EVAAIR - Interim / Quarterly Report 2021

Stock Code:2618

EVA AIRWAYS CORP. AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors’ Review Report For the Nine Months Ended September 30, 2021 and 2020

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

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	Page
	1 2 3 4 5 6 7 8 8 8～10 10～12 12 12～53 53～58 58 59～61 61 61 61～62 62～63, 65～68 63, 69 63, 70 63 63～64

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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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 September 30, 2021 and 2020, and the related consolidated statements of comprehensive income for the three months and nine months ended September 30, 2021 and 2020, as well as the changes in equity and cash flows for the nine 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 $622,015 thousand and $591,763 thousand as of September 30, 2021 and 2020, respectively, and its equity in net earnings (losses) on these investee companies of $11,128 thousand, $(9,059) thousand, $22,269 thousand and $(8,448) thousand for the three months and nine 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.

3-1

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 September 30, 2021 and 2020, and of its consolidated financial performance for the three months and nine months then ended, as well as its consolidated cash flows for the nine 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) November 3, 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.

Reviewed only, not audited in accordance with generally accepted auditing standards as of September 30, 2021 and 2020

EVA AIRWAYS CORP. AND SUBSIDIARIES

Consolidated Balance Sheets

September 30, 2021, December 31 and September 30, 2020

(Expressed in Thousands of New Taiwan Dollars)

2021.9.30 Assets Amount % Current assets: 1100 Cash and cash equivalents (note 6(a)) $ 46,902,369 15 1110 Financial assets at fair value through profit or loss －current (notes 6(b) and 6(p)) 1,721,137 1 1136 Financial assets at amortized cost－current (note 6(b)) 1,304,615 - 1140 Contract assets－current (note 6(x)) 603,070 - 1150 Notes receivable, net (note 6(d)) 3,297 - 1160 Notes receivable－related parties (notes 6(d) and 7) - - 1170 Accounts receivable, net (note 6(d)) 7,818,639 2 1180 Accounts receivable－related parties (notes 6(d) and 7) 232,662 - 130x Inventories (note 6(f)) 3,094,657 1 1460 Non-current assets or disposal group classified as held for sale, net (note 6(g)) 67,575 - 1470 Other current assets (notes 6(e), 6(o), and 7) 1,217,661 - Total current assets 62,965,682 19 Non-current assets: 1510 Financial assets at fair value through profit or loss －non-current (notes 6(b) and 6(p)) - - 1517 Financial assets at fair value through other comprehensive income－non-current (note 6(b)) 3,784,151 1 1550 Investments accounted for using equity method (notes 6(h) and 7) 2,109,777 1 1600 Property, plant and equipment (notes 6(k), 7 and 8) 124,513,350 38 1755 Right-of-use assets (notes 6(l), 6(r), and 7) 99,464,198 31 1760 Investment property, net (notes 6(m), 6(s) and 7) 1,672,559 1 1780 Intangible assets (notes 6(n) and 7) 1,495,510 - 1840 Deferred tax assets 5,959,005 2 1900 Other non-current assets (notes 6(c), 6(o),7, 8 and 9) 21,983,746 7 Total non-current assets 260,982,296 81 Total assets $ 323,947,978 100	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	2020.9.30 Amount % 42,673,154 13 1,637,151 1 781,049 - 580,205 - 16,513 - 1,009 - 5,948,987 2 599,457 - 3,482,560 1 848,459 - 1,259,988 - 57,828,532 17 - - 2,745,681 1 2,139,855 1 135,782,150 41 110,819,932 33 - - 1,757,384 - 5,560,198 2 15,219,478 5 274,024,678 83 331,853,210 100 2021.9.30 Liabilities and Equity Amount % Current liabilities: 2100 Short-term borrowings (notes 6(p) and 8) $ - - 2120 Financial liabilities at fair value through profit or loss －current (notes 6(b) and 6(p)) - - 2126 Financial liabilities for hedging－current (notes 6(c), 6(q) and 7) 11,685,996 4 2130 Contract liabilities－current (note 6(x)) 5,035,174 1 2170 Notes and accounts payable 3,329,226 1 2180 Accounts payable－related parties (note 7) 49,030 - 2200 Other payables (notes 6(v), 7 and 9) 9,281,702 3 2230 Current tax liabilities 897,722 - 2260 Liabilities related to non-current assets or disposal group classified as held for sale (note 6(g)) - - 2280 Lease liabilities－current (notes 6(q) and 7) 369,791 - 2320 Current portion of long-term liabilities (notes 6(p) and 8) 19,696,855 6 2399 Other current liabilities (notes 6(i) and 6(r)) 2,398,735 1 Total current liabilities 52,744,231 16 Non-current liabilities: 2500 Financial liabilities at fair value through profit or loss －non-current (notes 6(b) and 6(p)) 6,500 - 2511 Financial liabilities for hedging－non-current (notes 6(c), 6(q) and 7) 66,602,690 21 2527 Contract liabilities－non-current (note 6(x)) 1,416,422 - 2530 Bonds payable (note 6(p)) 4,733,656 2 2540 Long-term borrowings (notes 6(p) and 8) 87,902,343 27 2570 Deferred tax liabilities 1,845,904 1 2580 Lease liabilities－non-current (notes 6(q) and 7) 4,314,947 1 2640 Net defined benefit liabilities－non-current 3,188,339 1 2670 Other non-current liabilities (note 6(r)) 20,268,483 6 Total non-current liabilities 190,279,284 59 Total liabilities 243,023,515 75 Equity (notes 6(b), 6(c), 6(p), 6(u) and 6(v)): 3110 Ordinary share 51,307,686 16 3140 Advance receipts for share capital 77,701 - 3200 Capital surplus 8,470,947 3 3300 Retained earnings 7,429,204 2 3400 Other equity interest 8,079,632 2 Total equity attributable to owners of parent 75,365,170 23 36XX Non-controlling interests (notes 6(i), 6(j) and 6(v)) 5,559,293 2 Total equity 80,924,463 25 Total liabilities and equity $ 323,947,978 100	2021.9.30		2020.12.31		2020.9.30
			Amount %		Amount %		Amount %
					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		150,000 - 2,399 - 12,132,756 4 4,978,682 2 2,667,241 1 118,992 - 7,339,690 2 976,170 - 68 - 365,146 - 23,411,880 7 1,017,368 - 53,160,392 16 - - 79,572,494 24 2,744,035 1 4,250,000 1 86,479,592 26 1,145,816 - 4,554,001 2 4,126,058 1 21,190,307 7 204,062,303 62 257,222,695 78 48,535,695 15 - - 7,849,700 2 7,261,533 2 4,559,411 1 68,206,339 20 6,424,176 2 74,630,515 22 331,853,210 100

See accompanying notes to consolidated financial statements.

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 and nine months ended September 30, 2021 and 2020

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

For the three months ended September 30, 2021 Amount % 4000 Operating revenue (notes 6(s), 6(x) and 7) $ 25,814,068 100 5000 Operating costs (notes 6(c), 6(e), 6(f), 6(k), 6(l), 6(n), 6(q), 6(t), 6(y), 7 and 9) (21,496,379) (83) 5900 Gross profit from operations 4,317,689 17 6000 Operating expenses (notes 6(d), 6(e), 6(k), 6(l), 6(m), 6(n), 6(q), 6(t), 6(y) and 7) (2,007,975) (8) 6900 Net operating income (loss) 2,309,714 9 7000 Non-operating income and expenses (notes 6(c), 6(h), 6(q), 6(r), 6(z) and 7): 7010 Other income 185,288 1 7020 Other gains and losses 340,085 1 7050 Finance costs (980,423) (4) 7060 Shares of profit of associates accounted for using equity method 19,828 - Total non-operating income and expenses (435,222) (2) 7900 Profit (loss) before tax 1,874,492 7 7950 Income tax benefit (expenses) (note 6(u)) (358,941) (1) 8200 Profit (loss) 1,515,551 6 8300 Other comprehensive income (notes 6(b), 6(c), 6(h), 6(u) and 6(v)): 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 (876,579) (3) 8317 Gains (losses) on hedging instruments that will not be reclassified to profit or loss - - 8320 Share of other comprehensive income of associates accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss - - 8349 Income tax benefit (expenses) related to components of other comprehensive income that will not be reclassified to profit or loss (120) - Components of other comprehensive income that will not be reclassified to profit or loss (876,699) (3) 8360 Components of other comprehensive income that will be reclassified to profit or loss: 8361 Exchange differences on translation of foreign financial statements 1,814 - 8368 Gains (losses) on hedging instruments (258,485) (1) 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 (6,682) - 8399 Income tax benefit (expenses) related to components of other comprehensive income that will be reclassified to profit or loss 51,697 - Components of other comprehensive income that will be reclassified to profit or loss (211,656) (1) 8300 Other comprehensive income, net of tax (1,088,355) (4) 8500 Total comprehensive income $ 427,196 2 Profit (loss), attributable to: 8610 Owners of parent $ 1,483,575 6 8620 Non-controlling interests 31,976 - $ 1,515,551 6 Comprehensive income attributable to: 8710 Owners of parent $ 414,327 2 8720 Non-controlling interests 12,869 - $ 427,196 2 Earnings per share (note 6(w)) 9750 Basic earnings per share (in New Taiwan Dollars) $ 0.29 9850 Diluted earnings per share (in New Taiwan Dollars) $ 0.28	For the three months ended September 30, 2020	For the nine months ended September 30, 2021	For the nine months ended September 30, 2020
	Amount % 18,402,985 100 (17,718,279) (96) 684,706 4 (1,997,399) (11) (1,312,693) (7) 47,388 - 228,881 1 (1,254,074) (6) 50,707 - (927,098) (5) (2,239,791) (12) 465,975 3 (1,773,816) (9) 54,006 - (2,031) - - - 390 - 52,365 - (8,392) - 1,826,088 10 14,842 - (365,218) (2) 1,467,320 8 1,519,685 8 (254,131) (1) (1,807,956) (9) 34,140 - (1,773,816) (9) (291,700) (1) 37,569 - (254,131) (1) (0.37) (0.37)	Amount % 69,655,836 100 (61,870,458) (89) 7,785,378 11 (6,436,139) (9) 1,349,239 2 275,848 - 637,754 1 (3,029,364) (4) 47,743 - (2,068,019) (3) (718,780) (1) 132,155 - (586,625) (1) 978,095 2 - - 149 - (360) - 977,884 2 (22,529) - 1,107,790 2 (21,973) - (221,558) (1) 841,730 1 1,819,614 3 1,232,989 2 (569,819) (1) (16,806) - (586,625) (1) 1,232,816 2 173 - 1,232,989 2 (0.11) (0.11)	Amount % 67,925,015 100 (61,997,465) (91) 5,927,550 9 (7,500,503) (11) (1,572,953) (2) 395,578 1 735,033 1 (3,856,356) (6) 136,204 - (2,589,541) (4) (4,162,494) (6) 588,201 1 (3,574,293) (5) 99,394 - 2,551 - - - (1,168) - 100,777 - (28,940) - 2,179,689 3 (8,420) - (435,938) (1) 1,706,391 2 1,807,168 2 (1,767,125) (3) (3,642,322) (5) 68,029 - (3,574,293) (5) (1,832,450) (3) 65,325 - (1,767,125) (3) (0.75) (0.75)

See accompanying notes to consolidated financial statements.

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

EVA AIRWAYS CORP. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the nine months ended September 30, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

					Attribut	able to owners o	f parent	f parent					Non- controlling interests	Total equity
Ordinary share	Advance receipts for share capital	Capital surplus		R	etained 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 - - - -	2,221,732 352,270 - - -		9,895,516 (352,270) (1,213,393) (3,642,322) -	12,117,248 - (1,213,393) (3,642,322) -		(42,773) - - - (33,868)	722,495 - - - 97,948	2,069,817 - - - 1,745,792	2,749,539 - - - 1,809,872	71,252,182 - (1,213,393) (3,642,322) 1,809,872	6,889,834 - - 68,029 (2,704)	78,142,016 - (1,213,393) (3,574,293) 1,807,168
-	-	-	-		(3,642,322)	(3,642,322)		(33,868)	97,948	1,745,792	1,809,872	(1,832,450)	65,325	(1,767,125)
-	-	-	-		-	-		-	-	-	-	-	(530,983)	(530,983)
$ 48,535,695	-	7,849,700	2,574,002		4,687,531	7,261,533		(76,641)	820,443	3,815,609	4,559,411	68,206,339	6,424,176	74,630,515
$ 48,535,695 - - -	- - - -	7,985,673 255,744 - -	2,574,002 - - -		5,253,136 - (569,819) 149	7,827,138 - (569,819) 149		(113,246) - - (39,964)	1,113,299 - - 956,218	5,448,829 - - 886,232	6,448,882 - - 1,802,486	70,797,388 255,744 (569,819) 1,802,635	5,862,141 - (16,806) 16,979	76,659,529 255,744 (586,625) 1,819,614
-	-	-	-		(569,670)	(569,670)		(39,964)	956,218	886,232	1,802,486	1,232,816	173	1,232,989
2,771,991 - -	77,701 - -	229,530 - -	- - -		- - 171,736	- - 171,736		- - -	- - (171,736)	- - -	- - (171,736)	3,079,222 - -	- (303,021) -	3,079,222 (303,021) -
$ 51,307,686	77,701	8,470,947	2,574,002		4,855,202	7,429,204		(153,210)	1,897,781	6,335,061	8,079,632	75,365,170	5,559,293	80,924,463

See accompanying notes to consolidated financial statements.

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

Consolidated Statements of Cash Flows

For the nine months ended September 30, 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 gains on financial assets or liabilities at fair value through profit or loss Interest expense Interest income Dividend income Shares of profit of associates accounted for using equity method Losses (gains) on disposal of property, plant and equipment Gains on disposal of non-current assets classified as held for sale Unrealized foreign exchange gains Others Total adjustments to reconcile profit (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 nine months ended September 30 2021 2020 (718,780) (4,162,494) (25,017) - 20,987,449 20,449,197 291,106 324,504 (15,581) (6,843) 3,029,364 3,856,356 (113,687) (240,921) (144,897) (139,645) (47,743) (136,204) 16,182 (39,625) (6,870) (141,369) (1,074,203) (700,744) (285,764) (237,250) 22,610,339 22,987,456 (156,632) (235,189) 5,327 826,798 840 187,394 (1,527,515) 11,245,671 170,885 (110,914) 150,144 (158,977) (166,598) (100,939) (1,523,549) 11,653,844 (715,159) (15,456,655) 413,114 (6,953,537) (48,361) 14,355 1,166,548 (3,575,371) (334,707) (4,104,819) (392,079) (771,625) (567,850) 7,854 (478,494) (30,839,798) (2,002,043) (19,185,954) 20,608,296 3,801,502 19,889,516 (360,992) (319,734) (336,028) 19,569,782 (697,020)
		2021 (718,780) (25,017) 20,987,449 291,106 (15,581) 3,029,364 (113,687) (144,897) (47,743) 16,182 (6,870) (1,074,203) (285,764) 22,610,339 (156,632) 5,327 840 (1,527,515) 170,885 150,144 (166,598) (1,523,549) (715,159) 413,114 (48,361) 1,166,548 (334,707) (392,079) (567,850) (478,494) (2,002,043) 20,608,296 19,889,516 (319,734) 19,569,782
	$

See accompanying notes to consolidated financial statements.

7-1

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

Consolidated Statements of Cash Flows (continued)

For the nine months ended September 30, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Cash flows used in investing activities:
Proceeds from disposal of financial assets at fair value through other
comprehensive income
Acquisition of financial assets at amortized cost
Acquisition of financial assets at fair value through profit or loss
Proceeds from disposal of financial assets at fair value through profit or loss
Acquisition of investments accounted for using equity method
Proceeds from disposal of non-current assets classified as held for sale
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Acquisition of intangible assets
Acquisition of investment properties
Decrease (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 issuance of bonds payable
Repayments of bonds payable
Proceeds from long-term borrowings
Repayments of long-term borrowings
Payments of lease liabilities
Increase (decrease) in other non-current liabilities
Interest paid
Changes in non-controlling interests
Net cash flows from (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

See accompanying notes to consolidated financial statements.

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

Notes to the Consolidated Financial Statements

September 30, 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) wholesale and retail sale of medical devices
(c) maintenance of aircraft, engine and parts, and manufacture of aircraft parts;
(d) ground service at airports;
(e) catering service;
(f) air cargo entrepot;
(g) 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 November 3, 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”

(Continued)

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

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

●Amendments to IFRS 16“Covid-19-Related Rent Concessions beyond June 30, 2021”
(b) The impact of IFRS issued by the FSC but not yet effective

The Group assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2022, would not have a significant impact on its consolidated financial statements:

－
●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”
(c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

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

Standards or Interpretations

Amendments to IAS 1 “Disclosure of Accounting Policies”

Effective date per Content of amendment IASB 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.

(Continued)

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

Standards or
Interpretations
Amendments to IAS 8
“Definition of Accounting
Estimates”
Amendments to IAS 12
“Deferred Tax related to
Assets and Liabilities arising
from a Single Transaction”

Content of amendment
Effective date per
IASB
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 amendments narrowed the scope of the
recognition exemption so that it no longer
applies to transactions that, on initial
recognition, give rise to equal taxable and
deductible temporary differences.
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.

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 IAS 1 “Classification of Liabilities as Current or Non-current”
●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

(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.

(Continued)

EVA AIRWAYS CORP. AND SUBSIDIARIES Notes to the 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 2021.9.30 2020.12.31 2020.9.30 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 2021.9.30 2020.12.31 2020.9.30 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 -
			2021.9.30 % 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

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 period 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.

(Continued)

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

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.

(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 and cash equivalents
Cash on hand Cash in bank Short-term notes	2021.9.30 $ 78,091 46,824,278 - $ 46,902,369	2020.12.31 83,400 40,785,790 - 40,869,190	2020.9.30
			85,154 42,566,000 22,000
			42,673,154

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

(b) Financial assets and liabilities

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

Financial assets mandatorily measured at fair value through profit or loss: Money market funds Convertible bonds with embedded derivatives	2021.9.30 $ 1,721,137 - $ 1,721,137	2020.12.31 1,978,251 2,793 1,981,044	2020.9.30
			1,636,496 655
			1,637,151

(Continued)

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

Financial liabilities mandatorily measured at fair value through profit or loss: Forward exchange contracts Convertible bonds with embedded derivatives	2021.9.30 $ - 6,500 $ 6,500	2020.12.31 - - -	2020.9.30
			2,399 -
			2,399

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

－
(ii) Financial assets at amortized cost current

2021.9.30 2020.12.31 Time deposits over three months $ 1,304,615 807,013 (iii) Financial assets at fair value through other comprehensive income 2021.9.30 2020.12.31 Equity investments at fair value through other comprehensive income: Publicly traded stocks $ 3,283,388 1,316,591 Non-publicly traded stocks 500,763 1,728,203 $ 3,784,151 3,044,794	2020.9.30
	781,049
	2020.9.30
	1,176,414 1,569,267
	2,745,681

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.

In July, 2021, the Group has sold its equity securities as at fair value through other comprehensive income. The shares sold had a fair value of $238,712 and the Group recognized a gain of $171,736, which was accounted for as other equity. The gain has been transferred to retained earnings. There was no such transaction for the nine months ended September 30, 2020.

(iv) For credit risk and market risk, please refer to note 6(aa).
(v) The aforementioned financial assets were not pledged.

(Continued)

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

The details of financial liabilities for hedging were as follows:

Financial liabilities for hedging: Foreign currency component of non- derivative lease liabilities Fuel swap and option agreements Forward exchange contracts Total Current Non-current	2021.9.30 $ 78,288,686 - - $ 78,288,686 $ 11,685,996 66,602,690 $ 78,288,686	2020.12.31 88,632,815 - - 88,632,815 11,564,988 77,067,827 88,632,815	2020.9.30
			91,377,006 319,152 9,092
			91,705,250
			12,132,756 79,572,494
			91,705,250

(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 2021.9.30 2020.12.31 2020.9.30 $ - - (95,022) $ - - (224,130) $ - - (319,152)	Fair value of assigned hedging instrument 2021.9.30 2020.12.31 2020.9.30 $ - - (95,022) $ - - (224,130) $ - - (319,152)	Fair value of assigned hedging instrument 2021.9.30 2020.12.31 2020.9.30 $ - - (95,022) $ - - (224,130) $ - - (319,152)
		2021.9.30 $ - $ - $ -	2020.12.31 - - -
Floating price of fuel Floating price of fuel	Fuel swap agreements Option agreements
				(319,152)

(ii) Forward exchange contracts

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

Forward exchange purchased			2020.9.30
	Contract Amount (in thousands) USD$ 12,660	Currency TWD to USD	Maturity dates Average strike price 2020/10/05 USD29.6~30.1

There was no such transaction as of September 30, 2021 and December 31, 2020.

(Continued)

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

(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 September 30, 2021, December 31 and September 30, 2020, the cash flow hedged items and non-derivative 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
		2021.9.30 $ 78,288,686	2020.12.31 88,632,815
	Foreign currency of lease liabilities			91,377,006

(iv) The details arising from cash flow hedges for the three months and nine months ended September 30, 2021 and 2020, were as follows:

		For the three	For the three	For the nine	For the nine
		months ended	months ended	months ended	months ended
		September 30,	September 30,	September 30,	September 30,
Account Item		2021	2020	2021	2020
Recognized in other comprehensive
income during the period	$	(258,485)	1,824,057	1,107,790	2,182,240
Reclassification from equity to increase
(decrease) in operating costs for the
period	$	-	328,774	-	1,264,168
Reclassification from equity to increase
(decrease) in other non-current assets
for the period	$	-	6,680	-	12,733
Reclassification from equity to exchange
losses (gains) for the period	$	(326,331)	(169,499)	(946,299)	(310,869)
Ineffective portion of forward exchange
hedge recognized in profit or loss	$	-	-	-	155

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	2021.9.30 $ 3,297 8,240,128 (188,827) $ 8,054,598	2020.12.31 9,464 6,885,217 (215,412) 6,679,269	2020.9.30 17,522 6,789,342 (240,898) 6,565,966

(Continued)

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

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:

	2021.9.30
Notes and accounts receivable (including related parties) carrying amount Weighted- average loss rate $ 7,984,323 0.00% 193,643 64.41% 33,760 95.85% 2,035 100% 29,664 100% $ 8,243,425 2020.12.31		Loss allowance provision
		35 124,735 32,358 2,035 29,664
		188,827

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% 2020.9.30	Loss allowance provision
		69,745 79,102 23,480 24,467 18,618
		215,412

Notes and accounts receivable (including related parties) carrying amount $ 6,560,560 97,336 94,801 37,408 16,759 $ 6,806,864	Weighted- average loss rate 0.61% 62.61% 96.54% 85.48% 100%	Loss allowance provision
		39,702 60,940 91,522 31,975 16,759
		240,898

(Continued)

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

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 September 30	For the nine months ended September 30, 2021 $ 215,412 (25,017) (1,568) $ 188,827	For the nine months ended September 30, 2020
		241,563 - (665
		240,898

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

(e) Other receivables

Other receivables－related parties Others Less: allowance for impairment	2021.9.30 $ 304,031 321,005 (145) $ 624,891	2020.12.31 241,094 168,876 (145) 409,825	2020.9.30 370,482 290,996 -
			661,478

For the three months and the nine months ended September 30, 2021 and 2020, the Group was awarded government grants amounting to $509,879, $499,692, $1,465,850 and $1,161,649, 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 September 30, 2021, December 31 and September 30, 2020, the receivables related to the abovementioned grant amounted to $276,211, $138,840 and $241,198, respectively.

There was no change on the movements in the allowance for other receivables for the nine months ended September 30, 2021 and 2020.

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

(f) Inventories

(i) The components were as follows:

Aircraft spare parts Consumables for use and merchandise for in-flight sales Aircraft components and others	2021.9.30 $ 567,947 1,021,520 1,505,190 $ 3,094,657	2020.12.31 453,564 1,143,990 1,657,610 3,255,164	2020.9.30
			463,976 1,237,454 1,781,130
			3,482,560

(Continued)

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

(ii) Except for cost of goods sold and inventories recognized as expenses, the gains or losses which were recognized as operating costs were as follows:

Losses on (gains on reversal) valuation of inventories and obsolescence Unallocated fixed manufacturing overhead Losses (gains) on inventory count Proceeds from disposal of scraps Total	For the three months ended September 30, 2021	For the three months ended September 30, 2020

The aforementioned gains on reversal valuation of inventories were due to the disposal of inventories which had been recognized as loss on valuation.

As of September 30, 2021, December 31 and September 30, 2020, these inventories were not pledged.

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

A part of the office building in Los Angeles was presented as non-current assets or disposal group classified as held for sale following the expectation of the Group’s management to sell part of the building. The efforts to sell the disposal group have commenced, and sales are expected within one year. As of September 30, 2021, December 31 and September 30, 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	2021.9.30		2020.12.31 852,175 1,142	2020.9.30
	$ 67,575 $ -			848,459
				68

As of September 30, 2021, December 31 and September 30, 2020, the non-recurring fair value measurements for non-current assets or disposal group classified as held for sale of $85,083, $1,012,756 and $1,037,066, respectively (before costs to sell amounted to $4,348, $52,373 and $20,960, respectively) have been categorized as a Level 2 fair value based on the observable inputs with settled deals.

(Continued)

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

(h) Investments accounted for using equity method

A summary of the Group’ s financial information for investments accounted for using the equity method at the reporting date is as follows:

method at the reporting date is as follows:
Associates	2021.9.30 $ 2,109,777	2020.12.31 2,145,944	2020.9.30
			2,139,855

In 2021, the Group acquired 49% shares of Spirit Evergreen Aftermarket Solutions Co., Ltd. for $13,695 in cash, resulting in the Group to have significant influence over Spirit Evergreen Aftermarket Solutions Co., Ltd..

(i) Associate which is material to the Group consisted of the followings:

Name of the associate	Nature of relationship with the Group	Principal place of business or country of incorporation of the associate	The proportion of shareholding and voting rights	The proportion of shareholding and voting rights
			2021.9.30	2020.12.31 2020.9.30
GE Evergreen Engine Services Corp.	Maintenance, manufacturing, and sales of aircraft, engine and engine components	Taiwan	% 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.

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	2021.9.30 $ 3,806,462 3,570,325 2,484,127 732,815 $ 4,159,845 $ 2,038,323	2020.12.31 4,396,851 3,108,528 2,642,077 502,424 4,360,878 2,136,830	2020.9.30
			5,026,253 2,877,949 3,297,900 216,155
			4,390,147
			2,151,172

(Continued)

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

	For the three	For the three	For the three	For the nine	For the nine
	months ended	months ended		months ended	months ended
	September 30,	September	30,	September 30,	September 30,
	2021	2020		2021	2020
Operating revenues	$ 4,037,734	3,842,327		11,132,389	11,364,252
Profit	$ 17,755	104,738		51,988	242,377
Other comprehensive income	(13,637)	30,291		(44,843)	(17,183)
Comprehensive income	$ 4,118	135,029		7,145	225,194
Comprehensive income
attributable to the Group	$ 2,018	66,164		3,501	110,345
				For the nine	For the nine
			months ended		months ended
			September 30,		September 30,
				2021	2020
Share of net assets of the associate as of January 1			$	2,136,830	2,040,827
Comprehensive income attributable to the Group				3,501	110,345
Dividends received from the associate				(102,008)	-
Share of net assets of the associate as of September 30				2,038,323	2,151,172
Less: downstream transaction unrealized gain				(550,561)	(603,080)
Carrying amount of the associate equity as of September 30			$	1,487,762	1,548,092

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

2021.9.30 2020.12.31 Carrying amount of individually insignificant associates’ equity $ 622,015 603,750 For the three months ended September 30, 2021 For the three months ended September 30, 2020 For the nine months ended September 30, 2021 Attributable to the Group: Profit (loss) $ 11,128 (9,059) 22,269 Other comprehensive income - - 149 Comprehensive income $ 11,128 (9,059) 22,418		2020.9.30
		591,763
		For the nine months ended September 30, 2020
		(8,448 - (8,448

(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.

(Continued)

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

(i) Changes in ownership in subsidiaries

In order to prepare for the listing of the consolidated subsidiary, Evergreen Aviation Technologies Corp., (hereinafter refer to as EGAT), and comply with the “Taiwan Stock Exchange Corporation Rules Governing Review of Securities Listings” , the release of the shares of EGAT held by the Company was resolved in the shareholders’ meeting of the Company on July 16, 2021. The shares shall be subscribed by all shareholders of the Company on the basis of the percentage of shareholdings, and the number of shares of subscription not fully been subscribed by shareholders of the Company shall be purchased by the specific person's designated by the Chairman. The subscription price, which was referred to the reasonable opinion issued by the professional institution, was set at $62 per share. For the nine months ended September 30, 2021, the share payment for the above transaction was $290,615, and the total amount accumulated as of October 2021 was $844,093, and was recognized as other current liabilities.

(j) Subsidiaries with material non-controlling interests

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

Name of the subsidiary Evergreen Sky Catering Corp. Evergreen Aviation Technologies Corp.	Principal place of business or country of incorporation of the subsidiary Taiwan Taiwan	The proportion of ownership interests and voting rights held by non-controlling interests 2021.9.30 2020.12.31 2020.9.30 % 50.2 % 50.2 % 50.2 % 20.58 % 20.58 % 20.58
		2021.9.30 % 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:

Current assets Non-current assets Current liabilities Non-current liabilities Net assets Carrying amounts of non-controlling interests	2021.9.30 $ 1,071,340 5,653,079 342,588 2,550,823 $ 3,831,008 $ 1,923,166	2020.12.31 1,127,503 5,730,933 445,882 2,198,600 4,213,954 2,115,405	2020.9.30
			1,003,620 5,738,741 480,952 1,985,028
			4,276,381
			2,146,743

(Continued)

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

For the three months ended September 30, 2021 For the three months ended September 30, 2020 For the nine months ended September 30, 2021 For the nine months ended September 30, 2020 Operating revenues $ 171,525 83,443 469,252 745,184 Loss $ (111,629) (157,157) (382,947) (350,515) Other comprehensive income - - - - Comprehensive income $ (111,629) (157,157) (382,947) (350,515) Loss attributable to non-controlling interests $ (56,037) (78,892) (192,239) (175,958) Comprehensive income attributable to non-controlling interests $ (56,037) (78,892) (192,239) (175,958) For the nine months ended September 30, 2021 For the nine months ended September 30, 2020 Cash flows from (used in) operating activities $ (373,000) 78,974 Cash flows used in investing activities (4,311) (74,110) Cash flows from financing activities 257,909 417,125 Net increase (decrease) in cash and cash equivalents $ (119,402) 421,989 Dividend paid for non-controlling interests $ - 36,749	For the three months ended September 30, 2021 For the three months ended September 30, 2020 For the nine months ended September 30, 2021 For the nine months ended September 30, 2020 Operating revenues $ 171,525 83,443 469,252 745,184 Loss $ (111,629) (157,157) (382,947) (350,515) Other comprehensive income - - - - Comprehensive income $ (111,629) (157,157) (382,947) (350,515) Loss attributable to non-controlling interests $ (56,037) (78,892) (192,239) (175,958) Comprehensive income attributable to non-controlling interests $ (56,037) (78,892) (192,239) (175,958) For the nine months ended September 30, 2021 For the nine months ended September 30, 2020 Cash flows from (used in) operating activities $ (373,000) 78,974 Cash flows used in investing activities (4,311) (74,110) Cash flows from financing activities 257,909 417,125 Net increase (decrease) in cash and cash equivalents $ (119,402) 421,989 Dividend paid for non-controlling interests $ - 36,749	For the three months ended September 30, 2021 For the three months ended September 30, 2020 For the nine months ended September 30, 2021 For the nine months ended September 30, 2020 Operating revenues $ 171,525 83,443 469,252 745,184 Loss $ (111,629) (157,157) (382,947) (350,515) Other comprehensive income - - - - Comprehensive income $ (111,629) (157,157) (382,947) (350,515) Loss attributable to non-controlling interests $ (56,037) (78,892) (192,239) (175,958) Comprehensive income attributable to non-controlling interests $ (56,037) (78,892) (192,239) (175,958) For the nine months ended September 30, 2021 For the nine months ended September 30, 2020 Cash flows from (used in) operating activities $ (373,000) 78,974 Cash flows used in investing activities (4,311) (74,110) Cash flows from financing activities 257,909 417,125 Net increase (decrease) in cash and cash equivalents $ (119,402) 421,989 Dividend paid for non-controlling interests $ - 36,749
	$ (373,000) (4,311) 257,909 $ (119,402) $ -	78,974 (74,110) 417,125 421,989 36,749

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

Current assets Non-current assets Current liabilities Non-current liabilities Net assets Carrying amounts of non-controlling interests	2021.9.30 $ 11,133,304 12,527,059 4,327,570 9,803,288 $ 9,529,505 $ 1,961,172	2020.12.31 10,960,088 12,876,758 3,456,975 10,427,777 9,952,094 2,048,141	2020.9.30
			15,634,216 12,900,038 3,627,581 11,888,562
			13,018,111
			2,679,127

(Continued)

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

	For the three	For the three	For the three	For the three	For the three	For the nine			For the nine
	months ended			months ended		months ended		months ended
		September		September		September			September
		30,	2021		30, 2020	30, 2021			30, 2020
Operating revenues	$	2,514,813			2,407,595	7,302,767			8,603,582
Profit	$		220,935		324,242	657,805			1,171,875
Other comprehensive income			(6,682)		14,842	(21,973)			(8,420)
Comprehensive income	$		214,253		339,084	635,832			1,163,455
Profit attributable to non-
controlling interests	$		45,468		66,729	135,376			241,172
Comprehensive income
attributable to non-controlling
interests	$		44,093		69,783	130,854			239,439
					For the nine			For the nine
					months ended		months ended
					September 30,			September 30,
						2021			2020
Cash flows from operating activities					$	1,332,653			7,206,833
Cash flows used in investing activities						(116,403)			(429,511)
Cash flows used in financing activities						(1,557,028)			(3,470,742)
Net increase (decrease) in cash and cash equivalents					$	(340,778)			3,306,580
Dividend paid for non-controlling		interests			$	217,853			403,043

(k) Property, plant and equipment

The movements in cost and accumulated depreciation of property, plant and equipment were as follows:

Cost: Beginning balance as of January 1, 2021 Additions Disposals Reclassification (Note) Effect of exchange rate changes Balance as of September 30, 2021 Beginning balance as of January 1, 2020 Additions Disposals Reclassification (Note) Effect of exchange rate changes Balance as of September 30, 2020	Land $ 5,388,250 - - (351,025) - $ 5,037,225 $ 5,444,102 - - (55,852) - $ 5,388,250	Building and structures 23,551,022 150 (1,160) 31,772 (8,023) 23,573,761 23,070,177 149,445 (42,963) 600,749 (11,206) 23,766,202	Machinery and equipment 31,160,065 873,616 (863,378) (168,947) (3,189) 30,998,167 30,622,782 894,649 (928,484) 673,827 (5,009) 31,257,765	Leased improvements 1,673,950 1,928 (39,685) - - 1,636,193 1,729,011 6,108 (71,221) 17,108 - 1,681,006	Aircraft 145,549,912 - - - - 145,549,912 141,170,870 3,136,511 - 1,242,531 - 145,549,912	Unfinished construction 570,910 148,692 - (638,319) (604) 80,679 924,544 194,720 - (818,520) (827) 299,917	Total 207,894,109 1,024,386 (904,223) (1,126,519) (11,816)
							206,875,937
							202,961,486 4,381,433 (1,042,668) 1,659,843 (17,042)
							207,943,052

(Continued)

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

Accumulated depreciation: Beginning balance as of January 1, 2021 Depreciation expense Disposals Reclassification (Note) Effect of exchange rate changes Balance as of September 30, 2021 Beginning balance as of January 1, 2020 Depreciation expense Disposals Reclassification (Note) Effect of exchange rate changes Balance as of September 30, 2020 Carrying amounts: Balance as of January 1, 2021 Balance as of September 30, 2021 Balance as of January 1, 2020 Balance as of September 30, 2020	Land $ - - - - - $ - $ - - - - - $ - $ 5,388,250 $ 5,037,225 $ 5,444,102 $ 5,388,250	Building and structures 8,649,536 620,613 (210) - (1,189) 9,268,750 8,097,172 611,225 (42,963) - (1,339) 8,664,095 14,901,486 14,305,011 14,973,005 15,102,107	Machinery and equipment 17,120,788 1,606,690 (826,218) (392,773) (1,550) 17,506,937 16,062,774 1,645,088 (870,727) (7,081) (2,380) 16,827,674 14,039,277 13,491,230 14,560,008 14,430,091	Leased improvements 1,087,141 105,076 (39,684) - - 1,152,533 986,822 144,808 (71,221) (121) - 1,060,288 586,809 483,660 742,189 620,718	Aircraft 47,815,225 6,619,142 - - - 54,434,367 39,167,828 6,441,017 - - - 45,608,845 97,734,687 91,115,545 102,003,042 99,941,067	Unfinished construction - - - - - - - - - - - - 570,910 80,679 924,544 299,917	Total 74,672,690 8,951,521 (866,112 (392,773 (2,739
							82,362,587
							64,314,596 8,842,138 (984,911 (7,202 (3,719
							72,160,902
							133,221,419
							124,513,350
							138,646,890
							135,782,150

Note: Reclassifications are mainly the transfers of property, plant and equipment to operating costs, operating expenses, investment property and the prepayments for business facilities being reclassified to property, plant and equipment.
(i) Leased aircraft

The estimated recovery costs incurred by leasing aircraft are recognized as right-of-use assets, please refer to note 6(l). The related restoration obligations are recognized as other current liabilities and other non-current liabilities and are amortized using interest method. Refer to note 6(r) for the movements of restoration obligations.

(ii) In 2015, the consolidated subsidiary, Evergreen Aviation Technologies Corp., (hereinafter refer to as EGAT), purchased a piece of agricultural land on Puxin, Dayuan Dist., Taoyuan City for car park lot connecting road amounting to $60,558. The purchase was in the name of EGAT’ s director. The Group has implemented mortgage right as adequate safeguard procedures for the agricultural land mentioned above.
(iii) Pledge

As of September 30, 2021, December 31 and September 30, 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 and the nine months ended September 30, 2021 and 2020, the Group capitalized the interest expenses amounting to $32,565, $30,813, $98,350 and $96,363, respectively. The ranges of the monthly interest rate used for capitalization calculation were 0.07%~0.08%, 0.08%~0.11%, 0.07%~0.08% and 0.08%~0.11%, respectively.

(Continued)

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

(l) Right-of-use assets

The movements in the Group’s leases on land, building and structures, as well as aircraft, were as follows:

Cost: Beginning balance as of January 1, 2021 Additions Decrease Effect of exchange rate changes Balance as of September 30, 2021 Beginning balance as of January 1, 2020 Additions Decrease Balance as of September 30, 2020 Accumulated depreciation: Beginning balance as of January 1, 2021 Depreciation expense Decrease Effect of exchange rate changes Balance as of September 30, 2021 Beginning balance as of January 1, 2020 Depreciation expense Decrease Effect of exchange rate changes Balance as of September 30, 2020 Carrying amount: Balance as of January 1, 2021 Balance as of September 30, 2021 Balance as of January 1, 2020 Balance as of September 30, 2020	Land $ 4,928,698 128,298 (5,082) - $ 5,051,914 $ 4,973,028 3,420 (47,750) $ 4,928,698 $ 480,850 179,570 (3,580) - $ 656,840 $ 247,506 175,008 - - $ 422,514 $ 4,447,848 $ 4,395,074 $ 4,725,522 $ 4,506,184	Building and structures 1,560,262 166,301 (19,806) - 1,706,757 1,309,624 287,694 (12,171) 1,585,147 811,374 319,721 (13,076) - 1,118,019 429,956 346,778 (8,570) - 768,164 748,888 588,738 879,668 816,983	Aircraft 140,729,381 405,703 - - 141,135,084 131,719,814 5,226,604 - 136,946,418 35,238,630 11,469,586 - - 46,708,216 20,441,125 11,060,367 - - 31,501,492 105,490,751 94,426,868 111,278,689 105,444,926	Machinery and equipment 105,743 23,828 (11,955) - 117,616 92,342 16,004 (9,343) 99,003 52,383 22,026 (10,311) - 64,098 29,348 24,906 (7,090) - 47,164 53,360 53,518 62,994 51,839	Total 147,324,084 724,130 (36,843) - 148,011,371 138,094,808 5,533,722 (69,264) 143,559,266 36,583,237 11,990,903 (26,967) - 48,547,173 21,147,935 11,607,059 (15,660) - 32,739,334 110,740,847 99,464,198 116,946,873 110,819,932

(m) Investment property

Investment property comprises land and plants that are held for profit from capital appreciation, as well as leases that are leased under operating leases, including properties that are owned by the Group. The leases of investment properties contain an initial non-cancellable lease term of 10 years. The leases provide the lessees with options to extend at the end of the term. For all investment property leases, the rental income is fixed under the contracts.

(Continued)

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

The movements in cost and accumulated depreciation of investment property were as follows:

Cost: Beginning balance as of January 1, 2021 Additions Transfer from property, plant and equipment Transfer from non-current assets classified as held for sale Transferred to non-current assets classified as held for sale Balance as of September 30, 2021 Accumulated depreciation: Beginning balance as of January 1, 2021 Depreciation expense Transferred to non-current assets classified as held for sale Balance as of September 30, 2021 Carrying amounts: Balance as of January 1, 2021 Balance as of September 30, 2021 Fair value amount: Balance as of January 1, 2021 Balance as of September 30, 2021	Land $ - - 354,061 86,159 (4,507) $ 435,713 $ - - - $ - $ - $ 435,713	Buildings and structures Total - - 28,507 28,507 628,396 982,457 657,898 744,057 (34,430) (38,937) 1,280,371 1,716,084 - - 45,025 45,025 (1,500) (1,500) 43,525 43,525 - - 1,236,846 1,672,559 $ - $ 2,229,683

The fair value of investment properties was based on a valuation conducted by a qualified independent appraiser who has recent valuation experience within the location and category of the investment property being valued. The inputs of levels of fair value hierarchy in determining the fair value had been classified to Level 3.

The Group’ s investment properties were measured at fair value using both cost method and comparative method.

As of September 30, 2021, the Group’s investment property was not pledged.

There was no such transaction as of September 30 and December 31, 2020.

(Continued)

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

(n) 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 September 30, 2021 Beginning balance as of January 1, 2020 Additions Disposals Balance as of September 30, 2020 Accumulated amortization: Beginning balance as of January 1, 2021 Amortization expense Disposals Balance as of September 30, 2021 Beginning balance as of January 1, 2020 Amortization expense Disposals Balance as of September 30, 2020 Carrying amounts: Balance as of January 1, 2021 Balance as of September 30, 2021 Balance as of January 1, 2020 Balance as of September 30, 2020	Operating concession $ 3,423,792 - - $ 3,423,792 $ 3,423,792 - - $ 3,423,792 $ 2,338,378 100,722 - $ 2,439,100 $ 2,204,082 100,723 - $ 2,304,805 $ 1,085,414 $ 984,692 $ 1,219,710 $ 1,118,987	Computer software 1,317,420 86,052 (247,978) 1,155,494 1,427,405 104,611 (157,252) 1,374,764 702,270 190,384 (247,978) 644,676 669,838 223,781 (157,252) 736,367 615,150 510,818 757,567 638,397	Total 4,741,212 86,052 (247,978) 4,579,286 4,851,197 104,611 (157,252) 4,798,556 3,040,648 291,106 (247,978) 3,083,776 2,873,920 324,504 (157,252) 3,041,172 1,700,564 1,495,510 1,977,277 1,757,384

(i) Amortization

For the nine months ended September 30, 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.

(Continued)

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

(o) Other current assets and other non-current assets

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

Prepaid expense Other receivables (including related parties) Others Total	2021.9.30 $ 501,649 624,891 91,121 $ 1,217,661	2020.12.31 465,343 409,825 169,844 1,045,012	2020.9.30
			443,705 661,478 154,805
			1,259,988

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

Prepayments for business facilities Refundable deposits Pledged time deposits Others Total	2021.9.30 $ 20,402,781 1,075,844 493,518 11,603 $ 21,983,746	2020.12.31 15,533,781 1,058,089 401,972 7,828 17,001,670	2020.9.30
			13,826,647 1,072,020 312,288 8,523
			15,219,478

(p) Short-term borrowings, long-term borrowings and bonds payable

The details, conditions and terms of the Group’s short-term borrowings, long-term borrowings and bonds payable were as follows:

			2021.9.30
	Currency	Interest rate	Maturity date		Amount
Secured bonds payable	TWD	1.07%	2021/12/29	$	4,250,000
Unsecured convertible bonds	TWD	-	2026/09/01		4,733,656
Subtotal					8,983,656
Less: Current portion (included in current portion		of long-term liabilities)			(4,250,000)
Total				$	4,733,656
Unsecured loans	TWD	0.90%~1.20%	2021/10/01~2026/07/29	$	42,683,653
Secured loans	TWD	0.97%~1.18%	2021/10/17~2034/10/31		60,665,545
Subtotal					103,349,198
Less: Current portion					(15,446,855)
Total				$	87,902,343

(Continued)

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

			2020.9.30
	Currency	Interest rate	Maturity date		Amount
Unsecured short-term loans	TWD	0.88%	2020/12/30	$	50,000
Secured short-term loans	TWD	1.05%	2020/11/20		100,000
Subtotal				$	150,000
Secured bonds payable	TWD	1.07%	2020/12/29~2021/12/29	$	8,500,000
Unsecured convertible bonds	TWD	-	2022/10/27		6,383,926
Subtotal					14,883,926
Less: Current portion (included	in current portion	of long-term liabilities)			(10,633,926)
Total				$	4,250,000
Unsecured loans	TWD	0.90%~1.27%	2020/12/14~2025/9/18	$	41,733,067
Secured loans	TWD	0.97%~1.37%	2020/11/14~2034/10/31		57,524,479
Subtotal					99,257,546
Less: Current portion					(12,777,954)
Total				$	86,479,592

The details of convertible bonds were as follows:

Total convertible bonds issued Less: Unamortized discounted bonds payable Cumulative converted amount Cumulative put/call 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)	2021.9.30 $ 15,000,000 (266,344) (3,680,700) (6,319,300) $ 4,733,656 $ (6,500) $ 619,458	2020.12.31 10,000,000 (149,959) (451,100) (6,316,000) 3,082,941 2,793 512,921	2020.9.30 7,000,000 (164,974) (451,100) - 6,383,926 655 376,948

(Continued)

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

－ Please refer to note 6(z) for the valuation loss/profit of embedded derivatives put/call options, which were recognized in net gains/losses on financial assets and liabilities at fair value through profit or loss, and the related interest expenses for the convertible bonds.

Except for the following disclosure, there was no significant change for the liability instruments of the third and fourth unsecured domestic convertible bonds for the nine months ended September 30, 2021 and 2020. For the related information, please refer to note 6(p) of the consolidated financial statements for the year ended December 31, 2020.

The liability instrument of the third unsecured domestic convertible bonds was issued on October 27, 2017, and was measured at an initial effective rate of 1.23%. As of December 31 and September 30, 2020, the conversion prices amounted to $13.4 and $13.4 per share, respectively. In addition, the corporate bonds, with the face values of $451,100 and $451,100, had been converted into 30,829 and 30,829 thousand ordinary shares, respectively. As of September 30, 2021, the third unsecured domestic convertible bonds had been converted and put/call amounting to $682,200 and $6,317,800, respectively. The Company exercised redemption rights and terminated OTC trading of the third domestic unsecured convertible bonds in August 2021.

The liability instrument of the fourth unsecured domestic convertible bonds was issued on October 21, 2020, and was measured at an initial effective rate of 1.04%. As of December 31, 2020, the conversion price amounted to $11.2 per share. As of September 30, 2021, the fourth unsecured domestic convertible bonds had been converted and call amounting to $2,998,500 and $1,500, respectively. The Company exercised redemption rights and terminated OTC trading of the fourth domestic unsecured convertible bonds in August 2021.

On September 1, 2021, the Company issued the fifth unsecured domestic convertible bonds amounting to $5,000,000 and was measured at an initial effective rate of 1.12%. The major terms are as follows:

(i) Total issue amount: TWD5,000,000
(ii) Issue price: At par value
(iii) Maturity date: Five years, with the maturity date on September 1, 2026.
(iv) Coupon rate: 0%.
(v) Conversion target: Ordinary shares of the Company.
(vi) Conversion price: The record date of conversion price was on August 24, 2021; the conversion price shall be the simple arithmetical average closing price of the ordinary shares of the Company for either one, three or five business days before the pricing date (exclusive), multiplied by the premium ratio of 104% (rounded off to the 1st decimal place). If the exdividend or the ex-right date happens before the pricing date, the closing price which was adopted to calculate the conversion price should be adjusted for the distribution of stock dividends or cash dividends; and if the ex-dividend or the ex-rights date happens between the conversion price determination date and the actual issuance date, the conversion price should be modified by the conversion price adjustment formula. As of September 30, 2021, the conversion price was $19.2.

(Continued)

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

(vii) Conversion period: The bondholders can convert their bonds into shares at any time between 3 months after the issuance date and the day before the maturity day, except for the following:
1) The closing period in accordance with the applicable laws;
2) The period that starts from the fifteen business days prior to the date of record for determination wherein the shareholders are entitled to receive the distributions or rights to subscribe for new shares in a capital increase for cash, and ends on the date of record for the distribution of the rights/benefits;
3) The period starts from the date of record of the capital decrease and ends one day prior to the reissuance of the trading of shares after the capital decrease.
4) The period from the date of the suspension of the conversion in respect of the change of par value of the Issuer's shares to one day prior to the first trading date of shares reissued after the change of par value.
(viii) Resell at the option of the bondholders (put option of the bondholders): Bondholders have the option to notify the Company of their request for bond redemption within 40 days prior to the third anniversary of the issuance date, and the Company should redeem the bonds at 100.75% of the par value within 5 business days following such date.
(ix) Redemption at the option of the Company (call option of the Company): If the closing price of shares for each of 30 consecutive trading days is at least 130% of the conversion price between the 3 months after the share issuance date and the 40th day before the maturity date, the Company may redeem all the outstanding bonds at their principal amount.

If the amount outstanding of bonds is less than 10% of the principal amount between the 3 months after the share issuance date and the 40th day before the maturity date, the Company may redeem the outstanding bonds at their principal amount.

As of September 30, 2021, the details of the future repayment periods and amounts of the Group’s long-term borrowings and bonds payable were as follows:

Year due		Amount
2021.10.1~2022.9.30	$	19,696,855
2022.10.1~2026.9.30		72,870,123
2026.10.1 and thereafter		19,765,876
	$	112,332,854

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

(i) Pledge for borrowings

The pledge for borrowings is disclosed in note 8.

(Continued)

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

(ii) Unused lines of credit

As of September 30, 2021, December 31 and September 30, 2020, the unused credit lines for short-term and long-term borrowings amounted to $19,076,427, $9,992,218 and $13,615,538, respectively.

(iii) Guarantee from the government for loans

As of September 30, 2021 and December 31 and September 30, 2020, the Group applied to different financial institutions for its project loans amounting to $33,280,000, $22,470,000 and $22,470,000, respectively, which were guaranteed by the government in accordance with the “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 and by the Ministry of Economic Affairs, wherein the credit lines of $21,900,000, $21,215,000 and $16,935,000, respectively, had been used. The guarantee loans shall be repaid within two to five years from their initial withdrawal. Among them, an application for an extension of two more years for the guarantee loans endorsed by the Ministry of Transportation and Communications had been filed.

(q) Lease liabilities

The components of lease liabilities were as follow:

Financial liabilities for hedging－current $ Financial liabilities for hedging－non-current $ Lease liabilities－current $ Lease liabilities－non-current $	2021.9.30 11,685,996 66,602,690 369,791 4,314,947	2020.12.31 11,564,988 77,067,827 362,101 4,458,004	2020.9.30
			11,804,512
			79,572,494
			365,146
			4,554,001

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

The amounts recognized in profit or loss were as follows:

Interest on lease liabilities Variable lease payments not included in the measurement of lease liabilities Revenue of subleasing right-of-use assets Expenses relating to short-term leases Expenses relating to leases of low- value assets, excluding short- term leases of low-value assets COVID-19-related rent concessions	For the three months ended September 30, 2021 $ 557,547 $ 2,454 $ 13 $ 31,659 $ 1,092 $ 54,959	For the three months ended September 30, 2020		For the nine months ended September 30, 2021 1,732,707 7,173 42 89,240 4,096 211,429	For the nine months ended September 30, 2020
		801,632 2,535 16 36,831 1,551 78,542			2,461,709
					9,762
					49
					120,839
					4,907
					188,284

(Continued)

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

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

Total cash outflow for leases	For the nine months ended September 30, 2021 For the nine months ended September 30, 2020 $ 10,357,688 11,545,690	For the nine months ended September 30, 2021 For the nine months ended September 30, 2020 $ 10,357,688 11,545,690
		11,545,690

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.

(r) Restoration obligations

The movements of the restoration obligations were as follows:

Beginning balance as of January 1 Additions Decreases Effect of exchange rate changes Balance as of September 30	For the nine months ended September 30, 2021 $ 21,900,283 1,030,845 (1,274,725) (127,905) $ 21,528,498	For the nine months ended September 30, 2020
		19,807,987 1,359,276 (202,330) (392,480)
		20,572,453

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.

(s) Operating leases

The investment properties leased out by the Group were classified as operating leases because they do not transfer substantially all the risks and rewards incidental to the ownership of the assets. Please refer to note 6 (m) for investment property.

(Continued)

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

A maturity analysis of lease payments, showing the undiscounted lease payments to be received after the reporting date, is as follows:

Less than one year One to two years Two to three years Three to four years Four to five years More than five years Total undiscounted lease payments	2021.9.30
	$ 16,710 16,877 17,046 17,216 17,388 275,923 $ 361,160

For the nine months ended September 30, 2021, the rent revenue from investment property amounted to $5,577. There was no such transaction as of December 31 and September 30, 2020.

(t) 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.

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

Operating costs and expenses	For the three months ended September 30, 2021 $ 61,751	For the three months ended September 30, 2020		For the nine months ended September 30, 2021 184,970	For the nine months ended September 30, 2020
		72,407			217,305

(ii) Defined contribution plans

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

follows:
Operating costs and expenses	For the three months ended September 30, 2021 $ 179,409	For the three months ended September 30, 2020		For the nine months ended September 30, 2021 546,745	For the nine months ended September 30, 2020
		183,296			569,351

(Continued)

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

(u) Income tax

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

Income tax benefit (expenses)	For the three months ended September 30, 2021 For the three months ended September 30, 2020 $ (358,941) 465,975	For the nine months ended September 30, 2021 132,155	For the nine months ended September 30, 2020
			588,201

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

For the three months ended September 30, 2021 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 $ (120) Gains or losses on hedging instruments - $ (120) Components of other comprehensive income that will be reclassified to profit or loss: Gains or losses on hedging instruments $ 51,697	For the three months ended September 30, 2020 (17) 407 390 (365,218)	For the nine months ended September 30, 2021 (360) - (360) (221,558)	For the nine months ended September 30, 2020
			(658) (510) (1,168) (435,938)

(iii) The Company’s income tax returns for the years through 2019 were assessed by the local tax authorities.

(v) Capital and other equity

Except for the following disclosure, there was no significant change for capital and other equity for the nine months ended September 30, 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.

(Continued)

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

(i) Ordinary shares

For the nine months ended September 30, 2021, convertible bonds issued by the Company amounting to $2,849,692, were converted into 284,969 thousand shares of ordinary shares. Part of the conversion of convertible bonds was recorded as advance receipts for share capital amounting to $77,701 because the registration process has yet to be completed. There was no such transaction for the nine months ended September 30, 2020.

(ii) Capital surplus

The details of capital surplus were as follows:

2021.9.30 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 1,940,322 Additional paid-in capital from conversion option 619,458 Changes in equity of associates accounted for using equity method 3,757 Difference between actual acquiring subsidiary’s equity and carrying amount 90,985 $ 8,470,947	2020.12.31 5,118,825 697,600 1,561,585 512,921 3,757 90,985 7,985,673	2020.9.30
		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.

Where the special surplus reserve set aside in the preceding paragraph belongs to a part not fully set aside accrued from prior years, the same amount thereof shall be set aside for the special surplus reserve from the retained earnings accrued from prior years. If the special surplus reserve is still insufficient, the amount from the net income after taxes for the current period plus the items other than the net income after taxes for the current period shall be included in the amount of the retained earnings for the current period to be set aside for such a purpose.

(Continued)

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

The dividends may be distributed either in full in cash, or in the combination of cash and stocks, however the cash dividends shall not be less than 10% of the total amount of dividends.

(iv) Earnings distribution

Based on the corporate sustainability principle, a resolution was passed during the shareholders’ meeting on July 16, 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 $1,213,393.

(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 (22,513) Exchange differences on associates accounted for using equity method (17,451) Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income - Disposal of investments in equity instruments designated at fair value through other comprehensive income - Changes in fair value of hedging instrument - Changes in fair value of hedging instrument reclassified to profit or loss - Balance as of September 30, 2021 $ (153,210) Balance as of January 1, 2020 $ (42,773) Exchange differences on translation of foreign financial statements (27,181) Exchange differences on associates accounted for using equity method (6,687) 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 / non-current assets - Balance as of September 30, 2020 $ (76,641)	Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income	Gains (losses) on hedging instruments		Non-controlling interests (6,967) (16) (4,522) 21,517 - - - 10,012 (3,867) (1,759) (1,733) 788 - - (6,571)	Total 6,441,915 (22,529) (21,973) 977,735 (171,736) 1,643,271 (757,039)
	1,113,299 - - 956,218 (171,736) - - 1,897,781 722,495 - - 97,948 - - 820,443
					8,089,644
					2,745,672 (28,940) (8,420) 98,736 972,842 772,950
					4,552,840

(Continued)

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

(w) Earnings per share (“EPS”)

The calculation of earnings per share is based on the profit (loss) attributable to the ordinary equity holders of the Company. The Group’s earnings per share were calculated as follows:

		For the three months ended September 30, 2021	For the three months ended September 30, 2021	For the three months ended September 30, 2021	For the three months ended September 30, 2021
			Weighted-average
			number of shares
			outstanding
			during the period		Earnings per
	Amount net of tax		(thousand shares)		share (in dollars)
Basic earnings per share:
Profit attributable to ordinary equity holders	$	1,483,575	5,126,540	$	0.29
Diluted earnings per share:
Profit attributable to ordinary equity holders	$	1,483,575	5,126,540
Effect of the potentially dilutive ordinary shares
Effect of conversion of convertible bonds	$	712	84,919
Profit attributable to ordinary equity holders
after adjusting the potential dilutive ordinary
shares	$	1,484,287	5,211,459	$	0.28

		For the three months ended September 30, 2020
			Weighted-average
			number of shares
			outstanding
			during the period		Earnings per
	Amount net of tax		(thousand shares)		share (in dollars)
Basic earnings per share:
Loss attributable to ordinary equity holders	$	(1,807,956)	4,853,569	$	(0.37)
Diluted earnings per share:
Loss attributable to ordinary equity holders	$	(1,807,956)	4,853,569	$	(0.37)

		For the nine months ended September 30, 2021
			Weighted-average
			number of shares
			outstanding
			during the period		Earnings per
	Amount net of tax		(thousand shares)		share (in dollars)
Basic earnings per share:
Loss attributable to ordinary equity holders	$	(569,819)	5,013,451	$	(0.11)
Diluted earnings per share:
Loss attributable to ordinary equity holders	$	(569,819)	5,013,451	$	(0.11)

(Continued)

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

Basic earnings per share: Loss attributable to ordinary equity holders Diluted earnings per share: Loss attributable to ordinary equity holders	For the nine months ended September 30, 2020 Amount net of tax Weighted-average number of shares outstanding during the period (thousand shares) Earnings per share (in dollars) $ (3,642,322) 4,853,569 $ (0.75) $ (3,642,322) 4,853,569 $ (0.75)
	Amount net of tax $ (3,642,322) $ (3,642,322)

For the nine months ended September 30, 2021, and the three months and nine months ended September 30, 2020, 0, 0 and 5,676 thousand shares of employee compensation respectively, 28,617, 488,724 and 488,724 thousand shares of conversion of all convertible bonds have an antidilutive effect, and hence they are not included in the calculation of the weighted average number of shares (diluted).

(x) Revenue from contracts with customers

(i) Disaggregation of revenue

	For the three months ended September 30, 2021	For the three months ended September 30, 2021	For the three months ended September 30, 2021	For the three months ended September 30, 2021
Aviation transportation segment	Aircraft maintenance and manufacture segment 246,011 375,871 166,241 1,038,815 9,200 1,836,138 - 1,341,493 494,645 1,836,138	Catering segment	Air cargo services segment 331,759 - - - - 331,759 - 309,617 22,142 331,759	Other segments 54,202 - - 80 - 54,282 - 43,366 10,916 54,282	Total
$ 7,576,845 12,925,268 327,812 2,638,828 60,361 $ 23,529,114 $ 23,056,149 - 472,965 $ 23,529,114		62,410 316 - 49 -			8,271,227 13,301,455 494,053 3,677,772 69,561
		62,775			25,814,068
		- - 62,775			23,056,149 1,694,476 1,063,443
		62,775			25,814,068

(Continued)

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

	For the three months ended September 30, 2020	For the three months ended September 30, 2020	For the three months ended September 30, 2020	For the three months ended September 30, 2020
Aviation transportation segment	Aircraft maintenance and manufacture segment Catering segment Air cargo services segment Other segments 294,177 22,737 266,076 78,934 476,609 276 - - 211,196 - - - 709,342 82 - 281 182 - - - 1,691,506 23,095 266,076 79,215 - - - - 1,414,755 - 244,031 72,962 276,751 23,095 22,045 6,253 1,691,506 23,095 266,076 79,215 For the nine months ended September 30, 2021				Total
$ 4,089,234 9,054,463 547,325 2,577,534 74,537 $ 16,343,093 $ 15,138,709 - 1,204,384 $ 16,343,093					4,751,158 9,531,348 758,521 3,287,239 74,719
					18,402,985
					15,138,709 1,731,748 1,532,528
					18,402,985

Aviation transportation segment	Aircraft maintenance and manufacture segment 754,620 1,338,226 294,022 2,924,628 16,044 5,327,540 - 4,107,090 1,220,450 5,327,540	Catering segment 152,139 932 - 73 - 153,144 - - 153,144 153,144	Air cargo services segment 891,052 - - - - 891,052 - 824,364 66,688 891,052	Other segments 184,475 - - 489 - 184,964 - 163,797 21,167 184,964	Total 21,356,824 36,224,126 1,481,058 10,394,677 199,151
$ 19,374,538 34,884,968 1,187,036 7,469,487 183,107 $ 63,099,136 $ 61,314,064 - 1,785,072 $ 63,099,136
					69,655,836
					61,314,064 5,095,251 3,246,521
					69,655,836

(Continued)

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

	For the nine months ended September 30, 2020
Aviation transportation segment	Aircraft maintenance and manufacture segment Catering segment Air cargo services segment Other segments Total 1,183,856 143,734 786,199 256,361 20,115,998 1,651,986 1,545 - - 28,766,103 525,870 - - - 3,143,636 3,043,705 396 - 281 15,481,784 61,623 - - - 417,494 6,467,040 145,675 786,199 256,642 67,925,015 - - - - 56,027,593 5,737,830 - 720,036 241,065 6,698,931 729,210 145,675 66,163 15,577 5,198,491 6,467,040 145,675 786,199 256,642 67,925,015 2021.9.30 2020.12.31 2020.9.30 $ 603,070 446,438 580,205 $ 6,451,596 7,166,810 7,722,717	Total 20,115,998 28,766,103 3,143,636 15,481,784 417,494
		67,925,015
		56,027,593 6,698,931 5,198,491
		67,925,015

The amount of revenue recognized for the nine months ended September 30, 2021 and 2020 that was included in the contract liability balance at the beginning of the period was $1,374,810 and $10,932,385, respectively.

The contract liabilities primarily relate to deferred recognition of revenue relating to ticket services and customer loyalty programs, for which revenue is recognized when the ticket sales for passengers and award points are redeemed or when they expire.

The major change in the balance of contract assets and contract liabilities is the difference between the time frame in the performance obligation to be satisfied and the payment to be received. Other significant changes during the period are as follows:

Changes in an estimate of the transaction price	For the nine months ended September 30, 2021 Contract liabilities $ (384,856)	For the nine months ended September 30, 2020 Contract liabilities (266,496)

(Continued)

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

(y) Remuneration to employees and directors

According to the Company’s Articles of Incorporation, once the Company incurs profit in a fiscal year, a minimum of 1% will be distributed as employees’remuneration and a maximum of 2% will be allotted for directors’ remuneration. However, if the Company has accumulated losses, the earnings shall first be offset against any deficit.

The definition of annual earnings, as described in the above-mentioned paragraph, is the Company’s profit before tax, excluding the amount of the employees’ remuneration, and the directors’ remuneration.

For the three months and nine months ended September 30, 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.

(z) Non-operating income and expenses

(i) Other income

Other income
Dividend income Interest income Interest income from bank deposits Other interest Total interest income Others	For the three months ended September 30, 2021 $ 141,335 35,247 1,915 37,162 6,791 $ 185,288	For the three months ended September 30, 2020 168 39,706 1,394 41,100 6,120 47,388	For the nine months ended September 30, 2021 141,335 109,681 4,006 113,687 20,826 275,848	For the nine months ended September 30, 2020
				137,178 235,273 5,648
				240,921 17,479
				395,578

(Continued)

EVA AIRWAYS CORP. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(ii) Other gains and losses

Gains (losses) on disposal of property, plant and equipment Foreign exchange gains (losses) Gains (losses) on financial assets (liabilities) at fair value through profit or loss Gains on disposal of non- current assets classified as held for sale Others gains and losses	For the three months ended September 30, 2021 $ (3,924) 266,359 4,338 6,870 66,442 $ 340,085	For the three months ended September 30, 2020 (2,373) 167,004 (691) 11,280 53,661 228,881	For the nine months ended September 30, 2021 (16,182) 468,838 15,581 6,870 162,647 637,754	For the nine months ended September 30, 2020 39,625 460,464 6,843 141,369 86,732
				735,033

(iii) Finance costs

Interest expense Bank borrowings Bonds Payable Lease liabilities Others Less: capitalized interest	For the three months ended September 30, 2021 $ 217,620 16,105 557,547 221,716 (32,565) $ 980,423	For the three months ended September 30, 2020 217,793 42,380 801,632 223,082 (30,813) 1,254,074	For the nine months ended September 30, 2021 673,664 49,678 1,732,707 671,665 (98,350) 3,029,364	For the nine months ended September 30, 2020
				701,649 126,958 2,461,709 662,403 (96,363)
				3,856,356

(aa) 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.

(Continued)

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

2) Circumstances of concentration of credit risk

Accounts receivable were due from many customers and regional distributions were decentralized. Therefore, there was no concentration of credit risk. In order to reduce the credit risk of accounts receivable, the Group continually evaluates each customer’ s financial situation and requires customers to be a member of IATA clearing house. Otherwise, the customer will have to provide bank guarantees or collaterals.

3) Credit risk of receivables

For credit risk exposure of notes and accounts receivable, please refer to note 6(d). Other financial assets at amortized cost includes other receivables and time deposits. For the details on loss allowance, please refer to notes 6(b), 6(e) and 6(o).

All of these financial assets are considered to have low risk, and thus, the impairment provision recognized during the period was limited to 12 months expected losses. Regarding how the financial instruments are considered to have low credit risk, please refer to note 4(f) 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 September 30, 2021 Non-derivative financial liabilities Long-term borrowings (including current portion of long-term liabilities) $ 103,349,198 Bonds payable 8,983,656 Lease liabilities and financial liabilities for hedging 82,973,424 Notes and accounts payable (including related parties) 3,378,256 Other payables (including related parties) 9,281,702 Subtotal 207,966,236 Derivative financial liabilities Convertible bonds with embedded derivatives 6,500 Total $ 207,972,736 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	Contractual cash flows 106,994,727 9,295,475 90,520,090 3,378,256 9,281,702 219,470,250 - 219,470,250 111,524,341 7,528,375 102,740,724 3,013,512 5,332,122 1,142 230,140,216	Within 1 year 16,484,573 4,295,475 13,973,911 3,378,256 9,281,702 47,413,917 - 47,413,917 16,071,174 4,295,475 14,134,937 3,013,512 5,332,122 1,142 42,848,362	1-5 years 70,293,692 5,000,000 47,347,495 - - 122,641,187 - 122,641,187 69,591,490 3,232,900 51,132,020 - - - 123,956,410	Over 5 years
				20,216,462 - 29,198,684 - -
				49,415,146
				-
				49,415,146
				25,861,677 - 37,473,767 - - -
				63,335,444

(Continued)

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

Carrying amount As of September 30, 2020 Non-derivative financial liabilities Short-term and long-term borrowings (including current portion of long-term liabilities) $ 99,407,546 Bonds payable 14,883,926 Lease liabilities and financial liabilities for hedging 96,296,153 Notes and accounts payable (including related parties) 2,786,233 Other payables (including related parties) 7,339,690 Liabilities related to non-current assets or disposal group classified as held for sale 68 Subtotal 220,713,616 Derivative financial liabilities Fuel swap agreements and options for hedge purposes 319,152 Forward exchange contracts for hedge purposes: Outflow 11,491 Inflow - Subtotal 11,491 Total $ 221,044,259	Contractual cash flows 103,103,156 15,185,325 109,229,744 2,786,233 7,339,690 68 237,644,216 319,152 477,509 (466,018) 11,491 237,974,859	Within 1 year 13,934,661 10,889,850 15,102,122 2,786,233 7,339,690 68 50,052,624 319,152 477,509 (466,018) 11,491 50,383,267	1-5 years 64,191,826 4,295,475 53,539,881 - - - 122,027,182 - - - - 122,027,182	Over 5 years
				24,976,669 - 40,587,741 - - -
				65,564,410
				-
				- -
				-
				65,564,410

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:

inancial assets Monetary items USD EUR JPY HKD CNY Non-monetary items		2021.9.30		2020.12.31		2020.9.30
	Foreign Currency $ 866,063 884 633,679 169,723 240,764 $ 39,380 78,878 8,022,356 23,526	Exchange rate USD/TWD= 27.85 EUR/TWD= 32.32 JPY/TWD= 0.2490 HKD/TWD= 3.5760 CNY/TWD= 4.3050 USD/TWD= 27.85 USD/CNY= 6.4692 IDR/TWD= 0.0020 USD/MOP= 8.0166	TWD	Exchange rate USD/TWD= 28.48 EUR/TWD= 35.02 JPY/TWD= 0.2763 HKD/TWD= 3.6730 CNY/TWD= 4.3770 USD/TWD= 28.48 USD/CNY= 6.5067 IDR/TWD= 0.0020 USD/MOP= 7.9864	TWD	Exchange rate USD/TWD= 29.10 EUR/TWD= 34.15 JPY/TWD= 0.2756 HKD/TWD= 3.7540 CNY/TWD= 4.2690 USD/TWD= 29.10 USD/CNY= 6.8166 IDR/TWD= 0.0020 USD/MOP= 7.9827	TWD
			24,119,861 28,565 157,786 606,928 1,036,488		18,570,244 113,849 176,680 813,307 1,223,012		15,439,007 36,640 128,573 478,173 1,033,619

			$ 25,949,628		$ 20,897,092		$ 17,116,012
			1,096,726 386,853 16,045 84,735		1,129,732 367,466 15,375 80,377		1,130,121 355,377 16,454 81,728
USD CNY IDR MOP
			$ 1,584,359		$ 1,592,950		$ 1,583,680

(Continued)

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

	2021.9.30		2020.12.31		2020.9.30
Foreign Currency $ 3,456,836 6,101 1,884,528 21,088 166,241	Exchange rate USD/TWD= 27.85 EUR/TWD= 32.32 JPY/TWD= 0.2490 HKD/TWD= 3.5760 CNY/TWD= 4.3050	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= 29.10 EUR/TWD= 34.15 JPY/TWD= 0.2756 HKD/TWD= 3.7540 CNY/TWD= 4.2690	TWD
		96,272,893 197,187 469,247 75,412 715,666		102,725,325 205,437 390,864 132,482 617,892		105,178,180 217,891 340,068 70,927 770,576

		$ 97,730,405		$ 104,072,000		$ 106,577,642

2) Sensitivity analysis

The Group’s monetary items exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, financial assets at amortized cost, notes and accounts receivable (including related parties), refundable deposits (included in other non-current assets), notes and accounts payable (including related parties), other payables (including related parties), lease liabilities and restoration obligations (included in other current liabilities and other non-current liabilities) that are denominated in foreign currency. A strengthening (weakening) of 1% of the TWD against the USD, EUR, JPY, HKD and CNY as of September 30, 2021 and 2020, would have changed the loss before tax by $64,043 and $17,905 and the equity by $781,851 and $912,521 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 and nine months ended September 30, 2021 and 2020, the Group’s foreign exchange gains (losses), net (including realized and unrealized of monetary items) amounted to $266,359, $167,004, $468,838 and $460,464, respectively.

(iv) Interest rate risk

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

The following sensitivity analysis is based on the exposure to interest rate risk of the nonderivative financial instruments on the reporting date. For variable-rate instruments, the sensitivity analysis assumes the variable-rate liabilities are outstanding for the whole year on the reporting date. The Group’ s internal department reported the increases/decreases in the interest rates and the exposure to changes in interest rates by 1% to the Group’ s key management so as to allow key management to assess the reasonableness of the changes in the interest rates.

(Continued)

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 $775,119 and $745,182 for the nine months ended September 30, 2021 and 2020, respectively due to the Group’s floatinginterest 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:

	2021.9.30	2021.9.30
Level 1 1,721,137 3,283,388 - 3,283,388 - - - - - 5,004,525 - - - - - - - - -	Fair value
	Level 2 - - - - - - - - - - 6,500 - 103,349,198 8,998,973 - - - 112,348,171 112,354,671	Level 3 - - 500,763 500,763 - - - - - 500,763 - - - - - - - - -	Total 1,721,137
			3,283,388 500,763
			3,784,151
			- - - -
			-
			5,505,288
			6,500
			-
			103,349,198 8,998,973 - - -
			112,348,171
			112,354,671

(Continued)

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

	2020.12.31	2020.12.31
Level 1 1,978,251 - 1,978,251 1,316,591 - 1,316,591 - - - - - 3,294,842 - - - - - - - - -	Fair value
	Level 2 - 2,793 2,793 - - - - - - - - 2,793 - 107,676,299 7,389,131 - - - - 115,065,430 115,065,430 2020.9.30	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 1,636,496 - 1,636,496 1,176,414 - 1,176,414	Fair value
	Level 2 - 655 655 - - -	Level 3 - - - - 1,569,267 1,569,267	Total 1,636,496 655
			1,637,151
			1,176,414 1,569,267
			2,745,681

(Continued)

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

	2020.9.30	2020.9.30
Level 1 - - - - - 2,812,910 - - - - - - - - - - -	Fair value
	Level 2 - - - - - 655 2,399 328,244 - 99,407,546 14,949,020 - - - - 114,356,566 114,687,209	Level 3 - - - - - 1,569,267 - - - - - - - - - - -	Total - - - -
			-
			4,382,832
			2,399
			328,244
			-
			99,407,546 14,949,020 - - - -
			114,356,566
			114,687,209

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)

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 3

The Group hold an investment in equity shares of Evergreen Steel Corporation, which was classified as fair value through other comprehensive income. As of September 30, 2021, December 31 and September 30, 2020, the fair values amounted to $1,917,722, $1,194,565 and $1,107,847, respectively. The fair value of the investment was previously categorized as Level 3 as of December 31 and September 30, 2020 because the shares were not listed on an exchange and there were no recent observable arm’ s length transactions in the shares. In April 2021, Evergreen Steel Corporation list its shares on the exchange, and currently, they were actively traded in the market. Since the equity shares currently have a published price quotation in an active market, the fair value measurement was transfer from Level 3 to Level 1 of the fair value hierarchy. For the nine months ended September 30, 2020, the fair value hierarchy levels of financial instruments were not transferred.

(Continued)

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

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 Transfer out Balance as of September 30, 2021 Balance as of January 1, 2020 Total gains or losses: Recognized in other comprehensive income Balance as of September 30, 2020	Fair value through other comprehensive income Unquoted equity instruments $ 1,728,203 142,088 (1,369,528) $ 500,763 $ 1,570,214 (947) $ 1,569,267

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 September 30, 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 nine months ended September 30, 2021 For the nine months ended September 30, 2020 $ (32,875) (947)

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.

(Continued)

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

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 September 30, 2021, December 31 and September 30, 2020 were 0.76~3.49, 0.80~3.46 and 0.77~3.41, respectively) � Market liquidity discount rate (as of September 30, 2021, December 31 and September 30, 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

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 September 30, 2021, December 31 and September 30, 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 2020.9.30 2021.9.30 2020.12.31 2020.9.30 87,822 79,730 (26,786) (84,196) (76,421) 87,822 79,730 (26,786) (84,196) (76,421)	Effects of changes in fair value on other comprehensive income Favorable Unfavorable 2020.12.31 2020.9.30 2021.9.30 2020.12.31 2020.9.30 87,822 79,730 (26,786) (84,196) (76,421) 87,822 79,730 (26,786) (84,196) (76,421)	Effects of changes in fair value on other comprehensive income Favorable Unfavorable 2020.12.31 2020.9.30 2021.9.30 2020.12.31 2020.9.30 87,822 79,730 (26,786) (84,196) (76,421) 87,822 79,730 (26,786) (84,196) (76,421)
			Favorable	2020.9.30 79,730 79,730
		2021.9.30 22,173 22,173	2020.12.31 87,822 87,822		2021.9.30 (26,786) (26,786)

The favorable and unfavorable effects represent the changes in fair value, and fair value is based on a variety of unobservable inputs calculated using a valuation technique. The analysis above only reflects the effects of changes in a single input, and it does not include the inter-relationships with another input.

(ab) Management of financial risk

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.

(ac) 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)

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

(ad) Financing activities not affecting current cash flow

The Group’s financing activities which did not affect the current cash flow in the nine months ended September 30, 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	2021.1.1 $ 80,000 7,332,941 107,594,362 93,452,920 $ 208,460,223	Cash flows (80,000) 4,991,710 (4,245,330) (10,257,179) (9,590,799)	Non-cash changes Interest expense Foreign exchange movement Other - - - 15,571 - (3,356,566) 166 - - 1,732,707 (946,299) (1,008,725) 1,748,444 (946,299) (4,365,291)	Non-cash changes Interest expense Foreign exchange movement Other - - - 15,571 - (3,356,566) 166 - - 1,732,707 (946,299) (1,008,725) 1,748,444 (946,299) (4,365,291)	2021.9.30 - 8,983,656 103,349,198 82,973,424
			Interest expense - 15,571 166 1,732,707 1,748,444	Foreign exchange movement - - - (946,299) (946,299)
					195,306,278

Short-term borrowings Bonds payable Long-term borrowings Lease liabilities and financial liabilities for hedging Total liabilities from financing activities	2020.1.1 $ 150,000 14,825,180 84,909,761 103,530,024 $ 203,414,965	Cash flows - - 14,344,817 (11,410,182) 2,934,635	Non-cash changes Interest expense Foreign exchange movement Other - - - 58,746 - - 2,968 - - 2,461,709 (310,869) 2,025,471 2,523,423 (310,869) 2,025,471	Non-cash changes Interest expense Foreign exchange movement Other - - - 58,746 - - 2,968 - - 2,461,709 (310,869) 2,025,471 2,523,423 (310,869) 2,025,471	2020.9.30 150,000 14,883,926 99,257,546 96,296,153
			Interest expense - 58,746 2,968 2,461,709 2,523,423	Foreign exchange movement - - - (310,869) (310,869)
					210,587,625

(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.

Relationship with the Group

The Company’s shareholder’s major shareholder

The Company’s shareholder

Evergreen International Storage & Transport Corp. The Company’s shareholder

Evergreen Logistics Corp.

UNI Airways Corp.

Ever Accord Construction Corp.

Evergreen Steel Corp.

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

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)

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
	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 September 30, 2021 $ 74,428 359,662 $ 434,090	For the three months ended September 30, 2020		For the nine months ended September 30, 2021	For the nine months ended September 30, 2020
		154,440 837,537		369,060 1,489,260 1,858,320	464,604 1,808,833
		991,977			2,273,437

Related parties leased aircraft from the Group. The rental is charged by actual flight hours and recorded under operating revenue.

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.

(Continued)

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

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.

The Group leased out plants and parcels of land to its related parties, with monthly rentals based on the market price in the neighboring areas.

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 September 30, 2021 $ 33,274 106,912 $ 140,186	For the three months ended September 30, 2020		For the nine months ended September 30, 2021	For the nine months ended September 30, 2020
		31,597 111,742		97,342 315,890 413,232	102,564 351,615
		143,339			454,179

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 September 30, 2021 $ 20,272 43,333 $ 63,605	For the three months ended September 30, 2020		For the nine months ended September 30, 2021	For the nine months ended September 30, 2020
		21,900 41,390		65,599 123,300 188,899	98,981 139,966
		63,290			238,947

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)

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 September 30, 2021 $ 357 2,192 $ 2,549	For the three months ended September 30, 2020		For the nine months ended September 30, 2021	For the nine months ended September 30, 2020
		1,613 1,590		2,030 4,154 6,184	5,455 60,752
		3,203			66,207

2) Disposals of property, plant and equipment

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

For the three September	For the three months ended September 30, 2020 Disposal price Gain from disposal - - 1 1 1 1	For the nine m September	onths ended 30, 2021	For the nine months ended September 30, 2020	For the nine months ended September 30, 2020
Disposal price $ - - $ -	Disposal price - 1	Disposal price - 20 20	Gain from disposal - - -	Disposal price 4,555 3,321 7,876	Gain from disposal
					369 303
	1				672

3) Acquisitions of other assets

The prices of intangible assets from related parties were summarized as follows:

Other related parties	For the three months ended September 30, 2021 $ 520	For the three months ended September 30, 2020		For the nine months ended September 30, 2021	For the nine months ended September 30, 2020
		-		1,047	-

4) 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
	2021.9.30 $ 550,561	2020.12.31 594,636	2020.9.30
			603,080

(Continued)

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

(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 September 30, 2021, December 31 and September 30, 2020, EGAT has partially paid the price of $574,584, $415,411 and $206,608, respectively.

(vi) Leases

The Group rented its offices from other related enterprise. For the three months and the nine months ended September 30, 2021 and 2020, the Group recognized the amount of $367, $483, $1,221 and $1,603, respectively, as interest expense. As of September 30, 2021, December 31 and September 30, 2020, the balance of lease liabilities amounted to $59,208, $62,574 and $69,076, respectively.

(vii) Receivables from related parties

Receivables from related parties of the Group were as follows:

Receivables from	related parties of the Group were	as follows:
Account	Class of related parties	2021.9.30 $ - 39,129 193,533 232,662 186,994 1 103,583 13,438 15 304,031 $ 536,693	2020.12.31 840 121,032 286,043 407,915 20,329 18 138,204 82,470 73 241,094 649,009	2020.9.30
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			1,009 231,953 367,504
				600,466
				122,560 17 198,794 49,026 85
				370,482
				970,948

(Continued)

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

(viii) Payables to related parties

Payables to related parties of the Group were as follows:

Account	Class of related parties	2020.9.30
Accounts payable Accounts payable Subtotal Other payables Other payables Subtotal Total	Associates Other related parties Associates Other related parties	88,498 30,494
		118,992
		14,280 38,937
		53,217
		172,209

(c) Key management personnel compensation

Key management personnel compensation comprised the following:

Short-term employee benefits Post-employment benefits	For the three months ended September 30, 2021 $ 32,920 1,629 $ 34,549	For the three months ended September 30, 2020		For the nine months ended September 30, 2021	For the nine months ended September 30, 2020
		32,296 1,445		101,114 4,374 105,488	103,131 4,586
		33,741			107,717

(8) Pledged assets

The carrying amounts of the pledged assets were as follows:

Pledged assets	Object	2021.9.30 $ 91,205,239 493,518 $ 91,698,757	2020.12.31 90,533,967 401,972 90,935,939	2020.9.30
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			85,817,584 312,288
				86,129,872

(Continued)

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

(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 September 30, 2021, fourteen Boeing aircraft had not yet been delivered by Boeing Company. The Company has partially prepaid the price of $15,633,879, 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 September 30, 2021, one Boeing engines had not yet been delivered by General Electric Company. The Company has partially prepaid the price of $290,872, which was included in other non-current assets.
(iii) Unused letters of credit for the Group were as follows:

Unused letters of credit	2021.9.30 $ 2,262,885	2020.12.31 2,363,681	2020.9.30
			2,440,695

(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:

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.

(Continued)

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

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)

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 nine months ended September 30, 2021, the estimated royalty amounted to $69,302, which was recorded as operating costs.

Besides, as of September 30, 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 September 30, 2021	For the three months ended September 30, 2021	For the three months ended September 30, 2021	For the three months ended September 30, 2020	For the three months ended September 30, 2020	For the three months ended September 30, 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	2,721,099 228,604 176,034 - 428,151 6,668,249 34,106	1,107,201 90,165 65,126 7,244 111,052 285,695 58,687	3,828,300 318,769 241,160 7,244 539,203 6,953,944 92,793	2,488,434 221,471 184,004 - 368,100 6,483,873 36,230	1,043,122 90,640 71,699 7,452 124,157 273,641 69,835	3,531,556 312,111 255,703 7,452 492,257 6,757,514 106,065

By function By item	For the nine months ended September 30, 2021			For the nine months ended September 30, 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	8,350,556 694,399 530,100 - 1,120,159 19,962,033 105,906	3,436,830 271,620 201,615 22,793 348,883 801,741 185,200	11,787,386 966,019 731,715 22,793 1,469,042 20,763,774 291,106	8,547,903 705,470 555,719 - 1,681,867 19,424,953 108,830	3,802,745 283,408 230,937 24,024 383,292 823,714 215,674	12,350,648 988,878 786,656 24,024 2,065,159 20,248,667 324,504

Note: For the three months and nine months ended September 30, 2021 and 2020, the depreciation expenses recognized were $7,012,985, $6,840,138, $20,987,449 and $20,449,197, respectively, less deferred gains of $4,082, $4,082, $12,246 and

$12,246, respectively, and subsidy and rent concession of $54,959, $78,542, $211,429 and $188,284, respectively.

(Continued)

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

(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.

(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 $33.28 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 nine months ended September 30, 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.

(Continued)

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

(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 nine months ended September 30, 2021 (excluding investees in Mainland China): Please see Table 5 attached.

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

(in shares)

		(in shares)
Shareholding Shareholder’s Name	Shares	Percentage
Evergreen Marine Corp. (Taiwan) Ltd.	776,541,111	% 15.11
Evergreen International Corp.	549,262,304	% 10.68
Falcon Investment Services Ltd.	480,386,482	% 9.34

(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 nine months ended September 30, 2021 and 2020, the above segments do not meet the quantitative thresholds to be reportable.

(Continued)

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

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

For the three months ended September 30, 2021 Revenue: Revenue from external customers Intersegment revenue Total revenue Reportable segment profit or loss For the three months ended September 30, 2020 Revenue: Revenue from external customers Intersegment revenue Total revenue Reportable segment profit or loss For the nine months ended September 30, 2021 Revenue: Revenue from external customers Intersegment revenue Total revenue Reportable segment profit or loss For the nine months ended September 30, 2020 Revenue: Revenue from external customers Intersegment revenue Total revenue Reportable segment profit or loss	Aviation transportation segment $ 23,529,114 15,535 $ 23,544,649 $ 2,112,953 $ 16,343,093 15,690 $ 16,358,783 $ (1,645,572) $ 63,099,136 41,078 $ 63,140,214 $ 949,261 $ 60,269,459 47,720 $ 60,317,179 $ (2,585,419)	Aircraft maintenance and manufacture segment 1,836,138 678,675 2,514,813 266,567 1,691,506 716,089 2,407,595 452,157 5,327,540 1,975,227 7,302,767 884,036 6,467,040 2,136,542 8,603,582 1,449,832	Sky catering segment 62,775 108,750 171,525 (152,476) 23,095 60,348 83,443 (194,898) 153,144 316,108 469,252 (509,107) 145,675 599,509 745,184 (407,883)	Air cargo services segment 331,759 99,594 431,353 119,434 266,076 100,578 366,654 93,200 891,052 305,723 1,196,775 277,316 786,199 260,199 1,046,398 189,110	Other segments 69,321 371,895 441,216 (26,526) 75,170 343,557 418,727 (25,479) 217,054 1,088,890 1,305,944 (234,355) 251,018 1,218,773 1,469,791 (235,301)	Reconciliation and elimination	Total 25,814,068 -
						(15,039) (1,274,449) (1,289,488) (10,238) 4,045 (1,236,262) (1,232,217) 7,899 (32,090) (3,727,026) (3,759,116) (17,912) 5,624 (4,262,743) (4,257,119) 16,708
							25,814,068
							2,309,714
							18,402,985 - 18,402,985 (1,312,693) 69,655,836 -
							69,655,836
							1,349,239
							67,925,015 -
							67,925,015
							(1,572,953)

For the three months and nine months ended September 30, 2021 and 2020, reportable segment profit or loss excludes non-operating income and expenses.

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

Table 1 Marketable Securities Held (excluding investments in subsidiaries, associates and joint ventures) (September 30, 2021)

(in shares)

Held Company Name	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account		September 30, 2021	September 30, 2021		Notes
				Shares/Units	Book value	Percentage of ownership	Fair value
The Company 〃〃〃 Evergreen Air Cargo Services Corp. 〃〃 The Company 〃〃〃〃〃〃 Evergreen Airline Services Corp. 〃 Hsiang Li Investment Corp. Evergreen Airways Service (Macau) Ltd.	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 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.	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 The Company's shareholder's shareholder The Company's shareholder's shareholder 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 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 9,195,459 11,409,010 1,627,066 231,580 8,502,418 28,630,008 37,606,277 38,201,625 1,000,000 1 557,349 158,800 2,740,542 500	676,885 200,951 461,901 50,125 116,523 192,406 22,346 1,721,137 21,504 429,372 785,894 435,481 1,917,722 35,500 7,068 70,226 4,946 75,228 1,210 3,784,151	- - - - - - - 2.11 5.67 4.85 9.98 9.10 10.00 4.55 0.01 0.01 0.46 0.0024	676,885 200,951 461,901 50,125 116,523 192,406 22,346 1,721,137 21,504 429,372 785,894 435,481 1,917,722 35,500 7,068 70,226 4,946 75,228 1,210 3,784,151

(Continued)

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 (September 30, 2021)

(September 30, 2	021)
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 Sky Catering Corp. Evergreen Air Cargo Services Corp.	UNI Airways Corp. Evergreen Logistics Corp. Evergreen Airline Services Corp. Evergreen Sky Catering Corp. Evergreen Aviation Technologies Corp. Evergreen Air Cargo Services Corp. The Company UNI Airways Corp. The Company GE Evergreen Engine Services Corp. UNI Airways Corp. The Company The Company	The Company's shareholder's equity investment The Company’s shareholder The Company's subsidiary The Company's subsidiary The Company's subsidiary The Company's subsidiary Parent company The Company's shareholder's equity investment Parent company The Company's equity investment The Company's shareholder Parent company Parent company	Sales Sales Purchases Purchases Purchases Purchases Sales Sales Sales Sales Sales Sales Sales	700,873 356,300 950,675 219,389 1,974,320 302,014 950,675 103,206 1,975,208 340,198 224,430 219,389 302,014	1.11 0.56 1.68 0.39 3.50 0.54 79.68 8.65 27.05 4.66 3.07 46.75 25.24	60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 30 days 60 days 60 days 60 days	- - - - - - - - - - - - -		81,263 - (217,467) (38,542) (386,332) (64,595) 226,152 22,522 387,247 33,660 58,426 45,860 67,979	1.25 - 6.45 1.14 11.45 1.91 80.57 8.02 21.55 1.87 3.25 46.34 43.49	(Note) (Note) (Note) (Note) (Note) (Note) (Note) (Note)

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

(Continued)

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 (September 30, 2021)

(September 30, 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.	The Company's shareholder's equity investment Parent company Parent company The Company's equity investment	184,658 249,881 387,657 220,657	(Note 1) 5.09 (Note 2) 6.12 (Note 2) 2.55	- - - -		113,228 249,629 387,657 220,267	- - - -

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)

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

Table 4 Business relationships and significant inter-company transactions

(September 30, 2021)

(Septem	ber 30, 2021)
Number	Trader	Company Name	Nature of Relationship	Transaction Details
				Financial Statements Item	Amount	Transaction Terms	Percentage of the Consolidated Net Revenue or Total Assets
0 0 0 0 0 0	The Company 〃〃〃〃〃	Evergreen Airline Services Corp. Evergreen Sky Catering Corp. Evergreen Aviation Technologies Corp. Evergreen Air Cargo Services Corp. Evergreen Airline Services Corp. Evergreen Aviation Technologies Corp.	1 1 1 1 1 1	Operating costs Operating costs Operating costs Operating costs Accounts payable－related parties Accounts payable－related parties	950,675 219,389 1,974,320 302,014 217,467 386,332	as general transactions as general transactions as general transactions as general transactions as general transactions as general transactions	1.36 0.31 2.83 0.43 0.07 0.12

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)

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

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

(For the nine months ended September 30, 2021)

(in shares)

Name of investor	Name of investee	Location	Main Businesses and Products	Initial Investment Amount	Initial Investment Amount	Ending Balance	Ending Balance		Net Income (Losses) of Investee	Share of Profit (Losses) of Investee	Notes
				September 30, 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 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. Spirit Evergreen Aftermarket Solutions Co., Ltd. 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., Taiwan Taoyuan Int'L Airport, Taoyuan City, Taiwan No.608 Hangzhan 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, Hangqin 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 Hangzhan S.Rd.,Taiwan Taoyuan Int'L Airport, Dayuan Dist., Taoyuan City, Taiwan 3F., No. 528 Chenggong Rd. Sec, 1, Guanyin 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 Maintenance, manufacturing, and sales of aircraft, engine and parts Ground handling	179,173 327 5,086 932,050 - 111,181 498,000 740,348 448,280 25,000 55,061 2,032,845 13,695 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 4,164,226 203,284,545 1,369,516 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 % 49.00 % 20.00	388,217 92,058 16,045 616,451 7,417,922 838,023 1,907,842 1,553,432 85,740 113,401 24,087 1,487,762 12,939 84,735	25,722 5,872 1,313 (30,325) 657,805 (106,840) (382,947) 218,366 3,484 27,672 (66,890) 51,988 (1,543) 30,922	25,722 5,813 670 (30,325) 522,399 (60,183) (190,707) 132,385 3,484 8,647 (17,712) 25,474 (756) 6,184	(Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 2) (Note 2) (Note 3) (Note 3) (Note 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)

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

Table 6 Information on investment in Mainland China

(September 30, 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	Investm	ent Flows	Accumulated Outflow of Investment from Taiwan as of September 30, 2021	Net Income (Losses) of investee	Direct/Indirect Shareholding (%) by the Company	Share of Profits/Losses (Note 2)	Carrying Amount as of September 30, 2021	Accumulated Inward Remittance of Earnings as of September 30, 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	109,707 75,333	14.00 % 14.00 %	15,359 10,547	253,673 133,180	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 September 30, 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 )	48,554,678

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.

AI assistant

EVAAIR — Interim / Quarterly Report 2021

52172_rns_2021-12-30_c6482d85-4b89-43f0-b2ad-3ee3f0c26885.pdf

EVA AIRWAYS CORP. AND SUBSIDIARIES

Consolidated Financial Statements

Table of contents

KPMG

Independent Auditors’ Review Report

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

Notes to Readers

Reviewed only, not audited in accordance with generally accepted auditing standards as of September 30, 2021 and 2020

EVA AIRWAYS CORP. AND SUBSIDIARIES

Consolidated Balance Sheets

September 30, 2021, December 31 and September 30, 2020

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 and nine months ended September 30, 2021 and 2020

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

EVA AIRWAYS CORP. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the nine months ended September 30, 2021 and 2020

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

Consolidated Statements of Cash Flows

For the nine months ended September 30, 2021 and 2020

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

Consolidated Statements of Cash Flows (continued)

For the nine months ended September 30, 2021 and 2020

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

Notes to the Consolidated Financial Statements

September 30, 2021 and 2020

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

(1) Company history

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

(3) New standards, amendments and interpretations adopted:

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

Standards or Interpretations

Effective date per Content of amendment IASB January 1, 2023

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

(4) Summary of significant accounting policies

(a) Statement of compliance

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

(b) Basis of consolidation

(i) List of subsidiaries in the consolidated financial statements

(c) Employee benefits

(d) Income taxes

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

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

(6) Explanation of significant accounts

(b) Financial assets and liabilities

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

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

(ii) Forward exchange contracts

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

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

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

(e) Other receivables

(f) Inventories

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

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

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

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

(i) Changes in ownership in subsidiaries

(j) Subsidiaries with material non-controlling interests

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

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

(k) Property, plant and equipment

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

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

(l) Right-of-use assets

(m) Investment property

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

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

(n) Intangible assets

(i) Amortization

(ii) Pledge

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

EVAAIR Interim / Quarterly Report 2021