unfavorable Factors

`■` Countermeasures