EVAAIR — Interim / Quarterly Report 2021

Dec 30, 2021

Stock Code:2618

EVA AIRWAYS CORP. AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors’ Review Report For the Three Months Ended March 31, 2021 and 2020

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

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Table of contents

Contents 1. Cover Page 2. Table of Contents 3. Independent Auditors’ Review Report 4. Consolidated Balance Sheets 5. Consolidated Statements of Comprehensive Income 6. Consolidated Statements of Changes in Equity 7. Consolidated Statements of Cash Flows 8. 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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1 2 3 4 5 6 7 8 8 8～10 10～11 11 12～46 46～50 51 51～53 53 53 53～54 54, 56~60 54, 61 55, 62 55 55

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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’ Review Report

To the Board of Directors of EVA AIRWAYS CORP.:

Introduction

We have reviewed the accompanying consolidated balance sheets of EVA AIRWAYS CORP. (“the Company”) and its subsidiaries (“the Group”) as of March 31, 2021 and 2020, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the three months then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies. 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 International Accounting Standard 34, “ Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

Except as explained in the Basis for Qualified Conclusion paragraph, we conducted our reviews in accordance with Statement of Auditing Standard 65, “ Review of Financial Information Performed by the Independent Auditor of the Entity”. A review of the consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the generally accepted auditing standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for Qualified Conclusion

As stated in note 6(h), the other equity accounted investments of the Group in its investee companies of $596,870 thousand and $628,100 thousand as of March 31, 2021 and 2020, respectively, and its equity in net earnings (losses) on these investee companies of $(4,624) thousand and $10,860 thousand for the three months then ended respectively, were recognized solely on the financial statements prepared by these investee companies, but not reviewed by independent auditors.

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.

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Qualified Conclusion

Except for the adjustments, if any, as might have been determined to be necessary had the financial statements of certain consolidated subsidiaries and equity accounted investee companies described in the Basis for Qualified Conclusion paragraph above been reviewed by independent auditors, based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as of March 31, 2021 and 2020, and of its consolidated financial performance for the three months then ended, and its consolidated cash flows for the three months then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “ Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

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

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KPMG

Taipei, Taiwan (Republic of China) May 4, 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 review such consolidated financial statements are those generally accepted and applied in the Republic of China.

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Reviewed only, not audited in accordance with generally accepted auditing standards as of March 31, 2021 and 2020

EVA AIRWAYS CORP. AND SUBSIDIARIES

Consolidated Balance Sheets

March 31, 2021, December 31 and March 31, 2020

(Expressed in Thousands of New Taiwan Dollars)

2021.3.31 Assets Amount % Current assets: 1100 Cash and cash equivalents (note 6(a)) $ 41,717,692 13 1110 Financial assets at fair value through profit or loss －current (note 6(b)) 1,759,277 1 1136 Financial assets at amortized cost－current (note 6(b)) 807,640 - 1139 Financial assets for hedging－current (note 6(c)) - - 1140 Contract assets－current (note 6(u)) 551,800 - 1150 Notes receivable, net (note 6(d)) 4,679 - 1160 Notes receivable－related parties (notes 6(d) and 7) 99 - 1170 Accounts receivable, net (note 6(d)) 6,716,440 2 1180 Accounts receivable－related parties (notes 6(d) and 7) 395,301 - 130x Inventories (note 6(f)) 3,111,327 1 1460 Non-current assets or disposal group classified as held for sale, net (note 6(g)) 818,034 - 1470 Other current assets (notes 6(e), 6(m) and 7) 1,096,279 - Total current assets 56,978,568 17 Non-current assets: 1510 Financial assets at fair value through profit or loss －non-current (notes 6(b) and 6(n)) 5,535 - 1517 Financial assets at fair value through other comprehensive income－non-current (note 6(b)) 3,197,679 1 1550 Investments accounted for using equity method (notes 6(h) and 7) 2,166,037 1 1600 Property, plant and equipment (notes 6(j), 7, 8) 130,446,881 40 1755 Right-of-use assets (notes 6(k), 6(p), and 7) 106,977,302 33 1780 Intangible assets (note 6(l)) 1,637,940 - 1840 Deferred tax assets 5,878,686 2 1900 Other non-current assets (notes 6(m),7, 8 and 9) 18,540,490 6 Total non-current assets 268,850,550 83 Total assets $ 325,829,118 100	2020.12.31 Amount % 40,869,190 13 1,978,251 1 807,013 - - - 446,438 - 8,624 - 840 - 6,262,730 2 407,075 - 3,255,164 1 852,175 - 1,045,012 - 55,932,512 17 2,793 - 3,044,794 1 2,145,944 1 133,221,419 40 110,740,847 34 1,700,564 - 5,776,712 2 17,001,670 5 273,634,743 83 329,567,255 100	2020.3.31 Amount % 40,379,087 12 1,472,763 1 722,086 - 5,187 - 691,413 - 244,277 - 48,641 - 10,755,664 3 320,790 - 3,532,557 2 642,628 - 1,275,951 - 60,091,044 18 - - 2,451,383 1 2,090,894 1 136,517,580 40 118,082,543 35 1,920,786 - 5,391,976 1 12,811,464 4 279,266,626 82 339,357,670 100 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (notes 6(n) and 8) 2120 Financial liabilities at fair value through profit or los －current (notes 6(b) and 6(n)) 2126 Financial liabilities for hedging－current (notes 6(c), 6(o) and 7) 2130 Contract liabilities－current (note 6(u)) 2170 Notes and accounts payable 2180 Accounts payable－related parties (note 7) 2200 Other payables (notes 7 and 9) 2230 Current tax liabilities 2260 Liabilities related to non-current assets or disposal group classified as held for sale (note 6(g)) 2280 Lease liabilities－current (notes 6(o) and 7) 2320 Current portion of long-term liabilities (notes 6(n) and 8) 2399 Other current liabilities (note 6(p)) Total current liabilities Non-current liabilities: 2511 Financial liabilities for hedging－non-current (notes 6(c), 6(o) and 7) 2527 Contract liabilities－non-current (note 6(u)) 2530 Bonds payable (note 6(n)) 2540 Long-term borrowings (notes 6(n) and 8) 2570 Deferred tax liabilities 2580 Lease liabilities－non-current (notes 6(o) and 7) 2640 Net defined benefit liabilities－non-current 2670 Other non-current liabilities (note 6(p)) Total non-current liabilities Total liabilities Equity (notes 6(c), 6(n), 6(r) and 6(s)): 3110 Ordinary share 3140 Advance receipts for share capital 3200 Capital surplus 3300 Retained earnings 3400 Other equity interest Total equity attributable to owners of parent 36XX Non-controlling interests (notes 6(i) and 6(s)) Total equity Total liabilities and equity	2021.3.31		2020.12.31		2020.3.31
			Amount %		Amount %		Amount %
			$ - - s - - 11,778,903 4 4,429,748 1 2,983,501 1 69,930 - 5,672,527 2 1,005,595 - 573 - 388,840 - 19,646,913 6 493,253 - 46,469,783 14 74,272,650 23 2,002,945 1 1,944,545 1 93,939,834 29 1,548,881 - 4,484,717 1 3,459,113 1 22,249,771 7 203,902,456 63 250,372,239 77 49,234,980 15 373,482 - 8,055,150 2 5,629,712 2 6,301,253 2 69,594,577 21 5,862,302 2 75,456,879 23 $ 325,829,118 100		80,000 - - - 11,564,988 4 4,649,328 1 2,916,119 1 97,393 - 5,332,122 2 709,799 - 1,142 - 362,101 - 19,148,239 6 571,924 - 45,433,155 14 77,067,827 23 2,517,482 1 3,082,941 1 92,696,123 28 1,624,345 1 4,458,004 1 3,580,418 1 22,447,431 7 207,474,571 63 252,907,726 77 48,535,695 15 - - 7,985,673 2 7,827,138 2 6,448,882 2 70,797,388 21 5,862,141 2 76,659,529 23 329,567,255 100		1,350,000 1 26,850 - 13,425,484 4 10,375,034 3 4,253,601 1 89,663 - 9,413,329 3 1,083,419 - 38,489 - 373,470 - 26,039,350 8 3,689,360 1 70,158,049 21 88,688,831 26 3,098,164 1 4,250,000 1 68,632,465 20 462,661 - 4,747,854 2 4,387,036 1 21,137,530 6 195,404,541 57 265,562,590 78 48,535,695 14 - - 7,849,700 3 9,683,228 3 712,067 - 66,780,690 20 7,014,390 2 73,795,080 22 339,357,670 100

See accompanying notes to consolidated financial statements.

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Reviewed only, not audited in accordance with generally accepted auditing standards EVA AIRWAYS CORP. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the three months ended March 31, 2021 and 2020

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

4000 Operating revenue (notes 6(u) and 7) 5000 Operating costs (notes 6(c), 6(f), 6(j), 6(k), 6(l), 6(o), 6(q), 6(v), 7 and 9) 5900 Gross profit from operations 6000 Operating expenses (notes 6(d), 6(j), 6(k), 6(l), 6(o), 6(q), 6(v) and 7) 6900 Net operating loss Non-operating income and expenses (notes 6(c), 6(h), 6(o), 6(p), 6(w) 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 Loss before tax 7950 Income tax benefit (expenses) (note 6(r)) Loss 8300 Other comprehensive income (notes 6(c), 6(h), 6(r) and 6(s)): 8310 Components of other comprehensive income that will not be reclassified to profit or loss: 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 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(t)) 9750 Basic earnings per share (in New Taiwan Dollars) 9850 Diluted earnings per share (in New Taiwan Dollars)	For the three months ended March 31, 2021 Amount % $ 19,678,810 100 (19,179,796) (97) 499,014 3 (2,260,612) (12) (1,761,598) (9) 43,839 - 318,780 2 (1,029,208) (5) 18,116 - (648,473) (3) (2,410,071) (12) 210,886 1 (2,199,185) (11) 152,882 1 - - (8) - 152,874 1 (958) - (377,321) (2) 4,232 - 75,464 - (298,583) (2) (145,709) (1) $ (2,344,894) (12) $ (2,197,426) (11) (1,759) - $ (2,199,185) (11) $ (2,345,055) (12) 161 - $ (2,344,894) (12) $ (0.45) $ (0.45)	For the three months ended March 31, 2020 Amount % 30,233,098 100 (27,573,330) (91) 2,659,768 9 (3,104,609) (10) (444,841) (1) 139,558 - 272,742 1 (1,316,643) (4) 51,055 - (853,288) (3) (1,298,129) (4) 203,547 - (1,094,582) (4) (194,950) - 14,878 - (3,155) - (183,227) - (1,162) - (2,331,640) (8) 10,739 - 466,328 (2) (1,855,735) (6) (2,038,962) (6) (3,133,544) (10) (1,220,628) (4) 126,046 - (1,094,582) (4) (3,258,100) (10) 124,556 - (3,133,544) (10) (0.25) (0.25)

See accompanying notes to consolidated financial statements.

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Reviewed only, not audited in accordance with generally accepted auditing standards

EVA AIRWAYS CORP. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the three months ended March 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Balance on January 1, 2020 Appropriation of prior year’s earnings: Cash dividends of ordinary share Profit (loss) Other comprehensive income Total comprehensive income Balance on March 31, 2020 Balance on January 1, 2021 Loss Other comprehensive income Total comprehensive income Conversion of convertible bonds Balance on March 31, 2021					Attribut	able to owners of	parent					Non- controlling interests	Total equity
	Ordinary share	Advance receipts for share capital	Capital surplus		Retained earnings			Other equity interest			Total equity attributable to owners of parent
				Legal reserve	Unappropriated retained earnings	Total	Exchange differences on translation of foreign financial statements	Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income	Gains (losses) on hedging instruments	Total
	$ 48,535,695 - - -	- - - -	7,849,700 - - -	2,221,732 - - -	9,895,516 (1,213,392) (1,220,628) -	12,117,248 (1,213,392) (1,220,628) -	(42,773) - - 10,103	722,495 - - (194,165)	2,069,817 - - (1,853,410)	2,749,539 - - (2,037,472)	71,252,182 (1,213,392) (1,220,628) (2,037,472)	6,889,834 - 126,046 (1,490)	78,142,016 (1,213,392) (1,094,582) (2,038,962)
	-	-	-	-	(1,220,628)	(1,220,628)	10,103	(194,165)	(1,853,410)	(2,037,472)	(3,258,100)	124,556	(3,133,544)
	$ 48,535,695	-	7,849,700	2,221,732	7,461,496	9,683,228	(32,670)	528,330	216,407	712,067	66,780,690	7,014,390	73,795,080
	$ 48,535,695 - -	- - -	7,985,673 - -	2,574,002 - -	5,253,136 (2,197,426) -	7,827,138 (2,197,426) -	(113,246) - 2,401	1,113,299 - 151,827	5,448,829 - (301,857)	6,448,882 - (147,629)	70,797,388 (2,197,426) (147,629)	5,862,141 (1,759) 1,920	76,659,529 (2,199,185) (145,709)
	-	-	-	-	(2,197,426)	(2,197,426)	2,401	151,827	(301,857)	(147,629)	(2,345,055)	161	(2,344,894)
	699,285	373,482	69,477	-	-	-	-	-	-	-	1,142,244	-	1,142,244
	$ 49,234,980	373,482	8,055,150	2,574,002	3,055,710	5,629,712	(110,845)	1,265,126	5,146,972	6,301,253	69,594,577	5,862,302	75,456,879

See accompanying notes to consolidated financial statements.

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Reviewed only, not audited in accordance with generally accepted auditing standards EVA AIRWAYS CORP. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the three months ended March 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Loss before tax Adjustments: Adjustments to reconcile profit (loss): Expected credit loss (gain) Depreciation expense Amortization expense Net losses (gains) on financial assets or liabilities at fair value through profit or loss Interest expense Interest income Shares of profit of associates accounted for using equity method Losses (gains) on disposal of property, plant and equipment Gains on disposal of non-current assets classified as held for sale Unrealized foreign exchange losses (gains) Others Total adjustments to reconcile profit (loss) 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 (outflow) generated from operations Income taxes paid Net cash flows from (used in) operating activities	For the three months ended March 31 2021 2020 $ (2,410,071) (1,298,129) (5) - 6,992,394 6,792,050 100,845 109,656 (7,665) 22,160 1,029,208 1,316,643 (36,765) (133,682) (18,116) (51,055) 11,492 (32,894) - (89,784) (298,091) 32,745 (82,100) (33,451) 7,691,197 7,932,388 (105,362) (346,397) 3,945 599,034 741 139,762 (453,705) 6,438,994 11,778 167,984 148,671 (183,249) (40,442) (157,087) (434,374) 6,659,041 (734,122) (9,706,307) 67,382 (5,367,214) (27,462) (15,004) 399,339 (1,508,625) (99,439) (1,346,809) (121,305) (515,092) (2,580) 3,273 (518,187) (18,455,778) (952,561) (11,796,737) 6,738,636 (3,864,349) 4,328,565 (5,162,478) (52,518) (146,129) 4,276,047 (5,308,607)	For the three months ended March 31 2021 2020 $ (2,410,071) (1,298,129) (5) - 6,992,394 6,792,050 100,845 109,656 (7,665) 22,160 1,029,208 1,316,643 (36,765) (133,682) (18,116) (51,055) 11,492 (32,894) - (89,784) (298,091) 32,745 (82,100) (33,451) 7,691,197 7,932,388 (105,362) (346,397) 3,945 599,034 741 139,762 (453,705) 6,438,994 11,778 167,984 148,671 (183,249) (40,442) (157,087) (434,374) 6,659,041 (734,122) (9,706,307) 67,382 (5,367,214) (27,462) (15,004) 399,339 (1,508,625) (99,439) (1,346,809) (121,305) (515,092) (2,580) 3,273 (518,187) (18,455,778) (952,561) (11,796,737) 6,738,636 (3,864,349) 4,328,565 (5,162,478) (52,518) (146,129) 4,276,047 (5,308,607)
		2021 (2,410,071) (5) 6,992,394 100,845 (7,665) 1,029,208 (36,765) (18,116) 11,492 - (298,091) (82,100) 7,691,197 (105,362) 3,945 741 (453,705) 11,778 148,671 (40,442) (434,374) (734,122) 67,382 (27,462) 399,339 (99,439) (121,305) (2,580) (518,187) (952,561) 6,738,636 4,328,565 (52,518) 4,276,047
	$

See accompanying notes to consolidated financial statements.

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Reviewed only, not audited in accordance with generally accepted auditing standards EVA AIRWAYS CORP. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (continued)

For the three months ended March 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) investing activities: 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 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 Increase 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 long-term borrowings Repayments of long-term borrowings Payments of lease liabilities Decrease in other non-current liabilities Interest paid 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 period Cash and cash equivalents at end of period

For the three months ended March 31 2021 2020 (253) (721,558) (90,000) (680,000) 310,293 170,009 - 680,980 (196,401) (489,012) 12,866 51,812 (38,221) (53,165) (94,037) (41,472) (1,429,151) (1,120,962) 36,204 149,333 - 24,088 (1,488,700) (2,029,947) - 1,300,000 (80,000) (100,000) 6,302,083 4,040,000 (4,559,865) (4,873,824) (2,776,751) (3,062,497) (3,035) (14,372) (821,423) (1,099,806) (1,938,991) (3,810,499) 146 (6,379) 848,502 (11,155,432) 40,869,190 51,534,519 $ 41,717,692 40,379,087

See accompanying notes to consolidated financial statements.

8

Reviewed only, not audited in accordance with generally accepted auditing standards EVA AIRWAYS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2021 and 2020

(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 May 4, 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 Group has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2021:

• ●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”

• ●Amendments to IFRS 16 “A one-year extension to the practical expedient for COVID-19 related rent concessions”

(Continued)

9

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

• (b) 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 Interpretations Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” Amendments to IAS 1 “Disclosure of Accounting Policies” Amendments to IAS 8 “Definition of Accounting Estimates”

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 key amendments to IAS 1 include: ●requiring companies to disclose their material accounting policies rather than their significant accounting policies; ●clarifying that accounting policies related to immaterial transactions, other events or conditions are themselves immaterial and as such need not be disclosed; and ●clarifying that not all accounting policies that relate to material transactions, other events or conditions are themselves material to a company’s financial statements. January 1, 2023 The amendments introduce a new definition for accounting estimates: clarifying that they are monetary amounts in the financial statements that are subject to measurement uncertainty. The amendments also clarify the relationship between accounting policies and accounting estimates by specifying that a company develops an accounting estimate to achieve the objective set out by an accounting policy. January 1, 2023

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)

10

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”

(4) Summary of significant accounting policies

Except the following accounting policies mentioned below, the significant accounting policies adopted in the consolidated financial statements are the same as those in the consolidated financial statement for the year ended December 31, 2020. For the related information, please refer to note 4 of the consolidated financial statements for the year ended December 31, 2020.

(a) Statement of compliance

These consolidated financial statements have been prepared in accordance with the preparation and guidelines of IAS 34 “Interim Financial Reporting” which are endorsed and issued into effect by FSC, and do not include all of the information required by the Regulations and International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations and SIC Interpretations endorsed and issued into effect by the FSC (hereinafter referred to IFRS endorsed by the FSC) for a complete set of the annual consolidated financial statements.

(b) Basis of consolidation

• (i) 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 2021.3.31 2020.12.31 2020.3.31 Note % 79.42 % 79.42 % 79.42 - % 56.33 % 56.33 % 56.33 Note 2 % 49.80 % 49.80 % 49.80 Note 1, Note 2 % 60.625 % 60.625 % 60.625 Note 2 % 100.00 % 100.00 % 100.00 - % 100.00 % 100.00 % 100.00 - % 99.00 % 99.00 % 99.00 - % 51.00 % 51.00 % 51.00 Note 2 % 100.00 % 100.00 % 100.00 -	Shareholding percentage 2021.3.31 2020.12.31 2020.3.31 Note % 79.42 % 79.42 % 79.42 - % 56.33 % 56.33 % 56.33 Note 2 % 49.80 % 49.80 % 49.80 Note 1, Note 2 % 60.625 % 60.625 % 60.625 Note 2 % 100.00 % 100.00 % 100.00 - % 100.00 % 100.00 % 100.00 - % 99.00 % 99.00 % 99.00 - % 51.00 % 51.00 % 51.00 Note 2 % 100.00 % 100.00 % 100.00 -
			2021.3.31 % 79.42 % 56.33 % 49.80 % 60.625 % 100.00 % 100.00 % 99.00 % 51.00 % 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

(Continued)

11

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

• Note 1: 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.

• Note 2: This is a non-significant subsidiary, its financial statements have not been reviewed by independent auditor.

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

(c) Employee benefits

Pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior fiscal year, adjusted for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events.

(d) Income taxes

Tax expense in the interim financial statements is measured and disclosed according to paragraph B12 of IAS 34 “Interim Financial Reporting”.

Income tax expense for the year is best estimated by multiplying pretax income for the interim reporting period with the effective annual tax rate as forecasted by the management. This should be recognized fully as tax expense for the current period. However, the Company incurs a pretax loss for interim reporting period and anticipates having a tax benefit for the full year when the management estimates its effective annual tax rate. An amount of deferred income tax benefit is recognized by multiplying pretax loss for the interim reporting period with the effective annual tax rate. Deferred income tax assets are adjusted relatively.

Temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and their respective tax bases which were recognized directly in equity or in other comprehensive income as tax expense shall be measured based on the tax rates that have been enacted or substantively enacted at the time when the asset or liability is realized or settled.

(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 IFRSs (in accordance with IAS 34 “Interim Financial Reporting” and 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.

The preparation of the consolidated financial statements, estimates and underlying assumptions are reviewed on an ongoing basis which are in conformity with the consolidated financial statements for the year ended December 31, 2020. For the related information, please refer to note 5 of the consolidated financial statements for the year ended December 31, 2020.

(Continued)

12

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

(6) Explanation of significant accounts

Except for the following disclosure, there is no significant difference as compared with those disclosed in the consolidated financial statements for the year ended December 31, 2020. Please refer to note 6 of the consolidated financial statements for the year ended December 31, 2020.

• (a) Cash and cash equivalents

Cash on hand Cash in bank Short-term notes	2021.3.31 $ 81,178 41,636,514 - $ 41,717,692	2020.12.31 83,400 40,785,790 - 40,869,190	2020.3.31
			89,931 40,234,156 55,000
			40,379,087

Refer to note 6(x) 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	2021.3.31 $ 1,759,277 5,535 $ 1,764,812 2021.3.31 $ -	2020.12.31 1,978,251 2,793 1,981,044 2020.12.31 -	2020.3.31
			1,472,763 -
			1,472,763
			2020.3.31
			26,850

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

• －

• (ii) Financial assets at amortized cost current

Time deposits over three months	2021.3.31 $ 807,640	2020.12.31 807,013	2020.3.31
			722,086

(Continued)

13

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	2021.3.31 $ 1,340,745 1,856,934 $ 3,197,679	2020.12.31 1,316,591 1,728,203 3,044,794	2020.3.31 988,686 1,462,697 2,451,383

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.

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

• (v) 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: Forward exchange contracts Current Financial liabilities for hedging: Fuel swap and option agreements Forward exchange contracts Foreign currency component of non- derivative lease liabilities Total Current Non-current	2021.3.31 $ - $ - 2021.3.31 $ - - 86,051,553 $ 86,051,553 $ 11,778,903 74,272,650 $ 86,051,553	2020.12.31 - - 2020.12.31 - - 88,632,815 88,632,815 11,564,988 77,067,827 88,632,815	2020.3.31
			5,187
			5,187
			2020.3.31
			1,414,707 1,952 100,697,656
			102,114,315
			13,425,484 88,688,831
			102,114,315

(Continued)

14

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

(i) Fuel swap and 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 swap and 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 2021.3.31 2020.12.31 2020.3.31 $ - - (552,395) $ - - (862,312) $ - - (1,414,707)	Fair value of assigned hedging instrument 2021.3.31 2020.12.31 2020.3.31 $ - - (552,395) $ - - (862,312) $ - - (1,414,707)	Period when Period when cash flows are profit or loss expected to occur is affected 2020 2020 2020 2020
		2021.3.31 $ - $ - $ -	2020.12.31 - - -
Floating price of fuel Floating price of fuel	Fuel swap agreements 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:

2020.3.31

Forward exchange purchased	Contract Amount (in thousands) USD$ 53,000	Currency TWD to USD	Maturity dates Average strike price 2020/04/01~2020/10/05 USD29.6~30.7

There was no such transaction as of March 31, 2021 and 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 March 31, 2021, December 31 and March 31, 2020, the cash flow hedged items and nonderivative financial hedging instruments were as follows:

Hedged item Foreign currency of operating revenue	Hedging instrument				Period when cash flows are expected to occur Period when profit or loss is affected 2020~2032 2020~2032
		2021.3.31 $ 86,051,553	2020.12.31 88,632,815
	Foreign currency of lease liabilities			100,697,656

(Continued)

15

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

• (iv) The details arising from cash flow hedges for the three months ended March 31, 2021 and 2020, were as follows:

Account Item For the three months ended March 31, 2021 Recognized in other comprehensive income during the period $ (377,321) Reclassification from equity to increase (decrease) in operating costs for the period $ - Reclassification from equity to exchange losses (gains) for the period $ (316,754)	For the three months ended March 31, 2020 (2,316,762) 225,265 (72,978)

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	2021.3.31 $ 4,778 7,326,034 (214,293) $ 7,116,519	2020.12.31 9,464 6,885,217 (215,412) 6,679,269	2020.3.31 292,918 11,317,689 (241,235) 11,369,372

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:

Not overdue Overdue within 30 days Overdue 31~60 days Overdue over 60 days but less than one year Overdue more than one year		2021.3.31
	Notes and accounts receivable (including related parties) carrying amount $ 7,207,848 71,936 20,416 9,663 20,949 $ 7,330,812	Weighted- average loss rate 1.48% 82.34% 85.33% 100% 100%	Loss allowance provision
			107,030 59,230 17,421 9,663 20,949
			214,293

(Continued)

16

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

Not overdue Overdue within 30 days Overdue 31~60 days Overdue over 60 days but less than one year Overdue more than one year 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 $ 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% 2020.3.31	Loss allowance provision
			69,745 79,102 23,480 24,467 18,618
			215,412
	Notes and accounts receivable (including related parties) carrying amount $ 9,619,208 1,907,737 45,393 20,427 17,842 $ 11,610,607	Weighted- average loss rate 0.45% 6.20% 96.46% 88.18% 100%	Loss allowance provision
			43,371 118,226 43,784 18,012 17,842
			241,235

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 March 31	For the three months ended March 31, 2021 For the three months ended March 31, 2020 $ 215,412 241,563 (5) - (1,114) (328) $ 214,293 241,235	For the three months ended March 31, 2021 For the three months ended March 31, 2020 $ 215,412 241,563 (5) - (1,114) (328) $ 214,293 241,235
		241,563 - (328) 241,235

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

• (e) Other receivables

Other receivables－related parties Others Less: allowance for impairment	2021.3.31 $ 216,654 234,538 (145) $ 451,047	2020.12.31 241,094 168,876 (145) 409,825	2020.3.31
			411,176 48,929 -
			460,105
			(Continued)

17

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

For the three months ended March 31, 2021 and 2020, the Group was awarded government grants amounting to $535,596 and $16,304, respectively, 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 March 31, 2021, December 31 and March 31, 2020, the receivables related to the abovementioned grant amounted to $166,355, $138,840 and $16,304, respectively.

There was no change on the movements in the allowance for other receivables for the three months ended March 31, 2021 and 2020.

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

• (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	2021.3.31 $ 405,358 1,098,572 1,607,397 $ 3,111,327	2020.12.31 453,564 1,143,990 1,657,610 3,255,164	2020.3.31
			528,680 1,283,186 1,720,691
			3,532,557

(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 Proceeds from disposal of scraps Total	For the three months ended March 31, 2021 For the three months ended March 31, 2020 $ (402,799) (543,433) 67,859 70,398 (698) (464) $ (335,638) (473,499)	For the three months ended March 31, 2021 For the three months ended March 31, 2020 $ (402,799) (543,433) 67,859 70,398 (698) (464) $ (335,638) (473,499)
		(543,433) 70,398 (464) (473,499)

As of March 31, 2021, December 31 and March 31, 2020, these inventories were not pledged.

(Continued)

18

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

(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 March 31, 2021, December 31 and March 31, 2020, the non-current assets or disposal group classified as held for sale comprised assets and liabilities were as follows:

Property, plant and equipment Other payables	2021.3.31		2020.12.31 852,175 1,142	2020.3.31
	$ 818,034 $ 573			642,628
				38,489

As of March 31, 2021, December 31 and March 31, 2020, the non-recurring fair value measurements for non-current assets or disposal group classified as held for sale of $1,014,712, $1,012,756 and $757,036, respectively (before costs to sell amounted to $52,474, $52,373 and $40,135, respectively) have been categorized as a Level 2 fair value based on the observable inputs with settled deals.

(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:

method at the reporting date is as follows:
Associates	2021.3.31 $ 2,166,037	2020.12.31 2,145,944	2020.3.31
			2,090,894

(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 Taiwan	The proportion of shareholding and voting rights	The proportion of shareholding and voting rights
			2021.3.31	2020.12.31 2020.3.31
GE Evergreen Engine Services Corp.	Maintenance, manufacturing, and sales of aircraft, engine and engine components		% 49.00	% 49.00 % 49.00

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.

(Continued)

19

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

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 Operating revenues Profit 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 Share of net assets of the associate as of March 31 Less: downstream transaction unrealized gain Carrying amount of the associate equity as of March 31	2021.3.31 2020.12.31 2020.3.31 $ 3,596,416 4,396,851 6,711,874 3,059,923 3,108,528 2,787,093 1,762,860 2,642,077 5,027,203 494,788 502,424 221,227 $ 4,398,691 4,360,878 4,250,537 $ 2,155,358 2,136,830 2,082,763 For the three months ended March 31, 2021 For the three months ended March 31, 2020 $ 3,545,399 3,838,699 $ 29,176 63,665 8,637 21,918 $ 37,813 85,583 $ 18,528 41,936 For the three months ended March 31, 2021 For the three months ended March 31, 2020 $ 2,136,830 2,040,827 18,528 41,936 2,155,358 2,082,763 (586,191) (619,969) $ 1,569,167 1,462,794	2021.3.31 2020.12.31 2020.3.31 $ 3,596,416 4,396,851 6,711,874 3,059,923 3,108,528 2,787,093 1,762,860 2,642,077 5,027,203 494,788 502,424 221,227 $ 4,398,691 4,360,878 4,250,537 $ 2,155,358 2,136,830 2,082,763 For the three months ended March 31, 2021 For the three months ended March 31, 2020 $ 3,545,399 3,838,699 $ 29,176 63,665 8,637 21,918 $ 37,813 85,583 $ 18,528 41,936 For the three months ended March 31, 2021 For the three months ended March 31, 2020 $ 2,136,830 2,040,827 18,528 41,936 2,155,358 2,082,763 (586,191) (619,969) $ 1,569,167 1,462,794
		63,665 21,918
		85,583
		41,936
		For the three months ended March 31, 2020
		2,040,827 41,936
		2,082,763 (619,969)
		1,462,794

(ii) The Group’s financial information for investments accounted for using the equity method that are individually insignificant was as follows:

Carrying amount of individually insignificant associates’ equity Attributable to the Group: Profit (loss) Other comprehensive income Comprehensive income	2021.3.31 2020.12.31 $ 596,870 603,750 For the three months ended March 31, 2021 $ (4,624) - $ (4,624)	2020.3.31
		628,100
		For the three months ended March 31, 2020
		10,860 -
		10,860

(Continued)

20

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

(iii) The aforementioned investments accounted for using equity method were not pledged.

• (iv) The unreviewed financial statements of investments accounted for using equity method

Except for GE Evergreen Engine Services Corp., investments were accounted for using equity method, and the share of profit or loss as well as other comprehensive income of those investments were calculated based on the financial statements that have not been reviewed by independent auditor.

(i) Subsidiaries with material non-controlling interests

The subsidiaries that have non-controlling interests which are material to the Group were listed as follows:

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 2021.3.31 2020.12.31 2020.3.31 % 50.2 % 50.2 % 50.2 % 20.58 % 20.58 % 20.58
		2021.3.31 % 50.2 % 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:

2021.3.31 Current assets $ 977,056 Non-current assets 5,698,134 Current liabilities 393,213 Non-current liabilities 2,208,802 Net assets $ 4,073,175 Carrying amounts of non-controlling interests $ 2,044,734 Operating revenues Profit (loss) Other comprehensive income Comprehensive income Profit (loss) attributable to non-controlling interests Comprehensive income attributable to non-controlling interests	2021.3.31	2020.12.31 2020.3.31 1,127,503 1,323,528 5,730,933 5,794,368 445,882 776,103 2,198,600 1,626,867 4,213,954 4,714,926 2,115,405 2,366,893 For the three months ended March 31, 2021 For the three months ended March 31, 2020	2020.3.31
			1,323,528 5,794,368 776,103 1,626,867
			4,714,926
			2,366,893
		$ 138,235 $ (140,779) - $ (140,779) $ (70,671) $ (70,671)	611,743
			14,824 -
			14,824
			7,442
			7,442

(Continued)

21

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	For the three months ended March 31, 2021 For the three months ended March 31, 2020	For the three months ended March 31, 2021 For the three months ended March 31, 2020
	$ (141,220) (2,798) (30,051) $ (174,069) $ -	248,152 (51,504) 389,539 586,187 -

(ii) The summarized financial information of Evergreen Aviation Technologies Corp. was listed as follows:

		2021.3.31	2020.12.31	2020.12.31	2020.3.31
Current assets	$	11,014,323	10,960,088		19,859,786
Non-current assets		12,949,135	12,876,758		13,108,084
Current liabilities		3,766,079	3,456,975		6,107,425
Non-current liabilities		9,977,942	10,427,777		12,424,933
Net assets	**$ **	10,219,437	9,952,094		14,435,512
Carrying amounts of non-controlling interests	$	2,103,160	2,048,141		2,970,828
		For	the three	For the three
		months ended		months ended
		March 31, 2021		March 31, 2020
Operating revenues		$	2,390,552		3,689,834
Profit		$	263,111		611,695
Other comprehensive income			4,232		10,740
Comprehensive income		$	267,343		622,435
Profit attributable to non-controlling interests		$	54,148		125,887
Comprehensive income attributable to non-controlling
interests		$	55,019		128,097
		For	the three	For the three
		months ended		months ended
		March 31, 2021		March 31, 2020
Cash flows from operating activities		$	361,652		1,774,803
Cash flows used in investing activities			(127,324)		(296,098)
Cash flows from (used in) financing activities			(441,014)		146,032
Net increase (decrease) in cash and cash equivalents		$	(206,686)		1,624,737
Dividend paid for non-controlling interests		$	-		-

(Continued)

22

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the Consolidated 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, 2021 Additions Disposals Reclassification (Note) Effect of exchange rate changes Balance as of March 31, 2021 Beginning balance as of January 1, 2020 Additions Disposals Reclassification (Note) Effect of exchange rate changes Balance as of March 31, 2020 Accumulated depreciation: Beginning balance as of January 1, 2021 Depreciation expense Disposals Reclassification (Note) Effect of exchange rate changes Balance as of March 31, 2021 Beginning balance as of January 1, 2020 Depreciation expense Disposals Reclassification (Note) Effect of exchange rate changes Balance as of March 31, 2020 Carrying amounts: Balance as of January 1, 2021 Balance as of March 31, 2021 Balance as of January 1, 2020 Balance as of March 31, 2020	Land $ 5,388,250 - - 3,036 - $ 5,391,286 $ 5,444,102 - - - - $ 5,444,102 $ - - - - - $ - $ - - - - - $ - $ 5,388,250 $ 5,391,286 $ 5,444,102 $ 5,444,102	Building and structures 23,551,022 - - 31,105 700 23,582,827 23,070,177 109,554 (42,963) - 3,120 23,139,888 8,649,536 207,036 - - 119 8,856,691 8,097,172 201,076 (42,963) - 304 8,255,589 14,901,486 14,726,136 14,973,005 14,884,299	Machinery and equipment 31,160,065 68,394 (535,404) (223,611) 276 30,469,720 30,622,782 232,368 (578,047) 255,932 335 30,533,370 17,120,788 541,392 (511,046) (233,867) 146 16,917,413 16,062,774 550,738 (559,129) (2,871) (185) 16,051,327 14,039,277 13,552,307 14,560,008 14,482,043	Leased improvements 1,673,950 1,437 (11,329) 492 - 1,664,550 1,729,011 3,261 (10,661) 4,189 - 1,725,800 1,087,141 35,137 (11,329) - - 1,110,949 986,822 52,368 (10,661) - - 1,028,529 586,809 553,601 742,189 697,271	Aircraft 145,549,912 - - - - 145,549,912 141,170,870 - - (15,047) - 141,155,823 47,815,225 2,206,381 - - - 50,021,606 39,167,828 2,146,931 - - - 41,314,759 97,734,687 95,528,306 102,003,042 99,841,064	Unfinished construction 570,910 124,282 - - 53 695,245 924,544 115,600 - 128,438 219 1,168,801 - - - - - - - - - - - - 570,910 695,245 924,544 1,168,801	Total 207,894,109 194,113 (546,733) (188,978) 1,029
							207,353,540
							202,961,486 460,783 (631,671) 373,512 3,674
							203,167,784
							74,672,690 2,989,946 (522,375) (233,867) 265
							76,906,659
							64,314,596 2,951,113 (612,753) (2,871) 119
							66,650,204
							133,221,419
							130,446,881
							138,646,890
							136,517,580

Note: Reclassifications are mainly the transfers of property, plant and equipment to operating costs, operating expenses, right-of-use assets, and the inventories as well as prepayments for business facilities being reclassified to property, plant and equipment.

(Continued)

23

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(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(p) 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 connecting road 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) Pledge

As of March 31, 2021, December 31 and March 31, 2020, 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.

• (iv) For the three months ended March 31, 2021 and 2020, the Group capitalized the interest expenses amounting to $31,952 and $33,415, respectively. The ranges of the monthly interest rate used for capitalization calculation were 0.07%~0.08% and 0.10%~0.11%, respectively.

(k) 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, 2021 Additions Decrease Effect of exchange rate changes Balance as of March 31, 2021 Beginning balance as of January 1, 2020 Additions Decrease Effect of exchange rate changes Balance as of March 31, 2020 Accumulated depreciation: Beginning balance as of January 1, 2021 Depreciation expense Decrease Effect of exchange rate changes Balance as of March 31, 2021	Land $ 4,928,698 128,298 - - $ 5,056,996 $ 4,973,028 3,419 (47,750) - $ 4,928,697 $ 480,850 60,008 - - $ 540,858	Building and structures 1,560,262 106,589 (15,571) - 1,651,280 1,309,624 123,255 (6,620) (819) 1,425,440 811,374 106,193 (8,948) - 908,619	Aircraft 140,729,381 - - - 140,729,381 131,719,814 4,896,672 - - 136,616,486 35,238,630 3,828,870 - - 39,067,500	Machinery and equipment 105,743 10,639 (2,934) - 113,448 92,342 5,362 (1,241) - 96,463 52,383 7,377 (2,934) - 56,826	Total 147,324,084 245,526 (18,505) - 147,551,105 138,094,808 5,028,708 (55,611) (819) 143,067,086 36,583,237 4,002,448 (11,882) - 40,573,803

(Continued)

24

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

Beginning balance as of January 1, 2020 Depreciation expense Decrease Effect of exchange rate changes Balance as of March 31, 2020 Carrying amount: Balance as of January 1, 2021 Balance as of March 31, 2021 Balance as of January 1, 2020 Balance as of March 31, 2020	Land $ 247,506 58,336 - - $ 305,842 $ 4,447,848 $ 4,516,138 $ 4,725,522 $ 4,622,855	Building and structures 429,956 117,115 (3,017) (71) 543,983 748,888 742,661 879,668 881,457	Aircraft 20,441,125 3,656,849 - - 24,097,974 105,490,751 101,661,881 111,278,689 112,518,512	Machinery and equipment 29,348 8,637 (1,241) - 36,744 53,360 56,622 62,994 59,719	Total 21,147,935 3,840,937 (4,258) (71)
					24,984,543
					110,740,847
					106,977,302
					116,946,873
					118,082,543

(l) Intangible assets

The movements in cost and accumulated amortization of intangible assets were as follows:

Cost: Beginning balance as of January 1, 2021 Additions Disposals Balance as of March 31, 2021 Beginning balance as of January 1, 2020 Additions Disposals Balance as of March 31, 2020 Accumulated amortization: Beginning balance as of January 1, 2021 Amortization expense Disposals Balance as of March 31, 2021 Beginning balance as of January 1, 2020 Amortization expense Disposals Balance as of March 31, 2020 Carrying amounts: Balance as of January 1, 2021 Balance as of March 31, 2021 Balance as of January 1, 2020 Balance as of March 31, 2020	Operating concession $ 3,423,792 - - $ 3,423,792 $ 3,423,792 - - $ 3,423,792 $ 2,338,378 33,575 - $ 2,371,953 $ 2,204,082 33,574 - $ 2,237,656 $ 1,085,414 $ 1,051,839 $ 1,219,710 $ 1,186,136	Computer software 1,317,420 38,221 (44,814) 1,310,827 1,427,405 53,165 (32,448) 1,448,122 702,270 67,270 (44,814) 724,726 669,838 76,082 (32,448) 713,472 615,150 586,101 757,567 734,650	Total 4,741,212 38,221 (44,814) 4,734,619 4,851,197 53,165 (32,448) 4,871,914 3,040,648 100,845 (44,814) 3,096,679 2,873,920 109,656 (32,448) 2,951,128 1,700,564 1,637,940 1,977,277 1,920,786

(Continued)

25

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

(i) Amortization

For the three months ended March 31, 2021 and 2020, 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.

• (m) 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	2021.3.31 $ 504,493 451,047 140,739 $ 1,096,279	2020.12.31 465,343 409,825 169,844 1,045,012	2020.3.31
			462,052 460,105 353,794
			1,275,951

The details of the Group’s other non-current assets were as follows:

Prepayments for business facilities Refundable deposits Pledged time deposits Others Total	2021.3.31 $ 16,977,770 1,056,293 501,107 5,320 $ 18,540,490	2020.12.31 15,533,781 1,058,089 401,972 7,828 17,001,670	2020.3.31
			11,225,555 1,492,115 86,818 6,976
			12,811,464

• (n) 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:

			2021.3.31
	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		1,944,545
Subtotal					6,194,545
Less: Current portion (included in current portion		of long-term liabilities)			(4,250,000)
Total				$	1,944,545
Unsecured loans	TWD	0.90%~1.20%	2021/04/30~2026/03/12	$	45,584,291
Secured loans	TWD	0.97%~1.18%	2021/04/17~2034/10/31		63,752,456
Subtotal					109,336,747
Less: Current portion					(15,396,913)
Total				$	93,939,834

(Continued)

26

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

		2020.12.31	2020.12.31
	Currency	Interest rate	Maturity date		Amount
Secured short-term loans	TWD	1.05%	2021/02/18	$	80,000
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%	2021/01/04~2025/12/21	$	45,783,967
Secured loans	TWD	0.97%~1.37%	2021/01/17~2034/10/31		61,810,395
Subtotal					107,594,362
Less: Current portion					(14,898,239)
Total				$	92,696,123

			2020.3.31
	Currency	Interest rate	Maturity date		Amount
Unsecured short-term loans	TWD	0.98%~1.25%	2020/06/20~2020/09/26	$	1,150,000
Secured short-term loans	TWD	1.15%	2020/05/26~2020/06/15		200,000
Subtotal				$	1,350,000
Secured bonds payable	TWD	1.07%	2020/12/29~2021/12/29	$	8,500,000
Unsecured convertible bonds	TWD	-	2022/10/27		6,344,702
Subtotal					14,844,702
Less: Current portion (included	in current portion	of long-term liabilities)			(10,594,702)
Total				$	4,250,000
Unsecured loans	TWD	0.91%~2.01%	2020/04/20~2025/03/13	$	27,253,385
Secured loans	TWD	0.99%~1.37%	2020/04/30~2034/10/31		56,823,728
Subtotal					84,077,113
Less: Current portion					(15,444,648)
Total				$	68,632,465

The details of convertible bonds were as follows:

Total convertible bonds issued Less: Unamortized discounted bonds payable Cumulative converted amount Cumulative put amount Convertible bonds issued balance Embedded derivatives－put/call options (included in financial assets /(liabilities) at fair value through profit or loss) Equity components－conversion options (included in capital surplus－share options)	2021.3.31 $ 10,000,000 (86,855) (1,652,600) (6,316,000) $ 1,944,545 $ 5,535 $ 458,464	2020.12.31 10,000,000 (149,959) (451,100) (6,316,000) 3,082,941 2,793 512,921	2020.3.31 7,000,000 (204,198) (451,100) - 6,344,702 (26,850) 376,948

(Continued)

27

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

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(w) 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.

As of March 31, 2021, December 31, 2020 and March 31, 2020, the conversion price of the third unsecured domestic convertible bonds was $13.4, $13.4 and $13.7 per share, respectively. In addition, corporate bonds with a face value of $451,000, $451,100 and $451,100, respectively has been converted to 30,829, 30,829 and 30,829 thousand shares of ordinary share, respectively.

As of March 31, 2021 and December 31, 2020, the conversion price of the fourth unsecured domestic convertible bonds was $11.2 and $11.2 per share, respectively. In addition, corporate bonds with a face value of $1,201,500 and $0, respectively has been converted to 107,277 and 0 thousand shares of ordinary share, respectively. There was no such transaction as of March 31, 2020.

There were no issues and repurchases of convertible bonds for the three months ended March 31, 2021 and 2020. For the related information, please refer to note 6(p) of consolidated financial statements for the year ended December 31, 2020.

As of March 31, 2021, the details of the future repayment periods and amounts of the Group’s longterm borrowings and bonds payable were as follows:

Year due		Amount
2021.4.1~2022.3.31	$	19,646,913
2022.4.1~2026.3.31		72,551,423
2026.4.1 and thereafter		23,332,956
	$	115,531,292

Information on the Group’s exposure to interest rate risk and liquidity risk is disclosed in note 6(x).

(i) Pledge for borrowings

The pledge for borrowings is disclosed in note 8.

(ii) Unused lines of credit

As of March 31, 2021, December 31 and March 31, 2020, the unused credit lines for shortterm and long-term borrowings amounted to $9,013,534, $9,992,218 and $6,235,569, respectively.

(Continued)

28

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, as of March 31, 2021 and December 31, 2020, the Group applied to financial institutions for project loans amounting to $22,470,000, which was guaranteed by the government. As of March 31, 2021 and December 31, 2020, the credit lines that have been used both amounted to $21,275,000. The guarantee loans shall be repaid within two years from the initial withdrawal. There was no such transaction as of March 31, 2020.

(o) 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	2021.3.31 $ 11,778,903 $ 74,272,650 $ 388,840 $ 4,484,717	2020.12.31 11,564,988 77,067,827 362,101 4,458,004	2020.3.31
			12,008,825
			88,688,831
			373,470
			4,747,854

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

The amounts recognized in profit or loss were as follows:

		For the three	For the three
	months ended		months ended
	March 31, 2021		March 31, 2020
Interest on lease liabilities	$	600,083	839,223
Variable lease payments not included in the measurement of lease
liabilities	$	2,520	3,660
Revenue of subleasing right-of-use assets	$	15	17
Expenses relating to short-term leases	$	29,447	48,127
Expenses relating to leases of low-value assets, excluding short-
term leases of low-value assets	$	1,532	1,822
COVID-19-related rent concessions	$	73,705	16,304

The amounts recognized in the statement of cash flows were as follows:

Total cash outflow for leases	For the three months ended March 31, 2021 For the three months ended March 31, 2020 $ 3,400,150 3,946,674	For the three months ended March 31, 2021 For the three months ended March 31, 2020 $ 3,400,150 3,946,674
		3,946,674

(Continued)

29

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

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.

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.

(p) 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 March 31	For the three months ended March 31, 2021 $ 21,900,283 209,776 (65,660) 18,661 $ 22,063,060	For the three months ended March 31, 2020
		19,807,987 625,145 (66,216) 103,511 20,470,427

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. The Group’ s restoration obligations are included in other current liabilities and other non-current liabilities.

(q) Employee benefits

(i) Defined benefit plans

There was no material volatility of the market, no material reimbursement and settlement or other material one-time events since prior fiscal year. As a result, the pension cost in the accompanying interim period was measured and disclosed according to the actuarial report as of December 31, 2020 and 2019.

(Continued)

30

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

The expenses recognized in profit or loss for the Group were as follows:

Operating costs and expenses	For the three months ended March 31, 2021 $ 61,852	For the three months ended March 31, 2020
		72,676

(ii) Defined contribution plans

The Group’s expenses under the pension plan cost to the Bureau of Labor Insurance were as follows:

Operating costs and expenses	For the three months ended March 31, 2021 $ 185,272	For the three months ended March 31, 2020
		199,773

(r) Income tax (i) The amounts of income tax benefit (expenses) were as follows:

Income tax benefit	For the three months ended March 31, 2021 $ 210,886	For the three months ended March 31, 2020
		203,547

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

Components of other comprehensive income that will not be reclassified to profit or loss: Unrealized gains or losses from investments in equity instruments measured at fair value through other comprehensive income Gains or losses on hedging instruments Components of other comprehensive income that will be reclassified to profit or loss: Gains or losses on hedging instruments	For the three months ended March 31, 2021 $ (8) - $ (8) $ 75,464	For the three months ended March 31, 2020
		(179 (2,976
		(3,155
		466,328

(iii) The Company’s income tax returns for the years through 2018 were assessed by the local tax authorities.

(Continued)

31

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

(s) Capital and other equity

Except for the following disclosure, there was no significant change for capital and other equity for the periods from January 1 to March 31, 2021 and 2020. For the related information, please refer to note 6(u) of the consolidated financial statements for the year ended December 31, 2020.

(i) Ordinary shares

For the three months ended March 31, 2021, convertible bonds issued by the Company amounting to $1,072,767, were converted into 107,277 thousand shares of ordinary shares. Part of the conversion of convertible bonds was recorded as advance receipts for share capital amounting to $373,482 because the registration process has yet to be completed. There was no such transaction for the three months ended March 31, 2020.

(ii) Capital surplus

The details of capital surplus were as follows:

2021.3.31 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 1,685,519 Additional paid-in capital from conversion option 458,464 Changes in equity of associates accounted for using equity method 3,757 Difference between actual acquiring subsidiary’s equity and carrying amount 90,985 $ 8,055,150	2020.12.31 5,118,825 697,600 1,561,585 512,921 3,757 90,985 7,985,673	2020.3.31
		5,118,825 697,600 1,561,585 376,948 3,757 90,985
		7,849,700

(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.

(Continued)

32

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

(iv) Earnings distribution

Based on the corporate sustainability principle, a resolution was passed during the Board meeting on March 22, 2021, in which the Company retained all its distributable earnings for future operation needs. Therefore, the Company did not appropriate retained earnings.

The appropriation of 2019 earnings was approved at the Board meeting on March 19, 2020. The cash dividends were amounting to $1,213,392.

(v) Other equity interest (net of taxes)

Exchange differences on translation of foreign financial statements Balance as of January 1, 2021 $ (113,246) Exchange differences on translation of foreign financial statements (960) Exchange differences on associates accounted for using equity method 3,361 Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income - Changes in fair value of hedging instrument - Changes in fair value of hedging instrument reclassified to profit or loss - Balance as of March 31, 2021 $ (110,845) Balance as of January 1, 2020 $ (42,773) Exchange differences on translation of foreign financial statements 1,574 Exchange differences on associates accounted for using equity method 8,529 Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income - Changes in fair value of hedging instrument - Changes in fair value of hedging instrument reclassified to profit or loss - Balance as of March 31, 2020 $ (32,670)	Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income	Gains (losses) on hedging instruments		Non-controlling interests (6,967) 2 871 1,047 - - (5,047) (3,867) (2,736) 2,210 (964) - - (5,357)	Total 6,441,915 (958) 4,232 152,874 (48,454) (253,403)
	1,113,299 - - 151,827 - - 1,265,126 722,495 - - (194,165) - - 528,330
					6,296,206
					2,745,672 (1,162) 10,739 (195,129) (1,975,239) 121,829
					706,710

(Continued)

33

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

(t) Earnings per share (“EPS”)

The calculation of earnings per share is based on the 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 Basic earnings per share: Loss attributable to ordinary equity holders Diluted earnings per share: Loss attributable to ordinary equity holders	For the three months ended March 31, 2021
	Amount net of tax Weighted-average number of shares outstanding during the period (thousand shares) Earnings per share (in dollars) $ (2,197,426) 4,883,066 $ (0.45) $ (2,197,426) 4,883,066 $ (0.45) For the three months ended March 31, 2020 Amount net of tax Weighted-average number of shares outstanding during the period (thousand shares) Earnings per share (in dollars) $ (1,220,628) 4,853,569 $ (0.25) $ (1,220,628) 4,853,569 $ (0.25)
	Amount net of tax $ (1,220,628) $ (1,220,628)

As of March 31, 2021 and 2020, 0 and 23,815 thousand shares of employee compensation respectively, 177,961 and 478,022 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).

• (u) Revenue from contracts with customers

• (i) Disaggregation of revenue

Primary geographical markets: Taiwan Asia Europe North America Others		For the	three months ended March 31, 2021	three months ended March 31, 2021	three months ended March 31, 2021
	Aviation transportation segment	Aircraft maintenance and manufacture segment 325,949 511,630 115,783 805,818 - 1,759,180	Catering segment 38,146 295 - 7 - 38,448	Air cargo services segment 270,538 - - - - 270,538	Other segments 65,597 - - 194 - 65,791	Total
	$ 4,915,987 9,986,513 395,036 2,185,867 61,450 $ 17,544,853					5,616,217 10,498,438 510,819 2,991,886 61,450
						19,678,810

(Continued)

34

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

For the three months ended March 31, 2021

Aviation transportation segment Aircraft maintenance and manufacture segment Catering segment Major products / services lines: Aviation transportation revenue $ 16,860,241 - - Services revenue - 1,405,951 - Others 684,612 353,229 38,448 $ 17,544,853 1,759,180 38,448 For the three months e Aviation transportation segment Aircraft maintenance and manufacture segment Catering segment Primary geographical markets: Taiwan $ 9,385,569 438,022 111,611 Asia 7,935,046 638,753 1,099 Europe 1,513,482 203,019 - North America 7,779,404 1,572,972 191 Others 203,944 60,711 - $ 26,817,445 2,913,477 112,901 Major products / services lines: Aviation transportation revenue $ 25,023,158 - - Services revenue - 2,593,140 - Others 1,794,287 320,337 112,901 $ 26,817,445 2,913,477 112,901 Contract balances 2021.3.31 Contract assets-maintenance services $ 551,800 Contract liabilities-tickets services, customer loyalty program and others $ 6,432,693	Aviation ransportation segment	Aircraft maintenance and manufacture segment - 1,405,951 353,229 1,759,180 For the	Catering segment - - 38,448 38,448 three months e	Air cargo services segment Other segments - - 248,209 60,752 22,329 5,039 270,538 65,791 nded March 31, 2020	Total 16,860,241 1,714,912 1,103,657
	$ 16,860,241 - 684,612 $ 17,544,853
					19,678,810
	Aviation transportation segment			Air cargo services segment Other segments Total 274,301 114,974 10,324,477 - - 8,574,898 - - 1,716,501 - - 9,352,567 - - 264,655 274,301 114,974 30,233,098 - - 25,023,158 252,244 111,582 2,956,966 22,057 3,392 2,252,974 274,301 114,974 30,233,098 2020.12.31 2020.12.31 446,438 691,413 7,166,810 13,473,198	Total
					10,324,477 8,574,898 1,716,501 9,352,567 264,655
					30,233,098
					25,023,158 2,956,966 2,252,974
					30,233,098

(ii) Contract balances

The amount of revenue recognized for the three months ended March 31, 2021 and 2020 that was included in the contract liability balance at the beginning of the period was $771,917 and $10,069,339, respectively.

(Continued)

35

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

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	For the three months ended March 31, 2021 For the three months ended March 31, 2020 Contract liabilities Contract liabilities $ (384,856) (266,496)

(v) 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 three months ended March 31, 2021 and 2020, the Company did not accrue or recognize its employees’ and directors’ remuneration.

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)

36

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

(w) Non-operating income and expenses

(i) Other income

For the three months ended March 31, 2021 Interest income Interest income from bank deposits $ 35,819 Other interest 946 Total interest income 36,765 Others 7,074 $ 43,839	For the three months ended March 31, 2020
	131,550 2,132
	133,682 5,876
	139,558

(ii) Other gains and losses

For the three months ended March 31, 2021 Gains (losses) on disposal of property, plant and equipment $ (11,492) Foreign exchange gains (losses) 302,133 Gains (losses) on financial assets (liabilities) at fair value through profit or loss 7,665 Gains on disposal of non-current assets classified as held for sale - Others gains and losses 20,474 $ 318,780	For the three months ended March 31, 2020 32,894 155,187 (22,160) 89,784 17,037 272,742

(iii) Finance costs

For the three months ended March 31, 2021 Interest expense Bank borrowings $ 225,305 Bonds Payable 18,822 Lease liabilities 600,083 Others 216,950 Less: capitalized interest (31,952) $ 1,029,208	For the three months ended March 31, 2020 257,202 42,259 839,223 211,374 (33,415) 1,316,643

(Continued)

37

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

(x) Financial instruments

Except for the contention mentioned below, there was no significant change in the fair value of the Group’s financial instruments and degree of exposure to credit risk, liquidity risk and market risk arising from financial instruments. For the related information, please refer to note 6(aa) of the consolidated financial statements for the year ended December 31, 2020.

(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.

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(m).

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) of consolidated financial statement for the year ended December 31, 2020.

(ii) Liquidity risk

The followings were the contractual maturities of financial liabilities, including estimated interest payments:

Carrying amount As of March 31, 2021 Non-derivative financial liabilities Long-term borrowings (including current portion of long-term liabilities) $ 109,336,747 Bonds payable 6,194,545 Lease liabilities and financial liabilities for hedging 90,925,110 Notes and accounts payable (including related parties) 3,053,431 Other payables (including related parties) 5,672,527 Liabilities related to non-current assets or disposal group classified as held for sale 573 Total $ 215,182,933	Contractual cash flows 113,116,028 6,326,875 99,689,746 3,053,431 5,672,527 573 227,859,180	Within 1 year 16,525,387 4,295,475 14,297,743 3,053,431 5,672,527 573 43,845,136	1-5 years 72,688,209 2,031,400 50,419,501 - - - 125,139,110	Over 5 years
				23,902,432 - 34,972,502 - - -
				58,874,934

(Continued)

38

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

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 March 31, 2020 Non-derivative financial liabilities Short-term and long-term borrowings (including current portion of long-term liabilities) $ 85,427,113 Bonds payable 14,844,702 Lease liabilities and financial liabilities for hedging 105,818,980 Notes and accounts payable (including related parties) 4,343,264 Other payables (including related parties) 9,413,329 Liabilities related to non-current assets or disposal group classified as held for sale 38,489 Subtotal 219,885,877 Derivative financial liabilities Convertible bonds with embedded derivatives 26,850 Fuel swap agreements and options for hedge purposes 1,414,707 Subtotal 1,441,557 Forward exchange contracts for hedge purposes: Outflow 1,952 Inflow - Subtotal 1,952 Total $ 221,329,386	Contractual cash flows 111,524,341 7,528,375 102,740,724 3,013,512 5,332,122 1,142 230,140,216 89,121,165 15,185,325 120,807,319 4,343,264 9,413,329 38,489 238,908,891 - 1,414,707 1,414,707 635,762 (633,810) 1,952 240,325,550	Within 1 year 16,071,174 4,295,475 14,134,937 3,013,512 5,332,122 1,142 42,848,362 17,686,229 10,889,850 15,625,418 4,343,264 9,413,329 38,489 57,996,579 - 1,414,707 1,414,707 635,762 (633,810) 1,952 59,413,238	1-5 years 69,591,490 3,232,900 51,132,020 - - - 123,956,410 45,705,019 4,295,475 57,306,575 - - - 107,307,069 - - - - - - 107,307,069	Over 5 years
				25,861,677 - 37,473,767 - - -
				63,335,444
				25,729,917 - 47,875,326 - - -
				73,605,243
				- -
				-
				- -
				-
				73,605,243

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		2021.3.31		Foreign Currency $ 652,045 3,251 639,451 221,429 279,418	2020.12.31		Foreign Currency $ 693,812 3,980 425,725 148,869 171,565	2020.3.31
		Foreign Currency $ 642,133 2,275 987,904 140,460 167,146	Exchange rate USD/TWD= 28.54 EUR/TWD= 33.48 JPY/TWD= 0.2577 HKD/TWD= 3.6700 CNY/TWD= 4.3440	TWD		Exchange rate USD/TWD= 28.48 EUR/TWD= 35.02 JPY/TWD= 0.2763 HKD/TWD= 3.6730 CNY/TWD= 4.3770	TWD		Exchange rate USD/TWD= 30.23 EUR/TWD= 33.24 JPY/TWD= 0.2788 HKD/TWD= 3.8980 CNY/TWD= 4.2550	TWD
				18,323,255 76,165 254,583 515,488 726,082			18,570,244 113,849 176,680 813,307 1,223,012			20,970,465 132,284 118,692 580,291 730,010
				$ 19,895,573			$ 20,897,092			$ 22,531,742

(Continued)

39

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

F	Non-monetary items		2021.3.31		Foreign Currency $ 39,668 72,820 7,687,425 22,540 $ 3,606,929 5,866 1,414,638 36,069 141,168	2020.12.31		Foreign Currency $ 41,671 68,585 9,773,614 28,661 $ 3,856,492 11,012 1,375,584 4,532 173,358	2020.3.31
		Foreign Currency Exchange rate $ 39,508 USD/TWD= 28.54 74,878 USD/CNY= 6.5688 7,995,296 IDR/TWD= 0.0020 19,967 USD/MOP= 8.0061 $ 3,509,807 USD/TWD= 28.54 6,815 EUR/TWD= 33.48 1,495,004 JPY/TWD= 0.2577 17,313 HKD/TWD= 3.6700 147,759 CNY/TWD= 4.3440 Sensitivity analysis		TWD		Exchange rate USD/TWD= 28.48 USD/CNY= 6.5067 IDR/TWD= 0.0020 USD/MOP= 7.9864 USD/TWD= 28.48 EUR/TWD= 35.02 JPY/TWD= 0.2763 HKD/TWD= 3.6730 CNY/TWD= 4.3770	TWD		Exchange rate USD/TWD= 30.23 USD/CNY= 7.1034 IDR/TWD= 0.0019 USD/MOP= 7.9851 USD/TWD= 30.23 EUR/TWD= 33.24 JPY/TWD= 0.2788 HKD/TWD= 3.8980 CNY/TWD= 4.2550	TWD
				1,127,366 373,722 15,991 74,115			1,129,732 367,466 15,375 80,377			1,259,495 343,343 18,570 108,132
	USD CNY IDR MOP inancial liabilities Monetary items USD EUR JPY HKD CNY 2)
				$ 1,591,194			$ 1,592,950			$ 1,729,540
				100,152,356 228,157 385,263 63,540 641,867			102,725,325 205,437 390,864 132,482 617,892			116,562,469 366,023 383,513 17,667 737,640
				$ 101,471,183			$ 104,072,000			$ 118,067,312

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 March 31, 2021 and 2020, would have changed the loss before tax by $43,620 and $50,451 and the equity by $859,376 and $1,005,807 due to cash flow hedges, respectively. The analysis assumes that all other variables remain constant. The analysis is performed on the same basis for 2021 and 2020.

Due to the variety of the Group’s functional currency, the Group discloses its exchange gains and losses of monetary items collectively. For the three months ended March 31, 2021 and 2020, the Group’s foreign exchange gains (losses), net (including realized and unrealized of monetary items) amounted to $302,133 and $155,187, respectively.

(iv) Interest rate risk

The interest rate exposure of the Group’ s financial liabilities are illustrated in note 6(x) 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.

(Continued)

40

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

If the interest rate increases (decreases) by 1% with all other variable factors that remain constant, the loss before tax of the Group would have changed $272,092 and $210,943 for the three months ended March 31, 2021 and 2020, respectively due to the Group’s floating-interest borrowings.

• (v) 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:

Carrying amount Financial assets at fair value through profit or loss Money market funds $ 1,759,277 Convertible bonds with embedded derivatives 5,535 Subtotal 1,764,812 Financial assets at fair value through other comprehensive income Publicly traded stock 1,340,745 Non-publicly traded stock 1,856,934 Subtotal 3,197,679 Financial assets measured at amortized cost Cash and cash equivalents 41,717,692 Time deposits over three months 807,640 Notes and accounts receivable, and other receivables (including related parties) 7,567,566 Other non-current assets 1,557,400 Subtotal 51,650,298 Total $ 56,612,789 Financial liabilities for hedging－non-derivatives $ 86,051,553 Financial liabilities measured at amortized cost Long-term borrowings (including current portion of long-term liabilities) 109,336,747 Bonds payable 6,194,545 Lease liabilities 4,873,557 Notes and accounts payable (including related parties) 3,053,431 Other payables (including related parties) 5,672,527 Liabilities related to non-current assets or disposal group classified as held for sale 573 Subtotal 129,131,380 Total $ 215,182,933			2021.3.31	2021.3.31
		Level 1 1,759,277 - 1,759,277 1,340,745 - 1,340,745 - - - - - 3,100,022 - - - - - - - - -	Fair value
			Level 2 - 5,535 5,535 - - - - - - - - 5,535 - 109,337,583 6,227,461 - - - - 115,565,044 115,565,044	Level 3 - - - - 1,856,934 1,856,934 - - - - - 1,856,934 - - - - - - - - -	Total 1,759,277 5,535
					1,764,812
					1,340,745 1,856,934
					3,197,679
					- - - -
					-
					4,962,491
					-
					109,337,583 6,227,461 - - - -
					115,565,044
					115,565,044

(Continued)

41

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

Carrying amount Financial assets at fair value through profit or loss Money market funds $ 1,978,251 Convertible bonds with embedded derivatives 2,793 Subtotal 1,981,044 Financial assets at fair value through other comprehensive income Publicly traded stock 1,316,591 Non-publicly traded stock 1,728,203 Subtotal 3,044,794 Financial assets measured at amortized cost Cash and cash equivalents 40,869,190 Time deposits over three months 807,013 Notes and accounts receivable, and other receivables (including related parties) 7,089,094 Other non-current assets 1,460,061 Subtotal 50,225,358 Total $ 55,251,196 Financial liabilities for hedging－non-derivatives $ 88,632,815 Financial liabilities measured at amortized cost Short-term and long-term borrowings (including current portion of long-term liabilities) 107,674,362 Bonds payable 7,332,941 Lease liabilities 4,820,105 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 Subtotal 128,174,184 Total $ 216,806,999 Carrying amount Financial assets at fair value through profit or loss Money market funds $ 1,472,763 Financial assets for hedging 5,187 Financial assets at fair value through other comprehensive income Publicly traded stock 988,686 Non-publicly traded stock 1,462,697 Subtotal 2,451,383			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 2020.3.31	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 1,472,763 - 988,686 - 988,686	Fair value
			Level 2 - 5,187 - - -	Level 3 - - - 1,462,697 1,462,697	Total 1,472,763
					5,187
					988,686 1,462,697
					2,451,383

(Continued)

42

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

Carrying amount Financial assets measured at amortized cost Cash and cash equivalents 40,379,087 Time deposits over three months 722,086 Notes and accounts receivable, and other receivables (including related parties) 11,829,477 Other non-current assets 1,578,933 Subtotal 54,509,583 Total $ 58,438,916 Financial liabilities at fair value through profit or loss $ 26,850 Financial liabilities for hedging－derivatives 1,416,659 Financial liabilities for hedging－non-derivatives 100,697,656 Financial liabilities measured at amortized cost Short-term and long-term borrowings (including current portion of long-term liabilities) 85,427,113 Bonds payable 14,844,702 Lease liabilities 5,121,324 Notes and accounts payable (including related parties) 4,343,264 Other payables (including related parties) 9,413,329 Liabilities related to non-current assets or disposal group classified as held for sale 38,489 Subtotal 119,188,221 Total $ 221,329,386				2020.3.31	2020.3.31
			Level 1 - - - - - 2,461,449 - - - - - - - - - - -	Fair value
				Level 2 - - - - - 5,187 26,850 1,416,659 - 85,431,212 14,920,628 - - - - 100,351,840 101,795,349	Level 3 - - - - - 1,462,697 - - - - - - - - - - -	Total - - - -
						-
						3,929,333
						26,850
						1,416,659
						-
						85,431,212 14,920,628 - - - -
						100,351,840
						101,795,349

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)

43

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 three months ended March 31, 2021 and 2020, 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, 2021 Total gains or losses: Recognized in other comprehensive income Balance as of March 31, 2021	Fair value through other comprehensive income
	Unquoted equity instruments
	$ 1,728,203 128,731 $ 1,856,934

(Continued)

44

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

Balance as of January 1, 2020 Total gains or losses: Recognized in other comprehensive income Balance as of March 31, 2020	Fair value through other comprehensive income Unquoted equity instruments $ 1,570,214 (107,517) $ 1,462,697

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 March 31, 2021 and 2020, 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)	For the three months ended March 31,2021 For the three months ended March 31,2020 $ 128,731 (107,517

• 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 March 31, 2021, December 31 and March 31, 2020 were 0.65~3.23, 0.80~3.46 and 0.62~2.68, respectively) � Market liquidity discount rate (as of March 31, 2021, December 31 and March 31, 2020 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)

45

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 March 31, 2021, December 31 and March 31, 2020, 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 2020.3.31 2021.3.31 2020.12.31 2020.3.31 87,822 66,125 (95,270) (84,196) (78,670) 87,822 66,125 (95,270) (84,196) (78,670)	Effects of changes in fair value on other comprehensive income Favorable Unfavorable 2020.12.31 2020.3.31 2021.3.31 2020.12.31 2020.3.31 87,822 66,125 (95,270) (84,196) (78,670) 87,822 66,125 (95,270) (84,196) (78,670)	Effects of changes in fair value on other comprehensive income Favorable Unfavorable 2020.12.31 2020.3.31 2021.3.31 2020.12.31 2020.3.31 87,822 66,125 (95,270) (84,196) (78,670) 87,822 66,125 (95,270) (84,196) (78,670)
			Favorable	2020.3.31 66,125 66,125
		2021.3.31 89,550 89,550	2020.12.31 87,822 87,822		2021.3.31 (95,270) (95,270)

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.

(y) Management of financial risk

There were no significant changes in the objectives and policies concerning the financial risk that the Group was exposed to. For the related information, please refer to note 6(ab) of the consolidated financial statements for the year ended December 31, 2020.

(z) Capital management

The Group’ s objectives, policies and processes of capital management were the same as those disclosed in the consolidated financial statements for the year ended December 31, 2020. For the related information, please refer to note 6(ac) of the consolidated financial statements for the year ended December 31, 2020.

(Continued)

46

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

(aa) Financing activities not affecting current cash flow

The Group’ s financing activities which did not affect the current cash flow in the three months ended March 31, 2021 and 2020, were as follows:

Short-term borrowings Bonds payable Long-term borrowings Lease liabilities and financial liabilities for hedging Total liabilities from financing activities Short-term borrowings Bonds payable Long-term borrowings Lease liabilities and financial liabilities for hedging Total liabilities from financing activities	2021.1.1 $ 80,000 7,332,941 107,594,362 93,452,920 $ 208,460,223 2020.1.1 $ 150,000 14,825,180 84,909,761 103,530,024 $ 203,414,965	Cash flows (80,000) - 1,742,218 (3,366,651) (1,704,433) Cash flows 1,200,000 - (833,824) (3,893,065) (3,526,889)	Non-cash changes Interest expense Foreign exchange movement Other - - - 7,453 - (1,145,849) 167 - - 600,083 (316,754) 555,512 607,703 (316,754) (590,337) Non-cash changes Interest expense Foreign exchange movement Other - - - 19,522 - - 1,176 - - 839,223 (73,643) 5,416,441 859,921 (73,643) 5,416,441	Non-cash changes Interest expense Foreign exchange movement Other - - - 7,453 - (1,145,849) 167 - - 600,083 (316,754) 555,512 607,703 (316,754) (590,337) Non-cash changes Interest expense Foreign exchange movement Other - - - 19,522 - - 1,176 - - 839,223 (73,643) 5,416,441 859,921 (73,643) 5,416,441	2021.3.31 - 6,194,545 109,336,747 90,925,110
					206,456,402
					2020.3.31 1,350,000 14,844,702 84,077,113 105,818,980
			Interest expense - 19,522 1,176 839,223 859,921	Foreign exchange movement - - - (73,643) (73,643)
					206,090,795

(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

Evergreen International S.A. Evergreen International Corp.

Evergreen Marine Corp. (Taiwan) Ltd.

Evergreen International Storage & Transport Corp. Evergreen Logistics Corp. UNI Airways Corp.

Ever Accord Construction Corp.

Evergreen Steel Corp.

Evergreen Shipping Agency (Europe) GMBH SP. Z.O.O.

Relationship with the Group

The Company’s shareholder’s major shareholder The Company’s shareholder

The Company’s shareholder

The Company’s shareholder

The Company’s shareholder

The Company’s shareholder’s equity investment The Company’s shareholder’s equity investment The Company’s shareholder’s equity investment The Company’s shareholder’s equity investment

(Continued)

47

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

Names of related parties Relationship with the Group 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

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. 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

• (b) Significant transactions with related parties

• (i) Operating revenue

Significant sales to related parties of the Group were as follows:

Associates Other related parties	For the three months ended March 31, 2021 For the three months ended March 31, 2020	For the three months ended March 31, 2021 For the three months ended March 31, 2020
	$ 183,695 481,413 $ 665,108	90,354 540,538
		630,892

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)

48

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	For the three months ended March 31, 2021 For the three months ended March 31, 2020	For the three months ended March 31, 2021 For the three months ended March 31, 2020
	$ 31,700 114,692 $ 146,392	31,949 172,100
		204,049

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	For the three months ended March 31, 2021 For the three months ended March 31, 2020	For the three months ended March 31, 2021 For the three months ended March 31, 2020
	$ 25,642 49,945 $ 75,587	45,980 54,199
		100,179

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.

(Continued)

49

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

(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	For the three months ended March 31, 2021 For the three months ended March 31, 2020	For the three months ended March 31, 2021 For the three months ended March 31, 2020
	$ 855 32,825 $ 33,680	3,842 51,985
		55,827

• 2) Disposals of property, plant and equipment

The disposals of property, plant and equipment to related parties were summarized as follows:

Other related parties	For the three months ended March 31, 2021 Disposal price Gain from disposal $ 20 -	For the three months ended March 31, 2020	For the three months ended March 31, 2020
	Disposal price $ 20	Disposal price 3,320	Gain from disposal
			302

• 3) Others

Significant deferred gains from disposal from transactions with related parties were as follows:

GE Evergreen Engine Service Corp.	Deferred gains from disposal	Deferred gains from disposal	Deferred gains from disposal
	2021.3.31 $ 586,191	2020.12.31 594,636	2020.3.31
			619,969

(v) Construction commitment

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 March 31, 2021, December 31 and March 31, 2020, EGAT has partially paid the price of $501,240, $415,411 and $135,306, respectively.

(vi) Leases

The Group rented its offices from other related enterprise. For the three months ended March 31, 2021 and 2020, the Group recognized the amount of $447 and $586, respectively, as interest expense. As of March 31, 2021, December 31 and March 31, 2020, the balance of lease liabilities amounted to $73,597, $62,574 and $85,129, respectively.

(Continued)

50

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

(vii) Receivables from related parties

Receivables from related parties of the Group were as follows:

Account	Class of related parties	2021.3.31 $ 99 118,724 276,577 395,400 6,418 1 130,344 79,867 24 216,654 $ 612,054	2020.12.31 840 121,032 286,043 407,915 20,329 18 138,204 82,470 73 241,094 649,009	2020.3.31
Notes receivable Accounts receivable Accounts receivable Subtotal Other receivables Other receivables Other receivables Other receivables Other receivables Subtotal Total	EverFun Travel Service Corp. Associates Other related parties Associates GE Evergreen Engine Services Corp. Other associates Other related parties UNI Airways Corp. Evergreen Insurance Company Limited Other related parties			48,641 75,152 245,638
				369,431
				155,899 288 254,912 - 77
				411,176
				780,607

(viii) Payables to related parties

Payables to related parties of the Group were as follows:

Account	Class of related parties	2021.3.31 $ 15,334 54,596 69,930 12,795 46,648 59,443 $ 129,373	2020.12.31 18,002 79,391 97,393 15,093 48,921 64,014 161,407	2020.3.31
Accounts payable Accounts payable Subtotal Other payables Other payables Subtotal Total	Associates Other related parties Associates Other related parties			17,284 72,379
				89,663
				17,542 57,928
				75,470
				165,133

(c) Key management personnel compensation

Key management personnel compensation comprised the following:

Short-term employee benefits Post-employment benefits	For the three months ended March 31, 2021	For the three months ended March 31, 2020
	$ 34,254 1,459 $ 35,713	37,320 1,581
		38,901

(Continued)

51

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	2021.3.31 $ 94,838,170 501,107 $ 95,339,277	2020.12.31 90,533,967 401,972 90,935,939	2020.3.31
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			90,136,686 86,818
				90,223,504

(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 March 31, 2021, fourteen Boeing aircraft had not yet been delivered by Boeing Company. The Company has partially prepaid the price of $14,818,302, 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 March 31, 2021, two Boeing engines had not yet been delivered by General Electric Company. The Company has partially prepaid the price of $466,938, which was included in other non-current assets.

• (iii) Unused letters of credit for the Group were as follows:

Unused letters of credit	2021.3.31 $ 2,372,926	2020.12.31 2,363,681	2020.3.31
			2,628,875

• (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)

52

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)

53

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 three months ended March 31, 2021, the estimated royalty amounted to $21,545, which was recorded as operating costs.

Besides, as of March 31, 2021, the promissory notes for the performance of the concession contract issued by EGAC amounted to $751,963.

(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	For the three months ended March 31, 2021	For the three months ended March 31, 2021	For the three months ended March 31, 2021	For the three months ended March 31, 2020	For the three months ended March 31, 2020	For the three months ended March 31, 2020
	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	2,782,538 234,995 177,352 - 335,149 6,655,508 35,965	1,181,202 90,705 69,772 8,215 129,108 259,099 64,880	3,963,740 325,700 247,124 8,215 464,257 6,914,607 100,845	3,380,377 251,861 187,404 - 981,891 6,490,025 36,374	1,464,748 101,641 85,045 8,494 159,381 281,639 73,282	4,845,125 353,502 272,449 8,494 1,141,272 6,771,664 109,656

• Note: For the three months ended March 31, 2021 and 2020, the depreciation expenses recognized were $6,992,394 and $6,792,050, respectively, less deferred gains of $4,082 and $4,082, respectively, and subsidy and rent concession of $73,705 and $16,304, respectively.

• (b) Seasonality or cyclicality of interim operations:

The Group’ s aviation transportation segment is subject to seasonal fluctuations as a result of consecutive holidays and summer vacations. The third quarter typically results in higher revenues performing outcome for this segment.

(Continued)

54

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

• (c) 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.

(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 three months ended March 31, 2021:

• (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: None.

• (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 2 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 3 attached.

• (ix) Derivative transactions: Please refer to note 6(c) for related information.

• (x) Business relationships and significant inter-company transactions: Please see Table 4 attached.

• (b) Information on investees:

The followings are the information on investees for the three months ended March 31, 2021 (excluding investees in Mainland China): Please see Table 5 attached.

(Continued)

55

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

• (c) Information on investment in Mainland China : Please see Table 6 attached.

• (d) Major shareholders:

(in shares)

		(in shares)
Shareholding Shareholder’s Name	Shares	Percentage
Evergreen Marine Corp. (Taiwan) Ltd.	776,541,111	% 15.65
Evergreen International Corp.	549,262,304	% 11.07
Falcon Investment Services Ltd.	489,988,482	% 9.87

(14) Segment 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 three months ended March 31, 2021 and 2020, the above segments do not meet the quantitative thresholds to be reportable.

The Group’s operating segment information and reconciliation are as follows:

For the three months ended March 31, 2021 Revenue: Revenue from external customers Intersegment revenue Total revenue Reportable segment profit or loss For the three months ended March 31, 2020 Revenue: Revenue from external customers Intersegment revenue Total revenue Reportable segment profit or loss	Aviation transportation segment $ 17,544,853 12,309 $ 17,557,162 $ (1,929,160) Aviation transportation segment $ 26,817,445 17,339 $ 26,834,784 $ (1,070,439)	Aircraft maintenance and manufacture segment 1,759,180 631,372 2,390,552 325,141 Aircraft maintenance and manufacture segment 2,913,477 776,357 3,689,834 620,818	Sky catering segment 38,448 99,787 138,235 (173,205) Sky catering segment 112,901 498,842 611,743 20,203	Air cargo services segment 270,538 102,681 373,219 72,922 Air cargo services segment 274,301 84,138 358,439 56,501	Other segments 68,041 353,851		Reconciliation and elimination	Total 19,678,810 - 19,678,810 (1,761,598) Total 30,233,098 - 30,233,098 (444,841)
							(2,250) (1,200,000) (1,202,250) 2,784 Reconciliation and elimination
					421,892
							(4,389) (1,952,119) (1,956,508) (892)

56

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

Table 1 Marketable Securities Held (excluding investments in subsidiaries, associates and joint ventures) (March 31, 2021)

(in shares)

Held Company Name	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account		March 31, 2021	March 31, 2021		Notes
				Shares/Units	Book value	Percentage of ownership	Fair value
The Company 〃 〃 〃 Evergreen Air Cargo Services Corp. 〃 〃 The Company 〃 〃 〃 〃 〃 〃	Jih Sun Money Market Fund FSITC Taiwan Money Market Fund FSITC Money Market Fund Taishin 1699 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	None None None None None None None None None None The Company's shareholder's equity investment The Company's shareholder's equity investment None None	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 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	45,187,711 12,995,958 2,564,182 3,666,549 14,722,443 5,477,678 6,724,674 231,580 8,502,418 35,203,008 37,606,277 38,201,625 1,000,000 1	676,089 200,723 461,463 50,068 186,371 92,296 92,267 1,759,277 19,741 409,391 837,832 423,447 1,369,528 35,910 7,069	- - - - - - - 2.11 5.67 5.96 9.98 9.56 10.00 4.55	676,089 200,723 461,463 50,068 186,371 92,296 92,267 1,759,277 19,741 409,391 837,832 423,447 1,369,528 35,910 7,069

(Continued)

57

Held Company Name	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account		March 31, 2021	March 31, 2021		Notes
				Shares/Units	Book value	Percentage of ownership	Fair value
Evergreen Airline Services Corp. 〃 Hsiang Li Investment Corp. Evergreen Airways Service (Macau) Ltd.	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.	The Company's shareholder's shareholder The Company's shareholder's shareholder None None	Financial assets at fair value through other comprehensive income－non-current Financial assets at fair value through other comprehensive income－non-current Financial assets at fair value through other comprehensive income－non-current Financial assets at fair value through other comprehensive income－non-current	557,349 158,800 2,740,542 500	25,359 2,938 65,225 1,239 3,197,679	0.01 0.01 0.46 0.0024	25,359 2,938 65,225 1,239 3,197,679

(Continued)

58

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

Table 2 Total purchases from or sales to related parties with the dollar amount at least $100 million or 20% of paid-in capital (March 31, 2021)

(March 31, 2021)
Company Name	Related Party	Relationship	Transaction Details				Abnormal	Transaction	Notes/Accounts Receivable (Payable)		Notes
			Purchases/Sales	Amount	Percentage of Total Purchases/Sales	Payment Terms	Unit Price	Payment Terms	Balance	Percentage of Total Accounts/ Notes Receivable (Payable)
The Company 〃 〃 〃 Evergreen Airline Services Corp. Evergreen Aviation Technologies Corp. 〃 〃 Evergreen Air Cargo Services Corp.	UNI Airways Corp. Evergreen Airline Services Corp. Evergreen Aviation Technologies Corp. Evergreen Air Cargo Services Corp. The Company The Company GE Evergreen Engine Services Corp. UNI Airways Corp. The Company	The Company's shareholder's equity investment The Company's subsidiary The Company's subsidiary The Company's subsidiary Parent company Parent company The company's equity investment The company's shareholder Parent company	Sales Purchases Purchases Purchases Sales Sales Sales Sales Sales	203,642 304,143 627,686 101,429 304,143 631,373 172,361 111,482 101,429	1.16 1.74 3.60 0.58 78.34 26.41 7.21 4.66 27.18	60 days 60 days 60 days 60 days 60 days 60 days 30 days 60 days 60 days	- - - - - - - - -		115,904 (195,893) (363,846) (70,023) 206,315 366,068 112,073 112,808 73,534	2.06 6.20 11.51 2.22 75.51 21.29 6.52 6.56 47.22	(Note) (Note) (Note) (Note) (Note) (Note)

Note : The aforementioned inter-company transactions have been eliminated in the consolidated financial statements.

(Continued)

59

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

Table 3 Accounts receivable from related parties for which the dollar amount at least $100 million or 20% of paid-in capital (March 31, 2021)

(March 31, 2021)
Company Name	Related Party	Relationship	Balance of Receivables from Related Party	Turnover Rate	Past - due Receivables from Related Party		Amounts Received in Subsequent Period	Allowances for Impairment Loss
					Amount	Action taken
The Company Evergreen Airline Services Corp. Evergreen Aviation Technologies Corp. 〃 〃	UNI Airways Corp. The Company The Company GE Evergreen Engine Services Corp. UNI Airways Corp.	The Company's shareholder's equity investment Parent company Parent company The company's equity investment The company's shareholder	246,119 222,001 366,770 118,491 112,935	(Note 1) 5.17 (Note 2) 6.01 (Note 2) 5.42 3.70	- - - - -		163,189 222,001 366,770 118,491 48,117	- - - - -

Note1：Accounts receivable and revenue were not directly correlated because of the particular industry characteristics, and therefore, the turnover rate was not applicable.

Note2：The aforementioned inter-company transactions have been eliminated in the consolidated financial statements.

(Continued)

60

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

Table 4 Business relationships and significant inter-company transactions

(March 31, 2021)

Number	Trader	Company Name	Nature of Relationship	Transaction Details	Transaction Details	Transaction Details	Transaction Details
				Financial Statements Item	Amount	Transaction Terms	Percentage of the Consolidated Net Revenue or Total Assets
0 0 0 0 0	The Company 〃 〃 〃 〃	Evergreen Aviation Technologies Corp. Evergreen Airline Services Corp. Evergreen Air Cargo Services Corp. Evergreen Aviation Technologies Corp. Evergreen Airline Services Corp.	1 1 1 1 1	Operating costs Operating costs Operating costs Accounts payable－related parties Accounts payable－related parties	627,686 304,143 101,429 363,846 195,893	as general transactions as general transactions as general transactions as general transactions as general transactions	3.19 1.55 0.52 0.11 0.06

Note 1:The number is filled in as follows:

1.0 represents the parent company.

• 2.Subsidiaries are numbered sequentially by the number 1 according to the company.

Note 2:The types of relationships with the company are as follows:

• 1.Parent company to subsidiary.

• 2.Subsidiary to parent company.

3.Subsidiary to subsidiary.

Note 3: The section only discloses the information of parent company to subsidiaries transactions. The counter party is not disclosed due to duplicate.

(Continued)

61

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

Table 5 Information on investees (excluding investees in Mainland China)

(For the three months ended March 31, 2021)

(in shares)

											(in s
Name of investor	Name of investee	Location	Main Businesses and Products	Initial Investment Amount		Ending Balance			Net Income (Losses) of Investee	Share of Profit (Losses) of Investee	Notes
				March 31, 2021	December 31, 2020	Shares	Ratio of Shares	Book Value
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.	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.	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	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	179,173 327 5,086 932,050 - 111,181 498,000 740,348 448,280 25,000 55,061 2,032,845 8,032	179,173 327 5,086 932,050 - 111,181 498,000 740,348 448,280 25,000 55,061 2,032,845 8,032	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	% 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	375,230 93,255 15,991 658,881 7,959,967 861,391 2,028,441 1,586,345 74,206 117,583 31,450 1,569,167 74,115	8,554 (6,486) 1,207 (3,539) 263,111 (18,481) (140,779) 56,656 (30) 10,643 (38,519) 29,176 (31,901)	8,554 (6,421) 615 (3,539) 208,963 (10,410) (70,108) 34,348 (30) 3,326 (10,200) 22,740 (6,380)	(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)

Note1: The aforementioned inter-company transactions have been eliminated in the consolidated financial statements.

Note2: Investments were accounted for using equity method.

Note3: Investments of subsidiaries of the Company were accounted for using equity method.

(Continued)

62

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

Table 6 Information on investment in Mainland China

(March 31, 2021)

1. Information on Investment in Mainland China:

Investee Company	Main Business and Products	Total Amount of Paid-in Capital (CNY in Thousands)	Method of Investment (Note 1)	Accumulated Outflow of Investment from Taiwan as of January 1, 2021	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of March 31, 2021	Net Income (Losses) of investee	Direct/Indirect Shareholding (%) by the Company	Share of Profits/Losses (Note 2)	Carrying Amount as of March 31, 2021	Accumulated Inward Remittance of Earnings as of March 31, 2021
					Outflow	Inflow
Arport Air Cargo Terminal (Xiamen) Co., Ltd. Arport Air Cargo Service (Xiamen) Co., Ltd.	Forwarding and storage of air cargo Forwarding and storage of air cargo, truck freight transportation, other transportation auxiliary industry	CNY 254,480 CNY 14,000	2 2	138,784 61,418	- -	- -	138,784 61,418	38,721 22,923	14.00 % 14.00 %	5,421 3,209	246,036 127,686	106,670 58,498

(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 not reviewed 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 in Mainland China as of March 31, 2021 (USD in Thousands)	Investment Amounts Authorized by Investment Commission, MOEA (Note) (USD in Thousands)	Upper Limit on the Amount of Investment Stipulated by Investment Commission, MOEA
NTD 2,402,651 (USD 79,781 )	NTD 2,456,862 (USD 80,562 )	45,274,127

• 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.

• Significant transactions：None.