China Airlines Co., Ltd.
Chairman Hsieh, Su-Chien
Spokesperson & Deputy Spokesman
Name Spokesman Deputy Spokesman Lu, Shwu-Huoy Wang, Wei
Title Vice President, CORPORATE COMMUNICATIONS OFFICE Vice President, FINANCE DIV. Tel 886-3-399-8888 886-3-399-8888 Fax 886-3-399-8640 886-3-399-8313 Email [email protected] [email protected] Headquarter, Branches and Plant
Organiza on Unit Address Tel Headquarter No.1, Hangzhan S. Rd., Dayuan Dist., Taoyuan City 337, Taiwan 886-3-399-8888 Taipei Branch No.131, Sec on 3, Nanjing East Road, Taipei City 104, Taiwan 886-2-2715-2233 Cargo Sales & Service, Taiwan No.3, Aly. 123, Ln. 405, Dunhua N. Rd., Songshan Dist., Taipei City 105, Taiwan 886-2-2715-5151 Kaohsiung Branch 6 Floor, Asia-Paci c Financial Plaza, No.38 Of Xin Guang Road, Lingya District, Kaohsiung City 802, Taiwan 886-7-213-1200 Tainan Branch Room A, 6 Floor, No.358, Sec on 1, Tungmen Road, Tainan, Taiwan 886-6-235-8099 Taichung Branch Room 2, 15th Floor, No.218, Sec on 2, Taiwan Boulevard, West District, Taichung City 403, Taiwan 886-4-2325-9592 Maintenance Div. No.15, Hangqin S. Rd., Dayuan Dist., Taoyuan City 337, Taiwan 886-3-383-4251 Cargo Sales & Services Mainland China Suite 22i, No.726 Of West Yanan Road, Changning District, Shanghai, China 86-21-2220-3292 Beijing O ce Bright China Chang An Building, Tower2, Unit 1025, No.7 Jianguomen Nei Avenue, Beijing, China 86-10-6510-2671 Shanghai O ce Suite 22a, No.726 Of West Yanan Road, Changning District, Shanghai, China 86-21-2220-3333 Guangzhou O ce Room 1210, 12th Floor, Teem Tower, No.208 Of Tianhe Road, Tianhe District, Guangzhou, Guangdong, China 86-20-8527-2950 Shenzhen O ce Room 4805, O ce Tower, Shun Hing Di Wang Commercial Center, No.5002 Of Shen Nan East Road, Luohu District, Shenzhen,
Guangdong, China 86-755-8246-3560 Xian O ce Room 810, 8th Floor, Gaoxin Building 9, Gaoxin 4th Road, High-Tech Zone, Xi'an, Shaanxi, China 86-29-8985-1902 Chengdu O ce Room 1608, South Tower, Baoli Center Building, No.7, Consulate Rd. Chengdu, China 86-28-8602-7508 Zhengzhou O ce Rooms 1101-1102, Tower B, Yuhong Interna onal Building, No.59 Of Zijingshan Road, Zhengzhou, Henan, China 86-371-5562-9880 Changsha O ce Room 1207 Pinghetang business building, No.88, Huangxing Middle Road, Furong district, Changsha City, Hunan province, China 86-731-8224-0871 Shenyang O ce Room 1110, Tower E, Fortune Center, No. 59 of North Sta on Road, Shen He District, Shenyang, Liaoning, China 86-24-3128-7021 Xiamen O ce Unit 3310, 33rd Floor, Bank Center, No.189 Of Xiahe Road, Xiamen, Fujian, China 86-592-2388-388 Nanjing O ce Room B1-B2, Building 38, Nanjing Center Building, No.1 South Zhongshan Road, Qinhuai District, Nanjing, China 86-25-8467-1050 Ningbo O ce Room 1515, Zhongshan Building, No93 East Zhongshan Road, Haishu District, Ningbo, China 86-574-8775-4090 Hangzhou O ce Room 2307, Building 2, China Qian Tang Avia on Building, No.66, Shimin St., Jianggan District, Hangzhou, China 86-571-8668-4214 Fuzhou Sta om Room 2508, Zhonggeng Youth Plaza, No.83 Of East Road, Gulou District, Fuzhou, Fujian, China 86-591-8755-9705 Chongqing Sta on Room 2202, No.3 Building, Zhongyu Plaza, No.86 Of Hongjin Avenue, Yubei District, Chongqing, China 86-023-8828-0118 Haikou O ce 18E, Huanhai Business Building, No.15, Jinmao W. Rd., Haukuo Hainan, China 86-898-6853-9677 Nanchang Sta on Rm 511, o ce building 7, hengmaodreamwrold Square, 438 Beijing E. Rd, Nanchang, Jiangxi Province, China 86-0791-8378-0580 Sanya Sta on Room 306, Floor 3rd, Exit and entry administra on of Sanya comprehensive service center, Sanya Phoenix Int'l Airport, Hainan,
China 86-0898-8802-4956 Wenzhou Sta on Room 2310, Huameng Business Palace, No.2 Of Chezhan Road, Lucheng District, Wenzhou, Zhejiang, China 86-0577-8605-2181 Wuxi Sta on Room 1611-1612, 16th Floor, Columbus building, No 282, ChangJiang North Road, New District Wuxi, Jiangsu China 86-0510-8522-8710 Yancheng Sta on Room B1207, East Building High-End Business O ce (Hbo), Ren Min South Road No.1, Yancheng, Jiangsu, China 86-515-8996-6950 Qingdao O ce Unit 2801, O ce Tower, Shangri-La Centre, No.9 Xiang Gang Zhong Lu, Qingdao, China 86-532-6887-7106 Wuhan O ce Room 1315, 13F, New World Interna onal Trade Building,568 Jianshe Avenue, Wuhan, China 86-27-8555-8172 Changchun O ce Rooms 6006, 6th Floor, Bai-Nau Technology Building, No.1313 Of Gong Nong Road, Chaoyang District, Changchun, Jilin, China 86-431-8920-7672 Xuzhou Sta on Room 537, CUMT University Science Park, Jiefang S. Road, Xuzhou City, Jiangsu, China 86-516-8379-0550 Cargo Sales & Services, Japan Ni ochi-Uchisaiwaicho Bldg. 8F, 1-2-1 Uchisaiwaicho, Chiyoda-ku, Tokyo, 100-0011, Japan 81-3-6378-8860 Tokyo Branch Ni ochi-Uchisaiwaicho Bldg. 8F, 1-2-1 Uchisaiwaicho, Chiyoda-ku, Tokyo, 100-0011, Japan 81-3-6378-8855 Osaka Branch Nakanoshima Mitsui Bldg. 9F 3-3, 3-Chome Nakanoshima Kita-Ku Osaka-Shi, Osaka 530-0005, Japan 81-6-6459-5783 Sapporo Branch Kita 1 Jo Mitsui Building 3F, Kita 1, Jo Nishi 5, Chuo-ku, Sapporo-Shi Hokkaido, 060-0001, Japan 81-11-218-6766 Shizuoka Sta on Shizuoka Ariport Terminal Bldg. 1F, 3336-4, Sakaguchi, Makinohara-Shi, Shizuoka, 421-0411, Japan 81-548-29-2668 Toyama Sta on Toyama Airport Interna onal Terminal Building 3F, 191 Akigashima, Toyama-Shi, 939-8252, Japan 81-76-461-7200 Kagoshima Sta on Kagoshima Airport Interna anl Terminal Bldg. 1355-4 Fumoto, Kirishima, Kagoshima 899-6404, Japan 81-995-57-9898 Miyazaki Sta on Miyazaki Airport, Akae Miyazaki 880-0912, Japan 81-985-64-9811 Nagoya Branch 3F, NMF Nagoya-Fushimi Building, Nishiki 2-9-27, Naka-ku, Nagoya, Aichi, 460-0003, Japan 81-52-202-7253 Fukuoka Branch Daihakata Bldg. 8F, 2-20-1 Hakata Ekimae, Hakata-Ku, Fukuoka 812-0011, Japan 81-92-471-7788 Hiroshima Branch Hiroshima-Mitsui Bldg. 7F 2-7-10, Ote-Machi, Naka-Ku, Hiroshima-Shi, Hiroshima, 730-0051, Japan 81-82-542-0883 Takamatsu Sta on Takamatsu Airport Building, Oka, Konan-cho, Takamatsu, Kagawa, 761-1401, Japan 81-87-815-8702 Kumamoto Sta on Kumamoto Airport Int'l Terminal Bldg. 1802-2 Oyatsu, Mashiki-machi, Kamimashiki-gun, Kumamoto 861-2204, Japan 81-96-285-1814 Okinawa Branch Gojinsha Naha Matsuyama Bldg. 3F, 2-1-12 Matsuyama, Naha-Shi, Okinawa 900-0032, Japan 81-98-863-1013 Korea Branch 3F, eplaza Bldg., 25, Sejong-daero 4-gil, Jung-gu, Seoul, Republic of Korea 04527 82-2-317-8888 Busan Branch 3F, Kyo-Won B/D, Jungang Daero 216, Dong-Gu, Busan, Korea, 48733 82-51-462-8885 Hong Kong Branch Suites 2701-2705, 27F Devon House, Taikoo Place, 979 King's Road, Hong Kong 852-2843-9800 Thailand Branch 4Fl., The Peninsula Plaza Bangkok, 153 Rajadamri Rd., Bangkok 10330, Thailand 66-2-250-9898 Bali Branch Departure Int'l Terminal 2nd FL., No. A0-12B Ngurah Rai Airport. Tuban-Bali, Indonesia 62-361-935-7298 Malaysia Branch Unit 15.01, Level 15, AMODA Building, 22, Jalan Imbi, 55100 Kuala Lumpur, Malaysia 60-3-2142-7344 Penang Branch Unit 9.04, Level 9, Menara Boustead Penang, 39 Jalan Sultan Ahmad Shah, 10050 Penang, Malaysia 60-4-228-9227 Singapore Branch 302 Orchard Road, #14-01 Tong Building Singapore 238862 65-6-737-2144 Cambodia Branch #10, St.596 Toul Kork, Sangkat Beoung Kok II, Khan Toul Kork, Phnom Penh, Cambodia 855-23-883-696/686 Myanmar Branch No.353/355, Bo Aung Kyaw Street, Kyauktada Township, Yangon, Myanmar 95-1-839-2663 Philippines Branch G/F Unit-1 Golden Empire Tower 1322 Roxas Boulevard Cor. Padre Faura St., Ermita Manila, Philippines 63-2-8354-6700 to 09 Indonesia Branch In land Tower, M1 Floor, Jl. Jend. Sudirman Kav.32, Jakarta 10220, Indonesia 62-21-251-0788 Vietnam Branch 1B, 7F Crescent Plaza 105 Ton Dat Tien St., Dist.7, Ho Chi Minh City, Vietnam 84-28-5414-1008 Hanoi Branch 4th Floor, Opera Business Center, 60 Ly Thai To Street, Hoan Kiem District, Hanoi, Vietnam 84-24-3936-6364 Palau Branch P.O. BOX 10027 Koror, Republic of Palau 96940 680-488-8888 Australia Branch Suite 1, Level 1, Nigel Love Building, 10 Arrivals Crt. Sydney Interna onal Airport Mascot NSW 2020, Australia 61-2-8339-9188 Brisbane Branch 1G35, Brisbane International Terminal, Airport Drive, Brisbane Airport QLD 4008, Australia 61-7-3860-5611 Melbourne Branch Level 2, North End, Terminal 2, Melbourne Airport, Tullamarine 3045 61-3-9907-0910 New Zealand Branch GM60, Level 1, Auckland Interna onal Airport, Auckland 2150, New Zealand 64-9-256-8088 India Branch O ce No.323, 3rd Floor, MGF Metropolis, M.G. Road, Gurgaon 122001, Haryana, India 91-124-711-5000 Los Angeles Branch 200 N. Con nental Blvd., Suite 100, El Segundo, CA 90245, U.S.A. 1-310-322-2888 New York Branch 633 3rd Ave., 8th Fl., Suite 800, New York, NY 10017, U.S.A. 1-917-368-2000 San Francisco Branch 433 Airport Blvd., Suite 501 Burlingame, CA 94010, U.S.A. 1-650-931-8000 Honolulu Branch 1830 Ala Moana Blvd Room 212, Honolulu, Hawaii 96815, U.S.A. 1-808-955-0088 Canada Branch Suite 240-10451 Shellbridge Way, Richmond, Bri sh Columbia, V6X 2W8, Canada 1-604-242-1168 Cargo Sales & Services The Americas 5651 West 96th Street, Los Angeles, CA 90045, U.S.A. 1-310-646-1260 Guam Branch 518 Pale San Vitores Road, Suite 202-203, Concorde Center, Tumon, Guam 96913, U.S.A. 1-671-649-0861 Netherlands Branch O cia Gebouw I, De Boelelaan 7, 6th Floor, 1083 HJ Amsterdam, The Netherlands 31-20-646-1001 Germany Branch Kaiserstr. 53, 60329 Frankfurt, Germany 49-69-297-0580 Italy Branch Via Lucullo 3, 00187, Rome, Italy 39-06-474-5045 Cargo Sales & Services, Europe Cargo Center Luxair, L-1360, Luxembourg 352-348-363-9500 Austria Branch Mariahilfer Strasse 123/8 O.G. 1060 Vienna, Austria 43-1-8130-156 The United Kingdom Branch Minstrel House, 1F, 2 Chapel Place, Rivington Street, London, EC2A 3DQ 44-208-587-3688
Stock Transfer Agent: Name: Address: Website: Tel:
CTBC Bank Co., Ltd. 5F., No.83, Sec. 1, Chongqing S. Rd., Zhongzheng Dist., Taipei City 100, Taiwan h p://www.ctbcbank.com 886-2-6636-5566
Auditors: Name: Auditors: Address: Website: Tel:
Deloi e & Touche Huang, Jui-Chan ; Cheng, Shiuh-Ran 20F., No. 100, Songren Rd., Xinyi Dist., Taipei City 110, Taiwan
h p://www.deloi e.com.tw 886-2-2725-9988
Overseas Securities Exchange: N/A Corporate Website: http://www.china-airlines.com
Contents I. Letter to Shareholders ............................................................................................................................................. 1 II. Company Profile....................................................................................................................................................... 7
2.1 Date of Incorporation .............................................................................................................................................. 8 2.2 Company History ..................................................................................................................................................... 8
III. Corporate Governance Report ......................................................................................................................... 12 3.1 Organization .......................................................................................................................................................... 13 3.2 Directors, and Management Team ........................................................................................................................ 17 3.3 Implementation of Corporate Governance ............................................................................................................37 3.4 Information Regarding the Company’s Audit Fee and Independence ...................................................................76 3.5 Replacement of CPA .............................................................................................................................................. 77 3.6 Audit Independence .............................................................................................................................................. 78 3.7 Changes in Shareholding of Directors, Managers and Major Shareholders .......................................................... 78 3.8 Relationships among the Top Ten Shareholders ................................................................................................... 80 3.9 Ownership of Shares in Affiliated Enterprises ....................................................................................................... 81
IV. Capital Overview ................................................................................................................................................... 82 4.1 Capital and Shares ................................................................................................................................................. 83 4.2 Bonds .................................................................................................................................................................... 86 4.3 Other Securities-Related Issues ............................................................................................................................ 88 4.4 Financing Plans and Implementation.................................................................................................................... 88
V. Operational Highlights ......................................................................................................................................... 89 5.1 Business Activities ................................................................................................................................................. 90 5.2 Market and Sales Overview .................................................................................................................................. 98 5.3 Human Resources ............................................................................................................................................... 104 5.4 Environmental Protection Expenditure ............................................................................................................... 104 5.5 Labor Relations ................................................................................................................................................... 109 5.6 Major Contracts .................................................................................................................................................. 112
VI. Financial Information ........................................................................................................................................ 115 6.1 Five-Year Financial Summary .............................................................................................................................. 116 6.2 Five-Year Financial Analysis................................................................................................................................. 120 6.3 Consolidated Financial Statements for the Years Ended December 31, 2020 and 2019, and Independent
Auditors’ Report .................................................................................................................................................. 122 6.4 Parent Company Only Financial Statements for the Years Ended December 31, 2020 and 2019 and
Independent Auditors’ Report ............................................................................................................................ 122 6.5 Audit Committee’s Report .................................................................................................................................. 123
VII. Review of Financial Conditions, Financial Performance, and Risk Management ........................ 124 7.1 Analysis of Financial Status ................................................................................................................................. 124 7.2 Analysis of Financial Performance ...................................................................................................................... 126 7.3 Analysis of Cash Flow .......................................................................................................................................... 126 7.4 Major Capital Expenditure Items ........................................................................................................................ 126 7.5 Investment Policy in the Last Year, Main Causes for Profits or Losses, Improvement Plans and
Investment Plans for the Coming Year ................................................................................................................ 126 7.6 Analysis of Risk Management ............................................................................................................................. 126 7.7 Other important Matters .................................................................................................................................... 132
VIII. Special Disclosure ............................................................................................................................................ 133 8.1 Summary of Affiliated Companies ....................................................................................................................... 134 8.2 Private Placement Securities in the Most Recent Years ...................................................................................... 140 8.3 Shares in the Company Held or Disposed of by Subsidiaries in the Most Recent Years...................................... 140 8.4 Special Notes ....................................................................................................................................................... 140 8.5 Situations with Major Impacts on Shareholder Equity or Share Prices ............................................................... 140
(Appendix 1) Consolidated Financial Statements for the Years Ended December 31, 2020 and 2019 and Independent Auditors’ Report ........................................................................ 141
(Appendix 2) Parent Company Only Financial Statements for the Years Ended December 31, 2020 and 2019 and Independent Auditors’ Report ............................................................. 193
(Summary Translation) This document is prepared in accordance with the Chinese version and is for reference only. In the event of any discrepancy between the English version and the Chinese version, the Chinese version shall prevail.
Letter to Shareholders 1
Letter to Shareholders 1.1 Operating Performance in 2020
1.2 Business Plan for 2021
1.3 Development Strategies
2 Letter to Shareholders
I. Letter to Shareholders 2020 was a devastating year for both China Airlines and the aviation industry around the globe. Travel restriction and disease prevention measures implemented in most of the countries greatly struck the aviation market, forcing many airline companies to step out of the market or undertake reform. Facing unprecedented upheaval, China Airlines captures the market trend and creates revenue by leveraging 18 freighters, mitigating the impacts with air cargo shipment. China Airlines has overcome the drawbacks together with our employees and the professional operation of our cargo fleet has received universal recognition. In the epidemic prevention, China Airlines adopted the health care measures implemented by the health competent authority to provide passengers a safe and sound travel experience. This has gained passengers’ higher trust for China Airlines in resuming flights in the upcoming future. To maintain normal operation, China Airlines made several financial strategies to ensure stable finance, including internal cost control, cutting flights, financial assistance from the government, and aging freights retirement, etc. For passenger flights, China Airlines cut and adjusted the flights, timely rearranging the capacity to reduce losses. For cargo flights, China Airlines utilized the belly hold of the passenger flights to carry cargo. It also provided high-value goods shipment and charter service to expand its profit. 2021 is still a challenging year. Yet as the overall economy gradually recovers, the demands for IT equipment delivery and vaccine delivery appear. Thus, air cargo is still the main operation for China Airlines. China Airlines is the only carrier in Taiwan to be certified by the IATA Center of Excellence for Independent Validators in Pharmaceutical Logistics (CEIV Pharma) for temperature-controlled cold chain logistics so far. Recently introducing 18 new 747-400F aircraft and 3 new-gen 777F freighters, China Airlines will continue to leverage Taiwan's position as a transport hub to provide air cargo shipment. Passengers' safety and health are our top priority. China Airlines will closely follow the pandemic condition and properly evaluate the flight resumption. During the spread of COVID-19, China Airlines never stopped training employees and optimizing the operation procedure. Digital transformation has been what China Airlines doing, and we will make full preparation when the aviation industry gets back to normal.
In line with the six main strategies, safety, governance, fleet network, product service, group collaboration, and brand recognition, China Airlines has put the effort into the economy, environment, and society relentlessly. Since early 2020 of the COVID-19 outbreaks, China Airlines has served as the National Sky Team by giving international humanitarian assistance and delivering medical resources to countries with severe infection. China Airlines also offered special flights to carry Taiwanese stranded overseas back to the country. In the future, China Airlines will continue to bear the responsibility as a national carrier and create sustainable value for the public. As the aviation industry has suffered from a serious downturn, China Airlines will take a discreet attitude and flexible strategies to fight together with our employees. We will timely adjust and consolidate the resources in the Group to cope with the ever-changing market. We expect the full recovery of the economy will bring China Airlines thriving performance.
1.1 Operating Performance in 2020
Operating revenue in NT dollars (same hereafter) was NT$106.327 billion, a 27.36% decrease over the past year, and the after-tax net profit was NT$0.14 billion (which is an increase of 1.34 billion over the last year), for a basic after-tax net profit of NT$0.03 per share.
1.1.1 Results of the business strategy
A. Fleet:
Two 777F aircraft were introduced in the last quarter of 2020 to optimize the fleet structure. As of the end of December 2020, our fleet size was 93 vessels, including 70 passenger aircraft (including leased aircraft) and 23 cargo aircraft.
B. Passenger flights:
Revenue from passenger business was NT$20.508 billion, a 78.68% decrease over the past year and accounting for 19.29% of total operating revenue. As of the end of 2020, the China Airlines Group flew to 23 countries and 72 passenger destinations, spanning Asia, Europe, the Americas, and Oceania.
Letter to Shareholders 3
On average, there are 352 round-trip flights per week.
C. Cargo flights:
Revenue from cargo business was NT$81.693 billion, an 88.21% increase over the past year, accounting for 76.83% of total operating revenue. As of the end of 2020, the China Airlines Group flew 20 cargo planes in cargo operations to 17 countries and 39 destinations. On average, there were an average of 115 cargo flights per week.
D. Other operating income:
Other operating revenue included in-flight duty-free sales revenue, totaling NT$4.126 billion, a 39.23% decrease over the past year, accounting for 3.88% of the total operating revenue.
E. Investments and earnings:
As of the end of 2020, the Company had investment in a total of 31 companies, in areas of business such as air business, ground services, logistics, aircraft maintenance, air cargo station business, etc., which contributed NT$1.85 billion in loss over the year.
1.1.2 Business cash-flow budget and profitability analysis
A. Cash flow:
Operating revenue was NT$106.327 billion, a reduction of 40.045 billion over last year.
Operating costs and expenses were NT$101.442 billion, a reduction of NT$44.85 billion over last year.
Pre-tax net profit was NT$0.171 billion, an increase of NT$1.358 billion over the past year. After-tax net profit was NT$0.14 billion, an increase of NT$1.34 billion over last year.
B. Budget execution:
Projected operating revenue was NT$153.045 billion, and the actual operating revenue was NT$106.327 billion, for a 69.47% attainment; projected operating costs and fees were NT$151.084 billion, and actual operating costs were NT$101.442 billion, at a spending rate of 67.14%. Projected losses from non-operating activities totalled NT$0.76 billion, with actual losses from non-operating activities at NT$4.714 billion. Projected annual pre-tax net profit was NT$1.201 billion, and actual pre-tax net profit was NT$0.171 billion.
C. Profitability:
Return on assets 0.89% Return on equity 0.25% After-tax profit margin 0.13% After-tax earnings per share NT$0.03
1.1.3 Research and development A. "Solid root first, innovation as a supplement" was
the main strategy for IT development in 2020. China Airlines solidified the core business systems and reinforced the infrastructure to strengthen the risk management control of information safety. China Airlines also adopted innovative services such as robot customer service, process automation, big data analysis, mobile application, cloud computing, and VR/AR usage, etc. These applications have enhanced CAL's competency, increased revenue, cut down costs, and increased work efficiency.
B. Revenue Management System (RMS) is the core system to manage the sales of flight seats, which enhanced aviation network and competency. The new O&D (Original & Destination) RMS was implemented after evaluation and was officially operated on July 30, 2020. O&D RMS calculates the value of each seat by considering the booking information in the history and price information. Through dynamic deployment, routes and areas with high value will be highlighted, maximizing the passenger flight revenue.
C. In 2020, China Airlines continued to optimize the flight booking system and interface. The time for online booking has been extended to 80 minutes before the flight departure. For the ticket purchase on the CAL website, the 3-D secure protocol was implemented to safeguard the safety of credit card transactions for passengers around the globe; WeChat Pay was allowed for passengers in mainland China, leveling up the convenience for online ticket purchase. China Airlines established the pandemic section in response to the spread of COVID-19. Entry restrictions in Taiwan and other countries have been regularly updated, as well as schedule changes, ticket changes, ticket refunds, and other epidemic prevention measures. This was to facilitate passengers to keep up to date with the travel information and offer a friendlier experience in ticket purchases online.
D. Customer Relationship Management (CRM) project put passengers' travel experience in mind to fulfill a digitized service. By reviewing each phase in travel, from ticket purchase, preparation, check-in at the airport, and arrival, China Airlines built comprehensive, digitized, and
4 Letter to Shareholders
passenger-oriented services. The services include accessing travel information on the mobile app, enjoying more friendly airport and in-flight services, and receiving swift support for the flight change.
E. China Airlines leveraged the marketing funnel strategy and analyzed the browsing behaviors of CAL website visitors. By maximizing digital advertisement, approaching more consumers, and selecting potential target audiences using data analysis, China Airlines placed brand marketing advertisements on target consumers. Along with the promotion via eDM, app, and text messages, China Airlines displayed discount offers to potential customers, boosting customer consumption. In addition to newsletter marketing, content marketing, and social media, China Airlines continuously held physical campaigns and realized the corporate brand visions.
1.2 Business Plan for 2021 To prevent the spread of COVID-19, border lockdown and travel restrictions have been implemented in most of the countries, causing international flights to plummet and hitting hard on the aviation industry. China Airlines followed the pandemic prevention regulations in different countries and remained the normal operations of important routes to satisfy the market demand. For air cargo, as the delivery of the pandemic prevention resources and e-commerce goods remained strong, China Airlines agilely adjusted the capacity of passenger flights and cargo flights to enhance the overall capacity and increase revenue.
In 2021, it is expected that the global aviation market will recover as more people receive vaccines. China Airlines will continue to focus on the pandemic development in each area and agilely adjust its business pattern. China Airlines will push forward with its edge in air cargo and steadily recover its business.
1.2.1 Passenger Service
Other than the normal operations of important routes and flights, China Airlines will keep following the border policies around the world and the development of travel bubbles in Asia-Pacific countries to resume more passenger flights and grasp more opportunities.
After the market recovers, China Airlines will enter deep into the major markets, reinforce the role of Taoyuan International Airport as a major hub in the Asia-Pacific region, and strengthen the transfer capacity in the aviation network. China Airlines will
continue to work with other airline companies to boost overall performance. Meanwhile, China Airlines will keep track of the market trend and follow the diplomatic policies of the government to adjust aviation structure. By evaluating the market potential and adding more flights, China Airlines will remain steadfast as a leading carrier.
A. Northeast Asian Routes:
In response to the strong demand for air cargo shipment during the COVID-19 pandemic, China Airlines remains normal operations for flights between Taiwan and Japan (Taoyuan-Narita/ Osaka/Fukuoka/Nagoya) The flight to Nagoya is exclusively provided by China Airlines. For flights between Taiwan and South Korea, the Taoyuan-Seoul route remains a normal operation. As border control in different countries is constantly changing, China Airlines closely oversees the changes and adjusts accordingly. China Airlines will also control the ticket prices in the appropriate range to ensure company revenue.
B. Southeast Asian Routes:
Other than major routes and flights, China Airlines offers commercial/medical chartered flight services to destinations like Hanoi, Ho Chi Minh City, Yangon, Bali, and Palau, etc. Taoyuan-Cebu route and Taoyuan-Chiang Mai route may be opened depending on the tourist demand and post-pandemic market condition.
C. Cross-Strait Routes:
Due to the epidemic prevention policies and cancellation of business travels, the demand for cross-strait flights dropped dramatically. China Airlines currently only provide services in Beijing, Shanghai, Xiamen, and Chengdu. For Hong Kong station, passengers who arrive in Hong Kong by boat can directly depart by flight without the requirement of quarantine. This offers another option for Taiwanese businesspersons to head home.
D. Long-Haul Routes:
China Airlines maintains the normal operation in North America to connect to the southeast Asia network and facilitate the transit of passengers. China Airlines takes advantage of belly hold of passenger flights to carry cargo, and creates revenue by utilizing passenger flights to deliver cargo.
E. European Routes:
The coronavirus severely attacked Europe. Yet China Airlines remains operations in key destinations like London, Amsterdam, and Frankfurt to support the traveling needs of students and family members.
Letter to Shareholders 5
F. Australia and New Zealand Routes:
China Airlines remains normal operations in Australia and New Zealand but departure/arrival time is adjusted. China Airlines also strengthens the transit service from Australia/New Zealand to Europe, North America, and Northeast Asia in the hope of improving the flight service. In winter, cargo flights to New Zealand and Auckland are added, which provide passenger seats. Cargo flight to Christchurch is also open for expanding the aviation network of Australia and New Zealand.
1.2.2 Cargo Service China Airlines provides differentiation services by utilizing Boeing 747-400F cargo-only freighters to load large cargoes. Meanwhile, Fuel-saving Boeing 777F freighters are deployed to improve revenue management; China Airlines won many delivery opportunities by holding the CEIV Pharma certification. It will continue to provide mid-and long-term chartered flight service and provide customized regular/irregular charter service.
A. Long-Haul Routes
China Airlines arranges 40 long-haul routes every week, and adds more flights according to market change to meet the demands of high-price charter service. Through inter-airline cooperation, expanding the import and export sources of goods in Central and South America, extending aviation network services, and increasing loading capacity. After the introduction of the new 777F cargo aircraft at the end of 2020, China Airlines has prioritized flights to US West Coast destinations to improve flight payload and optimize economic efficiency.
B. European Routes:
China Airlines maintains the operation of 6 flights per week in cooperation with the pandemic prevention laws and continues to promote the potential markets of Delhi and Mumbai in India in response to the Indian market development plan, so as to achieve two-stage revenue benefits.
C. Regional routes:
China Airlines organizes 70 flights on regional routes and flexibly adds flights as demands rise; Cross-strait flights to Zhengzhou, Guangzhou, and Chongqing remain normal; The Second Freedom Rights to Ningbo was granted to expand China Airlines' aviation network.
Hong Kong route has been added to 19 flights per week. For Northeast Asia, other than the five flights per week as scheduled quarterly, cargo flights are added depending on the demand to cover charter service.
1.3 Development Strategies 1.3.1 Optimize the fleet scale and improve aircraft assets
China Airlines has been optimizing the fleet team. The next-gen passenger aircraft, Airbus A321neo, will be introduced in 2021 to replace Boeing 738 passenger aircraft. For cargo aircraft, six Boeing 777F are planned to be delivered before 2023. New aircraft feature low fuel consumption. They are more environmentally friendly as less CO2 is emitted. Their higher quality lowers the unit cost, improves airline performance, and strengthens overall competency.
China Airlines will further decide on the treatment of aging aircraft, sell aging Boeing 738 aircraft and replace 744 passenger aircraft, to optimize airline assets and reduce operational cost.
1.3.2 Cold chain logistics certification
China Airlines has been actively discovered the pharmaceutical cold chain logistic market. In April 2019, China Airlines became the first, and so far, the only, carrier in Taiwan that passed the strict review and received certification from the IATA Center of Excellence for Independent Validations. China Airlines has gained many experiences in cold chain logistics. It can carry out vaccine delivery with internationally acknowledged service. Deliveries for cargo chilled to as low as -80°C can now be undertaken once dry ice is added. This has effectively enhanced the competency, value, and performance of China Airlines in high-price cargo delivery. The inter-airline collaboration will be carried out to help other countries deliver vaccines. This further strengthens China Airlines' leading role in air cargo service in the Asia-Pacific region.
1.3.3 Inter-airline collaboration for substantial benefits
China Airlines is the first airline in Taiwan to join the global aviation alliance. We are also the first Taiwanese airline to conduct code-sharing cooperation. Currently, we have cooperated with 23 airlines in code-sharing, ranking first among all Taiwanese airlines. In addition to self-owned routes, China Airlines actively penetrates the market through aviation alliances, providing more convenient and complete services. China Airlines will seek more airlines to work with in the future and cover more services to enhance its competency.
China Airlines will maintain cooperation with UPS, DHL, FedEx, SF Express, and other international express delivery companies to strengthen partnerships with Japanese and American airlines in the Asian region.
6 Letter to Shareholders
1.3.4 Flexible sales strategy to increase revenue
For passenger flights, China Airlines will closely follow the pandemic condition, border policy in each country, and travel agreement development. China Airlines will adjust the delivery capacity, taking on the opportunity by offering more routes. China Airlines will also utilize the belly hold of passenger aircraft to deliver cargoes, supporting cargo delivery while increasing revenue.
For cargo flights, China Airlines will increase its delivery volume, improve revenue management, and agilely adjust the capacity and pricing strategy.
1.3.5 Consolidate Group resources to enhance performance
By rearranging the fleet capacity, China Airlines provides aviation services with differentiation to target customers. China Airlines offers multiple products to customers, reinforcing its leading position in the market.
1.3.6 Digitalization for enhanced efficiency and competency
China Airlines leverages technology to do online sales in hope of enhancing the efficiency of mobile applications. Online services have been provided for greater convenience in cargo and passenger flight services. The booking system and user interface have been optimized. The website has been localized. The 3-D secure protocol has been implemented for credit card transactions, providing an easier and friendlier experience in ticket purchases.
For cargo delivery, e-AWB was adopted and became the benchmark in the industry. Through EDI (Electronic Data Interchange) system, China Airlines can exchange information with business partners, greatly enhancing operational efficiency.
1.4 Effect of external competition, the legal environment, and the overall business environment 1.4.1 External competition
As the China-US trade war continues, high uncertainty remains as the regional economy is unstable, the supply chain is reconstructing, and high liquidity financial assets are rising. Moreover, if the COVID-19 outbreak is not under control, stricter border control may be adopted.
1.4.2 Legal environment
The health and quarantine-related control in different countries may restrict cabin crew's work, which further impairs the operational efficiency and revenue.
1.4.3 Overall business environment
A. As the vaccines are feasible, IATA estimated that the aviation industry can expect a lower loss in 2021. The passenger flight demand will increase by 50.4% compared with 2020. However, if the pandemic worsens, causing tightened travel restrictions, the aviation industry may only expect a 13% rise in passenger flight demand compared with 2020.
Cargo flights will remain strong and stable in delivering vaccines. As the capacity of belly hold of passenger aircraft is limited, and as the portion of special goods (e.g., vaccines) increases, the revenue is expected to grow 5%.
The fuel price in January was benefited from the economic stimulus plan in the US. However, the impact of border control on the demand for aviation fuel remains uncertain.
B. According to IHS Markit, the growth rate of the global economy is 5.1%. Taiwan Institute of Economic Research anticipated a 4.3% rise in the domestic economy in 2021. Benefiting from the remote business opportunity, 5G network, great demand in innovative technology, and the government's encouragement in green construction that attracts foreign investment, the domestic economy may outshine others.
Facing with the pandemic that directly impacts the aviation market and changing political and economic status, China Airlines will flexibly adjust its resources to cope with the external uncertainties. China Airlines will adjust its flight capacity and utilize the new fleet team to reach higher fuel efficiency. Risk control measures and countermeasures have been made so that China Airlines can leverage its edge in air cargo service to further penetrate the market. China Airlines will keep consolidating the Group resources, enhance its competency, and become a leading carrier with sustainable operation.
Chairman: Hsieh, Su-Chien
President: Kao, Shing-Hwang
Finance Manager: Chen, I-Chieh
Company Profile 7
Company Profile 2.1 Date of Incorporation
2.2 Company History
8 Company Profile
II. Company Profile 2.1 Date of Incorporation September 7, 1959
2.2 Company History
1959: China Airlines (CAL) was founded by 26 retired members of the Air Force with TWD 400,000 in capital. The Company flew charter flights using two rented PBY seaplanes.
1961: Provided military supply transport to Laos.
1962: Flew special cargo missions for the Vietnamese government and USARV. Inaugurated the first domestic route from Taipei to Hualien.
1966: Inaugurated the first international route from Taipei to Saigon (now Ho Chi Minh City), marking our official start in international aviation.
1967: Inaugurated Northeast Asia routes.
1970: Developed trans-Pacific routes to explore the US market.
1976: Inaugurated Middle East and Saudi Arabia routes.
1978: Invested in Taoyuan International Airport Services Co., Ltd.
1980: Invested in Dynasty Holidays, Inc.
1983: Expanded European routes.
1986: Divided the Operations Division into Passenger and Cargo Divisions to expand operations.
1988: Twenty-seven shareholders gifted shares to establish the China Aviation Development Foundation, transferring the rights of supervision and management to the society.
1989: Invested in Hwa Hsia Co., Ltd. and Tai Kong Ju Investment Co., Ltd.
1990: Added Phuket and Bali destinations. Invested in Abacus Distribution Systems (Taiwan) Ltd.
1991: Established the Hua Mei Investment Company and Mandarin Airlines. The Ministry of Finance approved the public offering of China Airlines shares.
1992: Resumed flights to Ho Chi Minh City. The Taiwan Stock Exchange approved the listing of China Airlines shares. The Company gained 100% equity interest in Mandarin Airlines.
1993: First flight to Frankfurt, Germany. Established the German Branch Office. Officially listed on the Taiwan Stock Exchange.
1994: New engine repair plant became operational and Songshan Training Minquan Building opened. Set up China Pacific Catering Services as a joint venture with the Swire Group.
1995: First flights to Switzerland and Italy. Entered into a joint venture with Pratt & Whitney and SIA Engineering Company Limited to establish Asian Compressor Technology Services Co. in Taiwan. Invested in CAL-Asia Investments Inc. Launched our “plum blossom” logo.
1996: Inaugurated the Taoyuan-Penang cargo route.
1997: Inaugurated the Kaohsiung-Hong Kong-Jakarta route. Established the first cargo-only flights between Asia and Miami. Established code share flights with Continental Airlines and American Airlines. Invested in Huasheng Investment Company and China Pacific Laundry Services Ltd.
1998: Set up our Penang Branch Office and Hanoi Branch. Began using the Third Maintenance Hangar.
1999: Inaugurated cargo flight routes to Sydney, Delhi, and Colombo. Set up Kaohsiung Airport Catering Services as a joint venture with TransAsia Airlines and Far Eastern Air Transport. Established Chung Hwa Express Corp. as a joint venture with Chunghwa Post. Established TACT Logistics through investment transfer.
2000: Launched Canada, Australia, and New Zealand routes; Taoyuan-Guam, Taoyuan-Manila, Kaohsiung-Manila, Hakodate charter, and Taoyuan-Penang passenger flights; Frankfurt cargo flights. Established the Shanghai office in Mainland China and new branch offices in Canada, Australia, New Zealand and Guam. Established YesTrip Travel Internet Technology Co.
2001: Inaugurated cargo flight routes to Seattle and Nashville. Made indirect investment in Xiamen International Airport Co., Ltd. Set up code-share flights with Delta Airlines. Introduced A340-300 passenger jets.
2002: Inaugurated passenger flight routes to Delhi and cargo routes to Manchester. Received approval to invest in China Cargo Airlines. Ordered 18 Airbus A330 passenger aircraft and 10 Boeing 747-400 cargo and passenger aircraft. Rejoined the International Air Transport Association (IATA).
2003: Inaugurated the first cross-strait Spring Festival charter flight. Inaugurated charter flights to Seoul and passenger routes to Brisbane and Hanoi and non-stop flights to Hawaii. Inaugurated cargo flight routes to Ho Chi Minh City and Delhi. Created the Paragon Card, the highest Dynasty Flyer membership tier. Received the Outstanding Service Award from the R.O.C. President.
Company Profile 9
2004: Launched sea-air transport charter flights. Inaugurated Hiroshima passenger flights and cargo routes to Milan and Prague. Introduced three A330-300 passenger jets, two Boeing 747-400 passenger jets and two Boeing 747-400 freighters.
2005: Flew the first direct charter flights to Beijing, and Spring Festival charters to Guangzhou and Shanghai. Inaugurated Vienna passenger flight route and Nagoya and Vienna cargo flight routes. Invested in China Aircraft Services Limited.
2006: Inaugurated cargo flight routes to Osaka, Hanoi, Houston and Stockholm. Flew the first cargo charter flight to Shanghai. Invested in Yangtze River Express Airlines Company. Began construction on the Taoyuan International Airport Airline Business Operation Center.
2007: Signed a letter of intent to purchase Airbus planes. Announced contract with AccorHotels for a new airport hotel. Inaugurated regularly scheduled passenger flights between Kaohsiung and Chiang Mai.
2008: Launched cross-strait humanitarian charter flights direct to Chengdu to deliver disaster relief supplies at no charge. Inaugurated cross-strait holiday charter flights, weekend charter flights to Shanghai, Beijing, Xiamen, and Guangzhou, and cross-strait direct cargo charter flights.
2009: Inaugurated the Taoyuan-Osaka-Los Angeles cargo flight route. Inaugurated scheduled cross-strait flights to Zhengzhou, Xiamen, Xi'an, Ningbo, Shenyang, and Changsha. Became an official member of IATA's e-Freight program. Inaugurated Taiwan's largest 120,000-pound power plant testing platform.
2010: New routes: Passenger routes between Taoyuan and Miyazaki, London, and Qingdao, Songshan Airport to Hongqiao and Haneda, and Kaohsiung to Xiamen and Narita, direct cargo flights to Xiamen, Nanjing and Fuzhou as well as special cargo charter flight direct to Xi'an. Established Company headquarters in China Airlines Park and won the National Building Golden Award and National First Award.
2011: New routes: Taoyuan - Brisbane - Auckland; Taoyuan - Osaka - New York; flights to and from Taoyuan and Wuhan, Sanya, Yancheng, Haikou, Nanchang and Dalian; Taicheng to Chongqing and Nanchang; Kaohsiung to Changsha, Chongqing, Beijing, and Kuala Lumpur. Officially joined SkyTeam, becoming the first Taiwanese airline member of an international airline alliance.
2012: New routes: Songshan to Wenzhou and Gimpo Airport, Taoyuan to Kagoshima, Shizuoka and Toyama, added Auckland leg to the Taoyuan-Sydney route, and Taoyuan to Seoul and Yangon. Joined the SkyTeam Cargo, becoming the first Taiwanese
airline to join an international air cargo alliance. Renovated the cabins of nine Boeing 747-400 passenger jets to install new cabin seats and video systems. Signed a Memorandum of Strategic Cooperation with Chunghwa Telecom. Signed an OnPoint Fuel & Carbon Solutions Agreement with GE Aviation. Awarded Business Next magazine’s Super Green Jury Award and obtained the First Place in the Green Brand Awards 2012 Transportation Category, Gold Award in Reader's Digest Trusted Brands 2012, the Sports Activists Award from Sports Affairs Council, First Place in Management magazine’s Consumer Brand Survey, and the 2012 Energy Conservation and Carbon Reduction Action Label Excellence Award. The China Airlines Maintenance Facility received ISO 14001 Environment Management System Certification. Launched the world's first trans-Pacific climate observation aircraft. Became the world's first airline to display carbon footprint and calories for in-flight meals.
2013: Formed Greater China Connection Partnership with China Southern, China Eastern and Xiamen Airlines. Launched code-sharing services with Russia's Transaero Airlines and Hawaiian Airlines, and expanded code-sharing services with China Southern Airlines. Launched Taoyuan-Takamatsu route, Chiayi-Shizuoka charter flights, Taoyuan-Hawaii direct flights, Taoyuan-Urumqi and Lijiang routes. Launched Taoyuan-Ishigaki, Tainan-Hong Kong, and Taoyuan-Busan routes as well as Songshan-Matsuyama charter flights. Launched the Taoyuan-Nanjing-Zhengzhou cargo route and Taoyuan-Weihai flights. Launched temperature-controlled product cargo services. Once again awarded Business Next magazine’s Super Green Jury Award and the First Place in the Green Brand Awards 2013 Transportation Category. Awarded Top Aviation Brand in Manager Today‘s Power Brands Survey 2013 and Reader's Digest Trusted Brands Gold Award. Won the National Standardization Awards’ Corporate Standardization Award, 3rd Taiwan Green Classics Award, Global Views Service Excellence Award 2013, and EPA’s 22nd Business Environmental Award.
2014: Awarded the EPA’s 23rd Business Environmental Award and the International Green Classics Award 2014; earned ISO 14001 Environment Management System Expansion Certification and ISO 50001 Energy Management System Setup Certification. Once again awarded Business Next magazine’s Super Green Jury Award and earned First Place in the Green Brand Awards Transportation Category for the third time. Inaugurated the Songshan-Fuzhou and Taoyuan to Changchun, Hefei, Yantai, and Xuzhou routes. Won the Annual Best of Design Awards in the 2014 Golden Pin Design Award for our NextGen 777 aircraft cabin design and named the Best Airline in North Asia by Global Traveler.
2015: Launched Taoyuan-Wuxi; Kaohsiung to Changzhou, Kumamoto, and Fukuoka; Taoyuan-Melbourne with
10 Company Profile
an extension to Christchurch; and Tainan-Osaka flights. Launched social media customer services, a first for Taiwan. Established an airplane maintenance training center. Received the following awards:
Brand Service: CAA 2014 Golden Wing Awards, second place in TheDesignAir Global Passenger Choice Top 10 Airlines Awards 2015, Reader's Digest Trusted Brands Gold Award, three top awards in the Global Traveler reader survey.
Corporate Social Responsibility: TCSA Taiwan Corporate Sustainability Award, EPA’s Business Environmental Awards.
Product Design: The NextGen 777-300ER passenger cabin design was awarded the Red Dot Design Award 2015, Family Couch design received the Global Traveler Leisure Travel Innovation Excellence Award, won the National Industry Innovation Award for NexGen Aesthetics.
Others: Centers for Disease Control Epidemic Prevention Award 2015.
2016: Launched the Taoyuan-Yangzhou route and Taoyuan-Shenzhen cargo route. Inaugurated Chinese passenger transit through Taiwan for outbound China Airlines flights. Increased free baggage allowance by 10 kg and reduced regional excess baggage charges. Took delivery of the first A350 airliner for any Taiwanese carrier. Completed the Air Passenger Transport Service-Product Carbon Footprint Category Regulations together with the Civil Aeronautics Administration. Received the following awards:
Brand Service: PAX International magazine reader survey's 2016 Outstanding Food Service by a Carrier, Best Premium Economy and Best Airline by Global Traveler; China Airlines Dynasty In-flight Magazine won the APEX Award of Excellence; the CAL website was named the 2016 Best Airline Website by WebAward.
Corporate Social Responsibility: Passed the third-party audits for ISO 14001 and ISO 50001 Environmental Management Systems. Received the IOSA flight safety certification and the TCSA Taiwan Corporate Sustainability Award. Selected as a Dow Jones Sustainability Indices constituent stock, the first such honor for a Taiwanese company and emerging market airline.
Product Design: Received 5 iF Design Awards for the Boeing 777-300ER passenger cabin, software user interface, tableware design, Sky Lounge design packaging, and Taiwan Taoyuan Airport Terminal 1 Lounge. A double win at TheDesignAir Awards 2016.
2017: Inaugurated the Taoyuan-London route, becoming the only airline in Taiwan to offer nonstop service to London. Partnered with Air France on a codeshare nonstop flight from Taoyuan to Paris. Added codeshares on Taiwan-Japan routes with Air Japan. Signed a memorandum of cooperation with KLM. Signed an agreement to enhance cooperation with American Airlines. Signed a letter of intent with Airbus, comprehensively strengthening cooperation on maintenance. Established a joint venture in Taoyuan with NORDAM Aerospace (USA) as “NORDAM Asia Ltd.” with both parties cooperating to drive business investment and training of aerospace maintenance personnel. Signed a memorandum of cooperation with Changgeng Hospital of Linkou for air medical treatment. Obtained AS 9110 Airbus certification for the maintenance facility. Transported Taiwanese satellites to the US on four occasions. Hosted the 2017 AAPA annual conference to empower development in the Asia-Pacific airline industry. Provided the second A330-300 to work on plans for greenhouse gas observation and testing in the Pacific. Signed the Buckingham Palace Declaration against illegal wildlife shipments. Used sustainable alternative fuels and setting a milestone in carbon reduction among Taiwanese airlines. Received many awards:
Brand Service: Excellence in Global Airline Cargo Service award. Cheers magazine's 2017 TOP 20 Most Influential Enterprises of the New Era. Awarded the Gold Medal for reputation by Reader’s Digest for the 19th consecutive year. Awarded the 2017 Global Vision magazine five-star service rating. Remained on top as Global Traveler's Best Airline in Northeast Asia.
Corporate Social Responsibility: Won the Taiwan Top 50 Enterprises Sustainability Report Gold Medal for Cargo Division, Climate Leader Award, and Harmony with Society award. Selected for the Dow Jones Sustainability Index for the second consecutive year.
2018: The new US destination Taoyuan-Ontario, California, route formally went into operation. Served as one of the ten major members in the IATA Nominating Committee in 2018. Launched Kaohsiung-Hong Kong-Jakarta and Taoyuan-Chongqing passenger transportation routes. Developed the cargo transport destination in Columbus, Ohio, United States. Joined hands with Japan Airlines in developing new destinations of Japan inland routes, including Sapporo-Niigata, Sapporo- Hanamaki, Fukuoka-Miyazaki, Fukuoka-Hanamaki, Fukuoka-Amami, Kagoshima-Amami and Kagoshima-Tokunoshima.
Brand Service: Selected as Cheers magazine's “2018 Top 20 Employers of the New Generation.” China Airlines’ in-flight magazine Dynasty received the 2018 APEX Awards for Publication Excellence in the US.
Company Profile 11
Corporate Governance: Ranked among the top 5% in the 4th Corporate Governance Review.
Corporate Social Responsibility: China Airlines Group donated NT$10 million in disaster relief for the Hualien earthquake. The second airline worldwide to be certified by dual systems, ISO 14001 and ISO 50001, maintaining the highest standards for environmental risk management. AL Park was awarded the Diamond Level of Green Building Label, with an annual electricity savings of 23,000 kWh. Cooperated with ClimateCare, a British professional environmental facility, to launch the “ECO Travel” carbon exchange program. Selected as a constituent stock in the Dow Jones Sustainability Index (DJSI). Awarded the Taiwan Corporate Sustainability Award.
Product Design: OBH Magazine awarded it the “Best Premium Economy Class Amenities Kit” for Onboard Hospitality.
2019: Flight addition on Taoyuan-Palau route. Developed cargo transport destination in Nagoya, Japan. Signed a letter of intent with Chung Yuan Christian University to jointly develop aviation talent. Approved by the US Transportation Security Administration to join the precheck program. More evolution in digital services: non-stop, 24-hour automated customer service.
Brand Service: Won the APEX 5-Star Award. The first cold-chain transportation of pharmaceuticals in Taiwan for international certification.
Corporate Governance: Placed in Top 5% of the Corporate Governance Ranking once again.
Corporate Social Responsibility: Evaluated as the role-model company for the global airlines by the International Carbon Disclosure Project. Selected as a constituent stock in the “TW ESG Index” for the first time. Selected as a constituent stock in the DJSI for the fourth consecutive year. Selected for the Global Corporate Sustainability Awards for the first time and presented with TCSA for the sixth consecutive year.
2020: Non-stop, 24-hour automated customer service. Implemented an online check-in service for all tourists since June 22 in response to pandemic prevention. Met with a delegation headed by the President of the Senate of the Czech Republic to foster greater economic and trade between Taiwan and the Czech Republic. Carried out beach clean-up activity in Guanyin shore in response to the beach cleaning promotion by the Taoyuan Government. Aircraft livery was showcased on the new 2021 calendar to demonstrate the beauty of Taiwan. The
first 777F cargo aircraft entered service. The various awards we received:
"The Best Entry Outside of the U.S." award at the 131st Rose Parade in 2020 for the second consecutive year.
Ranked world’s No.3 Carrier for sustainability by DJSI
Won the award for the seventh consecutive year at the “Oscars” of Taiwan corporate sustainability
"#What Travel Brings You" China Airlines commercial won CLIO Awards and the recognition of New Yor Festival.
Won the special prize and the first procurement prize in 2020 Buying Power Social Innovation Products and Services held by MOEA
Won the 2020 Air Cargo Executive of the Year Award
12 Corporate Governance Report
Corporate Governance Report 3.1 Organization
3.2 Directors and Management Team
3.3 Implementation of Corporate Governance
3.4 Information Pertaining to the Company’s Audit Fee
and Independence
3.5 Replacement of CPA
3.6 Audit Independence
3.7 Changes in Shareholding of Directors, Managers, and
Major Shareholders
3.8 Relationships among the Top Ten Shareholders
3.9 Ownership of Shares in Affiliated Enterprises
Corporate Governance Report 13
III. Corporate Governance Report
3.1 Organization
3.1.1 Organizational Chart (MAR 27, 2021)
SHAREHOLDERS MEETING
BOARD OF DIRECTORS
CORPORATE COMMUNICATIONS OFFICE
GENERAL AUDIT OFFICE
CHAIRMAN OF THE BOARD
PRESIDENT
CORPORATE DEVELOPMENT OFFICE
SECRETARIAL OFFICE, BOARD OF DIRECTORS
(VW)SENIOR VP
CABIN CREW DIV.
GROUND SERVICES DIV.
INFLIGHT SUPPLY CHAIN& MARKETING DIV.
HUMAN RESOURCES DIV.
EDUCATION TRAINING CENTER
SENIOR VICE PRESIDENT,EUROPE
(VF)SENIOR VP
(VE)SENIOR VP
FINANCE DIV.
LEGAL & INSURANCE DIV.
INFORMATIONMANAGEMENT DIV.
PASSENGER SALES & MARKETING DIV.
CARGO SALES MARKETING& SERVICES DIV.
MAINTENANCEDIV.
ENGINEERINGDIV.
QUALITYASSURANCE DIV.
LOS ANGELESBRANCH
VICE PRESIDENT,TAIWAN
VICE PRESIDENT,THE AMERICAS
SAN FRANCISCOBRANCH
NEW YORKBRANCH
HONOLULUBRANCH
ANCHORAGEBRANCH
CARGO SALES &SERVICES
THE AMERICAS
CANADA BRANCH
FUKUOKA BRANCH
KAGOSHIMASTATION
HIROSHIMABRANCH
SAPPORO BRANCH
OKINAWA BRANCH
TAIPEI BRANCH
KAOHSIUNGBRANCH
CARGO SALES &SERVICE, TAIWAN
VIETNAM BRANCH
PHILIPPINESBRANCH
MALAYSIA BRANCH
MYANMARBRANCH
PENANGBRANCH
PALAU BRANCH
SINGAPOREBRANCH
GUAM BRANCH
INDIA BRANCH
NEW ZEALANDBRANCH
INDONESIABRANCH
AUSTRALIABRANCH
BALI BRANCH
BRISBANEBRANCH
KOREA BRANCH
(VO)SENIOR VP
FLIGHTOPERATIONS DIV.
SYSTEM OPERATIONCONTROL DIV.
NETHERLANDSBRANCH
U.K. Branch
GERMANYBRANCH
ITALY BRANCH
AUSTRIA BRANCH
CARGO SALES &SERVICES, EUROPE
CORPORATESAFETY OFFICE
HANOI BRANCH
CAMBODIABRANCH
OCCUPATIONAL SAFETY & HEALTH DEPT.
ADMINISTRATION DIV.
VICE PRESIDENT,JAPAN
HONG KONGBRANCH
THAILANDBRANCH
OSAKA BRANCHTOKYO BRANCH
SHIZUOKASTATION
NAGOYA BRANCH
TOYAMASTATION
MIYAZAKISTATION
TAKAMATSUSTATION
CARGO SALES & SERVICES, JAPAN
ORGANIZATION CHART OF CHINA AIRLINES2021 / 03 / 18
TAICHUNG BRANCH
BUSAN BRANCH
TECHNICALTRAINING CENTER
MELBOURNEBRANCH
KUMAMOTOSTATION
VICE PRESIDENT,OCEANIA
(VV)SENIOR VP
GUANGZHOUOFFICE
SHENZHENOFFICE
CHENGDU OFFICE
ZHENGZHOUOFFICE
SHENYANG OFFICE
CHANGSHAOFFICE
CARGO SALES & SERVICES
MAINLAND CHINA
XIAN OFFICE
WUHAN OFFICE
NANCHANG STATION
HAIKOU OFFICE
SANYA STATION
ASSISTANT VP, SOUTH CHINA
CHONGQING STATION
SHANGHAI OFFICE
XIAMEN OFFICE
NANJING OFFICE
HANGZHOU OFFICE
NINGBO OFFICE
QINGDAO OFFICE
XUZHOU STATIONWUXI STATION
ASSISTANT VP, EAST CHINA
WENZHOU STATION
FUZHOUSTATION
BEIJING OFFICE
SENIOR VICE PRESIDENT, MAINLAND CHINA
ASSISTANT VP, NORTH CHINA
DATA PROTECTION &QUALITY MANAGEMENT OFFICE
AUDIT COMMITTEE
REMUNERATION COMMITTEE
RISK COMMITTEE
TAINAN SALES OFFICE
CEBU BRANCH
CHIANG MAI BRANCH
14 Corporate Governance Report
3.1.2 Major Corporate Functions
Department Functions
General Audit Office Responsible for auditing the internal control system, evaluate the results of the
implementation of the annual business plan.
Secretarial Office,
Board of Directors
Responsible for holding Board of Directors meetings, collating and sending meeting
proceedings and overseeing matters relating to resolutions, coordination channels
with public stockholders, matters relating to juridical person shareholder
representatives, director communications and services, and budgeting and controls
for the Board and all functional committees.
Corporate
Development Office
Responsible for drafting the Company’s medium- and long-term strategic operating
plan, fleet plan, and annual business plan; securing flying rights and building
relationships between the Company and civil aviation authorities in various
countries; establishing brand position and development strategies; planning
medium- and long-term design and development of passenger cabins and
entertainment systems; purchasing, selling, and leasing of aircraft.
Corporate Safety Office Drafts Company safety, security, quality assurance, environmental, and emergency
response policies and systems; establishes related management systems and
conducts educational training; implements related investigations, analysis, and
examinations; coordinates with government agencies and civil aviation authorities,
manufacturers, and groups to deal with Company safety, security, quality assurance,
environmental, and emergency response-related issues.
Corporate
Communications Office
Responsible for external Company communications, communication links with the
legislature and the media, planning social welfare activities, sponsoring charitable
activities, organizing inaugural flights and other holiday or celebratory activities,
publishing CAL Park Magazine, supervising and coordinating publication of Dynasty
magazine, and formulating the Company’s brand image and advertising strategy.
Legal & Insurance Div. Responsible for reviewing all outside agreements and contracts, handling litigation,
and management of insurance matters for Company assets, such as the fleet and
aeronautical parts, personnel, and passenger and cargo transportation.
Finance Div. Responsible for planning financing sources, managing use of funds, controlling the
budget, auditing accounts receivable and payable items, preparing financial
statements, managing tax-related issues, fuel purchasing, and providing accounting
and cost-analysis information. Supervising of the operational performance and
management of invested enterprises.
Administration Div. Responsible for procurement of general goods, managing renovation projects and
land/real estate, land transport management and vehicle maintenance, handling of
company licenses, monitoring and safekeeping of Company seals, sending and
receipt of prospectuses and official documents, and document management.
Cabin Crew Div. Responsible for establishing cabin crew operating standards, managing training of
cabin crew, planning for cabin crew manpower needs, and implementing assignment
of cabin crew personnel.
Corporate Governance Report 15
Department Functions
Ground Services Div. Responsible for establishing ground services operating standards, development of
the ground services operating system, planning and implementation of a full range of
ground services training, supervising ground services operations at all stations,
providing ground services at Taiwan Taoyuan and Songshan Airports, and overall
management of ground service provider contracts.
In-Flight Service Supply
Chain & Marketing Div. Responsible for research and development, marketing and planning of various
in-flight service supplies and products for sale; planning and supply management of
meals and beverages in all flights of the entire route; supervising and controlling the
logistics and supply management, such as purchasing, warehousing, preparation and
loading of various in-flight service supplies; working on improving the quality of
in-flight service products based on customer feedback and market trends.
Data Protection &
Quality Management
Office
Manages the personal information and quality management system, and reports
implementation results and improvement measures to the top management;
masters the content of laws and regulations related to the protection of personal
information in various countries to ensure compliance with laws and regulation
enforcement process in every country; sets up and implements the Company’s ISO
9001 quality management system, and imparts service quality education, internal
quality auditor training and encourages further understanding of measures
pertaining to quality-related issues.
Passenger Sales &
Marketing Div. Responsible for supervising the passenger transport network planning and route management of the entire network, seat control, business promotion, digital marketing, customer relationship maintenance, membership marketing and inter-airline cooperation, cross-industry collaboration, determination of passenger transport rates and various quotas, performance evaluation, and developing and maintaining revenue management systems and passenger transport business training at all levels.
Information
Management Div. Combines information technology with business knowledge to promote
computerization within the Company to upgrade operational competitiveness.
Human Resources Div. Responsible for planning the Company organization and human resources, the establishment of a personnel management system, and setting up pay standards. Provides recruitment services, supervises personnel management, established the employee training system and oversees future updates, provides employee health management, and manages personnel assignments to associated enterprises.
Occupational Safety &
Health Dept. Prepares the Company’s Occupational Health and Safety Manual and regulations; drafts, plans, supervises, and promotes health and safety matters and guides in their implementation in relevant departments to prevent occupational hazards and ensure employee health and safety. Received ISO45001:2018 and CNS45001:2018 occupational health and safety certification following SGS audit to effectively control occupational incident risk and improve occupational health and safety performance.
16 Corporate Governance Report
Department Functions
Cargo Sales, Marketing
& Services Div.
Formulates the cargo development strategy, supervises cargo operations on all
routes, plans the cargo flight timetable and controls the allocation of hold space, sets
cargo shipping rates and sales quotas, evaluates operating performance, drafts and
oversees cargo services and operating standards, is responsible for passenger and
cargo plane loading control operations, cargo equipment controls and
replenishment, Taipei cargo terminal operations, and accounting of the Cargo Sales,
Marketing & Services Division and Taiwan Cargo Center.
Flight Operations Div. Responsible for cabin crew manpower requirement planning, training and
management of cabin crew, developing flight operating standards, controlling fuel
consumption, planning and implementation of the crew and flight assignments, and
development of airplane flight manuals and maintenance of flight simulators.
System Operation
Control Div.
Manages the coordination of all airports in the system, oversees flight status,
coordinates and manages adjustment of flights in response to anomalies, guarantees
on-time performance rates, provides real-time information to aircraft in flight,
ensures flight safety, investigates causes for major delays to flights, establishes
comprehensive aircraft and statistical analysis data; operates and guides crew
allocation, plans and manages flight permits; responsible for safety management and
liability related to business.
Maintenance Div. Responsible for ensuring the maintenance of airplanes, client aircraft maintenance
services, support and supervision of station maintenance, and development of
maintenance capabilities.
Engineering Div. Responsible for the planning and control of airplane maintenance, materials supply
management, controlling of maintenance costs, and planning of the information
system development strategy.
Quality Assurance Div. Responsible for coordination and communication with other countries’ civil aviation
authorities; maintaining the validity of operating standards, repair facility licenses,
and aircraft airworthiness certificates; authorization and management of
maintenance personnel training and task assignments; formulation and
implementation of quality audit system. Established and implements the aircraft
quality management and on-site inspection systems, ensures introduction of new
aircraft and sale or return of aircraft as stipulated in the fleet plan, and assists in
aircraft incident investigations.
Technical Training
Center
Develop type training and license conversion training that comply with CAA 05-02A
requirements. Compose training plan and execute training in accordance with EMO
(Engineering & Maintenance Organization) demands and customer requests.
Branch offices Responsible for the development of individual branches and promotion of passenger
and freight-related operations.
Corporate Governance Report 17
3.2 Directors and Management Team 3.2.1 Directors
MAR 27, 2021
Title
Nam
e
Nationality/ Country of
Origin
Gender
Date First Elected
Date Elected
Date Ended
Shareholding when Elected
Current Shareholding
Spouse & Minor Shareholding
Shareholding by Nominee
Arrangement Experience (Education) Other Position
Executives, Directors or Supervisors who are Spouses or within Two Degrees of Kinship Remark
Shares % Shares % Shares % Shares % Title Name Relation
Chairman
China Aviation Developm
ent Foundation
R.O.C.
-
07/07/1988
06/27/2018
05/25/2021
1,867,341,935 34.13% 1,867,341,935 34.45% - - - - - - - - - -
Representative: Hsieh, Su-Chien
R.O.C.
Male
07/06/2016
06/27/2018
05/25/2021
48,517 0.00% 48,517 0.00% 0 0.00% 0 0.00%
Chairman, Taiwan Air Cargo Terminal Ltd. Senior Vice President of Marketing, China Airlines Ltd. Director, Taiwan Region and General Manager of Taipei Branch Office, China Airlines Ltd. General Manager, Australia Branch Office, China Airlines Ltd. General Manager, Indonesia Branch Office, China Airlines Ltd. General Manager, Kaohsiung Branch Office, China Airlines Ltd. Vice President, Passenger Sales Div. Chairman, Abacus Distribution Systems Taiwan Ltd. Bachelor’s Degree, Department of Economics, Soochow University
Chairman, CAL Park Co., Ltd. Chairman, CAL Hotel Co., Ltd. Chairman, CAL-Asia Investment Inc. Chairman, CAL-Dynasty International, Inc.
None None None None
Director
China Aviation Developm
ent Foundation
R.O.C.
-
07/07/1988
06/27/2018
05/25/2021
1,867,341,935 34.13% 1,867,341,935 34.45% - - - - - - - - - -
Representative: Kao, Shing-Hw
ang
R.O.C.
Male
03/11/2021
03/11/2021
05/25/2021
62,809 0.00% 62,809 0.00% 0 0.00% 0 0.00%
Senior Vice President (VO). Vice President, Flight Operations Div. Assistant Vice President, Flight Operations Div. Bachelor’s Degree, National Cheng Kung University
President, China Airlines Ltd. Director, Mandarin Airlines, Ltd. Director, Cal Hotel Co. Ltd. Director, CAL-Dynasty International, Inc. Director, Dynasty Properties Co., Ltd. Director, CAL-Asia Investment Inc. Director, Taoyuan International Airport Services Co., Ltd. Director & President, Cal Park Co. Ltd.
None None None Note1
18 Corporate Governance Report
Title
Nam
e
Nationality/ Country of
Origin
Gender
Date First Elected
Date Elected
Date Ended
Shareholding when Elected
Current Shareholding
Spouse & Minor Shareholding
Shareholding by Nominee
Arrangement Experience (Education) Other Position
Executives, Directors or Supervisors who are Spouses or within Two Degrees of Kinship Remark
Shares % Shares % Shares % Shares % Title Name Relation
Representative: Chen, Charles C.Y.
R.O.C.
Male
07/01/2000
06/27/2018
05/25/2021
190,166 0.00% 190,166 0.00% 155,849 0.00% 0 0.00%
Director, Wan Hai Lines Ltd. Chairman, UTAC Group, Singapore Chairman, Epistar Corp. Director, Formosa International Hotels Ltd. Director, Ascendas Pte. Ltd. Director, Ichia Technologies, Inc. Adjunct Associate Professor, National Tsing Hua University MBA, New York University, U.S.A.
Chairman, Eyon Holding Group Vice Chairman, Taiwan Air Cargo Terminal Ltd. Vice Chairman, Taian Insurance Co., Ltd. Chairman, Wan Hai International Pte. Ltd. President, Chen-Yung Foundation Vice Chairman, Wan Hai Lines (Singapore) Pte. Ltd. Director, Epistar Corp. Director, Shihlin Paper Co., Ltd.
None None None None
Representative: Ting, Kw
ang-Hung
R.O.C.
Male
01/28/2008
06/27/2018
05/25/2021
0 0.00% 0 0.00% 0 0.00% 0 0.00%
Chairman, Central Trading & Development Corp. BA in Finance, Boston University, U.S.A.
Member, Risk Committee, China Airlines Ltd. Group Chairman, Phu My Hung Holdings Group Chairman, Phu Yung An Corp. Chairman, Hiep Phuoc Power Co., Ltd. Chairman, Macro Technologies Inc. (Vietnam) Ltd. Chairman, Phu My Hung Asia Holdings Corp. Vice Chairman, TVBS Media Inc. Director, Phu My Hung Development Corp.
None None None None
Representative: Chen, Han-M
ing
R.O.C.
Male
07/26/2016
06/27/2018
05/25/2021
0 0.00% 0 0.00% 0 0.00% 0 0.00%
Director, Yuan-Chin Development Co., Ltd. Member, Rotary Club of Taipei Tunhua BA (Hons) Architecture, University of Plymouth, UK MSc, Birmingham City University, UK
Chairman, Tigerair Taiwan Co., Ltd. Chairman, Prime Development Co., Ltd. Director, Chyn-Tay Bearing Co., Ltd.
None None None None
Representative: Ko, Sun-Ta
R.O.C.
Male
06/27/2018
06/27/2018
05/25/2021
0 0.00% 0 0.00% 0 0.00% 0 0.00%
PT Lecturer, National Open University PT Lecturer, National Open College President, Keelung Fund for Children & Families MBA, Keio University, Japan
Chairman, K Hotels Group Chairman, The Tango Group Chairman, Kodak Trading Co., Ltd. Chairman, Kota Enterprise Co., Ltd.
None None None None
Representative: W
ei, Yung-Yeh
R.O.C.
Male
06/27/2018
06/27/2018
05/25/2021
3,737 0.00% 3,737 0.00% 0 0.00% 0 0.00%
Jet Airplane Maintenance Group, Air Force Technical School
Member of Council, China Airlines Employees Union Foreman, Line Maintenance Department, Engineering & Maintenance Division, China Airlines Ltd.
None None None Note1
Director
National
Development
Fund, Executive Yuan
R.O.C.
-
06/15/2012
06/27/2018
05/25/2021
519,750,519 9.50% 519,750,519 9.59% - - - - - - - - - -
Corporate Governance Report 19
Title
Nam
e
Nationality/ Country of
Origin
Gender
Date First Elected
Date Elected
Date Ended
Shareholding when Elected
Current Shareholding
Spouse & Minor Shareholding
Shareholding by Nominee
Arrangement Experience (Education) Other Position
Executives, Directors or Supervisors who are Spouses or within Two Degrees of Kinship Remark
Shares % Shares % Shares % Shares % Title Name Relation
Representative: Lin, Su-M
ing
R.O.C.
Male
06/15/2012
06/27/2018
05/25/2021
0 0.00% 0 0.00% 0 0.00% 0 0.00%
Member, Tax Reform Commission, Executive Yuan Member, Administration Appeals Commission, Taipei City Government Deputy Dean, College of Management, National Taiwan University Chairman, Department and Graduate Institute of Accounting, National Taiwan University Ph.D. in Accounting, Arizona State University, U.S.A.
Member, Risk Committee, China Airlines Ltd. Member, Risk Committee, China Airlines Ltd. Public Director, Taipei Exchange, R.O.C. Independent Director, Nan Shan Life Insurance Co., Ltd. Director, iPASS Corp. Professor, Department & Graduate Institute of Accounting, National Taiwan University
None None None None
Representative: W
ang, Shih-Szu
R.O.C
Female
06/27/2018
06/27/2018
05/25/2021
0 0.00% 0 0.00% 0 0.00% 0 0.00%
Deputy Mayor, Tainan City Government Director General, Tourism Bureau of Tainan City Government Chairperson, Research, Development and Evaluation Commission of Tainan City Government Director General, Ketagalan Foundation Director General, Information Department of Kaohsiung City Government Director General, Judicial Reform Foundation Director General, Taiwan Association for Human Rights Master’s Degree, International Development Policy, Duke University, U.S.A.
None None None None None
Independent Director
Chung, Lo-Min
R.O.C.
Male
06/15/2012
06/27/2018
05/25/2021
0 0.00% 0 0.00% 0 0.00% 0 0.00%
Chairman, China Steel Chemical Corp. Chairman, Universal exchange Inc. Executive Vice President, China Steel Corp. Vice President of Finance, China Steel Corp. MBA, Arizona State University, U.S.A.
Chairman, Risk Committee, China Airlines Ltd. Member, Audit Committee, China Airlines Ltd.
None None None None
Independent Director
Chang, Hsieh Gen-Sen
R.O.C.
Female
06/27/2018
06/27/2018
05/25/2021
0 0.00% 0 0.00% 0 0.00% 0 0.00%
Consultant, Legislative Council Office Director, Shian CPA Firm Adjunct Associate Professor, Chinese Culture University Controller, Amagic Holographics, Inc. Senior Associated CPA, Wu, Liang, and Huang CPAs Staff Accountant, AAA (Auto Club of S. California) MBA, University of California, Irvine, U.S.A.
Chairman, Audit Committee, China Airlines Ltd. Member, Remuneration Committee, China Airlines Ltd. Member, Risk Committee, China Airlines Ltd. Member, Foundation Management Committee, Environmental Protection Administration Independent Director, K Laser Technology Inc.
None None None None
20 Corporate Governance Report
Title
Nam
e
Nationality/ Country of
Origin
Gender
Date First Elected
Date Elected
Date Ended
Shareholding when Elected
Current Shareholding
Spouse & Minor Shareholding
Shareholding by Nominee
Arrangement Experience (Education) Other Position
Executives, Directors or Supervisors who are Spouses or within Two Degrees of Kinship Remark
Shares % Shares % Shares % Shares % Title Name Relation
Independent Director
Shen, Hui-Ya
R.O.C.
Female
06/27/2018
06/27/2018
05/25/2021
0 0.00% 0 0.00% 0 0.00% 0 0.00%
Independent Director of First Financial Holding Co., Ltd. Independent Director of Taiwan Fertilizer Co., Ltd. Committee of Securities and Futures Investors Protection Center Master of Laws, National Chung Hsing University
Chairman, Remuneration Committee, China Airlines Ltd. Member, Audit Committee, China Airlines Ltd. Member, Risk Committee, China Airlines Ltd. Consultant of Public Service Pension Fund Management Board, Ministry of Civil Service, Examination Yuan Lawyer, Lian Yung Law Office Independent Director, Formosa Advanced Technologies Co., Ltd.
None None None None
Note 1: In order to avoid the concurrent appointment from influencing the objectivity and supervision of the Board of Directors, except for President Kao, Shing-Hwang and Director Wei, Yung-Yeh, who are concurrently Directors and employees, none of the other members of the 21st Board of Directors is concurrently an employee of the Company.
Note 2: The average term of the members of the 21st Board of Directors as Directors of the Company was 6 years. Note 3: The three Independent Directors of the 21st Board of Directors have not been appointed for more than three terms.
Corporate Governance Report 21
Major shareholders from among institutional shareholders Name of Institutional Shareholders Major Shareholders
China Aviation Development Foundation A non-corporate organization. In February 1988, all 27 shareholders of the Company (Note) gifted the shares held and 100% of the shareholders’ equity to set up the foundation, which was reported to the Ministry of Transportation and Communications on March 2 of the same year. Its establishment was approved on July 6 of the same year.
National Development Fund, Executive Yuan Government
Note: The source is “Charter for Donations to the China Aviation Development Foundation”.
Donor Donation Amount
Wu, Yueh 10,977,697 common shares of China Airlines and the profits NT$2,530,666,534
Tsu, Jung-Chun 5,872,874 common shares of China Airlines and the profits NT$1,353,861,897
Tien, Hsi 515,938 common shares of China Airlines and the profits NT$118,938,155
Chang, Lin-Te 239,214 common shares of China Airlines and the profits NT$55,145,599
Chang, Chih-Chen 515,938 common shares of China Airlines and the profits NT$118,938,155
Lan, Ping-Chuan 515,938 common shares of China Airlines and the profits NT$118,938,155
Fu, Jui-Yuan 515,938 common shares of China Airlines and the profits NT$118,938,155
Hsu, Kang-Liang 2,026 common shares of China Airlines and the profits NT$467,049
Shih, Kuang-Lin 2,026 common shares of China Airlines and the profits NT$467,049
Liu, Chiung-Kuang 239,214 common shares of China Airlines and the profits NT$55,145,599
Han, Te-Hui 239,214 common shares of China Airlines and the profits NT$55,145,599
Yeh, Chih-Fang 239,214 common shares of China Airlines and the profits NT$55,145,599
Hung, Yang-Fu 239,214 common shares of China Airlines and the profits NT$55,145,599
Liu, Ping-Kuan 239,214 common shares of China Airlines and the profits NT$55,145,599
Chang, Tang-Tien 239,214 common shares of China Airlines and the profits NT$55,145,599
Li, Hsueh-Yen 239,214 common shares of China Airlines and the profits NT$55,145,599
Li, Chi-Tang 239,214 common shares of China Airlines and the profits NT$55,145,599
Wang, Yu-Ken 239,214 common shares of China Airlines and the profits NT$55,145,599
Yuan, Chin-Han 239,214 common shares of China Airlines and the profits NT$55,145,599
Fan, Kuang-Hua 239,214 common shares of China Airlines and the profits NT$55,145,599
Liu, Hui-Chun 239,214 common shares of China Airlines and the profits NT$55,145,599
Yeh, I-Fan 239,214 common shares of China Airlines and the profits NT$55,145,599
Chen, Chung-Yu 239,214 common shares of China Airlines and the profits NT$55,145,599
Yang, Hung-Ting 239,214 common shares of China Airlines and the profits NT$55,145,599
Tsai, Ming-Yung 222,205 common shares of China Airlines and the profits NT$51,224,474
Wang, Wei-Ming 515,938 common shares of China Airlines and the profits NT$118,938,155
Huang, Jen-Sheng 515,938 common shares of China Airlines and the profits NT$118,938,155
Total 23,999,880 common shares and the profits NT$5,532,645,517
22 Corporate Governance Report
Professional qualifications and independence analysis of directors
Note: Please tick the corresponding boxes that apply to the directors or supervisors during the two years prior to being elected or during their term in office. 1. Not an employee of the Company or any of its affiliates. 2. Not a director or supervisor of the Company or its affiliated enterprise (except for independent directors appointed in accordance
with the Act or the laws and regulations of the local country by, and concurrently serving as such at, the Company and its parent company, its subsidiary, or a subsidiary of the same parent).
3. Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of 1% or more of the total number of outstanding shares of the Company or ranking in the top 10 in holdings.
4. Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of any of the managers listed in (1) or the personnel listed in (2) or (3).
5. Not a director, supervisor, or employee of a corporate shareholder who directly holds more than 5% of the total shares issued by the Company, is among the top five shareholders, or appointed a representative to be a director or supervisor of the Company in accordance with Article 27, Paragraph 1 or 2 of the Company Act (except for independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, the Company and its parent company, its subsidiary, or a subsidiary of the same parent).
6. Not a director, supervisor, or employee of another company controlled by the same person who holds more than half of the Company's director seats or voting shares (except for independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, the Company and its parent company, its subsidiary, or a subsidiary of the same parent).
7. Not a director, supervisor or employee of another company or institution with the same person or spouse as the chairman, general manager or equivalent of the company (except for independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, the Company and its parent company, its subsidiary or a subsidiary of the same parent).
8. Not a director, supervisor, manager or shareholder holding more than 5% of shares of a specific company or institution that has financial or business dealings with the Company (except for independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, the Company and its parent company, its subsidiary or a subsidiary of the same parent and if the specific company or institution holds more than 20% but less than 50% of the total issued shares of the Company).
9. Not a professional who provides auditing-related services to the Company or its affiliates and who does not provide commercial, legal, financial, or accounting-related services to the Company or its affiliates with a cumulative amount of remuneration obtained in the last two years exceeding NT$500,000; and is not an owner, partner, director, supervisor, or manager, or the spouse of any of the above, of a sole proprietorship, partnership, company, or organization that provides such services to the Company or its affiliates. However, this does not apply to the members of the Remuneration Committee, the Special Committee for Merger/consolidation and Acquisition who perform their functions and powers in accordance with relevant laws and regulations of the Securities and Exchange Act or the Business Mergers and Acquisitions Act.
10. Not having a marital relationship, or a relative within the second degree of kinship to any other director of the Company. 11. Not been a person of any conditions defined in Article 30 of the Company Act. 12. Not a governmental, juridical person or its representative as defined in Article 27 of the Company Act.
Criteria
Name
Meets One of the Following Professional Qualification Requirements, Together with at Least Five Years of Work
Experience Independence Criteria (Note)
Number of Other Public Companies in Which the Individual is Concurrently Serving as an Independent Director
An Instructor or Higher Position in a Department of Commerce, Law, Finance, Accounting, or Other Academic Departments Related to the Business Needs of the Company in a Public or Private Junior College, College or University
A Judge, Public Prosecutor, Attorney, Certified Public Accountant, or Other Professional or Technical Specialist Who Has Passed a National Examination and been Awarded a Certificate in a Profession Necessary for the Business of the Company
Has Work Experience in the Areas of Commerce, Law, Finance, or Accounting, or Otherwise Necessary for the Business of the Company
1 2 3 4 5 6 7 8 9 10 11 12
Hsieh, Su-Chien - - - - - - - Kao, Shing-Hwang - - - - - - - Chen, Charles C.Y. - - - - Ting, Kwang-Hung - - - - - Chen, Han-Ming - - - - - - Ko, Sun-Ta - - - - - Wei, Yung-Yeh - - - - - Lin, Su-Ming - - 1 Wang, Shih-Szu - - - - - Chung, Lo-Min - - - Chang, Hsieh Gen-Sen - 1 Shen, Hui-Ya - 1
Corporate Governance Report 23
3.2.2 Management Team MAR 27, 2021
Title Name Nationality/ Country of
Origin Gender
Date Effective
Shareholding Spouse &
Minor Shareholding
Shareholding by Nominee
Arrangement Experience (Education) Other Positions
Managers Who Are Spouses or Within Two
Degrees of Kinship Remark
Shares % Shares % Shares % Title Name Relation
President Kao,
Shing-Hwang R.O.C. Male 03/18/2021 62,809 0.00% 0 0.00% 0 0.00%
Senior Vice President (VO). Vice President, Flight Operations Div. Assistant Vice President, Flight Operations Div. Bachelor’s Degree, National Cheng Kung University
Director, Mandarin Airlines, Ltd. Director, Cal Hotel Co. Ltd. Director, CAL-Dynasty International, Inc. Director, Dynasty Properties Co., Ltd. Director, CAL-Asia Investment Inc. Director, Taoyuan International Airport Services Co., Ltd. Director & President, Cal Park Co. Ltd
None None None Note 1
Auditor General, General Audit Office
Fang, Juo-Ling
R.O.C. Female 05/11/2018 8,000 0.00% 0 0.00% 0 0.00%
Vice President, Administration Div. Deputy Auditor General, General Audit Office Master’s Degree, Georgia State University, U.S.A.
Supervisor, Taiwan Airport Service Co., Ltd. Supervisor, China Pacific Catering Services Ltd. Supervisor, CAL Park Co., Ltd. Supervisor, Taiwan Aircraft Maintenance and Engineering Co., Ltd. Supervisor, CAL Hotel Co., Ltd..
Assistant Vice
President, Cabin
Crew Div.
Fang,
Yuan-Hua Siblings None
Deputy Auditor General, General Audit Office
Ho, Hui-Fen
R.O.C. Female 02/01/2018 0 0.00% 0 0.00% 0 0.00%
Assistant Vice President, Finance Div. General Manager, General Accounting Department, Finance Div. Master’s Degree, Soochow University
Supervisor, Sabre Travel Network (Taiwan) Ltd. Supervisor, Taiwan Air Cargo Terminal Ltd.
None None None None
Senior Vice President (VE)
Wang, Houng
R.O.C. Male 08/16/2017 12,069 0.00% 0 0.00% 0 0.00%
Vice President, Maintenance Div. Vice President, Engineering Div. Bachelor’s Degree, Feng Chia University
Chairman, Taiwan Aircraft Maintenance and Engineering Co., Ltd. Director, Mandarin Airlines, Ltd. Director, Taoyuan International Airport Services Co., Ltd. Vice Chairman, NORDAM Asia Ltd. Director, Cal Hotel Co. Ltd. Chairman & President, Kaohsiung Airport Catering Services Ltd.
None None None None
Senior Vice President (VV)
Wang, Chen-Min
R.O.C. Male 01/01/2019 35,621 0.00% 0 0.00% 0 0.00%
Vice President, Passenger Sales Div. & Passenger Marketing Div. General Manager, Korea Branch Bachelor’s Degree, Feng Chia University
Director, CAL Hotel Co., Ltd.. Director, Mandarin Airlines, Ltd. Chairman, Taiwan Air Cargo Terminal Ltd. Director, Tigerair Taiwan Co., Ltd. Director, Taiwan Aircraft Maintenance And Engineering Co., Ltd. CAL-Asia Investment Inc.
None None None None
24 Corporate Governance Report
Title Name Nationality/ Country of
Origin Gender
Date Effective
Shareholding Spouse &
Minor Shareholding
Shareholding by Nominee
Arrangement Experience (Education) Other Positions
Managers Who Are Spouses or Within Two
Degrees of Kinship Remark
Shares % Shares % Shares % Title Name Relation
Senior Vice President (VF)
Chen, I-Chieh
R.O.C. Male 03/18/2021 6,161 0.00% 0 0.00% 0 0.00%
Vice President, Finance Div. Vice President, Investment Development & Management Div. General Manager, Vietnam Branch Concurrently, General Manager, Hanoi Branch Master’s Degree, National Taipei University
Director, Mandarin Airlines, Ltd. Director, Tigerair Taiwan Co., Ltd. Chairman, Taiwan Airport Services Co. Ltd. Director, Taoyuan International Airport Services Co., Ltd. Director, Kaohsiung Airport Catering Services Ltd. Director, Taiwan Aircraft Maintenance And Engineering Co., Ltd.
None None None None
Senior Vice President (VO)
Lai, Ming-Hui
R.O.C. Male 03/18/2021 19,127 0.00% 0 0.00% 0 0.00%
Vice President, Flight Operations Div. Vice President, Corporate Safety Office. Bachelor’s Degree, National Cheng Kung University
Director, Mandarin Airlines, Ltd. Director, CAL Hotel Co., Ltd..
None None None None
Data Protection Officer, Data Protection & Quality Management Office
Huang, Ta-Fang R.O.C. Female 07/31/2020 0 0.00% 0 0.00% 0 0.00%
General Manager, Honolulu Branch. Vice President, Legal & Insurance Div. MBA, Baruch College, City University Of New York.
None None None None None
Vice President, Human Resources Div.
Yeah, Shao-Ting R.O.C. Male 04/01/2019 868 0.00% 0 0.00% 0 0.00%
Assistant Vice President, Human Resources Div. General Manager, Human Resources & Administration Department, Maintenance Div. Bachelor’s Degree, Chinese Culture University
Director, Taoyuan International Airport Services Co., Ltd. Director, Taiwan Airport Services Co. Ltd.
None None None None
Assistant Vice President, Human Resources Div.
Lee, Pei-Chen
R.O.C. Female 04/01/2019 58,430 0.00% 7,144 0.00% 0 0.00%
General Manager, Human Resources Development Dept., Human Resources Div. General Manager, Administration Dept., Ground Services Div. Master’s Degree, National Taiwan Normal University
None None None None None
Vice President, Flight Operations Div.
Chen, I-Ko
R.O.C. Male 03/20/2021 23,541 0.00% 0 0.00% 0 0.00%
Vice President, Corporate Safety Office. Assistant Vice President, Corporate Safety Office. Associate’s Degree, United College Of Engineering
None None None None None
Assistant Vice President, Flight Operations Div.
Chen, Chwen-Der
R.O.C. Male 08/01/2018 6,299 0.00% 0 0.00% 0 0.00%
General Manager, Flight Operations Training Dept., Flight Operations Div. General Manager, Planning & Development Dept., Flight Operations Div. Master’s Degree, National Cheng Chi University
None None None None None
Assistant Vice President, Flight Operations Div.
Kang, Yi-Chuan
R.O.C. Male 11/01/2020 241,000 0.00% 16,766 0.00% 0 0.00%
Assistant Vice President, Flight Operations Dep. Mandarin Airlines. General Manager, Crew Scheduling Dept., Flight Operations Div. Master’s Degree, National Chiao Tung University.
None None None None None
Corporate Governance Report 25
Title Name Nationality/ Country of
Origin Gender
Date Effective
Shareholding Spouse &
Minor Shareholding
Shareholding by Nominee
Arrangement Experience (Education) Other Positions
Managers Who Are Spouses or Within Two
Degrees of Kinship Remark
Shares % Shares % Shares % Title Name Relation
Assistant Vice President, Flight Operations Div.
Tung, Hsing-Hua
R.O.C. Male 03/16/2018 587 0.00% 0 0.00% 0 0.00%
General Manager, Legal Affairs Department, Legal & Insurance Div. General Manager, Business Management Department, Business Development Office Master’s Degree, Tunghai University
None None None None None
Vice President, System Operation Control Div.
Chou, Jyh-Shyan
R.O.C. Male 12/01/2017 9,171 0.00% 7,382 0.00% 0 0.00%
Assistant Vice President, Corporate Safety Office Vice President, Taiwan Airport Services Co., Ltd. Master’s Degree, RMIT University, AU
None None None None None
Assistant Vice President, System Operation Control Div.
He, Cheng R.O.C. Male 11/01/2019 251 0.00% 0 0.00% 0 0.00%
Control Manager , Flight Control Dept., System Operation Control Div. General Manager, Bali Branch, Indonesia Branch Master’s Degree, Assumption University, Thailand
None None None None None
Assistant Vice President, System Operation Control Div.
Huang, Hsiang-Piao
R.O.C. Male 08/01/2017 1,000 0.00% 0 0.00% 0 0.00%
General Manager, Safety Assurance Department, Corporate Safety Office General Manager, Administration Department, Ground Services Div. Bachelor’s Degree, National Sun Yat-Sen University
None None None None None
Vice President, Passenger Sales & Passenger Marketing Div.
Peng, Pao-Chu R.O.C. Female 01/01/2019 8,434 0.00% 0 0.00% 0 0.00%
Vice President, Corporate Development Office Assistant Vice President, Passenger Sales Div. Bachelor’s Degree, National Taiwan University
Director, Sabre Travel Network (Taiwan) Ltd. Director, Everest Investment Holdings Ltd. Director, Mandarin Airlines, Ltd.
None None None None
Assistant Vice President, Passenger Sales & Passenger Marketing Div.
Chen, Pei-Ti
R.O.C. Female 11/01/2018 926 0.00% 0 0.00% 0 0.00%
Assistant Vice President, Passenger Sales & Marketing Div. General Manager, Sales Management Department Bachelor’s Degree, National Taiwan University
None None None None None
Assistant Vice President, Passenger Sales & Marketing Div.
Pan, Yun-Hau
R.O.C. Male 05/09/2020 0 0.00% 4,999 0.00% 0 0.00%
Marketing Director, Europe. General Manager, Schedule Planning Dept., Passenger Marketing Div. Master’s Degree, Concordia University Aviation Management, Canada
None None None None None
26 Corporate Governance Report
Title Name Nationality/ Country of
Origin Gender
Date Effective
Shareholding Spouse &
Minor Shareholding
Shareholding by Nominee
Arrangement Experience (Education) Other Positions
Managers Who Are Spouses or Within Two
Degrees of Kinship Remark
Shares % Shares % Shares % Title Name Relation
Vice President, Finance Div.
Wang, Wei
R.O.C. Female 03/18/2021 33,297 0.00% 0 0.00% 0 0.00%
Assistant Vice President, Corporate Development Office. General Manager, Austria Branch. MBA, George Washington University, U.S.A.
Supervisor, NORDAM Asia Ltd. Supervisor, Cal Hotel Co. Ltd. Supervisor, Dynasty Aerotech International Corp. Director, Tigerair Taiwan Co., Ltd.
None None None None
Assistant Vice President, Finance Div.
Yen, Yang
R.O.C. Female 05/01/2018 0 0.00% 0 0.00% 0 0.00%
General Manager, Finance & Treasury Department, Finance Div. General Manager, Economics Analysis Department, Finance Div. Master’s Degree, The City University of New York, U.S.A.
Supervisor, Taiwan Aircraft Maintenance And Engineering Co., Ltd. Supervisor, Kaohsiung Airport Catering Services Ltd. Director, Dynasty Properties Co., Ltd. Director, Dynasty Hotel of Hawaii, Inc.
None None None None
Assistant Vice President, Finance Div.
Huang, Hui-Na
R.O.C. Female 09/01/2017 16,661 0.00% 0 0.00% 0 0.00%
General Manager, Passenger Sales Revenue Audit & Control Department, Finance Div. General Manager, Accounting And Administration Department, Taipei Branch Master’s Degree, Soochow University
Supervisor, Global Sky Express Ltd. Supervisor, Yestrip Co., Ltd.
None None None None
Vice President, Corporate Safety Office
Li, Chih-Wei
R.O.C. Male 03/20/2021 10,295 0.00% 0 0.00% 0 0.00%
Vice President, Quality Assurance Div. Assistant Vice President, Maintenance Div. Master’s Degree, Kai-nan University.
Director, NORDAM Asia Ltd.
None None None None
Assistant Vice President, Corporate Safety Office
Yu, Yueh-Han
R.O.C. Male 12/06/2018 0 0.00% 0 0.00% 0 0.00%
General Manager, Safety Department Corporate Safety Office Vice President of Safety, Security, Quality & Environment, Tigerair Taiwan Co., Ltd. Master’s Degree, National Sun Yat-sen University
None None None None None
Vice President, Legal & Insurance Div.
Chien, Feng-Nien
R.O.C. Male 01/03/2017 0 0.00% 0 0.00% 0 0.00%
Director of Legal Office, Taiwan Financial Asset Service Corporation Head Prosecutor, Taichung Prosecutors Office Master’s Degree, National Taiwan Ocean University
None None None None None
Vice President, Corporate Communications Office
Lu, Shwu-Huoy
R.O.C. Female 10/11/2020 22,605 0.00% 0 0.00% 0 0.00%
General Manager, Malaysia Branch. Assistant Vice President, Corporate Development Office. EMBA, National Central University
None None None None None
Assistant Vice President, Corporate Communications Office
Lin, Herng-Shan
R.O.C. Male 04/16/2019 0 0.00% 0 0.00% 0 0.00%
General Manager, Corporate Affairs Department, Corporate Communications Office General Manager, Employee Relations Department, Human Resources Div.
None None None None None
Corporate Governance Report 27
Title Name Nationality/ Country of
Origin Gender
Date Effective
Shareholding Spouse &
Minor Shareholding
Shareholding by Nominee
Arrangement Experience (Education) Other Positions
Managers Who Are Spouses or Within Two
Degrees of Kinship Remark
Shares % Shares % Shares % Title Name Relation
Master’s Degree, RMIT University, AU
Vice President, Administration Div.
Chen, Wei-Tau
R.O.C. Male 11/18/2019 36,165 0.00% 2,196 0.00% 0 0.00%
Vice President, Ground Services Division President, Taiwan Airport Services Co. Ltd. Bachelor’s Degree, Fu Jen Catholic University
Director, Dynasty Aerotech International Corp. Director, CAL Park Co., Ltd.
None None None None
Vice President, Information Management Div.
Chung, Ming-Jyh
R.O.C. Male 11/18/2019 638 0.00% 0 0.00% 0 0.00%
Vice President, Administration Div. Deputy Auditor General, General Audit Office Master’s Degree, National Taiwan University
Director, Sabre Travel Network (Taiwan) Ltd.
None None None None
Assistant Vice President, Information Management Div.
Liu, Duan-Shiuh
R.O.C. Male 04/20/2017 92,608 0.00% 0 0.00% 0 0.00%
Assistant Vice President, Ground Services Div. General Manager, Information Planning Department, Information Management Div. Master’s Degree, National Taipei University of Technology
None None None None None
Vice President, Cabin Crew Div.
Hong, Tsu-Kuang R.O.C. Male 05/04/2017 11,816 0.00% 0 0.00% 0 0.00%
Assistant Vice President, Flight Operations Div. General Manager, Food & Beverage Services Department, In-Flight Service Supply Div. Bachelor’s Degree, Soochow University
Director, China Pacific Laundry Services Ltd. Director, China Pacific Catering Services Ltd
None None None None
Assistant Vice President, Cabin Crew Div.
Fang, Yuan-Hua
R.O.C. Male 08/04/2018 30,348 0.00% 0 0.00% 0 0.00%
President, Dynasty Hotel of Hawaii, Inc. General Manager, Qingdao Office Master’s Degree, RMIT University, AU
None
Auditor General, General
Audit Office
Fang, Juo-Ling
Siblings None
Vice President, Corporate Development Office
Chang, Cheng-Hao
R.O.C. Male 01/21/2019 131,905 0.00% 0 0.00% 0 0.00%
Vice President, Cargo Sales & Marketing Div. President, Taiwan Air Cargo Terminal Ltd. Master’s Degree, Cranfield University, UK
Director, Tigerair Taiwan Co., Ltd. Director, Global Sky Express Ltd. Director, China Aircraft Services Limited. Director, Taiwan Air Cargo Terminal Ltd.
None None None None
Assistant Vice President, Corporate Development Office
Yeh, Jin-Fu
R.O.C. Male 03/18/2021 25,773 0.00% 0 0.00% 0 0.00%
Assistant Vice President, Administration Div. General Manager, Fukuoka Branch. Master’s Degree, National Cheng Kung University
None None None None None
Assistant Vice
President,
Corporate
Development
Office
Liu,
Shou-Shu R.O.C. Female 12/01/2018 0 0.00% 0 0.00% 0 0.00%
Special Assistant of President Office, Mandarin Airlines Bachelor’s Degree,
National Taiwan
University
None None None None None
Vice President, In-Flight Service Supply Chain & Marketing Div.
Chung,
Wan-Chun R.O.C. Female 11/23/2019 27,687 0.00% 0 0.00% 0 0.00%
General Manager, Hong Kong Branch Vice President, Finance Div. Master's Degree, University of Illinois At Urbana-Champaign, U.S.A.
Chairman, China Pacific Laundry Services Ltd. Director, China Pacific Catering Services Ltd. Director, Kaohsiung Airport Catering Services Ltd.
None None None None
Assistant Vice President, In-Flight Service Supply Chain & Marketing Div.
Chang, Hsu-Yu
R.O.C. Male 11/30/2020 6,211 0.00% 0 0.00% 0 0.00%
General Manager, Supply
Dept., Engineering Div.
General Manager, Dynasty
Aerotech International
Corp. Master's Degree, Cranfield University.
None None None None None
Vice President, Ground Services Div.
Chu, Te-Hsiu R.O.C. Male 11/18/2019 43,382 0.00% 8,277 0.00% 0 0.00%
Chief Representative, East China, and Concurrently General Manager, Shanghai Office Assistant Vice President,
Director, China Pacific Laundry Services Ltd. Director, Taoyuan International Airport Services Co., Ltd.
None None None None
28 Corporate Governance Report
Title Name Nationality/ Country of
Origin Gender
Date Effective
Shareholding Spouse &
Minor Shareholding
Shareholding by Nominee
Arrangement Experience (Education) Other Positions
Managers Who Are Spouses or Within Two
Degrees of Kinship Remark
Shares % Shares % Shares % Title Name Relation
Flight Operations Div. Bachelor’s Degree, Chinese Culture University
Assistant Vice President, Ground Services Div.
Huang, Chin-Feng
R.O.C. Male 10/16/2019 139,659 0.00% 589 0.00% 0 0.00%
President, Taoyuan International Airport Services Company Ltd. Senior Auditor, General Audit Office Bachelor’s Degree, Soochow University
None None None None None
Assistant Vice President, Ground Services Div.
Hsu, Hsueh-Wen
R.O.C. Male 02/01/2020 13,149 0.00% 0 0.00% 0 0.00%
Station Manager, Customer Service, Taoyuan International Airport, Ground Services Div. Station Manager, Customer Service, Songshan International Airport, Ground Services Div. Bachelor’s Degree, Fengjia University
None None None None None
Vice President, Cargo Sales, Marketing & Services Div.
Liu, Der-Chuan R.O.C. Male 07/17/2010 172 0.00% 0 0.00% 0 0.00%
Vice President, Cargo Sales & Marketing Div. Vice President, Cargo Services & Logistics Div. Bachelor’s Degree, Fu Jen University
Director, Taiwan Air Cargo Terminal Ltd. Director, Dynasty Aerotech International Corp. Director, Global Sky Express Ltd. Director, Eastern United International Logistics (Holdings) Ltd.
None None None None
Assistant Vice President, Cargo Sales, Marketing & Services Div.
Sheu, Yuh-Shy
R.O.C. Male 01/22/2019 24,648 0.00% 0 0.00% 0 0.00%
General Manager, Cargo Sales & Services, Mainland China General Manager, Cargo Sales Management Department, Cargo Sales, Marketing & Services Div. Bachelor’s Degree, Feng Chia University
None None None None None
Assistant Vice President, Cargo Sales, Marketing & Services Div.
Mao, Li-Chung
R.O.C. Male 12/20/2019 0 0.00% 0 0.00% 0 0.00%
Chief Representative, South China Concurrently, General Manager, Guangzhou Office. General Manager, Nanking Office. MBA, Chung Yuan Christian University
None None None None None
Assistant Vice President, Cargo Sales, Marketing & Services Div.
Hsueh, Po-Wen R.O.C. Male 09/18/2020 328 0.00% 0 0.00% 0 0.00%
Chief Representative, East China Concurrently, General Manager, Shanghai Office. General Manager, Cargo Sales & Services, Taiwan. Bachelor’s Degree from Chinese Culture University
None None None None None
Vice President, Maintenance Div.
Sun, Jia-Min
R.O.C. Male 09/16/2017 62,602 0.00% 0 0.00% 0 0.00%
Vice President, Engineering Div. Vice President, Corporate Safety Office Master’s Degree, National Taiwan University
Chairmanr, Dynasty Aerotech International Corp. Director, Taiwan Aircraft Maintenance And Engineering Co., Ltd. Director, China Aircraft Services Ltd.
None None None None
Assistant Vice President, Maintenance Div.
Hsiao, Jui-Fu
R.O.C. Male 09/16/2017 0 0.00% 0 0.00% 0 0.00%
General Manager, Line Maintenance Department, Maintenance Div. General Manager, Line Operation Department, Maintenance Div. Master’s Degree, Kainan University
None None None None None
Vice President, Engineering Div.
Lee, Jung-Hui
R.O.C. Male 09/16/2017 10,298 0.00% 0 0.00% 0 0.00%
Vice President Quality, Assurance Div. Assistant Vice President, Maintenance Div. Master’s Degree, Tatung University
Director, Taiwan Aircraft Maintenance And Engineering Co., Ltd. Director, Taikoo (Xiamen) Landing Gear Services Co., Ltd. Director, HAECO Composite Structures (Jinjiang) CO. LTD. Director, Dynasty Aerotech International Corp.
None None None None
Corporate Governance Report 29
Title Name Nationality/ Country of
Origin Gender
Date Effective
Shareholding Spouse &
Minor Shareholding
Shareholding by Nominee
Arrangement Experience (Education) Other Positions
Managers Who Are Spouses or Within Two
Degrees of Kinship Remark
Shares % Shares % Shares % Title Name Relation
Vice President, Taiwan
Chiu, Wei-Tuan
R.O.C. Male 03/19/2020 4,901 0.00% 0 0.00% 0 0.00%
Assistant Vice President, Passenger Sales & Marketing Div. General Manager, Osaka Branch Bachelor’s Degree, National Chung Hsing University
Director, Sabre Travel Network (Taiwan) Ltd.
None None None None
Vice President, Europe
Han, Liang-Chung
R.O.C. Male 06/12/2017 11,498 0.00% 0 0.00% 0 0.00%
Senior Vice President President, Mandarin Airlines Co., Ltd. Master’s Degree, Business of Administration, University of Pittsburgh, U.S.A.
None None None None None
Vice President, Mainland China
Chang, Chih-Chieh R.O.C. Male 10/08/2018 96,553 0.00% 0 0.00% 0 0.00%
Senior Vice President, President Office Vice President, Passenger Sales Div. Bachelor’s Degree, Tunghai University
None None None None None
Vice President, Oceania
Chen, Chung-Ming
R.O.C. Male 05/10/2017 32,779 0.00% 0 0.00% 0 0.00%
General Manager, Fukuoka Branch Assistant Vice President, Passenger Sales Div. Bachelor’s Degree, Department of Transportation & Logistics Management of National Chiao Tung University
None None None None None
Vice President, Japan
Chang, Horng-Jong
R.O.C. Male 05/27/2020 11,820 0.00% 0 0.00% 0 0.00%
Chairman, Tigerair Taiwan Co., Ltd. General Manager, Haikou Office. Washington University In St. Louis, Doctor of Science
Director, Dynasty Holidays, Inc. Director, Infini Travel Information, Inc.
None None None None
Note1: In order to prevent the concurrent appointment from influencing the objectivity and supervision of the Board of Directors, except for President Kao, Shing-Hwang and Director Wei, Yung-Yeh, who are concurrently Directors and employees, none of the other members of the 21st Board of Directors is concurrently an employee of the Company.
Note2: Company presidents, senior vice presidents, vice presidents, data protection officer, assistant vice presidents, and department and branch general managers have not worked for the Company's currently designated accounting firm or affiliated enterprises within the specified period and do not hold Company stock under the name of a different person.
30 Corporate Governance Report
3.2.3 Remuneration of Directors, President, and Vice President Remuneration of Directors
Title Name
(Note 1)
Remuneration Ratio of Total Remuneration
(A+B+C+D) to Net Loss (%) (Note 8)
Base Compensation (A) (Note 2)
Severance Pay (B) Bonus to Directors (C)
(Note 3) Allowances (D)
(Note 4)
CAL
Consolidated Subsidiaries of
CAL (Note 7)
CAL
Consolidated Subsidiaries of
CAL (Note 7)
CAL
Consolidated Subsidiaries of
CAL (Note 7)
CAL
Consolidated Subsidiaries of
CAL (Note 7)
CAL
Consolidated Subsidiaries of
CAL (Note 7)
Chairman Hsieh, Su-Chien 5,729 5,729 0 0 0 0 513 2,041 4.46% 5.55%
Director Chen, Charles C.Y. 40 40 0 0 0 0 480 720 0.37% 0.54%
Director Ting, Kwang-Hung 40 40 0 0 0 0 495 495 0.38% 0.38%
Director Chen, Han-Ming 40 2,182 0 0 0 0 480 902 0.37% 2.20%
Director Ko, Sun-Ta 40 40 0 0 0 0 480 480 0.37% 0.37%
Director Wei, Yung-Yeh 40 40 0 0 0 0 480 480 0.37% 0.37%
Director Lin, Su-Ming 40 40 0 0 0 0 500 500 0.39% 0.39%
Director Wang, Shih-Szu 40 40 0 0 0 0 276 276 0.23% 0.23%
Independent
Director Chung, Lo-Min 60 60 0 0 0 0 760 760 0.59% 0.59%
Independent
Director
Chang, Hsieh
Gen-Sen 60 60 0 0 0 0 770 770 0.59% 0.59%
Independent
Director Shen, Hui-Ya 60 60 0 0 0 0 760 760 0.59% 0.59%
1.State the policy, system, standard and structure of independent directors’ remuneration, and the association between the remuneration amount and factors, such as responsibilities, risks, and contributed time: The remuneration of the independent directors of the Company shall be handled in accordance with the Articles of Association and shall be determined by the Board of Directors with reference to the standards among related industries and listed companies, and shall be paid as fixed remuneration, transportation fees, and attendance fees.
Note 1: Aside from independent directors, all other directors are representatives of the Company’s juridical person shareholders China Aviation Development Foundation, National Development Fund (Executive Yuan).
Note 2: Refers to director remuneration over the past year (includes director salary, additional compensation, various bonuses, incentive pay).
Note 3: As stipulated in the Company’s Articles of Incorporation, directors are not awarded bonuses.
Note 4: Refers to relevant business expenses incurred by directors (including travel expenses, various allowances, company car). If provided with a car or other transportation, or exclusive personal expenses, the type and cost, rent (actual or fair market calculation), fuel cost, and other costs of the assets provided must be disclosed. The above figures do not include remuneration paid to drivers, which totaled NT$912,000.
Note 5: Refers to salary, bonuses, and allowances received by directors who are also employed by the Company (including as president, vice president, other management, or regular employee) over the past year and includes salary, additional compensation, various bonuses, incentive pay, travel expenses, various allowances, and company car. If provided with a car or other transportation, or exclusive personal expenses, the type and cost, rent (actual or fair market calculation), fuel cost, and other costs of the assets provided must be disclosed. The Company didn't carry out employee stock options, employee restricted stock awards and participation in a cash capital increase.
* The content is provided for information disclosure, not tax purposes.
Corporate Governance Report 31
Unit: NT$ thousands Dec 31, 2020 Remuneration Received by Directors Who are Also Employees Ratio of Total Compensation
(A + B + C + D + E + F + G) to Net
Loss (%) (Note 8)
Compensation Paid to
Directors from an
Invested Company or
Parent Company Other
than the Company’s
Subsidiary
(Note 9)
Salary, Bonuses, and
Allowances (E)(Note 5) Severance Pay (F)
Employees’ Compensation (G)
(Note 6)
CAL
Consolidated
Subsidiaries of
CAL
(Note 7)
CAL
Consolidated
Subsidiaries of
CAL
(Note 7)
CAL
Consolidated
Subsidiaries of CAL
(Note 7) CAL
Consolidated
Subsidiaries of
CAL
(Note 7) Cash Stock Cash Stock
0 0 0 0 0 0 0 0 4.46% 5.55% None
0 0 0 0 0 0 0 0 0.37% 0.54% None
0 0 0 0 0 0 0 0 0.38% 0.38% None
0 0 0 0 0 0 0 0 0.37% 2.20% None
0 0 0 0 0 0 0 0 0.37% 0.37% None
1,457 1,457 0 0 0 0 0 0 1.41% 1.41% None
0 0 0 0 0 0 0 0 0.39% 0.39% None
0 0 0 0 0 0 0 0 0.23% 0.23% None
0 0 0 0 0 0 0 0 0.59% 0.59% None
0 0 0 0 0 0 0 0 0.59% 0.59% None
0 0 0 0 0 0 0 0 0.59% 0.59% None
2.Except as disclosed in the above table, the remuneration received by the Directors of the Company for the services provided for all companies in the
financial report (such as serving as a consultant who is not an employee) in the most recent year: None
Note 6: Refers to employee compensation (including stock or cash) received by directors who are also employed by the Company (including as president, vice president, other management, or regular employee) over the past year, and the amount of employee compensation approved for distribution by the Board for the most recent year must be disclosed. The Company has no distributable earnings in 2020, so it does not plan to distribute employee compensation.
Note 7: The total remuneration provided by the Company and subsidiaries to directors is disclosed per the consolidated financial statement. Note 8: Net income refers to net income (after tax) for the most recent year. For those already using IFRS, net income refers to net income (after tax) reported on
the individual financial statement for the most recent year. The Company’s 2020 individual financial statement net profit (after tax) totaled NT$140,000,000.
Note 9: (1) The directors of the Company do not receive any remuneration related to the reinvestment of enterprises other than subsidiaries. (2) Compensation refers to pay, bonuses (including bonuses to employees, directors, or supervisors), or expenses paid in the execution of business to
Company directors who serve as director, supervisor, or manager of an invested company other than a Company subsidiary. Note 10: (1) Aside from Chairman Hsieh, Su-Chien, all other directors received a travel allowance.
(2) Transportation subsidies for Director Ting, Kwang-Hung, and Director Wei, Yung-Yeh were partially donated to the China Airlines Employee Union. (3) Director who also serves as an employee of the Company is Director Wei, Yung-Yeh.
32 Corporate Governance Report
President and Senior Vice President Remuneration
Title Name
Salary (A) (Note 2)
Severance Pay (B) Bonuses and Allowances (C)
(Note 3)
CAL
Consolidated Subsidiaries of
CAL (Note 5)
CAL
Consolidated Subsidiaries of
CAL (Note 5)
CAL
Consolidated Subsidiaries of
CAL (Note 5)
President Hsieh, Su-Chien (Note 1) 0 0 0 0 0 0
Senior Vice President Kao, Shing-Hwang 2,914 2,914 0 0 5,009 5,369
Senior Vice President Wang, Chen-Min 2,975 2,975 0 0 623 1,867
Senior Vice President Wang, Houng 3,122 3,122 0 0 666 1,266
Senior Vice President Chang, Young 3,169 3,169 0 0 655 2,117
Note 1: Director Hsieh, Su-Chien also served as president and did not accept president remuneration. Note 2: Refers to president and senior vice president salaries, additional compensation, and severance pay over the past year. Note 3: Refers to various bonuses, incentive pay, travel expenses, various allowances, and company car distributed to presidents and senior vice
presidents over the past year. If provided with a car or other transportation, or exclusive personal expenses, the type and cost, rent (actual or fair market calculation), fuel cost, and other costs of the assets provided must be disclosed. The above figures do not include remuneration paid to drivers, which totaled NT$3,943,000. As stipulated in IFRS 2, Share Based Payments including obtaining employee stock options and employee restricted stock awards and participation in a cash capital increase shall be calculated as remuneration.
* The content is provided for information disclosure, not tax purposes.
Corporate Governance Report 33
Unit: NT$ thousands December 31, 2020
Employees’ Compensation (D) (Note 4)
Ratio of Total Compensation (A + B + C + D) to Net Loss (%)
(Note 6) Compensation paid to the Presidents and Senior Vice
Presidents from an Invested Company or Parent Company Other Than the Company’s Subsidiary
(Note 7) CAL
Consolidated Subsidiaries of CAL
(Note 5) CAL
Consolidated Subsidiaries of CAL (Note 5)
Cash Stock Cash Stock
0 0 0 0 0% 0% None
0 0 0 0 5.66% 5.92% None
0 0 0 0 2.57% 3.46% None
0 0 0 0 2.71% 3.13% None
0 0 0 0 2.73% 3.78% None
Note 4: Refers to employee compensation (including stock or cash) approved for distribution by president and senior vice presidents over the past year. Net income refers to net income (after tax) for the most recent year. For those already using IFRS, net income refers to net income (after tax) reported on the individual financial statement for the most recent year. The Company has no distributable earnings in 2020, so it does not plan to distribute employee compensation.
Note 5: The total remuneration provided by the Company and subsidiaries to Company presidents and senior vice presidents is disclosed per the consolidated financial statement.
Note 6: Net income refers to net income (after tax) for the most recent year. For those already using IFRS, net income refers to net income (after tax) reported on the individual financial statement for the most recent year. The Company’s 2020 individual financial statement net profit (after tax) totaled NT$140,000,000.
Note 7: The President and Senior Vice President of the Company do not receive any remuneration related to the reinvestment of enterprises other than subsidiaries.
34 Corporate Governance Report
Top five managers with the highest remuneration
Title Name
(Note 1)
Salary (A) (Note 2)
Severance Pay (B) Bonuses and Allowances (C)
(Note 3)
CAL
Consolidated Subsidiaries of
CAL (Note 5)
CAL
Consolidated Subsidiaries of
CAL (Note 5)
CAL
Consolidated Subsidiaries of
CAL (Note 5)
Senior Vice President Kao, Shing-Hwang 2,914 2,914 0 0 5,009 5,369
Senior Vice President Wang, Chen-Min (Note 11) 2,975 2,975 0 0 623 1,867
Senior Vice President Wang, Houng 3,122 3,122 0 0 666 1,266
Senior Vice President Chang, Young 3,169 3,169 0 0 655 2,117
Vice President, Flight Operations Div. Chen, I-Ko 2,553 2,553 0 0 5,130 5,130
Note 1: The "top five managers with the highest remuneration" refer to the Company's presidents, the definition of which is based on the Ministry of Finance Official Letter No. Zheng-San 0920001301 regarding the scope of managerial officers issued by the former Securities and Futures Commission, Ministry of Finance on March 27, 2003.
Note 2: Refers to the salaries, additional compensation, and severance pay to the top five managers with the highest remuneration over the past year.
Note 3: Refers to various bonuses, incentive pay, travel expenses, various allowances, and company car distributed to the top five managers with the highest remuneration over the past year. If provided with a car or other transportation, or exclusive personal expenses, the type and cost, rent (actual or fair market calculation), fuel cost, and other costs of the assets provided must be disclosed. The above figures do not include remuneration paid to drivers, which totaled NT$3,943,000. As stipulated in IFRS 2, Share Based Payments including obtaining employee stock options and employee restricted stock awards and participation in a cash capital increase shall be treated as remuneration.
* The content is provided for information disclosure, not for tax purposes.
Corporate Governance Report 35
Unit: NT$ thousands December 31, 2020
Employees’ Compensation (D) (Note 4)
Ratio of Total Compensation (A + B + C + D) to Net Loss (%)
(Note 6) Compensation paid to the Presidents and Senior Vice Presidents from an Invested Company or Parent Company Other Than the Company’s Subsidiary
(Note 7) CAL
Consolidated Subsidiaries of CAL
(Note 5) CAL
Consolidated Subsidiaries of CAL (Note 5)
Cash Stock Cash Stock
0 0 0 0 5.66% 5.92% None
0 0 0 0 2.57% 3.46% None
0 0 0 0 2.71% 3.13% None
0 0 0 0 2.73% 3.78% None
0 0 0 0 5.49% 5.49% None
Note 4: Refers to employee compensation (including stock or cash) approved for distribution by the top five managers with the highest remuneration over the past year. Net income refers to net income (after tax) for the most recent year. For those already using IFRS, net income refers to net income (after tax) reported on the individual financial statement for the most recent year. The Company has no distributable earnings in 2020, so it does not plan to distribute employee compensation.
Note 5: The total remuneration provided by the Company and subsidiaries to the top five managers with the highest remuneration is disclosed per the consolidated financial statement.
Note 6: Net income refers to net income (after tax) for the most recent year. For those already using IFRS, net income refers to net income (after tax) reported on the individual financial statement for the most recent year. The Company’s 2020 individual financial statement net profit (after tax) totaled NT$140,000,000.
Note 7: The top five managers with the highest remuneration do not receive any remuneration related to the reinvestment of enterprises other than subsidiaries.
36 Corporate Governance Report
3.2.4 Comparison of Remuneration for Directors, Presidents, and Vice Presidents in the Most Recent Two Fiscal Years and Remuneration Policy for Directors, Presidents, and Vice Presidents
A. The ratio of the total remuneration paid by the Company and by all companies included in the consolidated financial statements for the two most recent fiscal years to directors, presidents, and vice presidents of the Company, to their net income (loss).
Title 2019 2020
CAL Consolidated Subsidiaries of CAL CAL Consolidated Subsidiaries of
CAL
Directors -1.62% -1.79% 9.74% 12.84%
Presidents and Senior Vice Presidents -2.06% -2.37% 13.67% 16.29%
B. The policies, standards, and portfolios for the payment of remuneration, the procedures for determining remuneration, and the correlation with business performance.
As stipulated in the Articles of Incorporation, the Board of Directors is authorized to set the chairman’s remuneration in accordance with the Company’s policies regarding manager compensation and based on the extent of his or her participation in Company operations. The travel allowances and remuneration of other directors are determined by the Board in reference to the compensation levels provided by related-industries and public companies. In accordance with Article 29 of the Company Act, president and senior vice president's remuneration is set by the Board of Directors’ resolution based on Company employee salary-related regulations. Bonuses and employee compensation are calculated based on the Company’s overall operating performance and the employee’s individual performance achievement rate.
C. Procedure for establishing remuneration In the case of remuneration for board members and managers, as per regulation, the Company's
Salary and Remuneration Committee meets regularly to assess and set salaries and remuneration, which are implemented after submission to the Board of Directors.
D. Linkage to business outcomes
(1) The remuneration of the president has already been determined based on his professional capability and the Company's operations and financial situation; the Senior Vice Presidents are evaluated based on the work performance evaluation regulation of the Company, which include 40% of personal performance management and 60% of two times of annual work evaluation. The criteria include financial aspect, customer aspect, internal process aspect, safety aspect, growth and learning aspect, etc.
(2) Pursuant to Chapter 5, Article 25 of the Articles of Incorporation, if the Company makes profits in the year, no less than 3% of the profit shall be distributed as employee remuneration in either stock or cash. According to the internal regulations, work performance bonus is distributed based on the company's management goals in different stage. 60% accounts for personal performance and 40% account for the job title.
E. Linkage to future risk Major decision making at operational levels of the company always takes into consideration and
balances various risk factors; major decision-making performance will be reflected in the Company's profits, thereby relating salaries and remuneration to management levels; specifically, the salaries and remuneration of the chairman of the board, the president, and senior vice presidents are linked to results and managing future risk.
Corporate Governance Report 37
3.3 Implementation of Corporate Governance 3.3.1 Board of Directors
A. From January 1, 2020, through March 27, 2021, a total of seven meetings of the Board of Directors were held. The average attendance rate was 98%. Director attendance is detailed below:
Title Name
(Note 1) Attendance
in Person By Proxy
Attendance Rate (%) (Note 2)
Juridical Person Shareholder Represented
Remarks
Chairman Hsieh, Su-Chien 7 0 100% China Aviation Development Foundation
None
Director Kao, Shing-Hwang 1 0 100% China Aviation Development Foundation
None
Director Chen, Charles C.Y. 7 0 100% China Aviation Development Foundation
None
Director Ting, Kwang-Hung 7 0 100% China Aviation Development Foundation
None
Director Chen, Han-Ming 7 0 100% China Aviation Development Foundation
None
Director Ko, Sun-Ta 7 0 100% China Aviation Development Foundation
None
Director Wei, Yung-Yeh 7 0 100% China Aviation Development Foundation
None
Director Lin, Su-Ming 7 0 100% National Development Fund (Executive Yuan)
None
Director Wang, Shih-Szu 7 0 100% National Development Fund (Executive Yuan)
None
Independent Director Chung, Lo-Min 6 1 86% - On March 18, 2020, Chang, Hsieh Gen-Sen attended as a proxy.
Independent Director Chang, Hsieh Gen-Sen 7 0 100% - None Independent Director Shen, Hui-Ya 7 0 100% - None Other items deserving mention: 1. In the operation of the company by the Board of Directors, should any one of the following situations arise, the Board Meeting date, session, content of the resolution,
opinions of all independent directors, and the Company’s response to these comments shall be properly recorded: (1) Matters listed under Article 14-3 of the Securities and Exchange Act: The Company has set up an Audit Committee, hence, this does not apply. (2) Other matters up for decision making by the Board not listed in Article 14-3 of the Securities and Exchange Act but were opposed by independent directors or about
which the said directors have reservations and their opinion has been recorded or submitted in a written statement: None. 2. Should a director recuse him or herself from a decision about which he or she has a conflict of interest, the name of the director, contents of the resolution, reasons for
recusal, and the results of the vote should be noted:
Meeting Dates Agenda content Directors recused for conflicting interest Reason for recusal Participation in vote
January 13, 2020: 9th meeting of the 21st Board of Directors
Chairman and Managers' 2020 Lunar New Year Incentive Chairman Hsieh, Su-Chien Personal interest in
this matter
Chairman Hsieh, Su-Chien, who recused according to law due to interests involved, did not participate in the discussion or voting. The rest of the 10 attending Directors approved the resolution.
May 7th, 2020: 10th meeting of the 21st Board of Directors
Release Director Chen, Han-Ming from non-competition restrictions Director Chen, Han-Ming Personal interest in
this matter
Director Chen, Han-Ming, who recused according to law due to interests involved, did not participate in the discussion or voting. The rest of the 10 attending Directors approved the resolution.
August 6th, 2020: 12th meeting of the 21st Board of Directors
Capital increase for Tigerair Taiwan Co., Ltd. Director Chen, Han-Ming Personal interest in
this matter
Director Chen, Han-Ming, who recused according to law due to interests involved, did not participate in the discussion or voting. The rest of the 10 attending Directors approved the matter.
Distribute flight safety bonus to Chairman and Managers Chairman Hsieh, Su-Chien Personal interest in
this matter
Chairman Hsieh, Su-Chien voluntarily gave up the bonus. The recusal was not necessary since no personal interest was involved. All attending Directors approved the matter.
January 18th, 2021: 14th meeting of the 21st Board of Directors
2021 Lunar New Year incentive for Chairman and Managers Chairman Hsieh, Su-Chien Personal interest in
this matter
Chairman Hsieh, Su-Chien voluntarily gave up the bonus. The recusal was not necessary since no personal interest was involved. All attending Directors approved the matter.
March 18th, 2021: 15th meeting of the 21st Board of Directors
The appointment of President Director Kao, Shing-Hwang Personal interest in this matter
Director Kao, Shing-Hwang, who recused according to law due to interests involved, did not participate in the discussion or voting. The rest of the 11 attending Directors approved the resolution.
Distribute flight safety bonus to managers Director Kao, Shing-Hwang Personal interest in
this matter
Director Kao, Shing-Hwang, who recused according to law due to interests involved, did not participate in the discussion or voting. The rest of the 11 attending Directors approved the resolution.
3. Board of Directors’ functional improvement goals for the last year and the current year (such as forming an audit committee and improving information transparency) and implementation assessment: (1) To strengthen the management mechanisms and oversight, three functional committees, namely, the Remuneration Committee, Audit Committee, and Risk
Committee, were set up under the Board of Directors. Each is convened based on its charter, and the charters were approved by the Board. The committees meet to review and discuss relevant issues and report their conclusions and suggestions to the Board for resolution. The committees have been a success. The regulations governing functional committees passed by the Board specify the number of committee members, term of office, committee powers, rules of procedure, and resources to be provided by the Company when the committees exercise their powers.
38 Corporate Governance Report
(2) In order to implement corporate governance and improve the functioning of the Board of Directors of the Company and establish performance objectives to enhance the efficiency of the Board of Directors, the Company has formulated the "Regulations Governing the Board Performance Evaluation," which is implemented once at the end of each year. The evaluation method is divided into performance evaluation of the entire Board of Directors, individual Board members, and the functional committees. The evaluation shall be conducted every three years by an external professional independent organization or a team of experts and scholars. The Company has conducted a performance evaluation in 2020. The self-evaluation results by the entire Board of Directors, individual Board members, and the functional committees are all excellent. Hang Seng S.D. Co., Ltd. conducted the 2020 external evaluation of the Board of Directors, and the result was excellent.
(3) The Company regularly arranges advanced courses for directors every year, which cover corporate governance-related topics, such as finance, risk management, sales, business, legal affairs, accounting, internal control system, financial reporting responsibility, corporate social responsibility, etc., and encourages members of the Board to continue to participate in courses related to corporate governance in their new or existing term of office to enable the members of the Board to have different professional functions, and to implement the diversification policy of directors.
(4) For more information regarding China Airlines Corporate Governance, please refer to our website (http://www.china-airlines.com): Corporate Social Responsibility, “Stakeholders' Area” and “Investor Information”.
4. Independent director attendance record for 2020 through March 27, 2021: Dates
Name 01/13/2020 03/18/2020 05/07/2020 08/06/2020 11/05/2020 01/18/2021 03/18/2021
Chung, Lo-Min ○ Chang, Hsieh Gen-Sen
Shen, Hui-Ya Note: Indicates attendance in person. ○ indicates attendance by proxy. indicates the director did not attend.
Note 1: For directors that are juridical persons, the name of the juridical person shareholder and its representatives must be disclosed. Note 2: (1) When a director resigns before the year’s end, the remark column shall have the date of resignation and actual attendance rate (%) calculated based on the number
of meetings held during the period prior to resignation and the actual number of meetings attended by him/her. (2) If there is a change of directors prior to the end of the year, both the new and old directors shall be included in the table and the remark column shall note whether
the director has been reelected or newly elected and the date of the (re)election. Actual attendance rate (%) is calculated based on the number of meetings held during the period of service and the actual number of meetings attended by him/her.
B. Evaluation of the Board of Directors Evaluation cycle Evaluation
period Scope of
evaluation Evaluation method Evaluation content
(1) Engage in one internal evaluation per year.
January 1 to December 31, 2020
Covers the evaluation of the board as a whole, the individual directors, and functional committees
Evaluation by the business team of the Board of Directors, self-evaluation by the Board members, and performance evaluation by the functional committee members
(1) Board of Directors’ performance evaluation: 11 metrics in total, including 5 measurement parameters, i.e., the degree of participation in the Company's operations, the Board of Directors’ decision-making quality, the composition and structure of the Board of Directors, the selection and continuing education of Directors, and internal control.
(2) Individual Board members: 18 metrics in total, including 6 measurement parameters, i.e., mastery of Company’s goals and tasks, recognition of Directors' responsibilities, participation in Company’s operations, internal relationship management and communication, Director's expertise and continuing education, and internal control.
(3) Evaluating Functional Committee Performance: 10 metrics in total, including 5 measurement parameters, i.e., the degree of participation in the Company's operations, functional committee responsibility awareness, decision-making quality of functional committee, composition and member selection of functional committee, and internal control.
(2)An external
evaluation shall be carried out every three years by an external professional independent organization or a team of experts and scholars.
January 1 to December 31, 2020
Covers the evaluation of the board as a whole, and functional committees
External evaluation form of the Functional Committees and the observation of the Board meeting
The evaluation aspects cover the engagement of company operation, decision-making improvement by the Board of Directors, the composition and structure of the Board of Directors, the selection and appointment of the Board of Directors, continuous learning, internal control, corporate governance and operating performance evaluation.
Corporate Governance Report 39
3.3.2 Audit Committee The Audit Committee convened six meetings from January 1, 2020, through March 27, 2021. The attendance of Committee members is as follows:
Title Name Attendance in
Person By Proxy Attendance Rate (%) Remarks
Independent Director (Chairman)
Chang, Hsieh Gen-Sen 6 0 100% None
Independent Director Chung, Lo-Min 6 0 100% None
Independent Director Shen, Hui-Ya 5 1 83% None
Other mentionable items: 1. Key functions of the Audit Committee:
The Committee consists of three Independent Directors. The key functions of the year are to assist the Board of Directors in supervising the Company on the fair presentation of the relevant financial statements, appointment (dismissal) of a CPA and its independence and performance, auditing of the Company's internal control system, compliance with related laws, regulations and rules of the Company (such as, internal control system, acquisition or disposal of assets, derivative commodity transactions, loaning funds to others, providing endorsements or guarantees for others), and other matters included in its statutory functions (appointment and dismissal of financial supervisors or internal audit executive, mergers and acquisition-related matters).
2. In the operation of the Audit Committee, should one of the below situations arise, the date of the Board Meeting, session, content of the resolution, result of the Audit Committee resolution, and the Company’s response to these views be properly recorded: (1) Matters listed under Article 14-5 of the Securities and Exchange Act:
Meeting Dates Agenda content
Outcome of the vote by the Board of
Auditors and company's handling of the Board's views
Outcome of the Board of Directors decision
March 18, 2020 7th Meeting of the Audit Committee of the 21st Board of Directors
2019 Financial Report and Consolidated Financial Report 2019 Deficit Compensation 2020 CPA Appointment and Remuneration 2019 Internal Control System Effectiveness Audit and Statement Amendment to 2020 Audit Plan
Passed to the Board of Directors on unanimous approval by all members attending.
Approved by all attending Directors in the 10th meeting of the 21st Board of Directors on March 18, 2020.
May 7, 2020 8th Meeting of the Audit Committee of the 21st Board of Directors
Disposal of 5 A330-300 aircraft through sale and leaseback transaction
Approved by all attending Directors in the 11th meeting of the 21st Board of Directors on May 7, 2020.
August 6, 2020 9th Meeting of the Audit Committee of the 21st Board of Directors
Second amendment to 2020 Audit Plan Capital increase for Tigerair Taiwan Co., Ltd. Issuing NT$6 billion in total face value of domestic unsecured convertible corporate bonds
Approved by all attending Directors in the 12th Extraordinary meeting of the 21st Board of Directors on August 6, 2020.
November 5, 2020 10th Meeting of the Audit Committee of the 21st Board of Directors
2021 Audit Plan
Approved by all attending Directors in the 13th meeting of the 21st Board of Directors on November 5th, 2020.
March 18, 2020 12th Meeting of the Audit Committee of the 21st Board of Directors
2020 Financial Report and Consolidated Financial Report
2020 Deficit Compensation 2021 CPA Appointment and Remuneration 2020 Internal Control System Effectiveness Audit and Statement
Approved by all attending Directors in the 15th meeting of the 21st Board of Directors on March 18th, 2021.
(2) Other matters up for decision by the Board not listed in Article 14-5 of the Securities and Exchange Act that were not passed by the Audit Committee but approved by a two-thirds majority of the entire Board: None.
3. In situations where independent directors recuse themselves due to conflict of interest, the independent director's name, the content of the resolution, the reason for recusal, and his or her voting participation should be properly recorded: None.
4. Communication between independent directors and internal audit managers and auditors (regarding issues such as Company financial and operational status, procedures, and results): (1) In addition to the independent directors of the Company receiving the audit report monthly, the audit officer submits the annual audit plan and the
implementation of independent directors through the Audit Committee and the Board of Directors. The audit officer replies to the independent director's questions, provides necessary information, strengthens the audit work in accordance with his instructions, and ensures the effectiveness of internal controls. In addition, in non-routine communication, the audit value shall be continuously improved. In case of any major violation, the independent director shall be informed immediately.
(2) Before the audit committee meeting held in each quarter, the certified public accountant and the independent directors shall convene a communication meeting to report to the independent director and explain the audit plan, implementation situation, or review results of the financial statements; the certified public accountant shall provide the financial statements and relevant necessary information to the audit committee and the Board of Directors in each quarter, and attend the meeting in a nonvoting capacity.
(3) Directors shall contact the audit supervisor or accountants when needed for full communication. Communication between independent directors and accountants:
Means of communication
Communication matters Communication results
Primary matter Proposal by independent director Results Company’s processing status
March 18, 2020 Audit Committee
Before the meeting, the accountant separately reported and explained
The impact of the COVID-19 pandemic on the Company's
Approved by all attending Independent
1. The managerial department provided the explanation and response forthwith
40 Corporate Governance Report
the audit situation to the independent director. At the meeting, the financial director of the company explained the audit results of the financial report in 2019, and discussed and communicated the issues raised by the participants.
passenger revenue was addressed, and the adjustment to items of loss allocation was discussed.
Directors. during the meeting. 1. 2. Continued to submit for the Board of
Directors’ approval, and completed the 2019 financial report announcement and declaration on March 31, 2020.
May 7, 2020 Audit Committee
Before the meeting, the accountant shall separately report and explain the review situation to the independent director. At the meeting, the financial director of the Company shall explain the review results of the financial report in the first quarter of 2020 and the amendment of laws and regulations, and discuss and communicate the issues raised by the participants.
The details and execution of the government financial assistance (NT$20 billion), including the contracting, distribution, and repayment schedule, etc. The disclosed matters impacted by the COVID-19.
Noted by all attending Independent Directors.
1. The managerial department has provided the explanation and response forthwith during the meeting.
2. Continued to report to the Board of Directors, and completed the Q1 2020 financial report was completed on May 15, 2020.
August 6, 2020 Audit Committee
Before the meeting, the accountant shall separately report and explain the review situation and the auditing/key audit matters of the 2020 financial statements to the independent director. At the meeting, the financial director of the Company shall explain the review results of the financial statements in the second quarter of 2020 and the impacts of new IFRS on the financial statements, and discuss and communicate the issues raised by the participants.
An inquiry into the impacts of COVID-19 disclosing on the financial statements. Ask the Company to increase revenue and save costs, assisting affiliates to improve operation.
Noted by all attending Independent Directors.
1. The managerial department has provided the explanation and response forthwith during the meeting.
2. Continued to report to the Board of Directors, and completed the Q2 2020 financial report announcement and declaration on August 14, 2020.
November 5, 2020 Audit Committee
Before the meeting, the accountant shall separately report and explain the review situation to the independent directors. At the meeting, the financial director of the Company shall explain the review results of the financial statements in the third quarter of 2020, and discuss and communicate the issues raised by the participants.
Profit difference in the second and third quarter. The impact of Mandarin Airlines and Tigerair Taiwan on the consolidated financial statements; the countermeasures against US dollar deflation and off-season of cargo shipment; the follow-up to aircraft replacement, the reasons of hedge financial assets increase and increase of contract liability; the impact of decreased cash and cash equivalents; the meaning of decreased cash and cash equivalents caused by fluctuated currency rate.
Noted by all attending Independent Directors.
1. The managerial department has provided the explanation and response forthwith during the meeting.
2. Continued to report to the Board of Directors, and completed the Q3 2020 financial report announcement and declaration on November 16, 2020.
March 18, 2021 Audit Committee
Before the meeting, the accountant separately reported and explained the audit situation to the
Asked about the content of the financial statements regarding leased
Approved by all attending Independent
1. The managerial department provided the explanation and response forthwith during the meeting. The CPA firm agreed
Corporate Governance Report 41
independent director. At the meeting, the financial director of the company explained the audit results of the financial report in 2020, and discussed and communicated the issues raised by the participants.
aircraft and purchased aircraft; the discussion on the dropping revenue due to COVID-19; suggested to lower the CPA commissioned fee.
Directors. to lower the fee. 2. Continued to submit for the Board of
Directors’ approval, and completed the 2020 financial report announcement and declaration on March 31, 2021.
Communication between independent directors and internal audit supervisor:
Means of communication
Communication matters Communication results
Primary matter Proposal by independent
director Results Company’s processing status
March 18, 2020 Audit Committee
Internal audit business report for Q4 2019
None Approved by all attending members and reported to the Board of Directors.
Reported to the Board of Directors on March 18, 2020.
2019 Internal Control System Effectiveness Audit and Statement
None Approved by all attending members and reported to the Board of Directors.
Resolved by the Board of Directors on March 18, 2020, and the 2019 Internal Control System was shared on March 23, and mentioned in the 2019 annual report.
Amendment to 2020 Audit Plan None
Approved by all attending members and reported to the Board of Directors.
Resolved by the Board of Directors on March 18, 2020, and the 2020 internal audit plan was unveiled on March 24.
May 7, 2020 Audit Committee
Internal audit business report for Q1 2020
None Approved by all attending members and reported to the Board of Directors.
Reported to the Board of Directors on May 7, 2020.
August 6, 2020 Audit Committee
Internal audit business report for Q2 2020
None Approved by all attending members and reported to the Board of Directors.
Reported to the Board of Directors on August 6, 2020.
Second amendment of 2020 audit plan
None Approved by all attending members and reported to the Board of Directors.
Reported to the Board of Directors on August 6, 2020.
May 8, 2019 Audit Committee
Internal audit business report for March 2019
None Approved by all attending members and reported to the Board of Directors.
Reported to the Board of Directors on May 8, 2019.
August 7, 2019 Audit Committee
Internal audit business report for Q2 2019
None Approved by all attending members and reported to the Board of Directors.
Reported to the Board of Directors on August 7, 2019.
November 5, 2020 Audit Committee
Internal audit business report for Q3 2020
None Approved by all attending members and reported to the Board of Directors.
Reported to the Board of Directors on November 5, 2020.
2021 Audit plan
Member Shen: The liquidation of YesTrip Co., Ltd. has not yet been completed. It is recommended to include the management team in the audit plan. Convener Chang: CAL shall reinforce the audit of the air cargo business. It is recommended to audit the cargo business and adjust the audit in each unit.
Approved by all attending members and reported to the Board of Directors for discussion after the amendment.
Reported to the Board of Directors on November 5, 2020.
January 18, 2021 Audit Committee
Internal audit business report for Q4 2020
None Approved by all attending members and reported to the Board of Directors.
Reported to the Board of Directors on January 18, 2021.
March 18, 2021 Audit Committee
Internal audit business report for January 2021
None
Approved by all attending members and reported to the Board of Directors.
Reported to the Board of Directors on March 18, 2021.
2020 internal control effectiveness audit and statement
None Approved by all attending members and reported to the Board of Directors.
Resolved by the Board of Directors on March 18, 2021, and the 2020 Statement of Internal Control System was shared on March 22 and disclosed in the 2020 annual report.
42 Corporate Governance Report
3.3.3 Risk Committee The Risk Committee convened five meetings from January 1, 2019, through April 25, 2020. Committee member attendance is as follows:
Title Name Attendance in
Person By Proxy Attendance Rate (%) Remarks
Independent Director (Chairman)
Chung, Lo-Min 5 0 100% None
Independent Director
Chang, Hsieh Gen-Sen 5 0 100% None
Independent Director
Shen, Hui-Ya 4 0 80% Absence on May 8, 2020
Director Lin, Su-Ming 4 1 80% On March 18, 2021, Chung, Lo-Min attended as a proxy.
Director Ting, Kwang-Hung 4 1 80% On August 5, 2020, Lin, Su-Ming attended as a proxy;
Following are the other mentionable items: 1. Key functions of the Risk Committee:
The Committee reviews the establishment, implementation, and response measures of the Company's management strategies for overall finance, economy, flight safety, and other risks, and submits its views and recommendations to the Board of Directors for implementation.
2. Professional competence of risk management committee members: Independent director Shen, Hui-Ya is an able legal professional; Independent directors Chang, Hsieh Gen-Sen, Chung, Lo-Min, and director Lin, Su-Ming all have the professional ability in financial accounting and practical practice and management experience; Director Ting, Kwang-Hung has the ability to make business-related judgments, leadership and decision making, operation and management, crisis handling, and has an outlook on international markets.
2. The operation of the Risk Committee:
Meeting Dates Agenda content Risk Committee resolution results and company action on Risk Committee’s views
Results of the Board of Directors decision
March 18, 2020 7th Meeting of the Risk Management Committee of the 21st Board of Directors
Safety management report 2020Q1 Operations risk management analysis Financial status report Operations outlook and financing, crude oil market analysis Financial risk hedging strategy Oil risk hedging strategy
Passed to the Board of Directors on unanimous approval by all members in attendance.
Unanimously passed by all members of the Board of Directors in attendance.
May 8, 2020 8th Meeting of the Risk Management Committee of the 21st Board of Directors
Safety management report 2020Q2 Operations risk management analysis Financial status report Operations outlook and financing, crude oil market analysis Financial risk hedging strategy Oil risk hedging strategy
August 5, 2020 9th Meeting of the Risk Management Committee of the 21st Board of Directors
Safety management report 2020Q3 Operations risk management analysis Financial status report Operations outlook and financing, crude oil market analysis Financial risk hedging strategy Oil risk hedging strategy
November 5, 2020 10th Meeting of the Risk Management Committee of the 21st Board of Directors
Safety management report
Climate control report
2020Q4 Operations risk-management analysis
Financial status report Operations outlook and financing, crude oil market analysis Financial risk hedging strategy Oil risk hedging strategy
March 18, 2021 11th Meeting of the Risk Management Committee of the 21st Board of Directors
Safety management report 2021Q1 Operations risk-management analysis Financial status report Operations outlook and financing, crude oil market analysis Financial risk hedging strategy Oil risk hedging strategy
Corporate Governance Report 43
3.3.4 Corporate Governance Implementation Status and Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx-Listed Companies
Evaluation Item
Status of Implementation Deviations from the
Corporate Governance Best-Practice Principles for TWSE/TPEx-
Listed Companies
and Reasons
Yes No Brief Explanation
1. Did the Company establish its Corporate Governance Best-Practice Principles in accordance with Corporate Governance Best-Practice Principles for TWSE/TPEx-Listed Companies and did it share those Principles?
The Corporate Governance Principles of the Company have been formulated in compliance with the Corporate Governance Best-Practice Principles for TSEC/TPEx-Listed Companies; its amendment has been approved at the 6th meeting of the 21st Board of Directors on May 8, 2019, and shared under the “Important Company Regulations” on the Company’s website.
No Difference
2. Company ownership structure and shareholder rights (1) Did the Company
establish internal operational procedures for dealing with shareholder suggestions, questions, disputes, and lawsuits and put these procedures into practice?
(1) The Company's website has a portal for shareholder services and a “Method for Handling Investor Relations” has been set so that investor suggestions and concerns are dealt with by shareholder service personnel and shareholder service agents according to relevant procedures. This ensures a smooth channel of communication between the Company and its shareholders and the quality of disclosed information.
No Difference
(2) Does China Airlines maintain a list of the major Company shareholders and the ultimate owners of these shareholders?
(2) The China Aviation Development Foundation is China Airlines’ largest shareholder and the company is in communication and contact with it.
No Difference
(3) Did China Airlines establish and implement risk control mechanisms and firewalls at the Company and affiliated enterprises?
(3) The Company has established Operational Procedures for Endorsements/Guarantees, Operational Procedures for Lending Funds to Others, and Regulations Governing Management of Invested Enterprises. All capital loans and funding, endorsements/guarantees, and operational supervision and management of Company subsidiaries are in accordance with these procedures and regulations. Audit units perform quarterly audits of Company endorsements/guarantees and capital loans/funding, which are provided to management and independent directors. The Finance Div. is responsible for overseeing implementation at invested enterprises and should any errors be noticed, a rectification deadline is set and the progress is monitored.
No Difference
(4) Did the Company establish internal standards to prevent insider trading on undisclosed information?
(4) The Company established the Director's Code of Conduct, Procedures for Handling Material Inside Information, and High-Level Manager Code of Conduct to specify insider trading prevention and processing of secret stock trading and operating information as required of employees by law. Those with access to undisclosed material inside information are prohibited from engaging in securities trading.
No Difference
3. Structure and responsibilities of the Board of Directors (1) Has the
Company established policies calling for diversity among
(1) China Airlines advocates and respects the director's diversity policy, and is convinced that diversity can improve the overall performance of the Company. Members of the Board of Directors shall be based on personal capabilities and diversification from different aspects is also taken into consideration, including basic characteristics (e.g., age, gender and nationality, etc.), experience and skills (e.g., aviation, sea freight, transportation, finance and accounting, law and insurance, electricity, technology, and public utilities, etc.), operation and management, leadership and decision-making, and crisis management ability. In order to strengthen the Board's functions to achieve the ideal goals of corporate governance, the Company has formulated the Corporate Governance Principles, Article 20 of which specifies the overall abilities the Board of Directors is to be equipped with, which are as follows: A. The ability to make operational judgment.
No Difference
44 Corporate Governance Report
Evaluation Item
Status of Implementation Deviations from the
Corporate Governance Best-Practice Principles for TWSE/TPEx-
Listed Companies
and Reasons
Yes No Brief Explanation
members of the Board of Directors and put said policies into practice?
B. The ability to perform accounting and financial analysis. C. The ability to conduct management administration. D. The ability to manage crisis situations. E. Industrial knowledge. F. Perspective of the international market. G. The ability to lead. H. The ability to make decisions. The diversification policies of the current executives of the Company and their progress are as follows: MAR 27, 2021
Diversified Core Nam
e
Basic composition Industrial experience Professional competence
Nationality
Gender
Has employee status
Age
Length of office of
independent director Airlines
Transport
Professional services and m
arketing
Financial and Finance
Construction and engineering
Banking, insurance and real estate
Business and supply
Information and technology
Metal and m
achinery
Law
Accounting
Risk managem
ent
40-50
51-60
61-70
Less than 3 years
Six to nine years
Hsieh, Su-Chien
R.O.C.
Male - - - - - ○ - - ○ - - ○
Kao, Shing-Hw
ang
R.O.C.
Male - - - - ○ - - ○ ○ - ○
Chen, Charles C.Y.
R.O.C.
Male - - - - - - ○ - ○ - - -
Ting, Kw
ang-Hung
R.O.C.
Male - - - - - - - - - - ○
Chen, Han-M
ing
R.O.C.
Male - - - - - - ○ - - -
Ko, Sun-Ta
R.O.C.
Male - - - - - - - ○ - - - - - -
Wei,
Yung-Yeh
R.O.C.
Male - - - - - - - - - - - - - ○
Lin, Su-Ming
R.O.C.
Male - - - - - - - - - ○ - - - ○ ○
Wang,
Shih-Szu
R.O.C.
Female
- - - - - - - - - - - - - ○ -
Chung, Lo-M
in
R.O.C.
Male - - - - - - ○ - - ○ ○ ○ -
Corporate Governance Report 45
Evaluation Item
Status of Implementation Deviations from the
Corporate Governance Best-Practice Principles for TWSE/TPEx-
Listed Companies
and Reasons
Yes No Brief Explanation
Chang, Hsieh
Gen-Sen
R.O.C.
Female
- - - - - - - - - - - - - ○
Shen, Hui-Ya
R.O.C.
Female
- - - - - - - - - - - - - - ○
Note: Indicates the director has the capability; ○ indicates the director has some capability. a. The 11 directors (including 3 independent directors) of the 21st Board of Directors of the Company have business judgment,
leadership decision-making, operation and management, international market outlook, crisis management, and other capabilities, as well as industrial experience, and professional ability, among which, those with experience in transportation and tourism industry are Chairman Hsieh, Su-Chien, director Chen, Charles C.Y., director Ko, Sun-ta, and Director Wei, Yung-Yeh. Those who are good at marketing are Chairman Hsieh, Su-Chien, director Charles C.Y. Chen, director Ting, Kwang-Hung, director Chen, Han-Ming and director Ko, Sun-ta; Director Chen, Charles C.Y., who have made significant contributions to the public welfare; Independent director Shen, Hui-Ya is competent in legal affairs; Director Wang, Shih-Szu, a previous politician (vice mayor of Tainan City); Independent director Chang, Hsieh Gen-Sen, independent director Chung, Lo-Min, director Lin, Su-Ming and director Ting, Kwang-Hung have the professional ability of accountancy or finance and have practical practice, management, or teaching experience.
b. The average term of office of the company's directors is 6 years, among which two independent directors Chang, Hsieh Gen-Sen and Shen, Hui-Ya have tenure of fewer than three years. The term of office of independent director Chung, Lo-Min is eight years, and the consecutive term of office of all independent directors does not exceed three terms. The directors are all local citizens, and three independent directors constitute 27% of the board; there is one director who is also an employee (9%). The age distribution range of directors includes two directors aged 40-50, five directors aged 51-60, and four directors aged 61-70. In addition, the Company also pays attention to gender equality in the composition of the Board. The current board of directors consists of three female members (two of whom are independent directors), and the proportion of female directors is high, at 27%. In the future, the Company will remain committed to improving the proportion of female directors.
c. Diversity, complementarity, and implementation of directors comply with and exceed the standards specified in Article 20 of the Corporate Governance Principles of China Airlines. In the future, the board of directors will continue to update its diversified policies according to board operations, operation style, and development needs, including but not limited to the standards of basic conditions and values, professional knowledge and skills, so as to ensure that board members generally have the necessary knowledge, skills, and literacy to perform their duties.
(2) In addition to the establishment of the Remuneration Committee and Audit Committee as required by law, did the Company establish committees with other functions of its own accord?
(2) In addition to setting up the Audit Committee and the Remuneration Committee according to law, to improve the risk management of the Company, the Company has voluntarily set up a Risk Management Committee, with five directors (including three Independent Directors) as members. Meetings are held on a quarterly basis according to the organization regulations approved by the Board of Directors. The Committee responds to the Board of Directors and assists it in reviewing the establishment, implementation outcomes, and response measures of the Company's management strategies for overall finance, economy, flight safety, and other risks, and submits its conclusions and recommendations to be resolved by the Board of Directors. Good operational effectiveness has been achieved.
No Difference
(3) Has the Company formulated performance evaluation guidelines and evaluation methods for the Board of Directors and does it evaluate its performance regularly each year, and, furthermore, does it report the evaluation outcomes to the Board of Directors and use them as references for deciding on the remuneration of individual directors and nomination for continuing terms as directors?
(3) The Company approved the “Regulations Governing the Board Performance Evaluation” in the 8th meeting of the 21st Board of Directors on November 7, 2019. An internal evaluation of the Board’s performance is made at the end of each year. The evaluation is divided into the performance evaluation of the entire Board of Directors, individual Board members, and functional committees. The evaluation shall be completed by the end of January of the following year, the outcomes of which shall be submitted by the Human Resources Department to be reported at the Board meeting held by the end of March. The evaluation shall be conducted every three years by an external professional independent organization or a team of experts and scholars. The results will be referred to in deciding directors' remuneration and nomination while renewing their performance. The Company completed the 2020 Board Performance Evaluation in accordance with the above regulations, which has been reported at the 15th meeting of the 21st Board of Directors on March 18, 2021, and disclosed on the Company’s official website. The self-evaluation results are as follows: A. Entire Board of Directors
a. Evaluation items: Ten items in total, including five major aspects, i.e., the degree of participation in the Company's operations, improvement of Board of Directors’ decision-making quality, composition and structure of the Board of Directors, continuing education of Directors, and internal control.
b. Results of self-evaluation: Above standards. B. Individual Board members
a. Evaluation items: Eighteen items in total, including six major aspects, i.e., mastery of Company’s goals and tasks, recognition of Directors' responsibilities, participation in Company’s operations, internal relationship management and communication, Director's expertise and continuing education, and internal control.
b. Results of self-evaluation: Above standards. C. Functional Committees
a. Evaluation items: Ten items in total, including the degree of participation in the Company’s operations, functional committee responsibility awareness, improvement to functional committees’ decision-making quality, composition and member selection of functional committee, and internal control.
b. Results of self-evaluation: Above standards. In addition, the implementation of the performance evaluation of the Board of Directors of the Company will be performed by an external professional independent institution or a team of external experts and scholars every three years.
External evaluation result:
1. Evaluation period: January 1 to December 31, 2020
2. Criteria: The engagement of company operation, decision-making improvement by the Board of Directors, the
No Difference
46 Corporate Governance Report
Evaluation Item
Status of Implementation Deviations from the
Corporate Governance Best-Practice Principles for TWSE/TPEx-
Listed Companies
and Reasons
Yes No Brief Explanation
composition and structure of the Board of Directors,
the selection and appointment of the Board of Directors, continuous learning, internal control, corporate governance
and operating performance evaluation. 3. Result and suggestions: The evaluation result of the China Airlines 2020 Board of Directors and Functional Committee was excellent; It is suggested to add one extra independent director to enhance the diversity of the Board.
(4) Does the Company periodically assess the independence of external CPAs?
(4) The Audit Committee and the Board of Directors of the Company regularly assess the independence and competence of the accountants each year in accordance with the Company's Corporate Governance Principles, completing the “Accountant Independence Evaluation Form,” and acquiring the “Accountant Independence Declaration.” The evaluation results are as follows:
Item Assessed Assessment Results Conforms to independence Yes No
1. Issued an accountant independence declaration Yes 2. Has not gone seven continuous years without changing accountants Yes 3. Not served as Company director or manager Yes 4. Not a shareholder of the Company and has never been on the payroll Yes 5. The accounting firm for which they work is not a Company-affiliated enterprise Yes 6. Has not provided any non-auditing services to the Company that could affect
complete independence Yes After assessment by the Company, accountants Huang, Jui-Chan and Cheng, Shiuh-Ran of Deloitte & Touche both conform to the above assessment standards for independence, and are suitable to act as CPAs for this company. After the 12th meeting of the 21st Audit Committee on March 18, 2021, a report will be made to the 15th meeting of the 21st Board of Directors on the appointment of accountants.
No Difference
4. Does the TWSE/TPEx- listed company have in place an appropriate number of qualified corporate governance officers, and a designated chief corporate governance manager to be responsible for corporate governance-related matters (including but not limited to providing directors and supervisors with the information required to conduct business, assist directors and supervisors in legal compliance, handling matters related to board meetings and shareholders’ meetings in accordance with law, and preparing minutes of the board and shareholders’ meetings)?
(1) The Company approved the establishment of the Chief Corporate Governance Officer at the 6th meeting of the 21st Board of Directors on May 8, 2019, which is served by the Vice President Chien, Feng-Nien, who has professional qualifications and conducts legal-related matters as head of the department for more than three years. The Chief Corporate Governance Officer’s main duties include handling relevant meeting affairs of the Board of Directors and Shareholders Meetings in accordance with law, generating minutes of the Board meetings and Shareholders’ Meetings, assisting Directors in assuming their positions and continuing education, providing Directors with the information required to perform their duties, assisting Directors in complying with laws and regulations, and other matters provided in laws, regulations, the Company’s Articles of Incorporation, or contracts.
(2) The Chief Corporate Governance Officer supervises concerned units implementing corporate governance matters: A. The Chief Corporate Governance Officer concentrates on the following matters which are handled by the personnel of the Board of
Directors Business Task Force when handling matters related to the Board of Directors and Committees (including preparing the meeting minutes), assisting Directors in handling their positions, legal compliance and continuing education, and providing Directors with the information required to conduct business: a. Notifying respective members of meetings seven days prior to the convening of meetings of Board of Directors and Committees,
with cause(s) or subject(s) of the meeting and sufficient meeting materials attached; having the minutes of each meeting signed or sealed by the Chairman and recorder of each meeting, and be distributed to the members of the meeting within 20 days of the meeting.
b. Providing new Director training to first-time Directors, introducing the Company's business, organization and other matters needing attention, and providing newly elected Directors with regulatory guidance manuals regarding insiders and directors to assist Directors in taking office and ensure legal compliance; also, assisting Directors in completing annual training courses in accordance with the Company's business characteristics and Directors' requirements.
c. Providing necessary Company information to the Directors, maintaining cordial communication and exchange between the Directors and supervisors, and assisting in arranging communication meetings between Independent Directors and chief audit executive, CPAs, or other internal units to facilitate the conduct of business by Independent Directors.
d. Amending internal regulations related to corporate governance in cooperation with the latest laws and regulations relevant to the Company's field of business and corporate governance, and submitting amendments to the Board of Directors for resolution.
B. In relation to the Company’s registration and change of registration, the Administration Division is responsible for completing the relevant registration with the competent authority in time limit for matters requiring registration or changes to registration matters of the Company.
C. In addition, the Finance Division is responsible for the handling of matters related to shareholders' meetings (planning and convening of shareholders' meetings, the preparation of meeting minutes and other stock affairs-related business). It also provides sufficient information to the shareholders to ensure that the shareholders' rights and interests are well protected.
(3) From January 1, 2019 through April 25, 2020, the Chief Corporate Governance Officer has attended the following courses: Sponsoring Organization Course Date(s) Training hours
Taiwan Corporate Governance Association
Technology and Information Safety Risk in the 5G and IoT Era 2020/05/07 3hr
Taiwan Corporate Governance Association
Trends of Digital Technology and Artificial Intelligence and Risk Management 2020/08/06 3hr
No Difference
5. Has the Company established communication channels with stakeholders (including but not limited to shareholders, employees, customers, and suppliers) and set up an area dedicated to stakeholders on the
The Company identifies stakeholders in accordance with the five principles of the AA1000 Stakeholder Engagement Standard (SES). To fully and effectively communicate with stakeholders, a spokesperson and “Stakeholders Section” have been created on the Company’s official website to provide contact information of the units associated with various issues, so as to facilitate stakeholders’ interaction with respective personnel working on relevant issues (including contact personnel, e-mails, and telephone numbers); also, a webpage for communication with stakeholders has been created on the corporate social responsibility website, explaining stakeholders’ issues of concern, communication channels, response frequency and communication results. The communication situation with various stakeholders is also reported to the Board of Directors every year. The outcomes from its implementation since 2020 have been reported at the 14th meeting of the 21st Board of Directors on January 18, 2021. Relevant content and frequency of the actual implementation show proper responses to various issues that include corporate social responsibility. See the following for details: (1) Company website -- stakeholders section: https://www.china-airlines.com/tw/en/about-us/stakeholder (2) Company Corporate Social Responsibility (CSR) website -- stakeholder engagement:
http://calec.china-airlines.com/csr/en/management_interested.html
No Difference
Corporate Governance Report 47
Evaluation Item
Status of Implementation Deviations from the
Corporate Governance Best-Practice Principles for TWSE/TPEx-
Listed Companies
and Reasons
Yes No Brief Explanation
Company website? Does the Company respond appropriately to corporate social responsibility issues that stakeholders consider important?
(3) Explanatory table:Item
Category Focus of
Communication Contact Person Channel of Communication Frequency Result of Communication
Employees
Public health and safety
Flight safety management
Risk and hazards management
Labor/management relations and engagement
Human Resource Div. Miss Chi Tel: +886(0)-3-3998917
Labor-Management Conference
Four to six times per year
Employee satisfaction surveys are conducted once every two years; the score in 2019 was 6.4 (Note: the highest score is 10) Due to COVID-19, the survey was postponed to 2021 to avoided the survey result is distorted.
Union Real time
Employee concerns mailbox (Wecare listens mailbox, Speak Out employee communication mailbox, Team+ real-time information platform)
Real time
Website for retired employees and those who have left employment
Real time
Customers
Public health and safety
Flight safety management
Passenger service management
• Privacy and Information Security
Passenger Service Passenger dedicated phone line: +886(0)-2-412-9000 Cargo Service Mr. Lin Tel: +886(0)-3-3998262 Aircraft Maintenance Mr. Chou Tel: +886(0)-3-3987215
Customer satisfaction surveys Real time
2020: 1. Passenger
satisfaction rate was 88.60%
2. Cargo satisfaction rate was 88.5%
3. Maintenance factory satisfaction score was 8.57
(Note: highest score is 10)
Global business meetings Annually Taiwan district business meetings
Twice per year
Discussions with travel agencies Occasional
Company website, industry social responsibility network, Facebook, e-mail, and message
Real time
Customer-service hotline Real time
Corporate customer visits Occasional
Investors
Public health and safety
Flight safety management
Operating and financial performance
Risk and hazards management
Vice President, Corporate Communications Office and speakwoman: Lu, Shwu-Huoy email: [email protected] Vice President, Finance Div.: Wang, Wei email: [email protected] Finance Div. Mr. Yang Tel: +886(0)-3-3998331 Finance Div. Mr. Lin Tel: +886(0)-3-3998361
Shareholders’ meeting Annually
Continues to announce and respond with operation-related results according to laws, regulations, and investors’ demand
Shareholder hotline/mailbox Real time Corporate customer hotline Real time Corporate customer hotline Annually
Corporate information meeting Occasional
Partners (Suppliers)
Public health and safety
Flight safety management
Operating and financial performance
Governance and business integrity
General Products Administration Div. Miss Xiao Tel: +886(0)-3-3999143 Aircraft Parts Engineering Div. Mr. Tsai Tel: +886(0)-3-3834251 Ext.7507 e-Shopping/Duty- Free In-Flight Service Supply Chain & Marketing Div.
Telephone, e-mail Occasional
A general supplier meeting was held at the end of 2020
Consultative conferences Occasional Business visits Occasional
Site inspections At least once every 6 months
48 Corporate Governance Report
Evaluation Item
Status of Implementation Deviations from the
Corporate Governance Best-Practice Principles for TWSE/TPEx-
Listed Companies
and Reasons
Yes No Brief Explanation
Miss Tseng Tel: +886(0)-3-3993913
Society
Public health and safety
Corporate governance and business integrity
Flight safety management
• Brand management
Corporate Development Office Mr. Zhong Tel: +886(0)-3-3998530 Corporate Communications Office Mr. Lee Tel: +886(0)-3-3998639
Hold activities for the public good, participate in societal activities
Occasional
A total of 355,459 individuals benefited in 2020
Press releases and messages Monthly Occasional
Network mailbox Occasional Daily
6. Has the Company appointed a professional shareholder services agent to handle shareholders' meeting matters?
The Company’s professional services organization is CTBC Bank, which has been assigned the task of handling shareholder meeting matters.
No Difference
7. Information disclosure (1) Has the
Company created a public website to disclose financial, operational, and corporate governance information?
(1) Dedicated units within the Company provide information to be disclosed on the China Airlines corporate website (http://www.china-airlines.com) regarding marketing, operations, finance, administration, aircraft operations, human resources, training, shareholders’ meetings, and the annual report, prospectus, and any material information. Through this easily available information, consumers, suppliers, and investors can better understand China Airlines’ operations.
No Difference
(2) Has the Company adopted other methods of information disclosure (e.g., setting up an English website, designating a specialist responsible for gathering and disclosing Company information, setting up a spokesperson system, uploading recordings of investor conferences onto the Company website)?
(2) The Company has set up an English language website, the China Airlines Corporate Website (https://www.china-airlines.com/tw/en), with the Office of Public Relations as the spokesperson responsible for gathering and disclosing company information monthly and for posting corporate information to the outside world, including press releases, new interviews, and press conferences.
No Difference
(3) Does the Company publicly announce and register the annual financial report within two months of the end of the fiscal year, and publicly announce and register the first, second, and third quarter financial reports and the monthly operating status earlier than the prescribed time limit?
(3) The Company publicly does not announce and register the annual financial report within two months of the end of the fiscal year, nor publicly announce and register the first, second, and third quarter financial reports and the monthly operating status earlier than the prescribed time limit.
Even though the Company didn't publicly announce/reg
ister the annual
financial report and
the monthly operating
status earlier than the
prescribed time limit, yet all the work
has been done within
the time regulated.
Corporate Governance Report 49
Evaluation Item
Status of Implementation Deviations from the
Corporate Governance Best-Practice Principles for TWSE/TPEx-
Listed Companies
and Reasons
Yes No Brief Explanation
8. Does China Airlines have other important information to facilitate better understanding of the Company's corporate governance practices (including, but not limited to employee rights, employee care, investor relations, supplier relations, stakeholder rights, director and supervisor training regimes, risk management policies, and risk measurement standards as well as the implementation of client policies and the Company's purchase of liability insurance for its directors and supervisors)?
(1) Employee rights: In addition to obeying the Labor Standards Act, in 2002 the Company signed a collective agreement that remains in force today. Salaries and remuneration, benefits and insurance are adjusted annually based on the remuneration policy and revenue, and there are also procedures for merit pay and higher pay for promotions to select and promote outstanding employees.
(2) Employee care: Primarily in three areas: A. Information:
a. China Airlines has set up a China Airlines electronic bulletin board on the Company’s internal information webpage to announce welfare information of the Company (such as childcare measures, various welfare subsidies, complimentary/discounted tickets and employee stock ownership trust). We have also set up a retirement/resignation section to thoroughly explain various procedures for handling retirement/resignation. In addition, a mailbox for all employees and the Team+ real-time messaging platform has been established to inform employees of important messages.
b. Wecare listens mailbox, Speak Out employee communication mailbox, Team+ real-time messaging platform, etc. have been established to provide employees with two-way channels to fully express personal opinions and demands.
B. Organizational: Based on the scale and dependencies of each unit in the Company, employee relations departments or dedicated personnel have been established to be responsible for good communication channels and overall management of relations, assisting in publicizing various beneficial policies of the Company and eliminating misunderstandings by improving internal employee satisfaction, cohesiveness, feeling of identification with the Company, and work achievements at appropriate times.
C. Systematic: Periodically hold labor-management conferences and supervisor-employee communication meetings and have employee benefits committee members participate in meetings with various types of unions and employee representatives to tell employees about related governance actions at appropriate moments; each resolution gives full respect to employee opinions and interests.
(3) Investor relations: The Company has established Rules for Handling Investor Relations by which it handles all investor concerns or opinions. A total of 1 were handled in 2020, and the company will continue to announce and respond with operation-related results according to laws, regulations, and investors’ demand.
(4) Supplier relations: In accordance with the Company’s Regulations Governing the Procurement and Inspection of General Items, except for patents and emergency procurement, all procurement shall be processed through open tendering and the tender announcement shall be disclosed on the Company’s website to establish a transparent, open, fair, and competitive trading environment. At the same time, the Company requires suppliers to issue a “Tenderer Declaration” before bidding, which regulates that suppliers must comply with the integrity and ethical requirements including the principle of conflict of interest avoidance, anti-bribery regulations, and supplier integrity, as well as requiring suppliers to abide by relevant local laws and regulations.
(5) Stakeholder interests: The Company website has a “Stakeholder Contact” and other diverse communications channels and platforms to address all manner of stakeholder complaints and wishes appropriately and effectively.
(6) Continuing education for directors and supervisors: see P.67-69 for details. (7) Status of implementation for risk management policy and risk balance standards:
The Company's operations are enormously impacted by both the domestic and international environment. So as to further improve the risk management system mechanism and reduce the effect created by interplay among risks, the Company has established a Risk Committee answering directly to the Board of Directors. The committee meets once per quarter and issues periodic reports to the Board of Directors, assisting the Board in oversight of the setting, and results and adaptive measures related to company risk management strategies. See P.42 for operation details. Moreover, to establish a solid internal governance system, the Company has additionally set up the China Airlines Procedures for Handling Important Internal Information, Ethical Code of Conduct for Directors, Ethical Code of Conduct for Senior Supervisors and Rules for Employee Conduct in the Course of Work.
(8) Implementation of customer policies: The Company takes the initiative to send service satisfaction questionnaires to members’ mailboxes (non-members can also fill out the questionnaire on the official website) to obtain passenger experience satisfaction with the Company’s passenger flights and their suggestions; A total of 53,801 effective customer satisfaction questionnaires were completed in 2020, with a satisfaction rate of 88.60%. After compiling and analyzing statistics, the above data have been reviewed and the products and services will be improved, where necessary, to comprehensively enhance customer satisfaction.
(9) Company purchases of liability insurance for directors and supervisors: The Company purchased liability insurance for all Directors in 2021 to reduce and diversify the Directors' legal liability risks. Important contents, such as Directors' liability insurance insured amount, coverage and premium rate, have been reported in the 15th meeting of the 21st Board of Directors on March 18, 2021.
No Difference
9. Please explain improvements that have been made in response to the results of the Corporate Governance Evaluation issued by the Taiwan Stock Exchange Corporate Governance Center: (1)The Company’s annual report and website have fully disclosed the specific management goals, current achievements, and other information of the Board members’ diversification
policy, providing detailed descriptions of the diversification policy and implementation situation; it has also been disclosed that the selection of Board members is based on the their abilities while also considering diversity, including basic components (for example: age, gender and nationality, races, birth, or cultural background, etc.), experience and skills (for example: aviation, sea freight, transportation, finance and accounting, law and insurance, academics, electricity, technology, and public utilities, etc.), as well as business judgment, business management, leadership and decision-making, and crisis management capabilities-sufficient to fully demonstrate that the existing Directors have a high degree of cross-industry, diversified, and complementary capabilities.
(2)The Company has set up a Chief Corporate Governance Manager to be responsible for corporate governance related matters, and has explained in the Company’s annual report its functions and powers, and the operation and execution situation of its key businesses.
(3)The Company has, by the resolution of the Board of Directors in January 2019, approved the “Regulations Governing the Board Performance Evaluation,” and completed the 2018 to 2020 performance self-evaluation of the Board of Directors and external evaluation of 2020 Board of Director and Functional Committee. The evaluation results have been published in the annual report and on the website of the Company; in addition, on the Company’s website and the corporate social responsibility website, the communication situation between the Independent Directors and the chief audit executive and accountants; the operation status of functional committees other than those required by laws; the implementation status of ethical corporate management; and the information relevant to stakeholder communication, etc., have also been disclosed.
50 Corporate Governance Report
3.3.5 Composition, Responsibilities, and Operations of the Remuneration Committee The objective of the Remuneration Committee is to assist the Board in implementing and assessing the Company’s overall compensation and benefits policy and director and manager remuneration. A. Professional Qualifications and Independence Analysis of Remuneration Committee
Members
Title (Note 1)
Criteria
Name
Meets One of the Following Professional Qualification Requirements, Together with at Least Five Years’ Work Experience
Independence Criteria (Note 1)
Number of Other Public Companies in Which the Individual is Concurrently Serving as a Remuneration Committee Member
Remarks
An instructor or higher position in a department of commerce, law, finance, accounting, or other academic department related to the business needs of the Company in a public or private junior college, college or university
A judge, public prosecutor, attorney, Certified Public Accountant, or another professional or technical specialist who has passed a national examination and been awarded a certificate in a profession necessary for the business of the Company
Has work experience in the areas of commerce, law, finance, or accounting, or otherwise necessary for the business of the Company
1 2 3 4 5 6 7 8 9 10
Independent Director (Chairman)
Shen, Hui-Ya 1 -
Independent Director
Chang, Hsieh Gen-Sen 1 -
Other He, Jyun-Huei - 0 -
Note 1: Please tick the corresponding boxes that apply to a member during the two years prior to being elected or during their term(s) in office. 1. Not an employee of the Company or any of its affiliates. 2. Not a director or supervisor of the Company or its affiliated enterprise (except for independent directors appointed in accordance with
the Act or the laws and regulations of the local country by, and concurrently serving as such at, the Company and its parent company, its subsidiary or a subsidiary of the same parent).
3. Does not hold more than 1% of the Company's outstanding shares in their own names or under the name of spouse, underage children, or proxy shareholder; nor is a top-10 natural-person shareholder of the Company.
4. Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of any of the manager listed in (1) or the personnel listed in (2) and (3).
5. Not a director, supervisor or employee of a corporate shareholder who directly hold more than 5% of the total issued shares of the company, is within the top five shareholders, or appointed a representative to be a director or supervisor of the company in accordance with Article 27, Paragraph 1 or 2 of the Company Act (except for independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, the Company and its parent company, its subsidiary or a subsidiary of the same parent).
6. Not a director, supervisor or employee of another company controlled by the same person who holds more than half of the Company's director seats or voting shares (except for independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, the Company or its parent company, its subsidiary or a subsidiary of the same parent).
7. Not a director, supervisor or employee of another company or institution with the same person or spouse as the chairman, general manager or equivalent of the Company (except for independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, the Company and its parent company, its subsidiary or a subsidiary of the same parent).
8. Not a director, supervisor, manager or shareholder holding more than 5% of shares of a specific company or institution that has financial or business dealings with the Company (except for independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, the Company and its parent company, its subsidiary or a subsidiary of the same parent and if the specific company or institution holds more than 20% but less than 50% of the total issued shares of the Company).
9. Not a professional who provides auditing related services to the Company or its affiliates and did not provide commercial, legal, financial or accounting related services to the Company or its affiliates with the cumulative amount of remuneration obtained in the last two years exceeding NT$500,000; and is not an owner, partner, director, supervisor, or manager, or the spouse of any of the above, of a sole proprietorship, partnership, company, or organization that provides such services to the Company or its affiliates. However, this does not apply to the members of the Remuneration Committee, the Public Takeover Review Committee or the Special Merger and Acquisition Committee who perform their functions and powers in accordance with the relevant laws and regulations of the Securities and Exchange Act or the Business Mergers and Acquisitions Act.
10. Not a person of any of the conditions defined in Article 30 of the Company Act. Note 2: The Remuneration Committee is composed of four members. For the Remuneration Committee Charter, please refer to the Company
website: https://www.china-airlines.com/tw/en/investor-relations/important-company-regulations
Corporate Governance Report 51
B. Attendance of Members at Remuneration Committee Meetings The Company's Remuneration Committee has a total of 3 members, and the term of the current Committee members: June 27, 2018, to June 26, 2021. The Remuneration Committee convened four meetings over the past year (from January 1, 2020, through March 27, 2021). Committee member attendance is detailed below:
Title Name Attendance in
Person By Proxy Attendance Rate (%) Remarks
Independent Director (Chairman)
Shen, Hui-Ya 4 0 100% None
Independent Director Chang, Hsieh Gen-Sen 4 0 100% None
Other He, Jyun-Huei 4 0 100% None
Other mentionable items: 1. The members of the Committee shall exercise the due care of a good administrator, perform the following functions and duties faithfully, and shall
be responsible to the Board of Directors and submit their recommendations to the Board of Directors for discussion: (1) Establishment and regular review of policies, systems, standards, and structures for performance evaluation and salary and compensation for
Directors and managers. (2) Regular evaluation and setting up of salary and compensation for Directors and managers. (3) Regular review of matters related to the organization regulations for the Board of Directors’ revision. (4) Other matters handed over for discussion by the Board of Directors.
2. If the Board of Directors declines to adopt or modifies a recommendation of the Remuneration Committee, the date of the meeting, session, the content of the motion, resolution by the Board of Directors, and the Company’s response to the Remuneration Committee’s opinion (e.g., the remuneration passed by the Board of Directors exceeds the recommendation of the remuneration committee, the circumstances and cause for the difference shall be recorded): None.
3. Resolutions of the Remuneration Committee objected to by members or subject to a qualified opinion and recorded or declared in writing, the date of the meeting, session, the content of the motion, all members’ opinions and the response to members’ opinion should be specified:
Meeting Dates Agenda content Resolution Handling of members’ opinions by the Company
January 13, 2020 7th Meeting of the Remuneration Committee of the 21st Board of Directors
Chairman and Managers' 2020 Lunar New Year Incentive
Approved by all attending members to be reported to the Board of Directors for discussion.
No further business
July 21, 2020 8th Meeting of the Remuneration Committee of the 21st Board of Directors
1. Amendment to the Charter of Remuneration Committee 2. Flight safety bonus to Chairman and managers
Approved by all attending members to be reported to the Board of Directors for discussion.
No further business
January 18, 2020 9th Meeting of the Remuneration Committee of the 21st Board of Directors
Chairman and Managers' 2021 Lunar New Year Incentive
Approved by all attending members to be reported to the Board of Directors for discussion.
No further business
March 18, 2021 10th Meeting of the Remuneration Committee of the 21st Board of Directors
1. Resignation pay for the former Senior Vice President Chang, Young
2. Flight safety bonus to managers
Approved by all attending members to be reported to the Board of Directors for discussion.
No further business
52 Corporate Governance Report
3.3.6 Corporate Social Responsibility and Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/GTSM Listed Companies
Evaluation Item
Implementation Status Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
Yes No Brief Explanation
1. Does the Company, based on the materiality principle, conduct risk assessments on environmental, social and corporate governance issues related to the Company’s operations and formulate relevant risk management policies or strategies?
Our risk management framework is based on the materiality principle to identify both traditional risks and medium-term/long-term strategic risks. All impacts and countermeasures are analyzed and proposed through Risk Identification, Risk Analysis, Risk Assessment, and Risk Control, then followed up on and reviewed by the Risk Management Committee under the Board of Directors. The Committee assists the Board of Directors to inspect the strategies, execution results and countermeasures of each risk management strategy. A responsible unit will be required to control the risks. Among which, safety and operation risks are cross-unit operational risks and shall be handled by the Company's management level. The "Corporate Safety Committee" and the "Corporate Sustainability Committee" have been established under the President of the Company to be responsible for such risks and report the environmental and energy management performance to the top management on a quarterly basis. In addition, through the routine "Sustainability Committee" and "Board of Directors and Risk Management Committee" meetings, reports have been made to the Directors on environmental and climate risks, opportunity issues, and various responding control operations and development plans.
No Difference
2.Has the Company designated full- (or part-) time personnel to implement corporate social responsibility policy with senior management authorized by the Board of Directors to manage them, and do they give status reports to the Board of Directors?
The Company has set up a Corporate Sustainability Committee in 2014, which is solely responsible for the promotion of sustainability and is the highest governance organization for sustainability governance promotion, with the President sitting as its Chairman. There are six major task forces in the Committee, based on different aspects of sustainability, which are “Trust Value Team, Manpower Value Team, Joint Creation Value Team, Environmental Value Team, Social Value Team, and Sustainable Development Foundation Team.” Their main responsibilities are strategy formulation, business planning, and promotion of different aspects of sustainability; the teams report the implementation status to the Board of Directors on a regular basis every year in accordance with the Corporate Social Responsibility and Sustainable Development Best-Practice Principles. The results of the 2020 CSR operation and the 2021 CSR operation plan were reported in the 14th meeting of the 21st Board of Directors on January 18, 2021.
No Difference
3.Environmental issues (1)Has China Airlines established an
environmental management system that is specifically designed with the Company's operations in mind?
(1)Environmental management organization and system A. In 2012, the Company was the first in Taiwan’s industry to establish a “Corporate
Environmental Committee,” in which the President serves as the representative of the top management, and the Corporate Safety Office serves as the executive secretary. According to the business attributes, five major environment management committees were established to respectively control and carry out aviation, maintenance and cargo transport service, headquarters and branch administration, environmental, energy, climate change and other risk and opportunity management related affairs of the operational activities, fully covering the corporate business scope. The Corporate Environmental Committee coordinates and integrates various environmental, energy, and climate change risk and opportunity response strategies and management resources through quarterly management meetings. Related important resolutions are also reported to the Directors through routine Board meetings and Risk Management Committee meetings.
B. In order to integrate environmental protection operations into the daily operational risk management operations of the enterprise, China Airlines has introduced a number of international standard management systems since 2009, and has established and improved the environmental management operation mechanism of the enterprise, covering risk issues such as greenhouse gases, environmental management, and energy management. The Company has formulated management strategies and action measures for relevant risks and opportunities identified in various aspects of the environment. Beginning in 2017, the Company has introduced life cycle thinking and completed control over every link of the organization's operations; also, considering the issues of interest to stakeholders, the Company has further improved the level and perspective of environmental and energy risk management, and become comprehensively in line with the standard thinking of international enterprises’ sustainable development governance. System standards covered by China Airlines’ environmental management mechanism:
Standard
ISO 14064-1 Greenhouse gas inventory and management
system
ISO 14001 Environmental management
system
ISO 50001 Energy
management system
Time of introduction 2009 2012
(Note1) 2013
(Note2)
No Difference
Corporate Governance Report 53
Evaluation Item
Implementation Status Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
Yes No Brief Explanation
Standard
ISO 14064-1 Greenhouse gas inventory and management
system
ISO 14001 Environmental management
system
ISO 50001 Energy
management system
Scope
(1)Global aviation fuel
(2)Ground operations in Taiwan, including CAL Park, maintenance facility, Taipei branch (floors B1, 1, 2, and 9), Songshan Park, and Kaohsiung branch.
(1)Aircraft/engine maintenance operation
(2)Flight operation and management
(3)Cargo transport service
(4)Passenger transport service
(1)Aircraft/engine maintenance operation
(2)Flight operation and management
Note 1: The ISO 14001: 2015 version transferring operation was completed in 2017, and the certificate is valid through March 28, 2022.
Note 2: The ISO 50001:2018 version transferring operation was completed in 2019, and the certificate is valid through April 11, 2022.
(2)Has the Company endeavored to make more efficient use of resources and use renewable materials that have a lower impact on the environment?
(2)The Company’s implementation of environmental and energy performance management mainly promotes various resource conservation and reuse strategies and practices based on the “Environmental and Energy Management Policies,” as follows:
Concepts Policies Promotion strategies Plans of action
Complying with environmental laws and regulations
Performing compliance obligations and fulfilling environmental protection and energy conservation responsibilities.
˙ Understanding environmental protection trends in Taiwan and abroad, and improving the negotiation channel and platform for stakeholders.
˙ Actively participating in international cooperation and understanding mainstream issues.
˙ Perfecting management/supervision and evaluation mechanism
˙ Regular regulatory requirements checks and self-commitment reviews
˙Actively participating in domestic and foreign industry and government meetings to grasp the trends of regulations.
˙Implementation of checking mechanism for management system compliance obligation
˙Participation in DJSI, CDP, and other leading international evaluations
Conserving the Earth's resources
Establishing environmental and energy management systems, and management performance indicators.
˙ Continuously improving the operational quality of the corporate environmental and energy management system
˙ Developing and implementing environmental performance and carbon reduction targets
˙ Understanding updates to ISO standards, implementing and perfecting the improvement of enterprise Environmental Management System, EMS.
˙Improving the checking, oversight and evaluation mechanism for environmental, energy, and carbon emission risks
No Difference
54 Corporate Governance Report
Evaluation Item
Implementation Status Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
Yes No Brief Explanation
˙Establishing and implementing various energy conservation, carbon reduction and environmental performance targets
˙Implementing internal audit and management review mechanisms and conducting third party verification.
˙Establishing a Task Force on Climate-Related Financial Disclosures (TCFD) system
˙Establishing a corporate “Environmental Management Information System” to understand and document historical environmental performance.
Improving eco-efficiency
Implementing environmental and energy conservation education to foster employees’ environmental awareness.
˙ Creating diversified guidance and communication channels
˙ Establishing incentive programs to motivate colleagues to practice and develop environmental protection ideas.
˙ Implementing environmental and energy-saving education for all employees
˙Organizing an annual “environmental protection education seminar” and “environmental protection competition”
˙Establishing a platform to promote new knowledge of environmental protection and energy conservation from time to time
˙Establishing a reward system for proposals
Implementing green supply chain management to enhance overall eco-efficiency.
˙ Establishing a supply chain risk assessment and management system
˙Establishing environment and energy management capacity for companies of the Group
˙ Cultivating the Group’s and key suppliers’ environmental talent
˙Holding value chain environmental protection and energy saving education and training
˙Performing supply chain risk assessment operation
Corporate Governance Report 55
Evaluation Item
Implementation Status Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
Yes No Brief Explanation
˙Organizing conferences and regular meetings for suppliers to communicate China Airlines' sustainability and environmental protection requirements.
Fulfilling social responsibility
Creating a low-carbon operating environment to establish continual improvement of energy and environmental performance.
˙ Optimizing devices performance
˙ Promoting energy-saving education and establishing corporate energy-saving culture.
˙ Introducing low-carbon and renewable energy facilities
˙ Checking and optimizing energy equipment and management measures
˙Establishing and implementing energy conservation management and educational programs
˙Mastering technology and regulatory trends, and introducing renewable energy equipment in a timely manner.
Supporting green design and procurement to promote environmental sustainability.
˙ Deepening the awareness of planners in environmental protection and energy conservation
˙Promoting green procurement and green consumer culture
˙ Incorporating service process into the operation scope of the Environmental Management System (EMS) and strengthening personnel training.
˙Including environmental protection and energy saving effects as the key considerations for procurement
˙Establishing and promoting “Green Fares - Carbon Exchange Service”
˙Using environment-friendly certified on-board spare products and selling environment-friendly duty-free products
˙Diversifying the promotion of green consumer awareness
(3) Does the Company assess the potential corporate risks and opportunities created by climate change now and in the future and does it take measures to deal with climate related issues?
(3)The Company's climate change risk and opportunity management is as follows: A. Climate risk and opportunity management mechanism
With respect to specific issues, the Company has established functional task forces under the corporation's Environmental Committee, including the following task forces: Carbon management task force, aircraft alternative fuel research task force, TCFD work task force, among others, to facilitate cooperation among units and flexible allocation of required resources.
B. Climate risk and opportunity response measures Through the carbon management and the TCFD work task forces, the Company
No Difference
56 Corporate Governance Report
Evaluation Item
Implementation Status Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
Yes No Brief Explanation
identifies its environmental risk opportunity matrix, considers the identification and adjustment of changes in external specifications and technological development environmental conditions, brings the top nine topics into the scope of corporate environmental risk management and actively controls the response. Other issues have also been continuously improved through the operation of the corporate Environmental Management System (EMS).
Potential risks Potential opportunities Response measures ˙ Poor weather
conditions lead to flight delays, cancellations, etc., and increase business operational costs.
˙ The maintenance frequency and quality assurance requirements are increased, meaning increased costs.
˙ The operational efficiency of related equipment is reduced, and operational costs are increased.
˙ The demand for passenger and cargo transport is reduced, and revenue is reduced.
˙ Enhance emergency responsibility, properly handle customer needs, improve service quality and reputation.
˙ Properly handle and meet customer needs, and improve the corporate tenacity and reputation.
˙ Continue to strengthen operational procedures and emergency response mechanisms, strengthen personnel training, and improve the inter-unit coordination and business operational efficiency within the organization.
˙ Bring in a professional meteorological team, improve the accuracy of meteorological forecasts, and activate the aircraft dispatching operation as early as possible.
˙ Enhance the coordination of supply chain management and partnership, ensure the safe and easy transportation of goods and personnel at all stages.
˙ Higher oil prices increase business operation costs.
˙ The use of aviation sustainable fuel increased, the ratio of fuel added increased, and the operational cost increased.
˙ Effectively adjust the risk of rising fossil fuel prices
˙ Improve the consumption and efficiency of low-carbon energy and reduce energy expenditure.
˙ Use aviation sustainable fuel to improve brand benefits and revenue.
˙ Diversified financing channels
˙ Continuous evaluation and introduction of new technology (new energy-saving aircraft, fuel-saving technology, etc.)
˙ Continue to promote the measures of aviation fuel saving
˙ Energy consumption inventory and improved efficiency in flight and ground operations
˙ Promote the development of alternative fuels in Taiwan
˙ With the growth of business, carbon emissions continue to grow, increasing carbon exchange and regulatory costs.
˙ Install/purchase renewable energy facilities or adjust work details, increasing business operation cost.
˙ Continue to reduce greenhouse gas (GHG) emissions and reduce our sensitivity to changes in carbon transaction prices.
˙ Derivative income from carbon rights sales
˙ Improve the energy efficiency of flight and ground operations and reduce energy expenditure.
˙ Proactively participate in negotiation and communication between public departments and international organizations
˙ Establish a carbon discharge monitoring and management system
˙ Understand fluctuations in the carbon market and manage carbon rights appropriately.
˙ Planning and implementation of each item in carbon reduction measures
˙ Unstable supply of raw materials
˙ Increase in procurement costs
˙ Open up new markets and increase revenue.
˙ Use raw materials of the current season to adjust meals and reduce costs.
˙ Carry out supply chain management guidance and strengthen supply chain fitness.
˙ Coordinate with the season to flexibly
Corporate Governance Report 57
Evaluation Item
Implementation Status Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
Yes No Brief Explanation
˙ Sign long-term contracts with relevant supply partners to maintain stable services.
adjust raw materials used in meals to adapt to climate change trends, understand the compliance of goods carried, and strive for new market opportunities.
˙ Investors reduce their willingness to invest
˙ Capital investment is required to promote the consideration of highly efficient aircraft/sustainable fuel investment.
˙ Work with stakeholders to adapt to the climate and capture business opportunities by using innovative solutions.
˙ Discuss across departments, develop new routes and services.
˙ Develop a travel mode to save fuel and time
˙ Continue to research and analyze new technologies, facilities, and services, and introduce feasibility evaluation.
˙ The risk of infectious diseases has increased, reducing the demand for tourism and changing the demand for cargo transport.
˙ The consumer market attaches great importance to low-carbon and environmental protection of corporations, both of which affect brand trust and reduce revenue.
˙ Improvements in the awareness of carbon reduction changed the demand for air transport (such as changing to cruise lines, high-speed rail, etc.).
˙ Plan to promote low-carbon services and thereby enhance consumer support for our brand.
˙ Master the market model of low-carbon economy/transportation issues and create business opportunities and increase competitiveness.
˙ Cooperate with the governments of all countries to manage the disease properly, strengthen self-protection and response, and reduce the degree of impact.
˙ Develop all kinds of new products/services, improve service efficiency, and meet market demand.
˙ Launch environmentally friendly travel service ECO TRAVEL, invite passengers to participate in carbon reduction and enhance green/low-carbon business opportunities.
˙ Continuous research and development of new market channels or customer groups
˙ Develop diversified green and low-carbon activities and strengthen customer communication.
˙ Does not meet the expectations of stakeholders, affects brand reputation.
˙ Failure to properly manage supply chain issues, affecting operations.
˙ Strengthen the prediction system mechanism, maintain the rights and interests of customers, and stabilize revenue.
˙ We deal with emergency situations properly, increasing the public's confidence in us.
˙ Promote supply chain cooperation and enhance corporate sustainable competitiveness.
˙ Cooperate with and support the government's environmental protection policies, enhance industrial cooperation opportunities, and promote industrial competitiveness.
˙ We continue to strengthen communication between external stakeholders, support scientific research, participate in international environmental sustainability comparison assessments, and enhance the corporate sustainable image.
˙ Strengthen employee education and training, hold environmental protection and energy conservation activities, and improve employee awareness.
˙ Strengthen cooperation with domestic and overseas suppliers of low-carbon products to enhance the sustainable value of the supply chain.
58 Corporate Governance Report
Evaluation Item
Implementation Status Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
Yes No Brief Explanation
(4) Has the Company compiled statistics on the past two years of GHG emissions, water usage, and waste amounts, and has it devised policies for energy conservation and carbon emissions reduction, GHG emissions reduction, water conservation, and other waste management?
(4)The Company's environmental/carbon/energy performance management is as follows:
A. Greenhouse gas inventory and verification Since 2009, the Company has actively implemented ISO14064-1 greenhouse gas management, conducted and organized inventory of greenhouse gas emissions generated by operations, and carried out third-party verification.
Greenhouse gas emissions GHG
Emissions Category
Type 2019 2020
Category 1 Aviation operations 7,059,083 5,787,751 Ground operations 4,981 3,051
Category 2 Ground operations 18,169 17,572 Total (Tons of CO2e) 7,082,233 5,808,374
B. Greenhouse gas management and reduction strategy The Company’s greenhouse gas management and reduction strategy consider the international industrial carbon reduction targets, strategy implementation and benchmarking technology of the same and different industries. It combines its corporate financial operation plan and technical feasibility to formulate air and ground carbon-reduction targets. In the future, it will continue to incorporate the Science-Based Target (SBT) concept to carry out rolling inspection of corporate carbon reduction objectives and management paths through the corporate risk management mechanism and platform.
Carbon reduction goals Target description 2020 Achievement rate
Aviation
2020 To increase aviation fuel efficiency by 1.5% every year on average
Failed to achieve due to the impact of COVID-19 on the global market
2025 Improving annual aviation fuel efficiency by 1.5% and achieving carbon-neutral growth (CORSIA CNG2020) (the carbon emission in 2050 will be reduced to 50% of those in 2005)
2030
Ground
2020 38% reduction in carbon emissions
Achieved the target
2025 40.43% reduction in carbon emissions
2030 42.34% reduction in carbon emissions
Aviation operations were the first phase carbon reduction target to be achieved for the airlines industry: "By 2020, fuel consumption efficiency will be increased by 1.5% every year." The Company will continue to strengthen fuel consumption efficiency countermeasures, and has formulated four major fuel saving strategies, including "promoting green energy flights," "improving ground service controls," "continuous regular maintenance" and "fuselage weight reduction,” as well as several specific implementation measures. However, due to the COVID-19, the total fuel consumption decreased by 2.4% compared to the last year. The total flight reduced by 38%, and RTK reduced by 22%. Thus the total fuel consumption efficiency was 0.2583 ton/thousand RTK, unable to reach the 2020 goal (0.2349 ton/thousand RTK). For ground operations, 61 environmental management KPIs and 13 fuel saving measures were promoted in 2020, which resulted in a total annual carbon reduction of 115 tons of CO2e; among which, carbon reduction in ground operations amounted to 466.48 metric tons of CO2e. Various data are as follows:
Item Savings Unit Carbon reduction (Tons of
CO2e)
Aircraft fuel savings 19,131 Kiloliter 48,421
Ground fuel conservation
119 Kiloliter 307
Energy conservation 2,691 1,000 kilowatt
hours 143
Water conservation 3 1,000 kilowatt
hours 0.48
Paper conservation 3.78 Tons 16
No Difference
Corporate Governance Report 59
Evaluation Item
Implementation Status Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
Yes No Brief Explanation
2020 total carbon reduction 48,887.48 Considering the trend of energy saving around the world and rolling wave management, the Company made the amendment to the short-, mid-, and long-term carbon reduction goal for 2021:
Goals Description
Aviation
2023 Improving annual aviation fuel efficiency by 1.5% and achieving carbon-neutral growth (CORSIA CNG2020) (the carbon emission in 2050 will be reduced to 50% of those in 2005)
2025
2030
Ground
2023 41% reduction in carbon emissions 2025 44% reduction in carbon emissions 2030 50% reduction in carbon emissions
C.Targets and achievements in energy resource reduction The Company sets various environmental protection and energy conservation objectives in accordance with sustainable development goals (SDGs):
Item 2020 targets Achievements
2021 expected targets
Aviation fuel efficiency
Improvement of 1.5% over 2019
Did not meet target (Note)
Improvement of 1.5% over 2020
Ground carbon emissions
Reduction of 38% over 2009
100% Reduction of 39% over 2009
Water resources Reduction of 1.5% over 2018
100% Reduction of 2.2% over 2018
Domestic waste Reduction of 2% over 2018
100% Reduction of 3% over 2018
Hazardous industrial waste
Recycling ratio reached 40%
100% Recycling ratio reached 41%
Photocopy paper
Reduction of 5% over 2018
100% Reduction of 5% over 2018
Note: Failed to achieve due to the impact of COVID-19 on the global market.
D.Increased energy efficiency After obtaining "Diamond Green Building Label" certification in 2017, the headquarters for China Airlines continued to promote equipment renewal, optimize operational processes, and improve the overall energy efficiency of buildings; in 2019, the Company further responded to Taiwan's green energy policy. It completed the installation of 99kW solar photovoltaic facilities on the roof of the simulator training building for parallel power generation to support Taiwan's renewable energy through practical actions. In 2019, the Company received National Renewable Energy Certificate (T-REC) and was awarded the Bureau of Energy's (MOEA) Conservation Benchmark - Silver Award, Taipei Energy Conservation Leadership Award, supporting renewable energy with real actions. As of December 31, 2020, the Company received 117 certificates, and the total power generated was 215 thousand kW. 115 tonnes of CO2e were reduced.
E.Water resource utilization increase The total water consumption of the Company in 2020 was 126,774 kWh, which is about 13.46% less than that in 2019. Among which, the China Airlines headquarters park is in a specific area of the airport. The airport management unit collectively applies for and obtains tap water from the water supply unit and pays the sewage treatment fee. The domestic sewage is collected and sent to the domestic sewage treatment plant for treatment. The maintenance facility, Songshan Park, and Taipei branch apply directly for water supply from the water company. In order to reduce the risk associated with water resources, the Company has successively set up water meters at important water line nodes, and it tracks and analyzes the direction of water resource flow and water consumption hot spots, and promotes water reduction and recycling measures, including: Purchasing water conservation label products, promoting water conservation advocacy, setting up a rainwater recovery system, recycling cooling water and introducing Eco-shine, etc.
Item Unit 2019 2020
Tap water use volume Kilotons 146.49 126.77
Recycled water use volume Kilotons 17.41 8.64
60 Corporate Governance Report
Evaluation Item
Implementation Status Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
Yes No Brief Explanation
Recycling percentage % (recycled volume/water use total volume)
% 11.88% 6.8% 11.88%
F.Waste Management The Company processes waste management in accordance with the five following principles: Refuse, Reduce, Reuse, Recycle, Repair. We have set a goal for 100% resource reclamation of waste and have annually increased the waste reuse rate.
Waste Management
Principles Strategies and goals Actions
Refuse Through green design and procurement, reduce resource consumption and waste disposal demand at the source.
Support suppliers to develop and purchase non-disposable plastic products (such as: wooden cocktail stir rods); Increase green procurement.
Reduce
Accurately plan business and service supplies to reduce consumption; improve maintenance processes and reduce end waste; Implement electronic teaching materials and operations, conserve paper arising from training and communication.
Reuse Through improvement of operation processes, improve the reuse rate of waste and reduce the opportunities where waste would be generated.
Improve the reuse ratio (e.g., plastic waste bucket) of hazardous industrial waste.
Recycle
Working with the environmental protection agency's plastic film recycling platform, improving the recycling ratio of packaging plastics.
Repair Continue to use passenger and freight equipment (such as pallets or containers/netting) after repair.
In 2020, the production of ground operation and domestic waste was 454,279 kg, which is about 35.4% less than that of 702,966 kg in 2019. In 2020, the amount of business waste also decreased by 21.7% compared with that in 2019.
Item Handling method 2019 2020
Ground Operational
Domestic waste
Non-recyclable Incineration
381,626 327,728
Recyclable: Resources recycled
321,340 126,552
Hazardous industrial waste
Non-toxic: Entrust qualified organization to remove/dispose
233,018 184,420
Toxic: solidification and burial/chemical treatment
18,815 12,657
In the air Service
General industrial/domestic waste
Non-recyclable Incineration
3,052,461 943,952
Recyclable: Resources recycled
1,116,396 341,366
Total waste (kg) 5,123,656 1,936,675
4. Social issues (1) Has the Company established
management policies and procedures in accordance with relevant laws and regulations and international human rights conventions?
(1)In the area of comprehensive management systems and organizational capacity, the Company not only abides by the Employee Code of Conduct and Employee Work Standards set forth in various labor laws, but also refers to the Universal Declaration of Human Rights, the United Nations Global Compact, the International Labor Organization's basic compact on core labor standards, the UN Guiding Principles on Business and Human Rights, and local laws and regulations. The company has established a Human Rights Policy based on the aforementioned norms as guiding principles for the Company's management.
No Difference
Corporate Governance Report 61
Evaluation Item
Implementation Status Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
Yes No Brief Explanation
(2) Does the company establish and implement reasonable employee welfare measures (including compensation, vacation, and other benefits) that appropriately reflect the operating performance or results through employee compensation?
(2) Employees are the most important assets of a company. In addition to improved planning and setting standards for the implementation of salary, work bonuses, flight-safety bonuses, vacation, preferential air tickets, and several welfare measures, the Company offers performance bonuses, annual bonuses, year-end bonuses, promotions, and employee compensation with reference to the performance of employees at the end of each fiscal year and based on the Company's annual profit status. The Company takes this opportunity to care for its employees and treat them as the core of its sustainable operations. The average salary for all employees of the Company increased by about 1.67% in 2020.
No Difference
(3) Does the Company provide employees with a safe and healthy work environment and regularly implement health and safety education programs for employees?
(3)In order to protect the rights of employees, provide a healthy and safe working environment, and create a friendly workplace, the Company has established internal rules and regulations related to "employee complaint measures" and "employee safety report reward operation measures," and provides multiple communications channels, such as a speaking area, regularly scheduled labor-management consultation meetings, and special e-mails for complaints in various cases (including WeCare, workplace sexual harassment, professional ethics). Such channels are made accessible to all employees, and complaints are accepted in accordance with the operational procedures.
A. Keep pace with international double certification in this new era of workplace safety To adapt to trends of global international labor development, improve the efficiency of safety and health management, and promote systematic management measures, the Company established an independent safety and health management system and obtained ISO45001:2018 and TOSHMS certification on April 20, 2019, which serve as the management basis of occupational safety and health management system certification. Self-management and preventive measures based on the PDCA cycle mode are used to effectively control occupational disaster risk, improve occupational disease preventive management, improve occupational safety and health management performance, and actively implement occupational safety policies; Provide a safe, healthy, and comfortable working environment for employees, and promote industry competitiveness.
B. Occupational safety and health committee for two-way effective communication The Company has established an Occupational Safety and Health Committee in accordance with law. The committee is tasked with the objective of preventing occupational hazards and protecting the safety and health of all employees by reviewing, coordinating, and making recommendations pertaining to safety and health related matters. The position of chairman is served by the president. There is one vice chairman and one executive secretary under the chairman. The committee consists of the first-level management of designated units, occupational safety and health personnel, engineering and technical personnel, medical personnel, and labor representatives appointed by the labor union as members. A meeting is held once every three months to gather statistics and analyze the Company’s occupational accidents and report and follow up on subsequent safety and health management plans. A total of 14 safety and health proposals were reviewed, coordinated, and provided with suggestions in the meetings in 2019, and all proposals have been concluded; relevant meeting minutes have been announced on the Company’s internal website.
C. Full AQD for comprehensive risk assessment
Using China Airlines' Aviation Quality Database (AQD) of all personnel to reflect hidden hazards of the operating environment and implement risk assessment to reduce occupational accidents; the improvement rate of the safety and health related cases was 100%, indicating a safe, healthy, and comfortable working environment for China Airlines employees.
D. Strengthen occupational safety and pandemic prevention
To cope with the pandemic, China Airlines actively equips itself with the ability to deal with infectious diseases. Cross-unit control mechanisms and procedures were built to consolidate the efforts from each unit. The Company constantly reminds employees to keep full alert and quickly makes responses based on the condition of the epidemic. For employees who are exposed to high risks
No Difference
62 Corporate Governance Report
Evaluation Item
Implementation Status Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
Yes No Brief Explanation
(cabin crews), a health report system was built to track any abnormality. Ground service staff were asked to work remotely and business travels were restricted. Relevant health management policies have been strictly adopted. Cross-function collaboration system was built to provide various communication channels. The Company also strengthened employees' knowledge on the prevention of biological pathogen hazards through health promotion lectures and education training. The Company also makes good management, utilization and storage of the pandemic prevention resources to provide a safe, healthy and comfortable working environment for employees.
E. The Company values employees' health, and has been dedicated to creating a healthy workplace. Regular health checkup has been conducted with more inspecting items as prescribed by law and with higher frequency. Employees who are listed in the high-risk group are followed up and guided by doctors to realize the early inspection and precaution. Meanwhile, every year the Company makes clear direction for health promotion and approves a sufficient budget. The occupational health promotion plan is made by combining the resources from the health authority and community. Health promotion courses are held to create a positive and healthy workplace. Topics cover cancer screening, prevention of infectious disease, and vaccination, etc. In 2020, cardiovascular disease and coronavirus prevention were included in the training content. The Company also provides employees in Taiwan with a free vaccination. 2,108 people were vaccinated in 2020. To allow female employees to be able to do breastfeeding, breastfeeding rooms are established in compliance with the breastfeeding policy of the Health Promotion Administration, Ministry of Health and Welfare as well as the Act of Gender Equality in Employment.
(4) Has the Company established an effective career skill development training program for employees?
(4) In order to nurture the Company's human resources, it has a Training Advisory Committee, which is responsible for the planning of annual education and training for all colleagues, including strategic occupational training, management occupational training, and job training. Simultaneously, in accordance with the Company's operational development strategy, and to deepen the Company's various levels of management professionals and broaden the horizon of potential talents, strategic and management occupational training was held on a regular basis to sharpen employees’ necessary knowledge and skills. In addition, since 2009, the Company has established a Management Talent Training and Development System to nurture talents with international vision and management capabilities, and to strengthen the management knowledge of management professionals through job experience, management course training, and rigorous assessment systems. As of today, more than 100 outstanding management professionals have been trained and are now serving in key units in Taiwan and foreign branches. In 2019, a total of NT$253 million was invested in the training and development. The total number of training hours exceeded 52,865 hours.
No Difference
(5) Regarding customer health and safety, customer privacy, marketing and labeling of the products and services, does the Company follow relevant regulations and international standards, and formulate relevant policies and complaint procedures for consumer rights protection?
(5) In addition to stipulating service commitments, transportation terms and conditions, and disclaimer clauses in accordance with the law, regarding the consumer rights policies, the Company has also posted and shared on the Company’s website the information security policy with its “privacy protection policy” and “privacy protection statement.” It is committed to protecting the privacy of all customers’ personal information. Also, to protect the rights and interests of the passengers, reservation and ticket-related rules for flight changes have been clearly mentioned in the FAQs on the official website. Furthermore, the Company has in place consumer complaint procedures to provide consumers with complaint channels for products and services, including company website (including stakeholders section, customer feedback, and service satisfaction survey), Facebook fan page, customer service e-mail, and global branches’ addresses and phone numbers; consumers may also send letters to the Company directly. All complaints will be replied to after processing.
No Difference
(6) Has the Company formulated supplier management policies that require suppliers to follow relevant regulations on issues such as environmental protection, occupational safety and health or labor human rights, and their implementation status?
(6)The Company has formulated the “Supplier Code of Conduct” which specifies that suppliers shall provide a healthy and safe working environment and shall ensure that workers respect each other, enjoy dignity and fairness, and abide by professional ethical standards; in any case, when providing products and services, suppliers shall strictly comply with the legal, ethical requirements and their commitment to be responsible to the society and environment; if the Code is violated, the Company may terminate the business relationship between the two
No Difference
Corporate Governance Report 63
Evaluation Item
Implementation Status Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
Yes No Brief Explanation
parties. Moreover, the Company evaluates the supplier’s past credit history, and reviews the supplier’s quality, delivery date, and whether there are any negative reports before dealing with the supplier. In 2020, a total of 48 suppliers were reviewed. In accordance with the "Sustainable Supply Chain Management Policy Statement" of the Company, we have requested that every supplier sign the "Supplier Code of Conduct" when making a tender, jointly undertaking to create a sustainable industrial environment since 2016. We have also continued to promote the procurement of Green Mark certified products. By the end of 2020, we have completed green procurement of approximately NT$1.47 million in total. Therefore, the Company has been promoting sustainable supply chain management since the beginning of 2014. Subsequently, we established a Joint Value Creation Team for important procurement categories, including "aviation materials, aviation fuel, in-flight meals, service procurement, and general business affairs," and formulated long-term sustainability goals based on the United Nations' Sustainable Development Goals (SDGs), establishing China Airlines' Sustainable Supply Chain Management Policy Statement and Supplier Code of Conduct with reference to the Global Reporting Initiative (GRI), ISO 26000, United Nations Global Compact (UNGC), International Labour Organization (ILO), and other international standards. In addition, the Company has also established a risk investigation mechanism, performed audit operations, organized supplier meetings to enhance the effectiveness of engagement, and set up other management measures, and has regularly reported the management results to the Corporate Sustainability Committee for follow-up inspection on a quarterly basis.
5. Does the Company refer to internationally accepted report preparation standards or guidelines to prepare its Corporate Social Responsibility (CSR) Report and other reports that disclose the Company’s non-financial information? Has the aforementioned report been assured, verified, or certified by a third-party verification unit?
The Company follows the GRI Standards - Core option issued by the Global Sustainability Standards Board and refers to the UN Global Compact when preparing its CSR Report. In May 2021, the Company’s limited level report verification will be completed by KPMG based on the GRI Standards and ISAE3000 Assurance Standard, and a third-party verification statement was issued, which has been disclosed on the Company’s “Corporate Social Responsibility” section on its website.
No Difference
6. If the Company has drawn up a code for CSR based on the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies, please describe any differences between said code and the Best-Practice Principles: In order to fully implement the scope of corporate social responsibility, comply with the government's direction of CSR promotion, and accord with international practice, the Company has added to and amended the Company's Corporate Social Responsibility and Sustainable Development Best-Practice Principles on November 5th, 2020 based on the revised Corporate Social Responsibility Best-Practice Principles for TWSE/GTSM Listed Companies; through this CSR's highest guiding principle, we have comprehensively reviewed the Company's operational constitution, reflected the management and execution aspects, and striven to fulfill corporate social responsibility in three major aspects: environmental, social, and governance (economic) (ESG); there was no operational difference this year. For related information, please refer to the Company's corporate social responsibility website. No deviations were found this year.
7. Other important information for facilitating the understanding of CSR and its implementation: As the global aviation industry was fundamentally impacted by the coronavirus, China Airlines continued to fulfill its commitment to corporate sustainable development. Based on "promoting the local education internationalization," "enhancing international visibility of local brands in Taiwan" and "helping disadvantaged groups to obtain equal opportunities in society, "China Airlines looks forward to enhancing the education quality in Taiwan, strengthening Taiwan's visibility on the world stage, helping the vulnerable group to overcome difficulties, and giving back to society for sustainable development. (1) Promoting the internationalization of local education: Strengthening education: 46,017 persons benefited in 2020 Corporate visit: Every year, China Airlines invites colleges and universities to visit the company, and provides designated personnel to introduce corporate culture and training facilities for cabin crew, emergency training, and aviation training. Through real practices, it is hoped to cultivate students' knowledge of the aviation industry. In 2020, nine sessions of visits were paid by colleges and universities, benefiting 320 students. Lecture by volunteers: China Airlines Volunteering Club was established in 2001. Every year, the volunteers offer lectures to nearby schools. Through demonstration, the volunteers teach students relevant knowledge in the aviation industry, and enhance students' global perspective and growth. In 2020, 8 lectures in schools such as Xihai Elementary School, Zhuwei Elementary School, Shanfeng Elementary School, and Kuolin Elementary School in Dayuan District were held. In total, there were 50 participating volunteers and 24 hours of service, benefiting 604 students. Upholding the spirit of mutual support and spreading love, the China Airlines Volunteers Club gives back to the society and community with actions. Knowledge platform for elementary school students: Since 2014, China Airlines has been working with the Global Views Educational Foundation to collaborate on the "Common Knowledge Platform Public Welfare Project" sponsorship plan and to donate subscriptions to the "Global Kids Junior Monthly" to students in various elementary schools in Taoyuan City, Taitung County, Nantou County, and Hualien County to help students develop reading habits and to contribute to the cultural education of children. In 2020, 102 schools and about 44,472 students benefited. Little cabin crew dream project: China Airlines organizes the "Little Cabin Crew Dream Project" by utilizing the aviation resources to let people have another kind of travel experience. The activity attracted more than one hundred participants. With the professional guidance by a professional cabin crew mentor, participants got to learn basic knowledge of aviation; Flying simulation activity was provided to let participants to observe the in-flight operation. In 2020, 2
64 Corporate Governance Report
Evaluation Item
Implementation Status Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
Yes No Brief Explanation
sessions were held with 239 participants. Co-exist with the environment: 350 people participated. Beach cleanup activity: The activity is one of the key projects for China Airlines. This year, in response to the Taoyuan Government's promotion of beach cleanup, 350 employees including their family members and friends cleaned up Guanyin beach to eliminate the hazards in the ocean. 2,082 kg of garbage were collected, among which 318 kg were discarded fishnets. Fishnets being recycled can be further reused to realize a circular economy. Enhancing international visibility of local brands in Taiwan: International rescue: 2,278 items were sent in 2020, with 1,224 people benefited. 2020 was heavily impacted by COVID-19. China Airlines integrated the resources to carry out the international rescue. In response to the policy of the central government, medical resources were delivered by charter flights to countries around the world including Europe, Northeast Asia, and Southeast Asia. 10 flights were operated that sent 2,278 items, equivalent to 73,343 kg. Moreover, China Airlines took on the great mission to send Taiwanese travelers abroad home from areas with serious infections via charter flights. 9 flights were made, including Wuhan charter flight, the Japanese Diamond Princess cruise ship charter flight, and Shanghai charter flight. 1,223 people benefited. China Airlines stood in the front line and fought against the disease, improving Taiwan's visibility on the international stage. Sports sponsor: In 2020, 29,589 people benefited China Airlines has been supporting local sports teams to cultivate more athletes to win pride for Taiwan. In 2020, a charity basketball camp and baseball camp were held that invited players from Formosa Dreamers, Chen, Wei-Yin and Wang, Wei-Chung, both well-known professional baseball pitchers to teach young players. The campaigns have prepared these young dreamers to realize their dreams. Sports event sponsored in 2020: 2020 Standard Chartered Taipei Charity Marathon Sports teams and athletes sponsored in 2020: Formosa Dreamers, professional baseball players Chen, Wei-Yin and Wang, Wei-Chung, Rising Star Gymnastic Association Equal opportunity for the disadvantaged: In 2020 241,679 people benefited. Disadvantaged Students and Communities: CAL's Love All Around team consists of CAL employees who volunteer to provide care for schoolchildren in remote areas, and teach children aviation knowledge during employees' days off. Since 2014, it has covered 15 counties and cities in Taiwan, including 27 townships, 53 junior high and elementary schools and social welfare groups, and cared for 3,207 students. Another volunteering group headed to schools in remote area in Taitung. In 2020, the group was invited to join the event called "Foresee the Future" held by Shan-Shuei Primary and Junior School, the first school incorporating alternative education based in Taichung. Aviation knowledge was designed into fun games to let students learn and explore. 382 students participated. In 2020, the cabin crews organized four donation events, offering spare items on flights to the disadvantaged group. A total of 240,158 people benefited. Disadvantaged Seniors: China Airlines has long cooperated with Huashan Social Welfare Foundation, visiting the local seniors in Taoyuan regularly on three main festivals. In 2020, three charity events were held: Dragon Boat Event, Mid-Autumn Event, and Have Fun with Grandchild. By gathering the social effort, China Airlines helped the elderly who are disabled, demented and live alone. China Airlines also cooperated with Taoyuan Fishermen's Association to hold the 2020 Lunar New Year Gathering. Mushiang Orphanage, White Orphanage and senior fishermen were invited to join the gathering. 550 seniors were benefited.Happiness Bus 2.0 in Pingtung: Due to COVID-19, the Ministry of Transportation and Communications initiated relief program for the aviation industry. In compliance with the regulations of trust fund relief operation, China Airlines sponsored the Happiness Bus 2.0 in Pingtung to improve the traffic quality in Manzhou township, Pingtung and enhance the local residents' living quality. A total of 7,500 people benefited from this project.
Corporate Governance Report 65
3.3.7 Ethical Corporate Management and Deviations from “the Ethical Corporate Management Best-Practice Principles for TWSE/GTSM Listed Companies”
Evaluation Item
Implementation Status Deviations from the Ethical Corporate
Management Best-Practice Principles for
TWSE/TPEx Listed Companies and
Reason
Yes No Brief Explanation
1. Establishment of ethical operation policies and programs (1) Has the Company formulated an
ethical management policy approved by the Board of Directors, and expressly stated in the regulations and external documents the policies and practices of ethical management, as well as the Board of Directors and senior management’s commitment to actively implement the management policy?
(1) CAL has established Ethical Corporate Management Best-Practice Principles and Procedures for Ethical Management and Guidelines for Conduct, which were passed in 2016 at the 5th meeting of the 20th Board session. These guidelines and principles clearly spell out the Company’s ethical operating policies, methods, and commitments. They are published on the CAL website and the Taiwan Stock Exchange Market Observation Post System.
No Difference
(2) Has the Company established an assessment mechanism for the risk of unethical behaviors, regularly analyzed and evaluated business activities with a higher risk of being unethical within the business scope, and formulated a plan accordingly to prevent unethical behaviors, which covers at least the preventive measures provided in Article 7, Paragraph 2 of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies?
(2) The Company’s Ethical Corporate Management Best Practice Principles sets out various business activities with a higher risk of being unethical to be prevented within the business scope to strengthens relevant preventive measures, which include behaviors provided in the subparagraphs under Article 7, Paragraph 2 of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies.
No Difference
(3) Has the Company specified the operating procedures, behavioral guidelines, disciplinary penalties, and grievance system in its plan for unethical conduct prevention, and has it implemented the said program while also periodically reviewing and revising it?
(3) The Company's Procedures and Guidelines of Conduct for Ethical Management clearly set out all unethical and prohibited conduct, the whistleblowing system, and the disciplinary system. These procedures and guidelines are implemented in the operations of all units.
No Difference
2. Implementing ethical corporate management (1)Does the Company evaluate the ethical
records of the businesses with which it has dealings and include clear ethical corporate behavior provisions in contracts with such counterparties?
(1) In the process of business dealings with other companies, CAL employees explain our ethical management policy and related regulations to counterparties and expressly refuse to provide directly or indirectly, promise, demand, or accept any form of gratification. When signing contracts with others, CAL fully reviews the counterparty’s ethical corporate behavior and includes complying with our ethical corporate management policies as a provision in contracts.
No Difference
(2) Has the Company set up a special unit affiliated to the Board of Directors to promote corporate ethical management that periodically (at least once per year) reports to the Board of Directors on the status of the implementation of ethical management policies, the plan for unethical conduct prevention, and its supervision?
(2)A. The Company’s Human Resources Management Division, which is the dedicated unit for ethical management, is responsible for consolidating the ethical management implementation status in relevant units of the Company and reporting periodically to the Board of Directors once per year. The 2020 implementation status has been reported at the 13th meeting of the 21st Board of Directors on November 5, 2020. In addition, the Company encourages the reporting of unethical conduct and misconduct. An independent reporting mailbox has been set up and announced. The General Audit Office reports the received cases, handling methods, and follow-up review and rectification to the Board of Directors.
B. Relevant status of the Company’s implementation of ethical management policies in 2020: a. An E-learning training course was held to raise awareness of service principles
and code of conduct. b. Whistleblowing channels such as the following have been notified: chairman’s
mailbox, General Audit Office’s confidential mailbox, the Speak Out area, and the WeCare listens mailbox. These facilitate employees’ immediate reporting to management and the Human Resources Management Division.
c. "Employee Workplace Code of Conduct", "Employee Job Specifications", and relevant reward and disciplinary procedures have been established; clear standards and an effective disciplinary system have been set out.
d. Ethical management principles are followed through scheduled and unscheduled annual inspection mechanisms to prevent fraud and corruption.
No Difference
66 Corporate Governance Report
Evaluation Item
Implementation Status Deviations from the Ethical Corporate
Management Best-Practice Principles for
TWSE/TPEx Listed Companies and
Reason
Yes No Brief Explanation
(3) Has the Company formulated and implemented policies to prevent conflicts of interest and provide appropriate ways to record any potential conflicts found?
(3)CAL Procedures for Ethical Management and Guidelines for Conduct expressly state that should a conflict of interest arise in the execution of Company duties, employees shall report the situation to their direct supervisor, who should provide appropriate guidance.
No Difference
(4) Has the Company established an effective accounting system and an internal control system in efforts to implement ethical management? Has the Company’s internal audit unit used the results of ethical management risk assessments to draw up relevant audit plans and examined compliance with the plan for unethical conduct prevention or entrusted an accountant to perform such an audit?
(4)The Company has established effective systems, including an accounting system and internal control system. Annual audit plans are formulated every year based on risk assessments to examine the Company’s accounting and internal control systems. The systems are continuously inspected to implement ethical management.
No Difference
(5) Does the Company periodically hold internal and external ethical corporate behavior training?
(5)The Company promotes ethical behavior and corporate ethics when new employees assume office, and conducts E-Learning online courses for supervisors posted in Taiwan and abroad. The Ethical Corporate Management Best-Practice Principles, the Procedures and Guidelines of Conduct for Ethical Management, and other documents have been disclosed on the Company's internal and official website for the reference of internal and external personnel. In order to strengthen employees' understanding of the Company's corporate culture of ethical management, employees have been receiving training since 2017 through the E-learning system. The training situation for the last two years is as follows: A. 2019:
Trainee(s): Taiwanese and foreign cabin crew members (excluding personnel on leave of absence during training).
Number of trainees: 1,293 persons. Number of completions: 1,293 persons. Completion rate: 100%
B. 2020: Trainee(s): [Retraining] Domestic and overseas personnel who didn't complete the training in 2017/2018. Number of trainees: 212 persons. Number of completions: 212 persons. Completion rate: 100%
No Difference
3. Operation of the Company's Violation Reporting System (1) Has the Company established a
concrete violation reporting and rewards system, set up convenient reporting channels, and appointed suitable personnel to handle these cases?
(1) Article 20 of the Company's Procedures and Guidelines of Conduct for Ethical Management expressly provides and discloses the rules of reporting, the reporting channel, and the processing procedures; the reporting mailbox [email protected] is notified on the Company's website and internal website for the use of Company’s internal and external personnel. The reported cases will be handled by the General Audit Office of the Company and the circumstances of the report, its handling methods, follow-up review, and improvements made will be reported to the Board of Directors.
No Difference
(2) Has the Company established the standard operating procedures for the investigation of received reports, the follow-up measures to be taken after the investigation is completed, and the relevant confidentiality mechanism?
(2) According to CAL Procedures for Ethical Management and Guidelines for Conduct, all reports of violations and related follow-up investigations are kept strictly confidential and CAL has clear and effective awards and punishments, an appeals system, violation reporting confidentiality mechanism, and investigation SOP. In addition, the Company also incorporates ethical management into employee performance evaluation and human resources policies. A clear and effective reward and disciplinary system, grievance system, and the standard operating procedures for the investigation of reports have also been established.
No Difference
(3) Does the Company have any measures in place to protect individuals from possible mistreatment arising from reporting violations?
(3) Employees who process violation reports must sign a written statement pledging to maintain confidentiality of the reporters and details of the case. CAL also promises to protect the whistleblower from improper punishment due to reporting.
No Difference
4. Strengthening information disclosure Does the Company disclose the content of our Ethical Corporate Management Best-Practice Principles and their effectiveness on our website and the TWSE Market Observation Post System?
CAL’s Ethical Corporate Management Best-Practice Principles and Procedures for Ethical Management and Guidelines for Conduct are shown on the China Airlines website and the Taiwan Stock Exchange Market Observation Post System, along with the effectiveness of ethical operations and fair trade principles.
No Difference
5. If the Company has established a code of ethical corporate management based on the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies, please describe any differences between said code and the Best-Practice Principles: No Differences.
6. Other information that will assist in the understanding of Company ethical corporate management practices: None.
Corporate Governance Report 67
3.3.8 Corporate Governance Guidelines and Regulations The Company has established a Corporate Charter, Rules for Discussions of Official Business at Shareholder Meetings, Rules for Discussions of Official Business by the Board of Directors, Ethical Code of Conduct for Directors, Election of Directors, Rules for Corporate Governance, Guiding Principles for Operational Integrity, Guide to Integrity in Management and Business Procedures and Conduct, Practical Guidelines for Corporate Social Responsibility and Sustainable Development, Ethical Code of Conduct for Directors, Ethical Code of Conduct for Senior Supervisors, Employee Workplace Rules of Conduct, China Airlines Group Rules of Conduct, Supplier Code of Conduct, and Human Rights Policy; it has formed three committees under the Board of Directors for audit, remuneration, and risk, and has formulated various organizational rules. The relevant rules listed above are all made public on the Company's website (http://www.china-airlines.com) and the Company's social responsibility network (https://calec.china-airlines.com/csr/en/index.html).
3.3.9 Summary table of the resignation and dismissal of relevant persons of the Company:None
3.3.10 Other Important Information Regarding Corporate Governance A. The organization and operations of the Company’s internal auditing
The Company’s internal audit operations are handled by the General Audit Office. In compliance with Article 11 of the "Regulations Governing Establishment of Internal Control Systems by Public Companies," the General Audit Office is under the jurisdiction of the Board of Directors. The main internal audit operation methods are announced via the quality document management system in the Company's corporate internal information network. Information announced includes the manual of "Detailed Rules for Internal Audit Implementation" and relevant operational methods. A summary is provided as follows: (1)Day-to-day audit (pre-incident audit and post-incident audit). (2)Annual audit (on-site inspection of the head office, branch units, and subsidiaries). (3)Project audit. (4)Supervision of construction, maintenance, and procurement. (5)Financial inventory. (6)Self-assessment of the internal control system. (7)Periodical audit required by the Financial Supervisory Commission. (8)Other units that need unscheduled audits.
B. Certifications of the personnel related to the Company's internal audits R.O.C. Certified Public Accountant License: 1 person, R.O.C. Futures Specialist: 1 person.
C. Company financial staff certifications and licenses: Institute of Internal Auditors-Chinese Taiwan Internal Auditor Certificate Institute of Internal Auditors-Chinese Taiwan Internal Auditor Certificate: 4 people, International Internal Auditor Certificate: 3 people, R.O.C. Certified Public Accountant License: 2 people, R.O.C. Securities (Senior) Specialist: 5 people, R.O.C. Securities Investment Trust and Consulting Professional: 4 people, R.O.C. Futures Specialist: 4 people, R.O.C. Financial Planning Personnel Proficiency Test Passing Certificate: 4 people, R.O.C. Stock Affairs Specialist Proficiency Test Passing Certificate: 8 people, USA Certified Public Accountant License: 1 person, R.O.C. Basic Enterprise Internal Audit Proficiency Test Passing Certificate: 5 people.
D. Company Director Continuing Education From January 1, 2020, through March 27, 2021
Title Name Training hours Date(s) Sponsoring Organization Course
Chairman Hsieh, Su-Chien
3hr 05/07/2020 Training by: Taiwan Corporate Governance Association
Technology and Information Safety Risk in the 5G and IoT Era
3hr 08/06/2020 Training by: Taiwan Corporate Governance Association
Trends of Digital Technology and Artificial Intelligence and Risk Management
68 Corporate Governance Report
Title Name Training hours Date(s) Sponsoring Organization Course
Director Ting, Kwang-Hung
3hr 05/07/2020 Training by: Taiwan Corporate Governance Association
Technology and Information Safety Risk in the 5G and IoT Era
3hr 08/06/2020 Training by: Taiwan Corporate Governance Association
Trends of Digital Technology and Artificial Intelligence and Risk Management
Director Ko, Sun-Ta
3hr 05/07/2020 Training by: Taiwan Corporate Governance Association
Technology and Information Safety Risk in the 5G and IoT Era
3hr 08/06/2020 Training by: Taiwan Corporate Governance Association
Trends of Digital Technology and Artificial Intelligence and Risk Management
Director Wei, Yung-Yeh
3hr 05/07/2020 Training by: Taiwan Corporate Governance Association
Technology and Information Safety Risk in the 5G and IoT Era
3hr 08/06/2020 Training by: Taiwan Corporate Governance Association
Trends of Digital Technology and Artificial Intelligence and Risk Management
Director Lin, Su-Ming
3hr 05/07/2020 Training by: Taiwan Corporate Governance Association
Technology and Information Safety Risk in the 5G and IoT Era
3hr 08/06/2020 Training by: Taiwan Corporate Governance Association
Trends of Digital Technology and Artificial Intelligence and Risk Management
Director Wang, Shih-Szu
3hr 05/07/2020 Training by: Taiwan Corporate Governance Association
Technology and Information Safety Risk in the 5G and IoT Era
3hr 08/06/2020 Training by: Taiwan Corporate Governance Association
Trends of Digital Technology and Artificial Intelligence and Risk Management
Independent Director
Chang, Hsieh Gen-Sen
3hr 05/07/2020 Training by: Taiwan Corporate Governance Association
Technology and Information Safety Risk in the 5G and IoT Era
3hr 08/06/2020 Training by: Taiwan Corporate Governance Association
Trends of Digital Technology and Artificial Intelligence and Risk Management
Independent Director Chung, Lo-Min
3hr 05/07/2020 Training by: Taiwan Corporate Governance Association
Technology and Information Safety Risk in the 5G and IoT Era
3hr 08/06/2020 Training by: Taiwan Corporate Governance Association
Trends of Digital Technology and Artificial Intelligence and Risk Management
Independent Director Shen, Hui-Ya
3hr 08/06/2020 Training by: Taiwan Corporate Governance Association
Trends of Digital Technology and Artificial Intelligence and Risk Management
3hr 11/27/2020 Training by: Taiwan Corporate Governance Association
The Role of Institutional Investors in Improving Corporate Governance
3hr 11/27/2020 Training by: Securities and Futures Institute
2021 Global Economic Prospect and Industry Trends
Director Chen, Charles C.Y.
3hr 05/07/2020 Training by: Taiwan Corporate Governance Association
Technology and Information Safety Risk in the 5G and IoT Era
3hr 09/18/2020 Training by: Taiwan Institute of Directors
2020 Board of Directors Annual Conference: Strategic Alteration for Growth and Momentum
Director Chen, Han-Ming
3hr 01/15/2020 Training by: Taiwan Corporate Governance Association
Compliance with Company Regulations and Directors' Monitoring Obligations
3hr 03/13/2020 Training by: Taiwan Corporate Governance Association
Practical Problems of Irregular Transaction that Directors and Supervisors Shall Pay Attention
3hr 05/07/2020 Training by: Taiwan Corporate Governance Association
Technology and Information Safety Risk in the 5G and IoT Era
Corporate Governance Report 69
E. Corporate Governance Related Training Attended by Company Managers From January 1, 2020 through March 27, 2021
Title Name Training hours Date(s) Sponsoring Organization Course
Vice President,
Finance Div. Chen, I-Chieh 12hr
09/10/2020- 09/11/2020
Accounting Research and Development Foundation
Continued Education for Principal Accounting Officers of Issuers, Securities Firms, and Securities Exchanges
Assistant Vice President,
Finance Div. Yen, Yang
12hr 01/09/2020- 01/10/2020
Accounting Research and Development Foundation
Continued Education for Principal Accounting Officers of Issuers, Securities Firms, and Securities Exchanges
12hr 10/29/2020- 10/30/2020
Accounting Research and Development Foundation
Continued Education for Principal Accounting Officers of Issuers, Securities Firms, and Securities Exchanges
Deputy Auditor General,
General Audit Office
Fang, Juo-Ling
6hr 05/15/2020 Institute of Internal Auditors-Chinese Taiwan
Internal Audit Professional Courses- Audit Practices and Discussion of Ethics
6hr 10/15/2020 Institute of Internal Auditors-Chinese Taiwan
Internal Audit Professional Courses- Labor Incident Act Case Analysis
Deputy Auditor General,
General Audit Office
Ho, Hui-Fen
6hr 08/11/2020 Institute of Internal Auditors-Chinese Taiwan
Internal Audit Professional Courses- Fraud Prevention and Case Study
6hr 10/27/2020 Institute of Internal Auditors-Chinese Taiwan
Internal Audit Professional Courses- Common Contract Terms and Implementations - Case Study of Delegation of Authority
Note: Mr. Chen, I-Chieh was promoted as Senior Vice President on March 18, 2021.
F. Succession plan for the Board of Directors and key management of the Company
The selection and nomination of China Airlines’ directors are carried out in accordance with the Company Act, Securities and Exchange Act, China Airlines’ Rules Governing the Election of Directors, and Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies. All elections of directors are conducted in accordance with the candidate nomination system. Shareholders may nominate director candidates; through shareholders' voting in the annual general meeting, directors (including independent directors) are elected from the list of candidates nominated by shareholders. The term of office of a director is 3 years.
As for the selection of directors’ successors, the director representative successors should generally have the required abilities stated in the chapter in China Airlines’ "Corporate Governance Principles" describing competencies required by the Board of Directors. As required by law, independent directors must have certain professional qualifications and work experience. Professionals who are experienced in the industry, including government and academic fields, are the main direction of selection that forms the basis of succession planning (please refer to P.44-45 for diversification). In addition, the independence of all Board members is ensured in accordance with law, and the results of its annual evaluation are an important reference for whether continued nomination is needed.
To improve the directors' ability to exercise powers empowered in them by virtue of their posts and ensure that the Board's effectiveness is up to date, scheduled advanced courses are arranged every year to help elevate their professional competencies. The courses cover corporate governance-related topics, including finance, accounting, business, commerce, legal affairs, information, risk
70 Corporate Governance Report
management, internal control systems, and corporate social responsibility. To ensure that the succession plan is comprehensive, the contents are aligned with the latest regulations and conditions of internal and external environments, as well as topics applicable to future development needs. Furthermore, in relation to succession planning for important management personnel, in addition to having excellent professional management ability, one’s behavior, ethics, and instructions will be based on the resolutions of the Board of Directors, and handled in accordance with the “China Airlines Executives Code of Ethical Conduct” and related laws and regulations in the best interests of the Company, employees, and shareholders.
In the training plan for the Company's senior management, regular senior management lectures are held every year, where experts from the fields of industry, public sector, and academia are invited to deliver special lectures on the state of the global market and the development of the aviation industry to enable the Company's supervisors better understand the state of the market and their breadth of professional competence development may be improved. Periodic inter-agency transfers are made according to the Company's rules to create diversified management capabilities among important management personnel. In addition, to deepen the knowledge of the Company's management professionals at various levels and broaden the horizon of potential talent, strategic and management occupational training sessions are held on a regular basis and talent training programs conducted to refine knowledge and skills of mid-level supervisors, cultivate talent with international vision and management capabilities, and strengthen the management knowledge of management professionals through job experience, management course training, and rigorous assessment systems. As of today, more than 100 outstanding management professionals have thus been nurtured and are now serving in key units in Taiwan and foreign branches.
G. On December 6, 2012, after approval by the Board of Directors, the Company has formulated the China Airlines Ltd. Procedures for Handling Material Insider Information. In addition to notifying the new procedures to the Board, management, and employees, they were also published under Important Company Regulations on the Investor Relations section of the CAL website for reference at any time to avoid violations and prevent the occurrence of insider trading.
Corporate Governance Report 71
3.3.11 Internal Control Systems A. Internal Control Statement
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B. If the Company has commissioned external auditors to review the Company’s internal control system, the external auditor’s report should be disclosed: None.
Corporate Governance Report 73
3.3.12 Any disciplinary measures taken against the Company or its internal staff due to violations of legal requirements or taken by the Company against its own staff due to violations of the internal control system. The details of the disciplinary measures, major faults, and improvement measures should be noted
Date of penalty
Penalty official letter number Penalty Deficiency Improvement
February 25, 2020
2020 Labor Inspection No. 1090032769
A fine of NT$20,000.
The Company was under inspection by the Ministry of Labor on January 9, 2020. Due to business need, the Company rejected the annual leave application by the cabin crew, which violated Article 38, Paragraph 2 of the Labor Standards Act.
(1) The communication with the cabin crew on the date of the annual leave was insufficient. The internal communication process shall be improved.
(2) The job of cabin crews contains the work specialty. The Company rejected the leave application due to the company operation. According to law, the Company negotiated with the employee and the leave was granted, so the labor's rights were not harmed.
(3) The Company has proposed an administrative relief.
February 22, 2021.
2021 Labor Inspection No. 1100036610
A fine of NT$1,000,000.
On August 28, 31, 2018, the Company was inspected by the Ministry of Labor and was fined NT$1,000,000 due to cabin crew overworking. The case was originally annulled, yet identical events were found in other flights. Thus NT$1,000,000 was fined.
(1) The investigation authority improperly identified the reasons for flight delay stated in the verdict. The fine was directed given without further investigation. The main reason for the flight delay was waiting for the aviation personnel to give the apron instruction, which was a force majeure. Thus, the administrative appeal has been submitted.
(2) If the administrative appeal was dismissed, administrative relief will be taken.
In addition, from 2020 to the printing of the annual report, the Company was fined NT$30,000 by the Ministry of Labor by the ruling in the case of an unfair labor practice dispute with the Taoyuan Flight Attendants Union, and we continue to seek administrative remedies. The relevant data of cases and content of the disputes are as follows:
Date of penalty Penalty official letter number Main dispute Total amount of fines
February 1, 2021 2021 Labor Imposition No. 41 court verdict for inappropriate labor
(1) Dispute regarding granting of leave for union related business of the union's cadre. (2) Dispute regarding assigning representative on labor/management meeting (3) Dispute regarding employee performance evaluation
NT$30,000
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3.3.13 Major Resolutions of Shareholders’ Meeting and Board Meetings A. Major Resolutions of Shareholders’ Meeting in 2020
Item Major resolutions Execution 1. Business Report and Financial Statements
for the year 2019 This resolution was passed as proposed upon voting.
Announcement was made after resolution of Shareholders’ Meeting on June 23, 2020.
2. 2019 Deficit Compensation This resolution was passed as proposed upon voting.
Announcement was made after resolution of Shareholders’ Meeting on June 23, 2020.
3. Amendment to the Articles of Incorporation
This resolution was passed as proposed upon voting.
Announcement was made after resolution of Shareholders’ Meeting on June 23, 2020, and has been complied with since that day.
4. Amendment to Rules of Procedure for Shareholders' Meetings
This resolution was passed as proposed upon voting.
Announcement was made after resolution of Shareholders’ Meeting on June 23, 2020, and has been complied with since that day.
5. Proposal to release the non-competition restriction of holding concurrent positions on Director Chen, Han-Ming
This resolution was passed as proposed upon voting.
The non-competition restriction on Director Chen, Han-Ming was lifted based on the resolution of Shareholders’ Meeting on June 23, 2020, which was subsequently announced.
B. Major Resolutions of Board Meetings (January 1, 2020 to March 27, 2021)
Date Item Opinions of independent directors
Handling of Independent
Directors’ opinions by the Company
January 13, 2020 21st Board of Directors 9th Meeting
1.Provision of General Financing Limit and Financial Commodity Trading Risk Limit by Four Financial Institutions, Including DBS Bank (Taiwan)
2. 2019 Year-end Bonus and 2020 Lunar New Year Incentive 3. Matters Regarding the Signing of Agreement with the CAL
Employees Union on Issues of "13th Month Full Salary (Flight Safety Bonus)" and "Working Hours Rearrangement and Female Employees' Nighttime Work" on December 31, 2019
4. 2020 Employee Salary Adjustment 5. Chairman and Managers' 2020 Lunar New Year Incentive 6. Lifting of Non-competition Restriction on Holding
Concurrent Posts for Senior Vice President 7. Report on the Company's Lease on Real Estate with a
Subsidiary
Approved by all attending Independent Directors
None
March 18, 2020 21st Board of Directors 10th Meeting
1. Amendment to 2020 Audit Plan 2. 2019 Internal Control System Effectiveness Audit and
Statement 3. New Branch Unit in Response to Route Launch 4. Change in Personnel and Position 5. 2020 Annual Shareholders’ Meeting 6. 2019 Financial Report and Consolidated Financial Report 7. 2019 Business Report 8. 2019 Deficit Compensation 9. 2020 CPA Appointment and Remuneration 10. Offering of Unsecured Ordinary Bonds 11. Provision of General Financing Limit and Financial
Commodity Trading Risk Limit by Three Financial Institutions, Including First Commercial Bank
12. Amendments to the Company's Article of Incorporation 13. Rules and Procedures of the Shareholders' Meeting 14. Amendment to the Rules of Procedures for Board of
Directors' Meetings 15. Amendments to the Charter of Audit Committee
Approved by all attending Independent Directors
None
May 7, 2020 21st Board of Directors 11th Meeting
1. Disposal of 5 A330-300 aircraft through sale and leaseback transaction
2. Venue alteration for 2020 Annual Shareholders' Meeting 3. Lifting of Non-competition Restriction on Holding
Concurrent Posts for Director Chen, Han-Ming 4. Pursuant to Measures for the Relief of Industries and
Businesses Affected by the Coronavirus Disease Issued by the Ministry of Transportation and Communication, the Bank of Taiwan offered NT$20 billion syndicated loan to
Approved by all attending Independent Directors
None
Corporate Governance Report 75
Date Item Opinions of independent directors
Handling of Independent
Directors’ opinions by the Company
China Airlines. 5. A350 passenger aircraft mortgage loan by First Commercial
Bank, Hua Nan Commercial Bank, Ltd., and Land Bank of Taiwan
6. Provision of General Financing Limit and Financial Commodity Trading Risk Limit by Five Financial Institutions, Including First Commercial Bank
August 6, 2020 21st Board of Directors 12th Meeting
1. Second amendment to 2020 Audit Plan 2. Amendment to the Charter of Remuneration Committee 3. Distribute flight safety bonus to Chairman and Managers 4. Capital increase for Tigerair Taiwan Co., Ltd. 5. Issuing NT$6 billion in total face value of domestic
unsecured convertible corporate bonds 6. Provision of General Financing Limit and Financial
Commodity Trading Risk Limit by Five Financial Institutions, Including CTBC Bank
7. Liquidation of Yestrip Co., Ltd.
Approved by all attending Independent Directors
None
November 5, 2020 21st Board of Directors 13th Meeting
1. 2021 Audit Plan 2. 2021 Business Plan and Budget Plan 3. Assign a custodian for the Company's seal for signing
warranty/endorsement. 4. Provision of General Financing Limit and Financial
Commodity Trading Risk Limit by Five Financial Institutions, Including Taishin International Bank.
5. Amendment to the Corporate Social Responsibility and Sustainable Development Best Practice Principles
Approved by all attending Independent Directors
None
January 18, 2021 21st Board of Directors 14th Meeting
1. Provision of General Financing Limit and Financial Commodity Trading Risk Limit by Three Financial Institutions, Including Crédit Agricole CIB
2. 2021 Employee Lunar New Year Incentive 3. 2021 Employee salary adjustment 4. Chairman and Managers' 2020 Lunar New Year Incentive 5. 2021 Annual Shareholders' Meeting 6. Election of 22nd term of Board of Directors 7. Report on the Company's Lease on Real Estate with a
Subsidiary
Approved by all attending Independent Directors
None
March 18, 2021 21st Board of Directors 15th Meeting
1. Appointment of President 2. Appointment of Senior Vice President (VF) and position
adjustment for Financial Vice President 3. Appointment of Senior Vice President (VO) 4. Distribute managers' flight safety bonus 5. Resignation fee for the former Senior Vice President (VF)
Chang, Young 6. Manager adjustment in Taichung Branch 7. 2020 Internal Control System Effectiveness Audit and
Statement 8. 2020 Financial Report and Consolidated Financial Report 9. 2020 Business Report 10. 2020 Deficit Compensation 11. 2021 CPA appointment and remuneration 12. Provision of General Financing Limit and Financial
Commodity Trading Risk Limit by First Commercial Bank and Mega Bills
Approved by all attending Independent Directors
None
3.3.14 Major Issues of Record or Written Statements Made by Any Director or Supervisor Dissenting with Important Resolutions Passed by the Board of Directors: None.
76 Corporate Governance Report
3.4 Information Regarding the Company’s Audit Fee and Independence
3.4.1 Audit Fee Accounting Firm Name of CPA Period Covered by CPA’s Audit Remarks
Deloitte & Touche Huang, Jui-Chan Cheng, Shiuh-Ran 01/01/2020-12/31/2020 None
Unit: NT$ thousands
Fee Items Fee Range
Audit Fee Non-audit Fee Total
1 Under 2,000 2 2,000 - 3,999 3 4,000 - 5,999 4 6,000 - 7,999 5 8,000 - 9,999 6 Over 10,000
3.4.2 Audit and Non-Audit Fees Paid to CPAs, the Certified Accounting Firm to Which Said CPAs Belong and Any Affiliated Enterprises and Details Regarding Non-Audit Fees. See Below:
Unit: NT$ thousands
Accounting Firm
Name of CPA
Audit Fee
Non-audit Fee Period Covered by CPA’s Audit
Remarks System
of Design
Company Registration
Human Resource
Others Subtotal
Deloitte & Touch
Huang, Jui-Chan Cheng, Shiuh-Ran
7,350 - - - 4,044 4,044 01/01/2020- 12/31/2020
Others include the business tax audit fee of dual-status business entities adopting direct deduction, the transfer pricing report service fee, the related accountant certification fee for issuance of corporate bond, the US airport Passenger Facility Charge (PFC) tax collection and audit fee, and the consulting fee of General Data Protection Regulation (GDPR).
3.4.3 Changed audit firms and the audit fee paid was less than the audit fees paid in the previous year prior to the change: Not Applicable.
3.4.4 Those with audit fees amounting to a reduction of 15% or more compared to the previous year: None.
Corporate Governance Report 77
3.5 Replacement of CPA: 3.5.1 On the previous accountant
Date of change March 20, 2019
Reason and explanation for change
Due to internal reorganization at the CPA firm, the resolution was passed at the 5th meeting of the 21st Board of Directors on March 20, 2019 that from the financial report for Q1 of 2019, the CPAs would be switched to Huang, Jui-Chan and Cheng, Shiuh-Ran.
Explanation was termination of the person or accountant appointed or refusal of appointment
Involved party Situation
Accountant Appointee
Proactive termination of appointment
None. Did not accept further (continuing) appointment
Newest check report within two years other than one signed and issued without disclaimer and reason
None.
Objection from issuer Yes
Accounting principles or customary practice Financial report disclosure Scope of check or steps Other
None
Explanation Other items disclosed (for which disclosure is required under Article 10, Clause 6, items 1d through 1g)
None.
3.5.2 On successor accountants
Name of firm Deloitte & Touche
Accountant Name Huang, Jui-Chan; Cheng, Shiuh-Ran
Date of appointment March 20, 2019
Pre-appointment consultations for opinions on the method of accounting or accounting principles for specific transactions and consultation on the possibility of signing and results of the same
None.
Written opinions of successor accountants at odds with those of previous accountants
None.
3.5.3 Former Accountant’s Reply to Disclosures under Items 1 and 2-3,
Subparagraph 6, Article 10 of the Guidelines:
None.
78 Corporate Governance Report
3.6 The Company's Chairman, Presidents, or Accounting Officers hold any positions in the Company's independent auditing firm or its affiliates during 2019: None.
3.7 Changes in Shareholding of Directors, Managers, and Major Shareholders
Unit: Shares
Title Name
2020 The current year through March 27, 2021
Holding Increase
(Decrease)
Pledged Holding Increase
(Decrease)
Holding Increase
(Decrease)
Pledged Holding Increase
(Decrease) Major Shareholder China Aviation Development Foundation (Note)
0 0 0 0 Chairman China Aviation Development Foundation
Representative: Hsieh, Su-Chien
Director
China Aviation Development Foundation Representative: Chen, Charles C.Y.; Ting, Kwang-Hung; Chen, Han-Ming; Ko, Sun-Ta; Wei, Yung-Yeh, Kao, Shing-Hwang
Director National Development Fund, Executive Yuan Representative: Lin, Su-Ming; Wang, Shih-Szu 0 0 0 0
Independent Director Chung, Lo-Min 0 0 0 0
Independent Director Chang, Hsieh Gen-Sen 0 0 0 0
Independent Director Shen, Hui-Ya 0 0 0 0
President Kao, Shing-Hwang 0 0 0 0 Senior Vice President Wang, Chen-Min 0 0 0 0
Senior Vice President Wang, Houng 0 0 0 0
Senior Vice President Chen, I-Chieh 0 0 0 0
Senior Vice President Lai, Ming-Hui 0 0 0 0
Auditor General Fang, Juo-Ling 0 0 0 0 Data Protection Officer Huang, Ta-Fang (Assumed post on 07/31/2020) 0 0 0 0
Vice President Chien, Feng-Nien 0 0 0 0 Vice President Li, Chih-Wei Vice President Chen, I-Ko 0 0 0 0 Vice President Peng, Pao-Chu 0 0 0 0 Vice President Liu, Der-Chuan 0 0 0 0 Vice President Lu, Shwu-Huoy (Assumed post on 10/11/2020) Vice President Yeah, Shao-Ting 0 0 0 0 Vice President Chen, Wei-Tau 0 0 0 0
Vice President Wang, Wei 4,000 0 0 0
(15,000) 0 (10,000) 0 Vice President Hong, Tsu-Kuang 0 0 0 0 Vice President Chung, Wan-Chun 0 0 0 0 Vice President Chou, Jyh-Shyan 0 0 0 0 Vice President Chu, Te-Hsiu 0 0 0 0 Vice President Chang, Cheng-Hao 120,102 0 0 0
Corporate Governance Report 79
Title Name
2020 The current year through March 27, 2021
Holding Increase
(Decrease)
Pledged Holding Increase
(Decrease)
Holding Increase
(Decrease)
Pledged Holding Increase
(Decrease) Vice President Chung, Ming-Jyh 0 0 0 0 Vice President Sun, Jia-Min 0 0 0 0 Vice President Lee, Jung-Hui 0 0 0 0 Deputy Auditor General
Ho, Hui-Fen 0 0 0 0
Assistant Vice President Yu, Yueh-Han 0 0 0 0
Assistant Vice President Chen, Chwen-Der 0 0 (13,000) 0
Assistant Vice President Tung, Hsing-Hua 0 0 0 0
Assistant Vice President Kang, Yi-Chuan (Assumed post on 11/01/2020) 0 0 0 0
Assistant Vice President Huang, Hsiang-Piao 0 0 0 0
Assistant Vice President He, Cheng 0 0 0 0
Assistant Vice President Chen, Pei-Ti 0 0 0 0
Assistant Vice President Pan, Yun-Hau (Assumed post on 05/09/2020) 0 0 0 0
Assistant Vice President Mao, Li-Chung 0 0 0 0
Assistant Vice President Sheu, Yuh-Shy 0 0 0 0
Assistant Vice President Hsueh, Po-Wen (Assumed post on 09/18/2020) 0 0 0 0
Assistant Vice President Lin, Herng-Shan 0 0 0 0
Assistant Vice President Lee, Pei-Chen 0 0 0 0
Assistant Vice President Yen, Yang 0 0 0 0
Assistant Vice President Huang, Hui-Na 0 0 0 0
Assistant Vice President Fang, Yuan-Hua 0 0 0 0
Assistant Vice President Chang, Hsu-Yu (Assumed post on 11/30/2020) 0 0 0 0
Assistant Vice President Huang, Chin-Feng 0 0 0 0
Assistant Vice President Hsu, Hsueh-Wen (Assumed post on 02/01/2020) 0 0 0 0
Assistant Vice President Liu, Shou-Shu 0 0 0 0
Assistant Vice President Yeh, Jin-Fu (Assumed post on 11/12/2020) 0 0 0 0
Assistant Vice President Liu, Duan-Shiuh 0 0 0 0
Assistant Vice President Hsiao, Jui-Fu 0 0 0 0
Senior Vice President Chang, Young (Dismissed on 01/31/2020) 0 0 0 0
Data Protection Officer Wu, Hsiao-Sui (Dismissed on 07/31/2020) 0 0 0 0
80 Corporate Governance Report
Title Name
2020 The current year through March 27, 2021
Holding Increase
(Decrease)
Pledged Holding Increase
(Decrease)
Holding Increase
(Decrease)
Pledged Holding Increase
(Decrease) Vice President Liu, Tsao-Yang (Dismissed on 08/17/2020) 0 0 0 0 Assistant Vice President Chen, Jo-Ching (Dismissed on 04/01/2020) 0 0 0 0
Assistant Vice President Kao, Shu-Chuan (Dismissed on 04/01/2020) 0 0 0 0
Assistant Vice President Shann, Da-Sin (Dismissed on 09/18/2020) 0 0 0 0
Assistant Vice President Chiu, Wei-Tuan (Dismissed on 03/19/2020) 0 0 0 0
Assistant Vice President
An, Long-Chi (Assumed post on 04/01/2020) (Dismissed on 11/30/2020) 0 0 0 0
Note: Refers to major shareholders holding more than 10% of company shares.
3.7.1 Shares Trading with Related Parties: None.
3.7.2 Shares Pledge with Related Parties: None.
3.8 Relationships among the Top Ten Shareholders March 27, 2021
Name Current Shareholding
Spouse’s/minor’s Shareholding
Shareholding by Nominee
Arrangement
Name and Relationship Between the Company’s Top Ten Shareholders, or
Spouses or Relatives Within Two Degrees
Remarks
Shares % Shares % Shares % Name Relationship China Aviation Development Foundation (Representative: Wang, Kwo-Tsai)
1,867,341,935 34.45% 0 0% 0 0% None None None
National Development Fund of The Executive Yuan (Representative: Dr. Kung, Ming-Hsin)
519,750,519 9.59% 0 0% 0 0% None None None
New Labor Pension Fund 76,934,000 1.42% NA NA 0 0% None None None
China Airlines Ltd. Employee Stock Ownership Trust Plan
63,331,761 1.17% NA NA 0 0% None None None
Vanguard Emerging Markets Stock Index Fund, a Series of Vanguard International Equity Index Funds
35,905,146 0.66% NA NA 0 0% None None None
Vanguard Total International Stock Index Fund, a series of Vanguard Star Funds
35,231,442 0.65% NA NA 0 0% None None None
JPMorgan Chase Bank N.A. Taipei Branch in custody for Norges Bank
28,888,821 0.53% NA NA 0 0% None None None
Arrowstreet Capital Global All Country Alpha Extension Fund (Cayman) Limited
26,889,000 0.50% NA NA 0 0% None None None
Reasonable Deal Co., Ltd. (Representative: Li, Chuan-Zhe)
24,325,000 0.45% 0 0% 0 0% None None None
Wan Hai Lines Ltd. (Representative: Jiu Fu Garden Co., Ltd.)
23,753,862 0.44% NA NA 0 0% None None None
Corporate Governance Report 81
3.9 Ownership of Shares in Affiliated Enterprises Dec 31, 2020
Unit: shares; %
Affiliated Enterprises Ownership by the Company Direct or Indirect Ownership by
Directors, Managers Total Ownership
Shares % Shares % Shares % 1. CAL-Dynasty International, Inc. 2,614,500 100.00 - - 2,614,500 100.00 1A Dynasty Properties Co., Ltd. - - 5,000 100.00 5,000 100.00 1B Dynasty Hotel of Hawaii, Inc. - - 400,000 100.00 400,000 100.00 2. CAL-Asia Investment Inc. 7,172,346 100.00 - - 7,172,346 100.00 2A Eastern United International
Logistics (Holdings) Ltd. - - 1,050,000 35.00 1,050,000 35.00
2B Airport Air Terminal (Xiamen) Co., Ltd. - - (Note 1)
28.00 (Note 2)
(Note 1) 28.00
(Note 2) 2C Airport Air Cargo Service
(Xiamen) Co., Ltd. - - (Note 1) 28.00
(Note 2) (Note 1)
28.00 (Note 2)
2D Taikoo (Xiamen) Landing Gear Services Co., Ltd. - - (Note 1) 2.59 (Note 1) 2.59
2E Haeco Composite Structures (Jinjiang) Co., Ltd. - - (Note 1) 5.45 (Note 1) 5.45
3. Dynasty Aerotech International Corp. 77,270 100.00 - - 77,270 100.00
4. Yestrip Co., Ltd. 1,600,000 100.00 - - 1,600,000 100.00 5. CAL Park Co., Ltd. 150,000,000 100.00 - - 150,000,000 100.00 6. CAL Hotel Co., Ltd.. 46,500,000 100.00 - - 46,500,000 100.00 7. Taiwan Aircraft Maintenance And
Engineering Co., Ltd. 135,000,000 100.00 - - 135,000,000 100.00
8. Mandarin Airlines, Ltd. 188,154,025 93.99 - - 188,154,025 93.99 9. Sabre Travel Network (Taiwan)
Ltd. 13,021,042 93.93 - - 13,021,042 93.93
10. Tigerair Taiwan Co., Ltd. 212,420,046 75.86 15,433,000 5.51 227,853,046 81.37 11. China Pacific Laundry Services
Ltd. 13,750,000 55.00 - - 13,750,000 55.00
12. Taiwan Air Cargo Terminal Ltd. 135,000,000 54.00 12,500,000 5.00 147,500,000 59.00 13. Kaohsiung Airport Catering
Services 21,494,637 53.67 - - 21,494,637 53.67
13A Delica International Co., Ltd. - - 1,020,000 51 1,020,000 51 14. Dynasty Holidays, Inc. 160 20.00 - - 160 20.00 15. China Pacific Catering Services
Ltd. 43,911,000 51.00 - - 43,911,000 51.00
16. Taoyuan International Airport Services Co., Ltd. 34,300,000 49.00 - - 34,300,000 49.00
17. Taiwan Airport Service Co., Ltd. 20,626,644 47.35 469,755 1.08 21,096,399 48.43 17A Taiwan Airport Service
(Samoa) Co., Ltd. - - (Note 1) 100.00 (Note 1) 100.00
18. NORDAM Asia Ltd. 3,797,500 49.00 - - 3,797,500 49.00 19. Global Sky Express Ltd. 250,000 25.00 - - 250,000 25.00 20. China Aircraft Services Ltd. 28,400,000 20.00 - - 28,400,000 20.00 21. Jardine Air Terminal Services
Ltd. 12,000,000 15.00 - - 12,000,000 15.00
22. Everest Investment Holdings Ltd. (Note 4) 13.59 - - (Note 4) 13.59
23. Chung-Hwa Express Co., Ltd. 1,100,000 11.00 - - 1,100,000 11.00 Note 1: This company has not issued shares. Note 2: CAL-Asia Investments Inc. directly holds 14% stake, Taiwan Airport Service (Samoa) Co., Ltd. directly holds 14% stake.
Note 3: Yestrip Co. Ltd. was dissolved on October 26, 2020 by Taipei City Government, and it is in the procedures for Liquidation. Note 4: Includes 1,359,368 shares of common stock and 135,937 shares of preferred stock.
82 Capital Overview
Capital Overview 4.1 Capital and Shares
4.2 Corporate Bonds
4.3 Other Depository Receipts
4.4 Financing Plans and Implementation
Capital Overview 83
IV. Capital Overview 4.1 Capital and Shares 4.1.1 Source of Capital
A. Issued Shares MAR 27, 2021 Unit: shares; NT$ Month/
Year Par
Value (NT$)
Authorized Capital Paid-in Capital Remark
Shares Amount Shares Amount Sources of Capital Approval Date and
Document No. by Ministry of Economic Affairs
02/2012 10 5.2 billion 52 billion 5.2 billion 52 billion Cash increase NT$5,683,776,490
Jing Shou Shang No. 10101028630, February 20,
2012
05/2015 10 6 billion 60 billion 5.24 billion 52.4 billion Corporate debt for
equity swap NT$491,665,650
Jing Shou Shang No. 10401079310, May 7, 2015
05/2015 10 6 billion 60 billion 5.37 billion 53.7 billion Corporate debt for
equity swap NT$1,208,413,350
Jing Shou Shang No. 10401096840, May 28, 2015
09/2015 10 6 billion 60 billion 5.47 billion 54.7 billion Corporate debt for
equity swap NT$1,000,652,560
Jing Shou Shang No. 10401186200, September
17, 2015
12/2015 10 6 billion 60 billion 5.47 billion 54.7 billion Corporate debt for
equity swap NT$8,169,930
Jing Shou Shang No. 10401250360, December 8,
2015
12/2017 10 6 billion 60 billion 5.47 billion 54.7 billion Corporate debt for
equity swap, NT$945,010
Jing Shou Shang No. 10601158980, December 4,
2017
12/2018 10 6 billion 60 billion 5.42 billion 54.2 billion Treasury Stock Retired NT$500,000,000
Jing Shou Shang No. 10701157330, December 18,
2018
05/2019 10 7 billion 70 billion 5.42 billion 54.2 billion
Adjustment of authorized capital in accordance with the
Articles of Incorporation
Jing Shou Shang No. 10801043180, May 8, 2019
Note 1: The Company didn't use properties other than cash to return share prices, nor issued special shares. Note 2: In March 2021, six shareholders applied to transfer shares with a total of 7,936 shares. The number of outstanding
shares became 5,420,992,586 shares (including common shares 5,420,984,650, and 7,936 shares which haven't received the approval of MOE).
B. Type of Stock: MAR 27, 2021 Unit: Thousand shares Share Type Authorized Capital Remarks Issued Shares Un-issued Shares Total Shares
Common Stock Inscribed 5,420,993 1,579,007 7,000,000 Listed Stocks
4.1.2 Status of Shareholders MAR 27, 2021 Unit: shares
Item Government Agencies
Financial Institutions
Other Juridical Persons
Foreign Institutions & Natural Persons
Domestic Natural Persons
Treasury Stock Total
Number of Shareholders 2 27 289 645 244,336 0 245,299 Shareholding 519,750,520 73,454,329 2,267,579,709 479,258,277 2,080,949,751 0 5,420,992,586
% 9.59% 1.35% 41.83% 8.84% 38.39% 0.00% 100.00%
4.1.3 Shareholding Distribution Status MAR 27, 2021 Unit: shares Class of Shareholding Number of Shareholders Shareholding Percentage
1-999 37,340 11,235,728 0.21% 1,000-5,000 144,869 329,812,301 6.08% 5,001-10,000 30,913 259,243,177 4.78%
10,001-15,000 8,665 111,957,123 2.07% 15,001-20,000 7,359 139,757,464 2.58% 20,001-30,000 5,641 148,602,474 2.74% 30,001-40,000 2,645 96,169,114 1.77% 40,001-50,000 2,144 102,238,728 1.89%
50,001-100,000 3,324 248,517,333 4.58% 100,001-200,000 1,328 194,566,873 3.59% 200,001-400,000 565 159,259,857 2.94% 400,001-600,000 163 81,546,904 1.50% 600,001-800,000 85 59,726,844 1.10%
800,001-1,000,000 64 58,918,295 1.09% 1,000,001 or over 194 3,419,440,371 63.08%
Total 245,299 5,420,992,586 100.00%
84 Capital Overview
4.1.4 List of Major Shareholders MAR 27, 2021 Unit: shares
Shareholding Shareholder's Name
Shares Percentage
China Aviation Development Foundation 1,867,341,935 34.45% National Development Fund of The Executive Yuan 519,750,519 9.59% New Labor Pension Fund 76,934,000 1.42% China Airlines Ltd. Employee Stock Ownership Trust Plan 63,331,761 1.17% Vanguard Emerging Markets Stock Index Fund, a Series of Vanguard International
35,905,146 0.66%
Vanguard Total International Stock Index Fund, a series of Vanguard Star Funds 35,231,442 0.65%
JPMorgan Chase Bank N.A. Taipei Branch in custody for Norges Bank 28,888,821 0.53% Arrowstreet Capital Global All Country Alpha Extension Fund (Cayman) Limited 26,889,000 0.50% Reasonable Deal Co., Ltd. 24,325,000 0.45% Wan Hai Lines Ltd. 23,753,862 0.44%
4.1.5 Market Price, Net Worth, Earnings, and Dividends per Share Unit: Thousand shares; NT$
Year
Items
2019 (Distributed in 2020)
(Note 10)
2020 (Distributed in 2021)
(Note 11)
2021 (As of MAR 27)
(Note 9) Market
Price per Share
(Note 1)
Highest Market Price 11.25 13.15 15.75
Lowest Market Price 9.00 5.50 10.10
Average Market Price 9.69 9.46 13.34 Net Worth per Share (Note 2)
Before Distribution 10.44 10.62 -
After Distribution 10.44 10.62 -
Earnings per Share
Weighted Average Shares 5,418,096 5,418,776 - Diluted Earnings Per Share (Note 3) (0.22) 0.03 -
Dividends per Share (Note 8)
Cash Dividends - - - Stock Dividends
Dividends from Related Earnings - - - Dividends from Capital Surplus - - -
Accumulated Undistributed Dividends (Note 4) - - -
Return on Investment
Price / Earnings Ratio (Note 5) NA 284.33 - Price / Dividend Ratio (Note 6) NA NA - Cash Dividend Yield Rate (Note 7) NA NA -
*If shares are distributed in connection with a capital increase out of earnings or capital reserve, further disclose information on market prices and cash dividends retroactively adjusted based on the number of shares after distribution. Note 1: Annual Average Market Price=Annual Turnover Value/Trading Volume. Note 2: Based both on the number of issued shares at the end of the year, and on the distribution decided on at the Shareholders’
Meeting the following year. Note 3: For those requiring retroactive adjustment due to stock grants, both the pre-and post-adjustment EPS should be listed. Note 4: In issuing equity securities, provisions may be made to accumulate undistributed dividends for the year and postpone
distribution until a year when profit is made. The dividends accumulated over the period ending in the year of distribution should be disclosed.
Note 5: P/E Ratio=Average market price of a share in the current year/EPS. Note 6: P/D Ratio=Average market price of a share in the current year/cash dividend per share. Note 7: Cash dividend yield=cash dividend per share/average market price of a share in the current year. Note 8: In accordance with Taiwan Stock Exchange regulations, treasury share effects have already been considered. Note 9: Net worth per share and EPS are calculated based on the financial statement for the most recent quarter that has been
verified by an accountant. All other fields are based on the current year data through the publication date of the annual report.
Note 10: The Company’s EPS for 2019 was negative and thus it will not distribute earnings; it has been decided by the 10th meeting of the 21st Board of Directors on March 18, 2020, that the Company will not pay dividends for 2019, thus this does not apply.
Note 11: The Company does not have distributable earnings for 2020. It has been decided by the 15th meeting of the 21st Board of Directors on March 18, 2020, that the Company will not pay dividends for 2020.
Note 12: The Company's 2020 final daily closing price was NT$12.05 .
Capital Overview 85
4.1.6 Dividend Policy and Implementation Status A. Dividend Policy
The CAL Articles of Incorporation outlines the following dividend policy: If the Company makes a profit over the year, an amount of no less than 3% of the profit must be distributed as employee compensation. If the Company has accumulated losses, funds must be retained to offset the deficit. The aforementioned employee compensation is primarily disbursed as stock or cash and the resolution must be approved at a meeting of the Board of Directors with two-thirds of directors in attendance and must receive support from half of participating members. Should the Company make a profit over the year, said profit must first be used to pay all taxes and offset accumulated losses, then 10% of the remaining amount is to be set aside as a legal reserve. After setting aside or reversing a special reserve, any remaining amount along with accumulated undistributed earnings shall be distributed as shareholder dividends and bonuses according to a resolution drawn up by the Board: (1)Not less than 50% of the amount shall be distributed as shareholder dividends and bonuses. After
pretax profits are deducted as outlined above, should the amount left not be sufficient for distribution, the difference will be made up by accumulated undistributed profit.
(2)In the event of a yearly loss, depending on the financial, operation, and management considerations, all or part of the legal reserve may be distributed as new stock or cash as prescribed by law and competent authority regulations.
(3)Dividends and bonuses are distributed as stock or cash, with cash dividends making up no less than 30% of the total distributable dividends.
B. Proposed Distribution of Dividend The Company does not have distributable earnings for 2020. It has been decided by the 15th meeting of the 21st Board of Directors on March 18, 2020, that the Company will not pay dividends for 2020.
C. No significant change in expected future dividend policy.
4.1.7 Impact of Stock Dividends Issuance on Company’s Business Performance and Earnings per Share: Not Applicable.
4.1.8 Employees’ Compensation and Directors' Remuneration A. Articles of Incorporation regulations: See 4.1.6 Dividend Policy and Implementation
Status. B. The basis for estimating the amount of employee compensation and director
bonuses, for calculating the number of shares to be distributed as stock bonuses, and the accounting treatment of the discrepancy, if any, between the actual distributed amount and the estimated figure, for the current period The Company has not allocated employee compensation for this period. In addition, in accordance with the Articles of Incorporation, it will not pay remuneration to the directors.
C. Board approved employee compensation and director bonus proposal (1) Amount of employee bonuses (including stock and cash) and director bonuses distributed. If the
actual amount distributed differs from the original estimated amount, the difference, reason, and how this was handled is to be disclosed: It has been decided by the 15th meeting of the 21st Board of Directors on March 18, 2021, that the Company will not pay dividends for 2020.
(2) The amount of any proposed distribution of employee stock bonuses and the size of such an amount as a percentage of the sum of the net income for the current period and total employee bonuses: Not Applicable.
D. The actual employee compensation and director bonuses distributed for the previous year (2018) (including the number of shares distributed, value, and stock price). Should there be a discrepancy with the proposed amount of employee compensation and director bonuses, the difference, reason, and how this was handled should be stated (1) Employee compensation: None. (2) Director bonuses: Not Applicable.
4.1.9 Buyback of Treasury Stock: None.
86 Capital Overview
4.2 Bonds 4.2.1 Corporate Bonds
MAR 27, 2021
Corporate Bond Type Domestic Unsecured Straight Bond (2016-1)
Domestic Unsecured Straight Bond (2016-2)
Domestic Unsecured Straight Bond (2017-1)
Domestic Unsecured Straight Bond (2017-2)
Issue date 05/26/2016 09/27/2016 05/19/2017 10/12/2017
Denomination NT$1,000,000 NT$1,000,000 NT$1,000,000 NT$1,000,000
Issuing and transaction location Republic of China Republic of China Republic of China Republic of China
Issue price Par Par Par Par
Total price NT$5,000,000,000 NT$5,000,000,000 NT$2,350,000,000 NT$3,500,000,000
Coupon rate 1.19% per annum. 1.08% per annum
Tranche A: 1.20% per annum Tranche B: 1.75% per annum
Tranche A: 1.14% per annum Tranche B: 1.45% per annum
Tenor 5 year (May 26, 2016 to May 26, 2021)
5 year (September 27, 2016 to September 27, 2021)
Tranche A: 3 years (May 19, 2017 to May 19, 2020); Tranche B: 7 years (May 19, 2017 to May 19, 2024)
Tranche A: 3 years (October 12, 2017 to October 12, 2020); Tranche B: 5 years (October 12, 2017 to October 12, 2022)
Guarantee agency Not applicable Not applicable Not applicable Not applicable
Consignee Huanan Commercial Bank
Huanan Commercial Bank
Huanan Commercial Bank
Huanan Commercial Bank
Underwriting institution YuanTa Securities Ltd. Masterlink Securities Ltd.
Masterlink Securities Ltd.
Fubon Integrated Securities Ltd.
Certified lawyer
Ture Honesty International Law Office Kuo, Hui-Chi, Attorney At Law
Ture Honesty International Law Office Kuo, Hui-Chi, Attorney At Law
Ture Honesty International Law Office Kuo, Hui-Chi, Attorney At Law
Ture Honesty International Law Office Kuo, Hui-Chi, Attorney At Law
CPA Huang, Jui-chan (Deloitte & Touche)
Yang, Chen-Hsiu (Deloitte & Touche)
Yang, Chen-Hsiu (Deloitte & Touche)
Yang, Chen-Hsiu (Deloitte & Touche)
Repayment method
Repayment of 50% of the principal in the fourth year and the remaining 50% in the fifth year
Repayment of 50% of the principal in the fourth year and the remaining 50% in the fifth year
One-time repayment of capital upon maturity.
Tranche A: one-time payment upon maturity; Tranche B: return of 50% of capital 4 and 5 years from the start date, respectively.
Outstanding principal NT$2,500,000,000 NT$2,500,000,000 NT$1,000,000,000 NT$2,600,000,000
Terms of redemption or advance repayment None None None None
Restrictive clause None None None None Name of the credit rating agency, rating date, rating of corporate bonds
None None None None
Other rights attached
As of the printing date of this annual report, converted amount of (exchanged or subscribed) ordinary shares, GDRs, or other securities
Not applicable Not applicable Not applicable Not applicable
Issuance and conversion (exchange or subscription) method
Issuance and conversion, exchange or subscription method, issuing condition dilution, and impact on existing shareholders’ equity
Not applicable Not applicable Not applicable Not applicable
Transfer agent None None None None
Capital Overview 87
MAR 27, 2021
Corporate Bond Type Domestic Unsecured 6th Convertible Bond
Domestic Unsecured Ordinary Corporate Bonds (2018-1)
Domestic Unsecured Ordinary Corporate Bonds (2019-1)
Issue date 01/30/2018 10/30/2018 06/21/2019
Denomination NT$100,000 per unit NT$1,000,000 per unit NT$1,000,000 per unit
Issuing and transaction location Republic of China Republic of China Republic of China
Issue price Issued at 100.2% of par value Par Par
Total price NT$6,012,000,000 NT$4,500,000,000 NT$3,500,000,000
Coupon rate 0.00% per annum Tranche A: 1.32% per annum Tranche B: 1.45% per annum
Tranche A: 1.10% per annum Tranche B: 1.32% per annum
Tenor 5 years (January 30, 2018, to January 30, 2023)
Tranche A: 5 years (November 30, 2018, to November 30, 2023) Tranche B: 7 years (November 30, 2018, to November 30, 2025)
Tranche A: 5 years (June 21, 2019, to June 21, 2024) Tranche B: 7 years (June 21, 2019, to June 21, 2026)
Guarantee agency Not applicable Not applicable Not applicable
Consignee Chinatrust Commercial Bank Trust Department Huanan Commercial Bank Taishin International Bank
Underwriting institution Taishin Integrated Securities Ltd. Fubon Integrated Securities Ltd. Fubon Integrated Securities Ltd.
Certified lawyer Handsome Attorney-at-Law Chiu, Ya-Wen, Attorney At Law
Ture Honesty International Law Office Kuo, Hui-Chi, Attorney At Law
Ture Honesty International Law Office Kuo, Hui-Chi, Attorney At Law
CPA Not applicable Yang, Cheng-Hsiu (Deloitte & Touche)
Huang, Jui-chan (Deloitte & Touche)
Repayment method According to the offering of Domestic Unsecured 6th convertible bond section 6
Tranche A: Repayment of 50% of the principal at the end of the fourth year and the remaining 50% at the end of the fifth year; Tranche B: Repayment of 50% of the principal at the end of the sixth year and the remaining 50% at the end of the seventh year
Tranche A: Repayment of 50% of the principal at the end of the fourth year and the remaining 50% at the end of the fifth year; Tranche B: Repayment of 50% of the principal at the end of the sixth year and the remaining 50% at the end of the seventh year
Outstanding principal NT$5,999,900,000 NT$4,500,000,000 NT$3,500,000,000
Terms of redemption or advance repayment
According to the offering of Domestic Unsecured 6th convertible bond section 18 and 19
None None
Restrictive clause None None None Name of the credit rating agency, rating date, rating of corporate bonds
None None None
Other rights attached
As of the printing date of this annual report, converted amount of (exchanged or subscribed) ordinary shares, GDRs, or other securities
NT$100 thousand converted
Not applicable Other rights attached Issuance and conversion (exchange or subscription) method as per the 5th issue of domestic unsecured convertible bonds
According to the offering of Domestic Unsecured 6th convertible bond section 8 and 9
Issuance and conversion, exchange or subscription method, issuing condition dilution, and impact on existing shareholders’ equity
(Note) Not applicable Not applicable
Transfer agent None None None Note: As of March 27, 2021, according to the conversion price NT$12.60 of the sixth unsecured convertible bonds, and assuming the
convertible bonds have been fully converted, the shareholdings percentage of the three major shareholders, namely China Aviation Development Foundation, National Development Fund, and Chunghwa Telecom, will be reduced from 48.90% to 44.95%, but there will be no significant change in the shareholding structure, thus it has little effect on shareholder equity.
88 Capital Overview
4.2.2 Corporate Bonds Undergoing Private Placement A. At the 12th meeting of the 21st Board of Directors on August 6, 2020, the
Company’s seventh issuance of 60,000 domestic unsecured convertible corporate bonds was approved, each with a face value of NT$100,000, to be issued at 100% - 100.5% of the face value. The total issuance amount was capped at NT$6,030,000 thousand. It has been reported and put into effect by the approval of the Financial Supervisory Commission letter Jin-Guan-Zheng-Fa-Zi No. 1090379546 dated January 13, 2021.
B. Due to the recent changes in the domestic capital market conditions and the COVID-19 pandemic’s continuing impact on the air transport industry, and considering that rash pricing and non-ideal issuance conditions might damage shareholders’ rights, we applied for a three-month extension of the offering period for the seventh issuance of domestic unsecured convertible corporate bonds. It was approved and filed for future reference in letter Jin-Guan-Zheng-Fa-Zi No. 1100336476 dated March 24, 2021, and the offering period was extended to July 13, 2021. Once the market stabilizes, we will find the correct timing for pricing in order to protect the Company’s interests and shareholders’ rights.
4.2.3 Convertible Bonds Unit: NT$ Types of Corporate Bonds Domestic Unsecured 6th convertible bond
Year Item 2020 The current year through March 27, 2021
Convertible Bond Market Price
Highest 108.80 127.45 Lowest 92.10 102.00 Average 102.39 111.63
Conversion Price 12.60 12.60
Issuance date and conversion price at the time of issue
The convertible bonds were listed on the Taipei Exchange on January 30, 2018; the conversion price upon issuance was NT$13.20. Due to the distribution of 2018 and 2019 cash dividends, according to the provisions of the sixth unsecured convertible bonds’ issuance and conversion regulations, the conversion price shall be adjusted. The conversion price was thus reduced to NT$12.60.
Conversion method Issue new shares.
4.2.4 Exchangeable Bond, Shelf Registration, Shelf Registration: None.
4.3 Other Securities-Related Issues 4.3.1 Preferred shares: None.
4.3.2 Global Depository Receipts: None.
4.3.3 Employee Stock Options: None.
4.3.4 Employee Restricted Stock: None.
4.3.5 Status of New Shares Issuance in Connection with Mergers and Acquisitions: None.
4.4 Financing Plans and Implementation As of March 27, 2021, the use of funds earned through previously issued securities is progressing as planned and is in accordance with expected results.
Operational Highlights 89
Operational Highlights 5.1 Business Activities
5.2 Market and Sales Overview
5.3 Human Resources
5.4 Environmental Protection Expenditure
5.5 Labor Relations
5.6 Important Contracts
90 Operational Highlights
V. Operational Highlights 5.1 Business Activities 5.1.1 Business Scope
A. Main areas of business operations (1) Civil air transport business: Air passenger transport, regular and irregular contracting of
international charter flights business, and training of civil aviation personnel.
(2) General aviation business: In-flight commodity sales.
(3) Airport ground service business: Ground services for civil international airports and transit
aircraft.
(4) Air cargo terminal entrepot operation: Air cargo transport services.
(5) Aircraft and parts maintenance and manufacturing business: Aircraft body maintenance.
(6) Inflight catering service: Provision of in-flight catering or other related supplies.
(7) Laundry, dyeing, printing and finishing, and wholesale and retail of dyeing mills and dyestuff
cleaning supplies: Washing of cloth and clothing inside the aircraft and general washing business
in the hospitality industry.
(8) Warehouse and storage: Warehousing services for import, export, and entrepot air cargo.
(9) Other: All business items that are not prohibited or restricted by law, except for those that are
subject to special approval.
B. Revenue distribution Unit: NT$ thousands Proportion of Overall Business
Item 2020
Net Revenue Proportion of Revenue Passenger Revenue 25,704,367 22% Cargo Revenue 81,917,976 71% Other 7,628,207 7% Total 115,250,550 100%
C. Main products (1) Passenger service: Air passenger transport and regularly scheduled and non-scheduled contract
international charter flight services.
(2) Cargo service: Transport services for cargo, courier, mail, and packages.
(3) Ground services: Handling of luggage and cargo, aircraft cleaning, and ground support
equipment.
(4) In-flight sales: Providing in-flight duty free sales services.
(5) Airline catering: Providing meal services to airlines.
(6) Warehousing and logistics services: Provide airfreight forwarding and logistics services.
(7) Aircraft maintenance services: Airframe, engine, and aircraft component maintenance.
(8) Tourism and leisure services: General hotel industry and travel services.
(9) Investment holding and leasing services: Engaged in real estate investment, building
management, and leasing.
(10) Civil aviation personnel training: Organize maintenance training courses, develop professional
maintenance personnel.
Operational Highlights 91
D. Product Development (1) Revenue Management System (RMS)
Revenue Management System (RMS) is the core system to manage the sales of flight seats, which enhanced aviation network and competency. The new O&D (Original & Destination) RMS was implemented after evaluation and was officially operated on July 30, 2020. O&D RMS calculates the value of each seat by considering the booking information in the history and price information. Through dynamic deployment, routes and areas that create high value are highlighted to maximize the passenger flight revenue.
(2) Optimize booking system and user interface In 2020, China Airlines has been improving various services, including ticket booking 80 minutes prior to departure, 3-D secure protocol for credit card transactions, and WeChat Pay for the mainland China region. China Airlines established the pandemic section in response to the spread of COVID-19. Entry restrictions in Taiwan and other countries have been regularly updated, as well as schedule changes, ticket changes, ticket refunds, and other epidemic prevention measures. This was to facilitate passengers to keep up to date with the travel information and offer a friendlier experience in ticket purchases online.
(3) Customer Relationship Management (CRM) Improve digital service and consumer experience from the perspective of passengers by reviewing each phase in travel, from ticket purchase, preparation, check-in at the airport, and arrival, China Airlines built comprehensive, digitized, and passenger-oriented services. The services include accessing travel information on the mobile app, enjoying more friendly airport and in-flight services, and receiving swift support in the event of a flight change.
(4) Approach potential customers using digital marketing China Airlines leveraged the marketing funnel strategy and analyzed the browsing behaviors of CAL website visitors. By maximizing digital advertisement, approaching more consumers, and selecting potential target audiences using data analysis, China Airlines placed brand marketing advertisements on target consumers. Along with the promotion via eDM, app, and text messages, China Airlines displayed discount offers to potential customers, boosting customer consumption. In addition to newsletter marketing, content marketing, and social media exposure, China Airlines continuously held physical campaigns and realized the corporate brand visions.
(5) Developing potential destinations and optimizing the aviation network extension China Airlines has stayed close to the market condition, and deployed new destinations by evaluating the potential market, in order to strengthen the connectivity of the aviation network and enhance competency.
5.1.2 Industry Overview A. State of the industry and future development
(1) Economic growth According to the report made by IHS Markit in February 2021, the 2020 global economic growth rate was -3.7%, the first negative growth in ten years. In 2021, the business will get back to normal as the vaccines are available that eases the pandemic. IHS Markit estimated that the global economic growth rate will reach 5.1% in March 2021, while most major markets will grow, such as the US (5.7%), Europe (3.9%), Japan (2.6%), and China (7.8%). Taiwan has done exceptionally well in pandemic prevention. As the home economy and remote technology boosted during the outbreak that shifted the global supply chains. This created numerous opportunities for Taiwan in export business and manufacturing. According to the statistics made by the Directorate-General of Budget, Accounting and Statistics, Executive Yuan, Taiwan's annual growth rate in the economy was 3.11%, becoming one of the few countries with economic growth in 2020. In 2021, as export, investment, and consumption are on the rise, Taiwan's economy has grown stably. Domestic and foreign institutes estimated that the economic growth rate will reach 4.0%.
(2) Oil prices 2020 was severely impacted by the coronavirus pandemic. Lockdown and travel restrictions have been implemented in most countries. This caused the oil demand to drop. In April 2020, the WTI crude oil price dropped below zero, breaking the historical record. In the Short-Term Energy Outlook proposed by EIA (Energy Information Administration) in February 2021, as the demand for crude oil increases and the oil storage decreases, the WTI price is expected to be US$50.21/barrel, and the Brent price is expected to be US$53.2/barrel. As the pandemic poses uncertainty to the future economy, most financial institutes and energy institutes forecast that it's difficult for aviation fuel demand in 2021 to get back to the level in 2019.
(3) Air passenger market COVID-19 forced countries to adopt strict border control and disease inspection measures, leading to an almost standstill in demand for passenger flights. According to the forecast of IATA, the global passenger flight demand will return to the level in 2019 by the time of 2024. According to the statistics of IATA, 2020 RPKs dropped by 65.9%. The revenue from passenger flights dropped by NT$421 billion. The prospects in 2021 remain pessimistic as the new variant coronavirus appears, which prompted restricted travel by most countries in the first half of 2021. From the positive point of view, people in most developed countries are getting vaccinated, thus the travel restriction may be loosened. Therefore, the travel peak season in the summer can be expected. The passenger flight demand may be 38% of that of 2019. From the pessimistic point of view, border control in most countries may remain in the summer. In that case, the demand may only be 31% of that of 2019. No matter what, aviation companies will spend more than US$75 billion cash in 2021.
(4) Air cargo market According to IATA, global cargo flights were reduced drastically due to the pandemic in 2020. The loadability of the belly hold dropped by 53.1% in 2020. Even though the cargo flight capacity increased by 20.6%, the overall capacity still saw a fall of 24.1%. For global air cargo volume in 2020, a slide of 11.8% was seen, which was the most severe slump in 20 years. Thankfully, the drop in delivery supply was greater than the delivery capacity. In 2020, the delivery rate rose by 8.4%,
92 Operational Highlights
keeping the air cargo price at a high point. Despite the decline in delivery capacity, 2020 revenue was 15% higher than 2019. For most aviation companies, air cargo became the important income in 2020. IATA expected that 2021 air cargo demand will return to 2019. But since the new variant coronavirus still threatens the world in 2021, travel restriction remains. Thus, using belly hold of passenger flights to carry cargoes is still hard to achieve. This may create a challenge to satisfy the air cargo demand.
B. Relationship between upstream, midstream, and downstream firms The air transport service industry primarily provides transportation for passengers and cargo. These operations rely on the support and assistance of upstream, midstream, and downstream industries that enable us to provide comprehensive services and meet our customers’ needs. (1)Upstream industries
Primarily aircraft, aircraft engine, and ground service equipment (such as towing vehicles, loading vehicles, and equipment needed on the apron) manufacturers. Currently, in addition to purchasing aircraft, Taiwanese airlines also utilize leasing to add to their fleets, so the aircraft leasing industry is also an upstream industry for air transport providers.
(2)Midstream industries Primarily airlines themselves and related support industries such as the oil industry that provides aviation fuel, the aircraft maintenance industry that repairs and maintains airlines’ aircraft and components, and the airline catering industry that provides in-flight meals. In response to the changing needs of downstream industries, the air transport industry’s strategic adjustments in their operating scale, fleets, or flight networks will also affect the development of upstream industries.
(3)Downstream industries In passenger transport, the air transport industry primarily serves the public and travel agencies, while cargo transport services are provided to the courier and freight forwarding industries. As a member of the air transport industry, the needs of downstream customers are at the core of the CAL’s product and services planning. Our mission is to provide safe, convenient, and comprehensive services.
C. Product development trends (1)Aviation alliance cooperation
With the liberalization of the air-transport market, airports have become increasingly congested. Resources being limited, airlines provide passenger transportation services as part of alliance teams, with such mechanisms as code-sharing, extended route-agency systems, and combined mileage cumulation frequent flyer programs. Aviation alliance collaboration also includes operating in the same terminal at major airports, sharing maintenance facilities and operating equipment, mutual support of personnel, and cooperation in ground handling and inflight catering to reduce costs. This also helps passengers purchase flight tickets at a lower price. As long as they take alliance airlines, they can earn flight miles. Flight schedules provided by the alliance are more flexible with fewer transfers, making it easier for passengers to reach their destination early. At present, there are three major alliances in the aviation industry, namely, SkyTeam, Star Alliance, and One World. The Company is currently one of the 19-member airlines of the SkyTeam. Through extensive global network collaboration, we provide transportation services in 175 countries and to 1,150 destinations.
(2)Joint Venture (JV) For a closer strategic alliance relationship, airlines further share their route network with business partners and share joint marketing and bear risks together to earn more revenue and route profit. Joint ventures share revenue on cooperative routes, sometimes including cost sharing. The economies of scale, aviation network revenue, cost reduction and management efficiency improvements generated through cooperation can effectively improve operational efficiency, surpassing the benefits of alliance association. For example, United Airlines (UA) and All Nippon Airways (ANA / NH) have launched joint ventures since 2012. Passengers can take ANA from Taipei via Tokyo Narita or from Songshan via Tokyo Haneda to gateway cities in the United States, or choose United Airlines’ daily Taipei - San Francisco direct flight and transfer to major cities in the United States. Under the JV fare structure, due to the unified fare for the same cabin class and greater flight interoperability, the sales process is simpler.
(3)Grasping logistics trends and expanding business territory In response to the different transportation needs of special cargoes, such as semiconductor precision machinery, aircraft engine materials and the demand for equipment driven by the emerging 5G technology products, the Company provides professional large cargo loading services with its Boeing 747-400 cargo-only aircraft. For the vaccine delivery during the COVID-19 outbreak, China Airlines is well-versed in cold chain logistics and special goods delivery such as biotech medicines. Meanwhile, the Company is also the only Taiwanese carrier that received IATA CEIV pharma certification, meeting the needs of delivering vaccines. At the same time, the Company also cooperates with other airline alliances to assist other countries in delivering vaccines. Additionally, the home economy and the swift development of e-commerce have a higher demand for e-commerce goods delivery, pushing the Company to work with other airline
Operational Highlights 93
alliances and logistic vendors. The Company will stay close to the development of the logistic market and other potential opportunities to expand its air cargo business.
(4) Taoyuan International Airport expansion to become the transit hub in East Asia The government has been transforming the Taoyuan Airport as the transit hub in East Asia. The effort has been made not only in software upgrade and air right expansion, but also in hardware. In 2010 and 2011, Taiwan Taoyuan International Airport Park Overview Plan and Taiwan Taoyuan International Airport Park Implementation Plan were made to implement the reconstruction of Terminal 1, airside service roads, Terminal 3 satellite pier, and the third airway, etc. The Company also responded to the government policy by expanding its fleet capacity and building a transit hub in East Asia.
(5) Digital transformation in the aviation industry to rebuild traveler confidence COVID-19 escalated the digital transformation in the aviation industry, changing the airport and traveler's experience in 2020. Self-services in the airport, biometric technology, and Wi-Fi connectivity service not only shorten the check-in process but also maintain good social distances. China Airlines actively encourages passengers to utilize the internet to check in. In Hong Kong, New York, and San Francisco, the biometric-enabled check-in process was launched. At the end of 2020, IATA designed an application called "Travel Pass." The application provides passengers with disease control measures and travel restriction information. Users can upload their COVID-19 testing results and proof of COVID-19 vaccination, allowing the competent authority and aviation companies to identify passengers' health conditions before boarding. So far, multiple major aviation companies have undertaken the trial. The app will be officially launched in the first quarter of 2021. The aviation industry regards the Travel Pass developed by IATA as a milestone to resume the air travel.
D. Product competition China Airlines mainly provides regular/irregular flights that carry cargoes and passengers, as well as charter flight service. The Company will continue to optimize the aviation network and fleet scale to enhance the overall service quality, maintaining its solid role as a leading carrier in Taiwan. According to the IATA’s 2019 international passenger and cargo transport volume rankings published in 2020, the Company ranked 34th in the world, with a passenger transport volume of 42,142 million Revenue Passenger Kilometers (RPK);In cargo transport, the Company ranked 12th in the world, with a cargo transport volume of 5,334 million Freight Revenue Ton Kilometers (FRTK).
Taiwan National Airlines International and Cross-Strait Market Share for Passengers and Cargo in 2020 Airline Passenger Cargo
China Airlines 25.01% 42.86% EVA Air 26.31% 26.56%
Mandarin Airlines 1.44% 0.26% UNI Air 1.10% 0.21%
Tigerair Taiwan 3.94% 0.01% STARLUX Airlines 0.40% 0.07%
Other-Foreign Carriers 41.80% 30.03% Source: Civil Aeronautics Administration Monthly Statistics from January to December 2020-Taiwan National Airlines
International and Cross-Strait Market Share for Passengers and Cargo
IATA Global International Route Passenger and Cargo Rankings 2019 Passenger (Passenger-Kilometers) Ranking
Unit: million Cargo (Ton-Kilometer) Ranking
Unit: million 1 Emirates 299,496 1 Qatar Airways 13,024 2 Ryanair 185,405 2 Emirates 12,052 3 Qatar Airways 172,591 3 Cathay Pacific Airways 10,930 4 United Airlines 162,962 4 Federal Express 8,851 5 Lufthansa 160,731 5 Korean Air 7,390 6 British Airways 151,935 6 Lufthansa 7,223 7 Air France 143,347 7 Cargolux 7,180 8 Delta Air Lines 141,353 8 Turkish Airlines 7,000 9 Turkish Airlines 131,106 9 United Parcel Service 6,228
10 American Airlines 126,533 10 Singapore Airlines 6,146 11 Cathay Pacific Airways 119,328 11 Air China 5,651 12 KLM 109,476 12 China Southern Airlines 5,482 13 Singapore Airlines 109,462 13 China Airlines 5,334 14 easyJet 99,854 14 AirBridgeCargo Airlines 5,168 15 Air Canada 87,701 15 United Airlines 4,231 16 Etihad Airways 81,856 16 British Airways 4,200 17 Norwegian 81,234 17 All Nippon Airways 3,922 18 Korean Air 80,298 18 Air France 3,774 19 Air China 79,293 19 Polar Air Cargo 3,765 20 China Southern Airlines 71,788 20 KLM 3,609 21 China Eastern Airlines 69,426 21 Atlas Air 3,598 22 Aeroflot Russian Airlines 68,911 22 KLM(4) 3,604 23 LATAM 67,108 23 EVA Air 3,580
94 Operational Highlights
Passenger (Passenger-Kilometers) Ranking Unit: million
Cargo (Ton-Kilometer) Ranking Unit: million
24 Thai Airways International 65,380 24 American Airlines 3,550 25 Qantas Airways 59,721 25 Etihad Airways 3,471 26 Saudi Arabian Airlines 55,778 26 Kalitta Air(2)(3) 3,121 27 Wizzair 55,090 27 LATAM Group(3) 3,044 28 Iberia 54,243 28 AeroLogic(1) 2,803 29 All Nippon Airways 52,981 29 China Cargo Airlines 2,702 30 EVA Air 48,627 30 Saudi Arabian Airlines 2,487 31 Japan Airlines 44,650 31 Thai Airways International 2,438 32 Asiana Airlines 44,449 32 Delta Air Lines 2,417 33 Ethiopian Airlines 44,436 33 Japan Airlines 2,410 34 China Airlines 42,142 34 Silk Way West Airlines 2,354
Source: IATA WATS 2020
E. Intellectual Property The Company has internal regulations governing corporate identity system management and has a brand- management platform for control and management. The scope includes the Company’s office buildings and airport terminals (indoor and external signboards, marks and signs, etc.), transportation, advertisements, printed matter, inflight and ground service supplies, logos, products, and other installations, publishing, or broadcasting with the application of corporate identity covered by the Corporate Identity System Guideline (hereinafter referred to as the “CIS Guideline”). By managing the Company’s corporate identity, application, and authorization of corporate logos (i.e., trademarks), and through reviewing the plan, we maintain the consistency of corporate identity exposure, unify the Company’s visual identity, and strengthen the Company’s corporate image. According to application situation of corporate identity in units in Taiwan and abroad, the Company will discuss and report the implementation method every two years, and notify the units to be audited by e-mail or memo. The units to be audited have to upload the audit samples on the brand- management platform to the concerned unit for review (or for an on-site audit) to protect the Company’s trademark rights under the protection of law.
5.1.3 Research and Development A. Costs of R&D investment and successfully developed technologies or products
From January 1, 2020, as on the publication date of this report, the Company has invested approximately NT$61 million in research and development. The following table summarizes the technologies and products developed:
Project R&D Project Description
Chatbot
Provide an innovative channel that reaches passengers and provides flight status in real time. During peak seasons or when significant changes are made to flights due to force majeure, provide passengers with an online instant chatbot conversational service to minimize the time passengers spend waiting on the customer service hotline. AI technology and AI semantic module have been utilized to enhance the service quality. Chatbot was officially completed and launched in March 2020.
Online Customer Service System
The China Airlines Customer Service Center was established in October 2003. The customer service system was introduced in 2004 and has been in use for more than 16 years. The system equipment must keep up with the times to cope with today's multifaceted business environment. In response to the customer service center's heavy workload, changing times, and technological advancements, China Airlines plans to establish a next-generation multimedia customer service system. It involves several functions, including telephone services, fax, automated voice answering systems, voice outbound dialing, e-mail, Facebook, and online customer service on the official website. The system will not only increase passenger access channels, but also help managers obtain workload information and staff status in real time, promptly allocate human resources, and improve service effectiveness and quality. The OnlineCC was officially launched in April 2020.
Health self-management system
In response to COVID-19 and the rules of the Taiwan Center for Disease Control and Civil Aeronautics Administration, a body temp reporting system was built for staff to self-report their health condition. This allowed the Company to monitor the disease condition in real-time, and save the labor cost for follow-up. The system was completed and officially launched in April 2020.
Aircraft inspection training system using VR/AR
The Company used VR/AR technology in aircraft inspection and new employee training. New employees can have real-time practices in the training to familiarize the inspection procedure and operations. This can improve employees' ability in identifying abnormalities and enhance the maintenance training result. The system was completed and officially launched in July 2020.
Fuel-saving effectiveness management system
Through the information process, consistent and complete oil-saving analysis data are generated. Various fuel-saving analysis data and monthly oil-saving results are presented in graphs. By doing so, the Company can formulate a precise fuel-saving policy and cut down on operating costs. The system was completed and officially launched in December 2020.
Robotic Process Automation, RPA
Promoting the relevant application of robotic process automation to all business units in China Airlines, reducing the manpower requirements for indirect manual operations, so to avoid the oversights caused by repetitive data input and manual input errors, improve work efficiency, and
Operational Highlights 95
improve operating performance. The RPA is implemented in audit tools optimization: the automatic measurement function, the IATA automatic settlement and payment system, and the automatic download of the ticket price. The application was completed and officially launched in December 2020.
Establish the relevant mechanism of Cyber Security Management Act
In 2020, China Airlines put Cyber Security Management Act as its core in the cyber security operation by implementing international standards such as ISO 27001:2013 and ISO 27701:2019. At the end of the year, PCI DSS was completed that ensures the safety of credit card transactions. China Airlines enhanced the cyber security in all aspects according to the standards of the Cyber Security Management Act, which includes the introduction of audit and accountability tools and protection platforms from malware. This is to enhance the Company's security level and reduce the cyber risks. The system was completed and officially launched in December 2020.
CI Mobile APP
In order to enhance user experience on mobile devices, the Company continues to optimize CI Mobile App functionality. The planned improvement projects cover car rental, accommodation booking/ticket refund application/chatbot customer services, pre-stored travel documents, passport scanning (OCR), China Airlines eMall home delivery, push notification of system records, Google Pay-supported electronic boarding pass service, seat preselection, collaboration with credit card companies, proof of purchase application, function upgrade for the membership app/the establishment of an app for co-branded cards.
B. Future R&D Projects To meet the future development needs, China Airlines will continue to invest in R&D. In, we plan to invest a total of NT$114.38 million into R&D. The following table summarizes the future projects:
Project Future R&D Project Description Estimated Completion Date
e-Shopping- Phase I
The "e-Shopping Duty-free Website" has been in use since the first project revision in 2013. After observing the functions and web designs of other airlines' websites and online shopping platforms, improvements will continue to be made to the website. In order to uphold the Company's service spirit through continuous innovation and optimization while keeping up with today's trend of smart technology, plans to revise and optimize the website will be implemented. This will provide a more novel shopping experience that will in turn increase sales.
March 2021 (Implementation progress was 100% as of the annual report printing date)
iCabin Service 2.0, iCS 2.0
The cabin team leader, manager, the head attendant can obtain information about passengers, flights, team members right away through mobile devices. They can write up cabin reports with flexibility. In addition, the digitized cabin manual provides the latest version for team members to read at any time to improve passenger service quality.
April 2021 (Implementation progress was 100% as of the annual report printing date)
CRM- Phase I
To establish the Company's consistent customer relationship service system and to expand business opportunities through data analysis in integrated systems. The
primary goal is to serve passengers. We plan to consolidate data platforms such as membership, ticket files, reservations, in-flight duty-free products, and customer
feedback. Through one single platform, data visualization and other operations, we can effectively accelerate customer service processing and improving service quality.
June 2021 (Implementation progress was 92% as of the annual report printing
date)
Customer service system improvement
To optimize the customer service process, existing interface, and data security mechanism, China Airlines strengthens the automatic and digital process. Financial and human resource systems are interlinked to get a full picture of customers' consumption patterns, enhancing service efficiency.
November 2021
(Implementation progress was 2% as of the annual report printing date)
Mail system integration
In order to keep the Company’s email system up to date, China Airlines strengthens the system information security mechanism, enhances the compatibility of mobile devices, integrates the existing e-mail system, upgrades the platform by taking into account subsequent maintenance costs and technical support, so as to provide a safer and more stable email service and a high quality office environment.
December 2021
(Implementation progress was 8% as of the annual report printing date)
Major broadband construction for enhanced online service
According to the infrastructure plan for communication, China Airlines replaced 10Gb internet routers in park control room, floor control rooms, terminals, and cargo stations (60 routers in total. Speeds came to 10/40/100Gb) to enhance the online service.
June 2022
(Implementation progress was 16% as of the annual report printing date)
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Replacement of core optical fiber storage network switches
Through analysis, China Airlines adopted high-speed (32GB) Storage Area Network (SAN) and All Flash Storage devices to build a high-performance, high-reliability storage network. This reduced the downtime risks and improved the information efficiency of SAN.
December, 2022
(Implementation progress was 50% as of the annual report printing date)
Human Resource Management (HRM) system
In order to solve the problems of system expansion, difficulties in development and risks of information security, China Airlines made a new plan for business process, technical and regulatory aspects. By leveraging new technology and structure, adjusting SOP, and redefining the personal information processing principle, a new generation of human resources management system has been developed to achieve overall system synergy.
June 2023
(Implementation progress was 5% as of the annual report printing date)
New cargo operation and management system
The system aims to improve the management of cargo revenue. By introducing an external cargo operation and management system, China Airlines replaced current systems, CCNet and CIRAS. It is expected that the implementation can support the cargo business in the next ten to twenty years to achieve an efficient revenue forecast and price management.
December 2023
(Implementation progress was 8% as of the annual report printing date)
5.1.4 Long-term and Short-term Development
To promote sustainable operations and strengthen international competitiveness, CAL has planned the following short- and long-term passenger and cargo transport developments: A. Short-term Development
(1) Passenger Make short-term adjustments to ASK in response to the impact of the COVID-19 pandemic
Since the outbreak of the COVID-19 in late January 2020, border control in each country has become increasingly stringent and the overall aviation and tourism industries have been disrupted. The Company not only flexibly adjusts its delivery capacity in each route, but stays up to date on the border policy changes and travel bubbles development, as the vaccines are gradually available in each country. China Airlines hopes to minimize the loss and resume passenger flights as soon as possible.
Strive for providing Charter flight services to increase revenue Charter flight service is one of the main incomes for China Airlines during the pandemic. In 2020, China Airlines sent Taiwanese passengers back to Taiwan with charter flights, which include charter flights for the Japanese Diamond Princess cruise ship and charter flights departing from Wuhan, Shanghai, India, and Bali. Charter flights to Vietnam and Palau are also arranged to provide transportation for Taiwanese businessperson and foreign patients. In the post-COVID-19 era, China Airlines will provide different kinds of charter flights for students, corporates, and Taiwanese businessperson to enhance its revenue.
Open up new routes and explore market potential In 2020, China Airlines started successively opening up the Taoyuan-Cebu route and resuming the Taoyuan-Chiang Mai route to seize business opportunities in the market. At the same time, the schedules of these flights are arranged alongside the existing North America aviation network, so they can be connected to flights going to Los Angeles, Ontario, San Francisco, Vancouver, New York, and vice versa. This way, more convenient and comfortable services are provided to passengers traveling between Southeast Asia and North America.
(2) Cargo Improve revenue management and promote customized services
We will continue to improve revenue management. Regarding the different transportation needs of special cargo, such as time limit, volume, and special loading procedures, we will continue to enhance price differentiation and increase the added value of transportation services by utilizing the advantages of large cargo loading and professional services of our Boeing 747-400 all-cargo aircraft. The Company also highlights its charter flight service. By providing customized charter flight service, revenue can enhance profoundly. After the introduction of 777F new aircraft in 2021, the fleet scale increased. In response to the global aviation market changes caused by COVID-19, China Airlines will deploy the aviation network and adjust the flight schedule more flexibly. The Company will also explore the North America and Southeast Asia markets, stabilize the overall aviation network and promote charter flight service, realizing the freighters' performance.
B. Long-term Development (1) Passenger Roll out fleet plans.
In order to improve operational efficiency, in 2019, the Company finished its plans to replace the old cargo fleet and the old narrow-body fleet. Between 2021 and 2023, we will introduce 25 A321neo aircraft,
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which will gradually replace the narrow-body aircraft currently in operation. The new cabin design will enhance passenger service quality and strengthen product competitiveness. Efficiently establish aviation networks and deepen inter-airline cooperation to increase
revenue. Utilize the new-generation, long-haul aircrafts 777 and A350 to proactively maximize the benefits of China Airlines' aviation network in California (North America) and expand the customer base for long-haul flights; provide a more interconnected, and convenient aviation network in Europe to secure China Airlines' leading position in the market of flights flying from Taiwan to Europe; continue to expand the aviation network covering bi-directional transfers in routes between New Zealand/Australia, Europe, and Northeast Asia to strengthen China Airlines' travel services. Furthermore, increase flight destinations and expand into major cities and tourist destinations around the world through inter-airline cooperation; increase the overall earnings generated by the aviation network by increasing flight frequencies and interconnectivity. Optimize cabin products and strengthen brand marketing to enhance passenger experience and
increase loyalty. Continue to improve personnel service and cabin hardware; provide passengers with the best flight quality and pleasant in-flight services. Establish brand positioning and a marketing direction that is in line with the brand improvement plan and based on the corporate philosophy; enhance the brand recognition of China Airlines; further ensure the consistency of passenger experience and strengthen the brand loyalty passengers have for China Airlines' products.
(2) Cargo Enhance project-based revenue and e-commerce goods delivery
Under the development of the Southbound policy and the economic growth in Southeast Asia, there has been tremendous growth in electrical devices, textile items, e-commerce goods. In addition to the delivery of north-south goods in regions like Japan, Singapore, Malaysia, Indonesia, Vietnam, the Philippines, and Thailand, the Company also emphasized the Southeast Asia routes. According to the demand, the chain flight is changed to a direct flight to increase the transportation capacity, in order to fully cooperate with the development of Southeast Asia, and improve the overall revenue and economic efficiency. Other than that, China Airlines will keep navigating the potential markets in special goods delivery, such as semiconductor machines, aviation materials, temperature-control cold chain, and biotech items. Airline alliance for cargo information exchange
Since its launch in Shenzhen in 2015, the Company has been working closely with UPS, DHL, Fedex, and SF Express on the fixed seats of American chartered flights. In addition, the cooperation with NCA and NH continued. China Airlines currently works with 165 cargo service companies by creating a win-win situation in airline alliance and aviation network. In addition, China Airlines also promoted the digitalization of freight forwarding and the upgrade of the information system of freight operation/services, which are also the key points of the Company’s strategic development. Through the integration of various systems and the provision of real-time information of mobile devices, the Company not only improved the efficiency of internal operations, but also enhanced the quality and satisfaction of customer services. Leverage the advantages of our cargo fleet to capture potential business opportunities Starting from the end of 2020, new models of 777 F have been introduced. In addition to effectively
improving fuel efficiency and enhancing the capacity of long-haul routes, the existing aircraft fleet of 747F has been flexibly deployed to meet customers’ needs by carrying semiconductor machines, e-commerce goods, consumer electronic products and equipment. The Company also provides medium and short-term chartered flights, flexible adjustment on the capacity of the aircraft fleet, adding flights to create good revenue.
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5.2 Market and Sales Overview 5.2.1 Market Analysis
A. Main Sales (Service) Region Overview of Company passengers/cargo (RPK/FRTK, REV) by region and passenger and cargo transport market share over the past two years: (1)Passenger routes:
Item Area
2019 2020 No. of
Passengers No. of
Passengers No. of
Passengers No. of
Passengers RPK
(Million) Revenue
(NT$ Million) Trans-Pacific 1,017,031 1,017,031 1,017,031 235,264 2,499 4,601 Europe 623,389 623,389 623,389 122,553 1,157 2,615 South-East Asia 3,890,748 3,890,748 3,890,748 725,449 1,836 4,713 Domestic 1,467,638 1,467,638 1,467,638 1,729,624 397 2,688 Hong Kong/ Macau 2,532,308 2,532,308 2,532,308 243,329 194 944
North-East Asia 7,023,173 7,023,173 7,023,173 1,039,218 1,900 6,303 Oceania 651,793 651,793 651,793 149,571 906 1,948 Mainland China 2,624,929 2,624,929 2,624,929 247,045 208 1,892 Total 19,831,009 19,831,009 19,831,009 4,492,053 9,097 25,704
Note 1: Revenue passenger kilometers (RPK) equal the total number of revenue passengers multiplied by the flight distance travelled (kilometers).
Note 2: The above data includes scheduled flights, charter flights, and extra flights. Note 3: The above data includes Mandarin Airlines and Tigerair Taiwan.
(2) Cargo routes: Item
Area 2019 2020
FRTK (Million) FRTK (Million) FRTK (Million) Revenue (NT$ Million) Trans-Pacific 3,358 3,358 4,182 47,940 Europe 717 717 603 7,085 South-East Asia 756 756 952 15,380 North-East Asia 229 229 221 4,121 Oceania 161 161 234 2,420 Mainland China 149 149 176 4,972 Total 5,370 5,370 6,368 81,918
Note 1: Freight revenue ton-kilometer (FRTK) equals the revenue cargo load (tons) multiplied by the flight distance travelled (kilometers).
Note 2: The above data includes scheduled flights, charter flights, and extra flights. Note 3: The above data includes Mandarin Airlines and Tigerair Taiwan.
B. Market Share (%) of Major Product Categories in the Last Two Years Year
Airline Passengers Cargo
2019 2019 2019 2019 China Airlines 23.45% 25.01% 37.37% 42.86% EVA Air 21.70% 26.31% 24.12% 26.56% Mandarin Airlines 2.17% 1.44% 0.64% 0.26% UNI Air 1.43% 1.10% 0.56% 0.21% Far Eastern Air Transport 0.46% - - - Tigerair Taiwan 4.70% 3.94% 0.04% 0.01% Other-Foreign Carriers 46.09% 0.4% 37.27% 0.07%
Source: Civil Aeronautics Administration Monthly Statistics from January to December 2019 and 2020-Taiwan National Airlines International and Cross-Strait Market Share for Passengers and Cargo
C. Market Analysis of Major Product Categories (1) Passenger
According to IATA, travel restrictions remained tight in 2021 due to the new variant coronavirus. Although it is optimistic that developed countries will gradually ease tourism restrictions after the completion of vaccination for the disadvantaged group, the full year’s passenger demand remains at only 38% of 2019. Airlines may not be able to realize positive cash flow, and the loss can be turned into profit in 2022.
(2) Cargo In 2021, the COVID-19 pandemic continued to be severe, and the passenger flight market is expected to recover slowly, limiting the growth of belly hold capacity. However, as the economic recovery brought up the shipment market, many shipping ports in Europe and North America are experiencing traffic congestion and a lack of containers. Many businesses turned to air transport. Coupled with the heavy demand from aviation cargo-driven semiconductors, 5G, electric vehicles and epidemic prevention supplies, the air cargo market is expected to remain buoyant in 2021. In early 2021, the governments of major automotive manufacturers seek helps from Taiwan due to a global shortage of automotive chips. The dry freight rate after the mass production of vaccines is expected to increase in visibility for air cargo demand.
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D. Competitive Niche (1) The new-generation fleet can help to enhance service quality.
In line with the development of the aviation network, the Company continues to optimize the fleet team. 744 passenger aircraft was replaced to lower operating costs and improve the fleet team. The next-gen Airbus A321neo is about to be introduced in 2021 to replace Boeing 738 aircraft. It will be used in flights for regional routes to enhance competency. China Airlines will introduce new narrow-body aircraft by elevating the passenger services with comfortable seat design, in-flight entertainment, and meal design. By integrating software and hardware, the passengers can have more diverse, consistent, and high-quality in-flight services. Customer loyalty will also be enhanced.
(2) Highly-efficient cargo aircraft to be introduced. Three Boeing 777F were about to be introduced from December 2020 to January 2021. The remaining three aircraft will be delivered before 2023. 777F new cargo freights come with two engines and fuel-saving feature, which are the main aircraft model in the fleet. With the existing 18 747-400 cargo-only aircraft, the fleet team will come to 21 aircraft in 2021. This will create more cargo revenue for China Airlines as the demands for vaccine delivery and air cargo delivery are on the rise. The 777F features twin engines that translate into 20% lower fuel consumption and a range longer than the 747F. It can therefore be flown on trans-Pacific routes with fewer payload restrictions and better hold utilization. The aircraft are equipped with fully temperature-controlled cargo holds and the main cargo hold can be fitted with cargo pallet restraint systems used for carrying semiconductor machinery and engines. High-value cargo such as precision instruments and temperature-controlled goods can all be carried in the future.
(3) CEIV Pharma Certification In April 2019, China Airlines officially obtained IATA's CEIV Pharma Certification, becoming the first aviation company in Taiwan to earn such honor. The certification shows that China Airlines has reached international standards in the field of medicinal air transport, which is sensitive to time and temperature. This enhances the Company's competitiveness and benefits generated in the highly valued freight market. As one of the leading cargo carriers in the world, China Airlines has made all the necessary preparations and has received a number of inquiries on transportation plans for different types of vaccines. China Airlines’ CEIV Pharma certification, many years of experience in professional transportation, and an extensive network covering major European and American cities such as Frankfurt, London, New York and Chicago, mean that it stands ready to meet the demand for vaccine transportation. Talks are underway with partner airlines on opportunities offered by the transshipment of vaccines by other countries.
(4) The Group’s integrated resources increase the overall efficacy. China Airlines Group's overall combined fleet ASK provides differentiated aviation services and products to target markets with differentiated market positioning. Tigerair Taiwan operates with a low-cost airline business model and mainly flies regional routes. In the civil aviation market, Tigerair Taiwan, China Airlines, and Mandarin Airlines have each established their own positioning in different segments, providing consumers with a diversity of product options.
(5) Taken a leading position in the inter-airline collaboration market In addition to self-owned routes, China Airlines is the first airline in Taiwan to join the global aviation alliance. We are also the first Taiwanese airlines to conduct code-sharing cooperation. Currently, we have cooperated with 23 airlines in code-sharing, ranking first among all Taiwanese airlines. We actively penetrate the market through the aviation alliance, allowing passengers to travel between Taiwan and major cities around the world with a network of airlines and providing them with more convenient and complete services.
E. Corporate Policies (1) Corporate Human Rights Policy
To enforce the concept of human rights, CAL has established our human rights policies and management mechanisms in accordance with the UN Guiding Principles on Business and Human Rights, international trends, and local human rights-related laws & regulations. The scope of application covers the members of the China Airlines Group and their suppliers, and the Talent Value Task Force under the Company's Corporate Sustainability Committee is responsible for human rights management. China Airlines sees its employees as its family and aspires to communicate and reach a mutual understanding with the union through equal and respectful negotiation procedures, to create a more harmonious and friendly working environment, based on a mutually beneficial situation for both labor and management. The Company and the union shall maintain an equal, cooperative, and respectful relationship. It is our core attitude to promote rational communication through open and transparent negotiations, so that labor and management can reach consensus and achieve the common good, and can conduct two-way friendly communication on collective agreement issues. China Airlines believes that employees are the Company's most important assets. The Company gradually strengthens and optimizes the working conditions and environments of colleagues to ensure they have employment safety and room for growth. The Company will treat each union with empathy and communicate and negotiate with them on their individual needs, and will give priority to fair protection of the labor rights of every employee with the obligation to stay neutral according to the law, showing the unions consistent respect and providing them with equal resources.
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(2) Sustainable Supply Chain Management Based on the corporate vision of “becoming the top airline in Taiwan,” the Company, based in Taiwan and flying around the world, is committed to pursuing the business goal of corporate sustainable development. We strongly feel that only by cooperating with business partners can we truly implement corporate sustainable development and create sustainable value. Therefore, the Company has been promoting sustainable supply-chain management since the beginning of 2014. Subsequently, we established a Joint Creation Value Team for important procurement categories, including “aviation materials, aviation fuel, in-flight meals, service procurement, and general business affairs”; formulated long-term sustainability goals based on the United Nations’ Sustainable Development Goals (SDGs); and formulated China Airlines’ Sustainable Supply Chain Management Policy Statement and Supplier Code of Conduct with reference to the Global Reporting Initiative (GRI), ISO 26000, United Nations Global Compact (UNGC), International Labour Organization (ILO), and other international standards. In addition, the Company has also created a risk investigation mechanism, performed audit operations, organized supplier meetings to enhance the effectiveness of engagement, and set up other management measures, and has regularly reported the management outcomes to the Corporate Sustainability Committee for follow-up inspection on a quarterly basis.
(3) Environmental Sustainability Management The Company believes in environmental sustainable management and regards “environment” as one of the key elements in the implementation of sustainable management. Since 2007, we have established the concept of environmental and energy management. In 2011, a dedicated environmental department and Environmental Committee were set up; every quarter, the president reviews the Company’s environmental and energy-management performance and has also set incentive measures. In 2013, an environmental and energy policy statement was issued; the Company became the first domestic airline to establish a dedicated environmental organization and formulate policies. While pursuing business development, China Airlines recognizes the value and irreversibility of the global environment, and understands the corporation’s responsibility and obligation for protecting natural resources and environment. Based on this understanding, the Company established the four environmental and energy-management concepts and six environmental and energy policies according to the codes of practice for “Sustainable Environment Development” in the China Airlines Corporate Social Responsibility and Sustainable Development Best Practice Principles of the Board of Directors. The Company also referred to the UN’s SDGs while devising instructional strategies to ensure that the business operation direction is toward sustainable development, namely, environmental friendliness, low-carbon emissions, and energy conservation.
(4) Corporate Social Responsibility CAL's success today stands based on social support. Upholding our core philosophy of "giving back to society what we take from society," we at CAL continue to make social contributions aimed at creating love, while fulfilling our corporate responsibility in Taiwan. As a leader in Taiwan's aviation industry and a corporate citizen of Taiwan, the Company takes "continuous social value creation" as an important commitment for sustainable development. In 2020, the global aviation industry was severely impacted by COVID-19. China Airlines followed the pandemic prevention measures set out by the central government by reducing corporate interaction, educational sharing, and charity events. As the leading carrier in Taiwan, China Airlines is committed to social sustainable development and utilizes available resources. China Airlines sticks to the three main social strategies: Internationalize the local education, enhance Taiwan visibility on the global stage, and promote equal opportunity for the disadvantaged, and implements SDG3, SDG4, and SDG8 of the United Nations. China Airlines hopes to enhance the education quality in Taiwan, strengthen Taiwan's visibility in the world, assist the disadvantaged group in overcoming the difficulties, and create a sustainable society.
(5) Enterprise Risk Management Architecture and Process
China Airlines realizes the importance of risk management, and puts emphasis on the impacts it may bring. CAL's risk management framework complies with the Enterprise Risk Management (ERM) model, where a multi-level organizational approach is adopted to manage and control overall risks to CAL. The model emphasizes possible correlations between different risks, to reduce their overall impacts and achieve corporate sustainability. China Airlines' risk management is based on the materiality principle, which identifies traditional risks and mid-to-long-term strategic risks. By following the four main steps: identification, analysis, assessment, and control, China Airlines analyzes and assesses the impact of risk events on the Company. The Risk Committee and the Corporate Sustainability Committee were established to conduct regular follow-up and review. For risk identification, the aviation industry has its industrial specialty. Considering the operating environment and daily operation, the impacts, severity, and areas of the risk events are different. If a single mechanism is used for monitoring, the risk control result may be impacted. Therefore, China Airlines categorizes the risks into two levels: mid-to-long-term strategic risks and traditional short-term risks, which are monitored under two different systems: operating strategy management and annual sales plan/operational risk management. China Airlines also built up the new risk identification process. New risks have been identified through risk metrics. Regular risk review is conducted to formulate countermeasures in order to lower the impacts of new risks on the aviation industry.
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F. Favorable and Unfavorable Factors in the Long Term (1) Favorable Factors The international air cargo industry continued to boom: Almost 90% of the world’s passenger flights were
grounded by the pandemic, while almost half of the air cargo delivery relied on belly hold of passenger aircraft, resulting in a crowded air cargo space and soaring freight rates due to the growing delivery demand of medical supplies, components, e-commerce goods, information and communications, and home economy. In 2020, revenue from cargo operations increased due to the launch of new electronic products and the surge in Q4 shopping. In 2021, the Company will continue to rely on air cargo deliveries to generate stable income as vaccine delivery and air cargo delivery are boosting. Global economy rebound: Many countries have received the vaccination, and the pandemic started to
ease in some of the countries. According to a poll conducted by Kekst CNC, an international consulting firm, people from six countries, including the United Kingdom, the United States, France, Sweden and Germany, are on a growing trend towards vaccination compared to December 2020. Along with the financial incentive policy in many countries, it is expected that the global market will rebound in 2021, which may benefit the aviation industry. Rapid development in Southeast Asia: since 2016, the Taiwanese government has promoted the New
Southbound Policy to strengthen its strategic partnership with 18 countries, including 10 ASEAN countries, 6 countries in South Asia and New Zealand and Australia, so as to increase the attractiveness of Taiwan for economic trade and tourism in the southern countries. This triggered higher growth of tourists coming from Southeast Asia before the pandemic. In addition, because of the global supply chain shift driven by the US-China trade and the COVID-19 that pushed the demands for passenger and cargo delivery in Southeast Asia, the Company planned to open a new Taoyuan-Philippines Cebu flight and Taoyuan-Thailand Chiang Mai flight in 2020, mainly focusing on the markets in Southeast Asia and the transit opportunity between North America and Southeast Asia. The flights will resume after the pandemic.
(2) Unfavorable Factors COVID-19 endless impact: The spread of the pandemic worsened in autumn and winter 2020. Border
control and epidemic prevention measures were more stringent in some countries. Even though the vaccines are available, their security and protection ability still need scientific proof and time. With the new variant coronavirus appearing, the travel restriction remains strict in most countries. IATA said that the number of passengers decreased by 5.4% in January compared to December, implying that the aviation industry did not secede from the COVID-19. Before the COVID-19 can be controlled, the aviation industry still needs to bear the financial burden. Unequal distribution of COVID-19 vaccines: While vaccines have been developed successfully, mass
vaccination on a global scale is an uphill task. In many wealthy developed countries, including the UK and the United States, large quantities of vaccines have been purchased, some exceeding the needs of the domestic population. The number of vaccines sourced in Canada is even more than 5 times sufficient for the population nationwide. However, several health experts have warned that this will cause a shortage of the vaccine in the COVAX mechanism, unable to assist front-line healthcare personnel and vulnerable groups in low- and middle-income countries to receive the protection required, leading to a global health emergency. The prolonged pandemic situation and predicted delay before herd immunity occurs are likely to have a significant impact on the timing of the recovery of the tourism and aviation industries. Unstable global economy: The global economy is affected by the outbreak of COVID-19, and the increase
in the unemployment rate, widening poverty and wealth due to different economies and industries. This causes social instability and drags down the recovery momentum of economic activities. Apart from the outbreak, geopolitical tensions, the continuance of protectionism, and the ongoing trade disruption between the United States and China have added to the uncertainties on the aviation industry's recovery.
(3) Response Measures Flexible adjustment of passenger and cargo routes: Ad hoc adjustments of passenger aircraft to carry cargo to support cargo demand for greater revenue. China Airlines continues to stay focus on the development of COVID-19 and border policy in each country. It adds flights according to the rising demand and strengthens the aviation network to remain good competency. At the same time, the Company will keep abreast of the operating trend of the airline alliance and consolidate its leading position in the market with its strengths. China Airlines also adjusts its business strategies in different seasons (Christmas, Easter, New Year, etc.) to create revenue. Increase air cargo flight revenue: As the border control loosened and the economy recovered, the long-haul cargo route has gradually gone back to normal. China Airlines has not only utilized the belly hold of passenger flights to carry cargo to achieve higher revenue in cargo delivery, but flights are also expected to resume and increase for the European routes. The transit point will be adjusted to increase revenue. 777F aircraft is planned to enter service in LAX route to improve and enlarge the cargo capacity for the US routes; As for routes in Asia, China Airlines will capture the opportunities in high-price charter service and new route demand. Capacity will be maximized for freighters to increase the cargoes carried
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to enhance cargo delivery revenue. Optimize the fleet scale: China Airlines has optimized its fleet by replacing aging 744 passenger aircraft to reduce operating cost; Airbus A321neo narrow-body passenger aircraft is introduced in 2021 to replace Boeing 738 aircraft. The replacements have reduced carbon emission, saved more fuels, and become more environmentally friendly. The decline in unit cost will enhance the Company’s operating performance and competency. Three Boeing 777F are expected to be introduced from December 2020 to January 2021. The remaining three aircraft will be delivered before 2023. The fleet team will come to 21 aircraft by 2021, expecting to generate more freight revenue as the air cargo delivery demand and vaccine delivery remain strong. Safety measures for air traveling: To regain trust from passengers, China Airlines strictly follows the public health regulations promulgated by ICAO, IATA, ACI, and EASA. Various travel sanitation and safety tasks have been done on passenger service, aircraft, employee management and facilities. Other than the basic disease prevention measures such as temperature testing and wearing face masks, China Airlines actively elevated its disease prevention control by providing individual lunchbox, frequently sanitizing the luggage, reinforcing the aircraft cleaning, and improving the sanitization of the air-con system. China Airlines wants to guarantee tourists’ safety, improve the travel experience, and rebuild trust from the passengers.
Maintain robustness in finance: At the beginning of the COIVID-19 outbreak, China Airlines immediately adjusted its annual budget plan and canceled unnecessary spending. The capital was strictly controlled, and flexible labor deployment and personal leave projects were implemented to cut down on labor costs. In response to the large number of cancellations caused by COVID-19, credit facilities have been progressively raised since February 2020 to ensure a healthy capital turnover. To continuously utilize aircraft assets to generate working capital, in addition to the rental of an originally decommissioned Boeing 744F in 2019 to generate cash flow, China Airlines also continued to process the sale of the aging Boeing 738 aircraft and brought forward the decommission of the Boeing 744 passenger aircraft. In respect of the various relief measures provided by the government in the aviation industry, such as expenses reduction, subsidies, loan credit guarantees and interest subsidies, the Company continues to apply for these relief measures to alleviate operational pressures.
5.2.2 Procedures followed in the Production of Main Products A. Major Products and Their Main Uses
Major Products Main Uses Passenger services International passenger air transport and scheduled, non-scheduled, and charter flights. Cargo services International cargo, courier, mail, and package transport. In-flight sales Providing passengers with in-flight duty free sales services.
B. Major Products and Their Production Processes The Company is a member of the airline industry and not a manufacturer, so there is no production process in its operations.
5.2.3 Supply Status of Main Materials CAL is a member of the airline industry, not a manufacturer. Therefore, there is no need to produce raw materials. Aviation fuel makes up the largest proportion of operating costs. In addition to aviation fuel supplied at Taiwan Taoyuan Airport by CPC Corporation and Formosa Petrochemical Corporation, the Company also purchases fuel from large oil companies around the world at the various destinations served, so fuel supplies are very fragmented.
5.2.4 Major Suppliers and Clients A. Major Clients in the Last Two Calendar Years
CAL is a member of the airline industry and clients are members of the public.
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B. Major Suppliers in the Last Two Calendar Years CPC Corporation, Chevron Corporation, and Formosa Petrochemical Corporation, etc.
Unit: NT$ thousands
Item
2019 2020
Company Name Amount %
Relation with
Issuer
Company Name Amount %
Relation with
Issuer
1 CPC Corporation 17,197,546 11.33 None CPC Corporation 7,927,738 7.55% None
2 Chevron Corporation 5,126,545 3.38 None Chevron Corporation 3,315,153 3.16% None
3 Formosa
Petrochemical Corporation
4,939,381 3.25 None Formosa
Petrochemical Corporation
2,466,270 2.35% None
Other 124,493,760 82.04 Other 91,322,188 86.94% Net Total 151,757,232 100.00 Net Total 105,031,349 100.00%
Reasons for changes:
Fuel is the Company’s primary operating expense. Overall, purchases have remained stable.
5.2.5 Production in the Last Two Years Unit: thousand kilometers Year
Capacity and Traffic 2019 2020 Rate of Increase
(Decrease) Available Seat Kilometers (ASK) 58,590,098 16,116,497 -72.49% Revenue Passenger Kilometers (RPK) 47,462,113 9,097,129 -80.83% Load Factor (%) 81.01% 56.45% -24.56 ppt Freight Available Ton Kilometers (FATK) 8,012,739 8,830,722 10.21% Freight Revenue Ton Kilometers (FRTK) 5,370,078 6,367,751 18.58% Load Factor (%) 67.02% 72.11% 5.09 ppt Available Ton Kilometers (ATK) 13,269,365 10,278,085 -22.54% Revenue Ton Kilometers (RTK) 9,627,913 7,184,503 -25.38% Load Factor (%) 72.56% 69.90% -2.66 ppt Note 1: The above data includes scheduled flights, charter flights, and extra flights. Note 2: The above data includes Mandarin Airlines and Tigerair Taiwan.
Reasons for Changes: In 2020, to prevent the spread of COVID-19, countries adopted border control, which decreased the commercial and travel demand. Available Seat Kilometer (thousand km) and Revenue Passenger Kilometer (thousand km) in 2019 dropped sharply. Due to the cancellation of passenger flights in each airline, the supply of cargo delivery plummeted. China Airlines utilized the belly hold of passenger flights to support the cargo delivery instead. Thus, the Freight Tonne-Kilometer (thousand km) and Freight Revenue Tonne Kilometer (thousand km) increased compared to 2019.
5.2.6 Shipments and Sales in the Last Two Years Unit: thousand kilometers; NT$ thousands
Item 2019 2020
RPK/FRTK Amount RPK/FRTK Amount Passenger Revenue 47,462,113 111,413,435 9,097,129 25,704,367 Cargo Revenue 5,370,078 43,793,256 6,367,751 81,917,976 Other Operating Revenue - 13,237,469 - 7,628,207 Total - 168,444,160 - 115,250,550 Note 1: The above data includes scheduled flights, charter flights, and extra flights. Note 2: The above data includes Mandarin Airlines and Tigerair Taiwan.
Reasons for Changes: Due to the impact of COVID-19 in 2020, the passenger flights were supported by inelastic demand, leading to a fundamental decline in passenger flight revenue; cargo delivery supply dropped as well due to the limited supply from the belly hold of passenger aircraft, causing the imbalance of supply and demand in the freight market. The fare rose accordingly. China Airlines has been pursuing the best combination of profit, utilizing cargo-only aircraft and belly hold of passenger aircraft to support the cargo delivery. Therefore, the revenue in air cargo rose by 87% in 2020 compared to 2019.
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5.3 Human Resources Year 2019 2020 MAR 27, 2021
Number of Employees
Male 6,302 5,885 5,834 Female 5,937 5,505 5,425 Total 12,239 11,390 11,259
Average Age 41.40 42.72 42.97 Average Years of Service 14.00 15.35 15.58
Education
PhDs 0.09% 0.11% 0.11% Master’s Degrees 11.10% 12.02% 12.13%
Bachelor’s Degrees 82.63% 82.81% 82.75% Senior High School 5.89% 4.83% 4.78%
Below Senior High School 0.29% 0.24% 0.23%
5.4 Environmental Protection Expenditure
5.4.1 Total Losses and Penalties: None.
5.4.2 Company Countermeasures to Future Environmental Protection Issues A. ISO 14001 Environmental Management System and ISO 50001 Energy Management
System In order to integrate environmental protection operations into the daily operational risk management operations of the enterprise, China Airlines has introduced several international standard management systems (ISO 14064-1, ISO 14001, ISO 50001) since 2009, and has established and improved the environmental management operation mechanism of the enterprise, covering risk issues such as greenhouse gases, environmental management and energy management. The Company has formulated management strategies and action measures for relevant risks and opportunities identified in various aspects of the environment. (1)Management system operations
In 2017, we completed the revision of the ISO 14001: 2015 standard, incorporating the “life cycle thinking,” “stakeholder engagement,” “risk and opportunity management” and other aspects into the operation of the Corporate Environmental Management System (EMS). Following that, in 2019, we further developed ISO 50001:2018 version transferring operation, strengthening the identification and operation control of energy use, comprehensively reviewing and optimizing energy performance indicators, to fit into the international enterprise benchmark mode of thinking on sustainable development and governance.
(2)Value chain and outstation environment management In order to fully understand the global operational risks, the Company has initiated outstation risk/opportunity investigation and evaluation operation since 2018, strengthening the appreciation of international environmental-protection control trends, and ensuring the identification and handling of environmental energy-related risks and opportunities in operation. In 2019, we further focused on the current operational status of various issues of concern, and used best-case sharing to assist each station in seeking room for continuous improvement and implementing related operations. In addition to strengthening its own environmental sustainability management capacity, the Company also actively strengthens the sustainability value of the overall industrial chain. In 2018, it started the value chain environmental management operation and asked Group partners to set up environmental protection seeds, and by holding environmental/energy/carbon management workshop to promote Group partners’ understanding of the meaning and benefits of environmental/energy/carbon management. In 2019, it further improved the Group’s corporate environmental energy risk management capacity through environmental risk/opportunity investigation and communication meetings. In 2020, China Airlines further asked its value chain partners to promulgate appropriate policy on environment and energy. Management measures and monitoring tasks have been undertaken on key environmental impacts. More operating information was added (e.g., power/oil consumption) to reinforce the control and survey of the emissions. The Environmental Risk Analysis Result Briefing was held that invited the representative of partner companies and managers to demonstrate the result of the analysis and survey and share good practices.
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(3) Green maintenance operation and pollution prevention In order to reduce the environmental impact of the Company’s maintenance operations, in addition to implementing and continuously improving the aforementioned risk management operations, the EMO (park maintenance) Environmental Management Committee under the Company’s Corporate Environmental Committee also tracks and inspects on a quarterly basis the results of the environmental management of the maintenance plant area, in order to comply with environmental regulations, international trends, headquarters policies, and corporate environmental sustainability obligations. For example, for heating boilers and spray-painting operations at maintenance facilities, air pollutant emission tests are carried out annually in accordance with relevant regulations, while air pollution prevention fees are reported quarterly. Meanwhile, its operating unit performs declaration and arranges fee payment in accordance with the regulations every year, and operates in accordance with the water pollution prevention measures plan, waste disposal plan and related permit documents, and actively follows the principles of source reduction, poison reduction, and end-of-pipe recycling, continuously improving and enhancing environmental performance and ecological benefits.
The Company performs a third-party audit of ISO 14001 and ISO 50001 annually. The audit for 2020 was completed on December 25, 2020. The Company is the second airline in the world and the first Taiwanese airline to obtain certification for ISO14001 and ISO50001 at the same time. The scope of certification is also the most complete in the domestic service industry.
B. Environmental KPI Controls The Company has followed the United Nations’ SDGs and set several short-, medium-, and long-term environmental protection and energy conservation objectives, including those for aviation fuel efficiency, ground carbon emissions, water consumption, domestic waste, business waste, and photocopy paper consumption. The five major environmental management committees and the carbon management task force develop and implement annual environmental protection KPI, and the Corporate Environmental Committee chaired by the President conducts the annual audit and review. The Company completed a total of 73 KPIs in 2020 and reduced carbon emissions by 48,888 tons CO2e. 69 KPIs are further planned in 2021, and it is expected to reduce the emissions by 48,756 tons of CO2e. Please refer to the Corporate Social Responsibility Report for more information: https://calec.china-airlines.com/csr/report.html
C. Strengthening adaptability to climate risks and opportunities In order to strengthen our understanding of climate-related risks and opportunities, in 2018, the Company signed an initiative to supporting the international Task Force on Climate-Related Financial Disclosures, TCFD, and launched project operations, through interviews, questionnaires, workshops, high-level forums, and other engagement processes, exploring the current or future climate risks and opportunities faced by business operations in different climate scenarios, and their potential impacts and corresponding costs, to gradually establish the Company’s climate risk and opportunity management mechanism. In 2020, the Climate-Related Financial Disclosure Report, the first-ever in the aviation industry, was made and reported to the Board of Directors. For other relevant activities, please refer to China Airline's CSR website/focus on climate change: https://ppt.cc/fTsUJx
D. Solidifying environmental management supervision mechanism The Company promotes environmental management supervision mechanisms. Each unit independently implements the first-level audit of environmental management; second-level audit of environmental management is implemented by the headquarters. The double-audit mechanism ensures that environmental management is implemented at basic level operations at all units. The Company has completed the second-level audit in 2020 Q2 and Q4. In addition to the checklist items, the audit components also included improvement over the previous audit findings, the extent of redressal of external stakeholders’ concerns and annual KPI implementation review.
E. Environmental education and training for all employees To implement the corporate environmental and energy philosophy of “implementing environmental and energy conservation education to foster employees’ environmental awareness,” as well as to achieve the goal of “environmental protection by all employees,” the Company has set
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up an annual “environmental protection education campaign” for online or in-class environmental management education and training in Taiwan. The performance is as follows: (1)New employee and outstation supervisor environmental education and training implementation
rate is 100%. (2)The implementation rate of professional knowledge training on environmental/energy/carbon
management systems is 100%. (3)A total of 165 participants in the environmental protection forum for all employees on the
theme of climate change. (4)A total of 2,250 participants in interactive employee activities. (5)Published 24 promotional articles on the internal communication platform; set up “green
footprint” stickers on the ground and posters in the headquarters and maintenance park to convey information on 21 environmental protection measures, and set up plant identification placards.
F. Carbon Inventory and Reduction Project (1)Annual organization level greenhouse gas emission inventory operations
According to the ISO/CNS 14064-1 standard, the Company has conducted a greenhouse gas inventory each year since 2009, covering aviation, ground service and office administration operations, and also third-party verification operations in accordance with the requirements of “Reasonable Assurance”. The greenhouse gas emissions (Scope 1-2) in 2019 were 7,082,233 tons CO2e. In 2020, according to ISO14064-1:2018 standard, the Category 1-2 GHG emissions (ORIG Scope 1-2) were 5,808,374 tons CO2e, decreased by about 17.9%. In addition, according to the aforementioned standards, Category 3-6 were expanded and the emissions were 3,109,822 tons CO2e.
(2)EU ETS (European Emission Trading Scheme) operations According to the EU regulations, China Airlines' intra-EU flights emitted 62 tonnes of CO2 in 2020. After considering the operating condition and compliance, the financial unit sold its EU Emission Aviation Allowances (EUAA) in the account in 2019 and 2020 respectively. There are still 928 tonnes of CER (Certified Emission Reductions) available to partially offset the EUAA emission right. Further trading will be based on market demand and carbon pricing trends.
(3) CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) operation The Company follows the regulations of the Civil Aeronautics Administration and ICAO CORSIA SARPs, and has carried out monitoring, reporting, and verification (MRV) of carbon emission on international flights since 2019. The Company had completed the reporting and verification by the third party. On November 18, 2020, the Company received the verification approval notice from the Civil Aeronautics Administration. 77,293 international flights were verified in 2020, and the total emission was 6,339,661 tonnes.
G. Improving business eco-efficiency After obtaining the “Diamond Green Buildings Label” certification in 2017 for the headquarters of China Airlines, CAL Park, we continued to promote equipment renewal, optimize the operation process, and improve the overall energy efficiency of the buildings. In 2019, responding to the government’s green-energy policy, installed 99kW of solar photovoltaic facilities with grid-connected power generation on the rooftop of the simulator training building. As of December 31, 2020, these facilities had generated 215,000 kWh of electricity and reduced CO2e emissions by approximately 115 tons, and received National Renewable Energy Certificate(T-REC). These acts have fetched it the Energy Conservation Benchmark -- Silver Award of the Ministry of Economic Affairs, Bureau of Energy; Energy Conservation Leadership Award of Taipei City; No. 1 in Carbon Reduction and Electricity Conservation Reward Competition of Taoyuan Airport. Moreover, to reduce the risk of shortage of water resources, the Company has successively set up water meters at important water route nodes to track and analyze the flow direction of water
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resources and water-consumption hot spots, and has promoted water-reduction and recycling measures, including: purchasing water-conservation label products, water-conservation advocacy, setting up a rainwater-recovery system, promoting cooling-water recycling and introducing Eco-Shine environment-friendly cleaning solution. The quantum of tap water used dropped from 146.49 kilotons in 2019 to 126.77 kilotons in 2020, a decrease of about 13.46%. Data relevant to this has been disclosed in the Company’s 2020 CSR report and authenticated by third parties. In waste management, the Company manages waste based on five main principles: refuse, reduce, reuse, recycle, and repair. And with the goal of 100% waste-resource recovery, the Company is increasing its waste reuse rate year by year. In addition, considering that waste management in aviation services involves a wide range of businesses, the Company has constituted a waste- management team in 2019. Service and supply, planning and quality assurance units, as well as aviation catering, cabin cleaning, and other suppliers and partners are invited to form a periodical communication platform, where all parties come together to analyze the trends in international aviation service waste management to discuss response strategies. Domestic waste output from employees in 2019 and 2020 were 702,966 kg and 462,897 kg, respectively, showing a decrease of approximately 34.1%. Data relevant to this has been presented in the Company’s 2020 CSR report and authenticated by a third party.
H. Promote Green Consumption The Company actively shares its environmentalism philosophy and implementation performance irregularly through different platforms, such as social networks and inflight magazines, to establish and promote the awareness of green consumption. In 2017, in a further effort to follow international trends, the Company started promoting voluntary carbon-offsetting program for passengers: the "ECO TRAVEL - Carbon Offsetting" service. Diversified electronic-friendly service platforms, including the official website, ticket-purchasing system, and travel reminders, are used to invite passengers to practice "zero-carbon" flying. In 2020, a total of 180 people took part in the carbon-offsetting program, in which a total of 293.93 metric tons of carbon was offset. Such performance exceeded all other Taiwanese companies in the same industry during the same period. Other actions to elevate and promote green consumption include: (1) Selecting six environmental films to play on airplanes. (2) Presenting three posts about environmental topics and reports on social media. (3) Interactive educational work, such as promoting closing of windows in summer. (4) Adding environmental products in the catalogue of home-delivery duty-free goods, and include
China Airlines' sustainability logo. (5) Collaborated with Zenzhou Social Enterprise Co., Ltd., to develop China Airlines Foldable Silicone
Cups, clinching the Special Award in the Environmental Sustainability category in the Buying Power competition organized by the Ministry of Economic Affairs.
I. Continue to Support International Environmental Protection Research Projects The Company is working with several environmental-protection organizations, including Environmental Protection Administration, National Central University, and the European Union’s IAGOS-ERI in the implementation of the Pacific Greenhouse Gases Measurement (PGGM) project. In June 2012, July 2016, and July 2017, IAGOS instruments were installed on the Company’s B-18806, B-18317 and B-18316 aircraft, respectively. Since then, atmospheric gas data has been automatically collected during flights. The data is observed by important Taiwanese and foreign research organizations to gain an understanding of the changes in high-altitude gasses. This facilitates the understanding of environmental quality changes and provides reference material for important decision-making platforms, such as the UNFCCC. During July 1, 2012 to December 31, 2020, atmospheric data collected from a total of 12,810 flights was collected, contributing to the ecosystems on Earth and enhancing Taiwan's image in the environmentalism field.
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J. Transparent Disclosure of Environmental Protection Response and Performance Since 2012, the Company has been publishing its Corporate Social Responsibility (CSR) Report every year (former titles include Environmental Sustainability Report and Corporate Sustainability Report). The Company has also been establishing and updating the CSR network. It publicly and transparently discloses its sustainability governance strategies, as well as the results and performances in environmental, social, and financial aspects of its operations. The reports are an important tool and channel that facilitate discussion with stakeholders.
5.4.3 Countermeasures Unit: NT$ thousands Item
Year 2020 2021 2022 2023
Environmental protection equipment and maintenance costs (does not include depreciation) 13,968 14,000 14,000 14,000
Fees for wastewater equipment regular sampling inspections by inspection agencies and permitting 155 100 100 100
Waste disposal costs 3,854 4,000 4,000 4,000 Air pollution management costs 819 1,200 1,200 1,200 Aviation noise control fees (paid to the terminal based on airplane model and number of flights) 133,605 193,318 193,318 193,318
Fees for establishment of an environmental control system and strategic research project 1,616 4,000 4,000 4,000
Green procurement 10,199 20,000 20,000 20,000
5.4.4 Effect of Environmental Expenditure on Earnings Energy-saving equipment and improved management expenditure reduce both Company energy use and its operating costs.
5.4.5 Effect of Environmental Expenditure on Competitiveness Environmental performance has already become an important benchmark in achieving corporate social responsibility. With the rise in green consumers, actively investing in environmental improvements can positively improve our competitive position and improve brand image.
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5.5 Labor Relations 5.5.1 Employee benefits, training, retirement program, and status of
implementation, and labor-management agreements and protection of employee rights and interests A. Good Labor-Management Relations
On May 4, 1988, the China Airlines Union was established. On July 29, 2011, in accordance with revisions to the Labor Union Act, it was renamed the “China Airlines Employee Union.” In 2002, a collective agreement was signed between labor and management, which is regularly negotiated and renewed.
B. Retirement Program and Pension Preparations (1) Labor Standards Act Old-Age Pension System
The Labor Pension Reserve Supervisory Committee of the Company was established in June 1987 in compliance with letter Bei-Shi-She-II-Zi No. 43791 from the Taipei City Government. In the past years, the appropriation and payment of pensions in the old system of Labor Standards Act were handled according to Labor Standards Act. In 2020, employees who may claim from the old system pension account constitute approximately 42.3% of the employees of the Company (42.9% of Company employees are subject to both new and old systems). The monthly appropriation rate of old system of pensions has been increasing year by year since 2014 and has risen to 15% since January 2016, reaching the statutory limit. For employees who meet the retirement qualifications of the Labor Standards Act and whose retirement has taken effect, the concerned unit will take the initiative to get the pension, and apply to the local government for expenditure approval and reference or submit to the Taiwan Bank for payment application according to relevant regulations of the government; it will notify the employees to receive the payment once the check is prepared. The deposit of pension reserve funds is supervised by the Labor Pension Reserve Supervisory Committee of the Company. The business unit regularly holds a pension supervision committee meeting once every three months to report on the use of the pension reserve funds to the members, including the estimated result of the next year’s appropriation, number of retirements each quarter, and designated pension reserve funds account balance, and exchange of retirement-related issues.
(2) Labor Pension Act New Pension System According to the Labor Pension Statutes promulgated by the government on June 30, 2004, in the order Zong-Tong-Hua-Zong-(I)-Yi-Zi No. 09300121821, for employees who are subject to statutes, new system pensions shall be appropriated monthly to the Bureau of Labor Insurance according to statutes starting from July 2005. In 2020, employees who can claim from the new system pension account constitute approximately 57.7% of the employees of the Company (31.6% of Company employees can avail benefits from both new and old systems). The new system pension appropriation rate is 6% per month, and is deposited into the employee's designated personal pension account at the Bureau of Labor Insurance. After the retirement conditions are met, the employee has to apply to the Bureau of Labor Insurance for payment.
C. Labor-Management Communications (1) Units in the Company with a relatively large number of employees, such as the maintenance
facility, Ground Services Division, Cabin Crew Division, Flight Operations Division, and Taipei and Kaohsiung branches hold regular communication meetings. In addition, elected union representatives attend regular company-wide labor-management conferences to improve understanding and communication.
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(2) Establish an employee complaint mechanism and channels to ensure proper response: When employee rights have been violated or a situation is improperly handled, as mentioned in
the Regulations Governing Employee Complaints, a complaint can be lodged with the responsible operating unit or the Human Resources Division. If the employee is not satisfied with the response, he or she can appeal to the Human Resources Division. Eight written complaints from employees were handled in 2020.
D. Benefits (1) Employee care
Pension appropriation, labor and health insurance, employer liability insurance, group insurance, employee physical examination, and providing a nursing room.
(2) Employee stock ownership trust In August 1998, the Company set up an employee stock ownership trust, in which employees are free to participate. The amount, depending on the employee position, is deducted directly from their monthly salary. Through the end of 2020, a total of 2,112 employees participated.
(3) Profit sharing As per the Company charter, if the Company records a profit in a given year, it must set aside no less than three percent as employee bonuses. However, if the Company still has accumulated losses, it shall first retain a sum of money to make up for the shortage.
(4) Welfare system The Company’s Employee Welfare Committee was set up in December 1967. As stipulated by law, the Committee distributes benefits; handles the disbursement of wedding allowances, funeral allowances, disaster allowances, employee children excellence scholarships, birthday bonuses, and birth allowances; arranges visits to nursing homes, holds recreational sports activities, distributes meals and holiday gift certificates, and offers distress or purchase loans.
(5) Employee leisure Employee group activity subsidies, employee group travel subsidies, discounted tickets for current and former employees.
(6) Working environment Workplace compliance with occupational safety standards, gender equality.
E. Signing of Collective Agreement In 2019, the Company and the Pilots Union Taoyuan signed a collective agreement for the first time, effective for 3½ years. Since signing of the agreement with the China Airlines Corporate Union in 2002, it has been extended every 3 years. The two parties are currently negotiating the extension of the agreement, and the relevant negotiation records have been published on the Company’s internal enterprise information network.
F. Counseling To take care of our colleagues’ needs and participate in employees’ personal growth, the Company has employed professional counselors and psychiatrists to provide counseling services to employees. In 2020, there were a total of 75 counseling visits totaling 75 hours.
G. In addition to promoting employee education and training to enhance staff knowledge and skills, we also continue to accumulate knowledge and encourage exchange within the Company to build an organization for learning. Through the management personnel training program and the “China Airlines Lecture Hall” training system, the Company holds courses to improve employees’ strategic, management, professional, and general workplace skills.
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(1) To encourage employees participate in various classes and self-study opportunities provided by the ROC Workforce Development Agency under the Ministry of Labor, the self-pay portions of the costs for such courses will be subsidized by the Company if work-related courses are completed by an employee.
(2)The Company participated in the “Enterprise Human Resource Enhancement Program” of the Workforce Development Agency, Ministry of Labor and received training subsidy of NT$312.375 million.
(3) Popularize and hold strategic work, management, professional and general skills courses. Marketing training:
including marketing strategies, customer operations, freight business and related OJT training, with a total of 216 in-person classes and 76 e-classes; a total of 9,477 people were trained. Professional technical classes:
including enterprise safety/inspection work, flight services, joint management and EMO, with a total of 2,202 in-person classes and 624 e-classes; a total of 104,887 people were trained. Service:
including service quality assurance, introduction to public relations, service business, ground- service operations, and inflight products, with a total of 307 in-person classes and 163 e-classes; a total of 21,737 people were trained. Other:
including investment management unit business, law and insurance, financial, information technology, and human-resources management, with a total of 87 in-person classes and 41 e-classes; a total of 32,803 people were trained.
5.5.2 CAL has formulated an employee code of conduct or ethical code and arranges pre-employment Employee Rights and Responsibilities classes for new hires. The main content of the Company’s Employee Code of Conduct is as follows: The Company’s Employee Code of Conduct primarily consists of workplace ethics, privacy, occupational safety, discrimination and harassment, moral integrity, media and public image, conflict of interest avoidance, anti-trust and fair competition, exchanging gifts and anti-corruption, CAL asset and intellectual property protections, reporting responsibilities, respect for human rights, and commitment to environmental protection. The Company includes an assessment and consideration of these items of workplace behavior in its annual evaluation; employees unable to respect or who violate these regulations governing workplace behavior are penalized as per the Company's regulations governing rewards and penalties, based on the severity of the offense.
5.5.3 Implementation of work environment and employee personal safety protection measures The Company has formed an Occupational Safety and Health Committee in accordance with law. The committee’s roles are preventing occupational hazards and protecting the safety and health of all employees by reviewing, coordinating, and making recommendations pertaining to safety and health-related matters. The Chairman is served by the President. There is one vice chairman and one executive secretary under the Chairman. The Committee consists of the head of designated units, occupational safety and health personnel, engineering and technical personnel, medical personnel, and labor representatives appointed by the labor union as members. Meetings are held once every three months to collate and analyze occupational hazards of the Company and to report and track the follow-up safety and health management plans. The relevant minutes are published on the Company’s internal corporate information website. Formulate and follow the Occupational Safety and Health Management Manual; to adapt to trends of global international labor development, improve the
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efficiency of safety and health management, and promote systematic management measures, the Company established an independent safety and health management system and obtained ISO45001:2018 and TOSHMS certification on April 20, 2019, which serve as the management basis of occupational safety and health management system certification. Self-management and preventive measures based on the PDCA cycle mode are used to effectively control occupational disaster risk, improve occupational disease preventive management, improve occupational safety and health management performance, and actively implement occupational safety policies. The Company's Aviation Quality Database (AQD) is used to reflect potential hazards in the operating environment and implement risk assessment to reduce the occurrence of occupational disasters. The improvement rate of safety and health cases reached 100%, thereby providing employees with a safe, healthy and comfortable working environment and enhancing the Company's industry competitiveness. In response to the emerging epidemic, the Company actively strengthened the response to emerging infectious diseases, established cross-unit tiered mobilization mechanism, command system and operating procedures, integrated the related units’ common response, reminded employees to be alert, and activated the Company’s response mechanism according to the scale of the outbreak at the time. The Company has established a health management reporting system for employees with higher exposure risk levels (cabin crew), and handling mechanisms for abnormal reporting, remote working or adjusted schedules for ground service staff, strengthened various disease prevention advocacy, established cooperation mechanisms with relevant departments, established a cross-department communication platform, initiated multiple channels to provide real-time information, enhanced biohazard prevention awareness, conducted employee health education and training, preparation/management/use of epidemic prevention material, implemented risk management and control objectives to provide employees with a safe, healthy and comfortable working environment.
5.5.4 Over the most recent year through the date of the publication of this report, the estimated value of any losses or potential future losses due to labor disputes From 2020 to March 27, 2021, the Company was fined a total of NT$1.02 million by the government labor authorities for labor disputes or imperfections after labor inspections (please refer to P.73 for diversification). The Company will continue to maintain a genial interaction mechanism through diversified communication channels to achieve the goal of caring for employees’ welfare and to improving the quality of the work environment. Through comprehensive improvement to the satisfaction of employees of all categories, avoid issues that may arise from unnecessary labor disputes.
5.6 Major Contracts
Lease SASOFIV Aviation Ireland DAC 02/2006-02/2022 Aircraft Type:A330-300/No.:B-18351 - Lease SASOFIV Aviation Ireland DAC 02/2007-02/2023 Aircraft Type:A330-300/No.:B-18352 - Lease AerCap Ireland Ltd. 05/2008-05/2024 Aircraft Type:A330-300/No.:B-18353 - Lease Bluesky Magical 1001 Leasing Co. 11/2010-11/2022 Aircraft Type:A330-300/No.:B-18355 -
Lease MSN 1272&1278 Aircraft Leasing (Cayman) Ltd.
12/2011-12/2023 Aircraft Type:A330-300/No.:B-18356 -
Lease MSN 1272&1278 Aircraft Leasing (Cayman) Ltd.
01/2012-01/2024 Aircraft Type:A330-300/No.:B-18357 -
Lease AS Air Lease 83 Ireland Ltd. 10/2012-10/2024 Aircraft Type:A330-300/No.:B-18358 - Lease AS Air Lease 83 Ireland Ltd. 12/2012-12/2024 Aircraft Type:A330-300/No.:B-18359 - Lease Dianbao Aviation Leasing Ltd. 12/2013-12/2025 Aircraft Type:A330-300/No.:B-18360 -
Lease Wilmington Trust SP Services (Dublin) Ltd.
04/2013-04/2021 Aircraft Type:737-800/No.:B-18651 -
Lease Wilmington Trust SP Services (Dublin) Ltd.
05/2013-05/2021 Aircraft Type:737-800/No.:B-18652 -
Lease Wilmington Trust SP Services (Dublin) Ltd.
06/2013-06/2021 Aircraft Type:737-800/No.:B-18653 -
Lease Avolon Aerospace AOE 73 Ltd. 03/2014-03/2022 Aircraft Type:737-800/No.:B-18655 -
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Lease Avolon Aerospace AOE 78 Ltd. 05/2014-05/2022 Aircraft Type:737-800/No.:B-18656 - Lease SMBC Aviation Capital (UK) Ltd. 06/2014-06/2022 Aircraft Type:737-800/No.:B-18657 - Lease Jade Aviation (Ireland) AOE 5 Ltd. 06/2014-06/2026 Aircraft Type:A330-300/No.:B-18361 - Lease FPG Amentum 10/2014-09/2026 Aircraft Type:777-300ER/No.:B-18051 - Lease Oriental Leasing 4 Company Ltd. 10/2014-10/2026 Aircraft Type:777-300ER/No.:B-18052 - Lease Zeus Aircraft Owner 1 Ltd. 11/2014-11/2026 Aircraft Type:777-300ER/No.:B-18053 - Lease Korea Investment & Securities (KIS) 01/2015-01/2027 Aircraft Type:777-300ER/No.:B-18055 - Lease Sky High XXXVII Leasing Company Ltd. 05/2015-05/2027 Aircraft Type:777-300ER/No.:B-18001 - Lease Sky High XXXVII Leasing Company Ltd. 06/2015-06/2027 Aircraft Type:777-300ER/No.:B-18002 - Lease Sky High XXXVII Leasing Company Ltd. 08/2015-08/2027 Aircraft Type:777-300ER/No.:B-18003 -
Lease Wilmington Trust SP Services (Dublin) Ltd.
09/2015-09/2023 Aircraft Type:737-800/No.:B-18658 -
Lease ALC Blarney Aircraft Ltd. 10/2015-10/2023 Aircraft Type:737-800/No.:B-18659 - Lease Sky High XXXVII Leasing Company Ltd. 10/2015-10/2027 Aircraft Type:777-300ER/No.:B-18005 - Lease Zeus Aircraft Owner 2 Ltd. 01/2016-01/2028 Aircraft Type:777-300ER/No.:B-18006 - Lease UMB Bank N.A. 03/2016-03/2024 Aircraft Type:737-800/No.:B-18660 - Lease Zeus Aircraft Owner 3 Ltd. 05/2016-05/2028 Aircraft Type:777-300ER/No.:B-18007 - Lease Chilli Leasing LLC 09/2016-09/2024 Aircraft Type:737-800/No.:B-18661 - Lease Pacific Triangle Leasing Ltd. 09/2016-09/2024 Aircraft Type:737-800/No.:B-18662 - Lease BOC Aviation Ltd. 10/2016-10/2024 Aircraft Type:737-800/No.:B-18663 - Lease BOC Aviation Ltd. 11/2016-11/2024 Aircraft Type:737-800/No.:B-18665 - Lease BOC Aviation Ltd. 01/2017-01/2025 Aircraft Type:737-800/No.:B-18666 - Lease BOC Aviation Ltd. 02/2017-12/2025 Aircraft Type:737-800/No.:B-18667 - Lease Altitude Aircraft CAL I Ltd. 09/2019-113/09 Aircraft Type:A330-300/No.:B-18301 - Lease Altitude Aircraft CAL I Ltd. 09/2019-113/09 Aircraft Type:A330-300/No.:B-18302 - Lease Altitude Aircraft CAL I Ltd. 09/2019-113/09 Aircraft Type:A330-300/No.:B-18303 - Lease Altitude Aircraft CAL I Ltd. 09/2019-113/09 Aircraft Type:A330-300/No.:B-18305 - Lease Altitude Aircraft CAL I Ltd. 09/2019-113/09 Aircraft Type:A330-300/No.:B-18306 - Loan Taiwan Cooperative Bank 02/2008-02/2020 Aircraft Type:A330-300/No.:B-18317 - Loan Taipei Fubon Commercial Bank 10/2012-10/2019 Aircraft Type:737-800/No.:B-18610&B18617 - Loan Bank of Taiwan 12/2014-12/2019 Aircraft Type:747-400F/No.:B-18701 - Loan Hua Nan Commercial Bank 03/2015-03/2020 Unsecured Loan - Loan Mega International Commercial Bank 07/2015-07/2020 Aircraft Type:747-400F/No.:B-18711 - Loan Hua Nan Commercial Bank 06/2016-06/2021 Unsecured Loan - Loan E.SUN Commercial Bank 02/2020-02/2022 Unsecured Loan - Loan KGI Bank 02/2020-02/2022 Unsecured Loan - Loan Taishin International Bank 02/2020-02/2021 Unsecured Loan - Loan Bank SinoPac 02/2020-02/2023 Unsecured Loan - Loan Bank of Taiwan 07/2020-06/2022 Unsecured Loan - Loan Bank of Taiwan 10/2016-10/2028 Aircraft Type:A350-900/No.:B-18901 - Loan Bank of Communications 11/2016-11/2019 Unsecured Loan - Loan Bank of Communications 01/2017-01/2029 Aircraft Type:A350-900/No.:B-18902 - Loan Agricultural Bank of Taiwan 04/2017-04/2029 Aircraft Type:A350-900/No.:B-18905 - Loan Taiwan Business Bank 04/2017-04/2029 Aircraft Type:A350-900/No.:B-18905 - Loan Hua Nan Commercial Bank 06/2017-06/2029 Aircraft Type:A350-900/No.:B-18906 - Loan China Construction Bank Corporation 11/2017-11/2029 Aircraft Type:A350-900/No.:B-18903 - Loan Bank of Taiwan 04/2018-04/2030 Aircraft Type:A350-900/No.:B-18907 - Loan Hua Nan Commercial Bank 06/2020-06/2032 Aircraft Type:A350-900/No.:B-18917 - Loan Land Bank of Taiwan 06/2020-06/2032 Aircraft Type:A350-900/No.:B-18918 - Bills China Bills Finance Corporation 04/2016-04/2020 FRCP - Bills Mega Bills 07/2016-07/2020 FRCP - Bills International Bills Finance Corp. 09/2016-09/2020 FRCP - Bills China Bills Finance Corporation 04/2020-04/2023 FRCP - Bills International Bills Finance Corp. 03/2020-03/2025 FRCP - Bills China Bills Finance Corporation 05/2020-05/2023 FRCP -
Bills China Bills Finance Corporation and syndicate
12/2016-12/2020 FRCP Joint Underwriting, -
Bills China Bills Finance Corporation and syndicate
10/2017-04/2022 FRCP Joint Underwriting, -
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Bills Mega Bills and syndicate 11/2017-05/2021 FRCP Joint Underwriting, -
Bills International Bills Finance Corp. and syndicate
07/2019-08/2024 FRCP Joint Underwriting, -
Surface Rights Registration Contract of Taipei CAL Building
Northern Region Branch of National Property Administration of the Ministry of Finance
12/31/2016-12/30/2026
Renew lease period for 10 years according to the original contract. Rental price adjustments are based on the assessment of the Announced Land Current Value and publicly announced land value.
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Taipei CAL Building Lease Contract
FX Hotels Taiwan 09/01/99-12/30/2026
Rental subject: Located at No.131, Sec. 3, Nanjing E. Rd., Songshan Dist., Taipei City, CAL Building. Part of B1F 560.7 ㎡,1F 365.3㎡,10-13F 7,091 ㎡.Total 8,016.9 ㎡. 9 parking space at B1F
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Taipei CAL Building Lease Contract
OEC Freight Worldwide Co., Ltd. of the OEC Group
03/01/2016-12/31/2026
Rental subject: Located at No.131, Sec. 3, Nanjing E. Rd., Songshan Dist., Taipei City, CAL Building. 7F 1,796.8㎡, part of B1F 50.4㎡ 1 parking space at B1F, 12 parking spaces at B2F.
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Nankan CAL Park Land Lease Contract
Costco President Taiwan Inc.
Inception of the lease: 08/30/2012
Period of leasing: 20 years from the start of
lease
Rental subject: Land located at No.705 and No.705-1 Jinzhong part, Lujhu Dist., Taoyuan City. Total 27,709.21 ㎡
In accordance
with notarized
text
Kaohsiung CAL Building Lease Contract
FX Hotels Taiwan 12/31/2012-12/30/2032
Rental subject: Located at No.81, Zhonghua 3rd Rd., Qianjin Dist., Kaohsiung City. B1F 383.2 ㎡, 1F 336.8 ㎡, mezzanine 79.4 ㎡, 2F-12F 3,583.3㎡, Roof protrusion 117.2 ㎡. Total 4,499.9 ㎡
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CAL Park Building Lease Contract
CAL Park Co., Ltd.
01/01/2019-12/31/2021 The contract will be
automatically renewed for one year on the expiration of
this period and contract renewed every two years.
Rental subject: Administration Center Building, Crew Center Building, Flight Training Center Building, Basement Parking Lot. Total 83107.4 ㎡.
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Engineering consulting company commissioned technical service category
T.Y.Lin Taiwan Consulting Engineers. inc. 03/01/2019-11/30/2020
Renew lease period for 10 years according to the original contract. Rental price adjustments are based on the assessment of the Announced Land Current Value and publicly announced land value.
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Technical Cooperation Contract
Pratt & Whitney Effective from 12/18/2020,
with no expiry date.
Became a member of GTF Engine Repair Alliance and undertook the GTF-1100G engine maintenance business.
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Financial Information 115
Financial Information 6.1 Five-Year Financial Summary
6.2 Five-Year Financial Analysis
6.3 Consolidated Financial Statements for the Years
Ending December 31, 2020 and 2019, and
Independent Auditors’ Report
6.4 Parent Company Only Financial Statements for the
Years Ending December 31, 2020 and 2019 and
Independent Auditors’ Report
6.5 Audit Committee’s Review Report
116 Financial Information
VI. Financial Information 6.1 Five-Year Financial Summary 6.1.1 Consolidated Condensed Balance Sheet – Based on IFRS
Unit: NT$ thousands Year
Item Financial Summary for the Last Five Years (Note 1)
2016 (Note 2) 2017 (Note 3) 2018 (Note 4) 2019 (Note 5) 2020 (Note 6) Current assets 47,338,201 47,411,834 52,827,560 51,822,342 61,872,468 Property, plant and equipment 140,136,737 153,617,531 163,107,718 145,886,971 141,481,694 Intangible assets 1,137,115 1,019,345 1,210,796 1,182,692 1,076,351 Other assets 35,888,706 23,850,922 12,990,508 94,155,974 79,763,571 Total assets 224,500,759 225,899,632 230,136,582 293,047,979 284,194,084 Current liabilities
Before distribution 68,605,724 60,289,113 60,949,892 76,351,527 62,649,715 After distribution 68,605,724 61,482,783 62,086,170 76,351,527 -
Non-current liabilities 98,027,837 106,453,000 109,139,606 156,564,335 160,832,796 Total liabilities
Before distribution 166,633,561 166,742,113 170,089,498 232,915,862 223,482,511 After distribution 166,633,561 167,935,783 171,225,776 232,915,862 -
Equity attributable to shareholders of the parent
55,783,817 57,023,237 57,081,572 56,553,772 57,559,483
Capital stock 54,708,901 54,709,846 54,209,846 54,209,846 54,209,846 Capital surplus
Before distribution 799,932 799,999 1,241,214 2,488,907 1,187,327 After distribution 799,932 799,999 1,241,214 1,191,065 -
Retained earnings
Before distribution 206,092 1,664,405 1,615,661 (1,297,842) (350,581) After distribution 206,092 470,735 479,383 - -
Other equity interest 112,264 (107,641) 58,223 1,196,233 2,543,766 Treasury shares (43,372) (43,372) (43,372) (43,372) (30,875) Non-controlling interest 2,083,381 2,134,282 2,965,512 3,578,345 3,152,090 Total equity
Before distribution 57,867,198 59,157,519 60,047,084 60,132,117 60,711,573 After distribution 57,867,198 57,963,849 58,910,806 60,132,117 -
Note 1: 2016-2020 annual financial information was verified by Deloitte & Touche. Note 2: The 2016 Deficit Compensation Proposal was passed at the shareholder meeting held on June 22, 2017, with legal reserve bonds of NT$81,132,000 and
reversal of special reserve of 76,486,000 making up the shortfall. Note 3: In relation to 2017 surplus earnings distribution, after approval by the general meeting on June 27, 2018, the legal reserve appropriated was
NT$145,831,000, the special reserve appropriated was NT$118,810,000 and the cash dividend distributed was NT$1,193,670,000. Note 4: In relation to 2018 surplus earnings distribution, after approval by the general meeting on June 25, 2019, the legal reserve appropriated was NT$
114,493,000, the cash dividend distributed was NT$1,136,278,000, and reversal of special reserve of NT$105,843,000. Note 5: The 2019 Deficit Compensation Proposal was passed at the shareholder meeting held on June 23, 2020, with legal reserve bonds of NT$466,416,000,
special reserve of NT$12,967,000 and capital reserve of NT$1,297,843,000 to make up the losses. Note 6: The 2020 deficit make-up plan was approved by the 15th meeting of the 21st Board of Directors on March 18, 2021, but has yet to be approved at the
shareholders’ general meeting.
Financial Information 117
6.1.2 Consolidated Condensed Statement of Comprehensive Income – Based on IFRS
Unit: NT$ thousands; EPS (net) = NT$ Year
Item Financial Summary for the Last Five Years (Note 1)
2016 2017 2018 2019 2020 Revenue 141,079,107 156,121,785 170,711,607 168,444,160 115,250,550 Gross profit 18,005,906 21,972,411 17,207,531 16,686,928 10,219,201 Operating profit 4,564,687 8,826,160 4,022,383 2,665,821 2,184,416 Non-operating income and expenses (2,684,836) (5,302,197) (941,134) (2,762,638) (2,838,213) Pretax profit (loss) 1,879,851 3,523,963 3,081,249 (96,817) (653,797) Income from operations of continued segments - after tax
710,940 2,490,792 2,272,684 (675,002) (279,814)
Income from discontinued operations - - - - - Net income (loss) 710,940 2,490,792 2,272,684 (675,002) (279,814) Other comprehensive income (income/loss after taxes)
(681,669) (1,113,176) (578,363) 462,758 864,072
Total comprehensive gain (loss) for the year 29,271 1,377,616 1,694,321 (212,244) 584,258 Net income attributable to shareholders of the parent 571,540 2,208,066 1,790,361 (1,199,798) 140,000 Net income attributable to non-controlling interest 139,400 282,726 482,323 524,796 (419,814) Comprehensive income attributable to Shareholders of the parent
26,103 1,240,677 1,258,035 (647,085) 966,968
Comprehensive income attributable to non-controlling interest
3,168 136,939 436,286 434,841 (382,710)
Earnings (Loss) per share 0.10 0.40 0.33 (0.22) 0.03 Note 1: 2016-2020 annual financial information was verified by Deloitte & Touche.
118 Financial Information
6.1.3 Condensed Balance Sheet – Based on IFRS (Parent Company Only) Unit: NT$ thousands
Year Item
Financial Summary for the Last Five Years (Note 1) 2016 (Note 2) 2017 (Note 3) 2018 (Note 4) 2019 (Note 5) 2020 (Note 6)
Current assets 39,908,492 37,933,696 42,932,859 40,989,612 51,858,785 Property, plant and equipment 129,121,632 142,265,548 149,029,054 131,029,886 126,414,462 Intangible assets 1,115,101 989,327 979,708 971,298 867,453 Other assets 41,394,218 30,729,421 21,972,600 95,885,709 81,769,065 Total assets 211,539,443 211,917,992 214,914,221 268,876,505 260,909,765
Current liabilities
Before distribution
64,339,805 54,925,364 55,179,834 68,000,173 56,740,010
After distribution
64,339,805 56,119,034 56,316,112 68,000,173 -
Non-current liabilities 91,415,821 99,969,391 102,652,815 144,322,560 146,610,272
Total liabilities
Before distribution
155,755,626 154,894,755 157,832,649 212,322,733 203,350,282
After distribution
155,755,626 156,088,425 158,968,927 212,322,733 -
Equity attributable to shareholders of the parent
55,783,817 57,023,237 57,081,572 56,553,772 57,559,483
Capital stock 54,708,901 54,709,846 54,209,846 54,209,846 54,209,846
Capital surplus
Before distribution
799,932 799,999 1,241,214 2,488,907 1,187,327
After distribution
799,932 799,999 1,241,214 1,191,065 -
Retained earnings
Before distribution
206,092 1,664,405 1,615,661 (1,297,842) (350,581)
After distribution
206,092 470,735 479,383 - -
Other equity interest 112,264 (107,641) 58,223 1,196,233 2,543,766 Treasury shares (43,372) (43,372) (43,372) (43,372) (30,875) Non-controlling interest - - - - -
Total equity
Before distribution
55,783,817 57,023,237 57,081,572 56,553,772 57,559,483
After distribution
55,783,817 55,829,567 55,945,294 56,553,772 -
Note 1: 2016-2020 annual financial information was verified by Deloitte & Touche. Note 2: The 2016 Deficit Compensation Proposal was passed at the shareholder meeting held on June 22, 2017, with legal reserve bonds of NT$81,132,000 and
reversal of special reserve of 76,486,000 making up the shortfall. Note 3: In relation to 2017 surplus earnings distribution, after approval by the general meeting on June 27, 2018, the legal reserve appropriated was
NT$145,831,000, the special reserve appropriated was NT$118,810,000 and the cash dividend distributed was NT$1,193,670,000. Note 4: In relation to 2018 surplus earnings distribution, after approval by the resolution of the general meeting on June 25, 2019, the legal reserve
appropriated was NT$ 114,493,000, the cash dividend distributed was NT$1,136,278,000, and reversal of special reserve of NT$105,843,000. Note 5: The 2019 Deficit Compensation Proposal was passed at the shareholder meeting held on June 23, 2020, with legal reserve bonds of NT$466,416,000,
special reserve of NT$12,967,000 and capital reserve of NT$1,297,843,000 to make up the losses. Note 6: The 2020 deficit make-up plan was approved by the resolution of the 15th meeting of the 21st Board of Directors on March 18, 2021, but has yet to be
approved at the shareholders’ general meeting.
Financial Information 119
6.1.4 Condensed Statement of Comprehensive Income – Based on IFRS (Parent Company Only)
Unit: NT$ thousands; EPS (net) = NT$ Year
Item Financial Summary for the Last Five Years (Note 1)
2016 2017 2018 2019 2020 Revenue 127,524,864 139,815,211 150,264,792 146,372,401 106,327,123
Gross profit 15,275,980 17,966,397 12,649,836 11,364,235 11,136,944
Operating profit 4,475,707 7,358,114 1,847,567 80,235 4,884,855
Non-operating income and expenses
(2,938,456) (4,269,911) 468,064 (1,267,561) (4,713,760)
Pretax profit (loss) 1,537,251 3,088,203 2,315,631 (1,187,326) 171,095
Income from operations of continued segments - after tax
571,540 2,208,066 1,790,361 (1,199,798) 140,000
Income from discontinued operations
- - - - -
Net income (loss) 571,540 2,208,066 1,790,361 (1,199,798) 140,000
Other comprehensive income (income/loss after tax)
(545,437) (967,389) (532,326) 552,713 826,968
Total comprehensive gain (loss) for the tear
26,103 1,240,677 1,258,035 (647,085) 966,968
Net income attributable to shareholders of the parent
0.10 0.40 0.33 (0.22) 0.03
Note 1: 2016-2020 annual financial information was verified by Deloitte & Touche.
6.1.5 Condensed Balance Sheet – Based on ROC GAAP (Parent Company Only): Not Applicable.
6.1.6 Condensed Statement of Comprehensive Income – Based on ROC GAAP (Parent Company Only): Not Applicable.
6.1.7 Auditors’ Opinions from 2015 to 2020 Year Accounting Firm Name of CPA Audit Opinion
2016 Deloitte & Touche Yang, Chen-Hsiu; Chen, Li-Chi Unqualified Opinion 2017 Deloitte & Touche Yang, Chen-Hsiu; Chen, Li-Chi Unqualified Opinion 2018 Deloitte & Touche Yang, Chen-Hsiu; Huang, Jui-chan Unqualified opinions and other matters (Note 1) 2019 Deloitte & Touche Huang, Jui-chan; Cheng, Shiuh-Ran Unqualified opinions and other matters (Note 1) 2020 Deloitte & Touche Huang, Jui-chan; Cheng, Shiuh-Ran Unqualified opinions and other matters (Note 1)
Note 1: The financial statements and related information of some subsidiaries have not been audited by Deloitte & Touche since 2018; they have been audited by other accountants. The information on how the Company’s equity-accounted investments and overall gains are affected is explained in the paragraphs on "other matters".
120 Financial Information
6.2 Five-Year Financial Analysis 6.2.1 Consolidated Financial Analysis – Based on IFRS
Year
Item (Note 2)
Financial Summary for the Last Five Years (Note 1)
2016 2017 2018 2019 2020
Financial structure (%)
Debt ratio 74.22 73.81 73.91 79.48 78.64
Ratio of long-term capital to property, plant, and equipment
111.24 107.81 103.73 148.54 156.59
Solvency (%) Current ratio 69.00 78.64 86.67 67.87 98.76
Quick ratio 53.16 59.46 67.50 54.57 84.18
Interest earned ratio (times) 265.40 369.02 338.05 103.79 74.92
Operating performance
Accounts receivable turnover (times) 17.67 18.40 18.30 18.13 12.64
Average collection period 20.66 19.84 19.95 20.13 28.87
Inventory turnover (times) - - - - -
Accounts payable turnover (times) - - - - -
Average days in sales - - - - -
Property, plant, and equipment turnover (times)
1.05 1.06 1.08 1.09 0.80
Total assets turnover (times) 0.63 0.69 0.75 0.64 0.40
Profitability
Return on total assets (%) 0.80 1.60 1.48 0.76 0.75
Return on stockholders' equity (%) 1.20 4.26 3.81 (1.12) (0.46)
Pre-tax income to paid-in capital (%) 3.44 6.44 5.68 (0.18) (1.21)
Profit ratio (%) 0.50 1.60 1.33 (0.40) (0.24)
Earnings per share (NT$) 0.10 0.40 0.33 (0.22) 0.03
Cash flow Cash flow ratio (%) 25.71 47.35 44.34 49.15 15.52
Cash flow adequacy ratio (%) 303.17 351.58 366.94 518.35 579.32
Cash reinvestment ratio (%) 4.83 8.82 8.17 12.24 2.98
Leverage Operating leverage 4.99 3.16 6.00 14.20 16.28
Financial leverage 1.40 1.18 1.52 (3.95) (2.50)
Analysis of financial ratio differences for the last two years. (Not required if the difference does not exceed 20%)
1. Solvency ratios: Mainly due to the decrease in receipts in advance as compared to the previous period due to the impact of COVID-19 in 2020, resulting in a
decrease in current liabilities.
2. Operating and profitability ratios: Mainly due to the significant decrease in passenger revenue as compared to the previous period due to the impact of
COVID-19 in 2020, resulting in a decrease in sales revenue and operating profit.
3. Cash flow ratios: Cash flow from operating activities decreased as compared to the previous period due to the impact of COVID-19 on passenger
transportation in 2020. 4. Financial leverage: Mainly due to the impact of COVID-19 in 2020, operating profit decreased as compared to the previous period.
Financial Information 121
6.2.2 Financial Analysis – Based on IFRS (Parent Company Only) Year
Item (Note 2)
Financial Summary for the Last Five Years (Note 1)
2016 2017 2018 2019 2020
Financial structure (%)
Debt ratio 73.63 73.09 73.44 78.97 77.94 Ratio of long-term capital to fixed assets
114.00 110.35 107.18 153.31 161.51
Solvency (%) Current ratio 62.03 69.06 77.81 60.28 91.40 Quick ratio 45.82 49.03 57.87 45.87 76.90 Interest earned ratio (times) 246.03 350.56 292.02 60.78 99.48
Operating performance
Accounts receivable turnover (times)
15.92 16.62 16.57 16.72 12.34
Average collection period 22.92 21.96 22.46 21.83 29.57 Inventory turnover (times) - - - - - Accounts payable turnover (times) - - - - - Average days in sales - - - - - Fixed assets turnover (times) 1.03 1.03 1.03 1.05 0.83 Total assets turnover (times) 0.61 0.66 0.70 0.61 0.40
Profitability
Return on total assets (%) 0.75 1.54 1.33 0.51 0.89 Return on stockholders' equity (%) 1.00 3.91 3.14 (2.11) 0.25 Pre-tax income to paid-in capital (%) 2.81 5.64 4.27 (2.19) 0.32 Profit ratio (%) 0.45 1.58 1.19 (0.82) 0.13 Earnings per share (NT$) 0.10 0.40 0.33 (0.22) 0.03
Cash flow Cash flow ratio (%) 26.71 47.41 43.61 48.16 24.19 Cash flow adequacy ratio (%) 309.01 357.86 381.09 557.30 610.31 Cash reinvestment ratio (%) 4.94 8.48 7.68 11.34 4.50
Leverage Operating leverage 4.85 3.46 11.25 372.72 7.15 Financial leverage 1.38 1.21 3.45 (0.03) 2.32
Analysis of financial ratio differences for the last two years. (Not required if the difference does not exceed 20%) 1. Solvency ratios: Mainly due to the decrease in receipts in advance as compared to the previous period due to the impact of COVID-19 in 2020, resulting in a
decrease in current liabilities. 2. Operating ratios: Mainly due to a significant decrease in passenger revenue as compared to the previous period due to the impact of COVID-19 in 2020,
resulting in a decrease in sales revenue. 3. Profitability ratios: Mainly due to the increase in global demand for cargo transportation in 2020, resulting in an increase in operating profit as compared to
the previous period. 4. Cash flow ratios: Cash flow from operating activities decreased as compared to the previous period due to the impact of COVID-19 on passenger
transportation in 2020. 5. Leverage ratios: Mainly due to the impact of COVID-19 in 2020, the passenger income decreased as compared to the previous period and the operating profit
increased as compared to the previous period. Note 1: 2016-2020 annual financial information was verified by Deloitte & Touche. Note 2: The calculations of the above financial ratios are based on the following formulas:
1. Financial structure (1) Debt ratio = total liabilities / total assets (2) Ratio of long-term capital to property, plant, and equipment = (total shareholders' equity + non-current liabilities) / net property, plant, and
equipment 2. Solvency
(1) Current ratio = current assets / current liabilities (2) Quick ratio = (current assets – inventory – prepaid expenses) / current liabilities (3) Interest earned ratio (times) = earnings before interest and taxes / interest expenses
3. Operating performance (1) Accounts receivable turnover (including accounts receivable and notes receivable arising from business activities) = net sales / average accounts
receivable (including accounts receivable and notes receivable arising from business activities) (2) Average collection period = 365 / average accounts receivable turnover (3) Inventory turnover = cost of goods sold / average inventory (4) Accounts payable turnover (including accounts payable and notes payable arising from business activities) = cost of goods sold / average
accounts payable (including accounts payable and notes payable arising from business activities) (5) Average inventory turnover days = 365 / inventory turnover ratio (6) Property, plant, and equipment turnover = net sales / net property, plant, and equipment (7) Total asset turnover = net sales / average total assets
4. Profitability (1) Return on total assets = [net income + interest expense x (1 - effective tax rate)] / average total assets (2) Return on stockholders’ equity = net income / average stockholders’ equity (3) Net margin = net income / net sales (4) Earnings per share = (net income attributable to owners of the parent – preferred stock dividends) / weighted average number of shares
outstanding 5. Cash flow
(1) Cash flow ratio = net cash flows from operating activities / current liabilities (2) Cash flow adequacy ratio = five-year sum of net cash flows from operating activities / five-year sum of (capital expenditures + increase in
inventory + cash dividends) (3) Cash flow cash reinvestment ratio = (net cash flows from operating activities – cash dividends) / (gross property, plant, and equipment +
long-term investments + other non-current assets + working capital) 6. Leverage
(1) Operating leverage = (net sales – variable operating costs and expenses) / operating profit (2) Financial leverage = operating profit / (operating profit – interest expenses)
122 Financial Information
6.2.3 Consolidated Financial Analysis – Based on ROC GAAP: Not Applicable.
6.2.4 Financial Analysis – Based on ROC GAAP (Parent Company Only): Not Applicable.
6.3 Consolidated Financial Statements for the Years Ended December 31, 2020 and 2019, and Independent Auditors’ Report: Please refer to Appendix 1.
6.4 Parent Company Only Financial Statements for the Years Ended December 31, 2020 and 2019, and Independent Auditors’ Report: Please refer to Appendix 2.
Financial Information 123
6.5 Audit Committee’s Report Audit Committee’s Report
The Board of Directors shall prepare and send (1) the 2020 consolidated financial statement and
individual financial statement that have been jointly audited by Deloitte CPAs Huang, Jui-Chan and
Cheng, Shiuh-Ran, who released an official unqualified opinion by March 18, 2021, and (2) the 2020
business report and Earnings Distribution Statement after having found to have no discrepancies by
this audit committee and, thereupon, issue a report in accordance with the items stipulated in Article
14-4 of the Securities and Exchange Act and Article 219 of the Company Act.
China Airlines
Convener of the audit committee: Chang, Hsieh Gen-Sen
March 18, 2021
124 Review of Financial Conditions, Financial Performance, and Risk Management
Review of Financial Conditions, Financial Performance, and Risk Management 7.1 Analysis of Financial Status
7.2 Analysis of Operation Results
7.3 Analysis of Cash Flow
7.4 Major Capital Expenditure Items
7.5 Investment Policy Last Year, Main reasons for Profits/ Losses, Improvement Plans and Investment Plans for the Coming Year
7.6 Analysis of Risk Management
Review of Financial Conditions, Financial Performance, and Risk Management 125
VII. Review of Financial Conditions, Financial Performance, and Risk Management
7.1 Analysis of Financial Status (Consolidated) Analysis of changes in assets, liabilities, and equity over the past two years: Unit: NT$ thousands
Year Item 2020 2019
Difference
Amount %
Current assets 61,872,468 51,822,342 10,050,126 19.39
Property, plant and equipment 141,481,694 145,886,971 (4,405,277) (3.02)
Intangible assets 1,076,351 1,182,692 (106,341) (8.99)
Other assets 79,763,571 94,155,974 (14,392,403) (15.29)
Total assets 284,194,084 293,047,979 (8,853,895) (3.02)
Current liabilities 62,649,715 76,351,527 (13,701,812) (17.95)
Non-current liabilities 160,832,796 156,564,335 4,268,461 2.73
Total liabilities 223,482,511 232,915,862 (9,433,351) (4.05)
Capital stock 54,209,846 54,209,846 - -
Capital surplus 1,187,327 2,488,907 (1,301,580) (52.30)
Retained earnings (350,581) (1,297,842) 947,261 72.99
Other equity 2,543,766 1,196,233 1,347,533 112.65
Treasury shares (30,875) (43,372) 12,497 28.81
Non-controlling interests 3,152,090 3,578,345 (426,255) (11.91)
Total equity 60,711,573 60,132,117 579,456 0.96 Analysis of changes in financial ratios: 1. Assets: Mainly due to the impact of COVID-19 in 2020, to ensure the availability of funds, credit facilities and issuance of commercial
papers were gradually increased, resulting in an increase in current assets. Also, the annual amortization of the right-of-use assets reduces other assets once IFRS 16 is applied.
2. Liabilities: Mainly due to a significant decrease in receipts in advance due to the impact of COVID-19 in 2020, resulting in a decrease in contract liabilities of NT$15,841 million as compared to the previous period.
3. Capital surplus: Mainly to make up the accumulated losses of NT$1,298 million in 2019. 4. Other equity: Mainly due to the changes in the fair value of financial assets and hedging instruments measured by fair value through
other comprehensive income. Future response actions: The above changes do not significantly affect the Company.
7.2 Analysis of Financial Performance (Consolidated) Financial Performance Analysis Table Unit: NT$ thousands
Year Item 2020 2019
Difference Amount %
Revenue 115,250,550.00 168,444,160.00 (53,193,610.00) (31.58)
Cost 105,031,349.00 151,757,232.00 (46,725,883.00) (30.79)
Gross profit 10,219,201.00 16,686,928.00 (6,467,727.00) (38.76)
Operating expenses 8,034,785.00 14,021,107.00 (5,986,322.00) (42.70)
Operating income (loss) 2,184,416.00 2,665,821.00 (481,405.00) (18.06)
Non-operating income and expenses (2,838,213.00) (2,762,638.00) (75,575.00) (2.74)
Pretax profit (loss) (653,797.00) (96,817.00) (556,980.00) (575.29)
Income tax expense (373,983.00) 578,185.00 (952,168.00) (164.68)
Net income (loss) (279,814.00) (675,002.00) 395,188.00 58.55
Other comprehensive income 864,072.00 462,758.00 401,314.00 86.72
Total comprehensive gain (loss) for the year 584,258.00 (212,244.00) 796,502.00 375.28 Analysis of changes in financial ratios: 1. Operating revenue, gross profit, costs, expenses and profit or loss before tax: Due to the impact of COVID-19 in 2020, passenger revenue
and related costs decreased significantly as compared to the previous period. 2. Income tax and post-tax profit or loss: The impact of COVID-19 in 2020 resulted in a loss for most of the subsidiaries and income tax
benefit recognized. 3. Other comprehensive income (net): Mainly due to changes in the fair value of financial assets and hedging instruments assessed by fair
value of other comprehensive profit and loss cases. 4. Total comprehensive income for the period: The combined effects of the descriptions of 1, 2, and 3.
126 Review of Financial Conditions, Financial Performance, and Risk Management
7.3 Analysis of Cash Flow (Consolidated) 7.3.1 Cash Flow Analysis for the Current Year
Unit: NT$ thousands Year
Item 2020 2019 Difference
Amount % Cash and Cash Equivalents, Beginning of Year 28,459,528.00 24,937,537 3,521,991.00 14.12 Net Cash Flow from Operating Activities 9,723,475.00 37,526,612 (27,803,137.00) (74.09) Net Cash Flow from Investing Activities (25,048,173.00) (16,053,122) (8,995,051.00) (56.03) Net Cash Flow from Financing Activities 13,869,177.00 (17,614,558) 31,483,735.00 178.74 Exchange Rate Adjustment 121,930.00 (336,941) 458,871.00 136.19 Cash and Cash Equivalents, End of Year 27,125,937.00 28,459,528 (1,333,591.00) (4.69)
Analysis of change in cash flow in the current year: 1. The difference in cash flow from operating activities was mainly due to the impact of the COVID in 2020, resulting in a significant decrease
in receipts in advance as compared to the previous period. 2. The difference in cash flow from investment activities was mainly due to the settlement of 777F aircraft and designated USD deposits as
hedging instruments to reduce the USD exchange rate risk. 3. The difference in cash flow from financing activities was mainly due to financing to borrow funds for disease-related projects from the
government to ensure the availability of funds. 7.3.2 Remedy for Cash Deficit and Liquidity Analysis: None. 7.3.3 Cash Flow Analysis for the Coming Year
The cash balance at the beginning of the period was approximately NT$20.0 billion, the expected net cash inflow from operating activities for the year was approximately NT$18.7 billion. Cash outflow from investing activities was NT$18.0 billion, and cash outflow from financing activities was NT$20.6 billion. The cash shortage is expected to be financed by the issuance of domestic unsecured convertible corporate bonds, medium-term commercial paper and medium-term credit loans of approximately NT$21.0 billion, with a balance of NT$21.1 billion at the end of the period.
7.4 Major Capital Expenditure Items (Parent Company Only) Major capital expenditures primarily include purchases of new airplanes as part of the operational expansion, which does not have a significant impact on the Company’s financial operations.
7.5 Investment Policy during the Last Year, Main reasons for Profits/ Losses, Improvement Plans and Investment Plans for the Coming Year To support our primary airline operations and enhance competitiveness of the CAL Group, investments are made primarily in airline industry-related companies. Currently, these include air transport, ground services, logistics and warehousing, air cargo terminals, airline catering, laundry, information networks, aeronautics, tourism services, and investing and leasing industries to create a comprehensive air service network and wide-ranging services. Due to the year-long impact of the COVID-19 epidemic in 2020, the Company’s loss on investments accounted for using the equity method amounted to approximately NT$1.85 billion. In the coming year, the Company will continue to evaluate potential investments in passenger, cargo, aircraft maintenance and aviation training.
7.6 Analysis of Risk Management 7.6.1 Effects of Changes in Interest Rates, Foreign Exchange Rates and Inflation
on Corporate Finance, and Future Response Measures A. Impact of changes in interest rates, foreign exchange rates, and inflation on Company income
Although changes in interest and foreign exchange rates have an impact on Company income, effective control on the impact is limited.
Review of Financial Conditions, Financial Performance, and Risk Management 127
B. Response measures to changes in interest rates, foreign exchange rates, and inflation To prevent changes in interest rates, foreign exchange rates, and inflation from creating risks to the Company’s overall finances, we hold regular meetings of the Board of Directors Risk Committee, and remain alert to economic and financial developments both in Taiwan and overseas to develop a hedging strategy, evaluate performance of derivatives, and set an appropriate hedge ratio. These controls help prevent changes by utilizing financial hedging instruments in the financial environment and oil prices from creating systemic financial risks and enable CAL to properly manage risk.
7.6.2 Policies, Main reasons for Gain/Loss and Future Response Measures with Respect to High-risk, High-leveraged Investments, Lending or Endorsement Guarantees, and Derivatives Transactions A. The Company does not involve in high-risk, highly-leveraged investments.
B. The Company has developed the Operational Procedures for Lending Funds to Others and Operational Procedures for Endorsements/Guarantees, and risks of such operations are controlled through strict assessment. Therefore, loans and endorsements/guarantees do not bring profits or cause losses to the Company.
C. Company’s derivative products include forward foreign exchange and foreign exchange options contracts and oil options contracts, which are primarily to hedge against the risk of fluctuations in oil prices, interest rates, and foreign exchange rates. Transactions are performed in accordance with the Company’s Operational Procedures for Derivatives Trading and are regularly evaluated to ensure effective risk controls.
7.6.3 Future Research & Development Projects and Corresponding Budget: Please refer to page 95-96.
7.6.4 Effects of and Response to Changes in Policies and Regulations Relating to Corporate Finance and Sales: None.
128 Review of Financial Conditions, Financial Performance, and Risk Management
7.6.5 Effects of and Response to Changes in Technology and the Industry Relating to Corporate Finance and Sales: 1. Information Security Management Structure
China Airlines' information operations are in compliance with international information security standards and domestic information security regulations and are implemented in its daily general business; to this end, the “Information and Communication Security Promotion Team” of China Airlines was set up, in which the Vice President of the Information Management Division acts as the convener and reports the information and communication security business to the Board annually. Chairman Hsieh, Su-Chien is well qualified and has wide experience in management and cybersecurity. He has earlier served as the chairman of Sabre (Taiwan) Ltd., and is quite conversant with cybersecurity governance and monitors information operations in a timely manner.
2. Information Security Management Practices
In response to external attack methods, China Airlines has deployed relevant defense mechanisms and commissioned external information security experts to conduct penetration tests and information security health checks (including network structure inspection, network malicious activity inspection, etc.) on an annual basis. China Airlines also conducted internal information and communication security incident notification and response drills to review the effectiveness of the defense mechanisms. In each stage of system development and maintenance, weakness identification and repair are performed with various testing technologies to ensure the safety of our service.
3. Information Security Maintenance (1)Regular Evaluations and Exercises
In accordance with the Cyber Security Management Act, CAL conducts risk assessment of information and information and communication systems every year, and evaluates the cybersecurity responsibility levels of the core information and communication systems in aspects of confidentiality, integrity, availability, and compliance. CAL also develops a business continuity plan for the core information and communication systems and conducts a business continuity drill at least once every six months. This ensures timely and effective recovery of operational conditions to minimize possible losses in the event of disruptions. In addition, operational continuity plans are re-examined and evaluated periodically to ensure availability and integrity.
Review of Financial Conditions, Financial Performance, and Risk Management 129
(2)Transportation Safety Training Every year, at least 4 cybersecurity and information personnel receive at least 12 hours of professional training or functional training on cybersecurity; other employees receive at least 3 hours of general cybersecurity education and training. Additionally, social engineering exercises are carried out at least once every six months to enhance information security awareness. Through the promotion of information security in multiple pays, the Company also incorporates ethical corporate management into staff performance appraisal and human resources policies, establishes a clear and effective reward and punishment system, and abides the practices of workplace conduct. The Information Management Division conducts self-inspection and legal compliance evaluations on a semi-annual basis and independent audits are carried out by the audit department to ensure the overall operation of the system is running smoothly.
(3)Notification of Cyber Security Incidents The cybersecurity incident notification and response mechanism are initiated based on the level of cybersecurity incidents, and emergency preparedness; notification and response procedures are in place to control their impact and post-incident recovery. CAL develops the security incident notification & contingency drill plan at the beginning of each year and completes internal cybersecurity exercise by the end of each year.
4. Information Security Verification and Audit In order to maintain the effectiveness of the certification and establish a more complete management system, the Company implemented the ISO/IEC 27001: 2013 validation of the core information communication system, the Information Security Management System in 2020. Also, the Company attempted, for the first time, to introduce the ISO/IEC 27701: 2019 standard of the privacy information management system introduced by the International Standard Organization in August 2019. Based on the existing Information Security Management System (ISMS), we expanded the requirements and implementation of the privacy information management system and obtained the certificate of approval in November 2020. Per examination by the Information Management Division in 2020, neither the monitoring nor warning information from the defense system, which detects threats to information security, was confirmed to be a security incident caused by hacker intrusion or virus infection.
130 Review of Financial Conditions, Financial Performance, and Risk Management
5. Responses to the COVID-19 epidemic In response to the COVID-19 epidemic, the Information Management Division of the Company formulated the “Response Measures and Information for Social Distancing in Office and Remote Working For Employees” and the “Information Management Division's Response Measures for Response to Major Epidemics” and the “Operation Procedures for Maintenance and Operation of Applications System during Major Epidemics” in February 2020, enabling domestic and foreign employees to work at home. If there are network outages caused by cybersecurity threats or other disasters, notification and response can be implemented immediately. According to the Company’s regulations, firewall records are reviewed regularly to monitor the network usage via VPN. Accounts with no usage records or have expired, as well as accounts of transferred or terminated employees are deleted to reduce the cybersecurity risks.
6. Personal Information Protection Management System The Company places great importance on customer privacy and regards it as a basic service principle. In addition to complying with international and foreign laws related to personal information, the Company established the Personal Information Management Committee in 2014. Through the establishment of the Personal Information Protection Management System, the Company implements personal data protection and complies with the relevant regulations to protect our customers' rights and minimize the impact of personal data breach risks. In 2018, in order to comply with the General Data Protection Regulation (GDPR) put into effect by the European Union, the role of Data Protection Officer (DPO) has been established in the Company to oversee the management of personal data. The Company has publicly disclosed the relevant privacy policies and statements on privacy protection on the official website of China Airlines. Internally, it implemented the personal information management system, set up channels for the exercise of personal information rights, held annual personal information incident drills, confirmed the implementation of personal information inventory and risk assessment, comprehensively strengthened the concept of privacy protection and code of conduct of employees through education and training, and completed the personal information audit system. In response to various technological changes in the post-epidemic era, the Company continues to monitor the correlation between emerging technologies and privacy protection, and assess its risks through the implementation of the Data Protection Impact Assessment (DPIA) as a reference for future response measures. China Airlines is dedicated to protecting customers' personal information. In the future, CAL will continuously protect customers' personal information to increase its competitive advantage and customer trust.
7.6.6 The Impact of Changes in Corporate Image on Corporate Risk Management, and the Company’s Response Measures The Company has established a long-term safety management system, complied with standard operating procedures, continued to improve aviation and aircraft maintenance, and implemented the highest standard of flight safety. In the spirit of SOP+, various services were implemented, which were recognized by major domestic and overseas awards. The Company also actively invested in social welfare, fulfilled corporate responsibilities and incorporated environmental management into its operational focus. If there is any untrue or negative news, message, or incident that affects the Company's image, we will respond immediately, explaining and clarifying to the public, and post explanations on our website or social media platform if necessary, to reduce the negative effects.
At the time of the spread of COVID-19, the global aviation industry was hit and epidemic safety became another focus of operation management. The Company constantly pays attention to market trends, adjusts passenger and cargo flights in response to demand and focuses on cargo transportation, and actively plans to capture opportunities for passenger and cargo passengers such as seasonal travel, themed flights or business charter flights to increase revenue through multi-sales strategies. In addition, correct information on epidemic prevention management is disseminated in a timely manner to ensure the safety of passengers and crew.
7.6.7 Expected Benefits from, Risks Relating to, and Response to Merger and Acquisition Plans: None.
Review of Financial Conditions, Financial Performance, and Risk Management 131
7.6.8 Expected Benefits from, Risks Relating to, and Response to Factory Expansion Plans: None.
7.6.9 Risks Relating to and Response to Excessive Concentration of Purchasing Sources and Excessive Customer Concentration: None.
7.6.10 Effects of, Risks Relating to, and Response to Large Share Transfers or Changes in Shareholdings by Directors or Shareholders with Shareholdings of over 10%: None.
7.6.11 Effects of, Risks Relating to, and Response to the Changes in Management Rights: None.
7.6.12 Litigation or Non-litigation Matters Any major litigation, non-litigation, or administrative disputes involving the Company that are already finalized or still pending.
No. Case Name Summary Disputed Amount
(NT$) Litigants Current Status
1 Litigation for refunding overpayment on aircraft rental
1. In 2002, the Civil Aeronautics Administration (CAA) unilaterally terminated an aircraft rental contract with the Company for six aircraft, resulting in early termination of the contract, which changed the nature of the lease and the rent calculation basis and resulted in rent overpayment by the Company.
2. In 2010, the CAA resolved that the Civil Aeronautics Administration should pay the Company more than NT$1.5 billion and in 2015 the Supreme Court revoked the arbitration judgment, which resulted in the Company filing a civil lawsuit against the CAA to recoup the aforementioned rent overpayment.
3. This case has gone through the First and Second Instance trials. The court agreed that there was an overpayment of rent. However, due to incorrect logic used in the calculation, it mistakenly recognized that the Company had offset the final rent payment, so it was judged that the Company had no reason to request the CAAC to return the overpayment of rent.
More than 1.2 billion
Plaintiff: China Airlines Defendant: Civil Aeronautics Administration
The Third Instance trial of the case has commenced on November 27, 2019, and is under hearing by the Supreme Court.
7.6.13 Other Major Risks: 1. CAL fully understands the importance of risk management and the potential for interaction among
different types of risk. We formed a Risk Committee directly under the supervision of the Board of Directors to improve risk management and require subordinate units to control for each major risk category.
132 Review of Financial Conditions, Financial Performance, and Risk Management
The CAL risk management organization and units responsible for implementation:
Type of Risk Responsible Department Risk Management Measures
Operating Risk Corporate Development Office
The operating environment for the aviation industry is ever changing. Major political and economic events as well as unexpected internal or external events can have a huge impact on the company’s operations. The Corporate Development Office analyzes potential political, economic, aviation industry, and internal Company situations that could affect the Company and proposes concrete response plans to reduce their impact on China Airlines’ strategic direction and annual business plan.
Safety Risk Corporate Safety Office
Safety is the most basic principle and core value of China Airlines' business operation, as well as our responsibility and commitment to each customer. According to the Safety Management System (SMS), the Company constructs safety risk management. In relation to internal and external operation risks, such as navigation, maintenance, air service, and ground operation, the Company maintains operational risk within an acceptable range through continuous hazard identification and risk management, and proposes improvement measures to effectively enhance the overall safety performance of the Company.
Financial Risk Finance Div.
Both domestic and global economy affect the operating results of the Company. Primary operating costs for airlines include interest rate, exchange rate, and fuel, and outside factors that can result in significant volatility. Therefore, the Finance Division utilizes financial hedging instruments to fix the above factors within a certain range, regularly monitors financial risk, and develops relevant strategies and measures to effectively manage financial risk.
2. Business strategy improvement measures in response to the impact of COVID-19 in 2020 are as follows:
(1) A rolling schedule review and increase/decrease program of passenger flights will be carried out in accordance with national quarantine regulations and changes in market supply and demand, while a flexible deployment of passenger aircraft to support loading mails will reduce the impact of the epidemic on passenger transportation business.
(2) Strive to capture all kinds of business opportunities (students, enterprises, Taiwanese businesses, themed and chartered flights) during the epidemic period to increase revenue.
(3) Comprehensive review and timely revision of various fares, keeping abreast of developments in the airline alliance, strengthening membership and e-commerce relationships, and visiting and developing potential enterprise customers.
(4) For flights with rigid demand, China Airlines no longer follows the previous forward control method with reference to the sales price and location arrangement to increase the revenue of passenger operations.
(5) Strengthen passenger reservation and ticketing refresher courses to enhance the professional education of transport-related personnel globally.
7.7 Other Important Matters: None.
Special Disclosure 133
Special Disclosure 8.1 Summary of Affiliated Companies
8.2 Private Placement Securities in the Most Recent
Years
8.3 Shares in the Company Held or Disposed of by
Subsidiaries in the Most Recent Years
8.4 Special Notes
8.5 Situations with Major Impacts on Shareholder
Equity or Share Prices
134 Special Disclosure
VIII. Special Disclosure 8.1 Summary of Affiliated Companies 8.1.1 Basic information of Affiliated Companies
A. Affiliated Companies Chart
Dec 31, 2020 Note 1: The affiliates listed above are companies in which the company has invested and has a 50% or higher voting share, or the means to
control, either directly or through a subsidiary company. China Pacific Laundry Services, China Pacific Catering Services, and Nordam Asia are joint ventures.
Note 2: Yestrip Co., Ltd. was liquidated on October 26, 2020 after the approval of the Taipei City Government. The liquidation procedure is underway.
Special Disclosure 135
B. Basic information of Affiliated Company Dec 31, 2020/Unit: NT$ thousands
Company Date
Founded Address
Capital (Note)
Principal Activities
1. CAL-Dynasty International, Inc. 07/01/1991 200 Continental Blvd. Suite #101 El Segundo, CA90245, U.S.A.
775,241 Holding & investing
1A Dynasty Properties Co., Ltd. 08/15/1973 200 Continental Blvd. Suite #101 El Segundo, CA90245, U.S.A.
14,826 Real estate investing, property leasing
1B Dynasty Hotel of Hawaii, Inc. 12/10/1973 1830 Ala Moana Blvd. Honolulu, Hawaii 96815, U.S.A.
118,606 Hotel service
2. CAL-Asia Investment Inc. 06/29/1995 Mandar House, 3rd Floor, P.O. Box 2196, Johnson’s Ghut, Tortola, VG1110, Virgin Islands, British
212,671 Holding & investing
3. Dynasty Aerotech International Corp.
05/11/1989 No.6, Hangqin S. Rd., Dayuan District, Taoyuan City 77,270 Aviation ground handling service, cleaning service
4. Yestrip Co., Ltd. 01/18/2001 1,2F, No.131, Section 3, Nanjing E Rd., Zhongshan District, Taipei City
16,000 Travel service
5. CAL Park Co., Ltd. 09/06/2006 No.1, Hangzhan S. Rd., Dayuan District, Taoyuan City
1,500,000 Real estate leasing, parking lot management
6. CAL Hotel Co., Ltd. 01/03/2007 No.1-1, Hangzhan S. Rd., Dayuan District, Taoyuan City
465,000 Hotel business
7. Taiwan Aircraft Maintenance and
Engineering Co., Ltd. 01/16/2015
No.15, Hangqin S. Rd., Dayuan District, Taoyuan City
1,350,000 Aircraft maintenance and repair
8. Mandarin Airlines, Ltd. 04/29/1991 No.3, Alley 123, Lane 405, Dunhua N. Rd., Songshan District, Taipei City
2,001,825 Civil air transport
9. Sabre Travel Network (Taiwan) Ltd. 10/09/1990 15F, No.57, Fuxing N. Rd., Songshan District, Taipei City
138,618 IT service & GDS
10. Tigerair Taiwan Co., Ltd. 04/21/2014 No.3, Alley 123, Lane 405, Dunhua N. Rd., Songshan District, Taipei City
2,800,000 Civil air transport
11. China Pacific Laundry Services Ltd. 09/08/1997 No.7, Lane 54, Sande Street, Luzhu District, Taoyuan City
250,000 Laundry service
12. Taiwan Air Cargo Terminal Ltd. 12/22/1999 No.10-1, Hangqin N. Rd., Dayuan District, Taoyuan City
2,500,000 Air cargo and storage service
13. Kaohsiung Airport Catering
Services Ltd. 09/27/1999
No.2-10, Zhongshan 4th Rd., Xiaogang District, Kaohsiung City
400,500 Catering service
13A Delica International Co., Ltd. 05/24/2016 No.2-10, Zhongshan 4th Rd., Xiaogang District, Kaohsiung City
20,000 Catering service
14. China Pacific Catering Services
Ltd. 08/19/1994
No.22, Lane 156, Section 2, Haishan Rd., Luzhu District, Taoyuan City
861,000 Catering service
15. NORDAM Asia Ltd. 12/07/2017 No.15, Hangqin S. Rd., Dayuan Dist., Taoyuan City 77,500 Aircraft maintenance and repair
16. Taoyuan International Airport
Services Co., Ltd. 11/08/1978
No.15, Hangqin N. Rd., Dayuan District, Taoyuan City
700,000 Aviation ground handling service
17. Taiwan Airport Service Co., Ltd. 07/19/1966 3F, No.340, Dunhua N. Rd., Songshan District, Taipei City
435,600 Aviation ground handling service
17A Taiwan Airport Service (Samoa)
Co., Ltd. 03/22/2004
TrustNet Chambers, Lotemau Centre, P. O. Box 1225, Apia, Samoa
174,262 Holding & investing
18. Global Sky Express Ltd. 09/29/1994 8F-3, No.186, Section 4, Nanjing East Rd., Songshan District, Taipei City
10,000 Air freight forwarder
Note 1: Capital was calculated using the exchange rate at the end of 2020: 1TWD=0.0337 USD. Note 2: Yestrip Co., Ltd. was liquidated on October 26, 2020 after the approval of the Taipei City Government. The liquidation procedure is
underway.
136 Special Disclosure
C. Overall Description of the Industries in which Affiliated Companies (Including Subsidiaries and Other Invested Companies) Operate
China Airlines’ affiliated companies can be divided into seven categories, each of which is highly dependent on the Company’s operations, and include airlines, ground services, air transport support, aerospace technology, logistics and warehousing, tourism and leisure, and investment holdings and leasing. The categories are described below:
Classification Description
Airlines Mandarin Airlines provides domestic and international passenger and cargo air transport services to further capitalize on our competitive advantage in the cross-strait market. Tigerair Taiwan is tasked with operating in the Asian low-cost carrier market to develop new business opportunities.
Ground Handling Services
Ground services at Taiwan Taoyuan and Taitung Airports are provided by Taoyuan International Airport Services Co., Ltd., while those for Kaohsiung Airport and all other domestic airports are serviced by Taiwan Airport Service Co., Ltd. Overseas, the Company has invested in Jardine Aviation Services in Hong Kong, which serves as China Airlines’ ground handling agent in Hong Kong. Cleaning and repair ground services are provided by Dynasty Aerotech International Corp.
Air Transport Support The Company has invested in domestic airline reservation system operations and maintenance provider Sabre Travel Network (Taiwan) Ltd. Overseas, the Company has invested in Singapore’s Everest Company.
In-flight catering services are provided for northern Taiwan by China Pacific Catering Services Ltd. and by Kaohsiung Airport Catering Services in the South. Delica International Co., Ltd. is the subsidiary of Kaohsiung Airport Catering Services.
China Pacific Laundry Services Ltd. provides laundry services for textiles and clothing used aboard aircraft and general laundry services for the hospitality industry.
Logistics and Warehousing
Domestically, Taiwan Air Cargo Terminal Ltd. is responsible for providing warehousing services at Taiwan Taoyuan Airport and Kaohsiung International Airport. In Mainland China, the Company made indirect investments in Airport Air Cargo Terminal (Xiamen) Co., Ltd. and Airport Air Cargo Service (Xiamen) Co., Ltd.
Logistics services are provided domestically by invested companies Global Sky Express Ltd. and Chung Hwa Express Corp. Overseas, the Company has indirectly invested in Hong Kong’s Eastern United International Logistics.
Aerospace Technology
In the aerospace technology industry in Taiwan, the Company has invested in Taiwan Aircraft Maintenance and Engineering Ltd., which is responsible for all aspects of maintenance and repair services for Boeing 777 and 737 and Airbus A320 and A350 models; NORDAM Asia provides thrust reverser and composite material maintenance services in the Asian region; overseas, the Company invests in Xiamen Taiko Landing Gear Co. in Mainland China, which provides and maintains landing gear, and HAECO Composite Structures (Jinjiang) Co. Ltd., which provides composite material maintenance. In Hong Kong, the Company invests in China Aircraft Services Ltd., which provides aircraft maintenance capacity.
Tourism and Leisure Domestic investments include Yestrip and CAL Hotel Co., Ltd. Overseas investments include an indirect investment in Dynasty Hotel of Hawaii, Inc. in the USA and investment in Japan’s Dynasty Holidays.
Investment Holdings and Leasing Business Group
Established CAL-Dynasty International, Inc., which makes indirect investments in Chinese and American companies engaged in real estate investments and leasing management. CAL-Asia Investment Inc. and Taiwan Airport Service (Samoa) Co., Ltd. are engaged in general investment holdings.
Special Disclosure 137
D. Directors, Supervisors, and Presidents of Affiliated Companies Dec 31, 2019
Units: Shares; %
Company Title Name Shareholding
Shares % 1. CAL-Dynasty International, Inc. Chairman Hsieh, Su-Chien (Note 1) 2,614,500 100 Director Wang, Chen-Min (Note 1) (USD10, share)
Director (President) Hsu, Pao-Chieh (Note 1) 1A Dynasty Properties Co., Ltd. Chairman (President) Hsu, Pao-Chieh (Note 2) 5,000 100 Director Hsieh, Su-Chien; Yen,Yang (Note 2) (USD100, share) 1B Dynasty Hotel of Hawaii,
Inc. Chairman Hsu, Pao-Chieh (Note 2) 400,000 100
Director Yen, Yang (Note 2) (USD10, share) Director (President) Pan, Wen-Tsung (Note 1) 2. CAL-Asia Investment Inc. Chairman Hsieh, Su-Chien (Note 1) 7,172,346 100
Director Chang, Young (Note 1) (USD1, share) Director (President) Wang, Chen-Min (Note 1)
3. Dynasty Aerotech International Corp. (Note 3) Chairman Sun, Jia-Min (Note 1) 77,270 100
Director Liu, Der-Chuan; Lee, Jung-Hui; Chen, Wei-Tau (Note 1) Supervisor Chen, I-Chieh (Note 1) President Shih, Hui Huang (Note 1) (Nominated by China Airlines)
4. Yestrip Co., Ltd. (Note 3) Supervisor Huang, Hui-Na (Note 1) 1,600,000 100 5. CAL Park Co., Ltd. Chairman Hsieh, Su-Chien; (Note 1) 150,000,000 100
Director Chen, Wei-Tau (Note 1) Supervisor Fang, Juo-Ling (Note 1) Director (President) Chang, Young (Note 1)
6. CAL Hotel Co., Ltd. Chairman Hsieh, Su-Chien; (Note 1) 46,500,000 100
Director Wang, Chen-Min; Kao, Shing-Hwang; Wang, Houng; Hong, Tsu-Kuang (Note 1)
Supervisor Fang, Juo-Ling; Chen, I-Chieh (Note 1)
President Eric Rimbeuf
7. Taiwan Aircraft Maintenance and Engineering Co., Ltd. Chairman Wang, Houng (Note 1)
135,000,000 100
Director Chang, Young; Sun, Jia-Min; Lee, Jung-Hu; Wang, Chen-Min (Note 1)
Supervisor Fang, Juo-Ling; Yen, Yang (Note 1) President Tsai, Chih Hung (Nominated by China Airlines) 8. Mandarin Airlines, Ltd. Chairman Hsieh, Su-Chien (Note 1) 188,154,025 93.99
Director Chang, Young; Kao, Shing-Hwang; Wang, Houng; Wang, Chen-Min; Peng, Pao-Chu (Note 1)
Independent Director
Hsieh, Yung-Ming (Independent Directors Undertaking Public Welfare)
Supervisor Chen, I-Chieh Director (President) Tsao, Jyh-Fen (Note 1)
9. Sabre Travel Network (Taiwan) Ltd. Chairman Wu, Wen-Kuo (Note 1)
13,021,042
609,000
93.93
4.39
Director Chung, Ming-Jyh; Chiu,Wei-Tuan; Peng, Pao-Chu (Note 1) Director Alan Chen (Represent Sabre Travel Network Asia Pacific) Supervisor Ho, Hui-Fen President Lee, Hsien-Kuang (Nominated by China Airlines) 10. Tigerair Taiwan Co., Ltd. Chairman Chen, Han-Ming (Note 1)
212,420,046
75.86
Director Chang, Young; Wang, Chen-Min; Chang, Cheng-Hao; Chen, I-Chieh; Tsao, Jyh-Fen (Note 1)
Director Hsiao, Po Jen; Hsu, Yang Che; Jao, Shihchen; Yen, Sin-Hui Independent Director
Chen, I-Heng (Independent director undertaking public welfare); Fan, Hung-Shu; Yang, David
President Chang, Ming-Wei 11. China Pacific Laundry Services
Ltd. Chairman Chung, Wan-Chun (Note 1) 13,750,000 55 Director Hong, Tsu-Kuang; Chu, Te-Hsiu; (Note 1) Director Chan, Derrick (Represent Hendriz Holding) 3,750,000 15 Director Yeung, Maggie (Represent Heathlee Int’l) 3,750,000 15 Supervisor Caho, Wen-Kan (Represent Merton Lake) 3,750,000
15
Supervisor Chen, I-Chieh President Lin, Chun-Nan (Nominated by China Airlines)
12. Taiwan Air Cargo Terminal Ltd.
Chairman Wang, Chen-Min (Note 1) 135,000,000 54
Deputy Chairman Charles C. Y. Chen (Represent Eyon Industrial Co.) 6,000,000 2.4 Director Chang, Cheng-Hao; Liu, Der-Chuan (Note 1) Director UPS 20,000,000 8 Director Michael Shea (Represent Hsin Feng Corp.) 7,000,000 2.8 Supervisor Ho, Hui-Fen Supervisor Chen, Jyi-Fu (Represent Express Container Terminal Corp.) 15,000,000 6
138 Special Disclosure
Company Title Name Shareholding
Shares % 13. Kaohsiung Airport Catering
Services Ltd. Chairman Chang, Young (Note 1) 21,494,637 53.67
Director Chung, Wan-Chun; Wang, Wei (Note 1)
Director Lin, Jyh-Jong; Tsai, Ta-Wei (Nominated by Uni Airways Corporation)
16,178,945 40.4
Supervisor Han, Lan-Ping (Nominated by Evergreen International Corporation)
10,000 0.02
Supervisor Yen, Yang President Lee, Ho-Yuan
13A. Delica International Co., Ltd
Chairman Lee, Ho-Yuan (Nominated by Kaohsiung Airport Catering Services)
1,020,000 51
Director Lin, Jyh-Jong (Nominated by Kaohsiung Airport Catering Services)
Director Tokuyama, Keiichi; Tokuyama, Keisuke (Nominated by F. TEC Co., Ltd) 980,000 49
Supervisor Lai, Li Chao; Araki, Osamu President Eguchi, Kenichi
14. China Pacific Catering Services Ltd.
Chairman Yeh, Chu-Lan (Note 1) 43,911,000 51
Director Hong, Tsu-Kuang; Chung, Wan-Chun (Note 1) Director Wu, Hsiu-Lan; Mao, Chi-Chiung (Represent Aldeburgh Limited) 21,045,500 24.5 Supervisor Fang, Juo-Ling Supervisor Caho, Wen-Kan (Represent Deli Holdings Limited) 21,045,500 24.5 President Chen, Jo-Ching (Nominated By China Airlines)
15. NORDAM Asia Ltd. Chairman T. Hastings Siegfried (Nominated by The NORDAM Group) 3,952,500 51 Deputy Chairman Wang, Houng (Note 1) 3,797,500 49 Director Li, Chih-Wei (Note 1)
Director J.Terrell Siegfried、Jamie Lane (Nominated By The NORDAM Group)
Supervisor Ralph McDavid Supervisor Wang, Wei
16. Taoyuan International Airport Services Co., Ltd.
Chairman (President)
Lee, Chih-Chiang (Represent Motc) 31,500,000 45
Director Hsu, Cheng-Chang; Chang, Chang-Chi; Li, Hung-Sheng; Lee, Chun-Hsiung (Represent Motc)
Director Hsieh, Su-Chien; Chang, Young; Wang, Houng; Chu, Te-Hsiu; Yeah, Shao-Ting (Note 1) 34,300,000 49
Director Hung, Ngai (Represent UPS) 4,200,000 6 Supervisor Li, Mi; Li, Shen-Yi
17. Taiwan Airport Service Co., Ltd. Chairman Chang, Young (Note 1) 20,626,644 47.35
Director (President) Peng, Long-Min (Note 1) Director Chang, Cheng-Hao (Note 1)
Director Li, Li-Yu (Representing juridical person shareholder Rih Hsin Asset Management Company)
7,085,300 16.27
Director Chang, Chieh-Tang (Represent Goldsun Building Materials) 7,405,200 17 Supervisor Fang, Juo-Ling Supervisor Chen, Yao-Ming
17A Taiwan Airport Service (Samoa) Co., Ltd. Authorized Signatory Chang, Young (Represent Taiwan Airport Service Co.)
5,876,976 (1 USD, per share) 100
18. Global Sky Express Ltd. Chairman Li, Chung-Hui 50,000 5 Director Liu, Der-Chuan; Shann, Da-Sin; Chang, Cheng-Hao (Note 1) 250,000 25
Director Pao, Hsueh-Chao 40,000 4 Director Huang, Nan-Sheng 50,000 5 Director Wei, Ching-Li 20,000 2 Director Hsiao, Yu-Hsin 20,000 2 Director Chung, Mei-Chih (Represent Leader Mutual Freight System) 20,000 2 Supervisor Huang, Hui-Na Supervisor Yeh, Chien-Tien 10,000 1 Supervisor Chiang, Ming-Fang (Represent Morrison Express) 50,000 5 President Hwang, Chun-Chyuan (Nominated by China Airlines)
Note 1: Representative of juridical person shareholder China Airlines. Note 2: Representative of juridical person shareholder CAL-Dynasty International, Inc. Note 3: Yestrip Co., Ltd. was liquidated on October 26, 2020 after the approval of the Taipei City Government. Its Board of Directors no longer
exists.
Special Disclosure 139
E. Affiliated Company Business Overview Dec 31, 2019
Unit: NT$ thousands; EPS=NT$
Company Capital Total
Assets Total
Liabilities Total
Equity Operating Revenue
Operating Income (Loss)
Profit (Loss)
EPS (Dollars)
1. CAL-Dynasty International, Inc. 775,241 1,349,213 110,620 1,238,593 154,223 (32,649) (21,960) (8.40) 1A Dynasty Properties Co., Ltd. 14826 696181 176822 519359 93269 26052 19263 3852.62 1B Dynasty Hotel of Hawaii, Inc. 118,606 413,702 37,437 376,265 61,316 (61,265) (46,577) (116.44)
2. CAL-Asia Investment Inc. 212,671 462,453 6,567 462,446 0 (1,157) 45,068 6.28 3. Dynasty Aerotech International
Corp. 77,270 344,123 207,492 136,630 382,834 43,279 33,986 439.84
4. Yestrip Co., Ltd. 16,000 10,392 286 10,106 4,326 (16,567) (15,067) (9.42)
5. CAL Park Co., Ltd. 1,500,000 5,180,342 3,666,260 1,514,082 309,284 55,456 9,350 0.06
6. CAL Hotel Co., Ltd.. 465,000 533,457 129,017 404,440 339,310 (101,805) (73,586) (1.58)
7. Taiwan Aircraft Maintenance and
Engineering Co., Ltd. 1,350,000 3,360,075 2,660,312 699,763 46,559 (222,643) (222,223) (1.65)
8. Mandarin Airlines, Ltd. 2,001,825 8,256,878 6,930,337 1,326,541 3,823,365 (297,996) (376,255) (1.88)
9. Sabre Travel Network (Taiwan) Ltd.
138,618 319,008 71,076 247,932 18,546 (74,188) (49,995) (3.61)
10. Tigerair Taiwan Co., Ltd. 2,800,000 11,694,612 8,657,483 3,037,129 1,880,636 (1,808,558) (1,371,056) (4.90)
11. China Pacific Laundry Services
Ltd. 250,000 361,629 90,077 271,552 125,081 (48,609) (28,137) (1.13)
12. Taiwan Air Cargo Terminal Ltd. 2,500,000 5,216,303 2,334,637 2,881,666 2,121,992 422,645 318,494 1.27
13. Kaohsiung Airport Catering
Services Ltd. 400,500 1,059,589 367,878 691,712 1,317,060 1,246 9,129 0.23
13A Delica International Co., Ltd. 20,000 15,653 220 15,434 0 0 7 0.00
15. China Pacific Catering Services Ltd.
861,000 3,631,885 2,244,852 1,387,032 701,120 (598,856) (306,623) (3.56)
16. NORDAM Asia Ltd. 77,500 77,156 80 77,076 0 (121) (93) (0.01)
17. Taoyuan International Airport
Services Co., Ltd. 700,000 2,345,219 1,115,243 1,229,975 2,060,716 (393,726) (258,894) (3.70)
18. Taiwan Airport Service Co., Ltd. 435,600 1,367,067 943,003 424,064 343,106 (224,397) (156,739) (3.60)
18A Taiwan Airport Service
(Samoa) Co., Ltd. 174,262 367,456 0 367,456 0 0 22,328 3.80
19. Global Sky Express Ltd. 10,000 45,664 15,092 30,572 166,040 9,732 7,796 7.80
Note 1: Capital, total assets, total liabilities, total equity were calculated using the exchange rate at the end of 2020. Note 2: Operating revenue, operating profit, and income for the period were calculated using the 2020 quarterly average exchange rates.
Note 3: Exchange rates at the end of 2020 were 1TWD=0.0337 USD, 0.2340 CNY.
Note 4: Quarterly average exchange rates in 2020 were as follows:
Q1:1TWD=0.0331USD0.2310CNY. Q2:1TWD=0.0333 USD0.2365CNY. Q3:1TWD=0.0338 USD0.2359CNY. Q4:1TWD=0.0347USD0.2324CNY.
(2) Affiliated Company Consolidated Financial Statements: Information required to be disclosed regarding affiliated company’s consolidated financial statements is included in Appendix 1 Consolidated Financial Statements. The Company will no longer prepare a separate consolidated financial statement for affiliated companies.
(3) Relationship Report: China Airlines is not the subsidiary of any company, so a relationship report is not required.
140 Special Disclosure
8.2 Private Placement Securities in the Most Recent Years: None.
8.3 Shares in the Company Held or Disposed of by Subsidiaries in the Most Recent Years:
MAR 27, 2021 Units: NT$; shares; %
Company Capital Source of Funds
Stake in Subsidiary
(%)
Date of Acquisition or
Disposal
Number of Shares and
Value of Stocks
Acquired
Number of Shares and
Value of Stocks
Disposed
Investment Gain/Loss
Number of Shares and Value of Stock
Held as of the Printing Date of this
Report
Amount of Company
Endorsement /Guarantee of
Subsidiary Dynasty Aerotech International Corp.
77,270,000 Equity Fund 100%
109/02/20 - 152 220 0 shares
NT$0 -
109/02/21 - 300,000 485,539 109/02/25 - 300,000 398,925 109/02/26 - 214,000 270,365
Mandarin Airlines, Ltd. 2,001,825,000 Equity
Fund 93.99% - - - - 2,074,628 shares NT$31,223,000 -
Note: No subsidiary has a Company stock pledge nor has the Company lent money to any subsidiary.
8.4 Special Notes: None.
8.5 Situations with Major Impact on Shareholder Equity or Share Prices:
8.5.1 Change in the chairman of the board, general manager, or one-third or more of the directors of the Company. The Board has resolved to remove Mr. Hsieh, Su-Chien from the position of President on 18 March 2021 and to appoint Mr. Kao, Shing-Hwang to succeed as President.
8.5.2 Signing of major memoranda, strategic alliances or other plans for business cooperation or major contracts A. In order to strengthen the capital structure of the Company’s subsidiary, Tigerair Taiwan Co.,
Ltd., the Board of Directors resolved to participate in its cash capital increase on 6 August 2020.
B. On December 31, 2020, the Company renewed its land lease contract with Taiwan Air Cargo Terminal Ltd.
8.5.3 Others A. In response to the COVID-19 pandemic, the Company and its group members have improved
their pandemic prevention measures and adjusted the service content of catering and supplies for mainland-Taiwan air routes and Hong Kong-Macau-Taiwan air routes starting from January 28, 2020; the main consideration is to reduce personnel contact and reduce the unnecessary use of re-used products and use disposable products instead. At the same time, we also encourage passengers to bring their own products, such as environmental protection cups, to reduce the risk of infection. In addition to the normal disinfection procedures for all cross-strait, Hong Kong and Macao flights arrival to Taiwan, the disinfection of the dining trays, handrails and overhead luggage cabinets in the cabin are carried out to maintain the health of passengers and crew members.
B. The Company received an Italian aviation notice informing that, at the request of the country’s health bureau, the CI75 Taipei-Rome flight on February 2 and the CI76 Rome-Taipei flight on February 3 were canceled; In order to assist with the evacuation of the passengers, China Airlines obtained an agreement from the Italian Civil Aviation Authority to allow CI75 Taipei-Rome flight on February 2 and to reinstate CI76 Rome-Taipei flight on February 3.
DE
CL
AR
AT
ION
OF
CO
NSO
LID
AT
ION
OF
FIN
AN
CIA
L S
TA
TE
ME
NT
S O
F A
FFIL
IAT
ES
The
com
pani
es re
quire
d to
be
incl
uded
in th
e co
nsol
idat
ed fi
nanc
ial s
tate
men
ts o
f aff
iliat
es in
acc
orda
nce
with
the
“Cr
iteria
Gov
erni
ng P
repa
ratio
n of
Aff
iliat
ion
Repo
rts,
Con
solid
ated
Bus
ines
s R
epor
ts a
nd
Con
solid
ated
Fin
anci
al S
tate
men
ts o
f A
ffili
ated
Ent
erpr
ises
” fo
r th
e ye
ar e
nded
Dec
embe
r 31
, 202
0 ar
e
all t
he s
ame
as th
e co
mpa
nies
req
uire
d to
be
incl
uded
in th
e co
nsol
idat
ed f
inan
cial
sta
tem
ents
of
pare
nt
and
subs
idia
ry c
ompa
nies
as
prov
ided
in
Inte
rnat
iona
l Fi
nanc
ial
Rep
ortin
g St
anda
rd 1
0 “C
onso
lidat
ed
Fina
ncia
l St
atem
ents
.” R
elev
ant
info
rmat
ion
that
sho
uld
be d
iscl
osed
in
the
cons
olid
ated
fin
anci
al
stat
emen
ts o
f af
filia
tes
has
all
been
dis
clos
ed i
n th
e co
nsol
idat
ed f
inan
cial
sta
tem
ents
of
pare
nt a
nd
subs
idia
ry c
ompa
nies
. Hen
ce, w
e ha
ve n
ot p
repa
red
a se
para
te s
et o
f con
solid
ated
fina
ncia
l sta
tem
ents
of
affil
iate
s.
Ver
y tr u
ly y
ours
,
CH
INA
AIR
LIN
ES, L
TD.
By
Mar
ch 1
8, 2
021
- 1 -
(App
endi
x 1)
IND
EPE
ND
EN
T A
UD
ITO
RS’
REP
OR
T
The
Boa
rd o
f Dire
ctor
s and
Sha
reho
lder
s C
hina
Airl
ines
, Ltd
.
Opi
nion
We
have
aud
ited
the
acco
mpa
nyin
g co
nsol
idat
ed f
inan
cial
sta
tem
ents
of
Chi
na A
irlin
es, L
td. a
nd
its s
ubsi
diar
ies
(col
lect
ivel
y re
ferr
ed to
as
the
“Gro
up”)
, whi
ch c
ompr
ise
the
cons
olid
ated
bal
ance
sh
eets
as
of D
ecem
ber
31,
2020
and
201
9, a
nd t
he c
onso
lidat
ed s
tate
men
ts o
f co
mpr
ehen
sive
in
com
e, c
hang
es i
n eq
uity
and
cas
h flo
ws
for
the
year
s th
en e
nded
, an
d th
e no
tes
to t
he
cons
olid
ated
fin
anci
al
stat
emen
ts,
incl
udin
g a
sum
mar
y of
si
gnifi
cant
ac
coun
ting
polic
ies.
(col
lect
ivel
y re
ferr
ed to
as t
he “
cons
olid
ated
fina
ncia
l sta
tem
ents
”)
In o
ur o
pini
on, t
he a
ccom
pany
ing
cons
olid
ated
fin
anci
al s
tate
men
ts p
rese
nt f
airly
, in
all m
ater
ial
resp
ects
, the
con
solid
ated
fina
ncia
l pos
ition
of t
he G
roup
as
of D
ecem
ber 3
1, 2
020
and
2019
, and
its
con
solid
ated
fina
ncia
l per
form
ance
and
its
cons
olid
ated
cas
h flo
ws
for t
he y
ears
then
end
ed in
ac
cord
ance
with
the
Reg
ulat
ions
Gov
erni
ng t
he P
repa
ratio
n of
Fin
anci
al R
epor
ts b
y Se
curit
ies
Issu
ers,
and
Inte
rnat
iona
l Fi
nanc
ial
Rep
ortin
g St
anda
rds
(IFR
S),
Inte
rnat
iona
l A
ccou
ntin
g St
anda
rds (
IAS)
, IFR
IC In
terp
reta
tions
(IFR
IC),
and
SIC
Inte
rpre
tatio
ns (S
IC) e
ndor
sed
and
issu
ed
into
eff
ect b
y th
e Fi
nanc
ial S
uper
viso
ry C
omm
issi
on o
f the
Rep
ublic
of C
hina
.
Bas
is fo
r O
pini
on
We
cond
ucte
d ou
r au
dits
in a
ccor
danc
e w
ith th
e Re
gula
tions
Gov
erni
ng A
uditi
ng a
nd A
ttest
atio
n of
Fin
anci
al S
tate
men
ts b
y C
ertif
ied
Publ
ic A
ccou
ntan
ts a
nd a
uditi
ng s
tand
ards
gen
eral
ly a
ccep
ted
in th
e R
epub
lic o
f C
hina
. Our
res
pons
ibili
ties
unde
r th
ose
stan
dard
s ar
e fu
rther
des
crib
ed in
the
Aud
itors
’ R
espo
nsib
ilitie
s fo
r th
e A
udit
of th
e C
onso
lidat
ed F
inan
cial
Sta
tem
ents
sec
tion
of o
ur
repo
rt. W
e ar
e in
depe
nden
t of t
he G
roup
in a
ccor
danc
e w
ith T
he N
orm
of
Prof
essi
onal
Eth
ics
for
Cer
tifie
d Pu
blic
Acc
ount
ant
of t
he R
epub
lic o
f C
hina
, an
d w
e ha
ve f
ulfil
led
our
othe
r et
hica
l re
spon
sibi
litie
s in
acc
orda
nce
with
thes
e re
quire
men
ts. W
e be
lieve
that
the
audi
t evi
denc
e w
e ha
ve
obta
ined
is su
ffic
ient
and
app
ropr
iate
to p
rovi
de a
bas
is fo
r our
opi
nion
.
Key
Aud
it M
atte
rs
Key
aud
it m
atte
rs a
re th
ose
mat
ters
that
, in
our p
rofe
ssio
nal j
udgm
ent,
wer
e of
mos
t sig
nific
ance
in
our
audi
t of
the
cons
olid
ated
fin
anci
al s
tate
men
ts f
or t
he y
ear
ende
d D
ecem
ber
31, 2
020.
The
se
mat
ters
wer
e ad
dres
sed
in t
he c
onte
xt o
f ou
r au
dit
of t
he c
onso
lidat
ed f
inan
cial
sta
tem
ents
as
a w
hole
, and
in
form
ing
our
opin
ion
ther
eon,
and
we
do n
ot p
rovi
de a
sep
arat
e op
inio
n on
the
se
mat
ters
.
- 2 -
Hsi
eh, S
u-C
hien
141
Key
aud
it m
atte
r in
the
audi
t of t
he G
roup
’s c
onso
lidat
ed fi
nanc
ial s
tate
men
ts is
stat
ed b
elow
: R
ecog
nitio
n of
Car
go R
even
ue
In a
ccor
danc
e w
ith IF
RS
15 “
Rev
enue
from
Con
tract
s w
ith C
usto
mer
s”, c
argo
sal
es a
re a
ccou
nted
fo
r as
carg
o re
venu
e af
ter r
elev
ant t
rans
porta
tion
serv
ices
hav
e be
en p
rovi
ded.
For
the
year
end
ed
Dec
embe
r 31,
202
0, c
argo
reve
nue
amou
nted
to N
T$81
,692
,574
thou
sand
. Ref
er to
Not
es 4
and
27
to th
e ac
com
pany
ing
cons
olid
ated
fina
ncia
l sta
tem
ents
for d
etai
led
info
rmat
ion.
C
argo
rat
es a
re h
ighl
y af
fect
ed b
y th
e su
pply
and
dem
and
of t
he m
arke
t an
d sa
les
can
only
be
reco
gniz
ed
afte
r re
leva
nt
trans
porta
tion
serv
ices
ar
e pr
ovid
ed.
The
inpu
t, pr
oces
sing
an
d m
aint
enan
ce o
f fr
eigh
t inf
orm
atio
n on
the
air
way
bills
invo
lve
man
ual o
pera
tions
. The
refo
re, w
e id
entif
ied
the
reco
gniti
on o
f car
go re
venu
e as
a k
ey a
udit
mat
ter.
Our
mai
n au
dit p
roce
dure
s per
form
ed in
clud
ed th
e fo
llow
ing:
1.
W
e un
ders
tood
the
int
erna
l co
ntro
ls r
elat
ed t
o th
e re
cogn
ition
of
carg
o re
venu
e, i
nclu
ding
m
anua
l and
aut
omat
ic c
ontro
l. 2.
W
e un
ders
tood
and
test
ed th
e ef
fect
iven
ess
of in
form
atio
n sy
stem
rela
ted
to th
e re
cogn
ition
of
carg
o re
venu
e.
3.
We
sam
pled
the
air w
aybi
lls, c
onfir
med
that
car
go ra
tes w
ere
cons
iste
nt w
ith th
ose
stat
ed in
air
way
bills
, and
ver
ified
the
accu
racy
of c
argo
reve
nue.
O
ther
Mat
ter
We
did
not
audi
t th
e fin
anci
al s
tate
men
ts o
f so
me
subs
idia
ries
whi
ch w
ere
incl
uded
in
the
cons
olid
ated
fin
anci
al s
tate
men
ts.
Such
fin
anci
al s
tate
men
ts w
ere
audi
ted
by o
ther
ind
epen
dent
au
dito
rs, a
nd o
ur a
udit
opin
ion
is b
ased
sole
ly o
n th
e re
ports
of o
ther
aud
itors
. A
s of
Dec
embe
r 31,
202
0, to
tal a
sset
s of
thes
e su
bsid
iarie
s am
ount
ed to
NT$
11,6
94,6
12 th
ousa
nd,
repr
esen
ting
4.12
% o
f th
e co
nsol
idat
ed t
otal
ass
ets.
For
the
year
end
ed D
ecem
ber
31,
2020
, re
venu
e fr
om th
ese
subs
idia
ries
amou
nted
to N
T$1,
880,
636
thou
sand
, rep
rese
ntin
g 1.
63%
of
the
cons
olid
ated
tota
l rev
enue
. W
e ha
ve a
lso
audi
ted
the
pare
nt c
ompa
ny o
nly
finan
cial
sta
tem
ents
of
Chi
na A
irlin
es, L
td. a
s of
an
d fo
r th
e ye
ars
ende
d D
ecem
ber
31, 2
020
and
2019
on
whi
ch w
e ha
ve i
ssue
d an
unm
odifi
ed
opin
ion.
R
espo
nsib
ilitie
s of M
anag
emen
t and
Tho
se C
harg
ed w
ith G
over
nanc
e fo
r th
e C
onso
lidat
ed
Fina
ncia
l Sta
tem
ents
M
anag
emen
t is
resp
onsi
ble
for
the
prep
arat
ion
and
fair
pres
enta
tion
of th
e co
nsol
idat
ed f
inan
cial
st
atem
ents
in a
ccor
danc
e w
ith th
e Re
gula
tions
Gov
erni
ng th
e Pr
epar
atio
n of
Fin
anci
al R
epor
ts b
y Se
curit
ies
Issu
ers,
and
Inte
rnat
iona
l Fi
nanc
ial
Repo
rting
St
anda
rds
(IFR
S),
Inte
rnat
iona
l A
ccou
ntin
g St
anda
rds
(IAS)
, IF
RIC
In
terp
reta
tions
(IF
RIC
), an
d SI
C
Inte
rpre
tatio
ns (
SIC
) en
dors
ed a
nd is
sued
into
eff
ect b
y th
e Fi
nanc
ial S
uper
viso
ry C
omm
issi
on o
f the
Rep
ublic
of C
hina
, an
d fo
r su
ch in
tern
al c
ontro
l as
man
agem
ent d
eter
min
es is
nec
essa
ry to
ena
ble
the
prep
arat
ion
of
cons
olid
ated
fina
ncia
l sta
tem
ents
that
are
free
from
mat
eria
l mis
stat
emen
t, w
heth
er d
ue to
frau
d or
er
ror.
- 3 -
In p
repa
ring
the
cons
olid
ated
fin
anci
al s
tate
men
ts, m
anag
emen
t is
res
pons
ible
for
ass
essi
ng t
he
Gro
up’s
abi
lity
to c
ontin
ue a
s a
goin
g co
ncer
n, d
iscl
osin
g, a
s ap
plic
able
, mat
ters
rel
ated
to g
oing
co
ncer
n an
d us
ing
the
goin
g co
ncer
n ba
sis
of a
ccou
ntin
g un
less
man
agem
ent
eith
er i
nten
ds t
o liq
uida
te th
e G
roup
or t
o ce
ase
oper
atio
ns, o
r has
no
real
istic
alte
rnat
ive
but t
o do
so.
Thos
e ch
arge
d w
ith g
over
nanc
e, in
clud
ing
the
audi
t com
mitt
ee a
nd s
uper
viso
rs, a
re re
spon
sibl
e fo
r ov
erse
eing
the
Gro
up’s
fina
ncia
l rep
ortin
g pr
oces
s. A
udito
rs’ R
espo
nsib
ilitie
s for
the
Aud
it of
the
Con
solid
ated
Fin
anci
al S
tate
men
ts
Our
obj
ectiv
es a
re t
o ob
tain
rea
sona
ble
assu
ranc
e ab
out
whe
ther
the
con
solid
ated
fin
anci
al
stat
emen
ts a
s a
who
le a
re f
ree
from
mat
eria
l mis
stat
emen
t, w
heth
er d
ue to
fra
ud o
r er
ror,
and
to
issu
e an
aud
itors
’ re
port
that
inc
lude
s ou
r op
inio
n. R
easo
nabl
e as
sura
nce
is a
hig
h le
vel
of
assu
ranc
e, b
ut is
not
a g
uara
ntee
that
an
audi
t con
duct
ed in
acc
orda
nce
with
the
audi
ting
stan
dard
s ge
nera
lly a
ccep
ted
in t
he R
epub
lic o
f C
hina
will
alw
ays
dete
ct a
mat
eria
l m
isst
atem
ent
whe
n it
exis
ts. M
isst
atem
ents
can
aris
e fr
om fr
aud
or e
rror
and
are
con
side
red
mat
eria
l if,
indi
vidu
ally
or i
n th
e ag
greg
ate,
the
y co
uld
reas
onab
ly b
e ex
pect
ed t
o in
fluen
ce t
he e
cono
mic
dec
isio
ns o
f us
ers
take
n on
the
basi
s of t
hese
con
solid
ated
fina
ncia
l sta
tem
ents
. A
s pa
rt of
an
audi
t in
acco
rdan
ce w
ith th
e au
ditin
g st
anda
rds
gene
rally
acc
epte
d in
the
Repu
blic
of
Chi
na,
we
exer
cise
pro
fess
iona
l ju
dgm
ent
and
mai
ntai
n pr
ofes
sion
al s
kept
icis
m t
hrou
ghou
t th
e au
dit.
We
also
: 1.
Id
entif
y an
d as
sess
the
risks
of m
ater
ial m
isst
atem
ent o
f the
con
solid
ated
fina
ncia
l sta
tem
ents
, w
heth
er d
ue to
frau
d or
err
or, d
esig
n an
d pe
rfor
m a
udit
proc
edur
es r
espo
nsiv
e to
thos
e ris
ks,
and
obta
in a
udit
evid
ence
that
is s
uffic
ient
and
app
ropr
iate
to p
rovi
de a
bas
is fo
r our
opi
nion
. Th
e ris
k of
not
det
ectin
g a
mat
eria
l mis
stat
emen
t res
ultin
g fr
om f
raud
is h
ighe
r th
an f
or o
ne
resu
lting
fr
om
erro
r, as
fr
aud
may
in
volv
e co
llusi
on,
forg
ery,
in
tent
iona
l om
issi
ons,
mis
repr
esen
tatio
ns, o
r the
ove
rrid
e of
inte
rnal
con
trol.
2.
Obt
ain
an u
nder
stan
ding
of
inte
rnal
con
trol
rele
vant
to
the
audi
t in
ord
er t
o de
sign
aud
it pr
oced
ures
that
are
app
ropr
iate
in th
e ci
rcum
stan
ces,
but n
ot fo
r the
pur
pose
of e
xpre
ssin
g an
op
inio
n on
the
effe
ctiv
enes
s of t
he G
roup
’s in
tern
al c
ontro
l. 3.
Ev
alua
te th
e ap
prop
riate
ness
of a
ccou
ntin
g po
licie
s us
ed a
nd th
e re
ason
able
ness
of a
ccou
ntin
g es
timat
es a
nd re
late
d di
sclo
sure
s mad
e by
man
agem
ent.
4.
Con
clud
e on
the
app
ropr
iate
ness
of
man
agem
ent’s
use
of
the
goin
g co
ncer
n ba
sis
of
acco
untin
g an
d, b
ased
on
the
audi
t ev
iden
ce o
btai
ned,
whe
ther
a m
ater
ial
unce
rtain
ty e
xist
s re
late
d to
eve
nts
or c
ondi
tions
tha
t m
ay c
ast
sign
ifica
nt d
oubt
on
the
Gro
up’s
abi
lity
to
cont
inue
as
a go
ing
conc
ern.
If w
e co
nclu
de th
at a
mat
eria
l unc
erta
inty
exi
sts,
we
are
requ
ired
to d
raw
atte
ntio
n in
our
aud
itors
’ rep
ort t
o th
e re
late
d di
sclo
sure
s in
the
cons
olid
ated
fina
ncia
l st
atem
ents
or,
if su
ch d
iscl
osur
es a
re in
adeq
uate
, to
mod
ify o
ur o
pini
on. O
ur c
oncl
usio
ns a
re
base
d on
the
audi
t evi
denc
e ob
tain
ed u
p to
the
date
of
our
audi
tors
’ re
port.
How
ever
, fut
ure
even
ts o
r con
ditio
ns m
ay c
ause
the
Gro
up to
cea
se to
con
tinue
as a
goi
ng c
once
rn.
5.
Eval
uate
the
over
all p
rese
ntat
ion,
stru
ctur
e an
d co
nten
t of t
he c
onso
lidat
ed fi
nanc
ial s
tate
men
ts,
incl
udin
g th
e di
sclo
sure
s, an
d w
heth
er t
he c
onso
lidat
ed f
inan
cial
sta
tem
ents
rep
rese
nt t
he
unde
rlyin
g tra
nsac
tions
and
eve
nts i
n a
man
ner t
hat a
chie
ves f
air p
rese
ntat
ion.
6.
O
btai
n su
ffic
ient
and
app
ropr
iate
aud
it ev
iden
ce re
gard
ing
the
finan
cial
info
rmat
ion
of e
ntiti
es
or b
usin
ess
activ
ities
with
in t
he G
roup
to
expr
ess
an o
pini
on o
n th
e co
nsol
idat
ed f
inan
cial
st
atem
ents
. We
are
resp
onsi
ble
for
the
dire
ctio
n, s
uper
visi
on, a
nd p
erfo
rman
ce o
f th
e gr
oup
audi
t. W
e re
mai
n so
lely
resp
onsi
ble
for o
ur a
udit
opin
ion.
- 4 -
142
We
com
mun
icat
e w
ith th
ose
char
ged
with
gov
erna
nce
rega
rdin
g, a
mon
g ot
her m
atte
rs, t
he p
lann
ed
scop
e an
d tim
ing
of th
e au
dit a
nd s
igni
fican
t aud
it fin
ding
s, in
clud
ing
any
sign
ifica
nt d
efic
ienc
ies
in in
tern
al c
ontro
l tha
t we
iden
tify
durin
g ou
r aud
it.
We
also
pro
vide
tho
se c
harg
ed w
ith g
over
nanc
e w
ith a
sta
tem
ent
that
we
have
com
plie
d w
ith
rele
vant
et
hica
l re
quire
men
ts
rega
rdin
g in
depe
nden
ce,
and
to
com
mun
icat
e w
ith
them
al
l re
latio
nshi
ps a
nd o
ther
mat
ters
that
may
rea
sona
bly
be th
ough
t to
bear
on
our
inde
pend
ence
, and
w
here
app
licab
le, r
elat
ed sa
fegu
ards
. Fr
om th
e m
atte
rs c
omm
unic
ated
with
thos
e ch
arge
d w
ith g
over
nanc
e, w
e de
term
ine
thos
e m
atte
rs
that
wer
e of
mos
t si
gnifi
canc
e in
the
aud
it of
the
con
solid
ated
fin
anci
al s
tate
men
ts f
or t
he y
ear
ende
d D
ecem
ber 3
1, 2
020
and
are
ther
efor
e th
e ke
y au
dit m
atte
rs. W
e de
scrib
e th
ese
mat
ters
in o
ur
audi
tors
’ re
port
unle
ss la
w o
r re
gula
tion
prec
lude
s pu
blic
dis
clos
ure
abou
t the
mat
ter
or w
hen,
in
extre
mel
y ra
re c
ircum
stan
ces,
we
dete
rmin
e th
at a
mat
ter s
houl
d no
t be
com
mun
icat
ed in
our
repo
rt be
caus
e th
e ad
vers
e co
nseq
uenc
es o
f do
ing
so w
ould
rea
sona
bly
be e
xpec
ted
to o
utw
eigh
the
pu
blic
inte
rest
ben
efits
of s
uch
com
mun
icat
ion.
Th
e en
gage
men
t par
tner
s on
the
audi
ts r
esul
ting
in th
is in
depe
nden
t aud
itors
’ re
port
are
Jui-C
han
Hua
ng a
nd S
hiuh
-Ran
Che
ng.
Del
oitte
& T
ouch
e Ta
ipei
, Tai
wan
R
epub
lic o
f Chi
na
Mar
ch 1
8, 2
021
N
otic
e to
Rea
ders
Th
e ac
com
pany
ing
cons
olid
ated
fina
ncia
l sta
tem
ents
are
inte
nded
onl
y to
pre
sent
the
cons
olid
ated
fin
anci
al p
ositi
on, f
inan
cial
per
form
ance
and
cas
h flo
ws
in a
ccor
danc
e wi
th a
ccou
ntin
g pr
inci
ples
an
d pr
actic
es g
ener
ally
acc
epte
d in
the
Repu
blic
of C
hina
and
not
thos
e of
any
oth
er ju
risd
ictio
ns.
The
stan
dard
s, pr
oced
ures
and
pra
ctic
es to
aud
it su
ch c
onso
lidat
ed fi
nanc
ial s
tate
men
ts a
re th
ose
gene
rally
app
lied
in th
e Re
publ
ic o
f Chi
na.
For
the
conv
enie
nce
of
read
ers,
the
inde
pend
ent
audi
tors
’ re
port
an
d th
e ac
com
pany
ing
cons
olid
ated
fin
anci
al s
tate
men
ts h
ave
been
tra
nsla
ted
into
Eng
lish
from
the
ori
gina
l C
hine
se
vers
ion
prep
ared
and
use
d in
the
Repu
blic
of C
hina
. If t
here
is a
ny c
onfli
ct b
etw
een
the
Engl
ish
vers
ion
and
the
orig
inal
Chi
nese
ver
sion
or a
ny d
iffer
ence
in th
e in
terp
reta
tion
of th
e tw
o ve
rsio
ns,
the
Chi
nese
-lang
uage
ind
epen
dent
aud
itors
’ re
port
and
con
solid
ated
fin
anci
al s
tate
men
ts s
hall
prev
ail.
- 5 -
CH
INA
AIR
LIN
ES,
LT
D. A
ND
SU
BSI
DIA
RIE
S C
ON
SOL
IDA
TE
D B
AL
AN
CE
SH
EE
TS
DE
CE
MB
ER
31,
202
0 A
ND
201
9 (I
n T
hous
ands
of N
ew T
aiw
an D
olla
rs)
2020
2019
A
SSE
TS
A
mou
nt
%
Am
ount
%
C
UR
REN
T A
SSET
S
C
ash
and
cash
equ
ival
ents
(Not
es 4
, 6 a
nd 3
2)
$
27
,125
,937
10
$
28,4
59,5
28
10
Fina
ncia
l ass
ets a
t fai
r val
ue th
roug
h pr
ofit
or lo
ss -
curr
ent (
Not
es 4
, 7 a
nd 3
2)
274,
761
-
51
2,19
2
-
Fina
ncia
l ass
ets a
t am
ortiz
ed c
ost (
Not
es 9
and
32)
6,
551,
693
2
2,
355,
095
1 Fi
nanc
ial a
sset
s for
hed
ging
- cu
rrent
(Not
es 4
and
32)
7,
613,
636
3
9,
626
- N
otes
and
acc
ount
s rec
eiva
ble,
net
(Not
es 4
, 10
and
32)
9,69
7,51
1
4
8,52
0,83
4
3
Not
es a
nd a
ccou
nts r
ecei
vabl
e - r
elat
ed p
artie
s (N
otes
32
and
33)
1,66
7
-
10,3
48
- O
ther
rece
ivab
les (
Not
es 4
and
32)
80
1,13
4
-
774,
206
- C
urre
nt ta
x as
sets
(Not
es 4
and
28)
67
,549
-
54,6
89
- In
vent
orie
s, ne
t (N
otes
4 a
nd 1
1)
8,78
8,10
5
3
8,47
0,11
3
3
Non
-cur
rent
ass
ets h
eld
for s
ale
(Not
es 4
, 5 a
nd 1
2)
89,2
96
-
-
- O
ther
ass
ets -
cur
rent
(Not
e 18
)
86
1,17
9
-
2,65
5,71
1
1
To
tal c
urre
nt a
sset
s
61
,872
,468
22
51
,822
,342
18
NO
N-C
UR
REN
T A
SSET
S
Fi
nanc
ial a
sset
s at f
air v
alue
thro
ugh
othe
r com
preh
ensi
ve in
com
e - n
on-c
urre
nt (N
otes
8 a
nd 3
2)
163,
746
-
20
9,22
1
-
Fina
ncia
l ass
ets a
t am
ortiz
ed c
ost (
Not
es 4
and
9)
311,
596
-
10
5,58
6
-
Inve
stm
ents
acc
ount
ed fo
r usin
g th
e eq
uity
met
hod
(Not
es 4
and
14)
1,
970,
802
1
2,
223,
793
1 Pr
oper
ty, p
lant
and
equ
ipm
ent (
Not
es 4
, 5, 1
5 an
d 34
)
14
1,48
1,69
4
50
14
5,88
6,97
1
50
R
ight
-of-u
se a
sset
s (N
otes
4, 2
1 an
d 34
)
59
,861
,537
21
71
,033
,617
24
In
vest
men
t pro
perti
es (N
otes
4 a
nd 1
6)
2,07
4,79
8
1
2,07
5,06
8
1
Oth
er in
tang
ible
ass
ets (
Not
es 4
and
17)
1,
076,
351
-
1,
182,
692
- D
efer
red
inco
me
tax
asse
t (N
otes
4, 5
and
28)
6,
028,
200
2
5,
337,
626
2 O
ther
ass
ets -
non
-cur
rent
(Not
es 1
8, 2
1, 3
2 an
d 34
)
9,
352,
892
3
13
,171
,063
4
To
tal n
on-c
urre
nt a
sset
s
22
2,32
1,61
6
78
24
1,22
5,63
7
82
TOTA
L
$ 2
84,1
94,0
84
100
$
293
,047
,979
10
0
L
IAB
ILIT
IES
AN
D E
QU
ITY
CU
RR
ENT
LIA
BIL
ITIE
S
Sh
ort-t
erm
deb
ts (N
ote
19)
$
1,
932,
000
1
$
380,
000
- Sh
ort-t
erm
bill
s pay
able
(Not
e 19
)
8,
088,
882
3
-
- Fi
nanc
ial l
iabi
litie
s at f
air v
alue
thro
ugh
prof
it or
loss
- cu
rren
t (N
otes
4, 5
, 7 a
nd 3
2)
-
-
11,7
49
- Fi
nanc
ial l
iabi
litie
s for
hed
ging
- cu
rren
t (N
otes
4, 2
1 an
d 32
)
8,
129,
752
3
8,
618,
506
3 N
otes
and
acc
ount
s pay
able
(Not
e 32
)
1,
354,
237
1
1,
495,
606
1 A
ccou
nts p
ayab
le -
rela
ted
parti
es (N
otes
32
and
33)
128,
567
-
54
2,01
5
-
Oth
er p
ayab
les (
Not
es 2
2 an
d 32
)
8,
306,
257
3
13
,187
,972
5
Cur
rent
tax
liabi
litie
s (N
otes
4 a
nd 2
8)
216,
602
-
37
4,17
8
-
Leas
e lia
bilit
ies -
cur
rent
(Not
es 3
, 4 a
nd 2
1)
2,52
5,95
7
1
2,34
0,87
3
1
Con
tract
liab
ilitie
s - c
urre
nt (N
ote
23)
3,56
9,36
0
1
21,0
60,7
73
7 Pr
ovis
ions
- cu
rren
t (N
otes
4 a
nd 2
4)
164,
800
-
36
0,39
3
-
Bon
ds p
ayab
le a
nd p
ut o
ptio
n of
con
verti
ble
bond
s - c
urre
nt p
ortio
n (N
otes
4, 2
0, 2
7 an
d 32
)
11
,982
,859
4
10,0
00,0
00
3 Lo
ans a
nd d
ebts
- cu
rren
t por
tion
(Not
es 1
9, 3
2 an
d 34
)
15
,234
,374
5
14,1
48,8
92
5 O
ther
cur
rent
liab
ilitie
s (N
ote
32)
1,01
6,06
8
-
3,83
0,57
0
1
To
tal c
urre
nt li
abili
ties
62,6
49,7
15
22
76,3
51,5
27
26
N
ON
-CU
RR
ENT
LIA
BIL
ITIE
S
D
eriv
ativ
e fin
anci
al li
abili
ties f
or h
edgi
ng -
non-
curr
ent (
Not
es 3
, 4, 2
1 an
d 32
)
32
,455
,333
11
42
,420
,205
15
B
onds
pay
able
- no
n-cu
rren
t (N
otes
4, 2
0, 2
7 an
d 32
)
10
,300
,000
4
22,0
52,6
25
8 Lo
ans a
nd d
ebts
- no
n-cu
rren
t (N
otes
19,
32
and
35)
77,2
88,3
30
27
53,5
14,8
91
18
Con
tract
liab
ilitie
s - n
on-c
urre
nt (N
otes
4 a
nd 2
3)
1,76
1,10
4
1
2,23
6,31
1
1
Prov
isio
ns -
non-
curr
ent (
Not
es 4
and
24)
14
,369
,486
5
10,0
11,4
64
3 C
urre
nt ta
x lia
bilit
ies -
non
-cur
rent
(Not
es 4
and
28)
87
,181
-
-
-
Def
erre
d ta
x lia
bilit
ies (
Not
es 4
and
28)
1,
023,
084
-
55
7,14
2
-
Leas
e lia
bilit
ies -
non
-cur
rent
(Not
es 3
, 4, a
nd 2
1)
13,2
79,7
92
5
15
,801
,724
5
Acc
rued
pen
sion
cos
ts (N
otes
4, 5
and
25)
9,
737,
741
4
9,
435,
035
3 O
ther
non
-cur
rent
liab
ilitie
s (N
ote
32)
530,
745
-
53
4,93
8
-
To
tal n
on-c
urre
nt li
abili
ties
160,
832,
796
57
156,
564,
335
53
To
tal l
iabi
litie
s
22
3,48
2,51
1
79
23
2,91
5,86
2
79
EQU
ITY
ATT
RIB
UTA
BLE
TO
OW
NER
S O
F TH
E C
OM
PAN
Y (N
otes
20
and
26)
Shar
e ca
pita
l
54
,209
,846
19
54
,209
,846
19
C
apita
l sur
plus
1,
187,
327
-
2,
488,
907
1 R
etai
ned
earn
ings
(acc
umul
ated
def
icit)
Le
gal r
eser
ve
-
-
466,
416
- Sp
ecia
l res
erve
-
-
12
,967
-
Una
ppro
pria
ted
reta
ined
ear
ning
s (ac
cum
ulat
ed d
efic
it)
(350
,581
)
-
(1,7
77,2
25)
- To
tal r
etai
ned
earn
ings
(acc
umul
ated
def
icit)
(3
50,5
81)
-
(1
,297
,842
)
-
Oth
er e
quity
2,
543,
766
1
1,
196,
233
- Tr
easu
ry sh
ares
(3
0,87
5)
-
(4
3,37
2)
-
Tota
l equ
ity a
ttrib
utab
le to
ow
ners
of t
he C
ompa
ny
57,5
59,4
83
20
56,5
53,7
72
20
N
ON
-CO
NTR
OLL
ING
INTE
RES
TS (N
ote
26)
3,15
2,09
0
1
3,57
8,34
5
1
To
tal e
quity
60
,711
,573
21
60
,132
,117
21
TOTA
L
$ 2
84,1
94,0
84
100
$
293
,047
,979
10
0 Th
e ac
com
pany
ing
note
s are
an
inte
gral
par
t of t
he c
onso
lidat
ed fi
nanc
ial s
tate
men
ts.
- 6 -
143
CH
INA
AIR
LIN
ES,
LT
D. A
ND
SU
BSI
DIA
RIE
S C
ON
SOL
IDA
TE
D S
TA
TE
ME
NT
S O
F C
OM
PRE
HE
NSI
VE
INC
OM
E FO
R T
HE
YE
AR
S E
ND
ED
DE
CE
MB
ER
31,
202
0 A
ND
201
9 (I
n T
hous
ands
of N
ew T
aiw
an D
olla
rs, E
xcep
t Ear
ning
s Per
Sha
re)
2020
2019
A
mou
nt
%
Am
ount
%
R
EVEN
UE
(Not
es 4
, 27
and
34)
$
115
,250
,550
100
$ 1
68,4
44,1
60
1
00
C
OST
S (N
otes
4, 9
, 11,
17,
24,
25,
27
and
34)
105,
031,
349
91
151,
757,
232
90
G
RO
SS P
RO
FIT
10,2
19,2
01
9
16
,686
,928
10
OPE
RA
TIN
G E
XPE
NSE
S (N
otes
4, 2
5 an
d 27
)
8,
034,
785
7
14
,021
,107
8
O
PER
ATI
NG
PR
OFI
T
2,
184,
416
2
2,
665,
821
2
NO
N-O
PER
ATI
NG
INC
OM
E A
ND
LO
SS
Oth
er in
com
e (N
otes
4, 8
and
27)
68
6,57
4
1
718,
988
- O
ther
gai
ns a
nd lo
sses
(Not
es 1
2, 1
4, 1
5, 2
7 an
d 31
)
(2
65,9
90)
-
(4
73,8
12)
- Fi
nanc
e co
sts (
Not
es 2
7 an
d 32
)
(3
,057
,963
)
(3
)
(3
,340
,119
)
(2
) Sh
are
of th
e pr
ofit
of a
ssoc
iate
s and
join
t ven
ture
s (N
ote
14)
(200
,834
)
-
332,
305
-
Tota
l non
-ope
ratin
g in
com
e an
d lo
ss
(2,8
38,2
13)
(2)
(2,7
62,6
38)
(2)
PR
ETA
X L
OSS
(6
53,7
97)
-
(9
6,81
7)
-
IN
CO
ME
TAX
(BEN
EFIT
) EX
PEN
SE (N
otes
4, 5
an
d 28
)
37
3,98
3
-
(578
,185
)
-
N
ET (L
OSS
) IN
CO
ME
(279
,814
)
-
(675
,002
)
-
O
ther
com
preh
ensi
ve g
ain
for t
he y
ear,
net o
f inc
ome
tax
Item
s tha
t will
not
be
recl
assi
fied
subs
eque
ntly
to
prof
it or
loss
:
(L
oss)
gai
n on
hed
ging
instr
umen
ts su
bjec
t to
basi
s adj
ustm
ent (
Not
es 4
, 26
and
32)
(474
,202
)
(1
)
(1
7,70
5)
-
Unr
ealiz
ed g
ain
on in
vest
men
ts in
equ
ity
inst
rum
ents
des
igna
ted
as a
t fai
r val
ue th
roug
h ot
her c
ompr
ehen
sive
inco
me
(Not
e 8)
(4
5,58
8)
-
79,3
92
- R
emea
sure
men
t of d
efin
ed b
enef
it pl
ans (
Not
es 4
an
d 25
)
(3
99,1
50)
-
(7
81,7
93)
- Sh
are
of o
ther
com
preh
ensi
ve lo
ss o
f ass
ocia
tes
and
join
t ven
ture
s acc
ount
ed fo
r usi
ng th
e eq
uity
met
hod
(Not
es 4
and
14)
34
,271
-
(32,
102)
- In
com
e ta
x re
latin
g to
item
s tha
t will
not
be
recl
assi
fied
subs
eque
ntly
to p
rofit
or l
oss
(N
ote
28)
144,
158
-
14
5,16
6
-
(7
40,5
11)
(1)
(607
,042
)
-
(Con
tinue
d)
- 7 -
CH
INA
AIR
LIN
ES,
LT
D. A
ND
SU
BSI
DIA
RIE
S C
ON
SOL
IDA
TE
D S
TA
TE
ME
NT
S O
F C
OM
PRE
HE
NSI
VE
INC
OM
E FO
R T
HE
YE
AR
S E
ND
ED
DE
CE
MB
ER
31,
202
0 A
ND
201
9 (I
n T
hous
ands
of N
ew T
aiw
an D
olla
rs, E
xcep
t Ear
ning
s Per
Sha
re)
2020
2019
A
mou
nt
%
Am
ount
%
Ite
ms t
hat m
ay b
e re
clas
sifie
d su
bseq
uent
ly to
pro
fit
or lo
ss:
Exch
ange
diff
eren
ces o
n tra
nsla
tion
of th
e fin
anci
al st
atem
ents
of f
orei
gn o
pera
tions
(N
otes
4 a
nd 2
6)
$
(9
7,94
8)
-
$
(7
2,95
2)
-
Gai
n on
hed
ging
inst
rum
ents
not
subj
ect t
o ba
sis
adju
stm
ent (
Not
es 4
, 26
and
32)
2,10
3,33
2
2
1,41
1,62
3
-
Inco
me
tax
rela
ting
to it
ems t
hat m
ay b
e re
clas
sifie
d su
bseq
uent
ly to
pro
fit o
r los
s
(Not
e 28
)
(4
00,8
01)
-
(2
68,8
71)
-
1,60
4,58
3
2
1,06
9,80
0
-
O
ther
com
preh
ensi
ve g
ain
(loss
) for
the
year
, ne
t of i
ncom
e ta
x
86
4,07
2
1
462,
758
-
TOTA
L C
OM
PREH
ENSI
VE
INC
OM
E (L
OSS
) FO
R
THE
YEA
R
$
58
4,25
8
1
$
(2
12,2
44)
-
NET
INC
OM
E (L
OSS
) ATT
RIB
UTA
BLE
TO
:
O
wne
r of t
he C
ompa
ny
$
14
0,00
0
-
$
(1
,199
,798
)
(1
) N
on-c
ontro
lling
inte
rest
s
(4
19,8
14)
-
52
4,79
6
1
$
(2
79,8
14)
-
$
(675
,002
)
-
TO
TAL
CO
MPR
EHEN
SIV
E IN
CO
ME
ATT
RIB
UTA
BLE
TO
:
O
wne
r of t
he C
ompa
ny
$
96
6,96
8
1
$
(6
47,0
85)
- N
on-c
ontro
lling
inte
rest
s
(3
82,7
10)
-
43
4,84
1
-
$
58
4,25
8
1
$
(2
12,2
44)
- EA
RN
ING
S PE
R S
HA
RE
(NEW
TA
IWA
N
DO
LLA
RS;
Not
e 29
)
B
asic
$
0.03
$
(0
.22)
Dilu
ted
$
0.
03
$
(0.2
2)
Th
e ac
com
pany
ing
note
s are
an
inte
gral
par
t of t
he c
onso
lidat
ed fi
nanc
ial s
tate
men
ts.
(Con
clud
ed)
- 8 -
144
CH
INA
AIR
LIN
ES,
LT
D. A
ND
SU
BSI
DIA
RIE
S C
ON
SOL
IDA
TE
D S
TA
TEM
EN
TS
OF
CH
AN
GE
S IN
EQ
UIT
Y
FOR
TH
E Y
EA
RS
EN
DE
D D
EC
EMB
ER
31,
202
0 A
ND
201
9 (I
n T
hous
ands
of N
ew T
aiw
an D
olla
rs)
Equ
ity A
ttrib
utab
le to
Ow
ners
of t
he C
ompa
ny
Oth
er E
quity
Ret
aine
d Ea
rnin
gs
E
xcha
nge
Diff
eren
ces o
n
Unr
ealiz
ed G
ain
on F
inan
cial
A
sset
at F
air
Shar
e C
apita
l
Cap
ital S
urpl
us
L
egal
Res
erve
Spec
ial R
eser
ve
Una
ppro
pria
ted
Ear
ning
s (A
ccum
ulat
ed
Def
icit)
T
rans
latio
n of
the
Fina
ncia
l St
atem
ents
of
Fore
ign
Val
ue T
hrou
gh
Oth
er
Com
preh
ensi
ve
Inco
me
Gai
n (L
oss)
on
Hed
ging
In
stru
men
ts
Tre
asur
y Sh
ares
H
eld
by
Subs
idia
ries
Tot
al
N
on-C
ontr
ollin
g In
tere
sts
T
otal
Equ
ity
B
ALA
NC
E A
T JA
NU
AR
Y 1
, 201
9
$
54
,209
,846
$
1,
241,
214
$
351,
923
$
118,
810
$
1,14
4,92
8
$
(9
,664
)
$
42
,619
$
25
,268
$
(4
3,37
2 )
$
57,0
81,5
72
$
2,96
5,51
2
$
60
,047
,084
Bas
is ad
justm
ent t
o lo
ss o
n he
dgin
g in
stru
men
ts
-
-
-
-
-
-
-
(603
)
-
(603
)
-
(603
)
App
ropr
iatio
n of
201
8 ea
rnin
gs
Lega
l res
erve
-
-
114,
493
-
(1
14,4
93 )
-
-
-
-
-
-
-
Spec
ial r
eser
ve
-
-
-
(1
05,8
43 )
10
5,84
3
-
-
-
-
-
-
- C
ash
divi
dend
s - $
0.20
9607
37 p
er sh
are
-
-
-
-
(1
,136
,278
)
-
-
-
-
(1,1
36,2
78 )
-
(1
,136
,278
)
Cha
nges
in c
apita
l sur
plus
from
div
iden
ds d
istrib
uted
to su
bsid
iarie
s
-
606
-
-
-
-
-
-
-
60
6
-
606
A
ctua
l dis
posa
l of i
nter
ests
in su
bsid
iarie
s
-
1,24
7,08
7
-
-
-
-
-
-
-
1,24
7,08
7
7,54
6
1,25
4,63
3
Net
pro
fit (l
oss)
for t
he y
ear e
nded
Dec
embe
r 31,
201
9
-
-
-
-
(1,1
99,7
98 )
-
-
-
-
(1
,199
,798
)
524,
796
(6
75,0
02 )
O
ther
com
preh
ensiv
e in
com
e (lo
ss) f
or th
e ye
ar e
nded
Dec
embe
r 31,
201
9 ne
t of i
ncom
e ta
x
-
-
-
-
(577
,427
)
(53,
411 )
64,5
38
1,
119,
013
-
55
2,71
3
(89,
955 )
462,
758
To
tal c
ompr
ehen
sive
inco
me
(loss
) for
the
year
end
ed D
ecem
ber 3
1, 2
019
-
-
-
-
(1
,777
,225
)
(53,
411 )
64,5
38
1,
119,
013
-
(6
47,0
85 )
43
4,84
1
(212
,244
)
Cas
h di
vide
nds f
rom
subs
idia
ries p
aid
to n
on-c
ontro
lling
inte
rest
s
-
-
-
-
-
-
-
-
-
-
611,
841
61
1,84
1
Non
-con
trolli
ng in
tere
sts a
risin
g fro
m a
cqui
sitio
n of
subs
idia
ries
-
-
-
-
-
-
-
-
-
-
(4
16,4
38 )
(4
16,4
38 )
Lo
ss o
f con
trol o
f sub
sidia
ries
-
-
-
-
-
8,
368
10
5
-
-
8,47
3
(24,
957 )
(16,
484 )
BA
LAN
CE
AT
DEC
EMB
ER 3
1, 2
019
54
,209
,846
2,48
8,90
7
466,
416
12
,967
(1,7
77,2
25 )
(5
4,70
7 )
10
7,26
2
1,14
3,67
8
(43,
372 )
56,5
53,7
72
3,
578,
345
60
,132
,117
Issu
ance
of e
mpl
oyee
shar
e op
tions
by
subs
idia
ries
-
17
2
-
-
-
-
-
-
-
172
52
224
C
hang
es in
per
cent
age
of o
wne
rshi
p in
tere
sts i
n su
bsid
iarie
s
-
-
-
-
(169
,272
)
-
-
-
-
(169
,272
)
331,
427
16
2,15
5
Bas
is ad
justm
ents
to g
ain
on h
edgi
ng in
strum
ents
-
-
-
-
-
-
-
20
0,98
9
-
200,
989
-
20
0,98
9
App
ropr
iatio
n of
201
9 ea
rnin
gs
Lega
l res
erve
-
-
(466
,416
)
-
466,
416
-
-
-
-
-
-
-
Spec
ial r
eser
ve
-
-
-
(1
2,96
7 )
12
,967
-
-
-
-
-
-
- C
apita
l sur
plus
use
d to
cov
er a
ccum
ulat
ed d
efic
it
-
(1,2
97,8
43 )
-
-
1,
297,
843
-
-
-
-
-
-
-
N
et p
rofit
(los
s) fo
r the
yea
r end
ed D
ecem
ber 3
1, 2
020
-
-
-
-
14
0,00
0
-
-
-
-
140,
000
(4
19,8
14 )
(2
79,8
14 )
O
ther
com
preh
ensiv
e in
com
e (lo
ss) f
or th
e ye
ar e
nded
Dec
embe
r 31,
202
0,
net o
f inc
ome
tax
-
-
-
-
(3
19,5
76 )
(7
9,54
5 )
(3
5,90
3 )
1,
261,
992
-
82
6,96
8
37,1
04
86
4,07
2
Tota
l com
preh
ensi
ve in
com
e (lo
ss) f
or th
e ye
ar e
nded
Dec
embe
r 31,
202
0
-
-
-
-
(179
,576
)
(79,
545 )
(35,
903 )
1,26
1,99
2
-
966,
968
(3
82,7
10 )
58
4,25
8
Dis
posa
l of t
reas
ury
shar
es
-
(3
,909
)
-
-
(1,7
34 )
-
-
-
12
,497
6,85
4
-
6,85
4
Cas
h di
vide
nds f
rom
subs
idia
ries p
aid
to n
on-c
ontro
lling
inte
rest
s
-
-
-
-
-
-
-
-
-
-
(375
,024
)
(375
,024
)
BA
LAN
CE
AT
DEC
EMB
ER 3
1, 2
020
$
54,2
09,8
46
$
1,18
7,32
7
$
-
$
-
$
(3
50,5
81 )
$
(134
,252
)
$
71
,359
$
2,
606,
659
$
(30,
875 )
$
57
,559
,483
$
3,
152,
090
$
60,7
11,5
73
The
acco
mpa
nyin
g no
tes a
re a
n in
tegr
al p
art o
f the
con
solid
ated
fina
ncia
l sta
tem
ents
. 145
CH
INA
AIR
LIN
ES,
LT
D. A
ND
SU
BSI
DIA
RIE
S C
ON
SOL
IDA
TE
D S
TA
TE
ME
NT
S O
F C
ASH
FLO
WS
FOR
TH
E Y
EA
RS
EN
DE
D D
EC
EM
BE
R 3
1, 2
020
AN
D 2
019
(In
Tho
usan
ds o
f New
Tai
wan
Dol
lars
)
20
20
20
19
C
ASH
FLO
WS
FRO
M O
PER
ATI
NG
AC
TIV
ITIE
S
Lo
ss b
efor
e in
com
e ta
x
$
(653
,797
)
$
(96,
817)
A
djus
tmen
ts fo
r ope
ratin
g ac
tiviti
es:
Dep
reci
atio
n ex
pens
e
31
,167
,247
32
,601
,400
A
mor
tizat
ion
expe
nse
206,
936
198,
237
Expe
cted
cre
dit l
oss r
ecog
nize
d on
trad
e re
ceiv
able
s
4,
895
24,0
96
Net
gai
n on
fair
valu
e ch
ange
s of f
inan
cial
ass
ets a
nd li
abili
ties h
eld
for t
radi
ng
(2,2
87)
(27,
580)
In
tere
st in
com
e
(2
82,5
06)
(417
,446
) D
ivid
end
inco
me
(23,
043)
(21,
422)
Sh
are
of lo
ss (p
rofit
) of a
ssoc
iate
s and
join
t ven
ture
s
20
0,83
4
(3
32,3
05)
Gai
n on
dis
posa
l of p
rope
rty, p
lant
and
equ
ipm
ent
(13,
347)
(32,
460)
G
ain
on d
ispo
sal o
f inv
estm
ents
acc
ount
ed fo
r usi
ng th
e eq
uity
m
etho
d
-
(7,6
56)
Loss
on
disp
osal
of n
on-c
urre
nt a
sset
s hel
d fo
r sal
e
-
10,4
62
Impa
irmen
t los
s rec
ogni
zed
on p
rope
rty, p
lant
, equ
ipm
ent
424,
573
- Lo
ss o
n in
vent
orie
s and
pro
perty
, pla
nt a
nd e
quip
men
t
47
1,50
7
57
2,02
6 N
et g
ain
on fo
reig
n cu
rren
cy e
xcha
nge
(1,3
38,7
16)
(59,
987)
C
ompe
nsat
ion
cost
s of e
mpl
oyee
shar
e op
tions
22
4
-
Fina
nce
cost
s
3,
057,
963
3,34
0,11
9 Im
pairm
ent l
oss o
f inv
estm
ents
acc
ount
ed fo
r usi
ng th
e eq
uity
m
etho
d
46
,757
-
Rec
ogni
tion
of p
rovi
sion
s
6,
075,
077
4,60
8,92
4 A
mor
tizat
ion
of u
nrea
lized
sale
-leas
ebac
ks
-
10
3,77
5 O
ther
s
(2
,435
)
(1
,484
) C
hang
es in
ope
ratin
g as
sets
and
liab
ilitie
s
Fi
nanc
ial a
sset
s man
dato
rily
clas
sifie
d as
at f
air v
alue
thro
ugh
prof
it or
loss
24
1,59
2
(2
78,7
41)
Fina
ncia
l lia
bilit
ies m
anda
toril
y cl
assi
fied
as a
t fai
r val
ue th
roug
h pr
ofit
or lo
ss
(11,
749)
11,5
28
Not
es a
nd a
ccou
nts r
ecei
vabl
e
(1
,073
,959
)
1,
564,
298
Acc
ount
s rec
eiva
ble
- rel
ated
par
ties
593,
365
66,5
38
Oth
er re
ceiv
able
s
(8
5,26
3)
(4
9,13
8)
Inve
ntor
ies
(83,
341)
(118
,317
) O
ther
cur
rent
ass
ets
1,83
0,88
7
54
8,15
6 N
otes
and
acc
ount
s pay
able
(6
28,7
80)
(14,
326)
A
ccou
nts p
ayab
le -
rela
ted
parti
es
(1,0
43,5
01)
(224
,931
) O
ther
pay
able
s
(4
,295
,509
)
(8
32,2
88)
Con
tract
liab
ilitie
s
(1
7,96
6,62
1)
1,
847,
286
Prov
isio
ns
(1,3
08,1
70)
(2,7
99,3
14)
Oth
er c
urre
nt li
abili
ties
(2,6
20,0
22)
202,
815
Acc
rued
pen
sion
liab
ilitie
s
(9
7,57
0)
(1
49,6
78)
Oth
er li
abili
ties
(17,
082)
(5,1
55)
Cas
h ge
nera
ted
from
ope
ratio
ns
12,7
74,1
59
40,2
30,6
15
Inte
rest
rece
ived
30
4,64
2
40
1,19
0 (C
ontin
ued)
- 10
-
CH
INA
AIR
LIN
ES,
LT
D. A
ND
SU
BSI
DIA
RIE
S C
ON
SOL
IDA
TE
D S
TA
TE
ME
NT
S O
F C
ASH
FLO
WS
FOR
TH
E Y
EA
RS
EN
DE
D D
EC
EM
BE
R 3
1, 2
020
AN
D 2
019
(In
Tho
usan
ds o
f New
Tai
wan
Dol
lars
)
20
20
20
19
D
ivid
ends
rece
ived
$
32,4
33
$
35
5,31
1 In
tere
st p
aid
(3,2
09,0
74)
(3,1
24,9
60)
Inco
me
tax
paid
(1
78,6
85)
(335
,544
)
Net
cas
h ge
nera
ted
from
ope
ratin
g ac
tiviti
es
9,72
3,47
5
37
,526
,612
CA
SH F
LOW
S FR
OM
INV
ESTI
NG
AC
TIV
ITIE
S
A
cqui
sitio
n of
fina
ncia
l ass
ets a
t am
ortiz
ed c
ost
(6,2
35,7
73)
(2,0
89,8
71)
Dis
posa
l of f
inan
cial
ass
ets a
t am
ortiz
ed c
ost
1,93
4,51
6
3,
447,
202
Paym
ents
to a
cqui
re fi
nanc
ial a
sset
s for
hed
ging
(1
0,26
9,05
5)
-
Dis
posa
l of f
inan
cial
ass
ets f
or h
edgi
ng
2,36
3,89
7
-
Proc
eeds
from
dis
posa
l of n
on-c
urre
nt a
sset
s hel
d fo
r sal
e
-
35,6
92
Paym
ents
for p
rope
rty, p
lant
and
equ
ipm
ent
(1,2
37,5
15)
(3,3
16,0
78)
Proc
eeds
from
dis
posa
l of p
rope
rty, p
lant
and
equ
ipm
ent
45,6
20
71,1
94
Incr
ease
in re
fund
able
dep
osits
(6
3,00
5)
(4
40,4
43)
Dec
reas
e in
refu
ndab
le d
epos
its
122,
324
218,
547
Incr
ease
in p
repa
ymen
ts fo
r equ
ipm
ent
(11,
407,
502)
(15,
658,
898)
(In
crea
se) d
ecre
ase
in c
ompu
ter s
oftw
are
cost
s
(1
30,4
61)
(172
,639
) D
ecre
ase
in re
stric
ted
asse
ts
(1
71,2
19)
38,6
36
Proc
eeds
from
dis
posa
l of a
ssoc
iate
s acc
ount
ed fo
r usin
g th
e eq
uity
m
etho
d
-
1,86
6,47
4 Pr
ocee
ds fr
om a
cqui
sitio
n of
join
t ven
ture
s acc
ount
ed fo
r usi
ng th
e eq
uity
met
hod
-
(3
5,52
5)
Net
cas
h ou
tflow
on
disp
osal
of s
ubsi
diar
ies (
Not
e 31
)
-
(17,
413)
Net
cas
h us
ed in
inve
stin
g ac
tiviti
es
(25,
048,
173)
(16,
053,
122)
CA
SH F
LOW
S FR
OM
FIN
AN
CIN
G A
CTI
VIT
IES
Dec
reas
e in
shor
t-ter
m d
ebts
1,
552,
000
380,
000
Incr
ease
in sh
ort-t
erm
bill
pay
able
8,
088,
882
- Pr
ocee
ds fr
om is
suan
ce o
f bon
ds p
ayab
le
-
3,
500,
000
Rep
aym
ents
of b
onds
pay
able
(9
,850
,000
)
(4
,445
,900
) Pr
ocee
ds fr
om lo
ng-te
rm d
ebts
45
,605
,919
9,
078,
690
Rep
aym
ents
of l
ong-
term
deb
ts
(20,
746,
998)
(17,
819,
750)
R
epay
men
ts o
f the
prin
cipa
l por
tion
of le
ase
liabi
litie
s
(1
0,58
3,87
2)
(1
1,69
2,31
0)
Proc
eeds
from
gua
rant
ee d
epos
its re
ceiv
ed
165,
404
180,
360
Ref
unds
of g
uara
ntee
dep
osits
rece
ived
(1
56,1
43)
(149
,198
) Pr
ocee
ds fr
om sa
le -
leas
ebac
ks
-
4,
905,
660
Div
iden
ds p
aid
to o
wne
rs o
f the
Com
pany
-
(1,1
35,6
72)
Issu
ance
of o
rdin
ary
shar
es o
f sub
sidi
arie
s
16
2,15
5
-
Cas
h di
vide
nds p
aid
to n
on-c
ontro
lling
inte
rest
s
(3
75,0
24)
(416
,438
) Pr
ocee
ds fr
om d
ispo
sal o
f tre
asur
y sh
ares
6,
854
-
Net
cas
h ge
nera
ted
from
(use
d in
) fin
anci
ng a
ctiv
ities
13
,869
,177
(1
7,61
4,55
8)
(Con
tinue
d)
- 11
-
146
CH
INA
AIR
LIN
ES,
LT
D. A
ND
SU
BSI
DIA
RIE
S C
ON
SOL
IDA
TE
D S
TA
TE
ME
NT
S O
F C
ASH
FLO
WS
FOR
TH
E Y
EA
RS
EN
DE
D D
EC
EM
BE
R 3
1, 2
020
AN
D 2
019
(In
Tho
usan
ds o
f New
Tai
wan
Dol
lars
)
20
20
20
19
EF
FEC
TS O
F EX
CH
AN
GE
RA
TE C
HA
NG
ES O
N T
HE
BA
LAN
CE
OF
CA
SH H
ELD
IN F
OR
EIG
N C
UR
REN
CIE
S
$
121,
930
$
(3
36,9
41)
N
ET (D
ECR
EASE
) IN
CR
EASE
IN C
ASH
AN
D C
ASH
EQ
UIV
ALE
NTS
(1
,333
,591
)
3,
521,
991
C
ASH
AN
D C
ASH
EQ
UIV
ALE
NTS
AT
THE
BEG
INN
ING
OF
THE
YEA
R
28,4
59,5
28
24,9
37,5
37
C
ASH
AN
D C
ASH
EQ
UIV
ALE
NTS
AT
THE
END
OF
THE
YEA
R
$
27
,125
,937
$
28,4
59,5
28
The
acco
mpa
nyin
g no
tes a
re a
n in
tegr
al p
art o
f the
con
solid
ated
fina
ncia
l sta
tem
ents
. (C
oncl
uded
)
- 12
-
CH
INA
AIR
LIN
ES,
LT
D. A
ND
SU
BSI
DIA
RIE
S N
OT
ES
TO
CO
NSO
LID
AT
ED
FIN
AN
CIA
L S
TA
TE
ME
NT
S FO
R T
HE
YE
AR
S E
ND
ED
DE
CE
MB
ER
31,
202
0 A
ND
201
9 (I
n T
hous
ands
of N
ew T
aiw
an D
olla
rs, U
nles
s Sta
ted
Oth
erw
ise)
1
. G
EN
ER
AL
INFO
RM
AT
ION
C
hina
Airl
ines
, Ltd
. (th
e “C
ompa
ny”)
was
fou
nded
in 1
959
and
its s
hare
s ha
ve b
een
liste
d on
the
Taiw
an
Stoc
k Ex
chan
ge s
ince
Feb
ruar
y 26
, 19
93.
The
Com
pany
prim
arily
pro
vide
s ai
r tra
nspo
rt se
rvic
es f
or
pass
enge
rs a
nd c
argo
. Its
oth
er o
pera
tions
incl
ude
(a) m
ail s
ervi
ces;
(b) g
roun
d se
rvic
es a
nd ro
utin
e ai
rcra
ft m
aint
enan
ce; (
c) m
ajor
mai
nten
ance
of f
light
equ
ipm
ent;
(d) c
omm
unic
atio
ns a
nd d
ata
proc
essi
ng s
ervi
ces
to o
ther
airl
ines
; (e)
the
sale
of a
ircra
ft pa
rts, e
quip
men
t and
the
entir
e ai
rcra
ft; a
nd (f
) lea
sing
of a
ircra
ft.
The
maj
or s
hare
hold
ers
of t
he C
ompa
ny a
re C
hina
Avi
atio
n D
evel
opm
ent
Foun
datio
n (C
AD
F) a
nd
Nat
iona
l Dev
elop
men
t Fun
d (N
DF)
, Exe
cutiv
e Y
uan.
As o
f Dec
embe
r 31,
202
0 an
d 20
19, C
AD
F an
d N
DF
join
tly h
eld
44.0
3% o
f the
Com
pany
’s sh
ares
.
2.
APP
RO
VA
L O
F FI
NA
NC
IAL
ST
AT
EM
EN
TS
The
cons
olid
ated
fin
anci
al s
tate
men
ts o
f th
e C
ompa
ny a
nd it
s su
bsid
iarie
s (c
olle
ctiv
ely
refe
rred
to a
s th
e “G
roup
”) w
ere
appr
oved
by
the
Com
pany
’s b
oard
of d
irect
ors o
n M
arch
18,
202
1.
3.
APP
LIC
AT
ION
OF
NEW
, AM
EN
DE
D A
ND
RE
VIS
ED
ST
AN
DA
RD
S A
ND
INT
ER
PRE
TA
TIO
NS
a.
Initi
al a
pplic
atio
n of
the
am
endm
ents
to
the
Inte
rnat
iona
l Fi
nanc
ial
Rep
ortin
g St
anda
rds
(IFR
S),
Inte
rnat
iona
l Acc
ount
ing
Stan
dard
s (IA
S), I
FRIC
Inte
rpre
tatio
ns (I
FRIC
), an
d SI
C In
terp
reta
tions
(SIC
) (c
olle
ctiv
ely,
the
“IFR
Ss”)
end
orse
d an
d is
sued
into
eff
ect b
y th
e Fi
nanc
ial S
uper
viso
ry C
omm
issi
on
(FSC
)
Exce
pt fo
r the
follo
win
g, th
e in
itial
app
licat
ion
of th
e IF
RSs
end
orse
d an
d is
sued
into
eff
ect b
y th
e FS
C
did
not h
ave
mat
eria
l im
pact
on
the
Gro
up’s
acc
ount
ing
polic
ies:
A
men
dmen
t to
IFR
S 16
“C
ovid
-19-
Rel
ated
Ren
t Con
cess
ions
” Th
e C
ompa
ny e
lect
ed t
o ap
ply
the
prac
tical
exp
edie
nt p
rovi
ded
in t
he a
men
dmen
t to
IFR
S 16
with
re
spec
t to
rent
con
cess
ions
neg
otia
ted
with
the
less
or a
s a
dire
ct c
onse
quen
ce o
f th
e C
OV
ID-1
9. T
he
rela
ted
acco
untin
g po
licie
s ar
e st
ated
in
Not
e 4.
Prio
r to
the
app
licat
ion
of t
he a
men
dmen
t, th
e C
ompa
ny sh
all d
eter
min
e w
heth
er o
r not
the
abov
emen
tione
d re
nt c
once
ssio
ns n
eed
to b
e ac
coun
ted
for
as le
ase
mod
ifica
tions
. Th
e C
ompa
ny a
pplie
d th
e am
endm
ent
from
Jan
uary
1,
2020
. B
ecau
se t
he a
bove
men
tione
d re
nt
conc
essi
ons
affe
ct o
nly
in 2
020,
ret
rosp
ectiv
e ap
plic
atio
n of
the
am
endm
ent
has
no i
mpa
ct o
n th
e re
tain
ed e
arni
ngs a
s of J
anua
ry 1
, 202
0.
- 13
-
147
b.
The
IFR
Ss e
ndor
sed
by th
e FS
C fo
r app
licat
ion
star
ting
from
202
1
New
IFR
Ss
E
ffec
tive
Dat
e A
nnou
nced
by
IASB
A
men
dmen
ts to
IFR
S 4 “
Exte
nsio
n of
the
Tem
pora
ry E
xem
ptio
n fr
om
App
lyin
g IF
RS
9”
Eff
ectiv
e im
med
iate
ly u
pon
prom
ulga
tion
by th
e IA
SB
Am
endm
ents
to IF
RS
9, IA
S 39
, IFR
S 7,
IFR
S 4
and
IFR
S 16
“I
nter
est R
ate
Ben
chm
ark
Ref
orm
- Ph
ase
2”
Jan
uary
1, 2
021
As
of t
he d
ate
the
cons
olid
ated
fin
anci
al s
tate
men
ts w
ere
auth
oriz
ed f
or i
ssue
, th
e G
roup
is
cont
inuo
usly
ass
essi
ng t
he p
ossi
ble
impa
ct t
hat t
he a
pplic
atio
n of
oth
er s
tand
ards
and
inte
rpre
tatio
ns
will
hav
e on
the
Gro
up’s
fin
anci
al p
ositi
on a
nd f
inan
cial
per
form
ance
and
will
dis
clos
e th
e re
leva
nt
impa
ct w
hen
the
asse
ssm
ent i
s com
plet
ed.
c.
N
ew IF
RSs
in is
sue
but n
ot y
et e
ndor
sed
and
issu
ed in
to e
ffec
t by
the
FSC
New
IFR
Ss
E
ffec
tive
Dat
e A
nnou
nced
by
IASB
(Not
e 1)
“A
nnua
l Im
prov
emen
ts to
IFR
S St
anda
rds 2
018-
2020
” J
anua
ry 1
, 202
2 (N
ote
2)
Am
endm
ents
to IF
RS
3 “R
efer
ence
to th
e C
once
ptua
l Fra
mew
ork”
J
anua
ry 1
, 202
2 (N
ote
3)
Am
endm
ents
to IF
RS
10 a
nd IA
S 28
“Sa
le o
r Con
tribu
tion
of A
sset
s be
twee
n an
Inve
stor
and
its A
ssoc
iate
or J
oint
Ven
ture
” T
o be
det
erm
ined
by
IASB
IFR
S 17
“In
sura
nce
Con
tract
s”
Jan
uary
1, 2
023
Am
endm
ents
to IF
RS
17
Jan
uary
1, 2
023
Am
endm
ents
to IA
S 1
“Cla
ssifi
catio
n of
Lia
bilit
ies a
s Cur
rent
or
Non
-cur
rent
” J
anua
ry 1
, 202
3
Am
endm
ents
to IA
S 1
“Dis
clos
ure
of A
ccou
ntin
g Po
licie
s”
Jan
uary
1, 2
023
(Not
e 6)
A
men
dmen
ts to
IAS
8 “D
efin
ition
of A
ccou
ntin
g Es
timat
es”
Jan
uary
1, 2
023
(Not
e 7)
A
men
dmen
ts to
IAS
16 “
Prop
erty
, Pla
nt a
nd E
quip
men
t - P
roce
eds
befo
re In
tend
ed U
se”
Jan
uary
1, 2
022
(Not
e 4)
Am
endm
ents
to IA
S 37
“O
nero
us C
ontra
cts -
Cos
t of F
ulfil
ling
a C
ontra
ct”
Jan
uary
1, 2
022
(Not
e 5)
Not
e 1:
U
nles
s st
ated
oth
erw
ise,
the
abo
ve N
ew I
FRSs
are
eff
ectiv
e fo
r an
nual
rep
ortin
g pe
riods
be
ginn
ing
on o
r afte
r the
ir re
spec
tive
effe
ctiv
e da
tes.
Not
e 2:
Th
e am
endm
ents
to IF
RS
9 w
ill b
e ap
plie
d pr
ospe
ctiv
ely
to m
odifi
catio
ns a
nd e
xcha
nges
of
finan
cial
liab
ilitie
s th
at o
ccur
on
or a
fter
the
annu
al r
epor
ting
perio
ds b
egin
ning
on
or a
fter
Janu
ary
1, 2
022.
The
am
endm
ents
to I
AS
41 “
Agr
icul
ture
” w
ill b
e ap
plie
d pr
ospe
ctiv
ely
to
the
fair
valu
e m
easu
rem
ents
on
or a
fter
the
annu
al r
epor
ting
perio
ds b
egin
ning
on
or a
fter
Janu
ary
1, 2
022.
The
am
endm
ents
to IF
RS
1 “F
irst-t
ime
Ado
ptio
ns o
f IFR
Ss”
will
be
appl
ied
retro
spec
tivel
y fo
r ann
ual r
epor
ting
perio
ds b
egin
ning
on
or a
fter J
anua
ry 1
, 202
2.
Not
e 3:
Th
e am
endm
ents
are
app
licab
le to
bus
ines
s co
mbi
natio
ns fo
r whi
ch th
e ac
quis
ition
dat
e is
on
or a
fter t
he b
egin
ning
of t
he a
nnua
l rep
ortin
g pe
riod
begi
nnin
g on
or a
fter J
anua
ry 1
, 202
2.
Not
e 4:
Th
e am
endm
ents
are
app
licab
le t
o pr
oper
ty,
plan
t an
d eq
uipm
ent
that
are
bro
ught
to
the
loca
tion
and
cond
ition
nec
essa
ry f
or th
em to
be
capa
ble
of o
pera
ting
in th
e m
anne
r int
ende
d by
man
agem
ent o
n or
afte
r Jan
uary
1, 2
021.
N
ote
5:
The
amen
dmen
ts a
re a
pplic
able
to c
ontra
cts
for
whi
ch th
e en
tity
has
not y
et f
ulfil
led
all i
ts ob
ligat
ions
on
Janu
ary
1, 2
022.
- 14
-
Not
e 6:
Th
e am
endm
ents
will
be
appl
ied
pros
pect
ivel
y fo
r an
nual
rep
ortin
g pe
riods
beg
inni
ng o
n or
af
ter J
anua
ry 1
, 202
3.
Not
e 7:
Th
e am
endm
ents
are
app
licab
le to
cha
nges
in a
ccou
ntin
g es
timat
es a
nd c
hang
es in
acc
ount
ing
polic
ies
that
occ
ur o
n or
afte
r th
e be
ginn
ing
of th
e an
nual
rep
ortin
g pe
riod
begi
nnin
g on
or
afte
r Jan
uary
1, 2
023.
Th
e ap
plic
atio
n of
new
IFR
Ss in
issu
e bu
t not
yet
end
orse
d an
d is
sued
into
eff
ect b
y th
e FS
C w
ould
not
ha
ve a
ny m
ater
ial i
mpa
ct o
n th
e G
roup
’s a
ccou
ntin
g po
licie
s. A
s of
the
date
the
cons
olid
ated
fina
ncia
l st
atem
ents
wer
e au
thor
ized
for
issu
e, th
e G
roup
is c
ontin
uous
ly a
sses
sing
the
poss
ible
impa
ct th
at th
e ap
plic
atio
n of
oth
er s
tand
ards
and
int
erpr
etat
ions
will
hav
e on
the
Gro
up’s
fin
anci
al p
ositi
on a
nd
finan
cial
per
form
ance
and
will
dis
clos
e th
e re
leva
nt im
pact
whe
n th
e as
sess
men
t is c
ompl
eted
. 4
. SI
GN
IFIC
AN
T A
CC
OU
NT
ING
PO
LIC
IES
Stat
emen
t of C
ompl
ianc
e Th
e co
nsol
idat
ed f
inan
cial
sta
tem
ents
hav
e be
en p
repa
red
in a
ccor
danc
e w
ith th
e R
egul
atio
ns G
over
ning
th
e Pr
epar
atio
n of
Fin
anci
al R
epor
ts b
y Se
curit
ies
Issu
ers
and
IFR
Ss a
s en
dors
ed a
nd is
sued
into
eff
ect b
y th
e FS
C.
Bas
is o
f Pre
para
tion
The
cons
olid
ated
fin
anci
al s
tate
men
ts h
ave
been
pre
pare
d on
the
hist
oric
al c
ost b
asis
exc
ept f
or f
inan
cial
in
stru
men
ts w
hich
are
mea
sure
d at
fair
valu
e.
The
fair
valu
e m
easu
rem
ents
, whi
ch a
re g
roup
ed in
to L
evel
s 1
to 3
bas
ed o
n th
e de
gree
to w
hich
the
fair
valu
e m
easu
rem
ent
inpu
ts ar
e ob
serv
able
and
bas
ed o
n th
e si
gnifi
canc
e of
the
inp
uts
to t
he f
air
valu
e m
easu
rem
ent i
n its
ent
irety
, are
des
crib
ed a
s fol
low
s:
a.
Leve
l 1 in
puts
are
quo
ted
pric
es (u
nadj
uste
d) in
act
ive
mar
kets
for i
dent
ical
ass
ets o
r lia
bilit
ies;
b.
Leve
l 2 in
puts
are
inpu
ts o
ther
than
quo
ted
pric
es in
clud
ed w
ithin
Lev
el 1
that
are
obs
erva
ble
for
an
asse
t or l
iabi
lity,
eith
er d
irect
ly (i
.e. a
s pric
es) o
r ind
irect
ly (i
.e. d
eriv
ed fr
om p
rices
); an
d c.
Le
vel 3
inpu
ts a
re u
nobs
erva
ble
inpu
ts fo
r an
asse
t or l
iabi
lity.
C
urre
nt a
nd N
on-c
urre
nt A
sset
s and
Lia
bilit
ies
Cur
rent
ass
ets i
nclu
de:
a.
A
sset
s hel
d pr
imar
ily fo
r the
pur
pose
of t
radi
ng;
b.
A
sset
s exp
ecte
d to
be
real
ized
with
in 1
2 m
onth
s afte
r the
repo
rting
per
iod;
and
c.
C
ash
and
cash
equ
ival
ents
unl
ess t
he a
sset
is re
stric
ted
from
bei
ng e
xcha
nged
or u
sed
to se
ttle
a lia
bilit
y fo
r at l
east
12
mon
ths a
fter t
he re
porti
ng p
erio
d.
Cur
rent
liab
ilitie
s inc
lude
: a.
Li
abili
ties h
eld
prim
arily
for t
he p
urpo
se o
f tra
ding
; b.
Li
abili
ties
due
to b
e se
ttled
with
in 1
2 m
onth
s af
ter
the
repo
rting
per
iod,
eve
n if
an a
gree
men
t to
re
finan
ce, o
r to
resc
hedu
le p
aym
ents
, on
a lo
ng-te
rm b
asis
is c
ompl
eted
afte
r the
rep
ortin
g pe
riod
and
befo
re th
e co
nsol
idat
ed fi
nanc
ial s
tate
men
ts a
re a
utho
rized
for i
ssue
; and
- 15
-
148
c.
Liab
ilitie
s fo
r whi
ch th
e G
roup
doe
s no
t hav
e an
unc
ondi
tiona
l rig
ht to
def
er s
ettle
men
t for
at l
east
12
mon
ths a
fter t
he re
porti
ng p
erio
d. T
erm
s of a
liab
ility
that
cou
ld, a
t the
opt
ion
of th
e co
unte
rpar
ty, r
esul
t in
its s
ettle
men
t by
the
issu
e of
equ
ity in
stru
men
ts d
o no
t aff
ect i
ts c
lass
ifica
tion.
A
sset
s and
liab
ilitie
s tha
t are
not
cla
ssifi
ed a
s cur
rent
are
cla
ssifi
ed a
s non
-cur
rent
. B
asis
of C
onso
lidat
ion
The
cons
olid
ated
fina
ncia
l sta
tem
ents
inco
rpor
ate
the
finan
cial
sta
tem
ents
of t
he C
ompa
ny a
nd th
e en
titie
s co
ntro
lled
by th
e C
ompa
ny. I
ncom
e an
d ex
pens
es o
f sub
sidi
arie
s ac
quire
d or
dis
pose
d of
dur
ing
the
perio
d ar
e in
clud
ed i
n th
e co
nsol
idat
ed s
tate
men
ts o
f pr
ofit
or l
oss
and
othe
r co
mpr
ehen
sive
inc
ome
from
the
ef
fect
ive
date
s of
acq
uisi
tions
up
to t
he e
ffec
tive
date
s of
dis
posa
ls,
as a
ppro
pria
te.
Whe
n ne
cess
ary,
ad
just
men
ts a
re m
ade
to th
e fin
anci
al s
tate
men
ts o
f sub
sidi
arie
s to
brin
g th
eir a
ccou
ntin
g po
licie
s in
to li
ne
with
tho
se u
sed
by t
he C
ompa
ny.
All
intra
-gro
up t
rans
actio
ns,
bala
nces
, in
com
e an
d ex
pens
es a
re
elim
inat
ed i
n fu
ll up
on c
onso
lidat
ion.
Tot
al c
ompr
ehen
sive
inc
ome
of s
ubsi
diar
ies
is a
ttrib
uted
to
the
owne
rs o
f th
e C
ompa
ny a
nd t
o th
e no
n-co
ntro
lling
int
eres
ts e
ven
if th
is r
esul
ts i
n th
e no
n-co
ntro
lling
in
tere
sts h
avin
g a
defic
it ba
lanc
e.
Cha
nges
in th
e G
roup
’s o
wne
rshi
p in
tere
sts
in s
ubsid
iarie
s th
at d
o no
t res
ult i
n th
e G
roup
losi
ng c
ontro
l ov
er th
e su
bsid
iarie
s ar
e ac
coun
ted
for a
s eq
uity
tran
sact
ions
. The
car
ryin
g am
ount
s of
the
inte
rest
s of
the
Gro
up a
nd th
e no
n-co
ntro
lling
inte
rest
s ar
e ad
just
ed to
ref
lect
the
chan
ges
in th
eir
rela
tive
inte
rest
s in
the
subs
idia
ries.
Any
diff
eren
ce b
etw
een
the
amou
nt b
y w
hich
the
non-
cont
rolli
ng in
tere
sts a
re a
djus
ted
and
the
fair
valu
e of
the
cons
ider
atio
n pa
id o
r rec
eive
d is
reco
gniz
ed d
irect
ly in
equ
ity a
nd a
ttrib
uted
to th
e ow
ners
of
the
Com
pany
. W
hen
the
Gro
up lo
ses
cont
rol o
f a s
ubsi
diar
y, a
gai
n or
loss
is re
cogn
ized
in p
rofit
or l
oss
and
is c
alcu
late
d as
the
diff
eren
ce b
etw
een
(i) t
he a
ggre
gate
of
the
fair
valu
e of
the
con
side
ratio
n re
ceiv
ed a
nd a
ny
inve
stm
ent r
etai
ned
in th
e fo
rmer
sub
sidi
ary
at it
s fa
ir va
lue
at th
e da
te w
hen
cont
rol i
s lo
st a
nd (
ii) th
e as
sets
(inc
ludi
ng a
ny g
oodw
ill) a
nd li
abili
ties
and
any
non-
cont
rolli
ng in
tere
sts
of th
e fo
rmer
sub
sidi
ary
at
thei
r car
ryin
g am
ount
s at
the
date
whe
n co
ntro
l is
lost
. The
Gro
up a
ccou
nts
for a
ll am
ount
s re
cogn
ized
in
othe
r co
mpr
ehen
sive
inco
me
in r
elat
ion
to th
at s
ubsid
iary
on
the
sam
e ba
sis
as w
ould
be
requ
ired
had
the
Gro
up d
irect
ly d
ispo
sed
of th
e re
late
d as
sets
or l
iabi
litie
s. Fo
reig
n C
urre
ncie
s In
pre
parin
g th
e co
nsol
idat
ed f
inan
cial
sta
tem
ents
of
the
Gro
up, t
rans
actio
ns in
cur
renc
ies
othe
r th
an th
e C
ompa
ny’s
fun
ctio
nal c
urre
ncy
(for
eign
cur
renc
ies)
are
rec
ogni
zed
at th
e ra
tes
of e
xcha
nge
prev
ailin
g at
th
e da
tes
of th
e tra
nsac
tions
. At t
he e
nd o
f ea
ch r
epor
ting
perio
d, m
onet
ary
item
s de
nom
inat
ed in
for
eign
cu
rren
cies
are
ret
rans
late
d at
the
rat
es p
reva
iling
at
that
dat
e. N
on-m
onet
ary
item
s th
at a
re m
easu
red
at
hist
oric
al c
ost i
n a
fore
ign
curr
ency
are
not
retra
nsla
ted.
Non
-mon
etar
y ite
ms m
easu
red
at fa
ir va
lue
that
are
de
nom
inat
ed in
fore
ign
curr
enci
es a
re re
trans
late
d at
the
rate
s pre
vaili
ng a
t the
dat
e w
hen
the
fair
valu
e w
as
dete
rmin
ed.
Exch
ange
diff
eren
ces
on m
onet
ary
item
s ar
isin
g fr
om s
ettle
men
t or
trans
latio
n ar
e re
cogn
ized
in p
rofit
or
loss
in th
e pe
riod
in w
hich
they
aris
e ex
cept
for:
a.
Exch
ange
diff
eren
ces
on f
orei
gn c
urre
ncy
borr
owin
gs r
elat
ing
to a
sset
s un
der
cons
truct
ion
for
futu
re
prod
uctiv
e us
e, w
hich
are
incl
uded
in th
e co
st o
f tho
se a
sset
s w
hen
they
are
rega
rded
as
an a
djus
tmen
t to
inte
rest
cos
ts o
n th
ose
fore
ign
curr
ency
bor
row
ings
; b.
Ex
chan
ge d
iffer
ence
s on
trans
actio
ns e
nter
ed in
to in
ord
er to
hed
ge c
erta
in fo
reig
n cu
rren
cy ri
sks.
- 16
-
Exch
ange
diff
eren
ces
aris
ing
on th
e re
trans
latio
n of
non
-mon
etar
y ite
ms
are
incl
uded
in p
rofit
or
loss
for
th
e pe
riod
exce
pt fo
r exc
hang
e di
ffer
ence
s ar
isin
g fr
om th
e re
trans
latio
n of
non
-mon
etar
y ite
ms
in re
spec
t of
whi
ch g
ains
and
los
ses
are
reco
gniz
ed d
irect
ly i
n ot
her
com
preh
ensi
ve i
ncom
e, i
n w
hich
cas
e, t
he
exch
ange
diff
eren
ces a
re a
lso
reco
gniz
ed d
irect
ly in
oth
er c
ompr
ehen
sive
inco
me.
Fo
r th
e pu
rpos
e of
pre
sent
ing
cons
olid
ated
fin
anci
al s
tate
men
ts, t
he a
sset
s an
d lia
bilit
ies
of t
he G
roup
’s
fore
ign
oper
atio
ns a
re tr
ansl
ated
into
New
Tai
wan
dol
lars
usi
ng e
xcha
nge
rate
s pre
vaili
ng a
t the
end
of e
ach
repo
rting
per
iod.
Inc
ome
and
expe
nse
item
s ar
e tra
nsla
ted
at t
he a
vera
ge e
xcha
nge
rate
s fo
r th
e pe
riod.
Ex
chan
ge d
iffer
ence
s ar
e re
cogn
ized
in
othe
r co
mpr
ehen
sive
inc
ome
(attr
ibut
ed t
o th
e ow
ners
of
the
Com
pany
and
non
-con
trolli
ng in
tere
sts a
s app
ropr
iate
). O
n th
e di
spos
al o
f a fo
reig
n op
erat
ion,
all
of th
e ex
chan
ge d
iffer
ence
s ac
cum
ulat
ed in
equ
ity in
resp
ect o
f th
at o
pera
tion
attri
buta
ble
to th
e ow
ners
of t
he C
ompa
ny a
re re
clas
sifie
d to
pro
fit o
r los
s. B
usin
ess C
ombi
natio
ns
Whe
re t
he c
onsi
dera
tion
the
Gro
up t
rans
fers
in
a bu
sine
ss c
ombi
natio
n in
clud
es a
sset
s or
lia
bilit
ies
resu
lting
fro
m a
con
tinge
nt c
onsi
dera
tion
arra
ngem
ent,
the
cont
inge
nt c
onsi
dera
tion
is m
easu
red
at i
ts ac
quis
ition
-dat
e fa
ir va
lue
and
cons
ider
ed a
s par
t of t
he c
onsi
dera
tion
trans
ferr
ed in
a b
usin
ess c
ombi
natio
n.
Cha
nges
in th
e fa
ir va
lue
of th
e co
ntin
gent
con
side
ratio
n th
at q
ualif
y as
mea
sure
men
t per
iod
adju
stm
ents
ar
e ad
just
ed r
etro
spec
tivel
y, w
ith th
e co
rres
pond
ing
adju
stm
ents
bei
ng m
ade
agai
nst g
oodw
ill o
r ga
ins
on
barg
ain
purc
hase
s. M
easu
rem
ent p
erio
d ad
just
men
ts a
re a
djus
tmen
ts th
at a
rise
from
add
ition
al in
form
atio
n ob
tain
ed d
urin
g th
e m
easu
rem
ent
perio
d ab
out f
acts
and
circ
umst
ance
s th
at e
xist
ed a
s of
the
acqu
isiti
on
date
.
Whe
n a
busi
ness
com
bina
tion
is a
chie
ved
in s
tage
s, th
e G
roup
’s p
revi
ousl
y he
ld e
quity
int
eres
t in
an
acqu
iree
is re
mea
sure
d to
fair
valu
e at
the
acqu
isiti
on d
ate,
and
the
resu
lting
is re
cogn
ized
in p
rofit
or l
oss
or o
ther
com
preh
ensi
ve in
com
e. A
mou
nts
aris
ing
from
inte
rest
s in
the
acqu
iree
prio
r to
the
acqu
isiti
on d
ate
that
hav
e pr
evio
usly
bee
n re
cogn
ized
in o
ther
com
preh
ensi
ve in
com
e ar
e re
cogn
ized
on
the
sam
e ba
sis
as
wou
ld b
e re
quire
d if
thos
e in
tere
sts w
ere
dire
ctly
dis
pose
d of
by
the
Gro
up
If th
e in
itial
acc
ount
ing
for
a bu
sine
ss c
ombi
natio
n is
inc
ompl
ete
by t
he e
nd o
f th
e re
porti
ng p
erio
d in
w
hich
the
com
bina
tion
occu
rs,
the
Gro
up r
epor
ts pr
ovis
iona
l am
ount
s fo
r th
e ite
ms
for
whi
ch t
he
acco
untin
g is
inco
mpl
ete.
Tho
se p
rovi
sion
al a
mou
nts
are
adju
sted
ret
rosp
ectiv
ely
durin
g th
e m
easu
rem
ent
perio
d, o
r add
ition
al a
sset
s or
liab
ilitie
s ar
e re
cogn
ized
, to
refle
ct n
ew in
form
atio
n ob
tain
ed a
bout
fact
s an
d ci
rcum
stan
ces
that
exi
sted
as
of t
he a
cqui
sitio
n da
te t
hat,
if kn
own,
wou
ld h
ave
affe
cted
the
am
ount
s re
cogn
ized
as o
f tha
t dat
e.
Inve
ntor
ies
Inve
ntor
ies
are
prim
arily
exp
enda
ble
and
none
xpen
dabl
e pa
rts a
nd m
ater
ials
, sup
plie
s us
ed in
ope
ratio
ns
and
item
s fo
r in
-flig
ht s
ales
and
are
sta
ted
at t
he l
ower
of
cost
or
net
real
izab
le v
alue
. Th
e co
sts
of
inve
ntor
ies s
old
or c
onsu
med
are
det
erm
ined
usi
ng th
e w
eigh
ted-
aver
age
met
hod.
N
on-c
urre
nt A
sset
s Hel
d fo
r Sa
le
Non
-cur
rent
ass
ets
are
clas
sifie
d as
hel
d-fo
r-sal
e if
thei
r ca
rryi
ng a
mou
nt w
ill b
e re
cove
red
prin
cipa
lly
thro
ugh
a sa
le tr
ansa
ctio
n ra
ther
than
thro
ugh
cont
inui
ng u
se. T
his
cond
ition
is re
gard
ed a
s m
et o
nly
whe
n th
e sa
le is
hig
hly
prob
able
and
the
non-
curr
ent a
sset
is a
vaila
ble
for i
mm
edia
te s
ale
in it
s pr
esen
t con
ditio
n.
To m
eet
the
crite
ria f
or t
he s
ale
bein
g hi
ghly
pro
babl
e, t
he a
ppro
pria
te l
evel
of
man
agem
ent
mus
t be
co
mm
itted
to th
e sa
le, w
hich
sho
uld
be e
xpec
ted
to q
ualif
y fo
r rec
ogni
tion
as a
com
plet
ed s
ale
with
in o
ne
year
from
the
date
of c
lass
ifica
tion.
N
on-c
urre
nt a
sset
s cl
assi
fied
as h
eld-
for-s
ale
are
mea
sure
d at
the
low
er o
f th
eir
prev
ious
car
ryin
g am
ount
an
d fa
ir va
lue
less
cos
ts to
sell.
Rec
ogni
tion
of d
epre
ciat
ion
of th
ose
asse
ts w
ould
cea
se.
- 17
-
149
Inve
stm
ents
in A
ssoc
iate
s and
Joi
nt V
entu
res
An
asso
ciat
e is
an
entit
y ov
er w
hich
the
Gro
up h
as s
igni
fican
t inf
luen
ce a
nd th
at is
nei
ther
a s
ubsi
diar
y no
r an
inte
rest
in a
join
t ven
ture
. A jo
int v
entu
re is
a jo
int a
rran
gem
ent w
here
by th
e G
roup
and
oth
er p
artie
s th
at h
ave
join
t con
trol o
f the
arr
ange
men
t and
the
right
s to
the
net a
sset
s of t
he a
rrang
emen
t. Th
e G
roup
use
s the
equ
ity m
etho
d to
acc
ount
for i
ts in
vest
men
ts in
ass
ocia
tes a
nd jo
int v
entu
res.
Und
er th
e eq
uity
met
hod,
inve
stm
ents
in a
n as
soci
ate
and
a jo
int v
entu
re a
re in
itial
ly re
cogn
ized
at c
ost a
nd
adju
sted
ther
eafte
r to
reco
gniz
e th
e G
roup
’s s
hare
of p
rofit
or l
oss
and
othe
r com
preh
ensi
ve in
com
e of
the
asso
ciat
e an
d jo
int
vent
ure.
The
Gro
up a
lso
reco
gniz
es t
he c
hang
es i
n th
e G
roup
’s s
hare
of
equi
ty o
f as
soci
ates
and
join
t ven
ture
attr
ibut
able
to th
e G
roup
. A
ny e
xces
s of
the
cost
of a
cqui
sitio
n ov
er th
e G
roup
’s s
hare
of n
et fa
ir va
lue
of th
e id
entif
iabl
e as
sets
and
lia
bilit
ies
of a
n as
soci
ate
reco
gniz
ed a
t the
dat
e of
acq
uisi
tion
is re
cogn
ized
as
good
will
, whi
ch is
incl
uded
w
ithin
the
carr
ying
am
ount
of t
he in
vest
men
t and
is n
ot a
mor
tized
. Any
exc
ess
of th
e G
roup
’s s
hare
of n
et
fair
valu
e of
the
ide
ntifi
able
ass
ets
and
liabi
litie
s ov
er t
he c
ost
of a
cqui
sitio
n, a
fter
reas
sess
men
t, is
reco
gniz
ed im
med
iate
ly in
pro
fit o
r los
s. W
hen
the
Gro
up s
ubsc
ribes
for
add
ition
al n
ew s
hare
s of
an
asso
ciat
e an
d jo
int
vent
ure
at a
per
cent
age
diff
eren
t fro
m i
ts e
xist
ing
owne
rshi
p pe
rcen
tage
, the
res
ultin
g ca
rryi
ng a
mou
nt o
f th
e in
vest
men
t di
ffer
s fr
om th
e am
ount
of t
he G
roup
’s p
ropo
rtion
ate
inte
rest
in th
e as
soci
ate
and
join
t ven
ture
. The
Gro
up re
cord
s su
ch a
diff
eren
ce a
s an
adj
ustm
ent t
o in
vest
men
ts w
ith th
e co
rres
pond
ing
amou
nt c
harg
ed o
r cr
edite
d to
ca
pita
l su
rplu
s -
chan
ges
in t
he G
roup
’s s
hare
of
equi
ty o
f as
soci
ates
and
joi
nt v
entu
res.
If th
e G
roup
’s
owne
rshi
p in
tere
st i
s re
duce
d du
e to
the
subs
crip
tion
of a
dditi
onal
new
sha
res
of t
he a
ssoc
iate
and
join
t ve
ntur
e, t
he p
ropo
rtion
ate
amou
nt o
f th
e ga
ins
or l
osse
s pr
evio
usly
rec
ogni
zed
in o
ther
com
preh
ensi
ve
inco
me
in r
elat
ion
to th
at a
ssoc
iate
and
join
t ven
ture
is r
ecla
ssifi
ed to
pro
fit o
r lo
ss o
n th
e sa
me
basi
s as
w
ould
be
requ
ired
had
the
inve
stee
dire
ctly
dis
pose
d of
the
rela
ted
asse
ts o
r lia
bilit
ies.
Whe
n th
e ad
just
men
t sh
ould
be
debi
ted
to c
apita
l su
rplu
s, bu
t th
e ca
pita
l su
rplu
s re
cogn
ized
fro
m i
nves
tmen
ts a
ccou
nted
for
us
ing
the
equi
ty m
etho
d is
insu
ffic
ient
, the
shor
tage
is d
ebite
d to
reta
ined
ear
ning
s. W
hen
the
Gro
up’s
sha
re o
f los
ses
of a
n as
soci
ate
and
a jo
int v
entu
re e
qual
s or
exc
eeds
its
inte
rest
in th
at
asso
ciat
e an
d jo
int v
entu
re (w
hich
incl
udes
any
car
ryin
g am
ount
of t
he in
vest
men
t acc
ount
ed fo
r usi
ng th
e eq
uity
met
hod
and
long
-term
inte
rest
s th
at, i
n su
bsta
nce,
for
m p
art o
f th
e G
roup
’s n
et in
vest
men
t in
the
asso
ciat
e an
d jo
int
vent
ure)
, th
e G
roup
dis
cont
inue
s re
cogn
izin
g its
sha
re o
f fu
rther
los
ses.
Add
ition
al
loss
es a
nd l
iabi
litie
s ar
e re
cogn
ized
onl
y to
the
ext
ent
that
the
Gro
up h
as i
ncur
red
lega
l ob
ligat
ions
, or
cons
truct
ive
oblig
atio
ns, o
r mad
e pa
ymen
ts o
n be
half
of th
at a
ssoc
iate
and
join
t ven
ture
. Th
e en
tire
carr
ying
am
ount
of t
he in
vest
men
t (in
clud
ing
good
will
) is t
este
d fo
r im
pairm
ent a
s a si
ngle
ass
et
by c
ompa
ring
its re
cove
rabl
e am
ount
with
its c
arry
ing
amou
nt. A
ny im
pairm
ent l
oss r
ecog
nize
d is
ded
ucte
d fr
om t
he c
arry
ing
amou
nt o
f th
e in
vest
men
t. A
ny r
ever
sal
of t
hat
impa
irmen
t lo
ss i
s re
cogn
ized
to
the
exte
nt th
at th
e re
cove
rabl
e am
ount
of t
he in
vest
men
t sub
sequ
ently
incr
ease
s. Th
e G
roup
dis
cont
inue
s th
e us
e of
the
equi
ty m
etho
d fr
om th
e da
te o
n w
hich
its
inve
stm
ent c
ease
s to
be
an
asso
ciat
e an
d a
join
t ven
ture
. Any
ret
aine
d in
vest
men
t is
mea
sure
d at
fai
r va
lue
at th
at d
ate
and
the
fair
valu
e is
reg
arde
d as
its
fai
r va
lue
on i
nitia
l re
cogn
ition
as
a fin
anci
al a
sset
. The
diff
eren
ce b
etw
een
the
prev
ious
car
ryin
g am
ount
of
the
asso
ciat
e an
d th
e jo
int v
entu
re a
ttrib
utab
le to
the
reta
ined
inte
rest
and
its
fair
valu
e is
inc
lude
d in
the
det
erm
inat
ion
of t
he g
ain
or l
oss
on d
ispo
sal
of t
he a
ssoc
iate
and
the
joi
nt
vent
ure.
The
Gro
up a
ccou
nts
for
all
amou
nts
prev
ious
ly r
ecog
nize
d in
oth
er c
ompr
ehen
sive
inc
ome
in
rela
tion
to th
at a
ssoc
iate
and
the
join
t ven
ture
on
the
sam
e ba
sis
as w
ould
be
requ
ired
had
that
ass
ocia
te
dire
ctly
dis
pose
d of
the
rela
ted
asse
ts o
r lia
bilit
ies.
If an
inve
stm
ent i
n an
ass
ocia
te b
ecom
es a
n in
vest
men
t in
a jo
int
vent
ure
or a
n in
vest
men
t in
a j
oint
ven
ture
bec
omes
an
inve
stm
ent
in a
n as
soci
ate,
the
Gro
up
cont
inue
s to
appl
y th
e eq
uity
met
hod
and
does
not
rem
easu
re th
e re
tain
ed in
tere
st.
- 18
-
Prop
erty
, Pla
nt a
nd E
quip
men
t Pr
oper
ty, p
lant
and
equ
ipm
ent a
re ta
ngib
le it
ems
that
are
hel
d fo
r use
in th
e pr
oduc
tion
or s
uppl
y of
goo
ds
or s
ervi
ces,
for
rent
al to
oth
ers,
or f
or a
dmin
istra
tive
purp
oses
and
are
exp
ecte
d to
be
used
for
mor
e th
an
one
perio
d. T
he c
ost o
f an
item
of p
rope
rty, p
lant
and
equ
ipm
ent s
hall
be re
cogn
ized
as a
n as
set i
f, an
d on
ly
if, it
is p
roba
ble
that
futu
re e
cono
mic
ben
efits
ass
ocia
ted
with
the
item
will
flow
to th
e G
roup
and
the
cost
of t
he i
tem
can
be
mea
sure
d re
liabl
y. P
rope
rty,
plan
t an
d eq
uipm
ent
are
stat
ed a
t co
st l
ess
reco
gniz
ed
accu
mul
ated
dep
reci
atio
n an
d re
cogn
ized
acc
umul
ated
impa
irmen
t los
s. Fr
eeho
ld la
nd is
not
dep
reci
ated
. D
epre
ciat
ion
is r
ecog
nize
d us
ing
the
stra
ight
-line
met
hod.
Eac
h si
gnifi
cant
par
t is
depr
ecia
ted
sepa
rate
ly.
The
estim
ated
use
ful
lives
, re
sidu
al v
alue
s an
d de
prec
iatio
n m
etho
ds a
re r
evie
wed
at
the
end
of e
ach
repo
rting
per
iod,
with
the
effe
cts o
f any
cha
nges
in th
e es
timat
es a
ccou
nted
for o
n a
pros
pect
ive
basi
s. A
sset
s hel
d un
der f
inan
ce le
ases
are
dep
reci
ated
ove
r the
ir ex
pect
ed u
sefu
l liv
es o
n th
e sa
me
basi
s as o
wne
d as
sets
. Ass
ets
are
depr
ecia
ted
over
the
shor
ter o
f the
leas
e te
rm a
nd th
eir u
sefu
l liv
es u
sing
the
stra
ight
-line
m
etho
d.
Any
gai
n or
los
s ar
isin
g on
the
dis
posa
l or
ret
irem
ent
of a
n ite
m o
f pr
oper
ty,
plan
t an
d eq
uipm
ent
is de
term
ined
as
the
diff
eren
ce b
etw
een
the
sale
s pr
ocee
ds a
nd t
he c
arry
ing
amou
nt o
f th
e as
set
and
is
reco
gniz
ed in
pro
fit o
r los
s. In
vest
men
t Pro
pert
ies
Inve
stm
ent p
rope
rties
are
pro
perti
es h
eld
to e
arn
rent
als
or f
or c
apita
l app
reci
atio
n. I
nves
tmen
t pro
perti
es
also
incl
ude
land
hel
d fo
r a c
urre
ntly
und
eter
min
ed fu
ture
use
. In
vest
men
t pr
oper
ties
are
mea
sure
d in
itial
ly a
t co
st,
incl
udin
g tra
nsac
tion
cost
s. Su
bseq
uent
to
initi
al
reco
gniti
on,
inve
stm
ent
prop
ertie
s ar
e m
easu
red
at c
ost
less
acc
umul
ated
dep
reci
atio
n an
d ac
cum
ulat
ed
impa
irmen
t los
s. D
epre
ciat
ion
is re
cogn
ized
usi
ng th
e st
raig
ht-li
ne m
etho
d. T
he e
stim
ated
use
ful l
ives
and
resi
dual
val
ues a
re
revi
ewed
at t
he e
nd o
f eac
h re
porti
ng p
erio
d.
Any
gai
n or
los
s ar
isin
g on
the
der
ecog
nitio
n of
inv
estm
ent
prop
ertie
s is
cal
cula
ted
as t
he d
iffer
ence
be
twee
n th
e ne
t dis
posa
l pro
ceed
s an
d th
e ca
rryi
ng a
mou
nt o
f the
ass
et a
nd is
incl
uded
in p
rofit
or l
oss
in
the
perio
d in
whi
ch th
e pr
oper
ty is
der
ecog
nize
d.
Inta
ngib
le A
sset
s In
tang
ible
ass
ets
with
fin
ite u
sefu
l liv
es t
hat
are
acqu
ired
sepa
rate
ly a
re i
nitia
lly m
easu
red
at c
ost
and
subs
eque
ntly
m
easu
red
at
cost
le
ss
accu
mul
ated
am
ortiz
atio
n an
d ac
cum
ulat
ed
impa
irmen
t lo
ss.
Am
ortiz
atio
n is
rec
ogni
zed
on a
stra
ight
-line
bas
is.
The
estim
ated
use
ful
lives
, re
sidu
al v
alue
s, an
d am
ortiz
atio
n m
etho
ds a
re re
view
ed a
t the
end
of e
ach
repo
rting
per
iod,
with
the
effe
cts
of a
ny c
hang
es in
th
e es
timat
es b
eing
acc
ount
ed f
or o
n a
pros
pect
ive
basi
s. Th
e re
sidu
al v
alue
of
an in
tang
ible
ass
et w
ith a
fin
ite u
sefu
l life
shal
l be
assu
med
zer
o un
less
the
Gro
up e
xpec
ts to
dis
pose
of t
he in
tang
ible
ass
et b
efor
e th
e en
d of
its e
cono
mic
life
.
- 19
-
150
Impa
irm
ent o
f Tan
gibl
e an
d In
tang
ible
Ass
ets O
ther
Tha
n G
oodw
ill
At t
he e
nd o
f eac
h re
porti
ng p
erio
d, th
e G
roup
revi
ews
the
carr
ying
am
ount
s of
its
tang
ible
and
inta
ngib
le
asse
ts, e
xclu
ding
goo
dwill
, to
dete
rmin
e w
heth
er th
ere
is a
ny in
dica
tion
that
thos
e as
sets
hav
e su
ffer
ed a
n im
pairm
ent l
oss.
If an
y su
ch in
dica
tion
exis
ts, t
he re
cove
rabl
e am
ount
of t
he a
sset
is e
stim
ated
in o
rder
to
dete
rmin
e th
e ex
tent
of t
he im
pairm
ent l
oss.
Whe
n it
is n
ot p
ossi
ble
to e
stim
ate
the
reco
vera
ble
amou
nt o
f an
indi
vidu
al a
sset
, the
Gro
up e
stim
ates
the
reco
vera
ble
amou
nt o
f th
e ca
sh-g
ener
atin
g un
it to
whi
ch th
e as
set
belo
ngs.
Cor
pora
te a
sset
s ar
e al
loca
ted
to th
e in
divi
dual
cas
h-ge
nera
ting
units
on
a re
ason
able
and
co
nsis
tent
bas
is; o
ther
wis
e, c
orpo
rate
ass
ets a
re a
lloca
ted
to th
e sm
alle
st g
roup
of c
ash-
gene
ratin
g un
its o
n a
reas
onab
le a
nd c
onsi
sten
t allo
catio
n ba
sis.
Inta
ngib
le a
sset
s w
ith in
defin
ite u
sefu
l liv
es a
nd in
tang
ible
ass
ets
not y
et a
vaila
ble
for
use
are
test
ed f
or
impa
irmen
t at l
east
ann
ually
, and
whe
neve
r the
re is
an
indi
catio
n th
at th
e as
set m
ay b
e im
paire
d.
The
reco
vera
ble
amou
nt is
the
high
er o
f fai
r val
ue le
ss c
osts
to s
ell a
nd v
alue
in u
se. I
n as
sess
ing
valu
e in
us
e, t
he G
roup
use
s th
e es
timat
ed c
ash
flow
s di
scou
nted
by
the
futu
re p
re-ta
x di
scou
nt r
ate,
and
the
di
scou
nt ra
te re
flect
s the
cur
rent
mar
ket t
ime
valu
e of
mon
ey a
nd th
e sp
ecifi
c ris
ks to
the
asse
t for
est
imat
ed
futu
re c
ash
flow
s not
yet
adj
ustin
g to
the
mar
ket.
If th
e re
cove
rabl
e am
ount
of
an a
sset
or
cash
-gen
erat
ing
unit
is e
stim
ated
to
be l
ess
than
its
car
ryin
g am
ount
, the
car
ryin
g am
ount
of t
he a
sset
or c
ash-
gene
ratin
g un
it is
redu
ced
to it
s rec
over
able
am
ount
. W
hen
an im
pairm
ent l
oss i
s su
bseq
uent
ly re
vers
ed, t
he c
arry
ing
amou
nt o
f the
ass
et o
r cas
h-ge
nera
ting
unit
is in
crea
sed
to th
e re
vise
d es
timat
e of
its
reco
vera
ble
amou
nt, b
ut o
nly
to th
e ex
tent
of t
he c
arry
ing
amou
nt
that
wou
ld h
ave
been
det
erm
ined
had
no
impa
irmen
t los
s be
en re
cogn
ized
for t
he a
sset
or c
ash-
gene
ratin
g un
it in
prio
r yea
rs. A
reve
rsal
of a
n im
pairm
ent l
oss i
s rec
ogni
zed
in p
rofit
or l
oss.
Fina
ncia
l Ins
trum
ents
Fi
nanc
ial a
sset
s an
d fin
anci
al li
abili
ties
are
reco
gniz
ed w
hen
the
Gro
up b
ecom
es a
par
ty to
the
cont
ract
ual
prov
isio
ns o
f the
inst
rum
ents
.
Fina
ncia
l as
sets
and
fin
anci
al l
iabi
litie
s ar
e in
itial
ly m
easu
red
at f
air
valu
e. T
rans
actio
n co
sts
that
are
di
rect
ly a
ttrib
utab
le t
o th
e ac
quis
ition
or
issu
ance
of
finan
cial
ass
ets
and
finan
cial
lia
bilit
ies
(oth
er t
han
finan
cial
ass
ets
and
finan
cial
lia
bilit
ies
at F
VTP
L) a
re a
dded
to
or d
educ
ted
from
the
fai
r va
lue
of t
he
finan
cial
ass
ets
or f
inan
cial
lia
bilit
ies,
as a
ppro
pria
te,
on i
nitia
l re
cogn
ition
. Tr
ansa
ctio
n co
sts
dire
ctly
at
tribu
tabl
e to
the
acq
uisi
tion
of f
inan
cial
ass
ets
or f
inan
cial
lia
bilit
ies
at F
VTP
L ar
e re
cogn
ized
im
med
iate
ly in
pro
fit o
r los
s. a.
Fi
nanc
ial a
sset
s A
ll re
gula
r pur
chas
es o
r sal
es o
f fin
anci
al a
sset
s ar
e re
cogn
ized
and
der
ecog
nize
d on
a tr
ade
date
bas
is.
All
regu
lar p
urch
ases
or s
ales
of f
inan
cial
ass
ets
are
buy
or s
ell o
f fin
anci
al a
sset
s in
the
perio
d se
t by
regu
latio
n or
mar
ket c
onve
ntio
n.
1)
Mea
sure
men
t cat
egor
y
Fina
ncia
l as
sets
are
cla
ssifi
ed in
to th
e fo
llow
ing
cate
gorie
s: F
inan
cial
ass
ets
at F
VTP
L, f
inan
cial
as
sets
at a
mor
tized
cos
t, an
d in
vest
men
ts in
equ
ity in
strum
ents
at F
VTO
CI.
a)
Fina
ncia
l ass
ets a
t FV
TPL
Fina
ncia
l ass
ets
are
clas
sifie
d as
at F
VTP
L w
hen
such
a fi
nanc
ial a
sset
is m
anda
toril
y cl
assi
fied
or d
esig
nate
d as
at
FVTP
L. F
inan
cial
ass
ets
man
dato
rily
clas
sifie
d as
at
FVTP
L in
clud
e in
vest
men
ts in
equ
ity in
stru
men
ts w
hich
are
not
des
igna
ted
as a
t FV
TOC
I and
deb
t ins
trum
ents
th
at d
o no
t mee
t the
am
ortiz
ed c
ost c
riter
ia o
r the
FV
TOC
I crit
eria
.
- 20
-
Fina
ncia
l as
sets
at
FVTP
L ar
e su
bseq
uent
ly m
easu
red
at f
air
valu
e, w
ith a
ny g
ains
or
loss
es
aris
ing
on r
emea
sure
men
t rec
ogni
zed
in p
rofit
or
loss
. Fai
r va
lue
is d
eter
min
ed in
the
man
ner
desc
ribed
in N
ote
33.
b)
Fi
nanc
ial a
sset
s at a
mor
tized
cos
t Fi
nanc
ial
asse
ts t
hat
mee
t th
e fo
llow
ing
cond
ition
s ar
e su
bseq
uent
ly m
easu
red
at a
mor
tized
co
st:
i. Th
e fin
anci
al a
sset
is
held
with
in a
bus
ines
s m
odel
who
se o
bjec
tive
is t
o ho
ld f
inan
cial
as
sets
in o
rder
to c
olle
ct c
ontra
ctua
l cas
h flo
ws;
and
ii.
Th
e co
ntra
ctua
l ter
ms o
f the
fina
ncia
l ass
et g
ive
rise
on sp
ecifi
ed d
ates
to c
ash
flow
s tha
t are
so
lely
pay
men
ts o
f prin
cipa
l and
inte
rest
on
the
prin
cipa
l am
ount
out
stan
ding
. Su
bseq
uent
to
initi
al r
ecog
nitio
n, f
inan
cial
ass
ets
at a
mor
tized
cos
t, in
clud
ing
cash
and
cas
h eq
uiva
lent
s, tra
de r
ecei
vabl
es,
othe
r re
ceiv
able
s an
d ot
her
finan
cial
ass
ets,
are
mea
sure
d at
am
ortiz
ed c
ost,
whi
ch e
qual
s th
e gr
oss
carr
ying
am
ount
det
erm
ined
usi
ng th
e ef
fect
ive
inte
rest
m
etho
d le
ss a
ny im
pairm
ent l
oss.
Exch
ange
diff
eren
ces a
re re
cogn
ized
in p
rofit
or l
oss.
Inte
rest
inco
me
is c
alcu
late
d by
app
lyin
g th
e ef
fect
ive
inte
rest
rate
to th
e gr
oss
carr
ying
am
ount
of
a fi
nanc
ial a
sset
. C
ash
equi
vale
nts i
nclu
de ti
me
depo
sits
with
orig
inal
mat
uriti
es w
ithin
3 m
onth
s fro
m th
e da
te o
f ac
quis
ition
, w
hich
are
hig
hly
liqui
d, r
eadi
ly c
onve
rtibl
e to
a k
now
n am
ount
of
cash
and
are
su
bjec
t to
an
insi
gnifi
cant
ris
k of
cha
nges
in
valu
e. T
hese
cas
h eq
uiva
lent
s ar
e he
ld f
or t
he
purp
ose
of m
eetin
g sh
ort-t
erm
cas
h co
mm
itmen
ts.
c)
In
vest
men
ts in
equ
ity in
stru
men
ts a
t FV
TOC
I O
n in
itial
reco
gniti
on, t
he G
roup
may
mak
e an
irre
voca
ble
elec
tion
to d
esig
nate
inve
stm
ents
in
equi
ty i
nstru
men
ts a
s at
FV
TOC
I. D
esig
natio
n as
at
FVTO
CI
is n
ot p
erm
itted
if
an e
quity
in
vest
men
t is
held
for t
radi
ng o
r if i
t is
cont
inge
nt c
onsi
dera
tion
reco
gniz
ed b
y an
acq
uire
r in
a bu
sine
ss c
ombi
natio
n.
Inve
stm
ents
in
equi
ty i
nstru
men
ts a
t FV
TOC
I ar
e su
bseq
uent
ly m
easu
red
at f
air
valu
e w
ith
gain
s an
d lo
sses
aris
ing
from
cha
nges
in f
air
valu
e re
cogn
ized
in o
ther
com
preh
ensi
ve in
com
e an
d ac
cum
ulat
ed in
oth
er e
quity
. The
cum
ulat
ive
gain
or l
oss w
ill n
ot b
e re
clas
sifie
d to
pro
fit o
r lo
ss o
n di
spos
al o
f the
equ
ity in
vest
men
ts; i
nste
ad, t
hey
will
be
trans
ferr
ed to
reta
ined
ear
ning
s. D
ivid
ends
on
thes
e in
vest
men
ts in
equ
ity in
stru
men
ts a
re re
cogn
ized
in p
rofit
or l
oss
whe
n th
e G
roup
’s r
ight
to r
ecei
ve th
e di
vide
nds
is e
stab
lishe
d, u
nles
s th
e di
vide
nds
clea
rly r
epre
sent
a
reco
very
of p
art o
f the
cos
t of a
n in
vest
men
t.
2)
Impa
irmen
t of f
inan
cial
ass
ets
The
Gro
up r
ecog
nize
s a
loss
allo
wan
ce f
or e
xpec
ted
cred
it lo
sses
on
finan
cial
ass
ets
at a
mor
tized
co
st (i
nclu
ding
trad
e re
ceiv
able
s), a
s wel
l as c
ontra
ct a
sset
s. Th
e G
roup
alw
ays
reco
gniz
es li
fetim
e ex
pect
ed c
redi
t los
ses
(EC
Ls) f
or tr
ade
rece
ivab
les
and
othe
r re
ceiv
able
s. Fo
r all
othe
r fin
anci
al in
stru
men
ts, t
he G
roup
reco
gniz
es li
fetim
e EC
Ls w
hen
ther
e ha
s be
en a
sig
nific
ant i
ncre
ase
in c
redi
t ris
k si
nce
initi
al r
ecog
nitio
n. I
f, on
the
othe
r ha
nd, t
he c
redi
t ris
k on
a f
inan
cial
ins
trum
ent
has
not
incr
ease
d si
gnifi
cant
ly s
ince
ini
tial
reco
gniti
on, t
he G
roup
m
easu
res t
he lo
ss a
llow
ance
for t
hat f
inan
cial
inst
rum
ent a
t an
amou
nt e
qual
to 1
2-m
onth
EC
Ls.
- 21
-
151
Expe
cted
cre
dit l
osse
s re
flect
the
wei
ghte
d av
erag
e of
cre
dit l
osse
s w
ith th
e re
spec
tive
risks
of
a de
faul
t occ
urrin
g as
the
wei
ghts
. Life
time
ECL
repr
esen
ts th
e ex
pect
ed c
redi
t los
ses
that
will
resu
lt fr
om a
ll po
ssib
le d
efau
lt ev
ents
ove
r th
e ex
pect
ed l
ife o
f a
finan
cial
ins
trum
ent.
In c
ontra
st,
12-m
onth
EC
L re
pres
ents
the
porti
on o
f life
time
ECL
that
is e
xpec
ted
to re
sult
from
def
ault
even
ts on
a fi
nanc
ial i
nstru
men
t tha
t are
pos
sibl
e w
ithin
12
mon
ths a
fter t
he re
porti
ng d
ate.
Th
e im
pairm
ent
loss
of
all f
inan
cial
ass
ets
is r
ecog
nize
d in
pro
fit o
r lo
ss b
y a
redu
ctio
n in
thei
r ca
rryi
ng a
mou
nts
thro
ugh
a lo
ss a
llow
ance
acc
ount
, exc
ept f
or in
vest
men
ts in
deb
t ins
trum
ents
that
ar
e m
easu
red
at F
VTO
CI,
for
whi
ch t
he l
oss
allo
wan
ce i
s re
cogn
ized
in
othe
r co
mpr
ehen
sive
in
com
e an
d th
e ca
rryi
ng a
mou
nts o
f suc
h fin
anci
al a
sset
s are
not
redu
ced.
3)
Der
ecog
nitio
n of
fina
ncia
l ass
ets
The
Gro
up d
erec
ogni
zes
a fin
anci
al a
sset
onl
y w
hen
the
cont
ract
ual r
ight
s to
the
cash
flo
ws
from
th
e as
set e
xpire
or w
hen
it tra
nsfe
rs th
e fin
anci
al a
sset
and
sub
stan
tially
all
the
risks
and
rew
ards
of
owne
rshi
p of
the
asse
t to
anot
her p
arty
. O
n de
reco
gniti
on o
f a
finan
cial
ass
et i
n its
ent
irety
, th
e di
ffer
ence
bet
wee
n th
e as
set’s
car
ryin
g am
ount
and
the
sum
of
the
cons
ider
atio
n re
ceiv
ed a
nd r
ecei
vabl
e an
d th
e cu
mul
ativ
e ga
in o
r lo
ss
that
had
bee
n re
cogn
ized
in o
ther
com
preh
ensi
ve in
com
e is
reco
gniz
ed in
pro
fit o
r los
s.
b.
Equi
ty in
stru
men
ts
Deb
t and
equ
ity in
stru
men
ts is
sued
by
the
entit
y in
the
Gro
up a
re c
lass
ified
as e
ither
fina
ncia
l lia
bilit
ies
or a
s eq
uity
in a
ccor
danc
e w
ith th
e su
bsta
nce
of th
e co
ntra
ctua
l arr
ange
men
ts a
nd th
e de
finiti
ons
of a
fin
anci
al li
abili
ty a
nd a
n eq
uity
inst
rum
ent.
Equi
ty i
nstru
men
ts is
sued
by
the
entit
y in
the
Gro
up a
re r
ecog
nize
d at
the
pro
ceed
s re
ceiv
ed, n
et o
f di
rect
issu
e co
sts.
Rep
urch
ase
of th
e G
roup
’s o
wn
equi
ty in
stru
men
ts is
reco
gniz
ed in
and
ded
ucte
d di
rect
ly fr
om e
quity
. N
o ga
in o
r lo
ss i
s re
cogn
ized
in
prof
it or
los
s on
the
pur
chas
e, s
ale,
iss
ue o
r ca
ncel
latio
n of
the
C
ompa
ny’s
ow
n eq
uity
inst
rum
ents
.
c.
Fina
ncia
l lia
bilit
ies
1)
Subs
eque
nt m
easu
rem
ent
Ex
cept
for
fin
anci
al l
iabi
litie
s at
FV
TPL,
all
finan
cial
lia
bilit
ies
are
mea
sure
d at
am
ortiz
ed c
ost
usin
g th
e ef
fect
ive
inte
rest
met
hod.
2)
Der
ecog
nitio
n of
fina
ncia
l lia
bilit
ies
The
diff
eren
ce b
etw
een
the
carr
ying
am
ount
of
a fin
anci
al l
iabi
lity
dere
cogn
ized
and
the
co
nsid
erat
ion
paid
, inc
ludi
ng a
ny n
on-c
ash
asse
ts tr
ansf
erre
d or
liab
ilitie
s as
sum
ed, i
s rec
ogni
zed
in
prof
it or
loss
.
d.
Con
verti
ble
bond
s Th
e co
mpo
nent
par
ts o
f co
mpo
und
inst
rum
ents
(i.e
. co
nver
tible
bon
ds)
issu
ed b
y th
e C
ompa
ny a
re
clas
sifie
d se
para
tely
as
finan
cial
lia
bilit
ies
and
equi
ty i
n ac
cord
ance
with
the
sub
stan
ce o
f th
e co
ntra
ctua
l arr
ange
men
ts a
nd th
e de
finiti
ons o
f a fi
nanc
ial l
iabi
lity
and
an e
quity
inst
rum
ent.
- 22
-
On
initi
al re
cogn
ition
, the
fair
valu
e of
the
liabi
lity
com
pone
nt is
est
imat
ed u
sing
the
prev
ailin
g m
arke
t in
tere
st r
ate
for
sim
ilar
non-
conv
ertib
le i
nstru
men
ts.
This
am
ount
is
reco
rded
as
a lia
bilit
y on
an
amor
tized
cos
t ba
sis
usin
g th
e ef
fect
ive
inte
rest
met
hod
until
ext
ingu
ishe
d up
on c
onve
rsio
n or
the
in
stru
men
t’s m
atur
ity d
ate.
Any
em
bedd
ed d
eriv
ativ
e lia
bilit
y is
mea
sure
d at
fair
valu
e.
The
conv
ersi
on o
ptio
n cl
assi
fied
as e
quity
is
dete
rmin
ed b
y de
duct
ing
the
amou
nt o
f th
e lia
bilit
y co
mpo
nent
from
the
fair
valu
e of
the
com
poun
d in
stru
men
t as
a w
hole
. Thi
s is r
ecog
nize
d an
d in
clud
ed
in e
quity
, net
of
inco
me
tax
effe
cts,
and
is n
ot s
ubse
quen
tly r
emea
sure
d. I
n ad
ditio
n, t
he c
onve
rsio
n op
tion
clas
sifie
d as
equ
ity w
ill re
mai
n in
equ
ity u
ntil
the
conv
ersi
on o
ptio
n is
exe
rcis
ed, i
n w
hich
cas
e,
the
bala
nce
reco
gniz
ed i
n eq
uity
will
be
trans
ferr
ed t
o ca
pita
l su
rplu
s -
shar
e pr
emiu
ms.
Whe
n th
e co
nver
sion
opt
ion
rem
ains
une
xerc
ised
at m
atur
ity, t
he b
alan
ce re
cogn
ized
in e
quity
will
be
trans
ferr
ed
to c
apita
l sur
plus
- sh
are
prem
ium
s. Tr
ansa
ctio
n co
sts
that
rela
te to
the
issu
e of
the
conv
ertib
le n
otes
are
allo
cate
d to
the
liabi
lity
and
equi
ty
com
pone
nts
in p
ropo
rtion
to
the
allo
catio
n of
the
gro
ss p
roce
eds.
Tran
sact
ion
cost
s re
latin
g to
the
eq
uity
com
pone
nt a
re re
cogn
ized
dire
ctly
in e
quity
. Tra
nsac
tion
cost
s rel
atin
g to
the
liabi
lity
com
pone
nt
are
incl
uded
in th
e ca
rryi
ng a
mou
nt o
f the
liab
ility
com
pone
nt.
e.
D
eriv
ativ
e fin
anci
al in
stru
men
ts
The
Gro
up e
nter
s in
to a
var
iety
of
deriv
ativ
e fin
anci
al in
stru
men
ts to
man
age
its e
xpos
ure
to in
tere
st ra
te, f
orei
gn e
xcha
nge
rate
and
fue
l pric
e ris
ks, i
nclu
ding
for
eign
exc
hang
e fo
rwar
d co
ntra
cts,
inte
rest
rate
swap
s, cu
rren
cy o
ptio
ns sw
aps a
nd fu
el sw
aps.
Der
ivat
ives
are
initi
ally
reco
gniz
ed a
t fai
r val
ue a
t the
dat
e th
e de
rivat
ive
cont
ract
s ar
e en
tere
d in
to a
nd
are
subs
eque
ntly
rem
easu
red
to th
eir f
air v
alue
at t
he e
nd o
f eac
h re
porti
ng p
erio
d. T
he re
sulti
ng g
ain
or
loss
is r
ecog
nize
d in
pro
fit o
r lo
ss im
med
iate
ly u
nles
s th
e de
rivat
ive
is d
esig
nate
d an
d ef
fect
ive
as a
he
dgin
g in
stru
men
t, in
whi
ch e
vent
, the
tim
ing
of th
e re
cogn
ition
in p
rofit
or l
oss d
epen
ds o
n th
e na
ture
of
the
hed
ging
rel
atio
nshi
p. W
hen
the
fair
valu
e of
a d
eriv
ativ
e fin
anci
al i
nstru
men
t is
pos
itive
, the
de
rivat
ive
is re
cogn
ized
as
a fin
anci
al a
sset
; whe
n th
e fa
ir va
lue
of a
der
ivat
ive
finan
cial
inst
rum
ent i
s ne
gativ
e, th
e de
rivat
ive
is re
cogn
ized
as a
fina
ncia
l lia
bilit
y.
H
edge
Acc
ount
ing
The
Gro
up e
nter
s in
to s
ome
deriv
ativ
e tra
nsac
tions
tha
t ai
m t
o m
anag
e in
tere
st r
ates
, for
eign
exc
hang
e ra
tes,
fuel
pric
es,
and
othe
r fa
ctor
s af
fect
ing
gain
s or
los
ses
on a
sset
s an
d lia
bilit
ies.
The
hedg
ing
trans
actio
ns a
re d
efin
ed a
s ca
sh f
low
hed
ges.
Whe
n en
terin
g in
to h
edgi
ng t
rans
actio
ns,
the
Gro
up h
as
prep
ared
off
icia
l doc
umen
ts th
at d
escr
ibe
the
hedg
ing
rela
tions
hip
betw
een
hedg
ing
inst
rum
ents
and
item
s w
hich
hav
e be
en h
edge
d, th
e ob
ject
ive
of ri
sk m
anag
emen
t, th
e he
dgin
g st
rate
gy, a
nd th
e w
ay to
eva
luat
e th
e ef
fect
iven
ess o
f the
hed
ging
inst
rum
ent.
Th
e ef
fect
ive
porti
on o
f cha
nges
in th
e fa
ir va
lue
of d
eriv
ativ
es th
at a
re d
esig
nate
d an
d qu
alify
as
cash
flow
he
dges
is re
cogn
ized
in o
ther
com
preh
ensi
ve in
com
e. T
he g
ain
or lo
ss re
latin
g to
the
inef
fect
ive
porti
on is
re
cogn
ized
imm
edia
tely
in p
rofit
or l
oss.
The
asso
ciat
ed g
ains
or
loss
es th
at w
ere
reco
gniz
ed in
oth
er c
ompr
ehen
sive
inco
me
are
recl
assi
fied
from
eq
uity
to p
rofit
or
loss
as
a re
clas
sific
atio
n ad
just
men
t in
the
line
item
rel
atin
g to
the
hedg
ed it
em in
the
sam
e pe
riod
as w
hen
the
hedg
ed i
tem
aff
ects
pro
fit o
r lo
ss.
If a
hedg
e of
a f
orec
aste
d tra
nsac
tion
subs
eque
ntly
res
ults
in th
e re
cogn
ition
of
a no
n-fin
anci
al a
sset
or
a no
n-fin
anci
al li
abili
ty, t
he a
ssoc
iate
d ga
ins
and
loss
es t
hat
wer
e re
cogn
ized
in
othe
r co
mpr
ehen
sive
inc
ome
are
rem
oved
fro
m e
quity
and
are
in
clud
ed in
the
initi
al c
ost o
f the
non
-fina
ncia
l ass
et o
r non
-fina
ncia
l lia
bilit
y.
- 23
-
152
Star
ting
from
201
8, th
e G
roup
dis
cont
inue
s he
dge
acco
untin
g on
ly w
hen
the
hedg
ing
rela
tions
hip
ceas
es to
m
eet
the
qual
ifyin
g cr
iteria
; fo
r in
stan
ce, w
hen
the
hedg
ing
inst
rum
ent
expi
res
or i
s so
ld, t
erm
inat
ed o
r ex
erci
sed.
The
cum
ulat
ive
gain
or
loss
on
the
hedg
ing
inst
rum
ent t
hat h
as b
een
prev
ious
ly r
ecog
nize
d in
ot
her c
ompr
ehen
sive
inco
me
from
the
perio
d in
whi
ch th
e he
dge
was
eff
ectiv
e re
mai
ns s
epar
atel
y in
equ
ity
until
the
fore
cast
ed tr
ansa
ctio
n oc
curs
. Whe
n a
fore
cast
ed tr
ansa
ctio
n is
no
long
er e
xpec
ted
to o
ccur
, the
ga
in o
r los
s acc
umul
ated
in e
quity
is re
cogn
ized
imm
edia
tely
in p
rofit
or l
oss.
Prov
isio
ns
The
Gro
up r
ecog
nize
s pr
ovis
ions
whe
n th
e G
roup
has
a p
rese
nt o
blig
atio
n (le
gal o
r co
nstru
ctiv
e) a
risin
g fr
om p
ast
even
ts (
lega
l or
con
stru
ctiv
e ob
ligat
ion)
, pa
ymen
t fo
r th
e ob
ligat
ion
is p
roba
ble,
and
the
ex
pend
iture
for s
ettli
ng th
e ob
ligat
ion
can
be e
stim
ated
relia
bly.
Th
e am
ount
reco
gniz
ed a
s a
prov
isio
n is
the
best
est
imat
e of
the
expe
nditu
re re
quire
d to
set
tle th
e pr
esen
t ob
ligat
ion,
taki
ng in
to a
ccou
nt th
e ris
ks a
nd u
ncer
tain
ties s
urro
undi
ng th
e ob
ligat
ion
as o
f the
bal
ance
she
et
date
. W
hen
a pr
ovis
ion
is m
easu
red
usin
g th
e ca
sh f
low
s es
timat
ed t
o se
ttle
the
pres
ent
oblig
atio
n, i
ts ca
rryi
ng a
mou
nt is
the
pres
ent v
alue
of t
hose
cas
h flo
ws.
Airc
raft
leas
e co
ntra
cts
Whe
n an
airc
raft
leas
e co
ntra
cts
expi
res
and
the
leas
ed it
em w
ill b
e re
turn
ed to
the
less
or, t
he G
roup
will
as
sess
if th
ere
are
exis
ting
oblig
atio
ns e
xist
and
if it
is re
quire
d to
reco
gniz
e a
prov
isio
n w
hen
sign
ing
the
leas
e co
ntra
ct.
Rev
enue
Rec
ogni
tion
Whe
n ap
plyi
ng IF
RS
15 d
urin
g 20
18, t
he G
roup
reco
gniz
es re
venu
e by
app
lyin
g th
e fo
llow
ing
step
s:
Iden
tifyi
ng th
e co
ntra
ct w
ith th
e cu
stom
er;
Iden
tifyi
ng th
e pe
rfor
man
ce o
blig
atio
ns in
the
cont
ract
;
D
eter
min
e th
e tra
nsac
tion
pric
e;
Allo
cate
the
trans
actio
n pr
ice
to th
e pe
rfor
man
ce o
blig
atio
ns in
the
cont
ract
; and
R
ecog
nize
reve
nue
whe
n th
e G
roup
satis
fies a
per
form
ance
obl
igat
ion.
Sh
ippi
ng se
rvic
e re
venu
e Pa
ssen
ger a
nd c
argo
reve
nue
are
reco
gniz
ed a
s rev
enue
whe
n th
e pa
ssen
gers
and
goo
ds a
re a
ctua
lly c
arrie
d.
Whe
n th
e tic
kets
are
sold
, due
to th
e fa
ct th
at th
e fu
lfillm
ent o
blig
atio
ns o
f the
ship
men
t hav
e no
t bee
n m
et,
the
rele
vant
am
ount
of r
even
ue is
firs
t rec
orde
d as
con
tract
liab
ilitie
s unt
il pa
ssen
gers
act
ually
boa
rd.
L
easi
ng
At t
he in
cept
ion
of a
con
tract
, the
Gro
up a
sses
ses w
heth
er th
e co
ntra
ct is
, or c
onta
ins,
a le
ase.
Th
e G
roup
as l
esse
e Th
e G
roup
reco
gniz
es ri
ght-o
f-us
e as
sets
and
leas
e lia
bilit
ies
for a
ll le
ases
at t
he c
omm
ence
men
t dat
e of
a
leas
e, e
xcep
t fo
r sh
ort-t
erm
lea
ses
and
low
-val
ue a
sset
lea
ses
acco
unte
d fo
r ap
plyi
ng a
rec
ogni
tion
exem
ptio
n w
here
leas
e pa
ymen
ts a
re re
cogn
ized
as e
xpen
ses o
n a
stra
ight
-line
bas
is o
ver t
he le
ase
term
s. R
ight
-of-
use
asse
ts a
re i
nitia
lly m
easu
red
at c
ost,
whi
ch c
ompr
ises
the
ini
tial
mea
sure
men
t of
lea
se
liabi
litie
s ad
just
ed f
or l
ease
pay
men
ts m
ade
at o
r be
fore
the
com
men
cem
ent
date
, plu
s an
y in
itial
dire
ct
cost
s inc
urre
d an
d an
est
imat
e of
cos
ts n
eede
d to
rest
ore
the
unde
rlyin
g as
sets
, and
less
any
leas
e in
cent
ives
re
ceiv
ed.
Rig
ht-o
f-us
e as
sets
are
sub
sequ
ently
mea
sure
d at
cos
t le
ss a
ccum
ulat
ed d
epre
ciat
ion
and
impa
irmen
t lo
sses
and
adj
uste
d fo
r an
y re
mea
sure
men
t of
the
lea
se l
iabi
litie
s. R
ight
-of-
use
asse
ts a
re
pres
ente
d on
a se
para
te li
ne in
the
cons
olid
ated
bal
ance
shee
ts.
- 24
-
Rig
ht-o
f-us
e as
sets
are
dep
reci
ated
usi
ng t
he s
traig
ht-li
ne m
etho
d fr
om t
he c
omm
ence
men
t da
tes
to t
he
earli
er o
f th
e en
d of
the
usef
ul li
ves
of th
e rig
ht-o
f-us
e as
sets
or
the
end
of th
e le
ase
term
s. H
owev
er, i
f le
ases
tran
sfer
ow
ners
hip
of th
e un
derly
ing
asse
ts to
the
Gro
up b
y th
e en
d of
the
leas
e te
rms
or if
the
cost
s of
rig
ht-o
f-use
ass
ets
refle
ct t
hat
the
Gro
up w
ill e
xerc
ise
a pu
rcha
se o
ptio
n, t
he G
roup
dep
reci
ates
the
rig
ht-o
f-us
e as
sets
from
the
com
men
cem
ent d
ates
to th
e en
d of
the
usef
ul li
ves o
f the
und
erly
ing
asse
ts.
Leas
e lia
bilit
ies
are
initi
ally
mea
sure
d at
the
pre
sent
val
ue o
f th
e le
ase
paym
ents
, whi
ch c
ompr
ise
fixed
pa
ymen
ts,
in-s
ubst
ance
fix
ed p
aym
ents
, va
riabl
e le
ase
paym
ents
whi
ch d
epen
d on
an
inde
x or
a r
ate,
re
sidu
al v
alue
gua
rant
ees,
the
exer
cise
pric
e of
a p
urch
ase
optio
n if
the
less
ee i
s re
ason
ably
cer
tain
to
exer
cise
tha
t op
tion,
and
pay
men
ts o
f pe
nalti
es f
or t
erm
inat
ing
a le
ase
if th
e le
ase
term
ref
lect
s su
ch
term
inat
ion,
less
any
lea
se i
ncen
tives
pay
able
. The
leas
e pa
ymen
ts a
re d
isco
unte
d us
ing
the
inte
rest
rat
e im
plic
it in
a l
ease
, if
that
rat
e ca
n be
rea
dily
det
erm
ined
. If
that
rat
e ca
nnot
be
read
ily d
eter
min
ed, t
he
Gro
up u
ses t
he le
ssee
’s in
crem
enta
l bor
row
ing
rate
.
Subs
eque
ntly
, le
ase
liabi
litie
s ar
e m
easu
red
at a
mor
tized
cos
t us
ing
the
effe
ctiv
e in
tere
st m
etho
d, w
ith
inte
rest
exp
ense
rec
ogni
zed
over
the
leas
e te
rms.
Whe
n th
ere
is a
cha
nge
in a
leas
e te
rm, a
cha
nge
in th
e am
ount
s exp
ecte
d to
be
paya
ble
unde
r a re
sidu
al v
alue
gua
rant
ee, a
cha
nge
in th
e as
sess
men
t of a
n op
tion
to
purc
hase
an
unde
rlyin
g as
set,
or a
cha
nge
in fu
ture
leas
e pa
ymen
ts re
sulti
ng fr
om a
cha
nge
in a
n in
dex
or a
ra
te u
sed
to d
eter
min
e th
ose
paym
ents
, th
e G
roup
rem
easu
res
the
leas
e lia
bilit
ies
with
a c
orre
spon
ding
ad
just
men
t to
the
right
-of-
use-
asse
ts. L
ease
liab
ilitie
s ar
e pr
esen
ted
on a
sep
arat
e lin
e in
the
cons
olid
ated
ba
lanc
e sh
eets
. V
aria
ble
leas
e pa
ymen
ts th
at d
o no
t dep
end
on a
n in
dex
or a
rate
are
reco
gniz
ed a
s ex
pens
es in
the
perio
ds
in w
hich
they
are
incu
rred
. Fo
r sa
le a
nd le
aseb
ack
trans
actio
ns, i
f th
e tra
nsfe
r of
an
asse
t sat
isfie
s th
e re
quire
men
ts o
f IF
RS
15 to
be
acco
unte
d fo
r as a
sale
, the
Gro
up re
cogn
izes
onl
y th
e am
ount
of a
ny g
ain
or lo
ss w
hich
rela
tes t
o th
e rig
hts
trans
ferr
ed to
the
buye
r-les
sor,
and
adju
sts
the
off-
mar
ket t
erm
s to
mea
sure
the
sale
pro
ceed
s at
fair
valu
e.
If th
e tra
nsfe
r doe
s no
t sat
isfy
the
requ
irem
ents
of I
FRS
15 to
be
acco
unte
d fo
r as a
sal
e, it
is a
ccou
nted
for
as a
fina
ncin
g tra
nsac
tion.
E
mpl
oyee
Ben
efits
a.
Sh
ort-t
erm
em
ploy
ee b
enef
its
Liab
ilitie
s re
cogn
ized
in
resp
ect
of s
hort-
term
em
ploy
ee b
enef
its a
re m
easu
red
at t
he u
ndis
coun
ted
amou
nt o
f the
ben
efits
exp
ecte
d to
be
paid
in e
xcha
nge
for t
he re
late
d se
rvic
es.
b.
Ret
irem
ent b
enef
its
Paym
ents
to
the
defin
ed c
ontri
butio
n re
tirem
ent
bene
fit p
lan
are
reco
gniz
ed a
s ex
pens
es w
hen
empl
oyee
s hav
e re
nder
ed se
rvic
es e
ntitl
ing
them
to th
e co
ntrib
utio
ns.
Def
ined
ben
efit
cost
s (in
clud
ing
serv
ice
cost
, ne
t in
tere
st a
nd r
emea
sure
men
t) un
der
the
defin
ed
cont
ribut
ion
retir
emen
t ben
efit
plan
are
det
erm
ined
usi
ng th
e pr
ojec
ted
unit
cred
it m
etho
d. S
ervi
ce c
ost
(incl
udin
g cu
rren
t se
rvic
e co
st a
nd p
ast
serv
ice
cost
) an
d ne
t in
tere
st o
n th
e ne
t de
fined
ben
efit
liabi
litie
s (a
sset
s) a
re r
ecog
nize
d as
em
ploy
ee b
enef
its e
xpen
se i
n th
e pe
riod
in w
hich
the
y oc
cur.
Rem
easu
rem
ent,
com
pris
ing
actu
aria
l gai
ns a
nd lo
sses
and
the
retu
rn o
n pl
an a
sset
s (ex
clud
ing
inte
rest
), is
rec
ogni
zed
in o
ther
com
preh
ensi
ve i
ncom
e in
the
per
iod
in w
hich
it
occu
rs.
Rem
easu
rem
ent
reco
gniz
ed in
oth
er c
ompr
ehen
sive
inco
me
is re
flect
ed im
med
iate
ly in
reta
ined
ear
ning
s an
d w
ill n
ot b
e re
clas
sifie
d to
pro
fit o
r los
s.
Net
def
ined
ben
efit
liabi
litie
s (as
sets
) rep
rese
nt th
e ac
tual
def
icit
in th
e G
roup
’s d
efin
ed b
enef
it pl
ans.
- 25
-
153
Bor
row
ing
Cos
ts
Bor
row
ing
cost
s di
rect
ly a
ttrib
utab
le t
o th
e ac
quis
ition
, co
nstru
ctio
n or
pro
duct
ion
of q
ualif
ying
ass
ets
(ass
ets w
hich
are
subs
tant
ially
read
y fo
r the
ir in
tend
ed u
se o
r sal
e th
roug
h a
fairl
y lo
ng p
erio
d) a
re a
dded
to
the
cost
of t
hose
ass
ets,
until
such
tim
e as
the
asse
ts a
re su
bsta
ntia
lly re
ady
for t
heir
inte
nded
use
or s
ale.
In
vest
men
t inc
ome
earn
ed o
n th
e te
mpo
rary
inve
stm
ent o
f spe
cific
bor
row
ings
pen
ding
thei
r exp
endi
ture
on
qual
ifyin
g as
sets
is d
educ
ted
from
the
borr
owin
g co
sts e
ligib
le fo
r cap
italiz
atio
n.
Oth
er th
an th
at w
hich
is st
ated
abo
ve, a
ll ot
her b
orro
win
g co
sts a
re re
cogn
ized
in p
rofit
or l
oss i
n th
e pe
riod
in w
hich
they
are
incu
rred
. G
over
nmen
t Gra
nts
Gov
ernm
ent g
rant
s ar
e no
t rec
ogni
zed
until
ther
e is
reas
onab
le a
ssur
ance
that
the
Gro
up w
ill c
ompl
y w
ith
the
cond
ition
s atta
ched
to th
em a
nd th
at th
e gr
ants
will
be
rece
ived
. G
over
nmen
t gr
ants
are
rec
ogni
zed
in p
rofit
or
loss
on
a sy
stem
atic
bas
is o
ver
the
perio
ds i
n w
hich
the
G
roup
reco
gniz
es a
s exp
ense
s the
rela
ted
cost
s for
whi
ch th
e gr
ants
are
inte
nded
to c
ompe
nsat
e.
Gov
ernm
ent g
rant
s th
at a
re r
ecei
vabl
e as
com
pens
atio
n fo
r ex
pens
es o
r lo
sses
alre
ady
incu
rred
or
for
the
purp
ose
of g
ivin
g im
med
iate
fina
ncia
l sup
port
to th
e G
roup
with
no
futu
re re
late
d co
sts
are
reco
gniz
ed in
pr
ofit
or lo
ss in
the
perio
d in
whi
ch th
ey a
re re
ceiv
ed.
The
bene
fit o
f a
gove
rnm
ent l
oan
rece
ived
at a
bel
ow-m
arke
t rat
e of
inte
rest
is tr
eate
d as
a g
over
nmen
t gr
ant
mea
sure
d as
the
diff
eren
ce b
etw
een
the
proc
eeds
rec
eive
d an
d th
e fa
ir va
lue
of t
he lo
an b
ased
on
prev
ailin
g m
arke
t int
eres
t rat
es.
Freq
uent
Fly
er P
rogr
ams
The
Com
pany
has
a “
Dyn
asty
Fly
er P
rogr
am”
thro
ugh
whi
ch p
rogr
am m
embe
rs c
an c
onve
rt ac
cum
ulat
ed
mile
age
to a
cab
in u
pgra
de,
free
tic
kets
and
oth
er m
embe
r re
war
ds a
nd o
pera
tes
a “T
iger
club
Mem
ber
Priv
ilege
Pro
gram
” to
pro
vide
mem
bers
with
acc
umul
ated
tic
ket
rew
ard
bonu
ses,
whi
ch c
an b
e us
ed t
o of
fset
the
paym
ents
for
airf
are,
lugg
age
fees
, prio
rity
chec
k-in
s, an
d or
derin
g of
mea
ls in
flig
ht c
abin
s. A
po
rtion
of
pass
enge
r re
venu
e at
tribu
tabl
e to
the
rew
ards
for
the
fre
quen
t fly
er p
rogr
am i
s de
ferr
ed. T
he
Com
pany
sho
uld
reco
gniz
es t
his
defe
rred
rev
enue
as
reve
nue
only
whe
n th
e C
ompa
ny h
as f
ulfil
led
its
oblig
atio
ns o
n th
e gr
antin
g of
rew
ards
or
whe
n th
e pe
riod
for
conv
ertin
g th
e m
ileag
e to
rew
ards
has
ex
pire
d.
Shar
e-ba
sed
Paym
ent A
rran
gem
ents
Eq
uity
-set
tled
shar
e-ba
sed
paym
ents
to e
mpl
oyee
s ar
e m
easu
red
at th
e fa
ir va
lue
of th
e eq
uity
inst
rum
ents
at
the
gran
t dat
e.
The
fair
valu
e de
term
ined
at
the
gran
t da
te o
f th
e eq
uity
-set
tled
shar
e-ba
sed
paym
ents
is
expe
nsed
on
a st
raig
ht-li
ne b
asis
ove
r th
e ve
stin
g pe
riod,
bas
ed o
n th
e G
roup
’s e
stim
ate
of e
quity
ins
trum
ent
that
will
ev
entu
ally
ves
t, w
ith a
cor
resp
ondi
ng in
crea
se in
cap
ital s
urpl
us -
empl
oyee
sha
re o
ptio
ns. T
he f
air
valu
e de
term
ined
at t
he g
rant
dat
e of
the
equi
ty-s
ettle
d sh
are-
base
d pa
ymen
ts is
reco
gniz
ed a
s an
exp
ense
in fu
ll at
the
gran
t dat
e w
hen
the
gran
ted
shar
e op
tions
are
ves
ted
imm
edia
tely
.
- 26
-
Tax
atio
n In
com
e ta
x ex
pens
e re
pres
ents
the
sum
of t
he c
urre
nt ta
x an
d de
ferr
ed ta
x.
a.
Cur
rent
tax
Th
e cu
rren
t tax
liab
ilitie
s ar
e ba
sed
on c
urre
nt ta
xabl
e pr
ofit.
Sin
ce p
art o
f the
inco
me
and
expe
nses
are
ta
xabl
e or
ded
uctib
le i
n ot
her
perio
ds,
or i
n ac
cord
ance
with
the
rel
evan
t ta
x la
ws
are
taxa
ble
or
dedu
ctib
le,
curr
ent
taxa
ble
prof
it di
ffer
s fr
om n
et p
rofit
rep
orte
d in
the
con
solid
ated
sta
tem
ents
of
com
preh
ensi
ve in
com
e. T
he G
roup
’s c
urre
nt ta
x lia
bilit
ies
are
calc
ulat
ed b
y th
e ta
x ra
te w
as le
gisl
ated
or
subs
tant
ially
legi
slat
ed a
t the
bal
ance
shee
t dat
e.
Acc
ordi
ng to
the
Inco
me
Tax
Law
, an
addi
tiona
l tax
at 1
0% o
f una
ppro
pria
ted
earn
ings
is p
rovi
ded
for
as in
com
e ta
x in
the
year
the
shar
ehol
ders
app
rove
the
rete
ntio
n of
thes
e ea
rnin
gs.
Adj
ustm
ents
of p
rior y
ears
’ tax
liab
ilitie
s are
add
ed to
or d
educ
ted
from
the
curr
ent y
ear’
s tax
pro
visi
on.
b.
D
efer
red
tax
Def
erre
d ta
x is
rec
ogni
zed
on t
empo
rary
diff
eren
ces
betw
een
the
carr
ying
am
ount
s of
ass
ets
and
liabi
litie
s in
the
con
solid
ated
fin
anci
al s
tate
men
ts a
nd t
he c
orre
spon
ding
tax
bas
es u
sed
in t
he
com
puta
tion
of ta
xabl
e pr
ofit.
Def
erre
d ta
x lia
bilit
ies a
re g
ener
ally
reco
gniz
ed fo
r all
taxa
ble
tem
pora
ry
diff
eren
ces.
Def
erre
d ta
x as
sets
are
gen
eral
ly r
ecog
nize
d fo
r al
l de
duct
ible
tem
pora
ry d
iffer
ence
s, un
used
los
s ca
rryf
orw
ards
and
unu
sed
tax
cred
its f
or p
urch
ases
of
mac
hine
ry,
equi
pmen
t an
d te
chno
logy
, res
earc
h an
d de
velo
pmen
t exp
endi
ture
s, an
d pe
rson
nel t
rain
ing
expe
nditu
res
to th
e ex
tent
th
at i
t is
pro
babl
e th
at t
axab
le p
rofit
will
be
avai
labl
e ag
ains
t w
hich
tho
se d
educ
tible
tem
pora
ry
diff
eren
ces c
an b
e ut
ilize
d.
Def
erre
d ta
x lia
bilit
ies
are
reco
gniz
ed fo
r tax
able
tem
pora
ry d
iffer
ence
s as
soci
ated
with
inve
stm
ents
in
subs
idia
ries
and
asso
ciat
es a
nd in
tere
sts
in jo
int v
entu
res,
exce
pt w
here
the
Gro
up is
abl
e to
con
trol t
he
reve
rsal
of t
he te
mpo
rary
diff
eren
ce a
nd it
is p
roba
ble
that
the
tem
pora
ry d
iffer
ence
will
not
reve
rse
in
the
fore
seea
ble
futu
re.
Def
erre
d ta
x as
sets
aris
ing
from
ded
uctib
le t
empo
rary
diff
eren
ces
asso
ciat
ed
with
such
inve
stm
ents
and
inte
rest
s are
onl
y re
cogn
ized
to th
e ex
tent
that
it is
pro
babl
e th
at th
ere
will
be
suff
icie
nt ta
xabl
e pr
ofit
agai
nst w
hich
to u
tiliz
e th
e be
nefit
s of
the
tem
pora
ry d
iffer
ence
s an
d th
ey a
re
expe
cted
to re
vers
e in
the
fore
seea
ble
futu
re.
The
carr
ying
am
ount
of d
efer
red
tax
asse
ts is
revi
ewed
at t
he e
nd o
f eac
h re
porti
ng p
erio
d an
d re
duce
d to
the
exte
nt th
at it
is n
o lo
nger
pro
babl
e th
at s
uffic
ient
taxa
ble
prof
it w
ill b
e av
aila
ble
to a
llow
all
or
part
of th
e as
sets
to b
e re
cove
red.
A p
revi
ousl
y un
reco
gniz
ed d
efer
red
tax
asse
t is
also
revi
ewed
at t
he
end
of e
ach
repo
rting
per
iod
and
reco
gniz
ed to
the
exte
nt th
at it
has
bec
ome
prob
able
that
futu
re ta
xabl
e pr
ofit
will
allo
w th
e de
ferr
ed ta
x as
set t
o be
reco
vere
d.
Def
erre
d ta
x lia
bilit
ies a
nd a
sset
s are
mea
sure
d at
the
tax
rate
s tha
t are
exp
ecte
d to
app
ly in
the
perio
d in
w
hich
the
liabi
litie
s ar
e se
ttled
or
the
asse
ts a
re r
ealiz
ed, b
ased
on
tax
rate
s (a
nd ta
x la
ws)
that
hav
e be
en e
nact
ed o
r sub
stant
ivel
y en
acte
d by
the
end
of th
e re
porti
ng p
erio
d. T
he m
easu
rem
ent o
f def
erre
d ta
x lia
bilit
ies
and
asse
ts re
flect
s th
e ta
x co
nseq
uenc
es th
at w
ould
follo
w fr
om th
e m
anne
r in
whi
ch th
e G
roup
exp
ects
, at t
he e
nd o
f the
repo
rting
per
iod,
to re
cove
r or s
ettle
the
carr
ying
am
ount
of i
ts a
sset
s an
d lia
bilit
ies.
c.
Cur
rent
and
def
erre
d ta
xes f
or th
e ye
ar
C
urre
nt a
nd d
efer
red
taxe
s ar
e re
cogn
ized
in p
rofit
or
loss
, exc
ept w
hen
they
rel
ate
to it
ems
that
are
re
cogn
ized
in o
ther
com
preh
ensi
ve in
com
e or
dire
ctly
in e
quity
, in
whi
ch c
ase,
the
curr
ent a
nd d
efer
red
taxe
s are
als
o re
cogn
ized
in o
ther
com
preh
ensi
ve in
com
e or
dire
ctly
in e
quity
, res
pect
ivel
y.
- 27
-
154
Mai
nten
ance
and
Ove
rhau
l Cos
ts
Rou
tine
mai
nten
ance
cos
ts a
re re
cogn
ized
in p
rofit
or l
oss i
n th
e pe
riod
in w
hich
they
are
incu
rred
. Th
e ov
erha
ul c
osts
of
an o
wne
d or
leas
ed a
ircra
ft th
at m
eet t
he c
riter
ia f
or f
ixed
ass
et c
apita
lizat
ion
are
capi
taliz
ed a
s re
plac
emen
ts f
or a
ircra
ft an
d en
gine
s an
d ar
e de
prec
iate
d on
a s
traig
ht-li
ne b
asis
ove
r th
e ex
pect
ed a
nnua
l ove
rhau
l cyc
le.
5
. C
RIT
ICA
L A
CC
OU
NT
ING
JU
DG
ME
NT
S A
ND
KE
Y S
OU
RC
ES
OF
EST
IMA
TIO
N
UN
CE
RT
AIN
TY
In
the
app
licat
ion
of th
e G
roup
’s a
ccou
ntin
g po
licie
s as
dis
clos
ed i
n N
ote
4, m
anag
emen
t is
req
uire
d to
m
ake
judg
men
ts, e
stim
atio
ns a
nd a
ssum
ptio
ns a
bout
the
carr
ying
am
ount
s of
ass
ets
and
liabi
litie
s th
at a
re
not r
eadi
ly a
ppar
ent f
rom
oth
er s
ourc
es. T
he e
stim
ates
and
ass
ocia
ted
assu
mpt
ions
are
bas
ed o
n hi
stor
ical
ex
perie
nce
and
othe
r fac
tors
that
are
con
side
red
rele
vant
. Act
ual r
esul
ts m
ay d
iffer
from
thes
e es
timat
es.
The
estim
ates
and
und
erly
ing
assu
mpt
ions
are
rev
iew
ed o
n an
ong
oing
bas
is.
Rev
isio
ns t
o ac
coun
ting
estim
ates
are
rec
ogni
zed
in th
e pe
riod
in w
hich
the
estim
ates
are
rev
ised
if th
e re
visi
ons
affe
ct o
nly
that
pe
riod
or in
the
perio
d of
the
revi
sion
s an
d fu
ture
per
iods
if th
e re
visi
ons
affe
ct b
oth
curr
ent a
nd f
utur
e pe
riods
. K
ey S
ourc
es o
f Est
imat
ion
Unc
erta
inty
Th
e ke
y as
sum
ptio
ns c
once
rnin
g th
e fu
ture
and
oth
er k
ey so
urce
s of e
stim
atio
n un
certa
inty
at t
he e
nd o
f the
re
porti
ng p
erio
d th
at h
ave
a si
gnifi
cant
risk
cau
sing
a m
ater
ial a
djus
tmen
t to
the
carr
ying
am
ount
s of
ass
ets
and
liabi
litie
s with
in th
e ne
xt fi
nanc
ial y
ear a
re d
iscu
ssed
bel
ow.
Def
ined
Ben
efit
Obl
igat
ions
Th
e pr
esen
t va
lue
of d
efin
ed b
enef
it ob
ligat
ions
at
the
end
of t
he r
epor
ting
perio
d is
cal
cula
ted
usin
g ac
tuar
ial
assu
mpt
ions
. Th
ose
assu
mpt
ions
, w
hich
are
bas
ed o
n m
anag
emen
t’s j
udgm
ents
and
est
imat
es,
com
pris
e th
e di
scou
nt ra
te a
nd e
xpec
ted
retu
rn o
n pl
an a
sset
s. C
hang
es in
act
uaria
l ass
umpt
ions
may
hav
e a
mat
eria
l im
pact
on
the
amou
nt o
f def
ined
ben
efit
oblig
atio
ns.
6
. C
ASH
AN
D C
ASH
EQ
UIV
AL
EN
TS
Dec
embe
r 31
20
20
20
19
C
ash
on h
and
and
revo
lvin
g fu
nds
$
33
3,67
7
$
483,
951
Che
ckin
g ac
coun
ts a
nd d
eman
d de
posi
ts
17,6
90,1
86
7,20
6,93
8 C
ash
equi
vale
nts
Tim
e de
posi
ts w
ith o
rigin
al m
atur
ities
of l
ess t
han
thre
e m
onth
s
6,
980,
493
16,5
65,8
21
Rep
urch
ase
agre
emen
ts c
olla
tera
lized
by
bond
s
2,
121,
581
4,20
2,81
8
$
27,1
25,9
37
$
28
,459
,528
- 28
-
The
mar
ket r
ate
inte
rval
s of
cas
h in
ban
ks a
nd c
ash
equi
vale
nts
at th
e en
d of
the
repo
rting
per
iod
wer
e as
fo
llow
s:
D
ecem
ber
31
2020
2019
Ban
k ba
lanc
e
0%-1
.9%
0%-1
.9%
Ti
me
depo
sits
with
orig
inal
mat
uriti
es o
f les
s tha
n th
ree
mon
ths
0.
24%
-2.2
0%
0.
59%
-3.5
5%
Rep
urch
ase
agre
emen
ts c
olla
tera
lized
by
bond
s
0.22
%-0
.55%
0.47
%-0
.7%
Th
e G
roup
des
igna
ted
som
e de
posi
ts d
enom
inat
ed i
n U
SD a
nd r
epur
chas
e ag
reem
ents
col
late
raliz
ed b
y bo
nds
as h
edgi
ng in
stru
men
ts to
avo
id e
xcha
nge
rate
fluc
tuat
ions
on
final
pay
men
ts o
f airc
raft
orde
rs a
nd
prep
aym
ents
for
equ
ipm
ent,
and
appl
ied
cash
flo
w h
edge
acc
ount
ing
to h
edge
its
for
eign
exc
hang
e ex
posu
re. T
he c
ontra
ct in
form
atio
n is
as f
ollo
ws:
Mat
urity
Dat
e
Subj
ect
C
arry
ing
Val
ue
D
ecem
ber 3
1, 2
020
20
21.1
.4-2
021.
11.1
F
inan
cial
ass
ets f
or h
edgi
ng -
curr
ent
$
7,6
13,6
36
Impa
ct o
n co
mpr
ehen
sive
inco
me
(loss
)
Rec
ogni
zed
in
Oth
er
Com
preh
ensi
ve
Inco
me
(Los
s)
For t
he y
ear e
nded
Dec
embe
r 31,
202
0
$ (3
72,6
32)
The
amou
nt o
f he
dgin
g in
stru
men
t se
ttlem
ents
rec
ogni
zed
as p
repa
ymen
ts f
or e
quip
men
t in
202
0 w
as
$81,
111
thou
sand
.
7.
FIN
AN
CIA
L IN
STR
UM
EN
TS
AT
FA
IR V
AL
UE
TH
RO
UG
H P
RO
FIT
OR
LO
SS (F
VTP
L)
Dec
embe
r 31
20
20
20
19
Fi
nanc
ial a
sset
s - c
urre
nt
Fi
nanc
ial a
sset
s man
dato
rily
clas
sifie
d at
FV
TPL
Der
ivat
ive
finan
cial
inst
rum
ents
(not
und
er h
edge
acc
ount
ing)
Fo
reig
n ex
chan
ge fo
rwar
d co
ntra
cts
$
-
$
43
4 N
on-d
eriv
ativ
e fin
anci
al a
sset
s
B
enef
icia
ry c
ertif
icat
es
274,
761
511,
758
$
274
,761
$ 5
12,1
92
Fi
nanc
ial l
iabi
litie
s - c
urre
nt
D
eriv
ativ
e fin
anci
al in
stru
men
ts (n
ot u
nder
hed
ge a
ccou
ntin
g) -
Fore
ign
exch
ange
forw
ard
cont
ract
s
$
-
$
11,7
49
- 29
-
155
At
the
end
of t
he r
epor
ting
perio
d, o
utst
andi
ng f
orei
gn e
xcha
nge
forw
ard
cont
ract
s no
t un
der
hedg
e ac
coun
ting
wer
e as
follo
ws:
Cur
renc
y
Mat
urity
Dat
e
Not
iona
l Am
ount
(I
n T
hous
ands
)
Dec
embe
r 31,
201
9
Buy
forw
ard
cont
ract
s N
TD/U
SD
20
20.0
1.15
-202
0.07
.31
NTD
570,
571/
USD
19,0
00
8.
FIN
AN
CIA
L A
SSE
TS
AT
FV
TO
CI
Inve
stm
ents
in E
quity
Inst
rum
ents
D
ecem
ber
31
2020
2019
Non
-cur
rent
Fore
ign
inve
stm
ents
U
nlis
ted
shar
es
$
134
,042
$ 1
82,3
56
Dom
estic
inve
stm
ents
Unl
iste
d sh
ares
29
,704
26
,865
$ 1
63,7
46
$
209
,221
Th
ese
inve
stm
ents
in
equi
ty i
nstru
men
ts a
re n
ot h
eld
for
tradi
ng. I
nste
ad, t
hey
are
held
for
med
ium
- to
lo
ng-te
rm st
rate
gic
purp
oses
. Acc
ordi
ngly
, the
man
agem
ent e
lect
ed to
des
igna
te th
ese
inve
stm
ents
in e
quity
in
stru
men
ts a
s at
FV
TOC
I as
it be
lieve
s th
at re
cogn
izin
g sh
ort-t
erm
fluc
tuat
ions
in th
ese
inve
stm
ents
’ fai
r va
lues
in p
rofit
or l
oss
wou
ld n
ot b
e co
nsis
tent
with
the
Gro
up’s
stra
tegy
of h
oldi
ng th
ese
inve
stm
ents
for
long
-term
pur
pose
s.
9.
FIN
AN
CIA
L A
SSE
TS
AT
AM
OR
TIZ
ED
CO
ST
D
ecem
ber
31
2020
2019
Cur
rent
Tim
e de
posi
ts w
ith o
rigin
al m
atur
ities
of m
ore
than
3 m
onth
s
$ 6
,551
,693
$ 2
,355
,095
Non
-cur
rent
Tim
e de
posi
ts w
ith o
rigin
al m
atur
ities
of m
ore
than
1 y
ear
$
31
1,59
6
$
105,
586
The
inte
rest
rate
s fo
r tim
e de
posi
ts w
ith o
rigin
al m
atur
ities
of m
ore
than
3 m
onth
s w
ere
0.21
%-1
.90%
and
0.
60%
-1.3
0% a
s of D
ecem
ber 3
1, 2
020
and
2019
, res
pect
ivel
y.
- 30
-
10.
NO
TE
S R
EC
EIV
AB
LE
AN
D A
CC
OU
NT
S R
EC
EIV
AB
LE
D
ecem
ber
31
2020
2019
Not
es re
ceiv
able
$
655
$
29
9,24
5
Acc
ount
s rec
eiva
ble
A
ccou
nts r
ecei
vabl
e
9,
903,
008
8,44
0,25
4 Le
ss: A
llow
ance
for i
mpa
irmen
t los
s
(2
06,1
52)
(218
,665
)
9,69
6,85
6
8,
221,
589
$
9,6
97,5
11
$
8,5
20,8
34
The
aver
age
cred
it pe
riod
was
7 t
o 55
day
s. In
det
erm
inin
g th
e re
cove
rabi
lity
of a
tra
de r
ecei
vabl
e, t
he
Gro
up c
onsi
dere
d an
y ch
ange
in
the
cred
it qu
ality
of
the
rece
ivab
le s
ince
the
dat
e cr
edit
was
ini
tially
gr
ante
d to
the
end
of
the
repo
rting
per
iod,
and
any
allo
wan
ce f
or i
mpa
irmen
t lo
ss w
as b
ased
on
the
estim
ated
irre
cove
rabl
e am
ount
s de
term
ined
by
refe
renc
e to
the
Gro
up’s
pas
t def
ault
expe
rienc
e w
ith th
e co
unte
rpar
ty a
nd a
n an
alys
is o
f the
cou
nter
party
’s c
urre
nt fi
nanc
ial p
ositi
on. T
he G
roup
ado
pted
a p
olic
y of
on
ly d
ealin
g w
ith e
ntiti
es t
hat
are
rate
d th
e eq
uiva
lent
of
inve
stm
ent
grad
e or
hig
her
and
obta
inin
g su
ffic
ient
col
late
ral,
whe
re a
ppro
pria
te, a
s a
mea
ns o
f m
itiga
ting
the
risk
of f
inan
cial
loss
fro
m d
efau
lts.
Cre
dit r
atin
g in
form
atio
n is
obta
ined
from
inde
pend
ent r
atin
g ag
enci
es w
here
ava
ilabl
e or
, if n
ot a
vaila
ble,
th
e G
roup
use
s ot
her
publ
icly
ava
ilabl
e fin
anci
al in
form
atio
n or
its
own
tradi
ng r
ecor
ds to
rat
e its
maj
or
cust
omer
s. Th
e G
roup
’s e
xpos
ure
and
the
cred
it ra
tings
of i
ts c
ount
erpa
rties
are
con
tinuo
usly
mon
itore
d an
d th
e ag
greg
ate
valu
e of
tran
sact
ions
con
clud
ed is
spr
ead
amon
gst a
ppro
ved
coun
terp
artie
s. C
redi
t exp
osur
e is
con
trolle
d by
cou
nter
party
lim
its t
hat
are
revi
ewed
and
app
rove
d by
the
risk
man
agem
ent
com
mitt
ee
annu
ally
. Th
e G
roup
app
lies
the
sim
plifi
ed a
ppro
ach
to a
llow
ing
for
expe
cted
cre
dit l
osse
s pr
escr
ibed
by
IFR
S 9,
w
hich
per
mits
the
use
of
lifet
ime
expe
cted
los
s al
low
ance
for
all
trade
rec
eiva
bles
. The
exp
ecte
d cr
edit
loss
es o
n tra
de r
ecei
vabl
es a
re e
stim
ated
usi
ng a
pro
visi
on m
atrix
by
refe
renc
e to
pas
t def
ault
expe
rienc
e w
ith th
e de
btor
s an
d an
ana
lysi
s of
the
debt
ors’
cur
rent
fin
anci
al p
ositi
on, a
djus
ted
for
gene
ral e
cono
mic
co
nditi
ons
of th
e in
dust
ry in
whi
ch th
e de
btor
s op
erat
e an
d an
ass
essm
ent o
f bot
h th
e cu
rren
t as
wel
l as
the
fore
cast
ed d
irect
ion
of e
cono
mic
con
ditio
ns a
t th
e re
porti
ng d
ate.
As
the
Gro
up’s
his
toric
al c
redi
t lo
ss
expe
rienc
e do
es n
ot s
how
sig
nific
antly
diff
eren
t lo
ss p
atte
rns
for
diff
eren
t cu
stom
er s
egm
ents
, th
e lo
ss
allo
wan
ce b
ased
on
the
past
due
stat
us is
not
furth
er d
istin
guis
hed
acco
rdin
g to
the
diff
eren
t seg
men
ts o
f the
G
roup
’s c
usto
mer
bas
e.
The
Gro
up w
rites
off
a tr
ade
rece
ivab
le w
hen
ther
e is
info
rmat
ion
indi
catin
g th
at th
e de
btor
is e
xper
ienc
ing
seve
re fi
nanc
ial d
iffic
ulty
and
ther
e is
no
real
istic
pro
spec
t of
reco
very
. For
acc
ount
s re
ceiv
able
that
hav
e be
en w
ritte
n of
f, th
e G
roup
con
tinue
s to
eng
age
in e
nfor
cem
ent
activ
ity t
o at
tem
pt t
o re
cove
r th
e re
ceiv
able
s whi
ch a
re d
ue. W
here
reco
verie
s are
mad
e, th
ese
are
reco
gniz
ed in
pro
fit o
r los
s. Th
e fo
llow
ing
tabl
e de
tails
the
loss
allo
wan
ce o
f tra
de re
ceiv
able
s bas
ed o
n th
e G
roup
’s p
rovi
sion
mat
rix.
D
ecem
ber 3
1, 2
020
N
ot P
ast D
ue
Up
to 3
0 D
ays
31
to 6
0 D
ays
61
to 9
0 D
ays
Ove
r 90
Day
s
Tot
al
Ex
pect
ed c
redi
t los
s rat
e
0.14
%
0.
18%
1.20
%
53
.78%
92.7
4%
G
ross
car
ryin
g am
ount
$ 9
,304
,785
$ 25
6,17
8
$ 13
4,11
1
$ 5,
513
$
202,
421
$
9,90
3,00
8 Lo
ss a
llow
ance
(life
time
ECLs
)
(1
3,39
2)
(4
70)
(1,6
08)
(2,9
65)
(187
,718
)
(2
06,1
52)
A
mor
tized
cos
t
$ 9
,291
,393
$ 25
5,70
8
$ 13
2,50
3
$ 2,
548
$
14,7
03
$
9,69
6,85
6
- 31
-
156
Dec
embe
r 31,
201
9
Not
Pas
t Due
U
p to
30
Day
s 3
1 to
60
Day
s 6
1 to
90
Day
s O
ver
90 D
ays
T
otal
Expe
cted
cre
dit l
oss r
ate
0.
12%
0.15
%
6.
16%
15.2
5%
97
.18%
Gro
ss c
arry
ing
amou
nt
$
6,7
05,6
62
$
1,33
2,64
0
$ 97
,700
$ 11
3,71
6
$ 19
0,53
6
$ 8,
440,
254
Loss
allo
wan
ce (l
ifetim
e EC
Ls)
(8,1
23)
(2,0
19)
(6,0
21)
(17,
340)
(185
,162
)
(2
18,6
65)
A
mor
tized
cos
t
$ 6
,697
,539
$ 1,
330,
621
$
91,6
79
$
96,3
76
$
5,37
4
$ 8,
221,
589
The
mov
emen
ts o
f the
loss
allo
wan
ce o
f tra
de re
ceiv
able
s wer
e as
follo
ws:
For
the
Yea
r E
nded
Dec
embe
r 31
20
20
20
19
B
alan
ce a
t Jan
uary
1
$
218
,665
$ 2
27,3
06
Add
: Net
rem
easu
rem
ent o
f los
s allo
wan
ce
4,89
5
24
,096
Le
ss: A
mou
nts w
ritte
n of
f
(17,
398)
(3
2,71
7)
Fore
ign
exch
ange
gai
ns a
nd lo
sses
(1
0)
(3)
Loss
of c
ontro
l of s
ubsi
diar
ies
(-)
(17)
Bal
ance
at D
ecem
ber 3
1
$ 2
06,1
52
$
218
,665
11.
INV
EN
TO
RIE
S
Dec
embe
r 31
20
20
20
19
A
ircra
ft sp
are
parts
$ 7
,898
,482
$ 7
,578
,125
Ite
ms f
or in
-flig
ht sa
le
627,
437
571,
601
Wor
k in
pro
cess
- m
aint
enan
ce se
rvic
es
214,
362
283,
933
Oth
ers
47
,824
36
,454
$ 8
,788
,105
$ 8
,470
,113
Th
e op
erat
ing
cost
s re
cogn
ized
for
the
yea
rs e
nded
Dec
embe
r 31
, 202
0 an
d 20
19 i
nclu
ded
loss
es f
rom
in
vent
ory
writ
e-do
wns
of $
190,
548
thou
sand
and
$32
7,91
9 th
ousa
nd, r
espe
ctiv
ely.
12.
NO
N-C
UR
RE
NT
ASS
ET
S H
EL
D F
OR
SA
LE
Dec
embe
r 31
20
20
20
19
Lo
ng-te
rm e
quity
inve
stm
ents
hel
d fo
r sal
e - A
sian
Com
pres
sor
Tech
nolo
gy S
ervi
ces
$
89,
296
$
-
To e
nhan
ce i
ts c
ompe
titiv
enes
s, th
e C
ompa
ny p
lans
to
intro
duce
new
airc
raft
and
retir
e ol
d ai
rcra
ft ac
cord
ing
to a
pla
nned
sche
dule
. Suc
h ai
rcra
ft, c
lass
ified
as n
on-c
urre
nt a
sset
s he
ld fo
r sal
e, h
ad a
n or
igin
al
book
val
ue w
hich
was
hig
her t
han
the
expe
cted
sale
pric
e an
d w
hich
was
reco
gniz
ed a
s an
impa
irmen
t los
s. H
owev
er, t
he a
ctua
l los
s sha
ll be
iden
tifie
d by
the
actu
al sa
le p
rice.
- 32
-
The
Com
pany
com
plet
ed t
he d
ispo
sal
proc
edur
es o
f so
me
airc
raft
and
reco
gniz
ed a
los
s on
dis
posa
l of
$1
0,46
2 th
ousa
nd in
201
9. T
he f
air
valu
e w
as d
eter
min
ed b
y tra
nsac
tions
of
the
rela
ted
mar
ket,
and
the
prop
osed
sale
pric
e w
as b
ased
on
the
curr
ent s
tatu
s of t
he a
ircra
ft. T
he fa
ir va
lue
is c
lass
ified
as L
evel
3.
13
. SU
BSI
DIA
RIE
S Su
bsid
iary
incl
uded
in th
e co
nsol
idat
ed fi
nanc
ial s
tate
men
ts:
Prop
ortio
n of
O
wne
rshi
p (%
)
Dec
embe
r 31
In
vest
or C
ompa
ny
In
vest
ee C
ompa
ny
M
ain
Bus
ines
ses a
nd P
rodu
cts
20
20
20
19
C
hina
Airl
ines
, Ltd
. T
iger
air T
aiw
an C
o., L
td. (
Not
e)
Air
trans
porta
tion
81
77
T
aiw
an A
ircra
ft M
aint
enan
ce
And
Eng
inee
ring
Co.
, Ltd
.
Airc
raft
mai
nten
ance
100
10
0
C
AL-
Dyn
asty
Inte
rnat
iona
l A
hol
ding
com
pany
, rea
l est
ate
and
hote
l se
rvic
es
10
0
100
C
AL-
Asi
a In
vest
men
t
Gen
eral
inve
stm
ent
10
0
100
D
ynas
ty A
erot
ech
Inte
rnat
iona
l C
orp.
C
lean
ing
of a
ircra
ft an
d m
aint
enan
ce o
f m
achi
ne a
nd e
quip
men
t
100
10
0
Y
estri
p
Tra
vel b
usin
ess
10
0
100
C
al P
ark
R
eal e
stat
e le
ase
and
inte
rnat
iona
l tra
de
10
0
100
C
al H
otel
Co.
, Ltd
. H
otel
bus
ines
s
100
10
0
Sab
re T
rave
l Net
wor
k (T
aiw
an)
Sal
e an
d m
aint
enan
ce o
f har
dwar
e an
d so
ftwar
e
94
94
M
anda
rin A
irlin
es
Air
trans
porta
tion
and
mai
nten
ance
of
airc
raft
94
94
T
aiw
an A
ir C
argo
Ter
min
al
(Not
e)
Air
carg
o an
d st
orag
e
59
59
K
aohs
iung
Cat
erin
g Se
rvic
es,
Ltd.
I
n-fli
ght c
ater
ing
54
54
T
aoyu
an In
tern
atio
nal A
irpor
t Se
rvic
es
Airp
ort s
ervi
ces
49
49
T
aiw
an A
irpor
t Ser
vice
s (N
ote)
A
irpor
t ser
vice
s
48
48
Glo
bal S
ky E
xpre
ss
For
war
ding
and
stor
age
of a
ir ca
rgo
25
25
C
al-D
ynas
ty
Dyn
asty
Pro
perti
es C
o., L
td.
Rea
l est
ate
man
agem
ent
10
0
100
In
tern
atio
nal
Dyn
asty
Hot
el o
f Haw
aii,
Inc.
H
otel
bus
ines
s
100
10
0 Ta
iwan
Airp
ort S
ervi
ces
Tai
wan
Airp
ort S
ervi
ce (S
amoa
) A
irpor
t sup
porti
ng se
rvic
e an
d in
vest
men
t
100
10
0 N
ote:
Pr
opor
tion
of o
wne
rshi
p is
con
side
red
from
the
pers
pect
ive
of th
e G
roup
. Ex
cept
that
the
Com
pany
has
con
trol o
ver T
aoyu
an In
tern
atio
nal A
irpor
t Ser
vice
, Tai
wan
Airp
ort S
ervi
ce
and
Glo
bal
Sky
Expr
ess,
the
othe
rs a
re i
nves
tees
tha
t th
e C
ompa
ny h
ad m
ore
than
50%
of
thei
r vo
ting
shar
es. T
he a
bove
fin
anci
al i
nfor
mat
ion
of t
he s
ubsi
diar
ies
for
the
year
s en
ded
Dec
embe
r 31
, 202
0 an
d 20
19 w
as re
porte
d ac
cord
ing
to fi
nanc
ial r
epor
ts th
at w
ere
not r
evie
wed
by
inde
pend
ent a
udito
rs.
In o
rder
to p
repa
re f
or th
e lis
ting
of T
iger
air
Taiw
an C
o., L
td. a
nd c
ompl
y w
ith th
e ru
les
rela
ting
to th
e ex
amin
atio
n fo
r pub
lic li
stin
g, th
e re
leas
e of
the
shar
es o
f Tig
erai
r Tai
wan
Co.
, Ltd
. hel
d by
the
Com
pany
an
d M
anda
rin A
irlin
es w
as re
solv
ed in
the
shar
ehol
ders
’ mee
ting
of th
e C
ompa
ny o
n Ju
ne 2
5, 2
019,
and
in
the
shar
ehol
ders
’ m
eetin
g of
Man
darin
Airl
ines
on
June
27,
201
9. T
he s
hare
s sh
all
be s
ubsc
ribed
by
all
shar
ehol
ders
of
the
Com
pany
and
Man
darin
Airl
ines
on
the
basi
s of
the
perc
enta
ge o
f sh
areh
oldi
ngs.
For
the
wai
ver
of s
ubsc
ribed
sha
res
by th
e or
igin
al s
hare
hold
ers
or th
e un
ders
ubsc
ribed
por
tion,
the
chai
rman
w
as a
utho
rized
to
desi
gnat
e sp
ecifi
c pe
rson
s fo
r su
bscr
iptio
n. T
he s
ubsc
riptio
n pr
ice
was
set
at
$41
per
shar
e. I
n O
ctob
er a
nd D
ecem
ber
2019
, th
e sh
ares
wer
e fu
lly p
aid
and
wer
e co
mpl
etel
y de
liver
ed a
nd
trans
ferr
ed. A
tota
l of 4
5,66
1,00
0 sh
ares
wer
e di
spos
ed o
f, an
d th
e G
roup
’s is
sued
sha
re c
apita
l dec
reas
ed
to 7
7%. T
he a
mou
nt o
f pro
ceed
s fr
om d
ispo
sal w
as $
1,86
6,47
4 th
ousa
nd, a
nd th
e re
late
d ga
in o
n di
spos
al
was
$1,
254,
633
thou
sand
and
reco
gniz
ed a
s cap
ital s
urpl
us.
- 33
-
157
To s
treng
then
the
cap
ital
stru
ctur
e of
Tig
erai
r Ta
iwan
Co.
, Ltd
., th
e bo
ard
of d
irect
ors
of t
he C
ompa
ny
appr
oved
the
pla
n to
iss
ue o
rdin
ary
shar
es f
or c
ash
at $
25 p
er s
hare
on
Aug
ust
6, 2
020.
The
Com
pany
su
bscr
ibed
for 4
7,22
8 th
ousa
nd sh
ares
in O
ctob
er 2
020
and
26,2
86 th
ousa
nd sh
ares
in N
ovem
ber 2
020.
The
pr
opor
tion
of o
wne
rshi
p of
the
Gro
up in
crea
sed
to 8
1%. B
ecau
se th
e sh
ares
are
sub
scrib
ed a
t a p
erce
ntag
e di
ffer
ent f
rom
its
exis
ting
owne
rshi
p pe
rcen
tage
, the
Com
pany
’s r
etai
ned
earn
ings
dec
reas
ed b
y $1
69,2
72
thou
sand
.
14
. IN
VE
STM
EN
TS
AC
CO
UN
TE
D F
OR
USI
NG
TH
E E
QU
ITY
ME
TH
OD
Dec
embe
r 31
20
20
20
19
In
vest
men
ts in
ass
ocia
tes
$
1,0
79,8
52
$
1,2
08,4
95
Inve
stm
ents
in jo
intly
con
trolle
d en
titie
s
89
0,95
0
1,
015,
298
$
1,9
70,8
02
$
2,2
23,7
93
a.
The
amou
nt o
f inv
estm
ent i
n as
soci
ates
wer
e as
follo
ws:
D
ecem
ber
31
2020
2019
U
nlis
ted
com
pani
es
C
hina
Airc
raft
Serv
ices
$
277,
234
$
46
1,26
3 D
ynas
ty H
olid
ays
5,23
7
10
,004
A
irpor
t Air
Car
go T
erm
inal
(Xia
men
)
47
6,21
9
44
6,16
1 A
irpor
t Air
Car
go S
ervi
ce (X
iam
en)
270,
046
248,
350
East
ern
Uni
ted
Inte
rnat
iona
l Log
istic
s (H
oldi
ngs)
Ltd
.
51
,116
42
,717
$ 1
,079
,852
$ 1
,208
,495
A
t the
end
of t
he re
porti
ng p
erio
d, th
e pr
opor
tion
of o
wne
rshi
p an
d vo
ting
right
s in
ass
ocia
tes
held
by
the
Gro
up w
ere
as fo
llow
s:
Prop
ortio
n of
Ow
ners
hip
and
Vot
ing
Rig
hts
Dec
embe
r 31
N
ame
of A
ssoc
iate
2020
2019
Chi
na A
ircra
ft Se
rvic
es
20
%
20
%
Dyn
asty
Hol
iday
s
20
%
20
%
Airp
ort a
ir C
argo
Ter
min
al (X
iam
en)
28
%
28
%
Airp
ort a
ir C
argo
Ser
vice
(Xia
men
)
28%
28%
Ea
ster
n U
nite
d In
tern
atio
nal L
ogis
tics (
Hol
ding
s) L
td.
35
%
35
%
- 34
-
The
inve
stm
ent i
ncom
e of
ass
ocia
tes a
ccou
nted
for u
sing
the
equi
ty m
etho
d w
as a
s fol
low
s:
20
20
20
19
C
hina
Airc
raft
Serv
ices
$ (1
02,7
58)
$
10
,365
D
ynas
ty H
olid
ays
(4,7
40)
15
Airp
ort a
ir C
argo
Ter
min
al (X
iam
en)
25,5
78
21,5
35
Airp
ort a
ir C
argo
Ser
vice
(Xia
men
)
19
,124
25
,146
Ea
ster
n U
nite
d In
tern
atio
nal L
ogis
tics (
Hol
ding
s) L
td.
13,9
40
3,38
7
$
(4
8,85
6)
$
60
,448
O
ther
com
preh
ensi
ve i
ncom
e of
ass
ocia
tes
acco
unte
d fo
r us
ing
the
equi
ty m
etho
d in
202
0 an
d 20
19
com
pris
ed o
f los
ses i
n th
e am
ount
of $
0.
The
finan
cial
sta
tem
ents
use
d as
a b
asis
of
the
amou
nts
and
rela
ted
info
rmat
ion
on t
he i
nves
tmen
ts
acco
unte
d fo
r usi
ng th
e eq
uity
met
hod
and
the
shar
e of
pro
fit o
r los
s an
d ot
her c
ompr
ehen
sive
inco
me
of th
ose
inve
stm
ents
for t
he y
ears
end
ed D
ecem
ber 3
1, 2
020
and
2019
wer
e al
l ind
epen
dent
ly a
udite
d,
exce
pt t
hose
of
Chi
na A
ircra
ft Se
rvic
es a
nd E
aste
rn U
nite
d In
tern
atio
nal
Logi
stic
s (H
oldi
ng)
Ltd.
H
owev
er, t
he m
anag
emen
t det
erm
ined
that
ther
e w
ould
hav
e be
en n
o si
gnifi
cant
adj
ustm
ents
had
this
inve
stee
’s fi
nanc
ial s
tate
men
ts b
een
inde
pend
ently
aud
ited.
Th
e bo
ard
of d
irect
ors
of th
e C
ompa
ny d
ecid
ed to
sel
l par
t of t
he e
quity
of D
ynas
ty H
olid
ays
to H
.I.S.
Ta
iwan
Co.
, Ltd
. on
Janu
ary
21, 2
019,
and
com
plet
ed th
e tra
nsac
tion
on J
anua
ry 3
1, 2
109.
Afte
r th
e sa
le o
f the
equ
ity, t
he G
roup
’s is
sued
sha
re c
apita
l dec
reas
ed fr
om 5
1% to
20%
. Dyn
asty
Hol
iday
s w
as
clas
sifie
d as
an
asso
ciat
e si
nce
the
Gro
up lo
st c
ontro
l of
the
subs
idia
ry. T
here
fore
, the
rel
evan
t ass
ets
and
liabi
litie
s w
ere
not c
onso
lidat
ed in
the
curr
ent p
erio
d, a
nd o
nly
the
prof
it an
d lo
ss fr
om J
anua
ry 1
, 20
19 t
o Ja
nuar
y 31
, 20
19 w
ere
cons
olid
ated
. Fo
r in
form
atio
n ab
out
the
disp
osal
of
the
subs
idia
ry,
plea
se re
fer t
o N
ote
30.
b.
In
vest
men
ts in
join
tly c
ontro
lled
entit
ies
The
inve
stm
ents
in jo
intly
con
trolle
d en
titie
s wer
e as
follo
ws:
D
ecem
ber
31
2020
2019
Chi
na P
acifi
c C
ater
ing
Serv
ices
$
695,
959
$
80
1,07
1 C
hina
Pac
ific
Laun
dry
Serv
ices
14
9,35
3
16
8,54
7 N
OR
DA
M A
sia
Ltd.
37
,767
37
,813
D
elic
a In
tern
atio
nal C
o., L
td.
7,87
1
7,
867
$
89
0,95
0
$ 1
,015
,298
A
t the
end
of
the
repo
rting
per
iod,
the
prop
ortio
n of
ow
ners
hip
and
votin
g rig
hts
in jo
intly
con
trolle
d en
titie
s hel
d by
the
Gro
up w
ere
as fo
llow
s:
Pr
opor
tion
of O
wne
rshi
p an
d V
otin
g R
ight
s
D
ecem
ber
31
2020
2019
Chi
na P
acifi
c C
ater
ing
Serv
ices
51%
51%
C
hina
Pac
ific
Laun
dry
Serv
ices
55%
55%
N
OR
DA
M A
sia
Ltd.
49%
49%
D
elic
a In
tern
atio
nal C
o., L
td.
51
%
51
%
- 35
-
158
The
Gro
up e
nter
ed i
nto
a jo
int
vent
ure
agre
emen
t w
ith t
he T
aiko
o G
roup
to
inve
st i
n C
hina
Pac
ific
Cat
erin
g Se
rvic
es a
nd C
hina
Pac
ific
Laun
dry
Serv
ices
. Acc
ordi
ng to
the
agre
emen
t, bo
th p
artie
s ha
ve
the
maj
ority
of v
otin
g po
wer
in th
e bo
ard
of d
irect
ors t
o pa
ss a
mot
ion
for v
eto,
and
ther
efor
e th
e G
roup
do
es n
ot h
ave
cont
rol.
To e
nhan
ce th
e G
roup
’s m
aint
enan
ce c
apab
ilitie
s, th
e C
ompa
ny e
stab
lishe
d a
join
t ven
ture
with
the
US
NO
RD
AM
Aer
ospa
ce G
roup
in
Dec
embe
r 20
17,
to p
rovi
de t
hrus
t re
vers
ers
and
com
posi
te r
epai
r se
rvic
es i
n A
sia
unde
r th
e N
OR
DA
M b
rand
. N
OR
DA
M h
as f
iled
for
Cha
pter
11
bank
rupt
cy
reor
gani
zatio
n in
the
USA
on
July
22,
201
8 to
solv
e th
e bu
sine
ss d
ispu
te w
ith it
s coo
pera
tive
partn
er, s
o its
ope
ratio
n w
as n
ot im
pact
ed. A
s a
resu
lt, N
OR
DA
M A
sia
susp
ende
d its
ope
ratio
n fr
om O
ctob
er 5
, 20
18 to
Oct
ober
4, 2
019
and
resu
med
bus
ines
s on
Oct
ober
4, 2
019.
The
Com
pany
incr
ease
d th
e ca
pita
l of
NO
RD
AM
Asi
a by
$35
,525
thou
sand
in N
ovem
ber 2
019.
To
exp
and
the
Gro
up’s
cat
erin
g bu
sine
ss, K
aohs
iung
Cat
erin
g en
tere
d in
to a
join
t ven
ture
agr
eem
ent
with
a J
apan
ese
bran
d co
mpa
ny t
o in
vest
in
Del
ica
Inte
rnat
iona
l C
o, L
td.,
with
the
Jap
anes
e br
and
com
pany
hav
ing
the
right
to
mak
e de
cisi
ons
on o
pera
tions
, and
the
refo
re, t
he G
roup
doe
s no
t ha
ve
cont
rol.
Det
ails
of i
nves
tmen
t inc
ome
attri
buta
ble
to in
vest
men
t in
join
tly c
ontro
lled
entit
ies w
ere
as fo
llow
s:
For
the
Yea
r E
nded
Dec
embe
r 31
20
20
20
19
C
hina
Pac
ific
Cat
erin
g Se
rvic
es
$
(136
,459
)
$ 2
56,8
99
Chi
na P
acifi
c La
undr
y Se
rvic
es
(15,
475)
15
,030
N
OR
DA
M A
sia
Ltd.
(4
6)
(70)
D
elic
a In
tern
atio
nal C
o., L
td.
2
(2
)
$ (1
51,9
78)
$
271
,857
O
ther
com
preh
ensi
ve i
ncom
e of
ass
ocia
tes
acco
unte
d fo
r us
ing
the
equi
ty m
etho
d in
202
0 an
d 20
19
com
pris
ed o
f los
ses i
n th
e am
ount
s of $
34,2
71 th
ousa
nd a
nd $
(32,
102)
thou
sand
, res
pect
ivel
y.
The
finan
cial
sta
tem
ents
use
d as
a b
asis
of
the
amou
nts
and
rela
ted
info
rmat
ion
on t
he i
nves
tmen
ts
acco
unte
d fo
r usi
ng th
e eq
uity
met
hod
and
the
shar
e of
pro
fit o
r los
s an
d ot
her c
ompr
ehen
sive
inco
me
of th
ose
inve
stm
ents
for t
he y
ears
end
ed D
ecem
ber 3
1, 2
020
and
2019
wer
e al
l ind
epen
dent
ly a
udite
d,
exce
pt fo
r NO
RD
AM
Asi
a Li
mite
d. H
owev
er, t
he m
anag
emen
t det
erm
ined
that
ther
e w
ould
hav
e be
en
no si
gnifi
cant
adj
ustm
ents
had
this
inve
stee
’s fi
nanc
ial s
tate
men
ts b
een
inde
pend
ently
aud
ited.
Fo
r de
tails
on
serv
ices
, maj
or b
usin
ess
offic
es a
nd th
e co
untry
whe
re th
e ab
ove
asso
ciat
es a
nd jo
intly
co
ntro
lled
entit
ies
are
regi
ster
ed,
refe
r to
Tab
le 6
“N
ames
, Lo
catio
ns,
And
Oth
er I
nfor
mat
ion
of
Inve
stee
s O
ver
Whi
ch t
he C
ompa
ny E
xerc
ises
Sig
nific
ant
Influ
ence
”, a
nd T
able
7 “
Inve
stm
ents
In
Mai
nlan
d C
hina
”, fo
llow
ing
thes
e no
tes t
o th
e co
nsol
idat
ed fi
nanc
ial s
tate
men
ts.
- 36
-
15.
PRO
PER
TY, P
LA
NT
AN
D E
QU
IPM
EN
T
Free
hold
Lan
d
Bui
ldin
gs
Fl
ight
E
quip
men
t
Equ
ipm
ent
unde
r Fi
nanc
e L
ease
s
Oth
ers
T
otal
Cos
t
Bal
ance
at J
anua
ry 1
, 20
19
$
1,
015,
564
$
13
,993
,585
$ 2
59,6
95,1
30
$
25
,805
,008
$
17,9
17,7
80
$
318
,427
,067
A
dditi
ons
-
20
9,41
3
2,
248,
856
-
86
4,22
3
3,
322,
492
Dis
posa
ls
-
(1,1
30 )
(20,
698,
042 )
(668
,721
)
(3
93,0
58 )
(21,
760,
951 )
R
ecla
ssifi
catio
n
-
1,90
6,07
8
30
,831
,748
(2
5,13
1,81
3 )
(1
,537
,494
)
6,
068,
519
Net
exc
hang
e di
ffere
nce
(13,
065 )
(23,
883 )
-
-
(2,4
58 )
(39,
406 )
Lo
ss o
f con
trol o
f su
bsid
iarie
s
-
-
-
(4
,474
)
(2
,158
)
(6
,632
)
Bal
ance
at D
ecem
ber 3
1,
2019
$
1,00
2,49
9
$
16,0
84,0
63
$
272
,077
,692
$
-
$
16,8
46,8
35
$
306
,011
,089
Acc
umul
ated
dep
reci
atio
n
and
impa
irmen
t
Bal
ance
at J
anua
ry 1
, 20
19
$
-
$
(6
,574
,873
)
$ (1
23,5
07,6
57 )
$
(1
4,63
4,82
2 )
$
(10,
601,
997 )
$
(155
,319
,349
) D
epre
ciat
ion
expe
nse
-
(4
66,9
43 )
(18,
571,
992 )
(741
,852
)
(9
21,2
46 )
(20,
702,
033 )
D
ispo
sals
-
1,
014
14,8
99,5
62
79,8
66
355,
222
15,3
35,6
64
Rec
lass
ifica
tion
-
-
(14,
706,
083 )
15,2
94,6
96
(45,
103 )
543,
510
Net
exc
hang
e di
ffere
nce
-
12
,262
-
-
1,
989
14,2
51
Loss
of c
ontro
l of
subs
idia
ries
-
-
-
2,
112
1,72
7
3,
839
B
alan
ce a
t Dec
embe
r 31,
20
19
$
-
$
(7
,028
,540
)
$ (1
41,8
86,1
70 )
$
-
$
(1
1,20
9,40
8 )
$ (1
60,1
24,1
18 )
B
alan
ce a
t Dec
embe
r 31,
20
19, n
et v
alue
$
1,00
2,49
9
$
9,05
5,52
3
$ 1
30,1
91,5
22
$
-
$
5,
637,
427
$
145
,886
,971
Cos
t
Bal
ance
at J
anua
ry 1
, 20
20
$
1,
002,
499
$
16
,084
,063
$ 2
72,0
77,6
92
$
-
$
16
,846
,835
$ 3
06,0
11,0
89
Add
ition
s
-
48,8
09
653,
519
-
53
5,18
7
1,
237,
515
Dis
posa
ls
(1
8,02
6 )
(3
75,0
83 )
(3,7
24,6
58 )
-
(3
87,8
58 )
(4,5
05,6
25 )
Rec
lass
ifica
tion
-
30
4
13
,000
,582
-
70,0
81
13,0
70,9
67
Net
exc
hang
e di
ffere
nce
(28,
650 )
(52,
458 )
-
-
(5,5
97 )
(86,
705 )
Bal
ance
at D
ecem
ber 3
1,
2020
$
955,
823
$
15
,705
,635
$ 2
82,0
07,1
35
$
-
$
17
,058
,648
$ 3
15,7
27,2
41
A
ccum
ulat
ed d
epre
ciat
ion
an
d im
pairm
ent
B
alan
ce a
t Jan
uary
1,
2020
$
-
$
(7,0
28,5
40 )
$
(141
,886
,170
)
$
-
$
(11,
209,
408 )
$
(160
,124
,118
) D
epre
ciat
ion
expe
nse
-
(4
92,7
34 )
(18,
007,
550 )
-
(9
25,1
38 )
(19,
425,
422 )
D
ispo
sals
-
37
1,93
3
3,
452,
870
-
38
1,03
7
4,
205,
840
Rec
lass
ifica
tion
-
-
1,48
9,15
8
-
1,34
8
1,
490,
506
Net
exc
hang
e di
ffere
nce
-
27
,704
-
-
4,
516
32,2
20
Impa
irmen
t los
ses
-
-
(4
24,5
73 )
-
-
(424
,573
)
Bal
ance
at D
ecem
ber 3
1,
2020
$
-
$
(7,1
21,6
37 )
$
(155
,376
,265
)
$
-
$
(11,
747,
645 )
$
(174
,245
,547
)
Bal
ance
at D
ecem
ber 3
1,
2020
, net
val
ue
$
95
5,82
3
$
8,58
3,99
8
$ 1
26,6
30,8
70
$
-
$
5,
311,
003
$
141
,481
,694
- 37
-
159
The
recl
assi
ficat
ion
mos
tly re
sulte
d fr
om th
e tra
nsfe
r of p
repa
ymen
ts fo
r equ
ipm
ent.
Prop
erty
, pla
nt a
nd e
quip
men
t are
dep
reci
ated
on
a st
raig
ht-li
ne b
asis
ove
r the
est
imat
ed u
sefu
l life
of t
he
asse
t: B
uild
ing
Mai
n bu
ildin
gs
45
-55
year
s O
ther
s
10-2
5 ye
ars
Mac
hine
ry a
nd e
quip
men
t
El
ectro
-mec
hani
cal e
quip
men
t
25 y
ears
O
ther
s
3-13
yea
rs
Off
ice
equi
pmen
t
3-15
yea
rs
Leas
ehol
d im
prov
emen
ts
Bui
ldin
g im
prov
emen
ts
5
year
s O
ther
s
3-5
year
s A
sset
s lea
sed
to o
ther
s
3-5
year
s Fl
ight
equ
ipm
ent a
nd e
quip
men
t und
er fi
nanc
e le
ases
A
irfra
mes
15-2
5 ye
ars
Airc
raft
cabi
ns
7-
20 y
ears
En
gine
s
10-2
0 ye
ars
Hea
vy m
aint
enan
ce o
n ai
rcra
ft
6-8
year
s En
gine
ove
rhau
ls
3-
10 y
ears
La
ndin
g ge
ar o
verh
auls
7-12
yea
rs
Rep
aira
ble
spar
e pa
rts
3-
15 y
ears
Le
ased
airc
raft
impr
ovem
ents
5-
12 y
ears
R
egar
ding
cha
nges
in f
leet
com
posi
tion,
cur
rent
and
for
ecas
ted
mar
ket v
alue
, and
oth
er te
chni
cal f
acto
rs,
the
Com
pany
rec
ogni
zed
impa
irmen
t los
ses
on a
ircra
ft eq
uipm
ent o
f $42
4,57
3 th
ousa
nd in
202
0. T
he fa
ir va
lue
was
det
erm
ined
bas
ed o
n ai
rcra
ft co
nditi
ons a
nd m
arke
t est
imat
es.
Ref
er to
Not
e 34
for t
he c
arry
ing
amou
nts o
f pro
perty
, pla
nt a
nd e
quip
men
t ple
dged
by
the
Gro
up.
Bas
ed o
n th
e pa
rticu
larit
y of
ris
k in
the
avia
tion
indu
stry
, all
of th
e G
roup
’s a
sset
s su
ch a
s ai
rcra
ft, r
eal
esta
te, a
nd m
ovab
le p
rope
rty a
re a
dequ
atel
y in
sure
d to
div
ersi
fy th
e po
tent
ial r
isk
rela
ted
to o
pera
tions
. Th
e G
roup
gen
erat
ed th
e fo
llow
ing
non-
cash
inve
stm
ent a
ctiv
ities
rela
ted
to th
e pu
rcha
se o
f pro
perty
, pla
nt
and
equi
pmen
t in
2020
and
201
9:
Dec
embe
r 31
20
20
20
19
In
crea
se in
pro
perty
, pla
nt a
nd e
quip
men
t
$ 1
,237
,515
$ 3
,322
,492
C
apita
lized
inte
rest
pai
d
-
(6,4
14)
Pu
rcha
se o
f pro
perty
, pla
nt a
nd e
quip
men
t pai
d
$ 1
,237
,515
$ 3
,316
,078
16.
INV
EST
ME
NT
PR
OPE
RT
IES
D
ecem
ber
31
2020
2019
Car
ryin
g am
ount
In
vest
men
t pro
perti
es
$
2,0
74,7
98
$
2,0
75,0
68
- 38
-
The
inve
stm
ent p
rope
rties
hel
d by
the
Gro
up w
ere
land
loca
ted
in N
anka
n an
d bu
ildin
gs in
Tai
pei,
whi
ch
wer
e al
l lea
sed
to o
ther
s. Th
e bu
ildin
gs a
re d
epre
ciat
ed o
n a
stra
ight
-line
bas
is o
ver 5
5 ye
ars.
The
fair
valu
e of
the
inve
stm
ent
prop
ertie
s he
ld b
y th
e G
roup
was
$2,
488,
931
thou
sand
and
$2,
506,
230
thou
sand
as o
f Dec
embe
r 31,
202
0 an
d 20
19, r
espe
ctiv
ely.
In a
dditi
on, m
anag
emen
t ass
esse
d th
at th
ere
was
no
sign
ifica
nt d
iffer
ence
in th
e fa
ir va
lue
as o
f Dec
embe
r 31,
202
0 an
d 20
19. T
he a
bove
fair
valu
e va
luat
ion
was
per
form
ed b
y in
depe
nden
t qu
alifi
ed p
rofe
ssio
nal
valu
ers,
and
the
futu
re i
ncom
e ev
alua
ted
by
man
agem
ent w
as b
ased
on
mar
ket t
rans
actio
ns.
All
of th
e G
roup
’s in
vest
men
t pro
perti
es w
ere
held
und
er fr
eeho
ld in
tere
st.
Cos
t
Acc
umul
ated
Net
Val
ue
Bal
ance
at J
anua
ry 1
, 201
9
$ 2
,082
,390
$
(7,0
45)
$
2,0
75,3
45
Dep
reci
atio
n ex
pens
e
-
(277
)
(2
77)
Bal
ance
at D
ecem
ber 3
1, 2
019
$
2,0
82,3
90
$
(7
,322
)
$ 2
,075
,068
B
alan
ce a
t Jan
uary
1, 2
020
$
2,0
82,3
90
$
(7
,322
)
$ 2
,075
,068
D
epre
ciat
ion
expe
nse
-
(2
70)
(270
)
B
alan
ce a
t Dec
embe
r 31,
202
0
$ 2
,082
,390
$
(7,5
92)
$
2,0
74,7
98
17.
OT
HE
R IN
TA
NG
IBL
E A
SSE
TS
Com
pute
r So
ftw
are
Cos
t
Rel
atio
nshi
p B
etw
een
Clie
nts
A
ccum
ulat
ed
Am
ortiz
atio
n
Net
Val
ue
B
alan
ce a
t Jan
uary
1, 2
019
$
2,2
37,3
82
$
18
6,19
7
$ (
1,21
2,78
3)
$ 1
,210
,796
A
dditi
ons
172,
639
-
-
172,
639
Am
ortiz
atio
n ex
pens
es
-
-
(198
,237
)
(1
98,2
37)
Dis
posa
l of s
ubsi
diar
ies
(3,8
58)
-
1,
357
(2,5
01)
Effe
cts o
f exc
hang
e ra
te c
hang
es
-
-
(5)
(5)
B
alan
ce a
t Dec
embe
r 31,
201
9
$ 2
,406
,163
$
186,
197
$
(1,
409,
668)
$
1,1
82,6
92
B
alan
ce a
t Jan
uary
1, 2
020
$
2,4
06,1
63
$
18
6,19
7
$ (
1,40
9,66
8)
$ 1
,182
,692
A
dditi
ons
130,
461
-
-
130,
461
Rec
lass
ifica
tion
(765
,426
)
-
735,
881
(29,
545)
A
mor
tizat
ion
expe
nses
-
-
(2
06,9
36)
(206
,936
) D
ispo
sal
(7
,554
)
-
7,24
3
(3
11)
Effe
cts o
f exc
hang
e ra
te c
hang
es
-
-
(10)
(10)
Bal
ance
at D
ecem
ber 3
1, 2
020
$
1,7
63,6
44
$
18
6,19
7
$
(873
,490
)
$ 1
,076
,351
Th
e ab
ove
othe
r int
angi
ble
asse
ts a
re a
mor
tized
on
a str
aigh
t-lin
e ba
sis o
ver 2
-16
year
s.
- 39
-
160
18.
OT
HE
R A
SSE
TS
D
ecem
ber
31
2020
2019
C
urre
nt
Te
mpo
rary
pay
men
ts
$
13
6,68
1
$
296,
759
Prep
aym
ents
34
8,55
4
1,
690,
368
Res
trict
ed a
sset
s
11
,065
14
,618
O
ther
s
36
4,87
9
65
3,96
6
$
861,
179
$
2,
655,
711
N
on-c
urre
nt
Pr
epay
men
ts fo
r airc
raft
$
5,
725,
340
$
8,
863,
861
Prep
aym
ents
- lo
ng-te
rm
2,21
6,04
9
2,
819,
575
Ref
unda
ble
depo
sits
1,
138,
943
1,26
1,61
1 R
estri
cted
ass
ets
240,
467
64,2
13
Oth
er fi
nanc
ial a
sset
s
18
,078
19
,103
O
ther
s
14,0
15
142,
700
$
9,
352,
892
$
13
,171
,063
Th
e pr
epay
men
ts f
or a
ircra
ft co
mpr
ised
the
prep
aid
depo
sits
and
cap
italiz
ed in
tere
st f
rom
the
purc
hase
of
ATR
72-6
00, A
321n
eo, A
320n
eo a
nd B
777F
airc
raft.
For
det
ails
on
the
airc
raft
purc
hase
con
tract
s, re
fer t
o N
ote
35.
19
. B
OR
RO
WIN
GS
a.
Sh
ort-t
erm
loan
s
Dec
embe
r 31
20
20
20
19
B
ank
loan
s - u
nsec
ured
$ 1
,932
,000
$
380,
000
In
tere
st ra
tes
0.
92%
-1.2
8%
0.
95%
-1.0
7%
a.
Sh
ort-t
erm
bill
s pay
able
Dec
embe
r 31
20
20
20
19
C
omm
erci
al p
aper
$ 8
,100
,000
$
- Le
ss: U
nam
ortiz
ed d
isco
unt o
n bi
lls p
ayab
le
(11,
118)
-
$ 8
,088
,882
$
-
Ann
ual d
isco
unt r
ate
0.
99%
-1.0
0%
-
- 40
-
b.
Long
-term
bor
row
ings
D
ecem
ber
31
2020
2019
Uns
ecur
ed b
ank
loan
s
$
23,4
70,6
96
$
1,
929,
827
Secu
red
bank
loan
s
39
,584
,540
34
,064
,099
C
omm
erci
al p
aper
Pr
ocee
ds fr
om is
sue
29,4
90,0
00
31,7
30,0
00
Less
: Una
mor
tized
dis
coun
t
22
,532
60
,143
92,5
22,7
04
67,6
63,7
83
Less
: Cur
rent
por
tion
15,2
34,3
74
14,1
48,8
92
$
77
,288
,330
$
53,5
14,8
91
In
tere
st ra
tes
0.
81%
-1.6
3%
0.
55%
-1.7
3%
For
info
rmat
ion
on s
ecur
ed b
ank
loan
s w
hich
wer
e se
cure
d by
bui
ldin
gs, m
achi
nery
equ
ipm
ent
and
fligh
t equ
ipm
ent,
refe
r to
Not
e 34
. B
ank
loan
s (N
ew T
aiw
an d
olla
rs) a
re re
paya
ble
quar
terly
, sem
iann
ually
or i
n lu
mp
sum
upo
n m
atur
ity.
Rel
ated
info
rmat
ion
is su
mm
ariz
ed a
s fol
low
s:
D
ecem
ber
31
2020
2019
Perio
ds
20
09.2
.4-
2032
.6.3
0
2008
.2.2
6-
2030
.4.2
5 Th
e G
roup
has
not
e is
suan
ce f
acili
ties
(NIF
s) o
btai
ned
from
cer
tain
fin
anci
al in
stitu
tions
. The
NIF
s, w
ith v
ario
us m
atur
ities
unt
il M
arch
202
5, w
ere
used
by
the
Gro
up t
o gu
aran
tee
com
mer
cial
pap
ers
issu
ed. A
s of
Dec
embe
r 31
, 202
0 an
d 20
19, t
he c
omm
erci
al p
aper
s w
ere
issu
ed a
t di
scou
nt r
ates
of
1.02
63%
-1.1
629%
and
1.1
300%
-1.3
380%
, res
pect
ivel
y.
In a
ccor
danc
e w
ith t
he “
Reg
ulat
ions
on
Rel
ief
and
Rev
italiz
atio
n M
easu
res
for
Indu
strie
s an
d En
terp
rises
Aff
ecte
d by
Sev
ere
Pneu
mon
ia w
ith N
ovel
Pat
hoge
ns”
endo
rsed
by
the
Min
istry
of
Tran
spor
tatio
n an
d C
omm
unic
atio
ns a
nd th
e “O
pera
tiona
l Gui
des
on R
elie
f Loa
n G
uara
ntee
s for
Aili
ng
Avi
atio
n In
dust
ry A
ffec
ted
by S
ever
e Pn
eum
onia
with
Nov
el P
atho
gens
”, t
he C
ompa
ny a
pplie
d fo
r pr
ojec
t fin
ance
loa
ns f
rom
fin
anci
al i
nstit
utio
ns t
o m
aint
ain
its o
pera
tions
; an
d sp
ecia
l fu
nds,
cred
it gu
aran
tees
alo
ng w
ith s
ubsi
dize
d in
tere
st ra
tes
wer
e pr
ovid
ed b
y th
e go
vern
men
t. Th
e to
tal a
mou
nt o
f th
e lo
ans
is $
24,3
90,0
00 t
hous
and,
whi
ch s
hall
be r
epai
d w
ithin
2 y
ears
fro
m t
he d
ate
of i
nitia
l dr
awdo
wn.
As
of D
ecem
ber
31,
2020
, th
e C
ompa
ny h
ad m
ade
a dr
awdo
wn
in t
he a
mou
nt o
f $2
3,48
0,00
0 th
ousa
nd.
- 41
-
161
20.
BO
ND
S PA
YA
BL
E
Dec
embe
r 31
20
20
20
19
U
nsec
ured
cor
pora
te b
onds
firs
t-tim
e is
sued
in 2
013
$
-
$
2,75
0,00
0 U
nsec
ured
cor
pora
te b
onds
firs
t-tim
e is
sued
in 2
016
2,35
0,00
0
4,
700,
000
Uns
ecur
ed c
orpo
rate
bon
ds se
cond
-tim
e is
sued
in 2
016
2,50
0,00
0
5,
000,
000
Uns
ecur
ed c
orpo
rate
bon
ds fi
rst-t
ime
issu
ed in
201
7
1,
000,
000
2,35
0,00
0 U
nsec
ured
cor
pora
te b
onds
seco
nd-ti
me
issu
ed in
201
7
2,
600,
000
3,50
0,00
0 U
nsec
ured
cor
pora
te b
onds
firs
t-tim
e is
sued
in 2
018
4,50
0,00
0
4,
500,
000
Uns
ecur
ed c
orpo
rate
bon
ds fi
rst-t
ime
issu
ed in
201
9
3,
500,
000
3,50
0,00
0 C
onve
rtibl
e bo
nds -
sixt
h-tim
e is
sued
5,
832,
859
5,75
2,62
5
22,2
82,8
59
32,0
52,6
25
Less
: Cur
rent
por
tion
and
put o
ptio
n of
con
verti
ble
bond
s
11
,982
,859
10
,000
,000
$
10,3
00,0
00
$
22
,052
,625
R
elat
ed is
suan
ce c
ondi
tions
wer
e as
follo
ws:
Cat
egor
y
Peri
od
C
ondi
tions
Rat
e (%
)
Se
ven-
year
priv
ate
unse
cure
d bo
nds -
issu
ed a
t pa
r in
Janu
ary
2013
; rep
ayab
le in
Ja
nuar
y 20
19 a
nd 2
020;
1.8
5% in
tere
st p
.a.,
paya
ble
annu
ally
.
20
13.0
1.17
- 20
20.0
1.17
P
rinci
pal r
epay
able
in
Janu
ary
of 2
019
and
2020
; ind
icat
or ra
te;
paya
ble
annu
ally
.
1.
85
Five
-yea
r uns
ecur
ed b
onds
- is
sued
at p
ar in
M
ay 2
016;
repa
yabl
e in
May
202
0 an
d 20
21;
1.19
% in
tere
st p
.a.,
paya
ble
annu
ally
.
20
16.0
5.26
- 20
21.0
5.26
P
rinci
pal r
epay
able
in M
ay
of 2
020
and
2021
; int
eres
t p.
a. p
ayab
le a
nnua
lly.
1.
19
Five
-yea
r uns
ecur
ed b
onds
- is
sued
at p
ar in
Se
ptem
ber 2
016;
repa
yabl
e in
Sep
tem
ber 2
020
and
2021
; 1.0
8% in
tere
st p
.a.,
paya
ble
annu
ally
.
20
16.0
9.27
- 20
21.0
9.27
P
rinci
pal r
epay
able
in
Sept
embe
r of 2
020
and
2021
; int
eres
t p.a
. pay
able
an
nual
ly.
1.
08
Thre
e-ye
ar p
rivat
e un
secu
red
bond
s - is
sued
at
par i
n M
ay 2
017;
repa
yabl
e on
due
dat
e;
inte
rest
of 1
.2%
p.a
., pa
yabl
e an
nual
ly.
20
17.0
5.19
- 20
20.0
5.19
P
rinci
pal r
epay
able
on
due
date
; ind
icat
or ra
te;
paya
ble
annu
ally
.
1.
20
Seve
n-ye
ar p
rivat
e un
secu
red
bond
s - is
sued
at
par i
n M
ay 2
017;
repa
yabl
e on
due
dat
e;
inte
rest
of 1
.75%
p.a
., pa
yabl
e an
nual
ly.
20
17.0
5.19
- 20
24.0
5.19
P
rinci
pal r
epay
able
on
due
date
; ind
icat
or ra
te;
paya
ble
annu
ally
.
1.
75
Thre
e-ye
ar p
rivat
e un
secu
red
bond
s - is
sued
at
par i
n O
ctob
er 2
017;
repa
yabl
e on
due
dat
e;
inte
rest
of 1
.14%
p.a
., pa
yabl
e an
nual
ly.
20
17.1
0.12
- 20
20.1
0.12
P
rinci
pal r
epay
able
on
due
date
; ind
icat
or ra
te;
paya
ble
annu
ally
.
1.
14
Five
-yea
r priv
ate
unse
cure
d bo
nds -
issu
ed a
t par
in
Oct
ober
201
7; re
paya
ble
in O
ctob
er 2
021
and
2022
; 1.4
5% in
tere
st p
.a.,
paya
ble
annu
ally
.
20
17.1
0.12
- 20
22.1
0.12
P
rinci
pal r
epay
able
in
Oct
ober
of 2
021
and
2022
; ind
icat
or ra
te;
paya
ble
annu
ally
.
1.
45
Five
-yea
r priv
ate
unse
cure
d bo
nds -
issu
ed a
t par
in
Nov
embe
r 201
8; re
paya
ble
in
Nov
embe
r 202
2 an
d 20
23; 1
.32%
inte
rest
p.a
., pa
yabl
e an
nual
ly
20
18.1
1.30
- 20
23.1
1.30
P
rinci
pal r
epay
able
in
Nov
embe
r of 2
022
and
2023
; ind
icat
or ra
te;
paya
ble
annu
ally
1.
32
(Con
tinue
d)
- 42
-
Cat
egor
y
Peri
od
C
ondi
tions
Rat
e (%
)
Fi
ve-y
ear p
rivat
e un
secu
red
bond
s - is
sued
at p
ar
in N
ovem
ber 2
018;
repa
yabl
e in
N
ovem
ber 2
022
and
2023
; 1.4
5% in
tere
st p
.a.,
paya
ble
annu
ally
20
18.1
1.30
- 20
25.1
1.30
P
rinci
pal r
epay
able
in
Nov
embe
r of 2
022
and
2023
; ind
icat
or ra
te;
paya
ble
annu
ally
1.
45
Five
-yea
r priv
ate
unse
cure
d bo
nds -
issu
ed a
t par
in
June
201
9; re
paya
ble
in Ju
ne 2
023
and
2024
; 1.1
0% in
tere
st p
.a.,
paya
ble
annu
ally
20
19.0
6.21
- 20
24.0
6.21
P
rinci
pal r
epay
able
in Ju
ne
of 2
023
and
2024
; in
dica
tor r
ate;
pay
able
an
nual
ly
1.
10
Seve
n-ye
ar p
rivat
e un
secu
red
bond
s - is
sued
at
par i
n Ju
ne 2
019;
repa
yabl
e in
June
202
5 an
d 20
26; 1
.32%
inte
rest
p.a
., pa
yabl
e an
nual
ly
20
19.0
6.21
- 20
26.0
6.21
P
rinci
pal r
epay
able
in Ju
ne
of 2
025
and
2026
; in
dica
tor r
ate;
pay
able
an
nual
ly
1.
32
Five
-yea
r con
verti
ble
bond
s - is
sued
at d
isco
unt
in D
ecem
ber 2
013;
repa
yabl
e in
lum
p su
m
upon
mat
urity
; 1.3
821%
dis
coun
t rat
e p.
a.
20
18.0
1.30
- 20
23.0
1.30
E
xcep
t for
con
verti
ng to
sh
are
capi
tal o
r buy
ing
back
, prin
cipa
l rep
ayab
le
in D
ecem
ber o
f 202
3
-
(Con
clud
ed)
The
Com
pany
issu
ed it
s 20
16 f
irst u
nsec
ured
cor
pora
te b
onds
with
a f
ace
valu
e of
$5,
000,
000
thou
sand
, an
d th
e pu
rcha
sers
of t
he b
onds
incl
uded
Man
darin
Airl
ines
Co.
, Ltd
. and
Sab
re T
rave
l Net
wor
k (T
aiw
an)
Co.
, Ltd
., w
hich
had
a fa
ce v
alue
of $
150,
000
thou
sand
, and
the
amou
nt w
as e
limin
ated
in th
e co
nsol
idat
ed
finan
cial
stat
emen
ts.
The
Com
pany
issu
ed th
e six
th is
sue
of it
s uns
ecur
ed c
onve
rtibl
e bo
nds,
and
the
issu
ance
con
ditio
ns w
ere
as
follo
ws:
a.
The
hold
ers m
ay d
eman
d a
lum
p-su
m p
aym
ent f
or th
e bo
nds u
pon
mat
urity
. b.
Th
e ho
lder
s ca
n re
ques
t tha
t the
Com
pany
repu
rcha
se th
eir b
onds
at f
ace
valu
e on
the
third
ann
iver
sary
of
the
offe
ring
date
. The
hol
ders
can
exe
rcis
e th
e rig
ht to
sell
on Ja
nuar
y 30
, 202
1.
c.
The
Com
pany
may
red
eem
the
bond
s at
fac
e va
lue
betw
een
Apr
il 30
, 201
8 an
d D
ecem
ber
20, 2
022
unde
r cer
tain
con
ditio
ns.
d.
Bet
wee
n Ja
nuar
y 26
, 201
4 an
d D
ecem
ber 1
6, 2
018
(exc
ept f
or th
e pe
riod
betw
een
the
form
er d
ivid
end
date
and
the
dat
e of
the
div
iden
d de
clar
atio
n on
rec
ord)
, ho
lder
s m
ay c
onve
rt th
e bo
nds
to t
he
Com
pany
’s o
rdin
ary
shar
es.
The
initi
al c
onve
rsio
n pr
ice
was
set
at
NT$
13.2
, w
hich
is
subj
ect
to
adju
stm
ent i
f the
re is
a c
apita
l inj
ectio
n by
cas
h, s
hare
div
iden
d di
strib
utio
n, a
nd th
e pr
opor
tion
of c
ash
divi
dend
s pe
r sha
re in
mar
ket p
rice
exce
edin
g 1.
5%. B
ecau
se th
e C
ompa
ny d
istri
bute
d ca
sh d
ivid
ends
on
July
29,
201
9, th
e co
nver
sion
pric
e w
as a
djus
ted
to N
T$12
.6.
The
conv
ertib
le b
onds
con
tain
bot
h lia
bilit
y an
d eq
uity
com
pone
nts.
The
equi
ty c
ompo
nent
was
pre
sent
ed
in e
quity
und
er th
e he
adin
g of
cap
ital s
urpl
us -
optio
ns. T
he e
ffec
tive
inte
rest
rate
of t
he li
abili
ty c
ompo
nent
w
as 1
.382
1% p
er a
nnum
on
initi
al re
cogn
ition
.
Proc
eeds
from
issu
ance
$ 6
,012
,000
Eq
uity
com
pone
nt
(409
,978
)
Li
abili
ty c
ompo
nent
at t
he d
ate
of is
suan
ce
$
5,6
02,0
22
- 43
-
162
The
seve
nth
issu
e of
the
Com
pany
’s u
nsec
ured
con
verti
ble
bond
s w
as re
solv
ed b
y th
e bo
ard
of d
irect
ors
of
the
Com
pany
on
Aug
ust
7, 2
019.
The
cum
ulat
ive
face
val
ue o
f th
e bo
nds
shal
l no
t ex
ceed
$3,
000,
000
thou
sand
. The
bon
ds a
re i
ssue
d at
100
%-1
00.5
% o
f th
e fa
ce v
alue
, and
the
iss
uanc
e pe
riod
is 5
yea
rs.
Dur
ing
the
perio
d of
pub
lic o
ffer
ings
, the
stoc
k m
arke
t and
the
dom
estic
cap
ital m
arke
t wer
e vo
latil
e du
e to
C
oron
aviru
s Pne
umon
ia a
nd th
e ch
ange
s in
the
shar
e pr
ice
of th
e C
ompa
ny w
ere
unfa
vora
ble
to th
e se
vent
h is
sue
of th
e C
ompa
ny’s
uns
ecur
ed c
onve
rtibl
e bo
nds.
Afte
r com
preh
ensi
ve c
onsi
dera
tion,
the
issu
ance
was
su
spen
ded
with
the
perm
issi
on o
f th
e co
mpe
tent
aut
horit
y ba
sed
on th
e be
st in
tere
st o
f th
e C
ompa
ny a
nd
the
shar
ehol
ders
’ equ
ity.
The
seve
nth
issu
e of
the
Com
pany
’s u
nsec
ured
con
verti
ble
bond
s w
as re
solv
ed b
y th
e bo
ard
of d
irect
ors
of
the
Com
pany
on
Aug
ust
6, 2
020.
The
cum
ulat
ive
face
val
ue o
f th
e bo
nds
shal
l no
t ex
ceed
$6,
000,
000
thou
sand
. The
bon
ds a
re is
sued
at 1
00%
-100
.5%
of t
he fa
ce v
alue
, and
the
issu
ance
per
iod
is 5
yea
rs.
21.
LE
ASI
NG
a.
R
ight
-of-
use
asse
ts
D
ecem
ber
31
2020
2019
C
arry
ing
amou
nts
Land
$
7,81
3,33
5
$
8,15
3,38
2 B
uild
ings
1,
394,
386
824,
955
Flig
ht e
quip
men
t
50
,644
,652
62
,052
,701
O
ther
equ
ipm
ent
9,16
4
2,
579
$
59
,861
,537
$
71,0
33,6
17
Fo
r Y
ear
End
ed D
ecem
ber
31
2020
2019
A
dditi
ons t
o rig
ht-o
f-use
ass
ets
$
2,
463,
869
$
5,
863,
625
D
epre
ciat
ion
for r
ight
-of-
use
asse
ts
La
nd
$
36
2,38
6
$
376,
425
Bui
ldin
gs
335,
553
798,
933
Flig
ht e
quip
men
t
11
,041
,881
10
,721
,575
O
ther
equ
ipm
ent
1,53
5
2,
157
$
11
,741
,555
$
11,8
99,0
90
b.
Leas
e lia
bilit
ies
Dec
embe
r 31
20
20
20
19
C
arry
ing
amou
nts
C
urre
nt
$
2,
525,
957
$
2,
340,
873
Non
-cur
rent
$
13,2
79,7
92
$
15
,801
,724
- 44
-
Ran
ge o
f dis
coun
t rat
e fo
r lea
se li
abili
ties (
incl
ude
US
leas
e he
dgin
g in
stru
men
ts):
Dec
embe
r 31
20
20
20
19
La
nd
1.
09%
-1.8
0%
1.
09%
-1.6
5%
Bui
ldin
gs
0%
-3.5
6%
0%
-3.5
6%
Flig
ht e
quip
men
t
0.68
%-3
.34%
2.49
%-3
.34%
O
ther
equ
ipm
ent
1.
06%
-1.5
0%
1.
06%
-1.5
0%
c.
Fi
nanc
ial l
iabi
litie
s und
er h
edge
acc
ount
ing
The
Gro
up s
peci
fies
a pa
rt of
US
leas
e co
ntra
ct a
s he
dgin
g in
stru
men
ts t
o av
oid
exch
ange
rat
e flu
ctua
tions
in p
asse
nger
reve
nue,
and
app
lies t
he a
ccou
ntin
g tre
atm
ent o
f cas
h flo
w h
edgi
ng. T
he le
ase
info
rmat
ion
is a
s fol
low
s:
Mat
urity
Dat
e
Subj
ect
C
arry
ing
Val
ue
Dec
embe
r 31,
202
0 2
022.
2.9-
2028
.5.1
5 F
inan
cial
liab
ilitie
s for
hed
ging
- cu
rren
t
$
8,12
0,44
5
Fin
anci
al li
abili
ties f
or h
edgi
ng -
non-
curr
ent
32,4
55,3
33
Dec
embe
r 31,
201
9 2
021.
4.15
-202
8.5.
15
Fin
anci
al li
abili
ties f
or h
edgi
ng -
curr
ent
8,57
7,48
2
Fin
anci
al li
abili
ties f
or h
edgi
ng -
non-
curr
ent
42,4
20,2
05
Influ
ence
of c
ompr
ehen
sive
inco
me
Rec
ogni
zed
in
Oth
er
Com
preh
ensi
ve
Inco
me
R
ecla
ssifi
ed to
In
com
e
For t
he y
ear e
nded
Dec
embe
r 31,
202
0
$ 2
,099
,550
$
352,
674
For t
he y
ear e
nded
Dec
embe
r 31,
201
9
1,
457,
058
(24,
029)
d.
As
less
ees,
Chi
na A
irlin
es,
Man
darin
Airl
ines
and
Tig
erai
r Ta
iwan
lea
sed
ten
777-
300E
R p
lane
s, fif
teen
A33
0-30
0 pl
anes
, fift
een
737-
800
plan
es, t
en A
320-
200
plan
es, f
ive
ERJ1
90 p
lane
s an
d th
ree
AR
T72-
600
plan
es fo
r ope
ratio
n, le
ase
perio
d ar
e 6
to 1
2 ye
ars
from
Feb
ruar
y 20
06 to
May
202
8. T
he
rent
al p
ricin
g m
etho
d is
par
tly a
fix
ed a
mou
nt o
f fu
nds,
and
som
e of
them
are
flo
atin
g re
nts,
float
ing
rent
s ar
e ac
cord
ing
to b
ench
mar
k ra
tio, t
he re
nt is
revi
sed
ever
y ha
lf ye
ar. W
hen
the
leas
e ex
pire
s, th
e le
ase
agre
emen
ts h
ave
no p
urch
ase
right
s. Th
e in
form
atio
n of
refu
ndab
le d
epos
its a
nd is
suan
ce o
f let
ter o
f cre
dit d
ue to
rent
al o
f pla
nes:
D
ecem
ber
31
2020
2019
Ref
unda
ble
depo
sits
$
725,
135
$
73
7,89
5 C
redi
t gua
rant
ees
1,
756,
656
1,71
7,95
3
- 45
-
163
CA
L Pa
rk,
and
Taoy
uan
Inte
rnat
iona
l A
irpor
t Se
rvic
e si
gned
a B
OT
cont
ract
with
a l
and
leas
e ag
reem
ent,
for t
he d
etai
ls fo
r the
leas
e ag
reem
ent,
plea
se re
fer t
o N
ote
35. T
he le
ase
incl
udes
an
optio
n to
ext
end
the
leas
e, a
s it i
s not
pos
sibl
e to
ext
end
the
leas
e, th
e am
ount
of t
he le
ase
rela
ted
to th
e pe
riod
cove
red
by th
e op
tion
is n
ot in
clud
ed in
the
leas
e lia
bilit
y. If
the
amou
nt o
f the
ext
ende
d le
ase
perio
d is
in
clud
ed in
the
leas
e lia
bilit
y, th
e le
ase
liabi
lity
will
incr
ease
by
$885
,657
thou
sand
on
Dec
embe
r 31
, 20
20.
Taiw
an A
ir C
argo
Ter
min
al C
o. a
nd C
AA
sig
ned
a B
OT
cont
ract
with
a l
and
leas
e ag
reem
ent.
For
deta
ils, p
leas
e re
fer t
o N
ote
35.
e.
In
Sep
tem
ber 2
019,
the
Com
pany
sig
ned
a re
ntal
con
tract
for s
ix A
321n
eo w
ith A
ir Le
ase
Cor
pora
tion,
w
hich
is e
xpec
ted
to b
e in
trodu
ced
betw
een
2021
and
202
2.
In O
ctob
er 2
019,
the
Com
pany
sig
ned
a re
ntal
let
ter
of i
nten
t fo
r ei
ght
A32
1neo
with
CA
LC L
ease
C
orpo
ratio
n, w
hich
is e
xpec
ted
to b
e in
trodu
ced
in 2
022.
In
Feb
ruar
y 20
20, T
iger
air
Taiw
an C
o., L
td. s
igne
d a
rent
al l
ette
r of
int
ent
for
eigh
t A
321n
eo w
ith
ICB
C L
ease
Cor
pora
tion,
whi
ch is
exp
ecte
d to
be
intro
duce
d in
202
1.
The
Com
pany
als
o si
gned
rela
ted
airc
raft
purc
hase
agr
eem
ent,
plea
se re
fer t
o no
te 3
5 fo
r det
ails
.
f. In
ord
er t
o re
vita
lize
asse
ts a
nd s
treng
then
the
finan
cial
stru
ctur
e, t
he C
ompa
ny s
old
five
of it
s ow
n A
330-
300
airc
raft
to A
ltava
ir L.
P. i
n Se
ptem
ber
2019
thr
ough
sal
e an
d le
aseb
ack
arra
ngem
ent
for
$4,9
05,6
60 th
ousa
nd. T
he le
ase
term
was
5 to
6 y
ears
and
a lo
ss o
f $1
03,7
75 th
ousa
nd w
as in
curr
ed.
The
leas
e ag
reem
ent h
ad n
o te
rms
for
leas
e re
new
al o
r of
ftake
rig
hts.
The
annu
al le
ase
paym
ents
for
ea
ch a
ircra
ft ar
e fr
om U
S$5,
389
thou
sand
to U
S$5,
437
thou
sand
.
g.
Oth
er le
ase
info
rmat
ion
The
Gro
up u
ses o
pera
ting
leas
e ag
reem
ent f
or in
vest
men
t pro
perti
es, r
efer
to N
ote
16.
F
or th
e Y
ear
End
ed D
ecem
ber
31
2020
2019
Shor
t-ter
m a
nd lo
w p
rice
leas
e pa
ymen
t
$
41,5
68
$
52
,675
To
tal o
f lea
se c
ash
outfl
ow
$
(12
,410
,357
)
$ (
13,8
84,3
67)
The
Gro
up c
hoos
es to
wai
ve th
e re
cogn
ition
of t
he c
ontra
ct p
rovi
sion
s for
the
shor
t-ter
m le
ases
and
low
pr
ice
leas
e, a
nd d
oes n
ot re
cogn
ize
the
rela
ted
right
-of-u
se a
sset
s and
leas
e lia
bilit
ies f
or su
ch le
ase.
22.
OT
HE
R P
AY
AB
LE
S
Dec
embe
r 31
20
20
20
19
Fu
el c
osts
$
1,
853,
717
$
3,
723,
213
Gro
und
serv
ice
expe
nses
95
6,95
6
1,
262,
878
Rep
air e
xpen
ses
366,
589
1,20
8,87
5 In
tere
st e
xpen
se
120,
550
219,
660
Shor
t-ter
m e
mpl
oyee
ben
efits
1,
948,
982
2,04
0,71
8 Te
rmin
al su
rcha
rges
42
0,19
4
1,
122,
532
Com
mis
sion
exp
ense
s
18
4,36
3
50
9,52
0 O
ther
s
2,
454,
906
3,10
0,57
6
$
8,30
6,25
7
$
13,1
87,9
72
- 46
-
23.
CO
NT
RA
CT
LIA
BIL
ITIE
S/D
EFE
RR
ED
RE
VE
NU
E
D
ecem
ber
31
2020
2019
Con
trac
t L
iabi
litie
s
Con
trac
t L
iabi
litie
s
Freq
uent
flye
r pro
gram
s
$
2,67
1,20
3
$
2,89
5,53
5 A
dvan
ce ti
cket
sale
s
2,
659,
093
20,4
01,5
49
Oth
ers
168
-
$
5,33
0,46
4
$
23,2
97,0
84
C
urre
nt
$
3,
569,
360
$
21
,060
,773
N
on-c
urre
nt
1,76
1,10
4
2,
236,
311
$
5,
330,
464
$
23
,297
,084
24
. PR
OV
ISIO
NS
D
ecem
ber
31
2020
2019
Ope
ratin
g le
ases
- ai
rcra
ft
$
14,5
34,2
86
$
10
,371
,857
Cur
rent
$
164,
800
$
36
0,39
3 N
on-c
urre
nt
14,3
69,4
86
10,0
11,4
64
$
14
,534
,286
$
10,3
71,8
57
Air
craf
t Lea
se
Con
trac
t
Bal
ance
at J
anua
ry 1
, 201
9
$
8,
794,
539
Add
ition
al p
rovi
sion
s rec
ogni
zed
4,
608,
924
Usa
ge
(2
,799
,314
) Ef
fect
of e
xcha
nge
rate
cha
nges
(232
,292
)
Bal
ance
at D
ecem
ber 3
1, 2
019
$
10,3
71,8
57
B
alan
ce a
t Jan
uary
1, 2
020
$
10,3
71,8
57
Add
ition
al p
rovi
sion
s rec
ogni
zed
6,
075,
077
Usa
ge
(1
,308
,170
) Ef
fect
of e
xcha
nge
rate
cha
nges
(604
,478
)
Bal
ance
at D
ecem
ber 3
1, 2
020
$
14,5
34,2
86
The
Gro
up le
ased
flig
ht e
quip
men
t und
er o
pera
ting
leas
e ag
reem
ents
. Und
er th
e co
ntra
cts,
whe
n th
e le
ases
ex
pire
and
the
equi
pmen
t is
retu
rned
to th
e le
ssor
, the
flig
ht e
quip
men
t has
to b
e re
paire
d ac
cord
ing
to th
e ex
pect
ed y
ears
of
use,
num
ber
of f
light
hou
rs, f
light
cyc
les
and
the
num
ber
of e
ngin
e re
volu
tions
. The
G
roup
had
exi
stin
g ob
ligat
ions
to
reco
gniz
e pr
ovis
ions
whe
n si
gnin
g a
leas
e or
dur
ing
the
leas
e te
rm.
Tige
rair
Taiw
an C
o., L
td. a
lso
leas
ed fl
ight
equ
ipm
ent u
nder
ope
ratin
g le
ase
agre
emen
ts. I
n ac
cord
ance
to
the
cont
ract
, Ti
gera
ir m
ust
pay
mai
nten
ance
res
erve
s m
onth
ly a
ccor
ding
to
the
actu
al n
umbe
r of
flig
ht
hour
s.
- 47
-
164
25.
RE
TIR
EM
EN
T B
EN
EFI
T P
LA
NS
a.
Def
ined
con
tribu
tion
plan
s Th
e G
roup
ado
pted
a p
ensi
on p
lan
unde
r th
e La
bor
Pens
ion
Act
(LP
A),
whi
ch i
s a
stat
e-m
anag
ed
defin
ed c
ontri
butio
n pl
an.
Und
er t
he L
PA,
an e
ntity
mak
es m
onth
ly c
ontri
butio
ns t
o em
ploy
ees’
in
divi
dual
pen
sion
acc
ount
s at 6
% o
f mon
thly
sala
ries a
nd w
ages
. Em
ploy
ees
base
d in
the
Uni
ted
Stat
es a
nd J
apan
of
Chi
na A
irlin
es C
o.,
Ltd.
and
sub
sidi
arie
s ar
e m
embe
rs o
f th
e U
nite
d st
ates
and
Jap
an g
over
nmen
t re
tirem
ent
bene
fit p
lans
. Su
bsid
iarie
s sh
ould
ap
prop
riate
a s
peci
fic p
ortio
n to
retir
emen
t ben
efit
plan
s. Th
e ob
ligat
ion
to th
e go
vern
men
t ret
irem
ent
bene
fit p
lans
of C
hina
Airl
ines
Co.
, Ltd
. and
subs
idia
ries i
s to
appr
opria
te a
spec
ific
porti
on a
mou
nt.
b.
D
efin
ed b
enef
it pl
ans
The
defin
ed b
enef
it pl
an a
dopt
ed b
y th
e C
ompa
ny a
nd in
acc
orda
nce
with
the
Labo
r Sta
ndar
ds L
aw is
op
erat
ed b
y th
e go
vern
men
t. Pe
nsio
n be
nefit
s ar
e ca
lcul
ated
on
the
basi
s of
the
leng
th o
f se
rvic
e an
d av
erag
e m
onth
ly s
alar
ies
of th
e si
x m
onth
s be
fore
retir
emen
t. Th
e C
ompa
ny a
nd s
ubsi
diar
y co
ntrib
ute
amou
nts
equa
l to
2%-1
5% o
f to
tal m
onth
ly s
alar
ies
and
wag
es to
a p
ensi
on f
und
adm
inis
tere
d by
the
pens
ion
fund
mon
itorin
g co
mm
ittee
. Pen
sion
con
tribu
tions
are
dep
osite
d in
the
Ban
k of
Tai
wan
in th
e co
mm
ittee
’s n
ame.
Bef
ore
the
end
of e
ach
year
, the
Gro
up a
sses
ses
the
bala
nce
in th
e pe
nsio
n fu
nd. I
f th
e am
ount
of
the
bala
nce
in th
e pe
nsio
n fu
nd is
inad
equa
te to
pay
ret
irem
ent b
enef
its f
or e
mpl
oyee
s w
ho c
onfo
rm to
retir
emen
t req
uire
men
ts in
the
next
yea
r, th
e G
roup
is re
quire
d to
fund
the
diff
eren
ce in
on
e ap
prop
riatio
n th
at s
houl
d be
mad
e be
fore
the
end
of M
arch
of
the
next
yea
r. Th
e pe
nsio
n fu
nd is
m
anag
ed b
y th
e B
urea
u of
Lab
or F
unds
, Min
istry
of
Labo
r (th
e “B
urea
u”);
the
Gro
up h
as n
o rig
ht to
in
fluen
ce th
e in
vest
men
t pol
icy
and
stra
tegy
. Th
e am
ount
s inc
lude
d in
the
cons
olid
ated
bal
ance
shee
ts in
resp
ect o
f the
Gro
up’s
def
ined
ben
efit
plan
s w
ere
as fo
llow
s:
Dec
embe
r 31
20
20
20
19
Pr
esen
t val
ue o
f def
ined
ben
efit
oblig
atio
n
$
18,7
93,5
09
$
18
,457
,304
Fa
ir va
lue
of p
lan
asse
ts
(9,0
55,7
68)
(9,0
22,2
69)
D
efic
it (n
et d
efin
ed b
enef
it lia
bilit
ies)
$
9,73
7,74
1
$
9,43
5,03
5 M
ovem
ents
in n
et d
efin
ed b
enef
it lia
bilit
ies (
asse
ts) w
ere
as fo
llow
s:
Pres
ent V
alue
of
the
Def
ined
B
enef
it O
blig
atio
n
Fair
Val
ue o
f th
e Pl
an A
sset
s
Net
Def
ined
B
enef
it L
iabi
litie
s (A
sset
s)
Bal
ance
at J
anua
ry 1
, 201
9
$
17,4
64,8
56
$
(8
,661
,474
)
$
8,80
3,38
2 C
urre
nt se
rvic
e co
st
1,
321,
600
-
1,
321,
600
Net
inte
rest
exp
ense
(inc
ome)
16
1,80
8
(8
6,23
4)
75
,574
R
ecog
nize
d in
pro
fit o
r los
s
1,
483,
408
(86,
234)
1,39
7,17
4 (C
ontin
ued)
- 48
-
Pres
ent V
alue
of
the
Def
ined
B
enef
it O
blig
atio
n
Fair
Val
ue o
f th
e Pl
an A
sset
s
Net
Def
ined
B
enef
it L
iabi
litie
s (A
sset
s)
Rem
easu
rem
ent
R
etur
n on
pla
n as
sets
(exc
ludi
ng a
mou
nts
incl
uded
in n
et in
tere
st)
$
-
$
(3
08,2
23)
$
(3
08,2
23)
Act
uaria
l (ga
in) l
oss -
cha
nges
in
dem
ogra
phic
ass
umpt
ions
15
,959
-
15,9
59
Act
uaria
l (ga
in) l
oss -
cha
nges
in fi
nanc
ial
assu
mpt
ions
44
0,37
4
-
440,
374
Act
uaria
l (ga
in) l
oss -
exp
erie
nce
adju
stm
ents
63
3,68
3
-
633,
683
Rec
ogni
zed
in o
ther
com
preh
ensi
ve in
com
e
1,
090,
016
(308
,223
)
78
1,79
3 C
ontri
butio
ns fr
om th
e em
ploy
er
-
(1
,418
,970
)
(1
,418
,970
) B
enef
its p
aid
(1,4
52,6
32)
1,45
2,63
2
-
Oth
ers
(128
,344
)
-
(128
,344
) B
alan
ce a
t Dec
embe
r 31,
201
9
18
,457
,304
(9
,022
,269
)
9,
435,
035
Cur
rent
serv
ice
cost
1,32
3,03
6
-
1,32
3,03
6 N
et in
tere
st e
xpen
se (i
ncom
e)
126,
390
(63,
554)
62,8
36
Rec
ogni
zed
in p
rofit
or l
oss
1,44
9,42
6
(6
3,55
4)
1,
385,
872
Rem
easu
rem
ent
R
etur
n on
pla
n as
sets
(exc
ludi
ng a
mou
nts
incl
uded
in n
et in
tere
st)
-
(3
03,4
07)
(303
,407
) A
ctua
rial (
gain
) los
s - c
hang
es in
de
mog
raph
ic a
ssum
ptio
ns
9,77
0
-
9,77
0 A
ctua
rial (
gain
) los
s - c
hang
es in
fina
ncia
l as
sum
ptio
ns
658,
370
-
65
8,37
0 A
ctua
rial (
gain
) los
s - e
xper
ienc
e ad
just
men
ts
34,4
17
-
34
,417
R
ecog
nize
d in
oth
er c
ompr
ehen
sive
inco
me
702,
557
(303
,407
)
39
9,15
0 C
ontri
butio
ns fr
om th
e em
ploy
er
-
(1
,304
,769
)
(1
,304
,769
) B
enef
its p
aid
(1,6
38,2
30)
1,63
8,23
0
-
Oth
ers
(177
,547
)
-
(177
,547
)
B
alan
ce a
t Dec
embe
r 31,
202
0
$
18,7
93,5
09
$
(9
,055
,768
)
$
9,73
7,74
1 (C
oncl
uded
) Th
roug
h th
e de
fined
ben
efit
plan
s un
der
the
Labo
r St
anda
rds
Law
, th
e G
roup
is
expo
sed
to t
he
follo
win
g ris
ks:
1)
Inve
stm
ent
risk:
The
pla
n as
sets
are
inv
este
d in
dom
estic
and
for
eign
equ
ity a
nd d
ebt
secu
ritie
s, ba
nk d
epos
its,
etc.
The
inv
estm
ent
is c
ondu
cted
at
the
disc
retio
n of
the
Bur
eau
or u
nder
the
m
anda
ted
man
agem
ent.
How
ever
, in
acco
rdan
ce w
ith re
leva
nt re
gula
tions
, the
retu
rn g
ener
ated
by
plan
ass
ets s
houl
d no
t be
belo
w th
e in
tere
st ra
te fo
r a 2
-yea
r tim
e de
posi
t with
loca
l ban
ks.
2)
Inte
rest
risk
: A d
ecre
ase
in th
e go
vern
men
t bon
d in
tere
st ra
te w
ill in
crea
se th
e pr
esen
t val
ue o
f the
de
fined
ben
efit
oblig
atio
n; h
owev
er, t
his
will
be
parti
ally
off
set b
y an
incr
ease
in th
e re
turn
on
the
plan
’s d
ebt i
nves
tmen
ts.
3)
Sala
ry r
isk:
The
pre
sent
val
ue o
f th
e de
fined
ben
efit
oblig
atio
n is
cal
cula
ted
by r
efer
ence
to
the
futu
re s
alar
ies
of p
lan
parti
cipa
nts.
As
such
, an
incr
ease
in th
e sa
lary
of
the
plan
par
ticip
ants
will
in
crea
se th
e pr
esen
t val
ue o
f the
def
ined
ben
efit
oblig
atio
n.
- 49
-
165
The
actu
aria
l va
luat
ions
of
the
pres
ent
valu
e of
the
def
ined
ben
efit
oblig
atio
n w
ere
carr
ied
out
by
qual
ified
act
uarie
s. Th
e si
gnifi
cant
ass
umpt
ions
use
d fo
r the
pur
pose
s of t
he a
ctua
rial v
alua
tions
wer
e as
fo
llow
s:
D
ecem
ber
31
2020
2019
Dis
coun
t rat
e(s)
0.32
%-0
.80%
0.63
%-1
.10%
Ex
pect
ed ra
te(s
) of s
alar
y in
crea
se
1.
00%
-2.5
0%
1.
00%
-2.5
0%
If po
ssib
le r
easo
nabl
e ch
ange
in e
ach
of th
e si
gnifi
cant
act
uaria
l ass
umpt
ions
will
occ
ur a
nd a
ll ot
her
assu
mpt
ions
will
rem
ain
cons
tant
, the
pre
sent
val
ue o
f th
e de
fined
ben
efit
oblig
atio
n w
ould
inc
reas
e (d
ecre
ase)
as f
ollo
ws:
Dec
embe
r 31
20
20
20
19
D
isco
unt r
ate(
s)
0.25
%/0
.5%
incr
ease
$
(438
,527
)
$
(939
,308
) 0.
25%
/0.5
% d
ecre
ase
457,
422
1,00
0,77
1 Ex
pect
ed ra
te(s
) of s
alar
y in
crea
se
0.5%
incr
ease
83
0,32
9
96
9,32
4 0.
5% d
ecre
ase
(772
,927
)
(9
27,1
80)
The
sens
itivi
ty a
naly
sis
pres
ente
d ab
ove
may
not
be
repr
esen
tativ
e of
the
actu
al c
hang
e in
the
pres
ent
valu
e of
the
defin
ed b
enef
it ob
ligat
ion
as it
is u
nlik
ely
that
the
chan
ge in
ass
umpt
ions
wou
ld o
ccur
in
isol
atio
n of
one
ano
ther
as s
ome
of th
e as
sum
ptio
ns m
ay b
e co
rrel
ated
.
D
ecem
ber
31
2020
2019
The
expe
cted
con
tribu
tions
to th
e pl
an fo
r the
nex
t yea
r
$ 9
16,6
27
$
930
,963
The
aver
age
dura
tion
of th
e de
fined
ben
efit
oblig
atio
n
8-11
yea
rs
8-
11 y
ears
26.
EQ
UIT
Y
a.
Shar
e ca
pita
l O
rdin
ary
shar
es
Dec
embe
r 31
20
20
20
19
N
umbe
rs o
f aut
horiz
ed sh
ares
(in
thou
sand
s)
7,00
0,00
0
7,
000,
000
Am
ount
of a
utho
rized
shar
es
$
70
,000
,000
$
70,0
00,0
00
Am
ount
of i
ssue
d sh
ares
$
54,2
09,8
46
$
54
,209
,846
- 50
-
b.
Cap
ital s
urpl
us
D
ecem
ber
31
2020
2019
Issu
ance
of c
onve
rtibl
e bo
nds i
n ex
cess
of p
ar v
alue
and
co
nver
sion
pre
miu
m
$
14
6,35
1
$
315,
114
Div
iden
d di
strib
uted
to su
bsid
iarie
s
-
3,90
9 R
etire
men
t of t
reas
ury
shar
es
33,5
13
33,5
13
Expi
red
empl
oyee
shar
e op
tions
11
,747
11
,747
Lo
ng-te
rm in
vest
men
ts
119,
134
118,
962
Bon
ds p
ayab
le e
quity
com
pone
nt
409,
978
409,
978
Diff
eren
ce in
sale
pric
e of
shar
es o
f sub
sidi
arie
s and
boo
k va
lue
-
1,12
9,08
0 O
ther
s
46
6,60
4
46
6,60
4
$ 1
,187
,327
$ 2
,488
,907
Th
e ca
pita
l su
rplu
s fr
om s
hare
s is
sued
in
exce
ss o
f pa
r (in
clud
ing
addi
tiona
l pa
id-in
cap
ital
from
is
suan
ce o
f ord
inar
y sh
ares
and
trea
sury
sha
re tr
ansa
ctio
ns) a
nd th
e di
ffer
ence
in s
ale
pric
e of
sha
res
of
subs
idia
ries
and
book
val
ue m
ay b
e us
ed t
o of
fset
def
icits
; in
add
ition
, w
hen
the
Com
pany
has
no
defic
it, su
ch c
apita
l sur
plus
may
be
dist
ribut
ed a
s cas
h di
vide
nds
or tr
ansf
erre
d to
cap
ital (
but l
imite
d to
a
certa
in p
erce
ntag
e of
the
Com
pany
’s p
aid-
in c
apita
l on
year
ly b
asis
). Th
e ca
pita
l sur
plus
from
long
-term
inve
stm
ents
, em
ploy
ee s
hare
opt
ions
exp
ired,
div
iden
ds d
istri
bute
d to
sub
sidi
arie
s an
d re
tirem
ent
of t
reas
ury
shar
es m
ay n
ot b
e us
ed f
or a
ny p
urpo
se.
Besi
des,
capi
tal
surp
lus
from
con
vers
ion
of e
mpl
oyee
sha
res
and
conv
ertib
le b
onds
pay
able
may
not
be
used
for
any
pu
rpos
e.
c.
A
ppro
pria
tion
of e
arni
ngs a
nd d
ivid
end
polic
y U
nder
the
div
iden
d po
licy
as s
et f
orth
in
the
Com
pany
’s A
rticl
es o
f In
corp
orat
ion
(the
“Arti
cles
”),
whe
re t
he C
ompa
ny m
ade
a pr
ofit
in a
fis
cal
year
, the
pro
fit s
hall
be f
irst
utili
zed
for
payi
ng t
axes
, of
fset
ting
loss
es o
f pr
evio
us y
ears
, set
ting
asid
e as
lega
l res
erve
10%
of
the
rem
aini
ng p
rofit
, set
ting
asid
e or
reve
rsin
g a
spec
ial r
eser
ve in
acc
orda
nce
with
the
law
s and
regu
latio
ns, a
nd th
en a
ny re
mai
ning
pr
ofit
toge
ther
with
any
und
istri
bute
d re
tain
ed e
arni
ngs
shal
l be
use
d by
the
Com
pany
’s b
oard
of
dire
ctor
s as
the
basi
s fo
r pr
opos
ing
a di
strib
utio
n pl
an, w
hich
is to
dis
tribu
te d
ivid
ends
and
bon
us n
o le
ss t
han
50%
of
the
rem
aini
ng p
rofit
and
und
istri
bute
d re
tain
ed e
arni
ngs.
The
divi
dend
s an
d bo
nus
men
tione
d ab
ove
can
be d
istri
bute
d in
the
form
of n
ew sh
ares
or c
ash,
and
the
cash
div
iden
ds sh
ould
be
no le
ss th
an 3
0% o
f the
tota
l div
iden
ds.
Und
er th
e C
ompa
ny A
ct, i
f sur
plus
ear
ning
s ar
e di
strib
uted
in th
e fo
rm o
f new
sha
res,
the
dist
ribut
ion
of s
hare
s sh
all b
e ap
prov
ed in
the
mee
ting
of th
e bo
ard
of d
irect
ors;
if s
uch
earn
ings
are
dis
tribu
ted
in
the
form
of
cash
, the
cas
h di
strib
utio
n sh
all
be a
utho
rized
afte
r a
reso
lutio
n ha
s be
en a
dopt
ed b
y a
maj
ority
vot
e at
a m
eetin
g of
the
boa
rd o
f di
rect
ors
atte
nded
by
two-
third
s of
the
tot
al n
umbe
r of
di
rect
ors;
and
in a
dditi
on, a
repo
rt of
suc
h di
strib
utio
n sh
all b
e su
bmitt
ed to
the
shar
ehol
ders
’ mee
ting.
If
the
Gro
up h
as n
o lo
ss, a
ccor
ding
to la
ws
and
regu
latio
ns, t
he G
roup
can
dis
tribu
te it
s ca
pita
l res
erve
, in
who
le o
r in
par
t, by
iss
uing
new
sha
res
or c
ash
base
d on
fin
anci
al,
busi
ness
and
man
agem
ent
cons
ider
atio
ns. I
f suc
h su
rplu
s ea
rnin
gs is
dis
tribu
ted
in th
e fo
rm o
f new
sha
res,
it sh
all b
e ap
prov
ed b
y a
mee
ting
of th
e bo
ard
of d
irect
ors;
if s
uch
surp
lus
earn
ing
is d
istri
bute
d in
the
form
of c
ash,
it s
hall
be
auth
oriz
ed a
fter a
reso
lutio
n ha
s be
en a
dopt
ed b
y a
maj
ority
vot
e at
a m
eetin
g of
the
boar
d of
dire
ctor
s at
tend
ed b
y tw
o-th
irds
of t
he t
otal
num
ber
of d
irect
ors;
and
in
addi
tion
ther
eto
a re
port
of s
uch
dist
ribut
ion
shal
l be
subm
itted
to th
e sh
areh
olde
rs’ m
eetin
g.
- 51
-
166
Und
er th
e di
vide
nd p
olic
y as
set f
orth
in th
e C
ompa
ny’s
Arti
cles
of I
ncor
pora
tion
(the
“Arti
cles
”) b
ased
on
the
amen
ded
Com
pany
Act
, whe
re th
e C
ompa
ny m
ade
prof
it in
a fi
scal
yea
r, th
e pr
ofit
shal
l be
first
utili
zed
for p
ayin
g ta
xes,
offs
ettin
g lo
sses
of p
revi
ous
year
s, se
tting
asi
de a
s a
lega
l res
erve
10%
of t
he
rem
aini
ng p
rofit
, se
tting
asi
de o
r re
vers
ing
a sp
ecia
l re
serv
e in
acc
orda
nce
with
the
law
s an
d re
gula
tions
, and
then
any
rem
aini
ng p
rofit
toge
ther
with
any
und
istri
bute
d re
tain
ed e
arni
ngs
shal
l be
us
ed b
y th
e C
ompa
ny’s
boa
rd o
f di
rect
ors
as t
he b
asis
for
pro
posi
ng a
dis
tribu
tion
plan
with
due
co
nsid
erat
ion
of a
ny fu
ture
airc
raft
acqu
isiti
on p
lans
and
fund
dem
ands
, whi
ch sh
ould
be
reso
lved
in th
e sh
areh
olde
rs’
mee
ting
for
the
dist
ribut
ion
of d
ivid
ends
and
bon
uses
to s
hare
hold
ers
by c
ash
or s
hare
s (c
ash
divi
dend
s ca
nnot
be
less
than
30%
of
tota
l di
vide
nds
dist
ribut
ed).
How
ever
, if
the
Com
pany
’s
prof
it be
fore
tax
in
a fis
cal
year
afte
r de
duct
ions
for
the
abo
vem
entio
ned
item
s is
not
suf
ficie
nt f
or
earn
ings
dis
tribu
tion,
reta
ined
ear
ning
s can
be
used
as a
supp
lem
ent f
or th
e de
ficie
ncy.
Th
e C
ompa
ny s
hall
set a
side
pro
fits
as a
lega
l res
erve
unt
il th
e le
gal r
eser
ve a
mou
nts
to th
e au
thor
ized
ca
pita
l. Th
e le
gal r
eser
ve c
ould
be
used
for
offs
ettin
g de
ficit
of th
e C
ompa
ny. I
f th
e C
ompa
ny h
as n
o de
ficit
in a
fis
cal y
ear,
the
Com
pany
can
dis
tribu
te a
ll or
par
t of
the
capi
tal s
urpl
us b
y ca
sh o
r sh
ares
w
ith d
ue c
onsi
dera
tion
of f
inan
ce,
mar
ketin
g an
d m
anag
emen
t re
quire
men
ts i
n ac
cord
ance
with
the
la
ws a
nd re
gula
tions
. Th
e di
strib
utio
n of
div
iden
ds s
houl
d be
res
olve
d an
d re
cogn
ized
in
the
shar
ehol
ders
’ m
eetin
g in
the
cu
rren
t yea
r. 1)
O
ffse
tting
def
icit
in 2
019
O
n Ju
ne 2
3, 2
020,
the
boar
d pr
opos
ed to
off
set t
he a
ccum
ulat
ed d
efic
it in
201
9. T
he d
efic
it in
clud
ed
a ne
t lo
ss o
f $1
,199
,798
tho
usan
d, n
egat
ive
adju
stm
ent
of o
ther
ret
aine
d ea
rnin
gs o
f $5
77,4
27
thou
sand
, the
rem
aini
ng a
mou
nt o
f acc
umul
ated
def
icit
was
$1,
777,
225
thou
sand
.
The
offs
ettin
g of
def
icit
for 2
019
is s
ubje
ct to
the
reso
lutio
n of
the
shar
ehol
ders
in th
eir m
eetin
g to
be
hel
d on
June
23,
202
0.
2)
O
ffse
tting
of d
efic
it in
202
0
On
Mar
ch 1
8, 2
021,
the
boa
rd p
ropo
sed
to o
ffse
t th
e ac
cum
ulat
ed d
efic
it in
202
0. T
he d
efic
it in
clud
ed a
net
inc
ome
of $
140,
000
thou
sand
and
the
begi
nnin
g ba
lanc
e of
und
istri
bute
d re
tain
ed
earn
ings
of $
0, n
egat
ive
adju
stm
ent o
f oth
er re
tain
ed e
arni
ngs
of $
490,
581
thou
sand
, the
rem
aini
ng
amou
nt o
f ac
cum
ulat
ed d
efic
it w
as $
350,
581
thou
sand
and
was
off
set
by c
apita
l re
serv
e of
$3
50,5
81 th
ousa
nd.
- 52
-
d.
Oth
er e
quity
item
s Th
e m
ovem
ent o
f oth
er e
quity
item
s is a
s fol
low
s:
Exc
hang
e D
iffer
ence
s on
Tra
nsla
tion
of
the
Fina
ncia
l St
atem
ents
of
Fore
ign
Ope
ratio
ns
Unr
ealiz
ed G
ain
(Los
s) o
n Fi
nanc
ial A
sset
s at
FV
TO
CI
Gai
n (L
oss)
on
Hed
ging
In
stru
men
ts
T
otal
Bal
ance
at J
anua
ry 1
, 201
9
$
(9,6
64)
$
42
,619
$
25,2
68
$
58
,223
Ex
chan
ge d
iffer
ence
s on
trans
latio
n of
the
finan
cial
st
atem
ents
of f
orei
gn o
pera
tions
(6
5,24
6)
-
-
(65,
246)
C
umul
ativ
e lo
ss o
n ch
ange
s in
fair
valu
e of
hed
ging
inst
rum
ents
-
-
1,
378,
603
1,37
8,60
3 C
umul
ativ
e ga
in o
n ch
ange
s in
fair
valu
e of
hed
ging
inst
rum
ents
re
clas
sifie
d to
pro
fit o
r los
s
-
-
20
,014
20
,014
U
nrea
lized
gai
n on
fina
ncia
l ass
ets
at F
VTO
CI
-
79
,392
-
79,3
92
Effe
cts o
f inc
ome
tax
11,8
35
(14,
854)
(2
79,6
04)
(282
,623
) O
ther
com
preh
ensi
ve in
com
e (lo
ss) r
ecog
nize
d in
the
perio
d
(5
3,41
1)
64,5
38
1,11
9,01
3
1,
130,
140
Dis
posa
l of s
ubsi
diar
ies
8,36
8
10
5
-
8,47
3 Tr
ansf
ers o
f ini
tial c
arry
ing
amou
nt o
f hed
ged
item
s
-
-
(6
03)
(603
)
B
alan
ce a
t Dec
embe
r 31,
201
9
$
(54,
707)
$
107,
262
$
1,1
43,6
78
$
1,1
96,2
33
B
alan
ce a
t Jan
uary
1, 2
020
$
(5
4,70
7)
$
10
7,26
2
$ 1
,143
,678
$ 1
,196
,233
Ex
chan
ge d
iffer
ence
s on
trans
latio
n of
the
finan
cial
st
atem
ents
of f
orei
gn o
pera
tions
(9
9,77
4)
-
-
(99,
774)
C
umul
ativ
e lo
ss o
n ch
ange
s in
fair
valu
e of
hed
ging
inst
rum
ents
-
-
1,
921,
255
1,92
1,25
5 C
umul
ativ
e ga
in o
n ch
ange
s in
fair
valu
e of
hed
ging
inst
rum
ents
re
clas
sifie
d to
pro
fit o
r los
s
-
-
(2
93,5
18)
(293
,518
) U
nrea
lized
gai
n on
fina
ncia
l ass
ets
at F
VTO
CI
-
(4
5,58
8)
-
(4
5,58
8)
Effe
cts o
f inc
ome
tax
20,2
29
9,68
5
(3
65,7
45)
(335
,831
) O
ther
com
preh
ensi
ve in
com
e (lo
ss) r
ecog
nize
d in
the
perio
d
(7
9,54
5)
(35,
903)
1,
261,
992
1,14
6,54
4 Tr
ansf
ers o
f ini
tial c
arry
ing
amou
nt o
f hed
ged
item
s
-
-
20
0,98
9
20
0,98
9
Bal
ance
at D
ecem
ber 3
1, 2
020
$
(1
34,2
52)
$
71
,359
$ 2
,606
,659
$ 2
,543
,766
- 53
-
167
e.
Non
-con
trolli
ng in
tere
sts
For
the
Yea
r E
nded
Dec
embe
r 31
20
20
20
19
B
egin
ning
bal
ance
$ 3
,578
,345
$ 2
,965
,512
N
et (l
oss)
inco
me
attri
buta
ble
to n
on-c
ontro
lling
inte
rest
s
(419
,814
)
52
4,79
6 Fo
reig
n ex
chan
ge d
iffer
ence
s
1,
826
(7
,706
) A
ctua
rial g
ains
and
loss
es o
n de
fined
ben
efit
plan
s
43
,157
(1
00,1
36)
Cas
h flo
w h
edge
on
chan
ges i
n fa
ir va
lue
of h
edgi
ng in
stru
men
ts
2,
993
(1
3,22
7)
Cum
ulat
ive
(loss
) gai
n ar
isin
g on
cha
nges
in fa
ir va
lue
of
hedg
ing
inst
rum
ents
recl
assi
fied
to p
rofit
or l
oss
(1,6
00)
8,52
8 Ef
fect
of i
ncom
e ta
x
(9,2
72)
22,5
86
37
,104
(8
9,95
5)
Dis
posa
l of s
ubsi
diar
ies
-
(2
4,95
7)
Dis
posa
l of p
art e
quity
of s
ubsi
diar
ies
-
61
9,38
7 O
utst
andi
ng sh
are
optio
ns h
eld
by e
mpl
oyee
s of s
ubsid
iarie
s
52
-
Acq
uisi
tion
of n
on-c
ontro
lling
inte
rest
s in
subs
idia
ries
331,
427
- D
ivid
ends
pai
d by
subs
idia
ries
(3
75,0
24)
(416
,438
)
Endi
ng b
alan
ce
$
3,1
52,0
90
$
3,5
78,3
45
f. Tr
easu
ry sh
ares
Tr
easu
ry s
hare
s ar
e th
e C
ompa
ny’s
sha
res
held
by
its s
ubsi
diar
ies
as o
f D
ecem
ber
31, 2
020
and
2019
w
ere
as fo
llow
s:
(I
n T
hous
ands
of S
hare
s)
Peri
od o
f Tre
asur
y Sh
ares
N
umbe
r of
Sh
ares
, B
egin
ning
of
Yea
r
Red
uctio
n D
urin
g th
e Y
ear
Num
ber
of
Shar
es, E
nd o
f Y
ear
For t
he y
ear e
nded
Dec
embe
r 31,
202
0
2,
889
(814
)
2,
075
For t
he y
ear e
nded
Dec
embe
r 31,
201
9
2,
889
-
2,
889
S
ubsi
diar
y
Shar
es
(In
Tho
usan
ds)
C
arry
ing
Am
ount
Mar
ket V
alue
D
ecem
ber 3
1, 2
020
M
anda
rin A
irlin
es
2,07
5
$ 2
4,99
9
$ 2
4,99
9
D
ecem
ber 3
1, 2
019
M
anda
rin A
irlin
es
2,07
5
$ 1
8,79
6
$ 1
8,79
6 D
ynas
ty A
erot
ech
Inte
rnat
iona
l Cor
p.
814
7,37
6
7,
376
$
26,
172
$
26,
172
The
abov
e ac
quis
ition
s by
sub
sidi
arie
s of
the
Com
pany
’s s
hare
s in
pre
viou
s ye
ars
was
due
to
inve
stm
ent p
lann
ing.
The
shar
es o
f the
Com
pany
hel
d by
its s
ubsi
diar
ies w
ere
treat
ed a
s tre
asur
y sh
ares
. Th
e su
bsid
iarie
s ca
n ex
erci
se s
hare
hold
ers’
rig
ht o
n th
ese
treas
ury
shar
es,
exce
pt f
or t
he r
ight
to
subs
crib
e fo
r the
Com
pany
’s n
ew sh
ares
and
vot
ing
right
s.
- 54
-
Dyn
asty
Aer
otec
h In
tern
atio
nal C
orp.
sol
d a
tota
l of 8
14 th
ousa
nd s
hare
s of
the
Com
pany
in 2
020
and
the
disp
osal
pric
e w
as $
6,85
4 th
ousa
nd.
27
. N
ET
INC
OM
E a.
R
even
ue
F
or th
e Y
ear
End
ed D
ecem
ber
31
2020
2019
Pass
enge
r
$
25,7
04,3
67
$
111
,413
,435
C
argo
81
,917
,976
43
,793
,256
O
ther
s
7,
628,
207
13,2
37,4
69
$
115
,250
,550
$ 1
68,4
44,1
60
b.
Oth
er in
com
e
F
or th
e Y
ear
End
ed D
ecem
ber
31
2020
2019
Inte
rest
inco
me
$
282
,506
$ 4
17,4
46
Subs
idy
inco
me
29,3
09
38,6
21
Div
iden
d in
com
e
23
,043
21
,422
O
ther
s
351,
716
241,
499
$
686
,574
$ 7
18,9
88
c.
Oth
er g
ains
and
loss
es
For
the
Yea
r E
nded
Dec
embe
r 31
20
20
20
19
G
ain
on d
ispo
sal p
rope
rty, p
lant
and
equ
ipm
ent
$
13
,347
$
32,4
60
Net
gai
n on
fina
ncia
l ass
ets a
t FV
TPL
2,28
7
27
,580
G
ain
(loss
) on
fore
ign
exch
ange
, net
52
7,23
4
(1
41,6
11)
Impa
irmen
t los
s on
flyin
g eq
uipm
ent
(424
,573
)
-
Fore
ign
inve
stm
ent i
mpa
irmen
t los
s und
er e
quity
met
hod
(46,
757)
-
Gai
n on
dis
posa
l of i
nves
tmen
ts
-
7,
656
Loss
on
non-
curr
ent a
sset
s hel
d fo
r sal
e
-
(10,
462)
Lo
ss o
n sa
le a
nd le
aseb
ack
-
(1
03,7
75)
Oth
ers
(337
,528
)
(2
85,6
60)
$
(265
,990
)
$ (4
73,8
12)
- 55
-
168
d.
Fina
nce
cost
s
F
or th
e Y
ear
End
ed D
ecem
ber
31
2020
2019
Inte
rest
exp
ense
B
onds
pay
able
$
342,
963
$
42
9,45
7 B
ank
loan
s
93
0,08
3
77
1,28
0 In
tere
st o
n le
ase
liabi
litie
s
1,
784,
917
2,13
9,38
2
$ 3
,057
,963
$ 3
,340
,119
Cap
italiz
atio
n in
tere
st
$
78,8
63
$
46
,528
Cap
italiz
atio
n ra
te
0.
71%
-1.9
2%
1.
01%
-1.3
5%
e.
D
epre
ciat
ion
and
amor
tizat
ion
expe
nse
For
the
Yea
r E
nded
Dec
embe
r 31
20
20
20
19
Pr
oper
ty, p
lant
, equ
ipm
ent
$
19,4
25,4
22
$
20
,702
,033
R
ight
of u
se a
sset
s
11
,741
,555
11
,899
,090
In
vest
men
t pro
perti
es
270
277
Inta
ngib
le a
sset
s
206,
936
198,
237
D
epre
ciat
ion
and
amor
tizat
ion
expe
nse
$
31,3
74,1
83
$
32
,799
,637
An
anal
ysis
of d
epre
ciat
ion
by fu
nctio
n
O
pera
ting
cost
s
$
30
,171
,665
$
30,9
27,9
97
Ope
ratin
g ex
pens
es
995,
582
1,67
3,40
3
$
31,1
67,2
47
$
32
,601
,400
An
anal
ysis
of a
mor
tizat
ion
by fu
nctio
n
O
pera
ting
cost
s
$
14
,312
$
12,3
80
Ope
ratin
g ex
pens
es
192,
624
185,
857
$
20
6,93
6
$
198,
237
f. Em
ploy
ee b
enef
its e
xpen
se
For
the
Yea
r E
nded
Dec
embe
r 31
20
20
20
19
Po
st-e
mpl
oym
ent b
enef
its
Def
ined
con
tribu
tion
plan
$
551,
154
$
57
4,80
9 D
efin
ed b
enef
it pl
an
1,38
5,87
2
1,
397,
174
$
1,
937,
026
$
1,
971,
983
(Con
tinue
d)
- 56
-
For
the
Yea
r E
nded
Dec
embe
r 31
20
20
20
19
O
ther
em
ploy
ee b
enef
its
Sala
ry e
xpen
ses
$
17
,958
,185
$
20,8
13,7
57
Pers
onne
l ser
vice
exp
ense
s
5,
400,
252
5,50
6,86
7
$
23,3
58,4
37
$
26
,320
,624
An
anal
ysis
of e
mpl
oyee
ben
efits
exp
ense
by
func
tion
Ope
ratin
g co
sts
$
20,4
66,0
80
$
23
,699
,685
O
pera
ting
expe
nses
4,
829,
383
4,59
2,92
2
$
25,2
95,4
63
$
28
,292
,607
(C
oncl
uded
) A
ccor
ding
to th
e C
ompa
ny’s
arti
cles
, the
Com
pany
acc
rues
com
pens
atio
n of
em
ploy
ees
at ra
tes
of n
o le
ss th
an 3
% o
f th
e ne
t pro
fit b
efor
e in
com
e ta
x an
d co
mpe
nsat
ion
of e
mpl
oyee
s, an
d ac
crue
s pr
ofit
bonu
s at a
cer
tain
rate
of p
rofit
bef
ore
tax
on th
e ba
sis o
f the
col
lect
ive
agre
emen
t sig
ned
with
the
Chi
na
Airl
ines
Em
ploy
ees
Uni
on.
For
the
year
s en
ded
Dec
embe
r 31
, 20
20 a
nd 2
019,
the
Com
pany
has
ex
perie
nced
a d
efic
it, a
nd th
eref
ore,
no
com
pens
atio
n of
em
ploy
ees i
s est
imat
ed.
Mat
eria
l di
ffer
ence
s be
twee
n su
ch e
stim
ated
am
ount
s an
d th
e am
ount
s pr
opos
ed b
y th
e bo
ard
of
dire
ctor
s on
or b
efor
e th
e da
te th
at th
e an
nual
con
solid
ated
fina
ncia
l sta
tem
ents
are
aut
horiz
ed fo
r iss
ue
are
adju
sted
in th
e ye
ar th
at th
e bo
nuse
s an
d re
mun
erat
ion
wer
e re
cogn
ized
. If t
here
is a
cha
nge
in th
e pr
opos
ed a
mou
nts
afte
r th
e an
nual
con
solid
ated
fin
anci
al s
tate
men
ts w
ere
auth
oriz
ed f
or i
ssue
, th
e di
ffer
ence
s are
reco
rded
as a
cha
nge
in th
e ac
coun
ting
estim
ate.
In
form
atio
n on
the
com
pens
atio
n of
em
ploy
ees
and
rem
uner
atio
n of
dire
ctor
s an
d su
perv
isor
s re
solv
ed
by t
he C
ompa
ny’s
boa
rd o
f di
rect
ors
in 2
020
and
2019
is
avai
labl
e at
the
Mar
ket
Obs
erva
tion
Post
Sy
stem
web
site
of t
he T
aiw
an S
tock
Exc
hang
e.
28
. IN
CO
ME
TA
X
a.
Inco
me
tax
expe
nse
reco
gniz
ed in
pro
fit o
r los
s Th
e m
ajor
com
pone
nts o
f tax
exp
ense
wer
e as
follo
ws:
For
the
Yea
r E
nded
Dec
embe
r 31
20
20
20
19
C
urre
nt ta
x
C
urre
nt y
ear
$
118
,814
$ 5
23,6
70
Prio
r yea
r adj
ustm
ent
(2
9,84
5)
(5,5
46)
Inco
me
tax
on u
napp
ropr
iate
d ea
rnin
gs
628
378
Def
erre
d ta
x
C
urre
nt y
ear
(551
,574
)
35
,149
A
djus
tmen
ts to
def
erre
d ta
x at
tribu
tabl
e to
cha
nges
in ta
x ra
tes
and
law
s
87
,994
24
,534
Inco
me
tax
expe
nse
reco
gniz
ed in
pro
fit o
r los
s
$ (3
73,9
83)
$
578
,185
- 57
-
169
A re
conc
iliat
ion
of a
ccou
ntin
g pr
ofit
and
inco
me
tax
expe
nse
is a
s fol
low
s:
F
or th
e Y
ear
End
ed D
ecem
ber
31
2020
2019
Prof
it be
fore
tax
$ (6
53,7
97)
$
(9
6,81
7)
In
com
e ta
x ex
pens
e ca
lcul
ated
at t
he st
atut
ory
rate
(% fo
r 201
9,
20%
for 2
018)
$ (1
30,7
59)
$
(1
9,36
2)
Effe
ct o
f diff
eren
t tax
of s
ubsi
diar
ies
(8
,456
)
1,
680
Effe
ct o
f adj
ustm
ent t
o in
com
e ta
x
Non
-ded
uctib
le e
xpen
ses i
n de
term
inin
g ta
xabl
e in
com
e
388,
066
16,9
36
Tax-
exem
pt in
com
e
(7
11,0
01)
(45,
861)
In
com
e ta
x on
una
ppro
pria
ted
earn
ings
(5%
)
62
8
37
8 B
asic
inco
me
tax
-
8,
468
Ove
rsea
s inc
ome
tax
expe
nse
16,2
44
11,1
57
Unr
ecog
nize
d lo
ss c
arry
forw
ards
, inv
estm
ent t
ax c
redi
ts a
nd
tem
pora
ry d
iffer
ence
12
,129
58
6,13
5 A
djus
tmen
ts fo
r prio
r yea
rs’ t
ax
(29,
845)
(5
,546
) A
djus
tmen
ts to
def
erre
d ta
x at
tribu
tabl
e to
cha
nges
in ta
x ra
tes
and
law
s
87
,994
24
,534
A
djus
tmen
ts to
cha
nges
in ta
x ra
tes a
nd la
ws
1,01
7
(3
34)
Oth
er
In
com
e ta
x ex
pens
e re
cogn
ized
in p
rofit
or l
oss
$
(373
,983
)
$ 5
78,1
85
b.
In
com
e ta
x re
cogn
ized
in o
ther
com
preh
ensi
ve in
com
e
2020
2019
Def
erre
d ta
x
Rec
ogni
zed
in o
ther
com
preh
ensi
ve in
com
e
Tran
slat
ion
of fi
nanc
ial s
tate
men
ts o
f for
eign
ope
ratio
ns
$
19
,864
$
13,4
54
Fair
valu
e ch
ange
s of f
inan
cial
ass
ets a
t FV
TOC
I
9,
685
(14,
854)
H
edgi
ng in
stru
men
ts fa
ir va
lue
reva
luat
ion
for c
ash
flow
he
dgin
g
(3
66,0
22)
(278
,664
) A
ctua
rial g
ain
or lo
ss o
n de
fined
ben
efit
plan
79
,830
15
6,35
9
Tota
l inc
ome
tax
reco
gniz
ed in
oth
er c
ompr
ehen
sive
inco
me
$ (2
56,6
43)
$
(123
,705
)
- 58
-
c.
Def
erre
d ta
x as
sets
and
liab
ilitie
s Fo
r the
yea
r end
ed D
ecem
ber 3
1, 2
020
Beg
inni
ng
Bal
ance
Rec
ogni
zed
in
Prof
it or
Los
s
Rec
ogni
zed
in
Oth
er
Com
preh
ensi
ve
Inco
me
E
xcha
nge
Diff
eren
ce
E
ndin
g B
alan
ce
D
efer
red
tax
asse
ts
Tem
pora
ry d
iffer
ence
s
D
efin
ed b
enef
it pl
ans
$ 1,
891,
851
$ (1
5,52
0 )
$ 80
,246
$
-
$
1,95
6,57
7 Fr
eque
nt fl
yer p
rogr
ams
59
2,97
7
(42,
447 )
-
-
550,
530
Mai
nten
ance
rese
rves
2,24
0,00
3
282,
021
-
-
2,
522,
024
Allo
wan
ce fo
r red
uctio
n of
inve
ntor
y
296,
857
(4
1,59
0 )
-
-
25
5,26
7 O
ther
s
315,
938
36
7,22
8
77
,917
(17,
281 )
743,
802
$ 5,
337,
626
$ 54
9,69
2
$
158,
163
$ (1
7,28
1 )
$ 6,
028,
200
D
efer
red
tax
liabi
litie
s
Te
mpo
rary
diff
eren
ces
Unr
ealiz
ed fo
reig
n ex
chan
ge g
ains
$
81,7
77
$ 81
,656
$
-
$
-
$
163,
433
Oth
ers (
Not
e)
47
5,36
5
4,45
6
414,
806
(3
4,97
6 )
85
9,65
1
$
557,
142
$ 86
,112
$
414,
806
$ (3
4,97
6 )
$ 1,
023,
084
For t
he y
ear e
nded
Dec
embe
r 31,
201
9
B
egin
ning
B
alan
ce
R
ecog
nize
d in
Pr
ofit
or L
oss
Rec
ogni
zed
in
Oth
er
Com
preh
ensi
ve
Inco
me
E
xcha
nge
Diff
eren
ce
E
ndin
g B
alan
ce
D
efer
red
tax
asse
ts
Tem
pora
ry d
iffer
ence
s
D
efin
ed b
enef
it pl
ans
$ 1,
765,
052
$ (2
9,56
0 )
$ 15
6,35
9
$
-
$
1,89
1,85
1 Fr
eque
nt fl
yer p
rogr
ams
51
0,06
0
82,9
17
-
-
59
2,97
7 M
aint
enan
ce re
serv
es
1,
811,
848
42
8,15
5
-
-
2,24
0,00
3 A
llow
ance
for r
educ
tion
of in
vent
ory
33
5,71
1
(38,
854 )
-
-
296,
857
Oth
ers
72
9,39
9
(429
,580
)
15,1
13
1,
006
31
5,93
8
$
5,15
2,07
0
$
13,0
78
$ 17
1,47
2
$
1,00
6
$
5,33
7,62
6
Def
erre
d ta
x lia
bilit
ies
Tem
pora
ry d
iffer
ence
s
U
nrea
lized
fore
ign
exch
ange
gai
ns
$ 17
$
81,7
60
$ -
$ -
$ 81
,777
O
ther
s (N
ote)
188,
430
(8
,999
)
295,
177
75
7
475,
365
$ 18
8,44
7
$
72,7
61
$ 29
5,17
7
$
757
$ 55
7,14
2
- 59
-
170
Ded
uctib
le te
mpo
rary
diff
eren
ces,
and
unus
ed lo
ss c
arry
forw
ards
for w
hich
no
defe
rred
tax
asse
ts h
ave
been
reco
gniz
ed in
the
cons
olid
ated
bal
ance
shee
ts.
D
ecem
ber
31
2020
2019
Loss
car
ryfo
rwar
ds
2021
$
-
$ 2
,899
,496
20
22
-
61
9,79
9 20
25
18,1
24
18,1
24
2026
34
4,20
0
54
6,89
9 20
27
68,4
15
68,4
15
2028
67
1,52
9
1,
706,
913
2029
1,
645,
438
955,
250
2030
85
2,28
1
-
$
3,5
99,9
87
$
6,8
14,8
96
D
iffer
ence
in d
epre
ciat
ion
$
4,5
63,9
24
$
1,3
48,0
96
d.
Unu
sed
tax
loss
car
ryfo
rwar
ds a
s of D
ecem
ber 3
1, 2
020
wer
e as
follo
ws:
Exp
iry
Yea
r
Unu
sed
Am
ount
Chi
na A
irlin
es, L
td.
20
28
$
495,
779
2029
1,43
9,28
7
$
1,9
35,0
66
M
anda
rin A
irlin
e C
o., L
td.
20
26
$
312,
724
2028
72,5
89
2030
524,
678
$
909,
991
Ti
gera
ir Ta
iwan
Co.
, Ltd
.
2030
$
2,0
56,9
78
Ta
oyua
n In
tern
atio
nal A
irpor
t Ser
vice
s
2030
$
55
6,79
0
Taiw
an A
irpor
t Ser
vice
s
2030
$
22
3,80
5 (C
ontin
ued)
- 60
-
Exp
iry
Yea
r
Unu
sed
Am
ount
Sabr
e Tr
avel
Net
wor
k (T
aiw
an)
20
30
$
75,1
88
C
al H
otel
Co.
, Ltd
.
2030
$
11
4,97
5
Kao
hsiu
ng C
ater
ing
Serv
ices
, Ltd
.
2030
$
85
,648
Taiw
an A
ircra
ft M
aint
enan
ce A
nd E
ngin
eerin
g C
o., L
td.
20
25
$
18,1
24
2026
31,4
76
2027
68,4
15
2028
103,
161
2029
206,
151
2030
241,
955
$
669,
282
(Con
clud
ed)
e.
In
com
e ta
x as
sess
men
t Th
e in
com
e ta
x re
turn
s fo
r 20
18 o
f th
e C
ompa
ny a
nd it
s su
bsid
iarie
s ha
ve b
een
exam
ined
by
the
tax
auth
oriti
es.
29.
EA
RN
ING
PE
R S
HA
RE
Th
e nu
mer
ator
s and
den
omin
ator
s use
d in
cal
cula
ting
earn
ings
per
shar
e w
ere
as fo
llow
s:
For
the
Yea
r E
nded
Dec
embe
r 31
20
20
20
19
B
asic
ear
ning
s (lo
ss) p
er sh
are
$
0.
03
$
(0
.22)
D
ilute
d ea
rnin
gs (l
oss)
per
shar
e
$
0.03
$
(0.2
2)
Ea
rnin
gs (l
oss)
use
d in
the
com
puta
tion
of b
asic
ear
ning
s per
shar
e
$
140,
000
$
(1,
199,
798)
Ef
fect
of p
oten
tially
dilu
tive
ordi
nary
shar
es:
Inte
rest
on
conv
ertib
le b
onds
(afte
r tax
)
-
-
Earn
ings
(los
s) u
sed
in th
e co
mpu
tatio
n of
dilu
ted
earn
ings
(los
s) p
er
shar
e
$
14
0,00
0
$ (
1,19
9,79
8)
- 61
-
171
For
the
Yea
r E
nded
Dec
embe
r 31
20
20
20
19
In
thou
sand
s
Wei
ghte
d av
erag
e nu
mbe
r of o
rdin
ary
shar
es in
com
puta
tion
of b
asic
ea
rnin
gs p
er sh
are
5
,418
,776
5,4
18,0
96
Effe
ct o
f pot
entia
lly d
ilutiv
e or
dina
ry sh
ares
:
C
onve
rtibl
e bo
nds
Com
pens
atio
n of
em
ploy
ees o
r bon
uses
issu
ed to
em
ploy
ees
-
-
Wei
ghte
d av
erag
e nu
mbe
r of o
rdin
ary
shar
es u
sed
in th
e co
mpu
tatio
n of
dilu
ted
earn
ings
per
shar
e
5,4
18,7
76
5
,418
,096
If
the
Gro
up o
ffer
ed t
o se
ttle
com
pens
atio
n or
bon
uses
pai
d to
em
ploy
ees
in c
ash
or s
hare
s, th
e G
roup
as
sum
ed t
he e
ntire
am
ount
of
the
com
pens
atio
n or
bon
uses
wou
ld b
e se
ttled
in
shar
es a
nd t
he r
esul
ting
pote
ntia
l sh
ares
wer
e in
clud
ed i
n th
e w
eigh
ted
aver
age
num
ber
of s
hare
s ou
tsta
ndin
g us
ed i
n th
e co
mpu
tatio
n of
dilu
ted
earn
ings
per
sha
re,
if th
e ef
fect
is
dilu
tive.
Suc
h di
lutiv
e ef
fect
of
the
pote
ntia
l sh
ares
was
inc
lude
d in
the
com
puta
tion
of d
ilute
d ea
rnin
gs p
er s
hare
unt
il th
e nu
mbe
r of
sha
res
to b
e di
strib
uted
to e
mpl
oyee
s is r
esol
ved
in th
e fo
llow
ing
year
.
30.
DIS
POSA
L O
F SU
BSI
DIA
RIE
S O
n Ja
nuar
y 21
, 201
9, th
e bo
ard
of d
irect
ors
of th
e Co
mpa
ny d
ecid
ed to
sel
l par
t of
Dyn
asty
Hol
iday
s to
H
.I.S.
Tai
wan
Co.
, Ltd
. for
dis
posa
l pric
e of
$34
,036
thou
sand
and
a g
ain
on d
ispo
sal o
f $7,
656
thou
sand
. A
fter t
he d
ispo
sal,
the
prop
ortio
n of
ow
ners
hip
decr
ease
d fr
om 5
1% to
20%
, and
the
Com
pany
lost
con
trol
of th
e su
bsid
iary
. a.
C
onsi
dera
tion
rece
ived
from
dis
posa
ls
Con
side
ratio
n re
ceiv
ed in
cas
h an
d ca
sh e
quiv
alen
ts
$ 3
4,03
6
b.
Ana
lysi
s of a
sset
s and
liab
ilitie
s on
the
date
con
trol w
as lo
st C
urre
nt a
sset
s
Cas
h an
d ca
sh e
quiv
alen
ts
$ 5
1,44
9 O
ther
cur
rent
ass
ets
47,5
10
Non
-cur
rent
ass
ets
17,0
35
Cur
rent
liab
ilitie
s
(4
9,74
2)
Non
-cur
rent
liab
ilitie
s
(1
5,31
8)
Net
ass
ets d
ispo
sed
of
$
50,
934
c.
G
ain
on d
ispo
sals
of s
ubsi
diar
ies
C
onsi
dera
tion
rece
ived
$ 3
4,03
6 N
et a
sset
s dis
pose
d of
(5
0,93
4)
Fair
valu
e of
equ
ity
10,1
87
Non
-con
trolli
ng in
tere
sts
24,9
57
Rec
lass
ifica
tion
of o
ther
com
preh
ensi
ve in
com
e in
resp
ect o
f sub
sidi
arie
s
(1
0,59
0)
Gai
n on
dis
posa
l
$
7,65
6
- 62
-
d.
Net
cas
h in
flow
on
disp
osal
of s
ubsi
diar
ies
C
onsi
dera
tion
rece
ived
in c
ash
and
cash
equ
ival
ents
$
34,
036
Less
: Cas
h an
d ca
sh e
quiv
alen
t bal
ance
s dis
pose
d of
(5
1,44
9)
$ (1
7,41
3)
31
. C
API
TA
L M
AN
AG
EM
EN
T
The
Gro
up m
anag
es i
ts c
apita
l to
ens
ure
that
ent
ities
in
the
Gro
up w
ill b
e ab
le t
o co
ntin
ue a
s go
ing
conc
erns
whi
le m
axim
izin
g th
e re
turn
to
stak
ehol
ders
thr
ough
the
opt
imiz
atio
n of
the
deb
t an
d eq
uity
ba
lanc
e. T
he c
apita
l st
ruct
ure
of t
he G
roup
con
sist
s of
net
deb
t (b
orro
win
gs o
ffse
t by
cas
h an
d ca
sh
equi
vale
nts)
and
equ
ity o
f the
Gro
up c
ompr
isin
g is
sued
cap
ital,
rese
rves
, ret
aine
d ea
rnin
gs, o
ther
equ
ity a
nd
non-
cont
rolli
ng in
tere
sts.
To s
uppo
rt its
ope
ratin
g ac
tiviti
es a
nd p
urch
ase
of a
ircra
ft, th
e G
roup
nee
ds to
mai
ntai
n su
ffic
ient
cap
ital.
Ther
efor
e, t
he g
oal
of c
apita
l m
anag
emen
t is
to
ensu
re f
inan
cial
res
ourc
es a
nd o
pera
ting
plan
is a
ble
to
supp
ort t
he f
utur
e w
orki
ng c
apita
l, ca
pita
l exp
endi
ture
s, de
bt r
epay
men
t and
div
iden
d ex
pens
es a
nd o
ther
ne
eds.
32
. FI
NA
NC
IAL
INST
RU
ME
NT
S
a.
Fina
ncia
l ins
trum
ents
not
eva
luat
ed a
t fai
r val
ue
Exce
pt a
s de
taile
d in
the
fol
low
ing
tabl
e, t
he m
anag
emen
t co
nsid
ers
the
carr
ying
am
ount
s of
fin
anci
al a
sset
s and
fina
ncia
l lia
bilit
ies r
ecog
nize
d in
the
finan
cial
stat
emen
ts a
s app
roxi
mat
ing
thei
r fa
ir va
lues
.
D
ecem
ber
31
2020
2019
Car
ryin
g A
mou
nt
Fa
ir V
alue
Car
ryin
g A
mou
nt
Fa
ir V
alue
Fi
nanc
ial l
iabi
litie
s
Bon
ds p
ayab
le
$
22,2
82,8
59
$
22,4
59,6
85
$
32,0
52,6
25
$
32,0
62,8
74
Som
e lo
ng-te
rm b
orro
win
gs a
nd c
apita
l le
ase
oblig
atio
ns a
re f
loat
ing-
rate
fin
anci
al l
iabi
litie
s, so
th
eir c
arry
ing
amou
nts
are
thei
r fai
r va
lues
. Fai
r va
lues
of b
ond
paya
ble
tradi
ng in
OTC
are
bas
ed
on q
uote
d m
arke
t pric
es (L
evel
1).
b.
Fa
ir va
lue
of fi
nanc
ial i
nstru
men
ts m
easu
red
at fa
ir va
lue
on a
recu
rrin
g ba
sis
The
follo
win
g ta
ble
prov
ides
an
anal
ysis
of
finan
cial
inst
rum
ents
that
are
mea
sure
d su
bseq
uent
to
initi
al r
ecog
nitio
n at
fai
r va
lue,
gro
uped
into
Lev
els
1 to
3 b
ased
on
the
degr
ee to
whi
ch th
e fa
ir va
lue
is o
bser
vabl
e:
1)
Leve
l 1
fair
valu
e m
easu
rem
ents
are
tho
se d
eriv
ed f
rom
quo
ted
pric
es (
unad
just
ed)
in a
ctiv
e m
arke
ts fo
r ide
ntic
al a
sset
s or l
iabi
litie
s; 2)
Le
vel 2
fair
valu
e m
easu
rem
ents
are
thos
e de
rived
from
inpu
ts o
ther
than
quo
ted
pric
es in
clud
ed
with
in L
evel
1 t
hat
are
obse
rvab
le f
or t
he a
sset
or
liabi
lity,
eith
er d
irect
ly (
i.e. a
s pr
ices
) or
in
dire
ctly
(i.e
. der
ived
from
pric
es);
and
- 63
-
172
3)
Leve
l 3 fa
ir va
lue
mea
sure
men
ts a
re th
ose
deriv
ed fr
om v
alua
tion
tech
niqu
es th
at in
clud
e in
puts
fo
r the
ass
et o
r lia
bilit
y th
at a
re n
ot b
ased
on
obse
rvab
le m
arke
t dat
a (u
nobs
erva
ble
inpu
ts).
Dec
embe
r 31,
202
0
L
evel
1
L
evel
2
L
evel
3
T
otal
Fina
ncia
l ass
ets a
t FV
TPL
Dom
estic
mon
ey
mar
ket f
unds
$ 27
4,76
1
$ -
$
-
$ 27
4,76
1
Fina
ncia
l ass
ets a
t FV
TOC
I
In
vest
men
ts in
equ
ity
inst
rum
ents
U
nite
d sh
ares
- do
mes
tic
$
-
$ -
$
46,2
89
$
46,2
89
Unl
iste
d sh
ares
- fo
reig
n
-
-
11
7,45
7
11
7,45
7
$ -
$
-
$ 16
3,74
6
$ 16
3,74
6
Fina
ncia
l ass
ets f
or
hedg
ing
$
7,61
3,63
6
$ -
$
-
$ 7,
613,
636
Fi
nanc
ial l
iabi
litie
s for
he
dgin
g
$ 40
,575
,778
$
9,
307
$
-
$ 40
,585
,085
D
ecem
ber 3
1, 2
019
Lev
el 1
Lev
el 2
Lev
el 3
Tot
al
Fi
nanc
ial a
sset
s at
FVTP
L
D
omes
tic m
oney
m
arke
t fun
ds
$
511,
758
$
-
$ -
$
511,
758
Fore
ign
exch
ange
ag
reem
ent
-
43
4
-
434
$
511,
758
$
434
$
-
$ 51
2,19
2
Fina
ncia
l ass
ets a
t FV
TOC
I
In
vest
men
ts in
equ
ity
inst
rum
ents
U
nite
d sh
ares
- do
mes
tic
$
-
$ -
$
26,8
65
$
26,8
65
Unl
iste
d sh
ares
- fo
reig
n
-
-
18
2,35
6
18
2,35
6
$ -
$
-
$ 20
9,22
1
$ 20
9,22
1 (C
ontin
ued)
- 64
-
L
evel
1
L
evel
2
L
evel
3
T
otal
Fina
ncia
l lia
bilit
ies a
t FV
TPL
Der
ivat
ive
inst
rum
ents
$ -
$
11,7
49
$
-
$ 11
,749
Fina
ncia
l ass
ets f
or
hedg
ing
$
-
$ 14
7
$ 9,
479
$
9,62
6
Fina
ncia
l lia
bilit
ies f
or
hedg
ing
$
50,9
97,6
87
$
37,0
69
$
3,95
5
$ 51
,038
,711
(C
oncl
uded
) Th
ere
wer
e no
tran
sfer
s bet
wee
n Le
vels
1 a
nd 2
in th
e cu
rren
t per
iod.
4)
Val
uatio
n te
chni
ques
and
inpu
ts a
pplie
d fo
r Lev
el 2
fair
valu
e m
easu
rem
ent
Fi
nanc
ial I
nstr
umen
ts
V
alua
tion
Tec
hniq
ues a
nd In
puts
Der
ivat
ives
inst
rum
ents
Dis
coun
ted
cash
flow
s.
Futu
re c
ash
flow
s are
est
imat
ed b
ased
on
obse
rvab
le fo
rwar
d ex
chan
ge ra
tes a
t the
end
of t
he re
porti
ng p
erio
d an
d co
ntra
ct fo
rwar
d ra
tes,
disc
ount
ed a
t a ra
te th
at re
flect
s the
cr
edit
risk
of v
ario
us c
ount
erpa
rties
. 5)
V
alua
tion
tech
niqu
es a
nd in
puts
app
lied
for L
evel
3 fa
ir va
lue
mea
sure
men
t Th
e fa
ir va
lues
of
fore
ign
exch
ange
s an
d fu
el o
ptio
ns a
re d
eter
min
ed u
sing
opt
ion
pric
ing
mod
els
whe
re t
he s
igni
fican
t un
obse
rvab
le i
nput
s ar
e im
plie
d flu
ctua
tion.
Cha
nges
in
the
impl
ied
fluct
uatio
ns u
sed
in is
olat
ion
wou
ld re
sult
in a
n in
crea
se o
r dec
reas
e in
the
fair
valu
e of
th
e fo
reig
n ex
chan
ge fo
rwar
d co
ntra
cts a
nd fu
el o
ptio
ns.
The
dom
estic
unl
iste
d eq
uity
inv
estm
ent
is b
ased
on
the
com
para
tive
com
pany
val
uatio
n to
es
timat
e th
e fa
ir va
lue.
The
mai
n as
sum
ptio
ns a
re b
ased
on
the
mul
tiplie
r of t
he m
arke
t pric
e of
th
e co
mpa
rabl
e lis
ted
com
pany
and
the
net v
alue
per
sha
re, w
hich
hav
e co
nsid
ered
the
liqui
dity
di
scou
nt. T
he h
ighe
r the
mul
tiplie
r or t
he lo
wer
the
liqui
dity
dis
coun
t, th
e hi
gher
the
fair
valu
e of
the
rele
vant
fina
ncia
l ins
trum
ents
. Th
e m
ovem
ents
of L
evel
3 fi
nanc
ial i
nstru
men
ts a
re a
s fol
low
s:
Mul
tiplic
ator
Liq
uidi
ty
Dis
coun
t
Dec
embe
r 31,
202
0
0.79
-16.
32
80%
D
ecem
ber 3
1, 2
019
0.
75-1
3.23
80
%
- 65
-
173
Der
ivat
ive
Inst
rum
ents
Equ
ity
Inst
rum
ents
Bal
ance
at J
anua
ry 1
, 202
0
$
5,52
4
$ 2
09,2
21
Rec
ogni
zed
in o
ther
com
preh
ensi
ve in
com
e
(5
,524
)
(4
5,47
5)
B
alan
ce a
t Dec
embe
r 31,
202
0
$
-
$ 1
63,7
46
B
alan
ce a
t Jan
uary
1, 2
019
$
4,
901
$
132
,191
R
ecog
nize
d in
oth
er c
ompr
ehen
sive
inco
me
623
77,0
30
B
alan
ce a
t Dec
embe
r 31,
201
9
$
5,52
4
$ 2
09,2
21
Bec
ause
som
e fin
anci
al in
stru
men
ts a
nd n
onfin
anci
al in
stru
men
ts m
ay n
ot h
ave
thei
r fai
r val
ues
disc
lose
d, th
e to
tal f
air
valu
e di
sclo
sed
here
in is
not
the
tota
l val
ue o
f th
e G
roup
’s c
olle
ctiv
e in
stru
men
ts.
c.
C
ateg
orie
s of f
inan
cial
inst
rum
ents
Dec
embe
r 31
20
20
20
19
Fi
nanc
ial a
sset
s
Fina
ncia
l ass
ets a
t FV
TPL
$
27
4,76
1
$
512,
192
Fina
ncia
l ass
ets f
or h
edgi
ng
7,61
3,63
6
9,
626
Fina
ncia
l ass
ets a
t am
ortiz
ed c
ost (
Not
e 1)
45
,898
,091
43
,143
,106
Fi
nanc
ial a
sset
s at F
VTP
CI -
equ
ity in
stru
men
t inv
estm
ent
163,
746
209,
221
Fi
nanc
ial l
iabi
litie
s
Fina
ncia
l lia
bilit
ies a
t FV
TPL
-
11
,749
Fi
nanc
ial l
iabi
litie
s for
hed
ging
40
,585
,085
51
,038
,711
Fi
nanc
ial l
iabi
litie
s at a
mor
tized
cos
t (N
ote
2)
165,
458,
441
144,
459,
429
Not
e 1:
Th
e ba
lanc
es in
clud
e lo
ans
and
rece
ivab
les
mea
sure
d at
am
ortiz
ed c
ost,
whi
ch c
ompr
ise
cash
an
d ca
sh e
quiv
alen
ts,
note
s an
d ac
coun
ts r
ecei
vabl
e, a
ccou
nts
rece
ivab
le -
rel
ated
par
ties,
othe
r rec
eiva
bles
, ref
unda
ble
depo
sits
and
oth
er re
stric
ted
finan
cial
ass
ets.
Not
e 2:
Th
e ba
lanc
es i
nclu
de f
inan
cial
lia
bilit
ies
mea
sure
d at
am
ortiz
ed c
ost,
whi
ch c
ompr
ise
shor
t-ter
m d
ebts
, sho
rt-te
rm n
otes
pay
able
, not
es a
nd a
ccou
nts
paya
ble,
acc
ount
s pa
yabl
e -
rela
ted
parti
es, o
ther
pay
able
s, bo
nds
paya
ble,
long
-term
loan
s, le
ase
liabi
litie
s pa
yabl
e, le
ase
liabi
litie
s, pr
ovis
ions
, par
t of
othe
r cu
rren
t lia
bilit
ies,
part
of o
ther
non
-cur
rent
liab
ilitie
s an
d gu
aran
tee
depo
sits
.
d.
Fina
ncia
l ris
k m
anag
emen
t obj
ectiv
es a
nd p
olic
ies
The
Gro
up h
as r
isk
man
agem
ent
and
hedg
ing
stra
tegi
es t
o re
spon
d to
cha
nges
in
the
econ
omic
and
fin
anci
al e
nviro
nmen
t an
d in
the
fue
l m
arke
t. To
red
uce
the
finan
cial
ris
ks f
rom
cha
nges
in
inte
rest
rate
s, in
exc
hang
e ra
tes
and
in f
uel
pric
es, t
he G
roup
has
its
ope
ratin
g co
sts
stay
with
in a
spe
cifie
d ra
nge
by u
sing
app
ropr
iate
fin
anci
al h
edgi
ng in
stru
men
ts a
nd h
edgi
ng p
erce
ntag
es in
acc
orda
nce
with
th
e “P
roce
ssin
g Pr
ogra
m o
f D
eriv
ativ
e Fi
nanc
ial
Inst
rum
ent
Tran
sact
ions
” ap
prov
ed b
y th
e G
roup
sh
areh
olde
rs to
redu
ce th
e im
pact
of m
arke
t pric
e ch
ange
s on
ear
ning
s. Th
ese
risks
incl
ude
mar
ket r
isk
(incl
udin
g fo
reig
n cu
rren
cy ri
sk, i
nter
est r
ate
risk
and
othe
r pric
e ris
k), c
redi
t ris
k an
d liq
uidi
ty ri
sk.
- 66
-
In a
dditi
on,
the
Gro
up h
as a
ris
k m
anag
emen
t co
mm
ittee
, w
hich
mee
ts p
erio
dica
lly t
o ev
alua
te t
he
perf
orm
ance
of
deriv
ativ
e in
stru
men
ts a
nd d
eter
min
e th
e ap
prop
riate
hed
ging
per
cent
age.
Thi
s co
mm
ittee
info
rms
the
Gro
up o
f glo
bal e
cono
mic
and
fina
ncia
l con
ditio
ns, c
ontro
ls th
e en
tire
finan
cial
ris
k re
sulti
ng fr
om c
hang
es in
the
finan
cial
env
ironm
ent a
nd fu
el p
rices
, and
dev
elop
s th
e st
rate
gy a
nd
resp
onse
to a
void
fina
ncia
l ris
k w
ith th
e as
sist
ance
of f
inan
cial
risk
exp
erts
to e
ffec
t ris
k m
anag
emen
t. 1)
M
arke
t ris
k Th
e G
roup
is p
rimar
ily e
xpos
ed to
the
finan
cial
risk
s of
cha
nges
in fo
reig
n cu
rren
cy e
xcha
nge
rate
s an
d in
tere
st ra
tes.
The
Gro
up e
nter
ed in
to d
eriv
ativ
e fin
anci
al in
stru
men
ts to
man
age
its e
xpos
ure
to
fore
ign
curr
ency
ris
k an
d in
tere
st r
ate
risk.
The
Gro
up e
nter
s in
to f
orei
gn e
xcha
nge
forw
ard
cont
ract
s, fo
reig
n cu
rren
cy o
ptio
n co
ntra
cts,
and
inte
rest
sw
ap c
ontra
cts
with
fai
r va
lues
tha
t ar
e hi
ghly
neg
ativ
ely
corr
elat
ed t
o th
e fa
ir va
lues
of
hedg
ed i
tem
s an
d ev
alua
tes
the
hedg
ing
effe
ctiv
enes
s of t
hese
inst
rum
ents
per
iodi
cally
. a)
Fo
reig
n cu
rren
cy ri
sk
The
Gro
up e
nter
s in
to fo
reig
n cu
rren
cy o
ptio
n co
ntra
cts
to h
edge
aga
inst
the
risks
on
chan
ge in
re
late
d ex
chan
ge r
ates
, ent
ers
into
for
war
d co
ntra
cts
to h
edge
aga
inst
the
risks
on
chan
ges
in
fore
ign-
curr
ency
ass
ets,
liabi
litie
s and
com
mitm
ents
in th
e re
late
d ex
chan
ge ra
tes.
Sens
itivi
ty a
naly
sis
The
Gro
up w
as m
ainl
y ex
pose
d to
the
US
dolla
r. Th
e fo
llow
ing
deta
ils th
e G
roup
’s s
ensi
tivity
to a
one
dol
lar
incr
ease
or
decr
ease
in th
e N
ew
Taiw
an d
olla
r (th
e fu
nctio
nal
curr
ency
) ag
ains
t th
e re
leva
nt f
orei
gn c
urre
ncie
s (i.
e. t
he U
S do
llar)
. Thi
s is
the
sens
itivi
ty r
ate
used
whe
n re
porti
ng f
orei
gn c
urre
ncy
risk
inte
rnal
ly to
key
m
anag
emen
t pe
rson
nel
and
repr
esen
ts m
anag
emen
t’s a
sses
smen
t of
the
rea
sona
bly
poss
ible
ch
ange
in
fore
ign
exch
ange
rat
es. T
he s
ensi
tivity
ana
lysi
s in
clud
ed o
nly
outs
tand
ing
fore
ign
curr
ency
den
omin
ated
mon
etar
y ite
ms
and
fore
ign
curr
ency
for
war
d co
ntra
cts
desi
gnat
ed a
s ca
sh f
low
hed
ges
and
adju
sts
thei
r tra
nsla
tion
at t
he e
nd o
f th
e re
porti
ng p
erio
d fo
r U
S$1
incr
ease
/dec
reas
e ag
ains
t the
New
Tai
wan
dol
lar.
Whe
n N
ew T
aiw
an d
olla
rs in
crea
se o
ne d
olla
r aga
inst
U.S
. dol
lars
and
all
othe
r var
iabl
es w
ere
held
con
stan
t, th
ere
wou
ld b
e an
incr
ease
in p
re-ta
x pr
ofit
and
othe
r com
preh
ensi
ve in
com
e fo
r th
e ye
ar e
nded
Dec
embe
r 31
, 20
20 o
f $3
45,4
40 t
hous
and
and
$1,1
50,8
96 t
hous
and
and
a de
crea
se i
n pr
e-ta
x pr
ofit
and
othe
r co
mpr
ehen
sive
inc
ome
for
the
year
end
ed D
ecem
ber
31,
2019
of $
105,
266
thou
sand
and
$1,
612,
256
thou
sand
, res
pect
ivel
y.
The
Gro
up’s
hed
ging
stra
tegy
is
to e
nter
int
o fo
reig
n ex
chan
ge f
orw
ard
cont
ract
s to
avo
id
exch
ange
rat
e ex
posu
re o
f its
for
eign
cur
renc
y de
nom
inat
ed r
ecei
pts
and
paym
ents
and
to
man
age
exch
ange
rate
exp
osur
e of
its
airc
raft
prep
aym
ents
in th
e ne
xt y
ear.
Thos
e tra
nsac
tions
ar
e de
sign
ated
as
cash
flo
w h
edge
s. W
hen
fore
cast
ed p
urch
ases
act
ually
tak
e pl
ace,
bas
is
adju
stm
ents
are
mad
e to
the
initi
al c
arry
ing
amou
nts o
f hed
ged
item
s. Fo
r th
e he
dges
of
high
ly p
roba
ble
airc
raft
prep
aym
ents
, as
the
criti
cal t
erm
s (i.
e. th
e no
tiona
l am
ount
, use
ful l
ife a
nd u
nder
lyin
g as
set)
of th
e fo
reig
n ex
chan
ge f
orw
ard
cont
ract
s an
d th
eir
corr
espo
ndin
g he
dged
item
s ar
e th
e sa
me,
the
Gro
up p
erfo
rms
a qu
alita
tive
asse
ssm
ent o
f th
e ef
fect
iven
ess,
and
it is
exp
ecte
d th
at th
e va
lue
of th
e fo
reig
n ex
chan
ge fo
rwar
d co
ntra
cts a
nd th
e va
lue
of th
e co
rres
pond
ing
hedg
ed it
ems
will
sys
tem
atic
ally
cha
nge
in th
e op
posit
e di
rect
ion
in
resp
onse
to m
ovem
ents
in th
e un
derly
ing
exch
ange
rate
s.
- 67
-
174
The
follo
win
g ta
ble
sum
mar
izes
the
info
rmat
ion
rela
ting
to th
e he
dgin
g of
fore
ign
curr
ency
risk
. D
ecem
ber 3
1, 2
020
N
otio
nal
Line
Item
in
C
arry
ing
Am
ount
H
edgi
ng In
stru
men
ts
C
urre
ncy
A
mou
nt
M
atur
ity
Fo
rwar
d R
ate
B
alan
ce S
heet
Ass
et
Li
abili
ty
Ca
sh fl
ow h
edge
A
ircra
ft re
ntal
s -
forw
ard
exch
ange
co
ntra
cts
N
TD/U
SD
N
TD 1
27,9
06/
USD
4,37
1 20
21.1
.8-
2021
.11.
9
28.5
-29.
7
Fina
ncia
l ass
ets f
or
hedg
ing
- cur
rent
/ lia
bilit
ies f
or h
edgi
ng -
curr
ent
$
-
$
3,
513
Avi
atio
n fu
el -
forw
ard
exch
ange
con
tract
s
NTD
/USD
NTD
142
,045
/ U
SD5,
000
2021
.1.2
9-
2021
.5.2
8
29.9
-29.
8
Fina
ncia
l ass
ets f
or
hedg
ing
- cur
rent
/ lia
bilit
ies f
or h
edgi
ng -
curr
ent
-
5,
794
The
abov
emen
tione
d he
dgin
g in
stru
men
ts a
pplie
d he
dge
acco
untin
g. T
he b
ook
valu
e of
oth
er
equi
ty f
or e
ach
hedg
ing
item
(ai
rcra
ft re
ntal
s in
U.S
. dol
lars
and
avi
atio
n fu
el)
was
$(3
,513
) th
ousa
nd a
nd $
(5,7
94) t
hous
and,
resp
ectiv
ely.
Fo
r the
yea
r end
ed D
ecem
ber 3
1, 2
020
Com
preh
ensi
ve In
com
e
Hed
ging
Gai
n (L
oss)
R
ecog
nize
d in
O
ther
C
ompr
ehen
sive
In
com
e
Am
ount
R
ecla
ssifi
ed to
Pr
ofit
and
Los
s an
d th
e A
djus
ted
Lin
e It
em
C
ash
flow
hed
ge
A
ircra
ft re
ntal
s
$
4,93
9
$
11,9
08
(Not
e)
Avi
atio
n fu
el
4,36
7
(16,
616)
Airc
raft
prep
aym
ents
(101
,570
)
-
M
aint
enan
ce c
ost
-
5
$
(9
2,26
4)
$
(4
,703
)
Not
e:
Incr
ease
in o
pera
ting
cost
s or e
xcha
nge
loss
. Th
e am
ount
of g
ains
and
loss
es o
n he
dgin
g in
stru
men
ts fo
r the
yea
r end
ed D
ecem
ber 3
1, 2
020
recl
assi
fied
from
pro
fit o
r los
s to
prep
aym
ents
for e
quip
men
t was
$11
9,87
8 th
ousa
nd.
Dec
embe
r 31,
201
9
Not
iona
l
Li
ne It
em in
Car
ryin
g A
mou
nt
Hed
ging
Inst
rum
ents
Cur
renc
y
Am
ount
Mat
urity
Forw
ard
Rat
e
Bal
ance
She
et
A
sset
Liab
ility
Cash
flow
hed
ge
Airc
raft
rent
als -
fo
rwar
d ex
chan
ge
cont
ract
s
N
TD/U
SD
N
TD50
9,50
7/
USD
16,9
67
20
20.1
.21-
20
20.1
2.24
29.5
-30.
8
Fina
ncia
l ass
ets f
or
hedg
ing
- cur
rent
/ lia
bilit
ies f
or h
edgi
ng -
curr
ent
$
38
$
8,49
1
Avi
atio
n fu
el -
forw
ard
exch
ange
con
tract
s
NTD
/USD
NTD
660,
661/
U
SD22
,000
2020
.2.2
7-
2020
.11.
30
29
.7-3
0.7
Fi
nanc
ial a
sset
s for
he
dgin
g - c
urre
nt/
liabi
litie
s for
hed
ging
- cu
rren
t
32
10,1
93
Airc
raft
prep
aym
ents
- fo
rwar
d ex
chan
ge
cont
ract
s
N
TD/U
SD
N
TD1,
411,
411/
U
SD47
,000
2020
.11.
4
29.6
-30.
5
Fina
ncia
l ass
ets f
or
hedg
ing
- cur
rent
/ lia
bilit
ies f
or h
edgi
ng -
curr
ent
77
18,3
85
The
abov
emen
tione
d he
dgin
g in
stru
men
ts a
pplie
d he
dge
acco
untin
g. T
he b
ook
valu
e of
oth
er
equi
ty f
or e
ach
hedg
ing
item
(ai
rcra
ft re
ntal
s in
U.S
. do
llars
, av
iatio
n fu
el a
nd a
ircra
ft pr
epay
men
ts) w
as $
(8,4
53) t
hous
and,
$(1
0,16
1) th
ousa
nd a
nd $
(18,
308)
thou
sand
, res
pect
ivel
y.
- 68
-
For t
he y
ear e
nded
Dec
embe
r 31,
201
9 C
ompr
ehen
sive
Inco
me
Hed
ging
Gai
n (L
oss)
R
ecog
nize
d in
O
ther
C
ompr
ehen
sive
In
com
e
Am
ount
R
ecla
ssifi
ed to
Pr
ofit
and
Los
s an
d th
e A
djus
ted
Lin
e It
em
C
ash
flow
hed
ge
A
ircra
ft re
ntal
s
$ (3
5,89
7)
$
9,
137
(Not
e)
Avi
atio
n fu
el
(10,
161)
(5
3)
A
ircra
ft pr
epay
men
ts
(1
7,70
5)
-
$ (6
3,76
3)
$
9,
084
N
ote:
D
ecre
ase
in o
pera
ting
cost
s or e
xcha
nge
loss
. A
nd th
e am
ount
of
gain
s an
d lo
sses
on
hedg
ing
inst
rum
ents
for
the
year
end
ed D
ecem
ber
31,
2019
recl
assi
fied
from
pro
fit o
r los
s to
prep
aym
ents
for e
quip
men
t was
$(6
03) t
hous
and.
b)
Inte
rest
rate
risk
Th
e G
roup
ent
ers
into
int
eres
t sw
ap c
ontra
cts
to h
edge
aga
inst
the
ris
ks o
n ch
ange
in
net
liabi
litie
s in
tere
st ra
tes.
The
risk
is m
anag
ed b
y th
e G
roup
by
mai
ntai
ning
an
appr
opria
te m
ix o
f fix
ed a
nd f
loat
ing
rate
bor
row
ings
, and
usi
ng in
tere
st r
ate
swap
con
tract
s an
d fo
rwar
d in
tere
st ra
te c
ontra
cts.
Th
e ca
rryi
ng a
mou
nt o
f th
e G
roup
’s f
inan
cial
ass
ets
and
finan
cial
liab
ilitie
s w
ith e
xpos
ure
to
inte
rest
rate
s at t
he e
nd o
f the
repo
rting
per
iod
wer
e as
follo
ws.
Dec
embe
r 31
20
20
20
19
Fa
ir va
lue
inte
rest
rate
risk
$
68,8
83,6
67
$
91
,414
,806
C
ash
flow
inte
rest
rate
risk
11
2,32
4,30
5
77
,821
,887
Se
nsiti
vity
ana
lysi
s Th
e se
nsiti
vity
ana
lyse
s be
low
wer
e de
term
ined
bas
ed o
n th
e G
roup
’s e
xpos
ure
to in
tere
st ra
tes
for
both
der
ivat
ives
and
non
-der
ivat
ive
inst
rum
ents
at
the
end
of t
he r
epor
ting
perio
d. F
or
float
ing
rate
lia
bilit
ies,
the
anal
ysis
was
pre
pare
d as
sum
ing
the
amou
nt o
f th
e lia
bilit
y ou
tsta
ndin
g at
the
end
of th
e re
porti
ng p
erio
d w
as o
utst
andi
ng f
or th
e w
hole
yea
r. A
one
yar
d (2
5 ba
sis)
poi
nt in
crea
se o
r dec
reas
e w
as u
sed
whe
n re
porti
ng in
tere
st ra
te ri
sk in
tern
ally
to k
ey
man
agem
ent
pers
onne
l an
d re
pres
ents
man
agem
ent’s
ass
essm
ent
of t
he r
easo
nabl
y po
ssib
le
chan
ge in
inte
rest
rate
s.
Had
int
eres
t ra
tes
incr
ease
d by
one
yar
d (2
5 ba
sis)
poi
nts
and
all
othe
r va
riabl
es b
een
held
co
nsta
nt,
the
Gro
up’s
pre
-tax
prof
it fo
r th
e ye
ar e
nded
Dec
embe
r 31
, 20
20 w
ould
hav
e de
crea
sed
by $
280,
811
thou
sand
. H
ad in
tere
st ra
tes
incr
ease
d by
one
yar
d (2
5 ba
sis)
poi
nts
and
had
all o
ther
var
iabl
es b
een
held
co
nsta
nt,
the
Gro
up’s
pre
-tax
prof
it fo
r th
e ye
ar e
nded
Dec
embe
r 31
, 20
19 w
ould
hav
e de
crea
sed
by $
194,
555
thou
sand
.
- 69
-
175
c)
Oth
er p
rice
risk
The
Gro
up w
as e
xpos
ed to
fuel
pric
e ris
k on
its p
urch
ase
of a
viat
ion
fuel
. The
Gro
up e
nter
s int
o fu
el sw
ap c
ontra
cts t
o he
dge
agai
nst a
dver
se ri
sks o
n fu
el p
rice
chan
ges.
D
ecem
ber 3
1, 2
020
N
otio
nal
Line
Item
in
C
arry
ing
Am
ount
H
edgi
ng In
stru
men
t
Cur
renc
y
Am
ount
Mat
urity
Forw
ard
Rat
e
Bal
ance
She
et
A
sset
Liab
ility
Cash
flow
hed
ges -
fu
el o
ptio
ns
U
SD
-
-
-
Fi
nanc
ial a
sset
s for
he
dgin
g - c
urre
nt/
liabi
litie
s for
hed
ging
- cu
rren
t
$
-
$
-
Hed
ge a
ccou
ntin
g co
ntin
ues
to b
e ap
plie
d to
the
abo
vem
entio
ned
hedg
ing
inst
rum
ents
. Th
e ca
rryi
ng a
mou
nt o
f oth
er e
quity
for e
ach
hedg
ing
item
(fue
l pay
men
ts) w
as $
0.
For t
he y
ear e
nded
Dec
embe
r 31,
202
0 C
ompr
ehen
sive
Inco
me
Hed
ging
Gai
n R
ecog
nize
d in
O
ther
C
ompr
ehen
sive
In
com
e
Am
ount
R
ecla
ssifi
ed to
Pr
ofit
and
Los
s an
d th
e A
djus
ted
Lin
e It
em
C
ash
flow
hed
ges -
fuel
opt
ions
$
(5,5
24)
$
(52,
853)
(N
ote)
N
ote:
In
crea
se in
ope
ratin
g co
sts.
Dec
embe
r 31,
201
9
Not
iona
l
Li
ne It
em in
Car
ryin
g A
mou
nt
Hed
ging
Inst
rum
ent
C
urre
ncy
A
mou
nt
M
atur
ity
Fo
rwar
d R
ate
B
alan
ce S
heet
Ass
et
Li
abili
ty
Ca
sh fl
ow h
edge
s -
fuel
opt
ions
USD
NT$
5,52
4
2020
.3.3
1-
2020
.12.
31
U
S$49
.65-
U
S$80
.75
Fi
nanc
ial a
sset
s for
he
dgin
g - c
urre
nt/
liabi
litie
s for
hed
ging
- cu
rren
t
$
9,47
9
$
3,
955
Hed
ge a
ccou
ntin
g co
ntin
ues
to b
e ap
plie
d to
the
abo
vem
entio
ned
hedg
ing
inst
rum
ents
. Th
e ca
rryi
ng a
mou
nt o
f oth
er e
quity
for e
ach
hedg
ing
item
(fue
l pay
men
ts) w
as $
5,52
4 th
ousa
nd.
For t
he y
ear e
nded
Dec
embe
r 31,
201
9 C
ompr
ehen
sive
Inco
me
Hed
ging
Gai
n (L
oss)
R
ecog
nize
d in
O
ther
C
ompr
ehen
sive
In
com
e
Am
ount
R
ecla
ssifi
ed to
Pr
ofit
and
Los
s an
d th
e A
djus
ted
Lin
e It
em
C
ash
flow
hed
ges -
fuel
opt
ions
$
623
$
(13,
597)
(N
ote)
N
ote:
In
crea
se in
ope
ratin
g co
sts.
- 70
-
Sens
itivi
ty a
naly
sis
The
sens
itivi
ty a
naly
sis
belo
w w
as d
eter
min
ed b
ased
on
the
expo
sure
to f
uel p
rice
risks
at t
he
end
of th
e re
porti
ng p
erio
d.
For
the
Yea
r E
nded
Dec
embe
r 31
20
20
20
19
Pr
e-ta
x Pr
ofit
Incr
ease
(D
ecre
ase)
Oth
er
Com
pre-
he
nsiv
e In
com
e In
crea
se
(Dec
reas
e)
Pre-
tax
Prof
it In
crea
se
(Dec
reas
e)
Oth
er
Com
pre-
he
nsiv
e In
com
e In
crea
se
(Dec
reas
e)
Fu
el p
rice
incr
ease
of
5%
$
1,
479
$
-
$
-
$
7,
973
Fuel
pric
e de
crea
se o
f 5%
(1
,479
)
-
-
-
2)
C
redi
t ris
k
Cre
dit r
isk
refe
rs to
the
risk
that
a c
ount
erpa
rty w
ill d
efau
lt on
its
cont
ract
ual o
blig
atio
ns re
sulti
ng
in f
inan
cial
loss
to th
e G
roup
. The
Gro
up’s
cre
dit r
isk,
prim
arily
com
es f
rom
acc
ount
s re
ceiv
able
ge
nera
ted
from
ope
ratin
g ac
tiviti
es a
nd b
ank
depo
sits
gen
erat
ed f
rom
inv
estin
g ac
tiviti
es,
fixed
in
vest
men
t inc
ome
and
othe
r fin
anci
al in
stru
men
ts, o
pera
tion
rela
ted
cred
it ris
k an
d fin
anci
al c
redi
t ris
k ar
e m
anag
ed se
para
tely
.
Ope
ratio
n - r
elat
ed c
redi
t ris
k Th
e G
roup
has
est
ablis
hed
proc
edur
es to
man
agem
ent o
pera
tions
rela
ted
cred
it ris
k to
mai
ntai
n th
e qu
ality
of a
ccou
nts r
ecei
vabl
e.
To a
sses
s in
divi
dual
cus
tom
ers,
the
Gro
up c
onsi
der
into
the
finan
cial
con
ditio
n of
the
cust
omer
s, th
e cr
edit
ratin
g ag
ency
rat
ing,
the
Gro
up’s
int
erna
l cr
edit
ratin
g, t
rans
actio
n hi
stor
y an
d cu
rren
t ec
onom
ic c
ondi
tions
and
man
y ot
her f
acto
rs th
at m
ay a
ffec
t the
repa
ymen
t. So
met
imes
, the
Gro
up
uses
cer
tain
cre
dit
enha
ncem
ent
tool
s to
red
uce
the
cred
it ris
k of
spe
cific
cus
tom
ers.
Sinc
e th
e cu
stom
ers
of th
e in
dust
ry is
dis
pers
ed a
nd n
on-re
late
d, th
e cr
edit
risk
conc
entra
tion
is n
ot c
ritic
al
avia
tion.
Fi
nanc
ial c
redi
t ris
k C
redi
t ris
k on
ban
k de
posi
ts, i
nves
tmen
ts in
com
e an
d ot
her f
inan
cial
inst
rum
ents
are
mea
sure
d an
d m
onito
r by
the
Gro
up’s
fin
ance
dep
artm
ent.
The
Gro
up’s
trad
ing
partn
ers
and
othe
r pa
rties
wer
e w
ell-p
erfo
rmin
g ba
nks
and
finan
cial
inst
itutio
ns, c
orpo
ratio
ns, a
nd g
over
nmen
t age
ncie
s, an
d so
the
risk
of c
ount
erpa
rties
fai
ling
to d
isch
arge
an
oblig
atio
n is
low
; th
eref
ore,
the
re i
s no
sig
nific
ant
cred
it ris
k.
- 71
-
176
3)
Liqu
idity
risk
Th
e ob
ject
ive
of t
he G
roup
’s m
anag
emen
t of
liq
uidi
ty i
s to
mai
ntai
n ca
sh a
nd c
ash
equi
vale
nts
suff
icie
nt f
or o
pera
ting
purp
oses
, mar
keta
ble
secu
ritie
s w
ith h
igh
liqui
dity
and
loan
com
mitm
ents
th
at a
re su
ffic
ient
to e
nsur
e th
at th
e G
roup
has
ade
quat
e fin
anci
al fl
exib
ility
.
Unu
sed
Ban
k L
oan
Lim
it (U
nsec
ured
)
Th
e G
roup
(Chi
na A
irlin
es, L
td.,
Man
darin
Airl
ines
and
Tig
erai
r Tai
wan
Co.
, Lt
d.)
$
22
,429
,000
Li
quid
ity a
nd in
tere
st ri
sk ra
te ta
ble
The
follo
win
g ta
ble
show
s th
e re
mai
ning
con
tract
ual
mat
urity
ana
lysi
s of
the
Gro
up’s
fin
anci
al
liabi
litie
s w
ith a
gree
d-up
on r
epay
men
t pe
riods
, whi
ch w
ere
base
d on
the
date
the
Gro
up m
ay b
e re
quire
d to
pay
the
first
repa
ymen
t and
fina
ncia
l lia
bilit
ies
is e
valu
ated
bas
ed o
n un
disc
ount
ed c
ash
flow
s, in
clud
ing
cash
flow
s of i
nter
est a
nd p
rinci
pal.
Ban
k lo
ans
with
a r
epay
men
t on
dem
and
clau
se w
ere
incl
uded
in th
e se
cond
col
umn
of th
e ta
ble
belo
w r
egar
dles
s of
whe
ther
or
not
the
bank
s w
ould
cho
ose
to e
xerc
ise
early
the
ir rig
hts
to
repa
ymen
t. Th
e m
atur
ity d
ates
for
oth
er n
on-d
eriv
ativ
e fin
anci
al l
iabi
litie
s w
ere
base
d on
the
ag
reed
-upo
n re
paym
ent d
ates
. The
Gro
up’s
liqu
idity
ana
lysi
s for
its d
eriv
ativ
e fin
anci
al in
stru
men
ts
is a
lso
show
n in
the
follo
win
g ta
ble.
The
tabl
e w
as b
ased
on
the
undi
scou
nted
con
tract
ual n
et c
ash
inflo
ws a
nd o
utflo
ws o
n de
rivat
ive
inst
rum
ents
that
settl
e on
a n
et b
asis
, and
the
undi
scou
nted
gro
ss
cash
inf
low
s an
d ou
tflow
s on
tho
se d
eriv
ativ
es t
hat
requ
ire g
ross
set
tlem
ent.
Whe
n th
e am
ount
pa
yabl
e or
rec
eiva
ble
is n
ot f
ixed
, the
am
ount
dis
clos
ed h
as b
een
dete
rmin
ed b
y re
fere
nce
to th
e pr
ojec
ted
inte
rest
rate
s as i
llust
rate
d by
yie
ld c
urve
s at t
he e
nd o
f the
repo
rting
per
iod.
D
ecem
ber 3
1, 2
020
The
Wei
ghte
d A
vera
ge
Eff
ectiv
e In
tere
st R
ate
(%)
L
ess t
han
1 Y
ear
1
to 5
Yea
rs
O
ver
5 Y
ears
Le
ase
liabi
litie
s
1.11
28
$
3,
494,
299
$
9,
770,
964
$
7,
982,
767
Floa
ting
inte
rest
rate
lia
bilit
ies
1.
6269
26
,195
,346
60
,977
,026
17
,175
,894
D
eriv
ativ
e in
stru
men
ts
3.04
92
9,24
9,60
9
32
,978
,809
1,
815,
449
Bon
ds p
ayab
le
2.
4622
12
,531
,511
9,
303,
608
1,28
0,77
8
$
51
,470
,765
$ 1
13,0
30,4
07
$
28
,254
,888
- 72
-
Dec
embe
r 31,
201
9
The
Wei
ghte
d A
vera
ge
Eff
ectiv
e In
tere
st R
ate
(%)
L
ess t
han
1 Y
ear
1
to 5
Yea
rs
O
ver
5 Y
ears
Le
ase
liabi
litie
s
1.16
13
$
3,
357,
996
$
10
,622
,204
$
8,94
9,19
4 Fl
oatin
g in
tere
st ra
te
liabi
litie
s
1.90
58
15,2
54,6
87
36,2
74,0
33
16,7
85,6
64
Der
ivat
ive
inst
rum
ents
3.
1131
10
,060
,822
39
,729
,062
6,
373,
333
Bon
ds p
ayab
le
2.
2573
10
,823
,905
19
,871
,174
3,
383,
401
$
39,4
97,4
10
$
106
,496
,473
$
35,4
91,5
92
33
. R
EL
AT
ED
-PA
RT
Y T
RA
NSA
CT
ION
S Th
e tra
nsac
tions
, acc
ount
bal
ance
s, in
com
e an
d ex
pens
es b
etw
een
rela
ted
parti
es w
ere
elim
inat
ed fr
om th
e co
nsol
idat
ed re
port
and,
ther
efor
e, w
ere
not d
iscl
osed
in th
is n
ote.
Exc
ept f
or th
e di
sclo
sure
s st
ated
in o
ther
no
tes,
trans
actio
ns b
etw
een
the
Gro
up a
nd it
s rel
ated
par
ties a
re d
iscl
osed
bel
ow:
a.
Rel
ated
par
ties’
nam
es a
nd re
latio
nshi
ps
N
ame
R
elat
ions
hip
with
the
Com
pany
D
ynas
ty H
olid
ays
Ass
ocia
te (b
ecom
e as
soci
ate
in Ja
nuar
y 20
19)
Chi
na A
ircra
ft Se
rvic
e A
ssoc
iate
A
irpor
t Air
Car
go T
erm
inal
(Xia
men
) Co.
, Ltd
. A
ssoc
iate
A
irpor
t Air
Car
go S
ervi
ce (X
iam
en) C
o., L
td.
Ass
ocia
te
East
ern
Uni
ted
Inte
rnat
iona
l Log
istic
s (H
ong
Kon
g)
Ass
ocia
te
Chi
na P
acifi
c C
ater
ing
Serv
ices
J
oint
ven
ture
inve
stm
ent
Chi
na P
acifi
c La
undr
y Se
rvic
es
Joi
nt v
entu
re in
vest
men
t N
OR
DA
M A
sia
Ltd.
J
oint
ven
ture
inve
stm
ent
Del
ica
Inte
rnat
iona
l Co.
, Ltd
. J
oint
ven
ture
inve
stm
ent
Chi
na A
viat
ion
Dev
elop
men
t Fou
ndat
ion
Dire
ctor
of t
he C
ompa
ny a
nd m
ajor
shar
ehol
der
Oth
ers
Dire
ctor
, key
man
agem
ent p
erso
nnel
, cha
irman
, ge
nera
l man
ager
of t
he G
roup
, spo
use
and
seco
nd-d
egre
e re
lativ
e b.
O
pera
ting
inco
me
Fo
r th
e Y
ear
End
ed D
ecem
ber
31
Acc
ount
Item
s
Rel
ated
Par
ty T
ype
20
20
20
19
Oth
er in
com
e M
ajor
shar
ehol
der o
f the
C
ompa
ny
$
5,
097
$
25
,457
A
ssoc
iate
$
122
$
1,
239
J
oint
ven
ture
inve
stm
ent
$
22
,445
$
42,4
57
- 73
-
177
c.
Purc
hase
s
F
or th
e Y
ear
End
ed D
ecem
ber
31
Rel
ated
Par
ty T
ype
20
20
20
19
M
ajor
shar
ehol
der o
f the
Com
pany
$
11,4
17
$
56
,474
A
ssoc
iate
$
457,
005
$
41
4,10
6 Jo
int v
entu
re in
vest
men
t
$
516,
347
$
1,9
11,0
91
d.
Acc
ount
s rec
eiva
ble
- rel
ated
par
ties (
gene
rate
d by
ope
ratio
ns)
D
ecem
ber
31
Rel
ated
Par
ty T
ype
20
20
20
19
Jo
int v
entu
re in
vest
men
t
$
1,66
7
$
7,76
0 M
ajor
shar
ehol
der o
f the
Com
pany
-
2,58
8
$
1,66
7
$
10,3
48
The
rece
ivab
les
are
not g
uara
ntee
d, a
nd th
ere
is n
o al
low
ance
for d
oubt
ful a
ccou
nts
rela
ted
to a
ccou
nts
rece
ivab
le -
rela
ted
parti
es. T
he p
aym
ent p
erio
ds o
f suc
h ac
coun
ts w
ere
with
in 3
0 to
90
days
, and
ther
e ar
e no
ove
rdue
pay
men
ts.
e.
A
ccou
nts p
ayab
le -
rela
ted
parti
es (g
ener
ated
by
oper
atio
ns)
D
ecem
ber
31
Rel
ated
Par
ty T
ype
20
20
20
19
A
ssoc
iate
$
52,1
87
$
51
,333
Jo
int v
entu
re in
vest
men
t
76
,380
48
4,70
0 M
ajor
shar
ehol
der o
f the
Com
pany
-
5,98
2
$
128,
567
$
54
2,01
5 Th
e re
mai
ning
bal
ance
of n
otes
and
acc
ount
s pay
able
- re
late
d pa
rties
will
be
paid
in c
ash
if th
ey a
re n
ot
secu
red.
f. Le
ases
of p
rope
rties
(ope
ratin
g le
ases
) U
nder
an
oper
atin
g le
ase
agre
emen
t, th
e C
ompa
ny re
nted
flig
ht tr
aini
ng m
achi
nes
and
fligh
t sim
ulat
ors
from
Chi
na A
viat
ion
Dev
elop
men
t Fo
unda
tion
to tr
ain
pilo
ts, t
he C
ompa
ny p
aid
the
rent
al b
ased
on
usag
e ho
urs.
In 2
020
and
2019
, the
Com
pany
had
pai
d re
ntal
s of
abo
ut $
11,4
17 th
ousa
nd a
nd $
56,4
74
thou
sand
, res
pect
ivel
y.
g.
Endo
rsem
ents
and
gua
rant
ees
D
ecem
ber
31
2020
2019
Aut
hori
zed
Am
ount
Act
ual
Am
ount
Use
d
Aut
hori
zed
Am
ount
Act
ual
Am
ount
Use
d Th
e C
ompa
ny
C
AL
Park
$ 3
,850
,000
$ 1
,892
,540
$ 3
,850
,000
$ 2
,129
,400
Ta
iwan
Air
Car
go T
erm
inal
-
-
1,
080,
000
- Ti
gera
ir Ta
iwan
2,
656,
591
265,
062
3,01
2,66
8
68
5,44
4 Ta
iwan
Air
Cra
ft M
aint
enan
ce
2,00
0,00
0
1,
336,
000
2,00
0,00
0
1,
279,
827
- 74
-
h.
Com
pens
atio
n of
key
man
agem
ent p
erso
nnel
For
the
Yea
r E
nded
Dec
embe
r 31
20
20
20
19
Sh
ort-t
erm
em
ploy
ee b
enef
its
$
33
,376
$
39,6
93
Post
-em
ploy
men
t ben
efits
2,
525
2,36
2
$
35,9
01
$
42
,055
Th
e re
mun
erat
ion
of d
irect
ors
and
key
exec
utiv
es w
as d
eter
min
ed b
y th
e re
mun
erat
ion
com
mitt
ee
havi
ng re
gard
to th
e pe
rfor
man
ce o
f ind
ivid
uals
and
mar
ket t
rend
s.
34.
PLE
DG
ED
ASS
ET
S Th
e fo
llow
ing
asse
ts w
ere
pled
ged
or m
ortg
aged
as
colla
tera
l for
long
-term
ban
k lo
ans,
leas
e ob
ligat
ions
an
d bu
sine
ss tr
ansa
ctio
ns:
Dec
embe
r 31
20
20
20
19
Pr
oper
ty, p
lant
and
equ
ipm
ent
$
34
,170
,076
$
31,2
60,8
01
Rig
ht-o
f-us
e as
sets
59,8
61,5
37
71,0
33,6
17
Res
trict
ed a
sset
s - n
on-c
urre
nt
Pled
ged
certi
ficat
e de
posi
ts
30
2,80
7
13
0,05
2
$
94,3
34,4
20
$
102
,424
,470
35
. C
OM
MIT
ME
NT
S A
ND
CO
NT
ING
EN
T L
IAB
ILIT
IES
As
of D
ecem
ber 3
1, 2
020,
exc
ept f
or th
e di
sclo
sure
s st
ated
in o
ther
not
es, t
he G
roup
had
com
mitm
ents
and
co
ntin
gent
liab
ilitie
s as f
ollo
ws:
a.
Taiw
an A
ir C
argo
Ter
min
al C
o. (
TACT
) si
gned
a t
erm
inal
con
stru
ctio
n co
ntra
ct w
ith t
he C
ivil
Aer
onau
tics
Adm
inis
tratio
ns (
CA
A) o
n Ja
nuar
y 14
, 200
0. T
he c
harte
red
oper
atio
n pe
riod
(CO
P) is
20
year
s fr
om t
he d
ate
of t
rans
fer
of t
he c
harte
red
oper
atio
n rig
hts
from
CA
A t
o TA
CT.
The
ter
min
al
expa
nsio
n an
d im
prov
emen
ts a
nd t
he e
quip
men
t in
stal
latio
n an
d up
grad
e in
the
Tai
wan
Tao
yuan
In
tern
atio
nal A
irpor
t car
go te
rmin
al a
nd K
aohs
iung
car
go te
rmin
al w
ere
expe
cted
to b
e co
mpl
eted
in
the
first
10
year
s of
the
COP.
Thi
s co
nstru
ctio
n pr
ojec
t was
app
rove
d by
TA
CT’
s bo
ard
of d
irect
ors
in
2003
. TA
CT
filed
an
appl
icat
ion
for
a 10
-yea
r ex
tens
ion
of t
he C
OP
for
the
carg
o te
rmin
als
in t
he
Taiw
an T
aoyu
an I
nter
natio
nal A
irpor
t and
Kao
hsiu
ng I
nter
natio
nal A
irpor
t and
rec
eive
d th
e ap
prov
al
from
the
Taoy
uan
Airp
ort C
orpo
ratio
n an
d C
AA
in Ju
ly 2
013
and
July
201
5, re
spec
tivel
y.
The
orig
inal
tot
al e
xpen
ditu
re o
f th
e pr
evio
us m
ain
cons
truct
ion
proj
ect
was
$8,
490,
000
thou
sand
. H
owev
er,
TACT
file
d an
arb
itrat
ion
for
the
tota
l am
ount
of
expe
nditu
re i
n 20
12 t
o re
vise
the
tot
al
amou
nt to
$6,
840,
000
thou
sand
.
- 75
-
178
As
of D
ecem
ber
31,
2020
, TA
CT h
ad s
igne
d th
e fo
llow
ing
cons
truct
ion
cont
ract
s w
ith u
nrel
ated
pa
rties
:
Clie
nt N
ame
C
ontr
act T
itle
Con
trac
t A
mou
nt (V
AT
In
clud
ed)
C
ECI E
ngin
eerin
g C
onsu
ltant
, Inc
., Ta
iwan
C
argo
Ter
min
al E
xpan
sion
Con
stru
ctio
n C
onsu
ltant
C
ontra
ct
$
552
,285
Bin
Li C
onst
ruct
ion
Co.
, Lt
d., T
aiw
an
Car
go T
erm
inal
Exp
ansi
on a
nd E
nhan
cem
ent
Con
stru
ctio
n
27
5,00
0
Trad
e-V
an In
form
atio
n Se
rvic
es C
o.
TA
CT w
areh
ouse
man
agem
ent s
yste
m in
tegr
ated
re
visi
on c
ontra
ct
30,0
00
As
of D
ecem
ber
31, 2
020,
the
cum
ulat
ed c
onsu
ltant
ser
vice
exp
ense
and
con
stru
ctio
n eq
uipm
ent h
ad
amou
nted
to
$4
87,6
45
thou
sand
(V
AT
incl
uded
) an
d $5
,372
,129
th
ousa
nd
(VA
T in
clud
ed),
resp
ectiv
ely.
Upo
n co
mpl
etio
n of
the
proj
ects
, the
am
ount
of
$468
,754
thou
sand
(V
AT
incl
uded
) an
d $5
,306
,700
tho
usan
d (V
AT
incl
uded
) w
ere
recl
assi
fied
to p
rope
rty,
plan
t, an
d eq
uipm
ent.
The
rem
aini
ng c
umul
ativ
e pa
ymen
ts w
ere
reco
gniz
ed u
nder
con
stru
ctio
n in
pro
gres
s. A
sset
s ac
quire
d fr
om c
argo
term
inal
impr
ovem
ents
, equ
ipm
ent a
cqui
sitio
n an
d su
bseq
uent
equ
ipm
ent
acqu
isiti
on a
nd re
plac
emen
t will
be
trans
ferr
ed to
the
gove
rnm
ent w
ithou
t any
com
pens
atio
n w
hen
the
char
tere
d op
erat
ing
licen
se e
xpire
s. TA
CT s
houl
d pa
y ro
yalti
es t
o Ta
oyua
n A
irpor
t C
orpo
ratio
n an
d th
e C
AA
dur
ing
the
char
tere
d op
erat
ion
perio
d. T
he c
alcu
latio
n is
bas
ed o
n an
nual
sal
es (
incl
udin
g op
erat
ing
and
non-
oper
atin
g re
venu
e bu
t exc
ludi
ng th
e re
ntal
reve
nue
from
spe
cific
dis
trict
s), a
nd T
aoyu
an A
irpor
t Cor
pora
tion
and
the
CA
A h
ave
the
optio
n to
adj
ust t
he ro
yalty
rate
s eve
ry 3
yea
rs st
artin
g fr
om th
e da
te o
f tra
nsfe
r of t
he
char
tere
d op
erat
ion
right
s on
the
basi
s of
act
ual r
even
ue a
nd e
xpen
ditu
res.
The
curr
ent r
oyal
ty r
ate
is 6%
.
b.
CA
L Pa
rk C
o., L
td. (
“CA
L Pa
rk”)
sig
ned
“Tai
wan
Tao
yuan
Int
erna
tiona
l Airp
ort A
viat
ion
Ope
ratio
n C
ente
r (in
clud
ing
Airp
ort
Hot
el)
Con
stru
ctio
n O
pera
ting
Con
tract
” w
ith t
he C
AA
on
Sept
embe
r 20
, 20
06. H
owev
er, o
n N
ovem
ber 1
, 201
0, th
e Ta
oyua
n A
irpor
t Cor
pora
tion
took
ove
r the
CA
A’s
righ
ts o
n th
is c
ontra
ct fr
om th
e C
AA
. The
con
tract
is e
ffec
tive
for 5
0 ye
ars
(con
sist
ing
of th
e de
velo
pmen
t sta
ge
and
oper
atin
g pe
riod)
from
the
cont
ract
dat
e. T
hree
yea
rs b
efor
e co
ntra
ct e
xpiry
dat
e, C
AL
Park
has
the
first
opt
ion
to re
new
the
cont
ract
onc
e w
ith a
20-
year
ext
ensio
n.
CA
L Pa
rk’s
bus
ines
s sc
ope
incl
udes
pro
vidi
ng b
usin
ess
and
othe
r op
erat
ing
spac
e re
late
d to
civ
il ai
r tra
nspo
rt, h
otel
s, av
iatio
n se
rvic
e an
d re
late
d in
dust
ries
adhe
red
to th
e ba
se a
nd e
ssen
tial s
ervi
ces
law
an
d ap
prov
ed b
y th
e Ta
oyua
n A
irpor
t Cor
pora
tion.
C
AL
Park
sho
uld
pay
land
ren
tals
on
the
date
of t
he re
gist
ratio
n of
sur
face
righ
ts. T
he re
ntal
rate
s fo
r th
e de
velo
pmen
t sta
ge d
iffer
from
thos
e fo
r the
ope
ratio
n pe
riod.
The
rent
al ra
tes
shou
ld fo
llow
Arti
cle
No.
2 o
f th
e “R
egul
atio
ns f
or F
avor
able
Ren
tals
Reg
ardi
ng P
ublic
Lan
d Le
ase
and
Supe
rfic
ies
in
Infr
astru
ctur
e Pr
ojec
ts,”
whi
ch st
ates
that
rent
al c
alcu
latio
n in
the
deve
lopm
ent s
tage
sho
uld
incl
ude
the
land
val
ue a
dded
tax
plus
the
nece
ssar
y m
aint
enan
ce fe
e; in
the
oper
atio
n pe
riod,
rent
als
are
60%
of t
he
amou
nt b
ased
on
the
Nat
iona
l Bui
ldin
g La
nd R
enta
l Sta
ndar
d pl
us la
nd v
alue
tax,
val
ue-a
dded
tax
and
the
nece
ssar
y m
aint
enan
ce fe
e.
Dur
ing
the
50 y
ears
beg
inni
ng fr
om th
e in
itial
ope
ratio
n da
te o
f CA
L Pa
rk to
the
end
of th
e co
nstru
ctio
n pe
riod,
CA
L Pa
rk sh
ould
pay
roya
lties
bas
ed o
n th
e op
erat
ing
reve
nue
estim
ated
in th
e fin
anci
al p
lan
of
its in
vest
men
t exe
cutio
n pr
opos
al. I
f th
e sa
les
and
busi
ness
tax
decl
ared
and
file
d by
a b
usin
ess
entit
y fo
r a
sing
le y
ear
exce
eds
10%
of
the
oper
atin
g re
venu
e as
esti
mat
ed i
n th
e fin
anci
al p
lan
in i
ts in
vest
men
t exe
cutio
n pr
opos
al, C
AL
Park
shou
ld p
ay a
dditi
onal
roya
lties
at 1
0% o
f thi
s exc
ess.
- 76
-
CA
L Pa
rk s
houl
d su
bmit
the
asse
t tra
nsfe
r pla
n w
ithin
five
yea
rs b
efor
e th
e ex
piry
dat
e of
the
char
tere
d op
erat
ion
perio
d, b
egin
the
nego
tiatio
n of
the
asse
t tra
nsfe
r co
ntra
ct, a
nd c
ompl
ete
the
assi
gnat
ion
no
late
r th
an th
ree
year
s be
fore
the
expi
ry d
ate
of th
e ch
arte
red
perio
d. I
f C
AA
dec
ides
not
to k
eep
the
build
ing
and
equi
pmen
t on
the
base
are
a, C
AL
Park
sho
uld
rem
ove
all r
elat
ed b
uild
ing
and
equi
pmen
t w
ithin
thre
e m
onth
s afte
r the
exp
iry d
ate.
c.
In O
ctob
er 2
019,
the
Com
pany
sig
ned
a co
ntra
ct w
ith A
irbus
S.A
.S.
to p
urch
ase
elev
en A
321n
eo
airc
raft
and
an o
ptio
n to
pur
chas
e fiv
e A
321n
eo a
ircra
ft. T
he t
otal
list
pric
e of
the
ele
ven
airc
raft
is
US$
1,67
6,41
3 th
ousa
nd,
and
the
list
pric
e of
the
opt
ion
to p
urch
ase
five
airc
raft
is U
S$76
9,92
2 th
ousa
nd.
The
expe
cted
del
iver
y pe
riod
of t
he e
leve
n ai
rcra
ft ra
nges
fro
m 2
024
to 2
026.
As
of
Dec
embe
r 31
, 202
0, th
e lis
t pric
e ha
s be
en p
aid
in th
e am
ount
of
US$
32,5
78 th
ousa
nd (r
ecog
nize
d as
pr
epay
men
ts f
or a
ircra
ft). I
n O
ctob
er 2
019,
the
Com
pany
sig
ned
a co
ntra
ct w
ith I
nter
natio
nal
Aer
o En
gine
s C
ompa
ny to
pur
chas
e fo
ur b
acku
p en
gine
s of
A32
1neo
. The
tota
l lis
t pric
e of
the
four
eng
ines
is
US$
60,2
89 th
ousa
nd.
d.
In J
uly
and
Aug
ust 2
019,
the
Com
pany
sig
ned
a co
ntra
ct w
ith th
e B
oein
g C
ompa
ny to
pur
chas
e th
ree
B77
7F a
ircra
ft an
d ex
erci
sed
the
optio
n to
pur
chas
e th
ree
B77
7F a
ircra
ft. T
he to
tal l
ist p
rice
of th
e si
x ai
rcra
ft is
US$
2,32
0,31
5 th
ousa
nd,
and
the
expe
cted
del
iver
y pe
riod
is f
rom
202
0 to
202
3. A
s of
D
ecem
ber
31, 2
020,
two
out o
f th
e si
x ai
rcra
ft ha
s be
en d
eliv
ered
, the
list
pric
e ha
d be
en p
aid
in th
e am
ount
of U
S$12
2,18
6 th
ousa
nd (r
ecog
nize
d as
pre
paym
ents
for a
ircra
ft), a
nd th
e to
tal l
ist p
rice
of th
e re
mai
ning
four
airc
raft
is U
S$1,
552,
879.
e.
In
Oct
ober
201
9, T
iger
air
Taiw
an C
o., L
td. s
igne
d a
cont
ract
with
Airb
us S
.A.S
. to
purc
hase
sev
en
A32
0neo
airc
raft
and
an o
ptio
n to
pur
chas
e tw
o A
320n
eo a
ircra
ft. T
he t
otal
lis
t pr
ice
of t
he s
even
ai
rcra
ft is
US$
729,
746
thou
sand
, and
the
list p
rice
of th
e op
tion
to p
urch
ase
two
airc
raft
is U
S$20
8,49
9 th
ousa
nd. T
he e
xpec
ted
deliv
ery
perio
d of
the
seve
n ai
rcra
ft ra
nges
from
202
5 to
202
7. A
s of D
ecem
ber
31, 2
020,
the
list p
rice
has b
een
paid
in th
e am
ount
of U
S$18
,549
thou
sand
(rec
ogni
zed
as p
repa
ymen
ts
for
airc
raft)
. In
add
ition
, in
Dec
embe
r 20
19,
Tige
rair
Taiw
an C
o.,
Ltd.
sig
ned
a co
ntra
ct w
ith
Inte
rnat
iona
l Aer
o En
gine
s Com
pany
to p
urch
ase
two
back
up e
ngin
es o
f A32
0neo
airc
raft.
The
tota
l lis
t pr
ice
of th
e tw
o en
gine
s is
US$
27,3
45 th
ousa
nd. A
s of
Dec
embe
r 31,
202
0, th
e lis
t pric
e ha
s be
en p
aid
in t
he a
mou
nt o
f U
S$2,
988
thou
sand
(re
cogn
ized
as
prep
aym
ents
for
airc
raft)
. In
Feb
ruar
y 20
20,
Tige
rair
Taiw
an C
o.,
Ltd.
ren
ted
thre
e A
320-
neo
airc
raft
from
Sky
Hig
h 11
7 Le
asin
g C
ompa
ny
Lim
ited,
one
A32
0-ne
o ai
rcra
ft fr
om S
ky H
igh
118
Leas
ing
Com
pany
Lim
ited,
one
A32
0-ne
o ai
rcra
ft fr
om S
ky H
igh
119
Leas
ing
Com
pany
Lim
ited
and
one
A32
0-ne
o ai
rcra
ft fr
om S
ky H
igh
120
Leas
ing
Com
pany
Lim
ited.
The
tota
l lis
t pric
e w
as a
roun
d U
S$25
0,00
0 th
ousa
nd a
nd le
ase
paym
ent w
ill c
hang
e on
the
bas
is o
f ac
tual
diff
eren
ces
of t
he y
ear.
The
airc
raft
was
ini
tially
sch
edul
ed t
o be
del
iver
ed
betw
een
2021
and
202
4. A
s of
Dec
embe
r 31
, 202
0, o
ne a
ircra
ft th
at w
as s
uppo
sed
to b
e de
liver
ed in
20
21 h
ad b
een
post
pone
d.
36
. IM
PAC
T O
F C
OV
ID-1
9 Si
nce
the
outb
reak
of
the
Cov
id-1
9 in
Jan
uary
202
0, t
he c
oron
aviru
s ha
s be
com
e a
pand
emic
. Th
e pa
ndem
ic h
as n
ow s
prea
d ar
ound
the
wor
ld a
nd m
ost c
ount
ries
have
not
rem
oved
thei
r tra
vel r
estri
ctio
ns.
Bec
ause
the
num
ber o
f inb
ound
and
out
boun
d pa
ssen
gers
has
dec
reas
ed si
gnifi
cant
ly, t
he G
roup
adj
usts
the
prop
ortio
n be
twee
n pa
ssen
ger
airc
raft
and
carg
o ai
rcra
ft us
ed
in
oper
atio
ns
to
com
ply
with
th
e go
vern
men
t’s e
pide
mic
pre
vent
ion
polic
y an
d ca
ter t
o m
arke
t dem
and.
The
Com
pany
redu
ces t
he fr
eque
ncy
of p
asse
nger
air
serv
ices
that
hav
e be
en s
ever
ely
affe
cted
, use
s th
e pa
ssen
ger
airc
raft
to s
uppo
rt th
e ca
rgo
fligh
t ar
rang
emen
t an
d ex
pand
s th
e fu
nctio
n of
all-
carg
o ai
rcra
ft to
max
imiz
e th
e op
portu
nitie
s fr
om a
ir ca
rgo
busi
ness
. Sin
ce M
arch
202
0, c
argo
has
bec
ome
the
mai
n so
urce
of r
even
ue fo
r the
Gro
up.
- 77
-
179
The
Gro
up c
ontin
ues
to a
djus
t the
res
pons
e m
easu
res
acco
rdin
g to
the
situ
atio
n. In
add
ition
, to
ensu
re th
e ad
equa
te l
iqui
dity
, th
e G
roup
als
o im
plem
ents
mea
sure
s fo
r hu
man
res
ourc
e m
anag
emen
t su
ch a
s po
stpo
ning
the
hirin
g of
new
com
ers,
rela
the
appl
icat
ion
of s
peci
al le
ave,
loos
enin
g th
e re
stric
tions
on
leav
e w
ithou
t pa
y, e
ncou
ragi
ng e
mpl
oyee
s to
tak
e le
ave,
adj
ustin
g w
orki
ng h
ours
and
sal
arie
s, et
c. T
he
Gro
up’s
pol
icie
s to
con
trol s
pend
ing
incl
ude
susp
ensi
on o
f no
n-ur
gent
cap
ital e
xpen
ditu
res,
redu
ctio
n in
an
d po
stpo
nem
ent o
f pay
men
ts.
Als
o, th
e G
roup
rece
ived
seve
ral r
emed
y m
easu
res
such
as g
over
nmen
t sub
sidy
for o
pera
tion
and
redu
ctio
n on
ren
t. In
202
0, b
ecau
se o
f th
e C
ovid
-19,
the
Gro
up r
ecei
ved
subs
idy
of $
1,29
3,38
8 th
ousa
nd f
or t
he
airp
ort l
andi
ng fe
es a
nd p
arki
ng fe
es, e
tc. T
he s
ubsi
dy fo
r hou
sing
and
land
rent
al, a
nd sa
lary
exp
ense
s w
as
$961
,208
thou
sand
, rec
ogni
zed
as d
educ
tion
from
oth
er in
com
e an
d ex
pens
es.
Th
e G
roup
has
obt
aine
d re
lief l
oan
from
the
gove
rnm
ent.
Ref
er to
Not
e 19
for d
etai
ls o
n th
e am
ount
of l
oan
and
its a
lloca
tion.
37
. SI
GN
IFIC
AN
T A
SSE
TS
AN
D L
IAB
ILIT
IES
DE
NO
MIN
AT
ED
IN F
OR
EIG
N C
UR
RE
NC
IES
The
follo
win
g in
form
atio
n w
as a
ggre
gate
d by
the
fore
ign
curr
enci
es o
ther
than
func
tiona
l cur
renc
ies
of th
e gr
oup
entit
ies
and
the
exch
ange
rate
s be
twee
n fo
reig
n cu
rren
cies
and
resp
ectiv
e fu
nctio
nal c
urre
ncie
s w
ere
disc
lose
d. T
he si
gnifi
cant
ass
ets a
nd li
abili
ties d
enom
inat
ed in
fore
ign
curr
enci
es w
ere
as fo
llow
s:
Dec
embe
r 31,
202
0
Fore
ign
Cur
renc
ies (
In
Tho
usan
ds)
E
xcha
nge
Rat
e
Car
ryin
g A
mou
nt
Fi
nanc
ial a
sset
s
Mon
etar
y ite
ms
USD
$
702,
507
28
.409
1
$
19,9
57,5
98
EUR
18
,250
34.8
432
635,
899
HK
D
344,
577
3.
6603
1,
261,
257
JPY
3,
475,
525
0.
2750
95
5,76
9 C
NY
56
0,25
2
4.34
40
2,43
3,73
7
Fina
ncia
l lia
bilit
ies
M
onet
ary
item
s
U
SD
2,20
8,21
4
28.4
091
62,7
33,3
83
EUR
6,
513
34
.843
2
22
6,94
9 H
KD
73
,825
3.66
03
270,
223
JPY
3,
725,
514
0.
2750
1,
024,
509
CN
Y
144,
376
4.
3440
62
7,16
8
- 78
-
Dec
embe
r 31,
201
9
Fore
ign
Cur
renc
ies (
In
Tho
usan
ds)
E
xcha
nge
Rat
e
Car
ryin
g A
mou
nt
Fi
nanc
ial a
sset
s
Mon
etar
y ite
ms
USD
$
658,
407
30
.030
0
$
19,7
71,9
57
EUR
18
,401
33.6
700
619,
571
HK
D
228,
234
3.
8595
88
0,86
8 JP
Y
6,26
2,27
2
0.27
66
1,73
2,13
0 C
NY
42
5,34
3
4.30
48
1,83
1,01
2
Fina
ncia
l lia
bilit
ies
M
onet
ary
item
s
U
SD
2,48
0,89
6
30.0
300
74,5
01,3
05
EUR
7,
638
33
.670
0
25
7,15
5 H
KD
74
,651
3.85
95
288,
117
JPY
6,
584,
434
0.
2766
1,
821,
237
CN
Y
153,
196
4.
3048
65
9,47
8 Fo
r th
e ye
ars
ende
d D
ecem
ber
31, 2
020
and
2019
, the
Gro
up’s
net
for
eign
exc
hang
e ga
in (
loss
es)
wer
e $5
27,2
34 th
ousa
nd a
nd $
(141
,611
) tho
usan
d, re
spec
tivel
y. It
is im
prac
tical
to d
iscl
ose
net f
orei
gn e
xcha
nge
gain
s (lo
sses
) by
eac
h si
gnifi
cant
for
eign
cur
renc
y du
e to
the
varie
ty o
f th
e fo
reig
n cu
rren
cy tr
ansa
ctio
ns
and
func
tiona
l cur
renc
ies o
f the
ent
ities
in th
e G
roup
.
38.
AD
DIT
ION
AL
DIS
CL
OSU
RE
S a.
Fo
llow
ing
are
the
addi
tiona
l dis
clos
ures
requ
ired
by th
e Se
curit
ies a
nd F
utur
es B
urea
u fo
r the
Com
pany
an
d its
inve
stee
s: 1
) Fin
anci
ng p
rovi
ded:
Tab
le 1
(atta
ched
). 2
) End
orse
men
ts/g
uara
ntee
s pro
vide
d: T
able
2 (a
ttach
ed).
3) M
arke
tabl
e se
curit
ies h
eld:
Tab
le 3
(atta
ched
). 4
) Mar
keta
ble
secu
ritie
s ac
quire
d an
d di
spos
ed o
f at c
osts
or p
rices
of a
t lea
st N
T$30
0 m
illio
n or
20%
of
the
paid
-in c
apita
l: N
one.
5
) Acq
uisi
tions
of
indi
vidu
al r
eal e
stat
es a
t cos
ts o
r pr
ice
of a
t lea
st N
T$30
0 m
illio
n or
20%
of
the
paid
-in c
apita
l: N
one
6)
Dis
posa
ls o
f in
divi
dual
rea
l es
tate
s at
cos
ts o
r pr
ices
of
at l
east
NT$
300
mill
ion
or 2
0% o
f th
e pa
id-in
cap
ital:
Non
e 7
) Tot
al p
urch
ases
from
or s
ales
to re
late
d pa
rties
am
ount
ing
to a
t lea
st N
T$10
0 m
illio
n or
20%
of t
he
paid
-in c
apita
l: Ta
ble
4 (a
ttach
ed)
8) R
ecei
vabl
es f
rom
rel
ated
par
ties
amou
ntin
g to
at
leas
t N
T$10
0 m
illio
n or
20%
of
the
paid
-in
capi
tal:
Tabl
e 5
(atta
ched
)
- 79
-
180
9) N
ames
, lo
catio
ns,
and
rela
ted
info
rmat
ion
of i
nves
tees
ove
r w
hich
the
Com
pany
exe
rcis
es
sign
ifica
nt in
fluen
ce: T
able
6 (a
ttach
ed)
10) D
eriv
ativ
e fin
anci
al tr
ansa
ctio
ns (N
otes
7 a
nd 3
2)
b.
In
vest
men
t in
mai
nlan
d C
hina
: Tab
le 7
(atta
ched
) c.
B
usin
ess
rela
tions
hips
and
im
porta
nt t
rans
actio
ns b
etw
een
Chi
na A
irlin
es,
Ltd.
and
its
sub
sidi
arie
s: Ta
ble
8 (a
ttach
ed)
d.
Info
rmat
ion
of m
ajor
shar
ehol
ders
: Tab
le 9
(atta
ched
) 39
. SE
GM
EN
T IN
FOR
MA
TIO
N
a.
Segm
ent i
nfor
mat
ion
Th
e G
roup
mai
nly
enga
ges
in a
ir tra
nspo
rtatio
n se
rvic
es fo
r pas
seng
ers
and
carg
o; th
e se
rvic
es in
clud
e ai
rpor
t se
rvic
e, s
tora
ge s
ervi
ce,
and
othe
r ai
r tra
nspo
rtatio
n se
rvic
es w
hich
are
bel
ow t
he f
inan
cial
th
resh
old
for a
n op
erat
ing
segm
ent o
f the
Gro
up. T
here
fore
, the
Gro
up’s
mai
n re
porta
ble
segm
ent i
s ai
r tra
nspo
rtatio
n. T
he a
ccou
ntin
g po
licie
s of
the
rep
orta
ble
segm
ent
are
cons
iste
nt w
ith t
he a
ccou
ntin
g po
licie
s des
crib
ed in
Not
e 4.
For
the
Yea
r E
nded
Dec
embe
r 31
, 202
0
Air
T
rans
port
atio
n
Oth
ers
A
djus
tmen
ts
and
Wri
te-o
ffs
T
otal
Ope
ratin
g re
venu
e
$ 1
12,0
31,1
24
$
7,
263,
997
$
(4
,044
,571
)
$ 1
15,2
50,5
50
O
pera
tion
prof
it an
d lo
sses
$
2,77
8,30
1
$
(509
,281
)
$
(84,
604)
$
2,
184,
416
Inte
rest
reve
nue
28
2,50
6 In
vest
men
ts in
com
e ac
coun
ted
for
usin
g th
e eq
uity
met
hod
(2
00,8
34)
Rev
enue
711,
308
Fina
ncia
l cos
ts
(3
,057
,963
) Ex
pens
es
(5
73,2
30)
Pr
ofit
befo
re in
com
e ta
x
$
(6
53,7
97)
Id
entif
iabl
e as
sets
$ 1
94,2
19,1
32
$
15
,319
,185
(6
,120
,289
)
$ 2
03,4
18,0
29
Inve
stm
ents
acc
ount
ed fo
r usi
ng
the
equi
ty m
etho
d
1,97
0,80
2 A
sset
s
78,8
05,2
53
To
tal a
sset
s
$
284
,194
,084
- 80
-
Fo
r th
e Y
ear
End
ed D
ecem
ber
31, 2
019
Air
T
rans
port
atio
n
Oth
ers
A
djus
tmen
ts
and
Wri
te-o
ffs
T
otal
Ope
ratin
g re
venu
e
$ 1
64,4
92,4
53
$
11
,067
,323
$
(7,1
15,6
16)
$
168
,444
,160
Ope
ratio
n pr
ofit
and
loss
es
$
1,
302,
647
$
1,
449,
620
$
(8
6,44
6)
$
2,66
5,82
1 In
tere
st re
venu
e
417,
446
Inve
stm
ents
inco
me
acco
unte
d fo
r us
ing
the
equi
ty m
etho
d
332,
305
Rev
enue
495,
249
Fina
ncia
l cos
ts
(3
,340
,119
) Ex
pens
es
(6
67,5
19)
Pr
ofit
befo
re in
com
e ta
x
$
(9
6,81
7)
Id
entif
iabl
e as
sets
$ 2
09,3
97,8
50
$
15
,915
,060
(6
,317
,254
)
$ 2
18,9
95,6
56
Inve
stm
ents
acc
ount
ed fo
r usi
ng
the
equi
ty m
etho
d
2,22
3,79
3 A
sset
s
71,8
28,5
30
To
tal a
sset
s
$
293
,047
,979
b.
G
eogr
aphi
cal s
egm
ent
The
geog
raph
ical
seg
men
t inf
orm
atio
n of
the
Com
pany
and
its
subs
idia
ries
in 2
020
and
2019
is li
sted
be
low
:
Fo
r th
e Y
ear
End
ed D
ecem
ber
31, 2
020
Am
eric
a
Nor
thea
st A
sia
So
uthe
ast A
sia
E
urop
e
Aus
tral
ia
C
hina
Dom
estic
Adj
ustm
ent a
nd
Elim
inat
ions
Con
solid
atio
n
Ope
ratin
g re
venu
e
$
53,2
48,4
99
$ 10
,515
,272
$
21,7
82,1
32
$ 9,
736,
725
$ 4,
377,
261
$ 7,
374,
972
$ 12
,260
,260
$
(4,0
44,5
71 )
$ 11
5,25
0,55
0
Ope
ratio
n pr
ofit
and
loss
es
$ 2,
184,
416
Inte
rest
reve
nue
28
2,50
6 In
vest
men
ts
inco
me
acco
unte
d fo
r us
ing
the
equi
ty
met
hod
(2
00,8
34 )
Reve
nue
71
1,30
8 In
tere
st ex
pens
e
(3,0
57,9
63 )
Expe
nses
(573
,230
)
Prof
it be
fore
in
com
e ta
x
$
(653
,797
)
Iden
tifia
ble
asse
ts
$ 1,
336,
074
$ 16
8,35
6
$
213,
936
$ 20
,984
$
15,3
83
$ 53
,322
$
207,
730,
263
$ (6
,120
,289
)
$
203,
418,
029
Inve
stm
ents
ac
coun
ted
for
usin
g th
e eq
uity
m
etho
d
1,97
0,80
2 A
sset
s
78,8
05,2
53
To
tal a
sset
s
$
284,
194,
084
For
the
Yea
r E
nded
Dec
embe
r 31
, 201
9
Am
eric
a
Nor
thea
st A
sia
So
uthe
ast A
sia
E
urop
e
Aus
tral
ia
C
hina
Dom
estic
Adj
ustm
ent a
nd
Elim
inat
ions
Con
solid
atio
n
Ope
ratin
g re
venu
e
$
40,3
24,1
60
$ 39
,232
,038
$
33,3
54,4
05
$ 15
,638
,657
$
7,07
3,17
0
$
21,7
90,9
43
$ 18
,146
,403
$
(7,1
15,6
16 )
$ 16
8,44
4,16
0
Ope
ratio
n pr
ofit
and
loss
es
$ 2,
665,
821
Inte
rest
reve
nue
41
7,44
6 In
vest
men
ts
inco
me
acco
unte
d fo
r us
ing
the
equi
ty
met
hod
33
2,30
5 Re
venu
e
495,
249
Inte
rest
expe
nse
(3
,340
,119
) Ex
pens
es
(6
67,5
19 )
Pr
ofit
befo
re
inco
me
tax
$ (9
6,81
7 )
Id
entif
iabl
e as
sets
$
1,39
9,59
1
$
222,
584
$ 15
4,07
4
$
26,7
07
$ 8,
985
$ 50
,948
$
223,
450,
021
$ (6
,317
,254
)
$
218,
995,
656
Inve
stm
ents
ac
coun
ted
for
usin
g th
e eq
uity
m
etho
d
2,22
3,79
3 A
sset
s
71,8
28,5
30
To
tal a
sset
s
$
293,
047,
979
- 81
-
181
TA
BL
E 1
C
HIN
A A
IRL
INE
S, L
TD
. AN
D S
UB
SID
IAR
IES
FIN
AN
CIN
G P
RO
VID
ED
TO
OT
HE
RS
FOR
TH
E Y
EA
R E
ND
ED
DE
CE
MB
ER
31,
202
0 (I
n T
hous
ands
of N
ew T
aiw
an D
olla
rs, U
nles
s Sta
ted
Oth
erw
ise)
No.
L
ende
r B
orro
wer
Fi
nanc
ial
Stat
emen
t A
ccou
nt
Rel
ated
Pa
rty
Hig
hest
B
alan
ce fo
r th
e Pe
riod
End
ing
Bal
ance
Act
ual
Bor
row
ing
Am
ount
Inte
rest
Rat
e (%
) N
atur
e of
Fi
nanc
ing
Bus
ines
s T
rans
actio
n A
mou
nt
Rea
sons
for
Shor
t-te
rm
Fina
ncin
g
Allo
wan
ce fo
r Im
pair
men
t L
oss
Col
late
ral
Fina
ncin
g L
imit
for
Eac
h B
orro
wer
Agg
rega
te
Fina
ncin
g L
imit
Not
e It
em
Val
ue
1 C
al-D
ynas
ty In
tern
atio
nal
Dyn
asty
Hot
el o
f H
awai
i, In
c.
Not
es re
ceiv
able
Y
$ 10
3,24
4
$ 99
,432
$ 28
,409
2.
25
Shor
t-ter
m
finan
cing
fa
cilit
y is
ne
cess
ary
$
- O
pera
ting
cycl
e ca
pita
l ex
pend
iture
$
-
$
-
$ 14
4,12
8
$ 28
8,25
6
Not
e 1:
Th
e m
axim
um a
mou
nt o
f loa
ns to
oth
ers b
y th
e G
roup
is u
p to
40%
of t
he G
roup
's ne
t wor
th a
s sta
ted
in it
s lat
est f
inan
cial
stat
emen
ts.
Not
e 2:
Th
e m
axim
um a
mou
nt o
f loa
ns to
an
indi
vidu
al c
ount
erpa
rty b
y th
e G
roup
is u
p to
20%
of t
he G
roup
's ne
t wor
th a
s sta
ted
in it
s lat
est f
inan
cial
stat
emen
ts.
182
TA
BL
E 2
C
HIN
A A
IRL
INE
S, L
TD
. AN
D S
UB
SID
IAR
IES
EN
DO
RSE
ME
NT
/GU
AR
AN
TE
E P
RO
VID
ED
FO
R T
HE
YE
AR
EN
DE
D D
EC
EM
BE
R 3
1, 2
020
(In
Tho
usan
ds o
f New
Tai
wan
Dol
lars
, Unl
ess S
tate
d O
ther
wis
e)
No.
E
ndor
sem
ent/
Gua
rant
ee
Prov
ider
Cou
nter
part
y L
imit
on E
ach
Cou
nter
part
y’s
End
orse
men
t/ G
uara
ntee
A
mou
nt
(Not
e 1)
Max
imum
B
alan
ce fo
r th
e Pe
riod
E
ndin
g B
alan
ce
Act
ual
Bor
row
ing
Am
ount
Val
ue o
f C
olla
tera
ls
Prop
erty
, Pla
nt
or E
quip
men
t
Rat
io o
f A
ccum
ulat
ed
Am
ount
of
Col
late
ral t
o N
et E
quity
of
the
Lat
est
Fina
ncia
l St
atem
ent (
%)
Max
imum
C
olla
tera
l/ G
uara
ntee
A
mou
nts
Allo
wab
le
(Not
e 2)
End
orse
men
t/ G
uara
ntee
G
iven
by
Pare
nt
on B
ehal
f of
Subs
idia
ries
End
orse
men
t/ G
uara
ntee
G
iven
by
Subs
idia
ries
on
Beh
alf o
f Par
ent
End
orse
men
t/ G
uara
ntee
G
iven
on
Beh
alf
of C
ompa
nies
in
Mai
nlan
d C
hina
Nam
e N
atur
e of
Rel
atio
nshi
p
0 C
hina
Airl
ines
C
AL
Park
10
0% o
wne
d su
bsid
iary
$ 11
,511
,896
$ 3,
850,
000
$
3,85
0,00
0
$ 1,
892,
540
$
- 6.
69
$
28,7
79,7
41
Y
N
N
(the
“Com
pany
”) T
iger
air T
aiw
an C
o., L
td.
75.8
6% o
wne
d su
bsid
iary
by
dire
ct a
nd in
dire
ct
hold
ings
11,5
11,8
96
3,03
8,19
7
2,
656,
591
265,
062
- 4.
62
28,7
79,7
41
Y
N
N
Taiw
an A
ircra
ft M
aint
enan
ce
and
Engi
neer
ing
Co.
, Ltd
. 10
0% o
wne
d su
bsid
iary
11
,511
,896
2,
000,
000
2,00
0,00
0
1,
336,
000
- 3.
47
28,7
79,7
41
Y
N
N
Not
e 1:
B
ased
on
the
Com
pany
’s g
uide
lines
, the
max
imum
am
ount
of g
uara
ntee
to a
n in
divi
dual
cou
nter
party
is u
p to
20%
of t
he C
ompa
ny’s
shar
ehol
ders
’ equ
ity.
Not
e 2:
B
ased
on
the
Com
pany
’s g
uide
lines
, the
allo
wab
le a
ggre
gate
am
ount
of c
olla
tera
l gua
rant
ee is
up
to 5
0% o
f the
Com
pany
’s sh
areh
olde
rs’ e
quity
. 183
TA
BL
E 3
C
HIN
A A
IRL
INE
S, L
TD
. AN
D S
UB
SID
IAR
IES
MA
RK
ET
AB
LE
SE
CU
RIT
IES
HE
LD
D
EC
EM
BE
R 3
1, 2
020
(In
Tho
usan
ds o
f New
Tai
wan
Dol
lars
, Unl
ess S
tate
d O
ther
wis
e)
Hol
ding
Com
pany
Nam
e M
arke
tabl
e Se
curi
ty T
ype
and
Issu
er/N
ame
Rel
atio
nshi
p w
ith th
e H
oldi
ng
Com
pany
Fi
nanc
ial S
tate
men
t Acc
ount
Dec
embe
r 31
, 202
0
Not
e N
umbe
r of
Sh
ares
/Uni
ts
Car
ryin
g A
mou
nt
Perc
enta
ge o
f O
wne
rshi
p (%
)
Mar
ket V
alue
or
Net
Ass
et
Val
ue
C
hina
Airl
ines
(“Pa
rent
com
pany
”)
Shar
es
Ever
est I
nves
tmen
t Hol
ding
s Ltd
. - o
rdin
ary
shar
es
- Fi
nanc
ial a
sset
s at F
VTO
CI -
non
-cur
rent
1,
359,
368
$
106,
779
13.5
9
$ 11
7,45
7 N
ote
1
Ever
est I
nves
tmen
t Hol
ding
s Ltd
. - p
refe
renc
e sh
ares
-
Fina
ncia
l ass
ets a
t FV
TOC
I - n
on-c
urre
nt
135,
937
10,6
78
-
Chu
ng H
ua E
xpre
ss C
o.
- Fi
nanc
ial a
sset
s at F
VTO
CI -
non
-cur
rent
1,
100,
000
29,7
04
11.0
0
29
,704
-
Ja
rdin
e A
ir Te
rmin
al S
ervi
ces
- Fi
nanc
ial a
sset
s at F
VTP
L - c
urre
nt
12,0
00,0
00
- 15
.00
- -
Th
e G
rand
Hi L
ai H
otel
-
Fina
ncia
l ass
ets a
t FV
TPL
- cur
rent
4,
021
- 0.
02
- -
M
anda
rin A
irlin
es
Shar
es
Chi
na A
irlin
es
Pare
nt c
ompa
ny
Fina
ncia
l ass
ets a
t FV
TOC
I - n
on-c
urre
nt
2,07
4,62
8
24
,999
-
24,9
99
-
Cal
-Asi
a In
vest
men
t Sh
ares
Ta
ikoo
(Xia
men
) Lan
ding
Gea
r Ser
vice
s -
Fina
ncia
l ass
ets a
t FV
TPL
- cur
rent
-
- 2.
59
- N
ote
2
HA
ECO
Com
posi
te S
truct
ures
(Jin
jiang
) -
Fina
ncia
l ass
ets a
t FV
TOC
I - n
on-c
urre
nt
-
16
,585
5.
45
16,5
85
Not
e 2
Sa
bre
Trav
el N
etw
ork
(Tai
wan
) B
enef
icia
ry c
ertif
icat
es
Fran
klin
Tem
plet
on S
inoA
m M
oney
Mar
ket F
und
- Fi
nanc
ial a
sset
s at F
VTP
L - c
urre
nt
4,05
1,15
3
42
,247
-
42,2
47
-
FSIT
C M
oney
Mar
ket F
und
- Fi
nanc
ial a
sset
s at F
VTP
L - c
urre
nt
308,
094
55,4
11
-
55
,411
Ta
iwan
Airp
ort S
ervi
ces
Shar
es
Tran
sAsi
a A
irway
s -
Fina
ncia
l ass
ets a
t FV
TPL
- cur
rent
2,
277,
786
- 0.
40
- -
D
ynas
ty A
erot
ech
Inte
rnat
iona
l Cor
p.
Ben
efic
iary
cer
tific
ates
Ta
ishi
n 16
99 M
oney
Mar
ket F
und
- Fi
nanc
ial a
sset
s at F
VTP
L - c
urre
nt
349,
523
4,77
1 -
4,77
1 -
K
aohs
iung
Cat
erin
g Se
rvic
es
Ben
efic
iary
cer
tific
ates
Pr
uden
tial F
inan
cial
Mon
ey M
arke
t Fun
d -
Fina
ncia
l ass
ets a
t FV
TPL
- cur
rent
5,
407,
832
86,2
81
-
86
,281
-
Pr
uden
tial F
inan
cial
Ret
urn
Fund
-
Fina
ncia
l ass
ets a
t FV
TPL
- cur
rent
4,
493,
628
70,9
49
-
70
,949
-
Ta
ishi
n 16
99 M
oney
Mar
ket F
und
- Fi
nanc
ial a
sset
s at F
VTP
L - c
urre
nt
1,10
6,80
7
15
,103
15,1
03
-
Not
e 1:
Th
e su
bsid
iary
’s n
et a
sset
val
ue w
as $
117,
457
thou
sand
, whi
ch in
clud
ed o
rdin
ary
shar
es a
nd p
refe
renc
e sh
ares
as o
f and
for t
he y
ear e
nded
Dec
embe
r 31,
202
0.
Not
e 2:
Th
e C
ompa
ny d
oes n
ot is
sue
shar
es b
ecau
se it
is a
lim
ited
com
pany
. N
ote
3:
The
tabl
e on
ly li
sts f
inan
cial
ass
ets t
hat a
re in
acc
orda
nce
with
IFR
S 9.
184
TA
BL
E 4
C
HIN
A A
IRL
INE
S, L
TD
. AN
D S
UB
SID
IAR
IES
TO
TA
L P
UR
CH
ASE
S FR
OM
OR
SA
LE
S T
O R
ELA
TE
D P
AR
TIE
S A
MO
UN
TIN
G T
O A
T L
EA
ST N
T$1
00 M
ILL
ION
OR
20%
OF
THE
PA
ID-I
N C
API
TA
L FO
R T
HE
YE
AR
EN
DE
D D
EC
EM
BE
R 3
1, 2
020
(In
Tho
usan
ds o
f New
Tai
wan
Dol
lars
, Unl
ess S
tate
d O
ther
wis
e)
Com
pany
Nam
e R
elat
ed P
arty
N
atur
e of
Rel
atio
nshi
p T
rans
actio
n D
etai
ls A
bnor
mal
Tra
nsac
tion
Not
e/A
ccou
nt P
ayab
le o
r R
ecei
vabl
e N
ote
Purc
hase
/ Sa
le
Am
ount
%
of
Tot
al
Paym
ent T
erm
s U
nit P
rice
Pa
ymen
t Ter
ms
End
ing
Bal
ance
%
of
Tot
al
Chi
na A
irlin
es, L
td.
Taiw
an A
ir C
argo
Ter
min
al
Subs
idia
ry
Purc
hase
$ 65
9,59
6 0.
69
30 d
ays
$ -
-
$ (6
7,46
5)
(3.3
9)
-
(“C
hina
Airl
ines
”)
Taiw
an A
irpor
t Ser
vice
s Su
bsid
iary
Pu
rcha
se
107,
482
0.11
40
day
s
-
-
(1
3,04
6)
(0.7
6)
-
Man
darin
Airl
ines
Su
bsid
iary
Sa
le
(221
,527
) (0
.21)
2
mon
ths
- -
69,1
79
0.71
-
Ti
gera
ir Ta
iwan
Su
bsid
iary
Sa
le
(240
,768
) (0
.23)
1
mon
th
12,0
08
0.12
Ta
oyua
n In
tern
atio
nal A
irpor
t Ser
vice
Su
bsid
iary
Pu
rcha
se
1,04
3,26
4 1.
10
40 d
ays
- -
(215
,542
) (1
2.56
) -
D
ynas
ty A
erot
ech
Inte
rnat
iona
l Cor
p.
Subs
idia
ry
Purc
hase
35
2,21
4 0.
37
2 m
onth
s
-
-
(4
9,10
8)
(2.8
6)
-
CA
L Pa
rk
Subs
idia
ry
Purc
hase
20
9,70
1 0.
22
2 m
onth
s
-
-
-
- -
G
loba
l Sky
Exp
ress
Su
bsid
iary
Sa
le
(139
,335
) (0
.13)
15
day
s
-
-
8,
180
0.
08
-
East
ern
Uni
ted
Inte
rnat
iona
l Log
istic
s Eq
uity
-met
hod
inve
stee
Pu
rcha
se
388,
451
0.41
2
mon
ths
- -
(41,
725)
(2
.43)
-
C
hina
Pac
ific
Cat
erin
g Se
rvic
es
Equi
ty-m
etho
d in
vest
ee
Purc
hase
47
3,46
0 0.
50
90 d
ays
- -
(71,
674)
(4
.18)
-
Man
darin
Airl
ines
Ta
iwan
Airp
ort S
ervi
ces
Sam
e pa
rent
com
pany
Pu
rcha
se
152,
475
4.14
1
mon
th
- -
(22,
407)
(5
.58)
-
Ti
gera
ir Ta
iwan
Sa
me
pare
nt c
ompa
ny
Purc
hase
14
9,04
8 4.
05
1 m
onth
-
-
(1
1,71
1)
(2.9
2)
C
al H
otel
C
AL
Park
Sa
me
pare
nt c
ompa
ny
Purc
hase
10
2,22
0 48
.59
1 m
onth
-
-
(7
6)
(0.2
5)
-
185
TA
BL
E 5
C
HIN
A A
IRL
INE
S, L
TD
. AN
D S
UB
SID
IAR
IES
RE
CE
IVA
BL
ES
FRO
M R
EL
AT
ED
PA
RT
IES
AM
OU
NT
ING
TO
AT
LEA
ST N
T$1
00 M
ILL
ION
OR
20%
OF
THE
PA
ID-I
N C
API
TA
L D
EC
EM
BE
R 3
1, 2
020
(In
Tho
usan
ds o
f New
Tai
wan
Dol
lars
, Unl
ess S
tate
d O
ther
wis
e)
Com
pany
Nam
e R
elat
ed P
arty
N
atur
e of
Rel
atio
nshi
p E
ndin
g B
alan
ce
Tur
nove
r R
ate
Ove
rdue
A
mou
nts R
ecei
ved
in S
ubse
quen
t Pe
riod
Allo
wan
ce fo
r B
ad D
ebts
A
mou
nt
Act
ion
Tak
en
M
anda
rin A
irlin
es
Chi
na A
irlin
es
Pare
nt c
ompa
ny
$
101
,725
N
ote
$
-
-
$
56,8
70
$
-
Ta
oyua
n In
tern
atio
nal A
irpor
t Ser
vice
C
hina
Airl
ines
Pa
rent
com
pany
21
5,54
2 3.
71
- -
215,
542
-
Not
e:
Acc
ount
s rec
eiva
ble
and
reve
nue
wer
e no
t dire
ctly
cor
rela
ted
beca
use
of th
e pa
rticu
lar i
ndus
try c
hara
cter
istic
s, an
d th
eref
ore
the
turn
over
rate
was
not
app
licab
le.
186
TA
BL
E 6
C
HIN
A A
IRL
INE
S, L
TD
. AN
D S
UB
SID
IAR
IES
NA
ME
S, L
OC
AT
ION
S, A
ND
OT
HE
R IN
FOR
MA
TIO
N O
F IN
VE
STE
ES
OV
ER
WH
ICH
TH
E C
OM
PAN
Y E
XE
RC
ISE
S SI
GN
IFIC
AN
T IN
FLU
EN
CE
FO
R T
HE
YE
AR
EN
DE
D D
EC
EM
BE
R 3
1, 2
020
(In
Tho
usan
ds o
f New
Tai
wan
Dol
lars
and
For
eign
Cur
renc
ies,
Unl
ess S
tate
d O
ther
wis
e)
Inve
stor
Com
pany
In
vest
ee C
ompa
ny
Loc
atio
n M
ain
Bus
ines
s and
Pro
duct
Inve
stm
ent A
mou
nt
Bal
ance
as o
f Dec
embe
r 31
, 202
0 N
et In
com
e (L
oss)
of t
he
Inve
stee
Inve
stm
ent
Inco
me
(Los
s)
Not
e D
ecem
ber
31,
2020
D
ecem
ber
31,
2019
N
umbe
r of
Sh
ares
/Uni
ts
Perc
enta
ge
of
Ow
ners
hip
(%)
Car
ryin
g A
mou
nt
Chi
na A
irlin
es, L
td.
CA
L Pa
rk
Taoy
uan,
Tai
wan
R
eal e
stat
e le
ase
and
inte
rnat
iona
l tra
de
$
1,50
0,00
0 $
1,
500,
000
15
0,00
0,00
0 10
0.00
$
1,
605,
033
$
9,35
0 $
53
,770
N
ote
4
Man
darin
Airl
ines
Ta
ipei
, Tai
wan
A
ir tra
nspo
rtatio
n an
d m
aint
enan
ce o
f airc
raft
2,
042,
368
2,
042,
368
18
8,15
4,02
5 93
.99
1,
223,
259
(3
76,2
55)
(3
53,6
42)
Not
es 1
and
4
Ta
iwan
Air
Car
go T
erm
inal
Ta
oyua
n, T
aiw
an
Air
carg
o an
d st
orag
e
1,35
0,00
0
1,35
0,00
0
135,
000,
000
54.0
0
1,55
6,13
3
318,
494
17
2,01
7 -
C
al-D
ynas
ty In
tern
atio
nal
Los A
ngel
es, U
SA
A h
oldi
ng c
ompa
ny, r
eal e
stat
e an
d ho
tel s
ervi
ces
U
S$
26,1
45
US$
26
,145
2,61
4,50
0 10
0.00
1,18
8,11
0
(21,
960)
(20,
542)
Not
e 2
Chi
na P
acifi
c C
ater
ing
Serv
ices
Ta
oyua
n, T
aiw
an
In-fl
ight
cat
erin
g
439,
110
43
9,11
0
43,9
11,0
00
51.0
0
695,
959
(2
67,5
66)
(1
36,4
59)
-
Taoy
uan
Inte
rnat
iona
l Airp
ort S
ervi
ces
Taoy
uan,
Tai
wan
A
irpor
t ser
vice
s
147,
000
14
7,00
0
34,3
00,0
00
49.0
0
602,
688
(2
58,8
94)
(1
26,8
58)
-
CA
L-A
sia
Inve
stm
ent
Terr
itory
of t
he B
ritis
h V
irgin
Isla
nds
Gen
eral
inve
stm
ent
US$
7,
172
US$
7,
172
7,
172,
346
100.
00
46
9,97
9
45,0
68
45
,068
-
Sa
bre
Trav
el N
etw
ork
(Tai
wan
) Ta
ipei
, Tai
wan
Sa
le a
nd m
aint
enan
ce o
f har
dwar
e an
d so
ftwar
e
52,2
00
52
,200
13,0
21,0
42
93.9
3
232,
883
(4
9,99
5)
(4
6,95
1)
-
Chi
na A
ircra
ft Se
rvic
e H
ong
Kon
g In
tern
atio
nal A
irpor
t A
irpor
t ser
vice
s H
K$
58,0
00
HK
$ 58
,000
28,4
00,0
00
20.0
0
277,
234
(5
13,7
90)
(1
02,7
58)
-
Taiw
an A
irpor
t Ser
vice
s Ta
ipei
, Tai
wan
A
irpor
t ser
vice
s
12,2
89
12
,289
20,6
26,6
44
47.3
5
200,
794
(1
56,7
39)
(7
4,21
4)
-
Kao
hsiu
ng C
ater
ing
Serv
ices
K
aohs
iung
, Tai
wan
In
-flig
ht c
ater
ing
38
3,84
6
383,
846
21
,494
,637
53
.67
51
2,92
6
9,12
9
(8,3
09)
Not
e 5
C
al H
otel
Co.
, Ltd
. Ta
oyua
n, T
aiw
an
Hot
el b
usin
ess
46
5,00
0
465,
000
46
,500
,000
10
0.00
405,
353
(7
3,58
6)
(7
3,90
6) N
ote
4
Chi
na P
acifi
c La
undr
y Se
rvic
es
Taoy
uan,
Tai
wan
C
lean
ing
and
leas
ing
of th
e to
wel
of a
irlin
es, h
otel
s, re
stau
rant
s and
hea
lth c
lubs
137,
500
13
7,50
0
13,7
50,0
00
55.0
0
149,
353
(2
8,13
7)
(1
5,47
5)
-
D
ynas
ty A
erot
ech
Inte
rnat
iona
l Cor
p.
Taoy
uan,
Tai
wan
C
lean
ing
of a
ircra
ft an
d m
aint
enan
ce o
f mac
hine
and
eq
uipm
ent
77,2
70
77
,270
77,2
70
100.
00
13
6,63
0
33,9
86
33
,967
N
ote
4
Y
estri
p
Taip
ei, T
aiw
an
Trav
el b
usin
ess
26
,265
26,2
65
1,
600,
000
100.
00
10
,270
(15,
067)
(14,
998)
Not
e 4
D
ynas
ty H
olid
ays
Toky
o, Ja
pan
Trav
el b
usin
ess
JPY
8,
000
JPY
20
,400
160
20.0
0
5,23
7
(23,
701)
(4,7
40)
-
Glo
bal S
ky E
xpre
ss
Taip
ei, T
aiw
an
Forw
ardi
ng a
nd st
orag
e of
air
carg
o
2,
500
2,
500
25
0,00
0 25
.00
7,
643
7,
796
1,
949
-
Tige
rair
Taiw
an C
o., L
td.
Taip
ei, T
aiw
an
Air
trans
porta
tion
and
mai
nten
ance
of a
ircra
ft
3,10
9,90
7
1,27
2,06
3
212,
420,
046
75.8
6
2,30
4,11
3
(1,3
71,0
56)
(9
56,0
08)
Not
e 4
Ta
iwan
Airc
raft
Mai
nten
ance
and
En
gine
erin
g C
o., L
td.
Taoy
uan,
Tai
wan
A
ircra
ft m
aint
enan
ce
1,
350,
000
1,
350,
000
13
5,00
0,00
0 10
0.00
699,
793
(2
22,2
23)
(2
22,1
96)
-
N
OR
DA
M A
sia
Ltd.
Ta
oyua
n, T
aiw
an
Airc
raft
mai
nten
ance
37,9
75
2,
450
3,
797,
500
49.0
0
37,7
67
(9
3)
(4
6)
-
M
anda
rin A
irlin
es
Tige
rair
Taiw
an C
o., L
td.
Taip
ei, T
aiw
an
Air
trans
porta
tion
and
mai
nten
ance
of a
ircra
ft
154,
330
15
4,33
0
15,4
33,0
00
5.51
167,
400
(1
,371
,056
)
(104
,501
) -
Ta
iwan
Airp
ort S
ervi
ces
Taip
ei, T
aiw
an
Airp
ort s
ervi
ces
11
,658
11,6
58
46
9,75
5 1.
08
4,
567
(1
56,7
39)
(1
,688
) -
CA
L-A
sia
Inve
stm
ent
East
ern
Uni
ted
Inte
rnat
iona
l Log
istic
s H
ong
Kon
g
Forw
ardi
ng a
nd st
orag
e of
air
carg
o H
K$
3,32
9 H
K$
3,32
9
1,05
0,00
0 35
.00
51
,116
39,8
29
13
,940
-
Taiw
an A
irpor
t Ser
vice
s Ta
iwan
Airp
ort S
ervi
ce (S
amoa
)
Sam
oa
Airp
ort s
ervi
ces a
nd in
vest
men
t
US$
5,
877
US$
5,
877
-
100.
00
37
3,44
2
22,3
55
22
,355
N
ote
3
K
aohs
iung
Cat
erin
g Se
rvic
es
Del
ica
Inte
rnat
iona
l Co.
, Ltd
. K
aohs
iung
, Tai
wan
C
ater
ing
busi
ness
10,2
00
10
,200
1,02
0,00
0 51
.00
7,
871
4
2
-
Not
e 1:
A
dopt
ed th
e tre
asur
y sh
ares
met
hod
in re
cogn
izin
g in
vest
men
t inc
ome
or lo
ss.
Not
e 2:
R
epre
sent
s the
con
solid
ated
fina
ncia
l inf
orm
atio
n of
the
fore
ign
hold
ing
com
pany
dis
clos
ed in
acc
orda
nce
with
loca
l reg
ulat
ions
. N
ote
3:
The
Com
pany
doe
s not
issu
e sh
ares
bec
ause
it is
a li
mite
d co
mpa
ny.
Not
e 4:
D
iffer
ence
cau
sed
by le
ase
arra
ngem
ent b
etw
een
cons
olid
ated
ent
ities
. N
ote
5:
Diff
eren
ce c
ause
d by
acq
uisi
tion.
187
TA
BL
E 7
C
HIN
A A
IRL
INE
S, L
TD
. AN
D S
UB
SID
IAR
IES
INV
EST
ME
NT
S IN
MA
INL
AN
D C
HIN
A
FOR
TH
E Y
EA
R E
ND
ED
DE
CE
MB
ER
31,
202
0 (I
n T
hous
ands
of N
ew T
aiw
an D
olla
rs/R
enm
inbi
/U.S
. Dol
lars
, Unl
ess S
tate
d O
ther
wis
e)
Chi
na A
irlin
es
Inve
stee
Com
pany
Nam
e M
ain
Bus
ines
s and
Pr
oduc
t
Tot
al A
mou
nt
of P
aid-
in
Cap
ital
I nve
stm
ent
Typ
e
Acc
umul
ated
O
utflo
w o
f In
vest
men
t fr
om T
aiw
an a
s of
Jan
uary
1,
2020
Inve
stm
ent F
low
A
ccum
ulat
ed
Out
flow
of
Inve
stm
ent
from
Tai
wan
as
of D
ecem
ber
31,
2020
Net
Inco
me
(Los
s) o
f th
e In
vest
ee
% O
wne
rshi
p of
Dir
ect o
r In
dire
ct
Inve
stm
ent
Inve
stm
ent
Gai
n (L
oss)
Car
ryin
g A
mou
nt
as o
f
Dec
embe
r 31
, 20
20
Acc
umul
ated
In
war
d R
emitt
ance
of
Ear
ning
s as o
f D
ecem
ber
31,
2020
Out
flow
In
flow
A
irpor
t Air
Car
go T
erm
inal
(X
iam
en) C
o., L
td.
Forw
ardi
ng a
nd st
orag
e of
air
carg
o $
1,
105,
474
(RM
B 25
4,48
0)
Indi
rect
(N
ote
1)
$
118,
920
(US$
4,
186)
$
- $
-
$
118,
920
(US$
4,
186)
$
91,3
11
(RM
B 21
,367
) 14
.00
$
12,7
94
(RM
B 2,
991)
$
238,
717
(RM
B 54
,953
) $
10
0,47
0 (U
S$
3,53
7)
(N
ote
2)
A
irpor
t Air
Car
go S
ervi
ce
(Xia
men
) Co.
, Ltd
. Fo
rwar
ding
and
stor
age
of a
ir ca
rgo
60
,817
(R
MB
14,0
00)
Indi
rect
(N
ote
1)
55
,325
(U
S$
1,94
7)
-
-
55,3
25
(US$
1,
947)
68
,272
(R
MB
15,9
76)
14.0
0
9,56
6 (R
MB
2,23
7)
134,
918
(RM
B 31
,058
)
44,3
33
(US$
1,
561)
(Not
e 2)
Taik
oo (X
iam
en) L
andi
ng
Gea
r Ser
vice
s
Land
ing
gear
m
aint
enan
ce se
rvic
es
2,36
0,51
1 (U
S$
83,0
90)
Indi
rect
(N
ote
1)
61
,114
(U
S$
2,15
1)
-
-
61,1
14
(US$
2,
151)
-
2.58
9
-
-
-
H
AEC
O C
ompo
site
St
ruct
ures
(Jin
jiang
) C
ompo
site
mat
eria
l
331,
335
(US$
11
,663
) In
dire
ct
(Not
e 1)
18,0
68
(US$
63
6)
-
-
18,0
68
(US$
63
6)
- 5.
45
-
16
,585
(R
MB
3,81
8)
10,1
28
(US$
35
7)
Acc
umul
ated
Inve
stm
ent i
n M
ainl
and
Chi
na a
s of
Dec
embe
r 31
, 202
0
Inve
stm
ent A
mou
nt
Aut
hori
zed
by In
vest
men
t C
omm
issi
on, M
OE
A
Lim
it on
Inve
stm
ent
$2
53,4
27
(US$
8,92
0)
$618
,216
(Not
e 3)
$3
4,53
5,69
0 (N
ote
4)
(C
ontin
ued)
188
Taiw
an A
irpor
t Ser
vice
s
Inve
stee
Com
pany
M
ain
Bus
ines
s and
Pr
oduc
t Pa
id-in
Cap
ital
Met
hod
of
Inve
stm
ent
Acc
umul
ated
O
utw
ard
Rem
ittan
ce fo
r In
vest
men
t fr
om T
aiw
an a
s of
Jan
uary
1,
2020
Rem
ittan
ce o
f Fun
ds
Acc
umul
ated
O
utw
ard
Rem
ittan
ce fo
r In
vest
men
t fr
om T
aiw
an a
s of
Dec
embe
r 31
, 20
20
Net
Inco
me
(Los
s) o
f the
In
vest
ee
% O
wne
rshi
p of
Dir
ect o
r In
dire
ct
Inve
stm
ent
Inve
stm
ent
Inco
me
(Los
s)
Car
ryin
g A
mou
nt a
s of
Dec
embe
r 31
, 20
20
Acc
umul
ated
R
epat
riat
ion
of
Inve
stm
ent
Inco
me
as o
f D
ecem
ber
31,
2020
Out
war
d In
war
d
A
irpor
t Air
Car
go T
erm
inal
(X
iam
en) C
o., L
td.
Forw
ardi
ng a
nd st
orag
e of
air
carg
o
$ 1,
105,
474
(RM
B 25
4,48
0 )
Indi
rect
(N
ote
5)
$
114,
158
(US$
4,
018)
$
- $
-
$
114,
158
(US$
4,
018)
$
91,3
11
(RM
B 21
,367
) 14
.00
$
12,7
84
(RM
B 2,
991)
$
237,
502
(RM
B 54
,673
) $
12
9,01
0 (U
S$
4,54
1)
A
irpor
t Air
Car
go S
ervi
ce
(Xia
men
) Co.
, Ltd
. Fo
rwar
ding
and
stor
age
of a
ir ca
rgo
60,8
17
(RM
B 14
,000
) In
dire
ct
(Not
e 5)
54,7
37
(US$
1,
927)
-
-
54
,737
(U
S$
1,92
7)
68,2
72
(RM
B 15
,976
) 14
.00
9,
558
(RM
B 2,
237)
13
5,12
8 (R
MB
31,1
07)
59
,426
(U
S$
2,09
2)
Acc
umul
ated
Out
war
d
Rem
ittan
ce fo
r In
vest
men
t in
M
ainl
and
Chi
na a
s of D
ecem
ber
31, 2
020
Inve
stm
ent A
mou
nts A
utho
rize
d by
In
vest
men
t Com
mis
sion
, MO
EA
Upp
er L
imit
on th
e A
mou
nt o
f In
vest
men
t Stip
ulat
ed b
y
Inve
stm
ent C
omm
issi
on, M
OE
A
$1
68,8
95
(US$
5,94
5)
$168
,895
(U
S$5,
945)
$2
54,4
38
(Not
e 6)
Not
e 1:
C
hina
Airl
ines
, Ltd
. the
“Co
mpa
ny”
inve
sted
in C
AL-
Asi
a In
vest
men
t, w
hich
, in
turn
, inv
este
d in
a c
ompa
ny lo
cate
d in
mai
nlan
d C
hina
. N
ote
2:
The
inw
ard
rem
ittan
ce o
f ear
ning
s in
2020
am
ount
ed to
US$
3,53
6,56
1 an
d U
S$1,
560,
538.
N
ote
3:
The
amou
nt c
ompr
ised
US$
19,8
28,3
24, R
MB
4,20
0,00
0 an
d N
T$36
,666
,667
. N
ote
4:
The
limit
stat
ed in
the
Inve
stm
ent C
omm
issi
on’s
regu
latio
n, “
Inve
stm
ent o
r Tec
hnic
al C
oope
ratio
n in
Mai
nlan
d C
hina
Adj
ustm
ent R
ule,
” is
the
larg
er o
f the
Com
pany
’s n
et a
sset
val
ue o
r 60%
of t
he c
onso
lidat
ed n
et a
sset
val
ue.
Not
e 5:
Ta
iwan
Airp
ort S
ervi
ces i
nves
ted
in T
aiw
an A
irpor
t Ser
vice
s (Sa
moa
), w
hich
in re
turn
, inv
este
d in
a c
ompa
ny lo
cate
d in
mai
nlan
d C
hina
. N
ote
6:
The
RM
B a
nd U
.S. d
olla
r am
ount
s of a
sset
s are
tran
slat
ed a
t yea
r-end
rate
s and
thos
e of
gai
ns (l
osse
s), a
t the
ave
rage
of t
he y
ear-e
nd ra
tes f
or th
e re
porti
ng p
erio
d.
(C
oncl
uded
)
189
TA
BL
E 8
C
HIN
A A
IRL
INE
S, L
TD
. AN
D S
UB
SID
IAR
IES
BU
SIN
ESS
RE
LA
TIO
NSH
IPS
AN
D IM
POR
TA
NT
TR
AN
SAC
TIO
NS
BE
TW
EE
N C
HIN
A A
IRL
INE
S, L
TD
. AN
D IT
S SU
BSI
DIA
RIE
S FO
R T
HE
YE
AR
EN
DE
D D
EC
EM
BE
R 3
1, 2
020
(In
Tho
usan
ds o
f New
Tai
wan
Dol
lars
)
No.
C
ompa
ny N
ame
Rel
ated
Par
ty
Nat
ural
of
Rel
atio
nshi
p (N
ote
1)
Inte
rcom
pany
Tra
nsac
tions
Fina
ncia
l Sta
tem
ent A
ccou
nt
Am
ount
T
rans
actio
n C
rite
ria
% o
f Tot
al
Con
solid
ated
T
otal
Rev
enue
or
Ass
ets
0 C
hina
Airl
ines
, Ltd
. G
loba
l Sky
Exp
ress
a
Car
go re
venu
e
$
137,
081
The
sam
e as
ord
inar
y tra
nsac
tions
0.
12
Man
darin
Airl
ines
a
Oth
er o
pera
ting
reve
nue
123,
469
The
sam
e as
ord
inar
y tra
nsac
tions
0.
11
Tige
rair
Taiw
an C
o., L
td.
a O
ther
ope
ratin
g re
venu
e
24
0,76
8 Th
e sa
me
as o
rdin
ary
trans
actio
ns
0.21
Ta
oyua
n In
tern
atio
nal A
irpor
t Ser
vice
s a
Airp
ort s
ervi
ce c
osts
1,
043,
264
The
sam
e as
ord
inar
y tra
nsac
tions
0.
91
Taiw
an A
irpor
t Ser
vice
a
Airp
ort s
ervi
ce c
osts
10
7,48
2 Th
e sa
me
as o
rdin
ary
trans
actio
ns
0.09
D
ynas
ty A
erot
ech
Inte
rnat
iona
l Cor
p.
a A
irpor
t ser
vice
cos
ts
352,
214
The
sam
e as
ord
inar
y tra
nsac
tions
0.
31
Taiw
an A
ir C
argo
Ter
min
al
a O
ther
ope
ratin
g co
sts
659,
596
The
sam
e as
ord
inar
y tra
nsac
tions
0.
57
CA
L Pa
rk
a O
ther
ope
ratin
g co
sts
209,
701
The
sam
e as
ord
inar
y tra
nsac
tions
0.
18
Man
darin
Airl
ines
a
Acc
ount
s pay
able
- re
late
d pa
rties
10
1,72
5 Th
e sa
me
as o
rdin
ary
trans
actio
ns
0.03
Ta
oyua
n In
tern
atio
nal A
irpor
t Ser
vice
s a
Acc
ount
s pay
able
- re
late
d pa
rties
21
5,54
2 Th
e sa
me
as o
rdin
ary
trans
actio
ns
0.07
M
anda
rin A
irlin
es
a B
onds
pay
able
- no
n-cu
rren
t
12
5,00
0 Th
e sa
me
as o
rdin
ary
trans
actio
ns
0.04
1
Taiw
an A
ir C
argo
Ter
min
al
Chi
na A
irlin
es, L
td.
b Sa
les r
even
ue
659,
596
The
sam
e as
ord
inar
y tra
nsac
tions
0.
57
2 M
anda
rin A
irlin
es
Taiw
an A
irpor
t Ser
vice
c
Airp
ort s
ervi
ce c
osts
15
2,47
5 Th
e sa
me
as o
rdin
ary
trans
actio
ns
0.13
C
hina
Airl
ines
, Ltd
. b
Ope
ratin
g ex
pens
es
123,
469
The
sam
e as
ord
inar
y tra
nsac
tions
0.
11
Chi
na A
irlin
es, L
td.
b A
ccou
nts r
ecei
vabl
e - r
elat
ed p
artie
s
10
1,72
5 Th
e sa
me
as o
rdin
ary
trans
actio
ns
0.03
C
hina
Airl
ines
, Ltd
. b
Fina
ncia
l ass
ets a
t am
ortiz
ed c
osts
12
5,00
0 Th
e sa
me
as o
rdin
ary
trans
actio
ns
0.04
3
Taoy
uan
Inte
rnat
iona
l Airp
ort S
ervi
ces
Chi
na A
irlin
es, L
td.
b A
irpor
t ser
vice
reve
nue
1,04
3,26
4 Th
e sa
me
as o
rdin
ary
trans
actio
ns
0.91
C
hina
Airl
ines
, Ltd
. b
Acc
ount
s rec
eiva
ble
- rel
ated
par
ties
215,
542
The
sam
e as
ord
inar
y tra
nsac
tions
0.
07
4 Ta
iwan
Airp
ort S
ervi
ce
Chi
na A
irlin
es, L
td.
b O
pera
ting
reve
nue
107,
482
The
sam
e as
ord
inar
y tra
nsac
tions
0.
09
Man
darin
Airl
ines
c
Ope
ratin
g re
venu
e
15
2,47
5 Th
e sa
me
as o
rdin
ary
trans
actio
ns
0.13
5
Dyn
asty
Aer
otec
h In
tern
atio
nal C
orp.
C
hina
Airl
ines
, Ltd
. b
Ope
ratin
g re
venu
e
35
2,21
4 Th
e sa
me
as o
rdin
ary
trans
actio
ns
0.31
6
Glo
bal S
ky E
xpre
ss
Chi
na A
irlin
es, L
td.
b O
pera
ting
expe
nse
137,
081
The
sam
e as
ord
inar
y tra
nsac
tions
0.
12
7 C
AL
Park
C
hina
Airl
ines
, Ltd
. b
Ope
ratin
g re
venu
e
20
9,70
1 Th
e sa
me
as o
rdin
ary
trans
actio
ns
0.18
C
al H
otel
Co.
, Ltd
. c
Ope
ratin
g re
venu
e
10
2,22
0 Th
e sa
me
as o
rdin
ary
trans
actio
ns
0.09
8
Cal
Hot
el C
o., L
td.
CA
L Pa
rk
c O
pera
ting
cost
s
10
2,22
0 Th
e sa
me
as o
rdin
ary
trans
actio
ns
0.09
9
Tige
rair
Taiw
an C
o., L
td.
Chi
na A
irlin
es, L
td.
b O
pera
ting
expe
nses
24
0,76
8 Th
e sa
me
as o
rdin
ary
trans
actio
ns
0.21
(C
ontin
ued)
190
Not
e 1:
Th
e th
ree
dire
ctio
nal t
ypes
for t
rans
actio
ns b
y bu
sine
ss re
latio
nshi
p be
twee
n C
hina
Airl
ines
, Ltd
. and
its s
ubsi
diar
ies a
re a
s fol
low
s: a.
Pa
rent
to su
bsid
iarie
s. b.
Su
bsid
iarie
s to
pare
nt.
c.
Subs
idia
ries t
o su
bsid
iarie
s. N
ote
2:
Inte
rcom
pany
tran
sact
ions
wer
e el
imin
ated
in th
e co
nsol
idat
ed fi
nanc
ial s
tate
men
ts.
Not
e 3:
Th
e C
ompa
ny o
nly
disc
lose
s tra
nsac
tion
amou
nts o
r bal
ance
s of m
ore
than
$10
0,00
0 th
ousa
nd.
(C
oncl
uded
) 191
TA
BL
E 9
C
HIN
A A
IRL
INE
S, L
TD
.
INFO
RM
AT
ION
OF
MA
JOR
ST
OC
KH
OL
DE
RS
FOR
TH
E Y
EA
R E
ND
ED
DE
CE
MB
ER
31,
202
0
Nam
e of
Maj
or S
hare
hold
er
Shar
es
Num
ber
of
Shar
es
Perc
enta
ge o
f O
wne
rshi
p (%
)
Chi
na A
viat
ion
Dev
elop
men
t Fou
ndat
ion
(CA
DF)
1,86
7,34
1,93
5 34
.44
Nat
iona
l Dev
elop
men
t Fun
d (N
DF)
519,
750,
519
9.59
Not
e 1:
Th
e in
form
atio
n of
maj
or sh
areh
olde
rs p
rese
nted
in th
is ta
ble
is p
rovi
ded
by th
e Ta
iwan
Dep
osito
ry &
C
lear
ing
Cor
pora
tion
base
d on
the
num
ber
of o
rdin
ary
shar
es a
nd p
refe
rred
sha
res
held
by
shar
ehol
ders
with
ow
ners
hip
of 5
% o
r gr
eate
r, th
at h
ave
been
iss
ued
with
out
phys
ical
reg
istra
tion
(incl
udin
g tre
asur
y sh
ares
) by
the
Com
pany
as
of th
e la
st b
usin
ess
day
for
the
curr
ent q
uarte
r. Th
e sh
are
capi
tal i
n th
e co
nsol
idat
ed fi
nanc
ial s
tate
men
ts m
ay d
iffer
from
the
actu
al n
umbe
r of s
hare
s th
at
have
bee
n is
sued
with
out p
hysi
cal r
egis
tratio
n be
caus
e of
diff
eren
t pre
para
tion
basi
s. N
ote
2:
If a
shar
ehol
der d
eliv
ers
the
shar
ehol
ding
s to
the
trust,
the
abov
e in
form
atio
n w
ill b
e di
sclo
sed
by th
e in
divi
dual
trus
ter
who
ope
ned
the
trust
acc
ount
. For
sha
reho
lder
s w
ho d
ecla
re in
side
r sh
areh
oldi
ngs
with
ow
ners
hip
grea
ter
than
10
%
in
acco
rdan
ce
with
th
e Se
curit
y an
d Ex
chan
ge
Act
, th
e sh
areh
oldi
ngs
incl
ude
shar
es h
eld
by s
hare
hold
ers
and
thos
e de
liver
ed t
o th
e tru
st o
ver
whi
ch
shar
ehol
ders
hav
e rig
hts
to d
eter
min
e th
e us
e of
tru
st p
rope
rty.
For
info
rmat
ion
rela
ting
to i
nsid
er
shar
ehol
ding
dec
lara
tion,
ple
ase
refe
r to
Mar
ket O
bser
vatio
n Po
st S
yste
m.
- 92
-
192
IND
EPE
ND
EN
T A
UD
ITO
RS’
REP
OR
T
The
Boa
rd o
f Dire
ctor
s and
the
Shar
ehol
ders
C
hina
Airl
ines
, Ltd
.
Opi
nion
We
have
au d
ited
the
acco
mpa
nyin
g fin
anci
al s
tate
men
ts o
f Chi
na A
irlin
es, L
td. (
the
“Com
pany
”),
whi
ch c
ompr
ise
the
bala
nce
shee
ts a
s of
Dec
embe
r 31
, 20
20 a
nd 2
019,
and
the
sta
tem
ents
of
com
preh
ensi
ve in
com
e, c
hang
es in
equ
ity a
nd c
ash
flow
s fo
r the
yea
rs th
en e
nded
, and
the
note
s to
th
e fin
anci
al s
tate
men
ts,
incl
udin
g a
sum
mar
y of
sig
nific
ant
acco
untin
g po
licie
s (c
olle
ctiv
ely
refe
rred
to a
s the
“fin
anci
al st
atem
ents
”).
In o
ur o
pini
on, t
he a
ccom
pany
ing
finan
cial
sta
tem
ents
pre
sent
fai
rly, i
n al
l mat
eria
l res
pect
s, th
e fin
anci
al p
ositi
on o
f th
e C
ompa
ny a
s of
Dec
embe
r 31
, 20
20 a
nd 2
019,
and
its
fin
anci
al
perf
orm
ance
and
its
cas
h flo
ws
for
the
year
s th
en e
nded
in
acco
rdan
ce w
ith t
he R
egul
atio
ns
Gov
erni
ng th
e Pr
epar
atio
n of
Fin
anci
al R
epor
ts b
y Se
curit
ies I
ssue
rs a
nd o
ther
regu
latio
ns.
Bas
is fo
r O
pini
on
We
c ond
ucte
d ou
r au
dits
in a
ccor
danc
e w
ith th
e Re
gula
tions
Gov
erni
ng A
uditi
ng a
nd A
ttest
atio
n of
Fin
anci
al S
tate
men
ts b
y C
ertif
ied
Publ
ic A
ccou
ntan
ts a
nd a
uditi
ng s
tand
ards
gen
eral
ly a
ccep
ted
in th
e R
epub
lic o
f C
hina
. Our
res
pons
ibili
ties
unde
r th
ose
stan
dard
s ar
e fu
rther
des
crib
ed in
the
Aud
itors
’ R
espo
nsib
ilitie
s fo
r th
e A
udit
of th
e Fi
nanc
ial S
tate
men
ts s
ectio
n of
our
rep
ort.
We
are
inde
pend
ent
of t
he C
ompa
ny i
n ac
cord
ance
with
The
Nor
m o
f Pr
ofes
sion
al E
thic
s fo
r Ce
rtifie
d Pu
blic
Acc
ount
ant o
f the
Rep
ublic
of C
hina
, and
we
have
fulfi
lled
our o
ther
eth
ical
resp
onsi
bilit
ies
in a
ccor
danc
e w
ith t
hese
req
uire
men
ts. W
e be
lieve
tha
t th
e au
dit
evid
ence
we
have
obt
aine
d is
su
ffic
ient
and
app
ropr
iate
to p
rovi
de a
bas
is fo
r our
opi
nion
.
Key
Aud
it M
atte
rs
Key
aud
it m
atte
rs a
re th
ose
mat
ters
that
, in
our p
rofe
ssio
nal j
udgm
ent,
wer
e of
mos
t sig
nific
ance
in
our
audi
t of
the
finan
cial
sta
tem
ents
for
the
year
end
ed D
ecem
ber
31, 2
020.
The
se m
atte
rs w
ere
addr
esse
d in
the
cont
ext o
f ou
r au
dit o
f th
e fin
anci
al s
tate
men
ts a
s a
who
le, a
nd in
for
min
g ou
r op
inio
n th
ereo
n, a
nd w
e do
not
pro
vide
a se
para
te o
pini
on o
n th
ese
mat
ters
.
Key
aud
it m
atte
r in
the
audi
t of t
he C
ompa
ny’s
fina
ncia
l sta
tem
ents
is st
ated
bel
ow:
Rec
ogni
tion
of C
argo
Rev
enue
In a
cco r
danc
e w
ith IF
RS
15 “
Rev
enue
from
Con
tract
s w
ith C
usto
mer
s”, c
argo
sal
es a
re a
ccou
nted
fo
r as
carg
o re
venu
e af
ter r
elev
ant t
rans
porta
tion
serv
ices
hav
e be
en p
rovi
ded.
For
the
year
end
ed
Dec
embe
r 31,
202
0, c
argo
reve
nue
amou
nted
to N
T$81
,692
,574
thou
sand
. Ref
er to
Not
es 4
and
26
to th
e ac
com
pany
ing
finan
cial
stat
emen
ts fo
r det
aile
d in
form
atio
n.
- 1 -
(App
endi
x 2)
C
argo
rat
es a
re h
ighl
y af
fect
ed b
y th
e su
pply
and
dem
and
of t
he m
arke
t an
d sa
les
can
only
be
reco
gniz
ed
afte
r re
leva
nt
trans
porta
tion
serv
ices
ar
e pr
ovid
ed,
The
inpu
t, pr
oces
sing
an
d m
aint
enan
ce o
f fr
eigh
t inf
orm
atio
n on
the
air
way
bills
invo
lve
man
ual o
pera
tions
. The
refo
re, w
e id
entif
ied
the
reco
gniti
on o
f car
go re
venu
e as
a k
ey a
udit
mat
ter.
Our
mai
n au
dit p
roce
dure
s per
form
ed in
clud
ed th
e fo
llow
ing:
1.
W
e un
ders
tood
the
inte
rnal
con
trols
rela
ted
to th
e re
cogn
ition
of c
argo
, inc
ludi
ng m
anua
l and
au
tom
atic
con
trol.
2.
We
unde
rsto
od a
nd te
sted
the
effe
ctiv
enes
s of t
he in
form
atio
n sy
stem
rela
ted
to th
e re
cogn
ition
of
car
go re
venu
e.
3.
We
sam
pled
the
air w
aybi
lls, c
onfir
med
that
car
go ra
tes w
ere
cons
iste
nt w
ith th
ose
stat
ed in
air
way
bills
, and
ver
ified
the
amou
nt o
f car
go re
venu
e.
Oth
er M
atte
r - A
udit
by O
ther
Inde
pend
ent A
udito
rs
The
finan
cial
sta
tem
ents
of
som
e in
vest
men
ts a
ccou
nted
for
usi
ng th
e eq
uity
met
hod
in N
ote
13
wer
e au
dite
d by
oth
er in
depe
nden
t aud
itors
, and
our
aud
it op
inio
n is
bas
ed s
olel
y on
the
repo
rts o
f ot
her a
udito
rs. A
s of
Dec
embe
r 31,
202
0, th
e af
orem
entio
ned
inve
stm
ents
acc
ount
ed fo
r usi
ng th
e eq
uity
met
hod
amou
nted
to
NT$
2,30
4,11
3 th
ousa
nd, r
epre
sent
ing
0.88
% o
f to
tal
asse
ts. F
or t
he
year
end
ed D
ecem
ber
31, 2
020,
com
preh
ensi
ve in
com
e (lo
ss) (
incl
udin
g sh
are
of p
rofit
or l
oss
of
subs
idia
ries,
asso
ciat
es a
nd j
oint
ven
ture
s an
d sh
are
of o
ther
com
preh
ensi
ve i
ncom
e (lo
ss)
of
subs
idia
ries,
asso
ciat
es a
nd j
oint
ven
ture
s ac
coun
ted
for
usin
g th
e eq
uity
met
hod)
am
ount
ed t
o N
T$(9
52,2
89) t
hous
and.
R
espo
nsib
ilitie
s of M
anag
emen
t and
Tho
se C
harg
ed w
ith G
over
nanc
e fo
r th
e Fi
nanc
ial
Stat
emen
ts
Man
agem
ent i
s re
spon
sibl
e fo
r th
e pr
epar
atio
n an
d fa
ir pr
esen
tatio
n of
the
finan
cial
sta
tem
ents
in
acco
rdan
ce w
ith t
he R
egul
atio
ns G
over
ning
the
Pre
para
tion
of F
inan
cial
Rep
orts
by
Secu
ritie
s Is
suer
s, an
d fo
r su
ch i
nter
nal
cont
rol
as m
anag
emen
t de
term
ines
is
nece
ssar
y to
ena
ble
the
prep
arat
ion
of fi
nanc
ial s
tate
men
ts th
at a
re fr
ee fr
om m
ater
ial m
isst
atem
ent,
whe
ther
due
to f
raud
or
err
or.
In p
repa
ring
the
finan
cial
sta
tem
ents
, m
anag
emen
t is
res
pons
ible
for
ass
essi
ng t
he C
ompa
ny’s
ab
ility
to c
ontin
ue a
s a
goin
g co
ncer
n, d
iscl
osin
g, a
s ap
plic
able
, mat
ters
rel
ated
to g
oing
con
cern
an
d us
ing
the
goin
g co
ncer
n ba
sis
of a
ccou
ntin
g un
less
man
agem
ent e
ither
inte
nds
to li
quid
ate
the
Com
pany
or t
o ce
ase
oper
atio
ns, o
r has
no
real
istic
alte
rnat
ive
but t
o do
so.
Thos
e ch
arge
d w
ith g
over
nanc
e, in
clud
ing
the
audi
t com
mitt
ee a
nd s
uper
viso
rs, a
re re
spon
sibl
e fo
r ov
erse
eing
the
Com
pany
’s fi
nanc
ial r
epor
ting
proc
ess.
Aud
itors
’ Res
pons
ibili
ties f
or th
e A
udit
of th
e Fi
nanc
ial S
tate
men
ts
Our
obj
ectiv
es a
re to
obt
ain
reas
onab
le a
ssur
ance
abo
ut w
heth
er th
e fin
anci
al st
atem
ents
as a
who
le
are
free
from
mat
eria
l mis
stat
emen
t, w
heth
er d
ue to
frau
d or
err
or, a
nd to
issu
e an
aud
itors
’ rep
ort
that
incl
udes
our
opi
nion
. Rea
sona
ble
assu
ranc
e is
a h
igh
leve
l of a
ssur
ance
, but
is n
ot a
gua
rant
ee
that
an
audi
t co
nduc
ted
in a
ccor
danc
e w
ith t
he a
uditi
ng s
tand
ards
gen
eral
ly a
ccep
ted
in t
he
Rep
ublic
of
Chi
na w
ill a
lway
s de
tect
a m
ater
ial
mis
stat
emen
t w
hen
it ex
ists
. Mis
stat
emen
ts c
an
aris
e fr
om fr
aud
or e
rror
and
are
con
side
red
mat
eria
l if,
indi
vidu
ally
or i
n th
e ag
greg
ate,
they
cou
ld
reas
onab
ly b
e ex
pect
ed to
influ
ence
the
econ
omic
dec
isio
ns o
f us
ers
take
n on
the
basi
s of
thes
e fin
anci
al st
atem
ents
.
- 2 -
193
As
part
of a
n au
dit i
n ac
cord
ance
with
the
audi
ting
stan
dard
s ge
nera
lly a
ccep
ted
in th
e Re
publ
ic o
f C
hina
, w
e ex
erci
se p
rofe
ssio
nal
judg
men
t an
d m
aint
ain
prof
essi
onal
ske
ptic
ism
thr
ough
out
the
audi
t. W
e al
so:
1.
Iden
tify
and
asse
ss th
e ris
ks o
f mat
eria
l mis
stat
emen
t of t
he fi
nanc
ial s
tate
men
ts, w
heth
er d
ue
to f
raud
or
erro
r, de
sign
and
per
form
aud
it pr
oced
ures
res
pons
ive
to t
hose
ris
ks, a
nd o
btai
n au
dit e
vide
nce
that
is s
uffic
ient
and
app
ropr
iate
to p
rovi
de a
bas
is fo
r our
opi
nion
. The
risk
of
not d
etec
ting
a m
ater
ial m
isst
atem
ent r
esul
ting
from
frau
d is
hig
her t
han
for o
ne re
sulti
ng fr
om
erro
r, as
frau
d m
ay in
volv
e co
llusi
on, f
orge
ry, i
nten
tiona
l om
issi
ons,
mis
repr
esen
tatio
ns, o
r the
ov
errid
e of
inte
rnal
con
trol.
2.
Obt
ain
an u
nder
stan
ding
of
inte
rnal
con
trol
rele
vant
to
the
audi
t in
ord
er t
o de
sign
aud
it pr
oced
ures
that
are
app
ropr
iate
in th
e ci
rcum
stan
ces,
but n
ot fo
r the
pur
pose
of e
xpre
ssin
g an
op
inio
n on
the
effe
ctiv
enes
s of t
he C
ompa
ny’s
inte
rnal
con
trol.
3.
Eval
uate
the
appr
opria
tene
ss o
f acc
ount
ing
polic
ies
used
and
the
reas
onab
lene
ss o
f acc
ount
ing
estim
ates
and
rela
ted
disc
losu
res m
ade
by m
anag
emen
t. 4.
C
oncl
ude
on t
he a
ppro
pria
tene
ss o
f m
anag
emen
t’s u
se o
f th
e go
ing
conc
ern
basi
s of
ac
coun
ting
and,
bas
ed o
n th
e au
dit
evid
ence
obt
aine
d, w
heth
er a
mat
eria
l un
certa
inty
exi
sts
rela
ted
to e
vent
s or
con
ditio
ns t
hat
may
cas
t si
gnifi
cant
dou
bt o
n th
e C
ompa
ny’s
abi
lity
to
cont
inue
as
a go
ing
conc
ern.
If w
e co
nclu
de th
at a
mat
eria
l unc
erta
inty
exi
sts,
we
are
requ
ired
to d
raw
atte
ntio
n in
our
aud
itors
’ rep
ort t
o th
e re
late
d di
sclo
sure
s in
the
finan
cial
stat
emen
ts o
r, if
such
dis
clos
ures
are
inad
equa
te, t
o m
odify
our
opi
nion
. Our
con
clus
ions
are
bas
ed o
n th
e au
dit
evid
ence
obt
aine
d up
to
the
date
of
our
audi
tors
’ re
port.
How
ever
, fu
ture
eve
nts
or
cond
ition
s may
cau
se th
e Co
mpa
ny to
cea
se to
con
tinue
as a
goi
ng c
once
rn.
5.
Eval
uate
the
over
all p
rese
ntat
ion,
stru
ctur
e an
d co
nten
t of
the
finan
cial
sta
tem
ents
, inc
ludi
ng
the
disc
losu
res,
and
whe
ther
the
finan
cial
sta
tem
ents
repr
esen
t the
und
erly
ing
trans
actio
ns a
nd
even
ts in
a m
anne
r tha
t ach
ieve
s fai
r pre
sent
atio
n.
6.
Obt
ain
suff
icie
nt a
ppro
pria
te a
udit
evid
ence
rega
rdin
g th
e fin
anci
al in
form
atio
n of
the
entit
ies
or b
usin
ess
activ
ities
with
in th
e C
ompa
ny to
exp
ress
an
opin
ion
on th
e fin
anci
al s
tate
men
ts.
We
are
resp
onsi
ble
for
the
dire
ctio
n, s
uper
visi
on a
nd p
erfo
rman
ce o
f th
e au
dit.
We
rem
ain
sole
ly re
spon
sibl
e fo
r our
aud
it op
inio
n.
We
com
mun
icat
e w
ith th
ose
char
ged
with
gov
erna
nce
rega
rdin
g, a
mon
g ot
her m
atte
rs, t
he p
lann
ed
scop
e an
d tim
ing
of th
e au
dit a
nd s
igni
fican
t aud
it fin
ding
s, in
clud
ing
any
sign
ifica
nt d
efic
ienc
ies
in in
tern
al c
ontro
l tha
t we
iden
tify
durin
g ou
r aud
it.
We
also
pro
vide
tho
se c
harg
ed w
ith g
over
nanc
e w
ith a
sta
tem
ent
that
we
have
com
plie
d w
ith
rele
vant
et
hica
l re
quire
men
ts
rega
rdin
g in
depe
nden
ce,
and
to
com
mun
icat
e w
ith
them
al
l re
latio
nshi
ps a
nd o
ther
mat
ters
that
may
rea
sona
bly
be th
ough
t to
bear
on
our
inde
pend
ence
, and
w
here
app
licab
le, r
elat
ed sa
fegu
ards
. Fr
om th
e m
atte
rs c
omm
unic
ated
with
thos
e ch
arge
d w
ith g
over
nanc
e, w
e de
term
ine
thos
e m
atte
rs
that
wer
e of
mos
t sig
nific
ance
in th
e au
dit o
f the
fina
ncia
l sta
tem
ents
for t
he y
ear e
nded
Dec
embe
r 31
, 202
0 an
d ar
e th
eref
ore
the
key
audi
t mat
ters
. We
desc
ribe
thes
e m
atte
rs in
our
aud
itors
’ rep
ort
unle
ss la
w o
r re
gula
tion
prec
lude
s pu
blic
dis
clos
ure
abou
t the
mat
ter
or w
hen,
in e
xtre
mel
y ra
re
circ
umst
ance
s, w
e de
term
ine
that
a m
atte
r sh
ould
not
be
com
mun
icat
ed in
our
repo
rt be
caus
e th
e ad
vers
e co
nseq
uenc
es o
f do
ing
so w
ould
rea
sona
bly
be e
xpec
ted
to o
utw
eigh
the
publ
ic in
tere
st
bene
fits o
f suc
h co
mm
unic
atio
n.
- 3 -
The
enga
gem
ent p
artn
ers
on th
e au
dit r
esul
ting
in th
is in
depe
nden
t aud
itors
’ re
port
are
Jui-C
han
Hua
ng a
nd S
hiuh
-Ran
, Che
ng.
Del
oitte
& T
ouch
e Ta
ipei
, Tai
wan
R
epub
lic o
f Chi
na
Mar
ch 1
8, 2
021
N
otic
e to
Rea
ders
Th
e ac
com
pany
ing
finan
cial
sta
tem
ents
are
int
ende
d on
ly t
o pr
esen
t th
e fin
anci
al p
ositi
on,
finan
cial
per
form
ance
and
cas
h flo
ws
in a
ccor
danc
e w
ith a
ccou
ntin
g pr
inci
ples
and
pra
ctic
es
gene
rally
acc
epte
d in
the
Repu
blic
of C
hina
and
not
thos
e of
any
oth
er ju
risd
ictio
ns. T
he st
anda
rds,
proc
edur
es a
nd p
ract
ices
to
audi
t su
ch f
inan
cial
sta
tem
ents
are
tho
se g
ener
ally
app
lied
in t
he
Repu
blic
of C
hina
.
For
the
conv
enie
nce
of r
eade
rs, t
he in
depe
nden
t aud
itors
’ rep
ort a
nd th
e ac
com
pany
ing
finan
cial
st
atem
ents
hav
e be
en tr
ansl
ated
into
Eng
lish
from
the
orig
inal
Chi
nese
ver
sion
pre
pare
d an
d us
ed
in t
he R
epub
lic o
f C
hina
. If
ther
e is
any
con
flict
bet
wee
n th
e En
glis
h ve
rsio
n an
d th
e or
igin
al
Chi
nese
ver
sion
or
any
diffe
renc
e in
the
inte
rpre
tatio
n of
the
two
vers
ions
, the
Chi
nese
-lang
uage
in
depe
nden
t aud
itors
’ rep
ort a
nd fi
nanc
ial s
tate
men
ts sh
all p
reva
il.
- 4 -
194
CH
INA
AIR
LIN
ES,
LT
D.
BA
LA
NC
E S
HE
ET
S D
EC
EM
BE
R 3
1, 2
020
AN
D 2
019
(In
Tho
usan
ds o
f New
Tai
wan
Dol
lars
)
20
20
20
19
ASS
ET
S
Am
ount
%
A
mou
nt
%
CU
RR
ENT
ASS
ETS
Cas
h an
d ca
sh e
quiv
alen
ts (N
otes
4, 6
and
30)
$
19,9
59,8
20
8
$
20,6
26,0
14
8 Fi
nanc
ial a
sset
s at f
air v
alue
thro
ugh
prof
it or
loss
- cu
rren
t (N
otes
4, 7
and
30)
-
-
43
4
-
Fina
ncia
l ass
ets a
t am
ortiz
ed c
ost -
cur
rent
(Not
es 9
and
30)
5,
863,
137
2
1,
460,
450
- Fi
nanc
ial a
sset
s for
hed
ging
- cu
rren
t (N
otes
4, 6
and
30)
7,
613,
636
3
9,
588
- N
otes
and
acc
ount
s rec
eiva
bles
, net
(Not
es 4
, 10
and
30)
9,19
8,05
5
4
7,69
4,43
1
3
Acc
ount
s rec
eiva
bles
- re
late
d pa
rties
(Not
e 31
)
10
1,42
4
-
232,
386
- O
ther
rece
ivab
les
427,
722
-
56
0,81
9
-
Cur
rent
tax
asse
ts (N
otes
4 a
nd 2
7)
60,1
29
-
52
,776
-
Inve
ntor
ies,
net (
Not
es 4
and
11)
8,
093,
152
3
8,
246,
515
3 N
on-c
urre
nt a
sset
s hel
d fo
r sal
e (N
otes
4 a
nd 1
2)
89,2
96
-
-
- O
ther
cur
rent
ass
ets (
Not
e 17
)
45
2,41
4
-
2,10
6,19
9
1
To
tal c
urre
nt a
sset
s
51
,858
,785
20
40
,989
,612
15
NO
N-C
UR
REN
T A
SSET
S
Fi
nanc
ial a
sset
s at f
air v
alue
thro
ugh
othe
r com
preh
ensi
ve in
com
e - n
on-c
urre
nt (N
otes
4, 8
and
30)
14
7,16
1
-
107,
856
- In
vest
men
ts a
ccou
nted
for u
sing
the
equi
ty m
etho
d (N
otes
4 a
nd 1
3)
12,3
21,1
57
5
13
,482
,877
5
Prop
erty
, pla
nt a
nd e
quip
men
t (N
otes
4, 1
4 an
d 32
)
12
6,41
4,46
2
48
13
1,02
9,88
6
49
R
ight
-of-
use
asse
ts (N
otes
4, 2
0 an
d 32
)
54
,555
,761
21
64
,262
,830
24
In
vest
men
t pro
perti
es (N
otes
4 a
nd 1
5)
2,04
7,44
8
1
2,04
7,44
8
1
Oth
er in
tang
ible
ass
ets (
Not
es 4
and
16)
86
7,45
3
-
971,
298
- D
efer
red
tax
asse
ts (N
otes
4 a
nd 2
7)
4,98
1,85
9
2
4,75
7,14
2
2
Oth
er n
on-c
urre
nt a
sset
s (N
otes
17,
20
and
30)
7,71
5,67
9
3
11,2
27,5
56
4
Tota
l non
-cur
rent
ass
ets
209,
050,
980
80
227,
886,
893
85
T
OTA
L
$ 2
60,9
09,7
65
100
$
268
,876
,505
10
0
L
IAB
ILIT
IES
AN
D E
QU
ITY
CU
RR
ENT
LIA
BIL
ITIE
S
Sh
ort-t
erm
bill
s pay
able
(Not
es 1
8 an
d 30
)
$
8,08
8,88
2
3
$
-
- Fi
nanc
ial l
iabi
litie
s at f
air v
alue
thro
ugh
prof
it or
loss
- cu
rren
t (N
otes
4, 7
and
30)
-
-
11
,749
-
Fina
ncia
l lia
bilit
ies f
or h
edgi
ng -
curr
ent (
Not
es 4
, 20
and
30)
8,12
6,23
9
3
8,61
0,01
5
3
Not
es a
nd a
ccou
nts p
ayab
le (N
ote
30)
1,12
8,51
7
1
1,22
2,41
0
-
Acc
ount
s pay
able
- re
late
d pa
rties
(Not
e 31
)
58
8,23
4
-
1,46
9,43
4
1
Oth
er p
ayab
les (
Not
es 2
1 an
d 26
)
7,
128,
080
3
10
,892
,203
4
Tax
liabi
litie
s - c
urre
nt
2
-
-
-
Leas
e lia
bilit
ies -
cur
rent
(Not
es 4
and
20)
84
2,59
2
-
695,
215
- C
ontra
ct li
abili
ties c
urre
nt (N
otes
4 a
nd 2
2)
3,21
8,84
6
1
18,5
84,2
87
7 B
onds
pay
able
and
put
opt
ion
of c
onve
rtibl
e bo
nds -
cur
rent
por
tion
(Not
es 4
, 19,
30
and
31)
12,1
32,8
59
5
10
,000
,000
4
Loan
s and
deb
ts -
curr
ent p
ortio
n (N
otes
18,
30
and
32)
14,7
98,4
42
6
13
,708
,320
5
Oth
er c
urre
nt li
abili
ties
687,
317
-
2,
806,
540
1
Tota
l cur
rent
liab
ilitie
s
56
,740
,010
22
68
,000
,173
25
NO
N-C
UR
REN
T LI
AB
ILIT
IES
Fina
ncia
l lia
bilit
ies f
or h
edgi
ng -
non-
curr
ent (
Not
es 4
, 20
and
30)
32,4
55,3
33
13
42,4
20,2
05
16
Bon
ds p
ayab
le (N
otes
4, 1
9, 3
0 an
d 31
)
10
,300
,000
4
22,3
52,6
25
8 Lo
ans a
nd d
ebts
(Not
es 1
8, 3
0 an
d 32
)
68
,815
,395
26
48
,618
,168
18
C
ontra
ct li
abili
ties (
Not
es 4
and
22)
1,
761,
104
1
2,
236,
311
1 Pr
ovis
ions
(Not
es 4
and
23)
13
,741
,244
5
9,43
1,73
6
4
Def
erre
d ta
x lia
bilit
ies (
Not
es 4
and
27)
87
5,38
8
-
399,
253
- Le
ase
liabi
litie
s - n
on-c
urre
nt (N
otes
4 a
nd 2
0)
10,0
55,7
76
4
10
,909
,262
4
Acc
rued
pen
sion
cos
ts (N
otes
5 a
nd 2
4)
8,21
7,39
5
3
7,58
8,74
5
3
Oth
er n
on-c
urre
nt li
abili
ties
388,
637
-
36
6,25
5
-
To
tal n
on-c
urre
nt li
abili
ties
146,
610,
272
56
144,
322,
560
54
To
tal l
iabi
litie
s
20
3,35
0,28
2
78
21
2,32
2,73
3
79
EQU
ITY
(Not
es 1
9 an
d 25
)
Sh
are
capi
tal
54,2
09,8
46
21
54,2
09,8
46
20
Cap
ital s
urpl
us
1,18
7,32
7
-
2,48
8,90
7
1
Ret
aine
d ea
rnin
gs (a
ccum
ulat
ed d
efic
it)
Lega
l res
erve
-
-
46
6,41
6
-
Spec
ial r
eser
ve
-
-
12,9
67
- U
napp
ropr
iate
d re
tain
ed e
arni
ngs (
accu
mul
ated
def
icit)
(3
50,5
81)
-
(1
,777
,225
)
-
Tota
l ret
aine
d ea
rnin
gs
(350
,581
)
-
(1,2
97,8
42)
- O
ther
equ
ity
2,54
3,76
6
1
1,19
6,23
3
-
Trea
sury
shar
es
(30,
875)
-
(43,
372)
-
To
tal e
quity
57
,559
,483
22
56
,553
,772
21
TOTA
L
$ 2
60,9
09,7
65
100
$
268
,876
,505
10
0 Th
e ac
com
pany
ing
note
s are
an
inte
gral
par
t of t
he fi
nanc
ial s
tate
men
ts.
- 5 -
CH
INA
AIR
LIN
ES,
LT
D.
STA
TE
ME
NT
S O
F C
OM
PREH
EN
SIV
E IN
CO
ME
FO
R T
HE
YE
AR
S E
ND
ED
DE
CE
MB
ER
31,
202
0 A
ND
201
9 (I
n T
hous
ands
of N
ew T
aiw
an D
olla
rs, E
xcep
t Ear
ning
s (L
oss)
Per
Sha
re)
2020
2019
A
mou
nt
%
Am
ount
%
R
EVEN
UE
(Not
es 4
, 26
and
31)
$
106
,327
,123
100
$ 1
46,3
72,4
01
1
00
C
OST
S (N
otes
4, 1
1, 2
6 an
d 31
)
95
,190
,179
89
13
5,00
8,16
6
92
GR
OSS
PR
OFI
T
11
,136
,944
11
11
,364
,235
8
O
PER
ATI
NG
EX
PEN
SES
(Not
es 4
, 26
and
31)
6,25
2,08
9
6
11,2
84,0
00
8
OPE
RA
TIN
G P
RO
FIT
4,88
4,85
5
5
80,2
35
-
NO
N-O
PER
ATI
NG
INC
OM
E A
ND
EX
PEN
SES
Oth
er in
com
e (N
ote
26)
440,
761
-
52
4,23
3
-
Oth
er g
ains
and
loss
es (N
otes
12,
13,
14
and
26)
(523
,827
)
-
(569
,582
)
-
Fina
nce
cost
s (N
otes
26
and
31)
(2,7
80,3
63)
(3)
(3,0
34,1
72)
(2)
Shar
e of
the
prof
it of
ass
ocia
tes a
nd jo
int v
entu
res
(Not
e 13
)
(1
,850
,331
)
(2
)
1,
811,
960
1
Tota
l non
-ope
ratin
g in
com
e an
d ex
pens
es
(4,7
13,7
60)
(5)
(1,2
67,5
61)
(1)
PR
OFI
T (L
OSS
) BEF
OR
E IN
CO
ME
TAX
17
1,09
5
-
(1,1
87,3
26)
(1)
IN
CO
ME
TAX
EX
PEN
SE (N
otes
4 a
nd 2
7)
31,0
95
-
12
,472
-
N
ET IN
CO
ME
(LO
SS)
140,
000
-
(1
,199
,798
)
(1
)
OTH
ER C
OM
PREH
ENSI
VE
INC
OM
E (L
OSS
)
Ite
ms t
hat w
ill n
ot b
e re
clas
sifie
d su
bseq
uent
ly to
pr
ofit
or lo
ss:
Loss
on
hedg
ing
inst
rum
ents
subj
ect t
o ba
sis
adju
stm
ents
(Not
es 4
, 25
and
30)
(474
,202
)
-
(17,
705)
- U
nrea
lized
(los
s) g
ain
on in
vest
men
ts in
equ
ity
inst
rum
ents
des
igna
ted
as a
t fai
r val
ue th
roug
h ot
her c
ompr
ehen
sive
inco
me
(Not
es 4
and
25)
39
,305
-
24,4
90
- R
emea
sure
men
t of d
efin
ed b
enef
it pl
ans (
Not
es 4
an
d 24
)
(4
94,2
18)
(1)
(562
,259
)
-
Shar
e of
the
othe
r com
preh
ensi
ve lo
ss o
f as
soci
ates
and
join
t ven
ture
s acc
ount
ed fo
r us
ing
the
equi
ty m
etho
d (N
otes
4 a
nd 2
5)
(9,0
95)
-
(7
2,71
8)
-
(Con
tinue
d)
- 6 -
195
CH
INA
AIR
LIN
ES,
LT
D.
STA
TE
ME
NT
S O
F C
OM
PREH
EN
SIV
E IN
CO
ME
FO
R T
HE
YE
AR
S E
ND
ED
DE
CE
MB
ER
31,
202
0 A
ND
201
9 (I
n T
hous
ands
of N
ew T
aiw
an D
olla
rs, E
xcep
t Ear
ning
s (L
oss)
Per
Sha
re)
2020
2019
A
mou
nt
%
Am
ount
%
In
com
e ta
x re
latin
g to
item
s tha
t will
not
be
recl
assi
fied
subs
eque
ntly
to p
rofit
or l
oss
(N
ote
27)
$
16
3,17
2
-
$
10
1,25
9
-
Item
s tha
t may
be
recl
assi
fied
subs
eque
ntly
to p
rofit
or
loss
:
Ex
chan
ge d
iffer
ence
s on
trans
latio
n of
the
finan
cial
stat
emen
ts o
f for
eign
ope
ratio
ns
(Not
es 4
and
25)
(1
01,1
42)
-
(5
9,17
4)
-
Shar
e of
the
othe
r com
preh
ensi
ve lo
ss o
f as
soci
ates
and
join
t ven
ture
s acc
ount
ed fo
r us
ing
the
equi
ty m
etho
d (N
otes
4 a
nd 2
5)
4,20
5
-
(13,
259)
- G
ain
on h
edgi
ng in
stru
men
ts n
ot su
bjec
t to
basi
s ad
just
men
t (N
otes
4, 2
5 an
d 30
)
2,
098,
393
2
1,
425,
306
1 In
com
e ta
x re
latin
g to
item
s tha
t may
be
recl
assi
fied
subs
eque
ntly
to p
rofit
or l
oss
(N
ote
27)
(399
,450
)
-
(273
,227
)
-
O
ther
com
preh
ensi
ve in
com
e (lo
ss) f
or th
e ye
ar,
net o
f inc
ome
tax
826,
968
1
55
2,71
3
1
TO
TAL
CO
MPR
EHEN
SIV
E IN
CO
ME
(LO
SS) F
OR
TH
E Y
EAR
$
966,
968
1
$
(647
,085
)
-
EAR
NIN
GS
(LO
SS) P
ER S
HA
RE
(NEW
TA
IWA
N
DO
LLA
RS;
Not
e 28
)
B
asic
$
0.03
$
(0
.22)
Dilu
ted
$
0.
03
$
(0.2
2)
Th
e ac
com
pany
ing
note
s are
an
inte
gral
par
t of t
he fi
nanc
ial s
tate
men
ts.
(Con
clud
ed)
- 7 -
196
CH
INA
AIR
LIN
ES,
LT
D.
STA
TE
ME
NT
S O
F C
HA
NG
ES
IN E
QU
ITY
FO
R T
HE
YE
AR
S E
ND
ED
DE
CE
MB
ER
31,
202
0 A
ND
201
9 (I
n T
hous
ands
of N
ew T
aiw
an D
olla
rs)
Oth
er E
quity
U
nrea
lized
Ret
aine
d E
arni
ngs
E
xcha
nge
Diff
eren
ces o
n
G
ain
(Los
s) o
n Fi
nanc
ial A
sset
s at
Shar
e C
apita
l
Cap
ital S
urpl
us
L
egal
Res
erve
Spec
ial R
eser
ve
Una
ppro
pria
ted
Ear
ning
s (A
ccum
ulat
ed
Def
icit)
Tra
nsla
tion
of th
e Fi
nanc
ial
Stat
emen
ts o
f Fo
reig
n O
pera
tions
Fair
Val
ue
Thr
ough
Oth
er
Com
preh
ensi
ve
Inco
me
Gai
n (L
oss)
on
Hed
ging
In
stru
men
ts
Tre
asur
y Sh
ares
H
eld
by
Subs
idia
ries
Tot
al E
quity
BA
LAN
CE
AT
JAN
UA
RY
1, 2
019
$
54,
209,
846
$
1,
241,
214
$
35
1,92
3
$
118,
810
$
1,
144,
928
$
(9
,664
)
$
42,6
19
$
25
,268
$
(43,
372)
$ 5
7,08
1,57
2
Bas
is a
djus
tmen
ts to
gai
n on
hed
ging
inst
rum
ents
-
-
-
-
-
-
-
(603
)
-
(603
)
App
ropr
iatio
n of
201
8 ea
rnin
gs
Lega
l res
erve
-
-
11
4,49
3
-
(114
,493
)
-
-
-
-
-
Spec
ial r
eser
ve
-
-
-
(1
05,8
43)
105,
843
-
-
-
-
- C
ash
divi
dend
s - $
0.20
9607
37 p
er sh
are
-
-
-
-
(1,1
36,2
78)
-
-
-
-
(1,1
36,2
78)
C
hang
es in
cap
ital s
urpl
us fr
om in
vest
men
ts in
ass
ocia
tes a
nd
join
t ven
ture
s acc
ount
ed fo
r usin
g th
e eq
uity
met
hod
-
60
6
-
-
-
-
-
-
-
606
A
ctua
l dis
posa
l or a
cqui
sitio
n of
inte
rest
s in
subs
idia
ries
-
1,
247,
087
-
-
-
-
-
-
-
1,
247,
087
N
et lo
ss fo
r the
yea
r end
ed D
ecem
ber 3
1, 2
019
-
-
-
-
(1,1
99,7
98)
-
-
-
-
(1,1
99,7
98)
O
ther
com
preh
ensi
ve in
com
e (lo
ss) f
or th
e ye
ar e
nded
Dec
embe
r 31,
201
9, n
et o
f inc
ome
tax
-
-
-
-
(577
,427
)
(5
3,41
1)
64,5
38
1,11
9,01
3
-
552,
713
To
tal c
ompr
ehen
sive
inco
me
(loss
) for
the
year
end
ed
D
ecem
ber 3
1, 2
019
-
-
-
-
(1,7
77,2
25)
(53,
411)
64
,538
1,
119,
013
-
(6
47,0
85)
C
hang
es in
cap
ital s
urpl
us fr
om in
vest
men
ts in
ass
ocia
tes a
nd
join
t ven
ture
s acc
ount
ed fo
r usin
g th
e eq
uity
met
hod
-
-
-
-
-
8,
368
105
-
-
8,47
3
BA
LAN
CE
AT
DEC
EMB
ER 3
1, 2
019
54,2
09,8
46
2,48
8,90
7
46
6,41
6
12
,967
(1
,777
,225
)
(5
4,70
7)
107,
262
1,14
3,67
8
(4
3,37
2)
56,5
53,7
72
Is
suan
ce o
f em
ploy
ee sh
are
optio
ns b
y su
bsid
iarie
s
-
172
-
-
-
-
-
-
-
17
2
Cha
nges
in p
erce
ntag
e of
ow
ners
hip
inte
rest
s in
subs
idia
ries
-
-
-
-
(169
,272
)
-
-
-
-
(1
69,2
72)
B
asis
adj
ustm
ent t
o ga
in o
n he
dgin
g in
stru
men
ts
-
-
-
-
-
-
-
20
0,98
9
-
200,
989
A
ppro
pria
tion
of 2
019
earn
ings
Le
gal r
eser
ve
-
-
(466
,416
)
-
466,
416
-
-
-
-
- Sp
ecia
l res
erve
-
-
-
(12,
967)
12
,967
-
-
-
-
-
Cap
ital s
urpl
us u
sed
to c
over
acc
umul
ated
def
icit
-
(1
,297
,843
)
-
-
1,
297,
843
-
-
-
-
-
Net
pro
fit fo
r the
yea
r end
ed D
ecem
ber 3
1, 2
020
-
-
-
-
140,
000
-
-
-
-
140,
000
O
ther
com
preh
ensi
ve in
com
e (lo
ss) f
or th
e ye
ar e
nded
Dec
embe
r 31,
202
0, n
et o
f inc
ome
tax
-
-
-
-
(319
,576
)
(7
9,54
5)
(35,
903)
1,
261,
992
-
82
6,96
8
Tota
l com
preh
ensi
ve in
com
e (lo
ss) f
or th
e ye
ar e
nded
Dec
embe
r 31,
202
0
-
-
-
-
(1
79,5
76)
(79,
545)
(3
5,90
3)
1,26
1,99
2
-
966,
968
D
ispo
sal o
f tre
asur
y sh
ares
-
(3,9
09)
-
-
(1,7
34)
-
-
-
12
,497
6,
854
B
ALA
NC
E A
T D
ECEM
BER
31,
202
0
$ 5
4,20
9,84
6
$
1,18
7,32
7
$
-
$
-
$
(350
,581
)
$
(134
,252
)
$
71,3
59
$
2,
606,
659
$
(3
0,87
5)
$
57,
559,
483
The
acco
mpa
nyin
g no
tes a
re a
n in
tegr
al p
art o
f the
fina
ncia
l sta
tem
ents
.
197
CH
INA
AIR
LIN
ES,
LT
D.
STA
TE
ME
NT
S O
F C
ASH
FL
OW
S FO
R T
HE
YE
AR
S E
ND
ED
DE
CE
MB
ER
31,
202
0 A
ND
201
9 (I
n T
hous
ands
of N
ew T
aiw
an D
olla
rs)
2020
2019
CA
SH F
LOW
S FR
OM
OPE
RA
TIN
G A
CTI
VIT
IES
Inco
me
(loss
) bef
ore
inco
me
tax
$
17
1,09
5
$
(1,1
87,3
26)
Adj
ustm
ents
for:
Dep
reci
atio
n ex
pens
e
28
,018
,746
29
,398
,635
A
mor
tizat
ion
expe
nse
169,
158
165,
981
Expe
cted
cre
dit l
oss r
ecog
nize
d on
trad
e re
ceiv
able
s
3,
000
24,0
00
Net
gai
n on
fair
valu
e ch
ange
s of f
inan
cial
ass
ets a
nd li
abili
ties a
t fa
ir va
lue
thro
ugh
prof
it or
loss
(3
,596
)
(2
5,70
0)
Inte
rest
inco
me
(208
,081
)
(3
14,9
44)
Div
iden
d in
com
e
(8
,720
)
(1
0,11
2)
Shar
e of
loss
(pro
fit) o
f ass
ocia
tes a
nd jo
int v
entu
res
1,85
0,33
1
(1
,811
,960
) G
ain
on d
ispo
sal o
f pro
perty
, pla
nt a
nd e
quip
men
t
(8
,005
)
(2
6,37
7)
Gai
n on
dis
posa
l of i
nves
tmen
ts a
ccou
nted
for u
sing
the
equi
ty
met
hod
-
(7
,656
) Lo
ss o
n di
spos
al o
f non
-cur
rent
ass
ets h
eld
for s
ale
-
10
,462
Lo
ss o
n in
vent
orie
s and
pro
perty
, pla
nt a
nd e
quip
men
t
47
1,51
8
57
1,96
0 Im
pairm
ent l
oss r
ecog
nize
d on
pro
perty
, pla
nt a
nd e
quip
men
t
42
4,57
3
-
Net
(gai
n) lo
ss o
n fo
reig
n cu
rren
cy e
xcha
nge
(1,0
48,3
69)
41,2
92
Impa
irmen
t los
s rec
ogni
zed
on in
vest
men
ts a
ccou
nted
for u
sing
the
equi
ty m
etho
d
46
,757
-
Fina
nce
cost
s
2,
780,
363
3,03
4,17
2 R
ecog
nitio
n of
pro
visi
ons
5,58
0,41
6
3,
616,
519
Loss
on
sale
-leas
ebac
ks
-
10
3,77
5 O
ther
s
1,
876
5 C
hang
es in
ope
ratin
g as
sets
and
liab
ilitie
s
Fi
nanc
ial a
sset
s man
dato
rily
clas
sifie
d as
at f
air v
alue
thro
ugh
prof
it or
loss
4,
030
25,2
66
Fina
ncia
l lia
bilit
ies m
anda
toril
y cl
assi
fied
as a
t fai
r val
ue th
roug
h pr
ofit
or lo
ss
(11,
749)
11,5
28
Not
es a
nd a
ccou
nts r
ecei
vabl
e
(1
,467
,229
)
1,
507,
192
Acc
ount
s rec
eiva
ble
- rel
ated
par
ties
130,
962
65,9
25
Oth
er re
ceiv
able
s
10
7,52
4
10
1,04
7 In
vent
orie
s
(7
0,34
4)
(1
28,0
37)
Oth
er c
urre
nt a
sset
s
1,
701,
803
351,
186
Not
es a
nd a
ccou
nts p
ayab
le
(59,
328)
53,0
77
Acc
ount
s pay
able
- re
late
d pa
rties
(8
81,2
00)
(114
,250
) O
ther
pay
able
s
(3
,724
,692
)
(7
31,5
99)
Con
tract
liab
ilitie
s
(1
5,84
0,64
8)
1,
851,
452
Prov
isio
ns
(705
,117
)
(1
,970
,226
) O
ther
cur
rent
liab
ilitie
s
(1
,915
,678
)
(1
20,6
55)
Acc
rued
pen
sion
liab
ilitie
s
13
4,43
2
93
,703
C
ash
gene
rate
d fr
om o
pera
tions
15
,643
,828
34
,578
,335
In
tere
st re
ceiv
ed
228,
141
307,
503
Div
iden
ds re
ceiv
ed
842,
919
940,
039
(Con
tinue
d)
- 9 -
CH
INA
AIR
LIN
ES,
LT
D.
STA
TE
ME
NT
S O
F C
ASH
FL
OW
S FO
R T
HE
YE
AR
S E
ND
ED
DE
CE
MB
ER
31,
202
0 A
ND
201
9 (I
n T
hous
ands
of N
ew T
aiw
an D
olla
rs)
2020
2019
Inte
rest
pai
d
$
(2,9
66,7
77)
$
(3
,038
,729
) In
com
e ta
x pa
id
(23,
308)
(41,
260)
Net
cas
h ge
nera
ted
from
ope
ratin
g ac
tiviti
es
13,7
24,8
03
32,7
45,8
88
C
ASH
FLO
WS
FRO
M IN
VES
TIN
G A
CTI
VIT
IES
Acq
uisi
tion
of fi
nanc
ial a
sset
s at a
mor
tized
cos
t
(5
,896
,451
)
(1
,467
,317
) D
ispo
sal o
f fin
anci
al a
sset
s at a
mor
tized
cos
t
1,
460,
450
2,31
0,00
0 Pa
ymen
ts to
acq
uire
fina
ncia
l ass
ets f
or h
edgi
ng
(10,
269,
055)
- Pr
ocee
ds fr
om d
ispo
sal o
f fin
anci
al a
sset
s for
hed
ging
2,
363,
897
- A
cqui
sitio
n of
inve
stm
ents
acc
ount
ed fo
r usi
ng th
e eq
uity
met
hod
(1,8
37,8
45)
(35,
525)
Pa
ymen
ts fo
r dis
posa
l of
pro
perty
, pla
nt a
nd e
quip
men
t
(8
59,6
54)
(2,3
97,7
42)
Proc
eeds
from
dis
posa
l of p
rope
rty, p
lant
and
equ
ipm
ent
23,3
85
38,5
96
Proc
eeds
from
dis
posa
l of n
on-c
urre
nt a
sset
s hel
d fo
r sal
e
-
35,6
92
Proc
eeds
from
dis
posa
l of i
nves
tmen
ts a
ccou
nted
for u
sing
the
equi
ty
met
hod
-
1,
713,
825
Incr
ease
in re
fund
able
dep
osits
(1
8,21
4)
(3
87,2
44)
Dec
reas
e in
refu
ndab
le d
epos
its
34,5
99
104,
825
Incr
ease
in p
repa
ymen
ts fo
r equ
ipm
ent
(9,9
66,3
42)
(13,
699,
043)
In
crea
se in
com
pute
r sof
twar
e co
sts
(95,
217)
(157
,571
)
Net
cas
h us
ed in
inve
stin
g ac
tiviti
es
(25,
060,
447)
(13,
941,
504)
CA
SH F
LOW
S FR
OM
FIN
AN
CIN
G A
CTI
VIT
IES
Incr
ease
in sh
ort-t
erm
bill
pay
able
8,
088,
882
- Pr
ocee
ds fr
om is
suan
ce o
f bon
ds p
ayab
le
-
3,
500,
000
Rep
aym
ents
of b
onds
pay
able
(1
0,00
0,00
0)
(4
,445
,900
) Pr
ocee
ds fr
om sa
le-le
aseb
acks
-
4,90
5,66
0 Pr
ocee
ds fr
om lo
ng-te
rm d
ebts
40
,200
,000
5,
500,
000
Rep
aym
ents
of l
ong-
term
deb
ts
(18,
912,
651)
(15,
336,
255)
R
epay
men
ts o
f the
prin
cipa
l por
tion
of le
ase
liabi
litie
s
(8
,909
,975
)
(9
,666
,313
) Pr
ocee
ds fr
om g
uara
ntee
dep
osits
rece
ived
16
6,69
7
16
7,03
4 R
efun
ds o
f gua
rant
ee d
epos
its re
ceiv
ed
(146
,566
)
(1
33,9
38)
Div
iden
ds p
aid
to o
wne
rs o
f the
Com
pany
-
(1,1
36,2
78)
N
et c
ash
gene
rate
d fr
om (u
sed
in) f
inan
cing
act
iviti
es
10,4
86,3
87
(16,
645,
990)
EFFE
CTS
OF
EXC
HA
NG
E R
ATE
CH
AN
GES
ON
TH
E B
ALA
NC
E O
F C
ASH
HEL
D IN
FO
REI
GN
CU
RR
ENC
IES
183,
063
(220
,402
)
NET
(DEC
REA
SE) I
NC
REA
SE IN
CA
SH A
ND
CA
SH
EQU
IVA
LEN
TS
(666
,194
)
1,
937,
992
C
ASH
AN
D C
ASH
EQ
UIV
ALE
NTS
AT
THE
BEG
INN
ING
OF
THE
YEA
R
20,6
26,0
14
18,6
88,0
22
C
ASH
AN
D C
ASH
EQ
UIV
ALE
NTS
AT
THE
END
OF
THE
YEA
R
$
19
,959
,820
$
20,6
26,0
14
The
acco
mpa
nyin
g no
tes a
re a
n in
tegr
al p
art o
f the
fina
ncia
l sta
tem
ents
. (C
oncl
uded
) - 1
0 -
198
CH
INA
AIR
LIN
ES,
LT
D.
NO
TE
S T
O F
INA
NC
IAL
ST
AT
EM
EN
TS
FOR
TH
E Y
EA
RS
EN
DE
D D
EC
EM
BE
R 3
1, 2
020
AN
D 2
019
(In
Tho
usan
ds o
f New
Tai
wan
Dol
lars
, Unl
ess S
tate
d O
ther
wis
e)
1.
GE
NE
RA
L IN
FOR
MA
TIO
N
Chi
na A
irlin
es, L
td. (
the
“Com
pany
”) w
as f
ound
ed in
195
9 an
d its
sha
res
have
bee
n lis
ted
on th
e Ta
iwan
St
ock
Exch
ange
sin
ce F
ebru
ary
26,
1993
. Th
e Co
mpa
ny p
rimar
ily p
rovi
des
air
trans
port
serv
ices
for
pa
ssen
gers
and
car
go. I
ts o
ther
ope
ratio
ns in
clud
e (a
) mai
l ser
vice
s; (b
) gro
und
serv
ices
and
rout
ine
airc
raft
mai
nten
ance
; (c)
maj
or m
aint
enan
ce o
f flig
ht e
quip
men
t; (d
) com
mun
icat
ions
and
dat
a pr
oces
sing
ser
vice
s to
oth
er a
irlin
es; (
e) th
e sa
le o
f airc
raft
parts
, equ
ipm
ent a
nd th
e en
tire
airc
raft;
and
(f) l
easi
ng o
f airc
raft.
Th
e m
ajor
sha
reho
lder
s of
the
Com
pany
are
Chi
na A
viat
ion
Dev
elop
men
t Fo
unda
tion
(CA
DF)
and
N
atio
nal D
evel
opm
ent F
und
(ND
F), E
xecu
tive
Yua
n. A
s of D
ecem
ber 3
1, 2
020
and
2019
, CA
DF
and
ND
F jo
intly
hel
d 44
.03%
of
the
Com
pany
’s s
hare
s. A
s of
Dec
embe
r 31
, 20
20 a
nd 2
019,
the
Com
pany
had
11
,534
and
12,
175
empl
oyee
s, re
spec
tivel
y.
2.
APP
RO
VA
L O
F FI
NA
NC
IAL
ST
AT
EM
EN
TS
The
finan
cial
stat
emen
ts w
ere
appr
oved
by
the
Com
pany
’s b
oard
of d
irect
ors o
n M
arch
18,
202
1.
3.
APP
LIC
AT
ION
OF
NEW
, AM
EN
DE
D A
ND
RE
VIS
ED
ST
AN
DA
RD
S A
ND
INT
ER
PRE
TA
TIO
NS
a.
In
itial
app
licat
ion
of t
he a
men
dmen
ts t
o th
e In
tern
atio
nal
Fina
ncia
l R
epor
ting
Stan
dard
s (IF
RS)
, In
tern
atio
nal A
ccou
ntin
g St
anda
rds (
IAS)
, IFR
IC In
terp
reta
tions
(IFR
IC),
and
SIC
Inte
rpre
tatio
ns (S
IC)
(col
lect
ivel
y, th
e “I
FRSs
”) e
ndor
sed
and
issu
ed in
to e
ffec
t by
the
Fina
ncia
l Sup
ervi
sory
Com
mis
sion
(F
SC)
Ex
cept
for t
he fo
llow
ing,
the
initi
al a
pplic
atio
n of
the
IFR
Ss e
ndor
sed
and
issu
ed in
to e
ffec
t by
the
FSC
di
d no
t hav
e m
ater
ial i
mpa
ct o
n th
e C
ompa
ny’s
acc
ount
ing
polic
ies:
A
men
dmen
t to
IFR
S 16
“C
ovid
-19-
Rel
ated
Ren
t Con
cess
ions
” Th
e C
ompa
ny e
lect
ed t
o ap
ply
the
prac
tical
exp
edie
nt p
rovi
ded
in t
he a
men
dmen
t to
IFR
S 16
with
re
spec
t to
rent
con
cess
ions
neg
otia
ted
with
the
less
or a
s a
dire
ct c
onse
quen
ce o
f th
e C
OV
ID-1
9. T
he
rela
ted
acco
untin
g po
licie
s ar
e st
ated
in
Not
e 4.
Prio
r to
the
app
licat
ion
of t
he a
men
dmen
t, th
e C
ompa
ny sh
all d
eter
min
e w
heth
er o
r not
the
abov
emen
tione
d re
nt c
once
ssio
ns n
eed
to b
e ac
coun
ted
for
as le
ase
mod
ifica
tions
. Th
e C
ompa
ny a
pplie
d th
e am
endm
ent
from
Jan
uary
1,
2020
. B
ecau
se t
he a
bove
men
tione
d re
nt
conc
essi
ons
affe
ct o
nly
in 2
020,
ret
rosp
ectiv
e ap
plic
atio
n of
the
am
endm
ent
has
no i
mpa
ct o
n th
e re
tain
ed e
arni
ngs a
s of J
anua
ry 1
, 202
0.
- 11
-
b.
The
IFR
Ss e
ndor
sed
by th
e FS
C fo
r app
licat
ion
star
ting
from
202
1
New
IFR
Ss
E
ffec
tive
Dat
e A
nnou
nced
by
IASB
A
men
dmen
ts to
IFR
S 4 “
Exte
nsio
n of
the
Tem
pora
ry E
xem
ptio
n fr
om
App
lyin
g IF
RS
9”
Eff
ectiv
e im
med
iate
ly u
pon
prom
ulga
tion
by th
e IA
SB
Am
endm
ents
to IF
RS
9, IA
S 39
, IFR
S 7,
IFR
S 4
and
IFR
S 16
“I
nter
est R
ate
Ben
chm
ark
Ref
orm
- Ph
ase
2”
Jan
uary
1, 2
021
A
s of
the
dat
e th
e fin
anci
al s
tate
men
ts w
ere
auth
oriz
ed f
or i
ssue
, th
e C
ompa
ny i
s co
ntin
uous
ly
asse
ssin
g th
e po
ssib
le im
pact
that
the
appl
icat
ion
of o
ther
stan
dard
s an
d in
terp
reta
tions
will
hav
e on
the
Com
pany
’s fi
nanc
ial p
ositi
on a
nd fi
nanc
ial p
erfo
rman
ce a
nd w
ill d
iscl
ose
the
rele
vant
impa
ct w
hen
the
asse
ssm
ent i
s com
plet
ed.
c.
N
ew IF
RSs
in is
sue
but n
ot y
et e
ndor
sed
and
issu
ed in
to e
ffec
t by
the
FSC
New
IFR
Ss
E
ffec
tive
Dat
e A
nnou
nced
by
IASB
(Not
e 1)
“A
nnua
l Im
prov
emen
ts to
IFR
S St
anda
rds 2
018-
2020
” J
anua
ry 1
, 202
2 (N
ote
2)
Am
endm
ents
to IF
RS
3 “R
efer
ence
to th
e C
once
ptua
l Fra
mew
ork”
J
anua
ry 1
, 202
2 (N
ote
3)
Am
endm
ents
to IF
RS
10 a
nd IA
S 28
“Sa
le o
r Con
tribu
tion
of A
sset
s be
twee
n an
Inve
stor
and
its A
ssoc
iate
or J
oint
Ven
ture
” T
o be
det
erm
ined
by
IASB
IFR
S 17
“In
sura
nce
Con
tract
s”
Jan
uary
1, 2
023
Am
endm
ents
to IF
RS
17
Jan
uary
1, 2
023
Am
endm
ents
to IA
S 1
“Cla
ssifi
catio
n of
Lia
bilit
ies a
s Cur
rent
or
Non
-cur
rent
” J
anua
ry 1
, 202
3
Am
endm
ents
to IA
S 1
“Dis
clos
ure
of A
ccou
ntin
g Po
licie
s”
Jan
uary
1, 2
023
(Not
e 6)
A
men
dmen
ts to
IAS
8 “D
efin
ition
of A
ccou
ntin
g Es
timat
es”
Jan
uary
1, 2
023
(Not
e 7)
A
men
dmen
ts to
IAS
16 “
Prop
erty
, Pla
nt a
nd E
quip
men
t - P
roce
eds
befo
re In
tend
ed U
se”
Jan
uary
1, 2
022
(Not
e 4)
Am
endm
ents
to IA
S 37
“O
nero
us C
ontra
cts -
Cos
t of F
ulfil
ling
a C
ontra
ct”
Jan
uary
1, 2
022
(Not
e 5)
Not
e 1:
U
nles
s st
ated
oth
erw
ise,
the
abo
ve N
ew I
FRSs
are
eff
ectiv
e fo
r an
nual
rep
ortin
g pe
riods
be
ginn
ing
on o
r afte
r the
ir re
spec
tive
effe
ctiv
e da
tes.
Not
e 2:
Th
e am
endm
ents
to IF
RS
9 w
ill b
e ap
plie
d pr
ospe
ctiv
ely
to m
odifi
catio
ns a
nd e
xcha
nges
of
finan
cial
liab
ilitie
s th
at o
ccur
on
or a
fter
the
annu
al r
epor
ting
perio
ds b
egin
ning
on
or a
fter
Janu
ary
1, 2
022.
The
am
endm
ents
to I
AS
41 “
Agr
icul
ture
” w
ill b
e ap
plie
d pr
ospe
ctiv
ely
to
the
fair
valu
e m
easu
rem
ents
on
or a
fter
the
annu
al r
epor
ting
perio
ds b
egin
ning
on
or a
fter
Janu
ary
1, 2
022.
The
am
endm
ents
to IF
RS
1 “F
irst-t
ime
Ado
ptio
ns o
f IFR
Ss”
will
be
appl
ied
retro
spec
tivel
y fo
r ann
ual r
epor
ting
perio
ds b
egin
ning
on
or a
fter J
anua
ry 1
, 202
2.
Not
e 3:
Th
e am
endm
ents
are
app
licab
le to
bus
ines
s co
mbi
natio
ns fo
r whi
ch th
e ac
quis
ition
dat
e is
on
or a
fter t
he b
egin
ning
of t
he a
nnua
l rep
ortin
g pe
riod
begi
nnin
g on
or a
fter J
anua
ry 1
, 202
2.
Not
e 4:
Th
e am
endm
ents
are
app
licab
le t
o pr
oper
ty,
plan
t an
d eq
uipm
ent
that
are
bro
ught
to
the
loca
tion
and
cond
ition
nec
essa
ry f
or th
em to
be
capa
ble
of o
pera
ting
in th
e m
anne
r int
ende
d by
man
agem
ent o
n or
afte
r Jan
uary
1, 2
021.
N
ote
5:
The
amen
dmen
ts a
re a
pplic
able
to c
ontra
cts
for
whi
ch th
e en
tity
has
not y
et f
ulfil
led
all i
ts ob
ligat
ions
on
Janu
ary
1, 2
022.
- 12
-
199
Not
e 6:
Th
e am
endm
ents
will
be
appl
ied
pros
pect
ivel
y fo
r an
nual
rep
ortin
g pe
riods
beg
inni
ng o
n or
af
ter J
anua
ry 1
, 202
3.
Not
e 7:
Th
e am
endm
ents
are
app
licab
le to
cha
nges
in a
ccou
ntin
g es
timat
es a
nd c
hang
es in
acc
ount
ing
polic
ies
that
occ
ur o
n or
afte
r th
e be
ginn
ing
of th
e an
nual
rep
ortin
g pe
riod
begi
nnin
g on
or
afte
r Jan
uary
1, 2
023.
Th
e ap
plic
atio
n of
new
IFR
Ss in
issu
e bu
t not
yet
end
orse
d an
d is
sued
into
eff
ect b
y th
e FS
C w
ould
not
ha
ve a
ny m
ater
ial i
mpa
ct o
n th
e C
ompa
ny’s
acc
ount
ing
polic
ies.
As o
f the
dat
e th
e fin
anci
al st
atem
ents
w
ere
auth
oriz
ed f
or i
ssue
, th
e C
ompa
ny i
s co
ntin
uous
ly a
sses
sing
the
pos
sibl
e im
pact
tha
t th
e ap
plic
atio
n of
oth
er s
tand
ards
and
inte
rpre
tatio
ns w
ill h
ave
on t
he C
ompa
ny’s
fin
anci
al p
ositi
on a
nd
finan
cial
per
form
ance
and
will
dis
clos
e th
e re
leva
nt im
pact
whe
n th
e as
sess
men
t is c
ompl
eted
.
4.
SIG
NIF
ICA
NT
AC
CO
UN
TIN
G P
OL
ICIE
S St
atem
ent o
f Com
plia
nce
The
finan
cial
stat
emen
ts h
ave
been
pre
pare
d in
acc
orda
nce
with
the
Reg
ulat
ions
Gov
erni
ng th
e Pr
epar
atio
n of
Fin
anci
al R
epor
ts b
y Se
curit
ies I
ssue
rs a
nd o
ther
regu
latio
ns.
B
asis
of P
repa
ratio
n Th
e fin
anci
al s
tate
men
ts h
ave
been
pre
pare
d on
the
hist
oric
al c
ost b
asis
exc
ept f
or f
inan
cial
inst
rum
ents
whi
ch a
re m
easu
red
at fa
ir va
lue.
Th
e fa
ir va
lue
mea
sure
men
ts, w
hich
are
gro
uped
into
Lev
els
1 to
3 b
ased
on
the
degr
ee to
whi
ch th
e fa
ir va
lue
mea
sure
men
t in
puts
are
obse
rvab
le a
nd b
ased
on
the
sign
ifica
nce
of t
he i
nput
s to
the
fai
r va
lue
mea
sure
men
t in
its e
ntire
ty, a
re d
escr
ibed
as f
ollo
ws:
a.
Le
vel 1
inpu
ts a
re q
uote
d pr
ices
(una
djus
ted)
in a
ctiv
e m
arke
ts fo
r ide
ntic
al a
sset
s or l
iabi
litie
s; b.
Le
vel 2
inpu
ts a
re in
puts
oth
er th
an q
uote
d pr
ices
incl
uded
with
in L
evel
1 th
at a
re o
bser
vabl
e fo
r an
as
set o
r lia
bilit
y, e
ither
dire
ctly
(i.e
. as p
rices
) or i
ndire
ctly
(i.e
. der
ived
from
pric
es);
and
c.
Leve
l 3 in
puts
are
uno
bser
vabl
e in
puts
for a
n as
set o
r lia
bilit
y.
Whe
n pr
epar
ing
thes
e pa
rent
com
pany
onl
y fin
anci
al s
tate
men
ts, t
he C
ompa
ny u
sed
the
equi
ty m
etho
d to
ac
coun
t for
its i
nves
tmen
ts in
sub
sidi
arie
s, as
soci
ates
and
join
t ven
ture
s. In
ord
er fo
r the
am
ount
s of
the
net
prof
it fo
r th
e ye
ar, o
ther
com
preh
ensi
ve in
com
e fo
r th
e ye
ar a
nd to
tal e
quity
in th
e pa
rent
com
pany
onl
y fin
anci
al s
tate
men
ts t
o be
the
sam
e w
ith t
he a
mou
nts
attri
buta
ble
to t
he o
wne
rs o
f th
e C
ompa
ny i
n its
st
anda
lone
fina
ncia
l sta
tem
ents
, adj
ustm
ents
aris
ing
from
the
diff
eren
ces
in a
ccou
ntin
g tre
atm
ents
bet
wee
n th
e pa
rent
com
pany
onl
y ba
sis
and
the
stan
dalo
ne b
asis
wer
e m
ade
to in
vest
men
ts a
ccou
nted
for u
sing
the
equi
ty m
etho
d, th
e sh
are
of p
rofit
or
loss
of
subs
idia
ries,
asso
ciat
es a
nd jo
int v
entu
res,
the
shar
e of
oth
er
com
preh
ensi
ve i
ncom
e of
sub
sidi
arie
s, as
soci
ates
and
joi
nt v
entu
res
and
the
rela
ted
equi
ty i
tem
s, as
ap
prop
riate
, in
thes
e pa
rent
com
pany
onl
y fin
anci
al st
atem
ents
. C
urre
nt a
nd N
on-c
urre
nt A
sset
s and
Lia
bilit
ies
Cur
rent
ass
ets i
nclu
de:
a.
A
sset
s hel
d pr
imar
ily fo
r the
pur
pose
of t
radi
ng;
b.
A
sset
s exp
ecte
d to
be
real
ized
with
in 1
2 m
onth
s afte
r the
repo
rting
per
iod;
and
- 13
-
c.
Cas
h an
d ca
sh e
quiv
alen
ts u
nles
s the
ass
et is
rest
ricte
d fr
om b
eing
exc
hang
ed o
r use
d to
settl
e a
liabi
lity
for a
t lea
st 1
2 m
onth
s afte
r the
repo
rting
per
iod.
C
urre
nt li
abili
ties i
nclu
de:
a.
Liab
ilitie
s hel
d pr
imar
ily fo
r the
pur
pose
of t
radi
ng;
b.
Liab
ilitie
s due
to b
e se
ttled
with
in 1
2 m
onth
s afte
r the
repo
rting
per
iod;
and
c.
Li
abili
ties
for w
hich
the
Com
pany
doe
s no
t hav
e an
unc
ondi
tiona
l rig
ht to
def
er s
ettle
men
t for
at l
east
12 m
onth
s afte
r the
repo
rting
per
iod.
A
sset
s and
liab
ilitie
s tha
t are
not
cla
ssifi
ed a
s cur
rent
are
cla
ssifi
ed a
s non
-cur
rent
. Fo
reig
n C
urre
ncie
s In
pre
parin
g th
e fin
anci
al s
tate
men
ts o
f the
Com
pany
, tra
nsac
tions
in c
urre
ncie
s ot
her t
han
the
Com
pany
’s
func
tiona
l cur
renc
y (f
orei
gn c
urre
ncie
s) a
re r
ecog
nize
d at
the
rate
s of
exc
hang
e pr
evai
ling
at th
e da
tes
of
the
trans
actio
ns. A
t the
end
of e
ach
repo
rting
per
iod,
mon
etar
y ite
ms
deno
min
ated
in fo
reig
n cu
rren
cies
are
re
trans
late
d at
the
rate
s pr
evai
ling
at th
at d
ate.
Non
-mon
etar
y ite
ms
that
are
mea
sure
d at
his
toric
al c
ost i
n a
fore
ign
curr
ency
are
not
ret
rans
late
d. N
on-m
onet
ary
item
s m
easu
red
at f
air
valu
e th
at a
re d
enom
inat
ed in
fo
reig
n cu
rren
cies
are
retra
nsla
ted
at th
e ra
tes p
reva
iling
at t
he d
ate
whe
n th
e fa
ir va
lue
was
det
erm
ined
. Ex
chan
ge d
iffer
ence
s on
mon
etar
y ite
ms
aris
ing
from
set
tlem
ent o
r tra
nsla
tion
are
reco
gniz
ed in
pro
fit o
r lo
ss in
the
perio
d in
whi
ch th
ey a
rise
exce
pt fo
r: a.
Ex
chan
ge d
iffer
ence
s on
for
eign
cur
renc
y bo
rrow
ings
rel
atin
g to
ass
ets
unde
r co
nstru
ctio
n fo
r fu
ture
pr
oduc
tive
use,
whi
ch a
re in
clud
ed in
the
cost
of t
hose
ass
ets
whe
n th
ey a
re re
gard
ed a
s an
adj
ustm
ent
to in
tere
st c
osts
on
thos
e fo
reig
n cu
rren
cy b
orro
win
gs;
b.
Exch
ange
diff
eren
ces o
n tra
nsac
tions
ent
ered
into
in o
rder
to h
edge
cer
tain
fore
ign
curr
ency
risk
s. Ex
chan
ge d
iffer
ence
s ar
isin
g on
the
retra
nsla
tion
of n
on-m
onet
ary
item
s ar
e in
clud
ed in
pro
fit o
r lo
ss f
or
the
perio
d ex
cept
for e
xcha
nge
diff
eren
ces
aris
ing
from
the
retra
nsla
tion
of n
on-m
onet
ary
item
s in
resp
ect
of w
hich
gai
ns a
nd l
osse
s ar
e re
cogn
ized
dire
ctly
in
othe
r co
mpr
ehen
sive
inc
ome,
in
whi
ch c
ase,
the
ex
chan
ge d
iffer
ence
s are
als
o re
cogn
ized
dire
ctly
in o
ther
com
preh
ensi
ve in
com
e.
For
the
purp
oses
of
pres
entin
g fin
anci
al s
tate
men
ts,
the
asse
ts a
nd l
iabi
litie
s of
the
Com
pany
’s f
orei
gn
oper
atio
ns a
re t
rans
late
d in
to N
ew T
aiw
an d
olla
rs u
sing
exc
hang
e ra
tes
prev
ailin
g at
the
end
of
each
re
porti
ng p
erio
d. I
ncom
e an
d ex
pens
e ite
ms
are
trans
late
d at
the
ave
rage
exc
hang
e ra
tes
for
the
perio
d.
Exch
ange
diff
eren
ces a
risin
g ar
e re
cogn
ized
in o
ther
com
preh
ensi
ve in
com
e (a
ttrib
uted
to th
e ow
ners
of t
he
Com
pany
and
non
-con
trolli
ng in
tere
sts a
s app
ropr
iate
). O
n th
e di
spos
al o
f a fo
reig
n op
erat
ion,
all
of th
e ex
chan
ge d
iffer
ence
s ac
cum
ulat
ed in
equ
ity in
resp
ect o
f th
at o
pera
tion
attri
buta
ble
to th
e ow
ners
of t
he C
ompa
ny a
re re
clas
sifie
d to
pro
fit o
r los
s. In
vent
orie
s In
vent
orie
s ar
e pr
imar
ily e
xpen
dabl
e an
d no
nexp
enda
ble
parts
and
mat
eria
ls, s
uppl
ies
used
in o
pera
tions
an
d ite
ms
for
in-fl
ight
sal
e an
d ar
e st
ated
at
the
low
er o
f co
st o
r ne
t re
aliz
able
val
ue.
The
cost
s of
in
vent
orie
s sol
d or
con
sum
ed a
re d
eter
min
ed u
sing
the
wei
ghte
d-av
erag
e m
etho
d.
- 14
-
200
Non
-cur
rent
Ass
ets H
eld
for
Sale
N
on-c
urre
nt a
sset
s ar
e cl
assi
fied
as h
eld-
for-s
ale
if th
eir
carr
ying
am
ount
will
be
reco
vere
d pr
inci
pally
th
roug
h a
sale
tran
sact
ion
rath
er th
an th
roug
h co
ntin
uing
use
. Thi
s co
nditi
on is
rega
rded
as
met
onl
y w
hen
the
sale
is h
ighl
y pr
obab
le a
nd th
e N
on-c
urre
nt a
sset
is a
vaila
ble
for i
mm
edia
te sa
le in
its p
rese
nt c
ondi
tion.
To
mee
t th
e cr
iteria
for
the
sal
e be
ing
high
ly p
roba
ble,
the
app
ropr
iate
lev
el o
f m
anag
emen
t m
ust
be
com
mitt
ed to
the
sale
, whi
ch s
houl
d be
exp
ecte
d to
qua
lify
for r
ecog
nitio
n as
a c
ompl
eted
sal
e w
ithin
one
ye
ar fr
om th
e da
te o
f cla
ssifi
catio
n.
Non
-cur
rent
ass
ets
clas
sifie
d as
hel
d-fo
r-sal
e ar
e m
easu
red
at th
e lo
wer
of
thei
r pr
evio
us c
arry
ing
amou
nt
and
fair
valu
e le
ss c
osts
to se
ll. R
ecog
nitio
n of
dep
reci
atio
n of
thos
e as
sets
wou
ld c
ease
. In
vest
men
ts A
ccou
nted
for
by th
e E
quity
Met
hod
Inve
stm
ents
in
subs
idia
ries,
asso
ciat
es a
nd j
oint
ly c
ontro
lled
entit
ies
are
acco
unte
d fo
r by
the
equ
ity
met
hod.
a.
In
vest
men
t in
subs
idia
ries
Su
bsid
iarie
s (in
clud
ing
spec
ial p
urpo
se e
ntiti
es) a
re th
e en
titie
s con
trolle
d by
the
Com
pany
. U
nder
the
equ
ity m
etho
d, t
he i
nves
tmen
t is
ini
tially
rec
ogni
zed
at c
ost
and
the
carr
ying
am
ount
is
incr
ease
d or
dec
reas
ed to
reco
gniz
e th
e C
ompa
ny’s
sha
re o
f the
pro
fit o
r los
s an
d ot
her c
ompr
ehen
sive
in
com
e of
the
sub
sidi
ary
afte
r th
e da
te o
f ac
quis
ition
. B
esid
es,
the
Com
pany
als
o re
cogn
izes
the
C
ompa
ny’s
shar
e of
the
chan
ges i
n ot
her e
quity
of t
he su
bsid
iary
. C
hang
es in
the
Com
pany
’s o
wne
rshi
p in
tere
sts
in s
ubsi
diar
ies
that
do
not r
esul
t in
the
Com
pany
’s lo
ss
of c
ontro
l ove
r th
e su
bsid
iarie
s ar
e ac
coun
ted
for
as e
quity
tran
sact
ions
. Any
diff
eren
ce b
etw
een
the
carr
ying
am
ount
s of
the
inv
estm
ent
and
the
fair
valu
e of
the
con
side
ratio
n pa
id o
r re
ceiv
ed i
s re
cogn
ized
dire
ctly
in e
quity
. W
hen
the
Com
pany
’s s
hare
of
loss
es o
f a
subs
idia
ry e
qual
s or
exc
eeds
its
inte
rest
in th
at s
ubsi
diar
y (w
hich
inc
lude
s an
y ca
rryi
ng a
mou
nt o
f th
e in
vest
men
t in
sub
sidi
ary
acco
unte
d fo
r by
the
equ
ity
met
hod
and
long
-term
inte
rest
s th
at, i
n su
bsta
nce,
for
m p
art o
f th
e C
ompa
ny’s
net
inve
stm
ent i
n th
e su
bsid
iary
), th
e C
ompa
ny c
ontin
ues r
ecog
nizi
ng it
s sha
re o
f fur
ther
loss
es.
The
acqu
isiti
on c
ost i
n ex
cess
of t
he a
cqui
sitio
n-da
te fa
ir va
lue
of th
e id
entif
iabl
e ne
t ass
ets
acqu
ired
is re
cogn
ized
as
good
will
. G
oodw
ill i
s no
t am
ortiz
ed.
The
acqu
isiti
on-d
ate
fair
valu
e of
the
net
id
entif
iabl
e as
sets
acq
uire
d in
exc
ess o
f the
acq
uisi
tion
cost
is re
cogn
ized
imm
edia
tely
in p
rofit
or l
oss.
Whe
n th
e C
ompa
ny c
ease
s to
hav
e co
ntro
l ove
r a
subs
idia
ry, a
ny r
etai
ned
inve
stm
ent i
s m
easu
red
at
fair
valu
e at
tha
t da
te a
nd t
he d
iffer
ence
bet
wee
n th
e pr
evio
us c
arry
ing
amou
nt o
f th
e su
bsid
iary
at
tribu
tabl
e to
the
reta
ined
inte
rest
and
its
fair
valu
e is
incl
uded
in th
e de
term
inat
ion
of th
e ga
in o
r los
s. Fu
rther
mor
e, t
he C
ompa
ny a
ccou
nts
for
all
amou
nts
prev
ious
ly r
ecog
nize
d in
oth
er c
ompr
ehen
sive
in
com
e in
rel
atio
n to
tha
t su
bsid
iary
on
the
sam
e ba
sis
as w
ould
be
requ
ired
if th
e C
ompa
ny h
ad
dire
ctly
dis
pose
d of
the
rela
ted
asse
ts o
r lia
bilit
ies.
Prof
its a
nd lo
sses
fro
m d
owns
tream
tra
nsac
tions
with
a s
ubsi
diar
y ar
e el
imin
ated
in
full.
Pro
fits
and
loss
es fr
om u
pstre
am w
ith a
subs
idia
ry a
nd si
de st
ream
tran
sact
ions
bet
wee
n su
bsid
iarie
s are
reco
gniz
ed
in t
he C
ompa
ny’s
fin
anci
al s
tate
men
ts o
nly
to t
he e
xten
t of
int
eres
ts i
n th
e su
bsid
iary
tha
t ar
e no
t re
late
d to
the
Com
pany
.
- 15
-
b.
Inve
stm
ents
in a
ssoc
iate
s and
join
t ven
ture
s A
n as
soci
ate
is a
n en
tity
over
whi
ch t
he C
ompa
ny h
as s
igni
fican
t in
fluen
ce a
nd t
hat
is n
eith
er a
su
bsid
iary
nor
an
inte
rest
in a
joi
nt v
entu
re.
A j
oint
ven
ture
is
a jo
int
arra
ngem
ent
whe
reby
the
C
ompa
ny a
nd o
ther
par
ties
that
hav
e jo
int c
ontro
l of t
he a
rran
gem
ent a
nd th
e rig
hts
to th
e ne
t ass
ets
of
the
arra
ngem
ent.
The
Com
pany
use
s th
e eq
uity
met
hod
to a
ccou
nt f
or it
s in
vest
men
ts in
ass
ocia
tes
and
join
t ven
ture
s. U
nder
the
equ
ity m
etho
d, a
n in
vest
men
t in
an
asso
ciat
e an
d jo
intly
con
trolle
d en
tity
is i
nitia
lly
reco
gniz
ed a
t cos
t and
adj
uste
d th
erea
fter
to r
ecog
nize
the
Com
pany
’s s
hare
of
the
prof
it or
loss
and
ot
her
com
preh
ensi
ve in
com
e of
the
asso
ciat
e an
d jo
intly
ven
ture
s. Th
e C
ompa
ny a
lso
reco
gniz
es th
e ch
ange
s in
the
Com
pany
’s s
hare
of
equi
ty o
f as
soci
ates
and
joi
ntly
ven
ture
s at
tribu
tabl
e to
the
C
ompa
ny.
Whe
n th
e C
ompa
ny s
ubsc
ribes
for
add
ition
al n
ew s
hare
s of
an
asso
ciat
e an
d jo
int
vent
ures
at
a pe
rcen
tage
diff
eren
t fr
om i
ts e
xist
ing
owne
rshi
p pe
rcen
tage
, th
e re
sulti
ng c
arry
ing
amou
nt o
f th
e in
vest
men
t diff
ers
from
the
amou
nt o
f th
e C
ompa
ny’s
pro
porti
onat
e in
tere
st in
the
asso
ciat
e an
d jo
int
vent
ures
. Th
e C
ompa
ny
reco
rds
such
a
diff
eren
ce
as
an
adju
stm
ent
to
inve
stm
ents
w
ith t
he
corr
espo
ndin
g am
ount
cha
rged
or
cred
ited
to c
apita
l sur
plus
. If
the
Com
pany
’s o
wne
rshi
p in
tere
st is
re
duce
d du
e to
the
subs
crip
tion
of a
dditi
onal
new
sha
res
of th
e as
soci
ate
and
join
tly c
ontro
lled
entit
y,
the
prop
ortio
nate
am
ount
of t
he g
ains
or l
osse
s pre
viou
sly
reco
gniz
ed in
oth
er c
ompr
ehen
sive
inco
me
in
rela
tion
to th
at a
ssoc
iate
and
join
t ven
ture
s is r
ecla
ssifi
ed to
pro
fit o
r los
s on
the
sam
e ba
sis a
s wou
ld b
e re
quire
d ha
d th
e in
vest
ee d
irect
ly d
ispo
sed
of t
he r
elat
ed a
sset
s or
lia
bilit
ies.
Whe
n th
e ad
just
men
t sh
ould
be
debi
ted
to c
apita
l sur
plus
, but
the
capi
tal s
urpl
us re
cogn
ized
from
inve
stm
ents
acc
ount
ed fo
r us
ing
the
equi
ty m
etho
d is
insu
ffic
ient
, the
shor
tage
is d
ebite
d to
reta
ined
ear
ning
s. W
hen
the
Com
pany
’s s
hare
of l
osse
s of
an
asso
ciat
e an
d jo
int v
entu
res
equa
ls o
r exc
eeds
its
inte
rest
in
that
ass
ocia
te a
nd jo
int v
entu
res
whi
ch in
clud
es a
ny c
arry
ing
amou
nt o
f th
e in
vest
men
t acc
ount
ed f
or
usin
g th
e eq
uity
met
hod
and
long
-term
int
eres
ts t
hat,
in s
ubst
ance
, for
m p
art
of t
he C
ompa
ny’s
net
in
vest
men
t in
the
asso
ciat
e an
d jo
int v
entu
res
entit
y, th
e C
ompa
ny d
isco
ntin
ues
reco
gniz
ing
its s
hare
of
furth
er lo
sses
. Add
ition
al lo
sses
and
liab
ilitie
s ar
e re
cogn
ized
onl
y to
the
exte
nt th
at th
e C
ompa
ny h
as
incu
rred
lega
l obl
igat
ions
, or c
onst
ruct
ive
oblig
atio
ns, o
r mad
e pa
ymen
ts o
n be
half
of th
at a
ssoc
iate
and
jo
int v
entu
res.
Any
exc
ess
of th
e co
st o
f acq
uisit
ion
over
the
Com
pany
’s s
hare
of t
he n
et fa
ir va
lue
of th
e id
entif
iabl
e as
sets
and
lia
bilit
ies
of a
n as
soci
ate
and
join
t ve
ntur
es r
ecog
nize
d at
the
dat
e of
acq
uisi
tion
is re
cogn
ized
as
good
will
, w
hich
is
incl
uded
with
in t
he c
arry
ing
amou
nt o
f th
e in
vest
men
t an
d is
not
am
ortiz
ed.
Any
exc
ess
of t
he C
ompa
ny’s
sha
re o
f th
e ne
t fa
ir va
lue
of t
he i
dent
ifiab
le a
sset
s an
d lia
bilit
ies o
ver t
he c
ost o
f acq
uisit
ion,
afte
r rea
sses
smen
t, is
reco
gniz
ed im
med
iate
ly in
pro
fit o
r los
s. Th
e en
tire
carr
ying
am
ount
of t
he in
vest
men
t (in
clud
ing
good
will
) is
test
ed fo
r im
pairm
ent a
s a
sing
le
asse
t by
com
parin
g its
reco
vera
ble
amou
nt w
ith it
s car
ryin
g am
ount
. Any
impa
irmen
t los
s rec
ogni
zed
is no
t allo
cate
d to
any
ass
et, i
nclu
ding
goo
dwill
, tha
t for
ms
part
of th
e ca
rryi
ng a
mou
nt o
f the
inve
stm
ent.
Any
rev
ersa
l of
tha
t im
pairm
ent
loss
is
reco
gniz
ed t
o th
e ex
tent
tha
t th
e re
cove
rabl
e am
ount
of
the
inve
stm
ent s
ubse
quen
tly in
crea
ses.
The
Com
pany
dis
cont
inue
s th
e us
e of
the
equ
ity m
etho
d fr
om t
he d
ate
on w
hich
it
ceas
es t
o ha
ve
sign
ifica
nt in
fluen
ce a
nd jo
int c
ontro
l. A
ny re
tain
ed in
vest
men
t is m
easu
red
at fa
ir va
lue
at th
at d
ate
and
the
fair
valu
e is
reg
arde
d as
its
fai
r va
lue
on i
nitia
l re
cogn
ition
as
a fin
anci
al a
sset
. The
diff
eren
ce
betw
een
the
prev
ious
car
ryin
g am
ount
of
the
asso
ciat
e an
d th
e jo
intly
con
trolle
d en
tity
attri
buta
ble
to
the
reta
ined
inte
rest
and
its
fair
valu
e is
incl
uded
in th
e de
term
inat
ion
of th
e ga
in o
r los
s on
dis
posa
l of
the
asso
ciat
e an
d th
e jo
intly
con
trolle
d en
tity.
The
Com
pany
acc
ount
s fo
r al
l am
ount
s pr
evio
usly
re
cogn
ized
in o
ther
com
preh
ensi
ve in
com
e in
rela
tion
to th
at a
ssoc
iate
and
the
join
tly c
ontro
lled
entit
y on
the
sam
e ba
sis
as w
ould
be
requ
ired
if th
at a
ssoc
iate
had
dire
ctly
dis
pose
d of
the
rela
ted
asse
ts o
r lia
bilit
ies.
- 16
-
201
Whe
n th
e C
ompa
ny tr
ansa
cts
with
its
asso
ciat
e an
d jo
int v
entu
res,
prof
its a
nd lo
sses
resu
lting
from
the
trans
actio
ns w
ith th
e as
soci
ate
are
reco
gniz
ed in
the
Com
pany
’ fin
anci
al st
atem
ents
onl
y to
the
exte
nt o
f in
tere
sts i
n th
e as
soci
ate
and
the
join
tly c
ontro
lled
entit
y th
at a
re n
ot re
late
d to
the
Com
pany
. Pr
oper
ty, P
lant
and
Equ
ipm
ent
Prop
erty
, pla
nt a
nd e
quip
men
t are
tang
ible
item
s th
at a
re h
eld
for u
se in
the
prod
uctio
n or
sup
ply
of g
oods
or
ser
vice
s, fo
r re
ntal
to o
ther
s, or
for
adm
inis
trativ
e pu
rpos
es a
nd a
re e
xpec
ted
to b
e us
ed f
or m
ore
than
on
e pe
riod.
The
cos
t of a
n ite
m o
f pro
perty
, pla
nt a
nd e
quip
men
t sha
ll be
reco
gniz
ed a
s an
asse
t if,
and
only
if,
it is
pro
babl
e th
at fu
ture
eco
nom
ic b
enef
its a
ssoc
iate
d w
ith th
e ite
m w
ill fl
ow to
the
Com
pany
; and
the
cost
of t
he it
em c
an b
e m
easu
red
relia
bly.
Pro
perty
, pla
nt a
nd e
quip
men
t are
sta
ted
at c
ost l
ess
reco
gniz
ed
accu
mul
ated
dep
reci
atio
n an
d re
cogn
ized
acc
umul
ated
impa
irmen
t los
s. Fr
eeho
ld la
nd is
not
dep
reci
ated
. D
epre
ciat
ion
is r
ecog
nize
d us
ing
the
stra
ight
-line
met
hod.
Eac
h si
gnifi
cant
par
t is
depr
ecia
ted
sepa
rate
ly.
The
estim
ated
use
ful
lives
, re
sidu
al v
alue
s an
d de
prec
iatio
n m
etho
ds a
re r
evie
wed
at
the
end
of e
ach
repo
rting
per
iod,
with
the
effe
cts o
f any
cha
nges
in th
e es
timat
es a
ccou
nted
for o
n a
pros
pect
ive
basi
s. A
sset
s hel
d un
der f
inan
ce le
ases
are
dep
reci
ated
ove
r the
ir ex
pect
ed u
sefu
l liv
es o
n th
e sa
me
basi
s as o
wne
d as
sets
. Ass
ets
are
depr
ecia
ted
over
the
shor
ter o
f the
leas
e te
rm a
nd th
eir u
sefu
l liv
es u
sing
the
stra
ight
-line
m
etho
d.
Any
gai
n or
los
s ar
isin
g on
the
dis
posa
l or
ret
irem
ent
of a
n ite
m o
f pr
oper
ty,
plan
t an
d eq
uipm
ent
is de
term
ined
as
the
diff
eren
ce b
etw
een
the
sale
s pr
ocee
ds a
nd t
he c
arry
ing
amou
nt o
f th
e as
set
and
is
reco
gniz
ed in
pro
fit o
r los
s. In
vest
men
t Pro
pert
ies
Inve
stm
ent p
rope
rties
are
pro
perti
es h
eld
to e
arn
rent
als
or f
or c
apita
l app
reci
atio
n. I
nves
tmen
t pro
perti
es
also
incl
ude
land
hel
d fo
r a c
urre
ntly
und
eter
min
ed fu
ture
use
. In
vest
men
t pr
oper
ties
are
mea
sure
d in
itial
ly a
t co
st,
incl
udin
g tra
nsac
tion
cost
s. Su
bseq
uent
to
initi
al
reco
gniti
on,
inve
stm
ent
prop
ertie
s ar
e m
easu
red
at c
ost
less
acc
umul
ated
dep
reci
atio
n an
d ac
cum
ulat
ed
impa
irmen
t los
s. A
ny g
ain
or l
oss
aris
ing
on t
he d
erec
ogni
tion
of i
nves
tmen
t pr
oper
ties
is c
alcu
late
d as
the
diff
eren
ce
betw
een
the
net d
ispo
sal p
roce
eds
and
the
carr
ying
am
ount
of t
he a
sset
and
is in
clud
ed in
pro
fit o
r los
s in
th
e pe
riod
in w
hich
the
prop
erty
is d
erec
ogni
zed.
In
tang
ible
Ass
ets
Inta
ngib
le a
sset
s w
ith f
inite
use
ful
lives
tha
t ar
e ac
quire
d se
para
tely
are
ini
tially
mea
sure
d at
cos
t an
d su
bseq
uent
ly
mea
sure
d at
co
st
less
ac
cum
ulat
ed
amor
tizat
ion
and
accu
mul
ated
im
pairm
ent
loss
. A
mor
tizat
ion
is r
ecog
nize
d on
a s
traig
ht-li
ne b
asis
. Th
e es
timat
ed u
sefu
l liv
es,
resi
dual
val
ues,
and
amor
tizat
ion
met
hods
are
revi
ewed
at t
he e
nd o
f eac
h re
porti
ng p
erio
d, w
ith th
e ef
fect
s of
any
cha
nges
in
the
estim
ates
bei
ng a
ccou
nted
for
on
a pr
ospe
ctiv
e ba
sis.
The
resi
dual
val
ue o
f an
inta
ngib
le a
sset
with
a
finite
use
ful l
ife s
hall
be a
ssum
ed to
be
zero
unl
ess
the
Com
pany
exp
ects
to d
ispo
se o
f the
inta
ngib
le a
sset
be
fore
the
end
of it
s eco
nom
ic li
fe.
- 17
-
Impa
irm
ent o
f Tan
gibl
e an
d In
tang
ible
Ass
ets O
ther
Tha
n G
oodw
ill
At
the
end
of e
ach
repo
rting
per
iod,
the
Com
pany
rev
iew
s th
e ca
rryi
ng a
mou
nts
of i
ts t
angi
ble
and
inta
ngib
le a
sset
s, ex
clud
ing
good
will
, to
dete
rmin
e w
heth
er th
ere
is a
ny in
dica
tion
that
thos
e as
sets
hav
e su
ffer
ed a
n im
pairm
ent l
oss.
If an
y su
ch in
dica
tion
exis
ts, t
he re
cove
rabl
e am
ount
of t
he a
sset
is e
stim
ated
in
ord
er to
det
erm
ine
the
exte
nt o
f the
impa
irmen
t los
s. W
hen
it is
not
pos
sibl
e to
est
imat
e th
e re
cove
rabl
e am
ount
of a
n in
divi
dual
ass
et, t
he C
ompa
ny e
stim
ates
the
reco
vera
ble
amou
nt o
f the
cas
h-ge
nera
ting
unit
to
whi
ch t
he a
sset
bel
ongs
. C
orpo
rate
ass
ets
are
allo
cate
d to
the
ind
ivid
ual
cash
-gen
erat
ing
units
on
a re
ason
able
and
con
sist
ent
basi
s; o
ther
wis
e, c
orpo
rate
ass
ets
are
allo
cate
d to
the
sm
alle
st g
roup
of
cash
-gen
erat
ing
units
on
a re
ason
able
and
con
sist
ent a
lloca
tion
basi
s. In
tang
ible
ass
ets
with
inde
finite
use
ful l
ives
and
inta
ngib
le a
sset
s no
t yet
ava
ilabl
e fo
r us
e ar
e te
sted
for
im
pairm
ent a
t lea
st a
nnua
lly, a
nd w
hene
ver t
here
is a
n in
dica
tion
that
the
asse
t may
be
impa
ired.
Th
e re
cove
rabl
e am
ount
is th
e hi
gher
of f
air v
alue
less
cos
ts to
sel
l and
val
ue in
use
. In
asse
ssin
g va
lue
in
use,
the
Com
pany
use
s th
e es
timat
ed c
ash
flow
s di
scou
nted
by
the
futu
re p
re-ta
x di
scou
nt r
ate,
and
the
di
scou
nt ra
te re
flect
s the
cur
rent
mar
ket t
ime
valu
e of
mon
ey a
nd th
e sp
ecifi
c ris
ks to
the
asse
t for
est
imat
ed
futu
re c
ash
flow
s not
yet
adj
ustin
g to
the
mar
ket.
If th
e re
cove
rabl
e am
ount
of
an a
sset
or
cash
-gen
erat
ing
unit
is e
stim
ated
to
be l
ess
than
its
car
ryin
g am
ount
, the
car
ryin
g am
ount
of t
he a
sset
or c
ash-
gene
ratin
g un
it is
redu
ced
to it
s rec
over
able
am
ount
. W
hen
an im
pairm
ent l
oss
is s
ubse
quen
tly is
reve
rsed
, the
car
ryin
g am
ount
of
the
asse
t or
cash
-gen
erat
ing
unit
is in
crea
sed
to th
e re
vise
d es
timat
e of
its
reco
vera
ble
amou
nt, b
ut o
nly
to th
e ex
tent
of
the
carr
ying
am
ount
tha
t w
ould
hav
e be
en d
eter
min
ed h
ad n
o im
pairm
ent
loss
bee
n re
cogn
ized
for
the
ass
et o
r ca
sh-g
ener
atin
g un
it in
prio
r yea
rs. A
reve
rsal
of a
n im
pairm
ent l
oss i
s rec
ogni
zed
in p
rofit
or l
oss.
Fina
ncia
l Ins
trum
ents
Fi
nanc
ial
asse
ts a
nd f
inan
cial
lia
bilit
ies
are
reco
gniz
ed w
hen
the
Com
pany
bec
omes
a p
arty
to
the
cont
ract
ual p
rovi
sion
s of t
he in
stru
men
ts.
Fi
nanc
ial
asse
ts a
nd f
inan
cial
lia
bilit
ies
are
initi
ally
mea
sure
d at
fai
r va
lue.
Tra
nsac
tion
cost
s th
at a
re
dire
ctly
attr
ibut
able
to
the
acqu
isiti
on o
r is
suan
ce o
f fin
anci
al a
sset
s an
d fin
anci
al l
iabi
litie
s (o
ther
tha
n fin
anci
al a
sset
s an
d fin
anci
al l
iabi
litie
s at
FV
TPL)
are
add
ed t
o or
ded
ucte
d fr
om t
he f
air
valu
e of
the
fin
anci
al a
sset
s or
fin
anci
al l
iabi
litie
s, as
app
ropr
iate
, on
ini
tial
reco
gniti
on.
Tran
sact
ion
cost
s di
rect
ly
attri
buta
ble
to t
he a
cqui
sitio
n of
fin
anci
al a
sset
s or
fin
anci
al l
iabi
litie
s at
FV
TPL
are
reco
gniz
ed
imm
edia
tely
in p
rofit
or l
oss.
a.
Fina
ncia
l ass
ets
All
regu
lar p
urch
ases
or s
ales
of f
inan
cial
ass
ets
are
reco
gniz
ed a
nd d
erec
ogni
zed
on a
trad
e da
te b
asis
. A
ll re
gula
r pur
chas
es o
r sal
es o
f fin
anci
al a
sset
s ar
e bu
y or
sel
l of f
inan
cial
ass
ets
in th
e pe
riod
set b
y re
gula
tion
or m
arke
t con
vent
ion.
1)
M
easu
rem
ent c
ateg
ory
Fina
ncia
l as
sets
are
cla
ssifi
ed in
to th
e fo
llow
ing
cate
gorie
s: F
inan
cial
ass
ets
at F
VTP
L, f
inan
cial
as
sets
at a
mor
tized
cos
t, an
d in
vest
men
ts in
equ
ity in
strum
ents
at F
VTO
CI.
a)
Fina
ncia
l ass
ets a
t FV
TPL
Fi
nanc
ial a
sset
s ar
e cl
assi
fied
as a
t FV
TPL
whe
n su
ch a
fina
ncia
l ass
et is
man
dato
rily
clas
sifie
d or
des
igna
ted
as a
t FV
TPL.
Fin
anci
al a
sset
s m
anda
toril
y cl
assi
fied
as a
t FV
TPL
incl
ude
inve
stm
ents
in e
quity
inst
rum
ents
whi
ch a
re n
ot d
esig
nate
d as
at F
VTO
CI a
nd d
ebt i
nstru
men
ts
that
do
not m
eet t
he a
mor
tized
cos
t crit
eria
or t
he F
VTO
CI c
riter
ia.
- 18
-
202
Fina
ncia
l as
sets
at
FVTP
L ar
e su
bseq
uent
ly m
easu
red
at f
air
valu
e, w
ith a
ny g
ains
or
loss
es
aris
ing
on r
emea
sure
men
t rec
ogni
zed
in p
rofit
or
loss
. Fai
r va
lue
is d
eter
min
ed in
the
man
ner
desc
ribed
in N
ote
31.
b)
Fina
ncia
l ass
ets a
t am
ortiz
ed c
ost
Fina
ncia
l as
sets
tha
t m
eet
the
follo
win
g co
nditi
ons
are
subs
eque
ntly
mea
sure
d at
am
ortiz
ed
cost
: i.
The
finan
cial
ass
et i
s he
ld w
ithin
a b
usin
ess
mod
el w
hose
obj
ectiv
e is
to
hold
fin
anci
al
asse
ts in
ord
er to
col
lect
con
tract
ual c
ash
flow
s; a
nd
ii.
The
cont
ract
ual t
erm
s of t
he fi
nanc
ial a
sset
giv
e ris
e on
spec
ified
dat
es to
cas
h flo
ws t
hat a
re
sole
ly p
aym
ents
of p
rinci
pal a
nd in
tere
st o
n th
e pr
inci
pal a
mou
nt o
utst
andi
ng.
Su
bseq
uent
to
initi
al r
ecog
nitio
n, f
inan
cial
ass
ets
at a
mor
tized
cos
t, in
clud
ing
cash
and
cas
h eq
uiva
lent
s, tra
de r
ecei
vabl
es,
othe
r re
ceiv
able
s an
d ot
her
finan
cial
ass
ets,
are
mea
sure
d at
am
ortiz
ed c
ost,
whi
ch e
qual
s th
e gr
oss
carr
ying
am
ount
det
erm
ined
usi
ng th
e ef
fect
ive
inte
rest
m
etho
d le
ss a
ny im
pairm
ent l
oss.
Exch
ange
diff
eren
ces a
re re
cogn
ized
in p
rofit
or l
oss.
Inte
rest
inco
me
is c
alcu
late
d by
app
lyin
g th
e ef
fect
ive
inte
rest
rate
to th
e gr
oss
carr
ying
am
ount
of
a fi
nanc
ial a
sset
. C
ash
equi
vale
nts i
nclu
de ti
me
depo
sits
with
orig
inal
mat
uriti
es w
ithin
3 m
onth
s fro
m th
e da
te o
f ac
quis
ition
, w
hich
are
hig
hly
liqui
d, r
eadi
ly c
onve
rtibl
e to
a k
now
n am
ount
of
cash
and
are
su
bjec
t to
an
insi
gnifi
cant
ris
k of
cha
nges
in
valu
e. T
hese
cas
h eq
uiva
lent
s ar
e he
ld f
or t
he
purp
ose
of m
eetin
g sh
ort-t
erm
cas
h co
mm
itmen
ts.
c)
Inve
stm
ents
in e
quity
inst
rum
ents
at F
VTO
CI
O
n in
itial
reco
gniti
on, t
he C
ompa
ny m
ay m
ake
an ir
revo
cabl
e el
ectio
n to
des
igna
te in
vest
men
ts in
equ
ity i
nstru
men
ts a
s at
FV
TOC
I. D
esig
natio
n at
FV
TOC
I is
not
per
mitt
ed i
f an
equ
ity
inve
stm
ent i
s he
ld fo
r tra
ding
or i
f it i
s co
ntin
gent
con
side
ratio
n re
cogn
ized
by
an a
cqui
rer i
n a
busi
ness
com
bina
tion.
In
vest
men
ts i
n eq
uity
ins
trum
ents
at
FVTO
CI
are
subs
eque
ntly
mea
sure
d at
fai
r va
lue
with
ga
ins
and
loss
es a
risin
g fr
om c
hang
es in
fai
r va
lue
reco
gniz
ed in
oth
er c
ompr
ehen
sive
inco
me
and
accu
mul
ated
in o
ther
equ
ity. T
he c
umul
ativ
e ga
in o
r los
s will
not
be
recl
assi
fied
to p
rofit
or
loss
on
disp
osal
of t
he e
quity
inve
stm
ents
; ins
tead
, the
y w
ill b
e tra
nsfe
rred
to re
tain
ed e
arni
ngs.
Div
iden
ds o
n th
ese
inve
stm
ents
in e
quity
inst
rum
ents
are
reco
gniz
ed in
pro
fit o
r los
s w
hen
the
Com
pany
’s ri
ght t
o re
ceiv
e th
e di
vide
nds
is e
stabl
ishe
d, u
nles
s th
e di
vide
nds
clea
rly re
pres
ent a
re
cove
ry o
f par
t of t
he c
ost o
f an
inve
stm
ent.
2)
Im
pairm
ent o
f fin
anci
al a
sset
s
The
Com
pany
rec
ogni
zes
a lo
ss a
llow
ance
for
exp
ecte
d cr
edit
loss
es o
n fin
anci
al a
sset
s at
am
ortiz
ed c
ost (
incl
udin
g tra
de re
ceiv
able
s), a
s wel
l as c
ontra
ct a
sset
s. Th
e C
ompa
ny a
lway
s re
cogn
izes
life
time
expe
cted
cre
dit l
osse
s (E
CLs
) fo
r tra
de r
ecei
vabl
es a
nd
othe
r rec
eiva
bles
. For
all
othe
r fin
anci
al in
stru
men
ts, t
he C
ompa
ny re
cogn
izes
life
time
ECLs
whe
n th
ere
has
been
a si
gnifi
cant
incr
ease
in c
redi
t ris
k si
nce
initi
al re
cogn
ition
. If,
on th
e ot
her h
and,
the
cred
it ris
k on
a f
inan
cial
ins
trum
ent
has
not
incr
ease
d si
gnifi
cant
ly s
ince
ini
tial
reco
gniti
on, t
he
Com
pany
mea
sure
s the
loss
allo
wan
ce fo
r tha
t fin
anci
al in
stru
men
t at a
n am
ount
equ
al to
12-
mon
th
ECLs
.
- 19
-
Expe
cted
cre
dit l
osse
s re
flect
the
wei
ghte
d av
erag
e of
cre
dit l
osse
s w
ith th
e re
spec
tive
risks
of
a de
faul
t occ
urrin
g as
the
wei
ghts
. Life
time
ECL
repr
esen
ts th
e ex
pect
ed c
redi
t los
ses
that
will
resu
lt fr
om a
ll po
ssib
le d
efau
lt ev
ents
ove
r th
e ex
pect
ed l
ife o
f a
finan
cial
ins
trum
ent.
In c
ontra
st,
12-m
onth
EC
L re
pres
ents
the
porti
on o
f life
time
ECL
that
is e
xpec
ted
to re
sult
from
def
ault
even
ts on
a fi
nanc
ial i
nstru
men
t tha
t are
pos
sibl
e w
ithin
12
mon
ths a
fter t
he re
porti
ng d
ate.
Th
e im
pairm
ent
loss
of
all f
inan
cial
ass
ets
is r
ecog
nize
d in
pro
fit o
r lo
ss b
y a
redu
ctio
n in
thei
r ca
rryi
ng a
mou
nts
thro
ugh
a lo
ss a
llow
ance
acc
ount
, exc
ept f
or in
vest
men
ts in
deb
t ins
trum
ents
that
ar
e m
easu
red
at F
VTO
CI,
for
whi
ch t
he l
oss
allo
wan
ce i
s re
cogn
ized
in
othe
r co
mpr
ehen
sive
in
com
e an
d th
e ca
rryi
ng a
mou
nts o
f suc
h fin
anci
al a
sset
s are
not
redu
ced.
3)
Der
ecog
nitio
n of
fina
ncia
l ass
ets
The
Com
pany
der
ecog
nize
s a fi
nanc
ial a
sset
onl
y w
hen
the
cont
ract
ual r
ight
s to
the
cash
flow
s fro
m
the
asse
t exp
ire o
r whe
n it
trans
fers
the
finan
cial
ass
et a
nd s
ubst
antia
lly a
ll th
e ris
ks a
nd re
war
ds o
f ow
ners
hip
of th
e as
set t
o an
othe
r par
ty.
On
dere
cogn
ition
of
a fin
anci
al a
sset
at a
mor
tized
cos
t in
its e
ntire
ty, t
he d
iffer
ence
bet
wee
n th
e as
set’s
car
ryin
g am
ount
and
the
sum
of
the
cons
ider
atio
n re
ceiv
ed a
nd r
ecei
vabl
e is
rec
ogni
zed
in
prof
it or
loss
. On
dere
cogn
ition
of
an in
vest
men
t in
a de
bt in
stru
men
t at F
VTO
CI,
the
diff
eren
ce
betw
een
the
asse
t’s c
arry
ing
amou
nt a
nd th
e su
m o
f the
con
side
ratio
n re
ceiv
ed a
nd re
ceiv
able
and
th
e cu
mul
ativ
e ga
in o
r lo
ss w
hich
had
bee
n re
cogn
ized
in
othe
r co
mpr
ehen
sive
inc
ome
is re
cogn
ized
in p
rofit
or l
oss.
How
ever
, on
dere
cogn
ition
of a
n in
vest
men
t in
an e
quity
inst
rum
ent a
t FV
TOC
I, th
e di
ffer
ence
bet
wee
n th
e as
set’s
car
ryin
g am
ount
and
the
sum
of
the
cons
ider
atio
n re
ceiv
ed a
nd r
ecei
vabl
e is
rec
ogni
zed
in p
rofit
or
loss
, and
the
cum
ulat
ive
gain
or
loss
whi
ch h
ad
been
reco
gniz
ed in
oth
er c
ompr
ehen
sive
inco
me
is tr
ansf
erre
d di
rect
ly to
reta
ined
ear
ning
s, w
ithou
t re
cycl
ing
thro
ugh
prof
it or
loss
.
b.
Equi
ty in
stru
men
ts
D
ebt a
nd e
quity
inst
rum
ents
issu
ed b
y th
e C
ompa
ny a
re c
lass
ified
as
eith
er f
inan
cial
liab
ilitie
s or
as
equi
ty i
n ac
cord
ance
with
the
sub
stan
ce o
f th
e co
ntra
ctua
l ar
rang
emen
ts a
nd t
he d
efin
ition
s of
a
finan
cial
liab
ility
and
an
equi
ty in
stru
men
t. Eq
uity
inst
rum
ents
issu
ed b
y th
e C
ompa
ny a
re re
cogn
ized
at t
he p
roce
eds
rece
ived
, net
of d
irect
issu
e co
sts.
Rep
urch
ase
of t
he C
ompa
ny’s
ow
n eq
uity
ins
trum
ents
is
reco
gniz
ed i
n an
d de
duct
ed d
irect
ly f
rom
eq
uity
. No
gain
or l
oss
is re
cogn
ized
in p
rofit
or l
oss
on th
e pu
rcha
se, s
ale,
issu
e or
can
cella
tion
of th
e C
ompa
ny’s
ow
n eq
uity
inst
rum
ents
.
c.
Fina
ncia
l lia
bilit
ies
1)
Subs
eque
nt m
easu
rem
ent
Ex
cept
for
fin
anci
al l
iabi
litie
s at
FV
TPL,
all
finan
cial
lia
bilit
ies
are
mea
sure
d at
am
ortiz
ed c
ost
usin
g th
e ef
fect
ive
inte
rest
met
hod.
2)
Der
ecog
nitio
n of
fina
ncia
l lia
bilit
ies
The
diff
eren
ce b
etw
een
the
carr
ying
am
ount
of
a fin
anci
al l
iabi
lity
dere
cogn
ized
and
the
co
nsid
erat
ion
paid
, inc
ludi
ng a
ny n
on-c
ash
asse
ts tr
ansf
erre
d or
liab
ilitie
s as
sum
ed, i
s rec
ogni
zed
in
prof
it or
loss
.
- 20
-
203
d.
Con
verti
ble
bond
s Th
e co
mpo
nent
par
ts o
f co
mpo
und
inst
rum
ents
(i.e
. co
nver
tible
bon
ds)
issu
ed b
y th
e C
ompa
ny a
re
clas
sifie
d se
para
tely
as
finan
cial
lia
bilit
ies
and
equi
ty i
n ac
cord
ance
with
the
sub
stan
ce o
f th
e co
ntra
ctua
l arr
ange
men
ts a
nd th
e de
finiti
ons o
f a fi
nanc
ial l
iabi
lity
and
an e
quity
inst
rum
ent.
On
initi
al re
cogn
ition
, the
fair
valu
e of
the
liabi
lity
com
pone
nt is
est
imat
ed u
sing
the
prev
ailin
g m
arke
t in
tere
st r
ate
for
sim
ilar
non-
conv
ertib
le i
nstru
men
ts.
This
am
ount
is
reco
rded
as
a lia
bilit
y on
an
amor
tized
cos
t ba
sis
usin
g th
e ef
fect
ive
inte
rest
met
hod
until
ext
ingu
ishe
d up
on c
onve
rsio
n or
the
in
stru
men
t’s m
atur
ity d
ate.
Any
em
bedd
ed d
eriv
ativ
e lia
bilit
y is
mea
sure
d at
fair
valu
e.
The
conv
ersi
on o
ptio
n cl
assi
fied
as e
quity
is
dete
rmin
ed b
y de
duct
ing
the
amou
nt o
f th
e lia
bilit
y co
mpo
nent
from
the
fair
valu
e of
the
com
poun
d in
stru
men
t as
a w
hole
. Thi
s is r
ecog
nize
d an
d in
clud
ed
in e
quity
, net
of
inco
me
tax
effe
cts,
and
is n
ot s
ubse
quen
tly r
emea
sure
d. I
n ad
ditio
n, t
he c
onve
rsio
n op
tion
clas
sifie
d as
equ
ity w
ill re
mai
n in
equ
ity u
ntil
the
conv
ersi
on o
ptio
n is
exe
rcis
ed, i
n w
hich
cas
e,
the
bala
nce
reco
gniz
ed i
n eq
uity
will
be
trans
ferr
ed t
o ca
pita
l su
rplu
s -
shar
e pr
emiu
ms.
Whe
n th
e co
nver
sion
opt
ion
rem
ains
une
xerc
ised
at m
atur
ity, t
he b
alan
ce re
cogn
ized
in e
quity
will
be
trans
ferr
ed
to c
apita
l sur
plus
- sh
are
prem
ium
s.
Tran
sact
ion
cost
s th
at r
elat
e to
the
issu
ance
of
the
conv
ertib
le n
otes
are
allo
cate
d to
the
liabi
lity
and
equi
ty c
ompo
nent
s in
pro
porti
on to
the
allo
catio
n of
the
gros
s pr
ocee
ds. T
rans
actio
n co
sts
rela
ting
to
the
equi
ty c
ompo
nent
are
rec
ogni
zed
dire
ctly
in
equi
ty.
Tran
sact
ion
cost
s re
latin
g to
the
lia
bilit
y co
mpo
nent
are
incl
uded
in th
e ca
rryi
ng a
mou
nt o
f the
liab
ility
com
pone
nt.
e.
D
eriv
ativ
e fin
anci
al in
stru
men
ts
The
Com
pany
ent
ers i
nto
a va
riety
of d
eriv
ativ
e fin
anci
al in
stru
men
ts to
man
age
its e
xpos
ure
to in
tere
st ra
te, f
orei
gn e
xcha
nge
rate
and
fue
l pric
e ris
ks, i
nclu
ding
for
eign
exc
hang
e fo
rwar
d co
ntra
cts,
inte
rest
rate
swap
s, cu
rren
cy o
ptio
ns sw
aps a
nd fu
el sw
aps.
Der
ivat
ives
are
initi
ally
reco
gniz
ed a
t fai
r val
ue a
t the
dat
e th
e de
rivat
ive
cont
ract
s ar
e en
tere
d in
to a
nd
are
subs
eque
ntly
rem
easu
red
to th
eir f
air v
alue
at t
he e
nd o
f eac
h re
porti
ng p
erio
d. T
he re
sulti
ng g
ain
or
loss
is r
ecog
nize
d in
pro
fit o
r lo
ss im
med
iate
ly u
nles
s th
e de
rivat
ive
is d
esig
nate
d an
d ef
fect
ive
as a
he
dgin
g in
stru
men
t, in
whi
ch e
vent
, the
tim
ing
of th
e re
cogn
ition
in p
rofit
or l
oss d
epen
ds o
n th
e na
ture
of
the
hed
ging
rel
atio
nshi
p. W
hen
the
fair
valu
e of
a d
eriv
ativ
e fin
anci
al i
nstru
men
t is
pos
itive
, the
de
rivat
ive
is re
cogn
ized
as
a fin
anci
al a
sset
; whe
n th
e fa
ir va
lue
of a
der
ivat
ive
finan
cial
inst
rum
ent i
s ne
gativ
e, th
e de
rivat
ive
is re
cogn
ized
as a
fina
ncia
l lia
bilit
y.
Der
ivat
ives
em
bedd
ed in
hyb
rid c
ontra
cts
that
con
tain
fin
anci
al a
sset
hos
ts th
at is
with
in th
e sc
ope
of
IFR
S 9
are
not s
epar
ated
; ins
tead
, the
cla
ssifi
catio
n is
det
erm
ined
in a
ccor
danc
e w
ith th
e en
tire
hybr
id
cont
ract
. Der
ivat
ives
em
bedd
ed in
non
-der
ivat
ive
host
con
tract
s th
at a
re n
ot fi
nanc
ial a
sset
s w
ithin
the
scop
e of
IFR
S 9
(e.g
., fin
anci
al l
iabi
litie
s) a
re t
reat
ed a
s se
para
te d
eriv
ativ
es w
hen
they
mee
t th
e de
finiti
on o
f a
deriv
ativ
e, t
heir
risks
and
cha
ract
eris
tics
are
not
clos
ely
rela
ted
to t
hose
of
the
host
cont
ract
s, an
d th
e ho
st c
ontra
cts a
re n
ot m
easu
red
at F
VTP
L.
Hed
ge A
ccou
ntin
g Th
e C
ompa
ny e
nter
s in
to s
ome
deriv
ativ
e tra
nsac
tions
that
aim
to m
anag
e in
tere
st ra
tes,
fore
ign
exch
ange
ra
tes,
fuel
pric
es,
and
othe
r fa
ctor
s af
fect
ing
gain
s or
los
ses
on a
sset
s an
d lia
bilit
ies.
The
hedg
ing
trans
actio
ns a
re d
efin
ed a
s ca
sh f
low
hed
ges.
Whe
n en
terin
g in
to h
edgi
ng tr
ansa
ctio
ns, t
he C
ompa
ny h
as
prep
ared
off
icia
l doc
umen
ts th
at d
escr
ibe
the
hedg
ing
rela
tions
hip
betw
een
hedg
ing
inst
rum
ents
and
item
s w
hich
hav
e be
en h
edge
d, th
e ob
ject
ive
of ri
sk m
anag
emen
t, th
e he
dgin
g st
rate
gy, a
nd th
e w
ay to
eva
luat
e th
e ef
fect
iven
ess o
f the
hed
ging
inst
rum
ent.
- 21
-
The
effe
ctiv
e po
rtion
of c
hang
es in
the
fair
valu
e of
der
ivat
ives
that
are
des
igna
ted
and
qual
ify a
s ca
sh fl
ow
hedg
es is
reco
gniz
ed in
oth
er c
ompr
ehen
sive
inco
me.
The
gai
n or
loss
rela
ting
to th
e in
effe
ctiv
e po
rtion
is
reco
gniz
ed im
med
iate
ly in
pro
fit o
r los
s. Th
e as
soci
ated
gai
ns o
r lo
sses
that
wer
e re
cogn
ized
in o
ther
com
preh
ensi
ve in
com
e ar
e re
clas
sifie
d fr
om
equi
ty to
pro
fit o
r lo
ss a
s a
recl
assi
ficat
ion
adju
stm
ent i
n th
e lin
e ite
m r
elat
ing
to th
e he
dged
item
in th
e sa
me
perio
d as
whe
n th
e he
dged
ite
m a
ffec
ts p
rofit
or
loss
. If
a he
dge
of a
for
ecas
ted
trans
actio
n su
bseq
uent
ly r
esul
ts in
the
reco
gniti
on o
f a
non-
finan
cial
ass
et o
r a
non-
finan
cial
liab
ility
, the
ass
ocia
ted
gain
s an
d lo
sses
tha
t w
ere
reco
gniz
ed i
n ot
her
com
preh
ensi
ve i
ncom
e ar
e re
mov
ed f
rom
equ
ity a
nd a
re
incl
uded
in th
e in
itial
cos
t of t
he n
on-fi
nanc
ial a
sset
or n
on-fi
nanc
ial l
iabi
lity.
St
artin
g fr
om 2
018,
the
Com
pany
dis
cont
inue
s hed
ge a
ccou
ntin
g on
ly w
hen
the
hedg
ing
rela
tions
hip
ceas
es
to m
eet t
he q
ualif
ying
crit
eria
; for
inst
ance
, whe
n th
e he
dgin
g in
stru
men
t exp
ires
or is
sol
d, te
rmin
ated
or
exer
cise
d. T
he c
umul
ativ
e ga
in o
r lo
ss o
n th
e he
dgin
g in
stru
men
t tha
t has
bee
n pr
evio
usly
rec
ogni
zed
in
othe
r com
preh
ensi
ve in
com
e fr
om th
e pe
riod
in w
hich
the
hedg
e w
as e
ffec
tive
rem
ains
sep
arat
ely
in e
quity
un
til th
e fo
reca
sted
tran
sact
ion
occu
rs. W
hen
a fo
reca
sted
tran
sact
ion
is n
o lo
nger
exp
ecte
d to
occ
ur, t
he
gain
or l
oss a
ccum
ulat
ed in
equ
ity is
reco
gniz
ed im
med
iate
ly in
pro
fit o
r los
s. Pr
ovis
ions
Th
e C
ompa
ny r
ecog
nize
s pr
ovis
ions
whe
n th
e C
ompa
ny h
as a
pre
sent
obl
igat
ion
(lega
l or
con
stru
ctiv
e)
aris
ing
from
pas
t eve
nts
(lega
l or c
onst
ruct
ive
oblig
atio
n), p
aym
ent f
or th
e ob
ligat
ion
is p
roba
ble,
and
the
expe
nditu
re fo
r set
tling
the
oblig
atio
n ca
n be
est
imat
ed re
liabl
y.
The
amou
nt re
cogn
ized
as
a pr
ovis
ion
is th
e be
st e
stim
ate
of th
e ex
pend
iture
requ
ired
to s
ettle
the
pres
ent
oblig
atio
n, ta
king
into
acc
ount
the
risks
and
unc
erta
intie
s sur
roun
ding
the
oblig
atio
n as
of t
he b
alan
ce s
heet
da
te.
Whe
n a
prov
isio
n is
mea
sure
d us
ing
the
cash
flo
ws
estim
ated
to
settl
e th
e pr
esen
t ob
ligat
ion,
its
carr
ying
am
ount
is th
e pr
esen
t val
ue o
f tho
se c
ash
flow
s. W
hen
the
airc
raft
leas
e co
ntra
cts
expi
re a
nd w
ill
be re
turn
ed to
less
or, t
he C
ompa
ny w
ill a
sses
s if t
here
are
exi
stin
g ob
ligat
ions
and
if a
pro
visi
on is
requ
ired
whe
n si
gnin
g th
e le
ase
cont
ract
. R
even
ue R
ecog
nitio
n Th
e C
ompa
ny re
cogn
izes
reve
nue
by a
pply
ing
the
follo
win
g st
eps:
Id
entif
ying
the
cont
ract
with
the
cust
omer
;
Id
entif
ying
the
perf
orm
ance
obl
igat
ions
in th
e co
ntra
ct;
Det
erm
ine
the
trans
actio
n pr
ice;
A
lloca
te th
e tra
nsac
tion
pric
e to
the
perf
orm
ance
obl
igat
ions
in th
e co
ntra
ct; a
nd
Rec
ogni
ze re
venu
e w
hen
the
Com
pany
satis
fies a
per
form
ance
obl
igat
ion.
Sh
ippi
ng se
rvic
e re
venu
e Pa
ssen
ger a
nd c
argo
reve
nue
are
reco
gniz
ed a
s rev
enue
whe
n th
e pa
ssen
gers
and
goo
ds a
re a
ctua
lly c
arrie
d.
Whe
n th
e tic
kets
are
sold
, due
to th
e fa
ct th
at th
e fu
lfillm
ent o
blig
atio
ns o
f the
ship
men
t hav
e no
t bee
n m
et,
the
rele
vant
am
ount
of r
even
ue is
firs
t rec
orde
d as
con
tract
liab
ilitie
s unt
il pa
ssen
gers
act
ually
boa
rd.
L
easi
ng
At t
he in
cept
ion
of a
con
tract
, the
Com
pany
ass
esse
s whe
ther
the
cont
ract
is, o
r con
tain
s, a
leas
e.
The
Com
pany
as l
esse
e Th
e C
ompa
ny re
cogn
izes
righ
t-of-
use
asse
ts a
nd le
ase
liabi
litie
s for
all
leas
es a
t the
com
men
cem
ent d
ate
of
a le
ase,
exc
ept
for
shor
t-ter
m l
ease
s an
d lo
w-v
alue
ass
et l
ease
s ac
coun
ted
for
appl
ying
a r
ecog
nitio
n ex
empt
ion
whe
re le
ase
paym
ents
are
reco
gniz
ed a
s exp
ense
s on
a st
raig
ht-li
ne b
asis
ove
r the
leas
e te
rms.
- 22
-
204
Rig
ht-o
f-us
e as
sets
are
ini
tially
mea
sure
d at
cos
t, w
hich
com
pris
es t
he i
nitia
l m
easu
rem
ent
of l
ease
lia
bilit
ies
adju
sted
for
lea
se p
aym
ents
mad
e at
or
befo
re th
e co
mm
ence
men
t da
te, p
lus
any
initi
al d
irect
co
sts i
ncur
red
and
an e
stim
ate
of c
osts
nee
ded
to re
stor
e th
e un
derly
ing
asse
ts, a
nd le
ss a
ny le
ase
ince
ntiv
es
rece
ived
. R
ight
-of-
use
asse
ts a
re s
ubse
quen
tly m
easu
red
at c
ost
less
acc
umul
ated
dep
reci
atio
n an
d im
pairm
ent
loss
es a
nd a
djus
ted
for
any
rem
easu
rem
ent
of t
he l
ease
lia
bilit
ies.
Rig
ht-o
f-us
e as
sets
are
pr
esen
ted
on a
sepa
rate
line
in th
e ba
lanc
e sh
eets
. R
ight
-of-
use
asse
ts a
re d
epre
ciat
ed u
sing
the
stra
ight
-line
met
hod
from
the
com
men
cem
ent
date
s to
the
ea
rlier
of
the
end
of th
e us
eful
live
s of
the
right
-of-
use
asse
ts o
r th
e en
d of
the
leas
e te
rms.
How
ever
, if
leas
es tr
ansf
er o
wne
rshi
p of
the
unde
rlyin
g as
sets
to th
e C
ompa
ny b
y th
e en
d of
the
leas
e te
rms
or if
the
cost
s of
rig
ht-o
f-us
e as
sets
ref
lect
tha
t th
e C
ompa
ny w
ill e
xerc
ise
a pu
rcha
se o
ptio
n, t
he C
ompa
ny
depr
ecia
tes
the
right
-of-
use
asse
ts f
rom
the
com
men
cem
ent
date
s to
the
end
of
the
usef
ul l
ives
of
the
unde
rlyin
g as
sets
. Le
ase
liabi
litie
s ar
e in
itial
ly m
easu
red
at t
he p
rese
nt v
alue
of
the
leas
e pa
ymen
ts, w
hich
com
pris
e fix
ed
paym
ents
, in
-sub
stan
ce f
ixed
pay
men
ts,
varia
ble
leas
e pa
ymen
ts w
hich
dep
end
on a
n in
dex
or a
rat
e,
resi
dual
val
ue g
uara
ntee
s, th
e ex
erci
se p
rice
of a
pur
chas
e op
tion
if th
e le
ssee
is
reas
onab
ly c
erta
in t
o ex
erci
se t
hat
optio
n, a
nd p
aym
ents
of
pena
lties
for
ter
min
atin
g a
leas
e if
the
leas
e te
rm r
efle
cts
such
te
rmin
atio
n, le
ss a
ny l
ease
inc
entiv
es p
ayab
le. T
he le
ase
paym
ents
are
dis
coun
ted
usin
g th
e in
tere
st r
ate
impl
icit
in a
lea
se, i
f th
at r
ate
can
be r
eadi
ly d
eter
min
ed. I
f th
at r
ate
cann
ot b
e re
adily
det
erm
ined
, the
C
ompa
ny u
ses t
he le
ssee
’s in
crem
enta
l bor
row
ing
rate
.
Subs
eque
ntly
, le
ase
liabi
litie
s ar
e m
easu
red
at a
mor
tized
cos
t us
ing
the
effe
ctiv
e in
tere
st m
etho
d, w
ith
inte
rest
exp
ense
rec
ogni
zed
over
the
leas
e te
rms.
Whe
n th
ere
is a
chan
ge in
a le
ase
term
, a c
hang
e in
the
amou
nts e
xpec
ted
to b
e pa
yabl
e un
der a
resi
dual
val
ue g
uara
ntee
, a c
hang
e in
the
asse
ssm
ent o
f an
optio
n to
pu
rcha
se a
n un
derly
ing
asse
t, or
a c
hang
e in
futu
re le
ase
paym
ents
resu
lting
from
a c
hang
e in
an
inde
x or
a
rate
use
d to
det
erm
ine
thos
e pa
ymen
ts, t
he C
ompa
ny r
emea
sure
s th
e le
ase
liabi
litie
s w
ith a
cor
resp
ondi
ng
adju
stm
ent t
o th
e rig
ht-o
f-us
e-as
sets
. Lea
se li
abili
ties a
re p
rese
nted
on
a se
para
te li
ne in
the
bala
nce
shee
ts.
Var
iabl
e le
ase
paym
ents
that
do
not d
epen
d on
an
inde
x or
a ra
te a
re re
cogn
ized
as
expe
nses
in th
e pe
riods
in
whi
ch th
ey a
re in
curr
ed.
For
sale
and
leas
ebac
k tra
nsac
tions
, if
the
trans
fer
of a
n as
set s
atis
fies
the
requ
irem
ents
of
IFR
S 15
to b
e ac
coun
ted
for
as a
sal
e, th
e C
ompa
ny r
ecog
nize
s on
ly th
e am
ount
of a
ny g
ain
or lo
ss w
hich
rela
tes
to th
e rig
hts
trans
ferr
ed to
the
buye
r-le
ssor
, and
adj
usts
the
off-
mar
ket t
erm
s to
mea
sure
the
sale
pro
ceed
s at
fair
valu
e. I
f th
e tra
nsfe
r do
es n
ot s
atis
fy t
he r
equi
rem
ents
of
IFR
S 15
to
be a
ccou
nted
for
as
a sa
le,
it is
ac
coun
ted
for a
s a fi
nanc
ing
trans
actio
n.
Em
ploy
ee B
enef
its
a.
Shor
t-ter
m e
mpl
oyee
ben
efits
Li
abili
ties
reco
gniz
ed i
n re
spec
t of
sho
rt-te
rm e
mpl
oyee
ben
efits
are
mea
sure
d at
the
und
isco
unte
d am
ount
of t
he b
enef
its e
xpec
ted
to b
e pa
id in
exc
hang
e fo
r the
rela
ted
serv
ices
. b.
R
etire
men
t ben
efits
Pa
ymen
ts t
o th
e de
fined
con
tribu
tion
retir
emen
t be
nefit
pla
n ar
e re
cogn
ized
as
expe
nses
whe
n em
ploy
ees h
ave
rend
ered
serv
ices
ent
itlin
g th
em to
the
cont
ribut
ions
. D
efin
ed b
enef
it co
sts
(incl
udin
g se
rvic
e co
st,
net
inte
rest
and
rem
easu
rem
ent)
unde
r th
e de
fined
co
ntrib
utio
n re
tirem
ent b
enef
it pl
an a
re d
eter
min
ed u
sing
the
proj
ecte
d un
it cr
edit
met
hod.
Ser
vice
cos
t (in
clud
ing
curr
ent
serv
ice
cost
and
pas
t se
rvic
e co
st)
and
net
inte
rest
on
the
net
defin
ed b
enef
it lia
bilit
ies
(ass
ets)
are
rec
ogni
zed
as e
mpl
oyee
ben
efits
exp
ense
in
the
perio
d in
whi
ch t
hey
occu
r. R
emea
sure
men
t, co
mpr
isin
g ac
tuar
ial g
ains
and
loss
es a
nd th
e re
turn
on
plan
ass
ets (
excl
udin
g in
tere
st),
- 23
-
is r
ecog
nize
d in
oth
er c
ompr
ehen
sive
inc
ome
in t
he p
erio
d in
whi
ch i
t oc
curs
. Re
mea
sure
men
t re
cogn
ized
in o
ther
com
preh
ensi
ve in
com
e is
refle
cted
imm
edia
tely
in re
tain
ed e
arni
ngs
and
will
not
be
recl
assi
fied
to p
rofit
or l
oss.
N
et d
efin
ed b
enef
it lia
bilit
ies
(ass
ets)
rep
rese
nt t
he a
ctua
l de
ficit
in t
he C
ompa
ny’s
def
ined
ben
efit
plan
s. B
orro
win
g C
osts
B
orro
win
g co
sts
dire
ctly
attr
ibut
able
to
the
acqu
isiti
on,
cons
truct
ion
or p
rodu
ctio
n of
qua
lifyi
ng a
sset
s (a
sset
s whi
ch a
re su
bsta
ntia
lly re
ady
for t
heir
inte
nded
use
or s
ale
thro
ugh
a fa
irly
long
per
iod)
are
add
ed to
th
e co
st o
f tho
se a
sset
s, un
til su
ch ti
me
as th
e as
sets
are
subs
tant
ially
read
y fo
r the
ir in
tend
ed u
se o
r sal
e.
Inve
stm
ent i
ncom
e ea
rned
on
the
tem
pora
ry in
vest
men
t of s
peci
fic b
orro
win
gs p
endi
ng th
eir e
xpen
ditu
re o
n qu
alify
ing
asse
ts is
ded
ucte
d fr
om th
e bo
rrow
ing
cost
s elig
ible
for c
apita
lizat
ion.
O
ther
than
that
whi
ch is
stat
ed a
bove
, all
othe
r bor
row
ing
cost
s are
reco
gniz
ed in
pro
fit o
r los
s in
the
perio
d in
whi
ch th
ey a
re in
curr
ed.
Gov
ernm
ent G
rant
s G
over
nmen
t gra
nts
are
not r
ecog
nize
d un
til th
ere
is r
easo
nabl
e as
sura
nce
that
the
Com
pany
will
com
ply
with
the
cond
ition
s atta
ched
to th
em a
nd th
at th
e gr
ants
will
be
rece
ived
. G
over
nmen
t gr
ants
are
rec
ogni
zed
in p
rofit
or
loss
on
a sy
stem
atic
bas
is o
ver
the
perio
ds i
n w
hich
the
C
ompa
ny re
cogn
izes
as e
xpen
ses t
he re
late
d co
sts f
or w
hich
the
gran
ts a
re in
tend
ed to
com
pens
ate.
G
over
nmen
t gra
nts
that
are
rec
eiva
ble
as c
ompe
nsat
ion
for
expe
nses
or
loss
es a
lread
y in
curr
ed o
r fo
r th
e pu
rpos
e of
giv
ing
imm
edia
te fi
nanc
ial s
uppo
rt to
the
Com
pany
with
no
futu
re re
late
d co
sts
are
reco
gniz
ed
in p
rofit
or l
oss i
n th
e pe
riod
in w
hich
they
are
rece
ived
. Th
e be
nefit
of
a go
vern
men
t loa
n re
ceiv
ed a
t a b
elow
-mar
ket r
ate
of in
tere
st is
trea
ted
as a
gov
ernm
ent
gran
t m
easu
red
as t
he d
iffer
ence
bet
wee
n th
e pr
ocee
ds r
ecei
ved
and
the
fair
valu
e of
the
loan
bas
ed o
n pr
evai
ling
mar
ket i
nter
est r
ates
. Fr
eque
nt F
lyer
Pro
gram
s Th
e Co
mpa
ny h
as a
“D
ynas
ty F
lyer
Pro
gram
” th
roug
h w
hich
pro
gram
mem
bers
can
con
vert
accu
mul
ated
m
ileag
e to
a c
abin
upg
rade
, fre
e tic
kets
and
oth
er m
embe
r rew
ards
. A
por
tion
of p
asse
nger
reve
nue
attri
buta
ble
to th
e re
war
ds fo
r the
freq
uent
flye
r pr
ogra
m is
def
erre
d. T
he
Com
pany
reco
gniz
es th
is d
efer
red
reve
nue
as re
venu
e on
ly w
hen
the
Com
pany
has
fulfi
lled
its o
blig
atio
ns
on th
e gr
antin
g of
rew
ards
or w
hen
the
perio
d fo
r con
verti
ng th
e m
ileag
e to
rew
ards
has
exp
ired.
Sh
are-
base
d Pa
ymen
t Arr
ange
men
ts
Equi
ty-s
ettle
d sh
are-
base
d pa
ymen
ts to
em
ploy
ees
are
mea
sure
d at
the
fair
valu
e of
the
equi
ty in
stru
men
ts
at th
e gr
ant d
ate.
Th
e fa
ir va
lue
dete
rmin
ed a
t th
e gr
ant
date
of
the
equi
ty-s
ettle
d sh
are-
base
d pa
ymen
ts i
s ex
pens
ed o
n a
stra
ight
-line
bas
is o
ver t
he v
estin
g pe
riod,
bas
ed o
n th
e C
ompa
ny’s
est
imat
e of
equ
ity in
stru
men
t tha
t will
ev
entu
ally
ves
t, w
ith a
cor
resp
ondi
ng in
crea
se in
cap
ital s
urpl
us -
empl
oyee
sha
re o
ptio
ns. T
he f
air
valu
e de
term
ined
at t
he g
rant
dat
e of
the
equi
ty-s
ettle
d sh
are-
base
d pa
ymen
ts is
reco
gniz
ed a
s an
exp
ense
in fu
ll at
the
gran
t dat
e w
hen
the
gran
ted
shar
e op
tions
are
ves
ted
imm
edia
tely
.
- 24
-
205
Tax
atio
n In
com
e ta
x ex
pens
e re
pres
ents
the
sum
of t
he c
urre
nt ta
x an
d de
ferr
ed ta
x.
a.
Cur
rent
tax
Th
e cu
rren
t tax
liab
ilitie
s ar
e ba
sed
on c
urre
nt ta
xabl
e pr
ofit.
Sin
ce p
art o
f the
inco
me
and
expe
nses
are
ta
xabl
e or
ded
uctib
le i
n ot
her
perio
ds,
or i
n ac
cord
ance
with
the
rel
evan
t ta
x la
ws
are
taxa
ble
or
dedu
ctib
le, c
urre
nt ta
xabl
e pr
ofit
diff
ers
from
net
pro
fit r
epor
ted
in th
e st
atem
ents
of
com
preh
ensi
ve
inco
me.
The
Com
pany
’s c
urre
nt t
ax l
iabi
litie
s ar
e ca
lcul
ated
by
the
tax
rate
was
leg
isla
ted
or
subs
tant
ially
legi
slat
ed a
t the
bal
ance
shee
t dat
e.
Acc
ordi
ng to
the
Inco
me
Tax
Law
, an
addi
tiona
l tax
at 1
0% o
f una
ppro
pria
ted
earn
ings
is p
rovi
ded
for
as in
com
e ta
x in
the
year
the
shar
ehol
ders
app
rove
the
rete
ntio
n of
thes
e ea
rnin
gs.
Adj
ustm
ents
of p
rior y
ears
’ tax
liab
ilitie
s are
add
ed to
or d
educ
ted
from
the
curr
ent y
ear’
s tax
pro
visi
on.
b.
D
efer
red
tax
Def
erre
d ta
x is
rec
ogni
zed
on t
empo
rary
diff
eren
ces
betw
een
the
carr
ying
am
ount
s of
ass
ets
and
liabi
litie
s in
the
finan
cial
stat
emen
ts a
nd th
e co
rres
pond
ing
tax
base
s use
d in
the
com
puta
tion
of ta
xabl
e pr
ofit.
Def
erre
d ta
x lia
bilit
ies
are
gene
rally
rec
ogni
zed
for
all t
axab
le te
mpo
rary
diff
eren
ces.
Def
erre
d ta
x as
sets
are
gen
eral
ly re
cogn
ized
for a
ll de
duct
ible
tem
pora
ry d
iffer
ence
s, un
used
loss
car
ryfo
rwar
ds
and
unus
ed
tax
cred
its
for
purc
hase
s of
m
achi
nery
, eq
uipm
ent
and
tech
nolo
gy,
rese
arch
an
d de
velo
pmen
t ex
pend
iture
s, an
d pe
rson
nel
train
ing
expe
nditu
res
to t
he e
xten
t th
at i
t is
pro
babl
e th
at
taxa
ble
prof
it w
ill b
e av
aila
ble
agai
nst w
hich
thos
e de
duct
ible
tem
pora
ry d
iffer
ence
s can
be
utili
zed.
D
efer
red
tax
liabi
litie
s ar
e re
cogn
ized
for t
axab
le te
mpo
rary
diff
eren
ces
asso
ciat
ed w
ith in
vest
men
ts in
su
bsid
iarie
s an
d as
soci
ates
and
inte
rest
s in
join
t ven
ture
s, ex
cept
whe
re th
e C
ompa
ny is
abl
e to
con
trol
the
reve
rsal
of t
he te
mpo
rary
diff
eren
ce a
nd it
is p
roba
ble
that
the
tem
pora
ry d
iffer
ence
will
not
reve
rse
in th
e fo
rese
eabl
e fu
ture
. Def
erre
d ta
x as
sets
aris
ing
from
ded
uctib
le te
mpo
rary
diff
eren
ces
asso
ciat
ed
with
such
inve
stm
ents
and
inte
rest
s are
onl
y re
cogn
ized
to th
e ex
tent
that
it is
pro
babl
e th
at th
ere
will
be
suff
icie
nt ta
xabl
e pr
ofit
agai
nst w
hich
to u
tiliz
e th
e be
nefit
s of
the
tem
pora
ry d
iffer
ence
s an
d th
ey a
re
expe
cted
to re
vers
e in
the
fore
seea
ble
futu
re.
The
carr
ying
am
ount
of d
efer
red
tax
asse
ts is
revi
ewed
at t
he e
nd o
f eac
h re
porti
ng p
erio
d an
d re
duce
d to
the
exte
nt th
at it
is n
o lo
nger
pro
babl
e th
at s
uffic
ient
taxa
ble
prof
it w
ill b
e av
aila
ble
to a
llow
all
or
part
of th
e as
sets
to b
e re
cove
red.
A p
revi
ousl
y un
reco
gniz
ed d
efer
red
tax
asse
t is
also
revi
ewed
at t
he
end
of e
ach
repo
rting
per
iod
and
reco
gniz
ed to
the
exte
nt th
at it
has
bec
ome
prob
able
that
futu
re ta
xabl
e pr
ofit
will
allo
w th
e de
ferr
ed ta
x as
set t
o be
reco
vere
d.
Def
erre
d ta
x lia
bilit
ies a
nd a
sset
s are
mea
sure
d at
the
tax
rate
s tha
t are
exp
ecte
d to
app
ly in
the
perio
d in
w
hich
the
liabi
litie
s ar
e se
ttled
or
the
asse
ts a
re r
ealiz
ed, b
ased
on
tax
rate
s (a
nd ta
x la
ws)
that
hav
e be
en e
nact
ed o
r sub
stan
tivel
y en
acte
d by
the
end
of th
e re
porti
ng p
erio
d. T
he m
easu
rem
ent o
f def
erre
d ta
x lia
bilit
ies
and
asse
ts re
flect
s th
e ta
x co
nseq
uenc
es th
at w
ould
follo
w fr
om th
e m
anne
r in
whi
ch th
e C
ompa
ny e
xpec
ts, a
t th
e en
d of
the
rep
ortin
g pe
riod,
to
reco
ver
or s
ettle
the
car
ryin
g am
ount
of
its
asse
ts a
nd li
abili
ties.
c.
C
urre
nt a
nd d
efer
red
taxe
s for
the
year
C
urre
nt a
nd d
efer
red
taxe
s ar
e re
cogn
ized
in p
rofit
or
loss
, exc
ept w
hen
they
rel
ate
to it
ems
that
are
re
cogn
ized
in o
ther
com
preh
ensi
ve in
com
e or
dire
ctly
in e
quity
, in
whi
ch c
ase,
the
curr
ent a
nd d
efer
red
taxe
s are
als
o re
cogn
ized
in o
ther
com
preh
ensi
ve in
com
e or
dire
ctly
in e
quity
, res
pect
ivel
y.
- 25
-
Mai
nten
ance
and
Ove
rhau
l Cos
ts
Rou
tine
mai
nten
ance
cos
ts a
re re
cogn
ized
in p
rofit
or l
oss i
n th
e pe
riod
in w
hich
they
are
incu
rred
. Th
e ov
erha
ul c
osts
of
an o
wne
d or
leas
ed a
ircra
ft th
at m
eet t
he c
riter
ia f
or f
ixed
ass
et c
apita
lizat
ion
are
capi
taliz
ed a
s re
plac
emen
ts f
or a
ircra
ft an
d en
gine
s an
d ar
e de
prec
iate
d on
a s
traig
ht li
ne b
asis
ove
r th
e ex
pect
ed a
nnua
l ove
rhau
l cyc
le.
5
. C
RIT
ICA
L A
CC
OU
NT
ING
JU
DG
ME
NT
S A
ND
KE
Y S
OU
RC
ES
OF
EST
IMA
TIO
N
UN
CE
RT
AIN
TY
In
the
appl
icat
ion
of th
e Co
mpa
ny’s
acc
ount
ing
polic
ies
as d
iscl
osed
in N
ote
4, m
anag
emen
t is
requ
ired
to
mak
e ju
dgm
ents
, est
imat
ions
and
ass
umpt
ions
abo
ut th
e ca
rryi
ng a
mou
nts
of a
sset
s an
d lia
bilit
ies
that
are
no
t rea
dily
app
aren
t fro
m o
ther
sou
rces
. The
est
imat
es a
nd a
ssoc
iate
d as
sum
ptio
ns a
re b
ased
on
hist
oric
al
expe
rienc
e an
d ot
her f
acto
rs th
at a
re c
onsi
dere
d re
leva
nt. A
ctua
l res
ults
may
diff
er fr
om th
ese
estim
ates
. Th
e es
timat
es a
nd u
nder
lyin
g as
sum
ptio
ns a
re r
evie
wed
on
an o
ngoi
ng b
asis
. R
evis
ions
to
acco
untin
g es
timat
es a
re r
ecog
nize
d in
the
perio
d in
whi
ch th
e es
timat
es a
re r
evis
ed if
the
revi
sion
s af
fect
onl
y th
at
perio
d or
in th
e pe
riod
of th
e re
visi
ons
and
futu
re p
erio
ds if
the
revi
sion
s af
fect
bot
h cu
rren
t and
fut
ure
perio
ds.
Key
Sou
rces
of E
stim
atio
n U
ncer
tain
ty
The
key
assu
mpt
ions
con
cern
ing
the
futu
re a
nd o
ther
key
sour
ces o
f est
imat
ion
unce
rtain
ty a
t the
end
of t
he
repo
rting
per
iod
that
hav
e a
sign
ifica
nt r
isk
of c
ausi
ng a
mat
eria
l adj
ustm
ent t
o th
e ca
rryi
ng a
mou
nts
of
asse
ts a
nd li
abili
ties w
ithin
the
next
fina
ncia
l yea
r are
dis
cuss
ed b
elow
.
Def
ined
Ben
efit
Obl
igat
ions
Th
e pr
esen
t va
lue
of d
efin
ed b
enef
it ob
ligat
ions
at
the
end
of t
he r
epor
ting
perio
d is
cal
cula
ted
usin
g ac
tuar
ial
assu
mpt
ions
. Th
ose
assu
mpt
ions
, w
hich
are
bas
ed o
n m
anag
emen
t’s j
udgm
ents
and
est
imat
es,
com
pris
e th
e di
scou
nt ra
te a
nd e
xpec
ted
retu
rn o
n pl
an a
sset
s. C
hang
es in
act
uaria
l ass
umpt
ions
may
hav
e a
mat
eria
l im
pact
on
the
amou
nt o
f def
ined
ben
efit
oblig
atio
ns.
6
. C
ASH
AN
D C
ASH
EQ
UIV
AL
EN
TS
D
ecem
ber
31
2020
2019
Cas
h on
han
d an
d re
volv
ing
fund
s
$
65,9
87
$
58
,661
C
heck
ing
acco
unts
and
dem
and
depo
sits
12
,864
,010
4,
867,
015
Cas
h eq
uiva
lent
s
Ti
me
depo
sits
with
orig
inal
mat
uriti
es o
f les
s tha
n th
ree
mon
ths
5,88
0,68
2
12
,662
,162
R
epur
chas
e ag
reem
ents
col
late
raliz
ed b
y bo
nds
1,14
9,14
1
3,
038,
176
$
19
,959
,820
$
20,6
26,0
14
- 26
-
206
The
mar
ket r
ate
inte
rval
s of
cas
h in
ban
ks a
nd c
ash
equi
vale
nts
at th
e en
d of
the
repo
rting
per
iod
wer
e as
fo
llow
s:
D
ecem
ber
31
2020
2019
Ban
k ba
lanc
e
0.00
%-1
.90%
0.01
%-1
.90%
Ti
me
depo
sits
with
orig
inal
mat
uriti
es o
f les
s tha
n th
ree
mon
ths
0.
30%
-0.5
5%
0.
60%
-2.5
5%
Rep
urch
ase
agre
emen
ts c
olla
tera
lized
by
bond
s
0.41
%-0
.49%
0.55
%-0
.70%
Th
e C
ompa
ny d
esig
nate
d so
me
depo
sits
den
omin
ated
in U
SD a
nd re
purc
hase
agr
eem
ents
col
late
raliz
ed b
y bo
nds
as h
edgi
ng in
stru
men
ts to
avo
id e
xcha
nge
rate
fluc
tuat
ions
on
final
pay
men
ts o
f airc
raft
orde
rs a
nd
prep
aym
ents
for
equ
ipm
ent,
and
appl
ied
cash
flo
w h
edge
acc
ount
ing
to h
edge
its
for
eign
exc
hang
e ex
posu
re. T
he c
ontra
ct in
form
atio
n is
as f
ollo
ws:
M
atur
ity D
ate
Su
bjec
t
Car
ryin
g V
alue
Dec
embe
r 31,
202
0
2021
.1.4
-202
1.11
.1
Fin
anci
al a
sset
s for
hed
ging
- cu
rren
t
$ 7
,613
,636
Im
pact
on
com
preh
ensi
ve in
com
e (lo
ss)
Rec
ogni
zed
in
Oth
er
Com
preh
ensi
ve
Inco
me
(Los
s)
For t
he y
ear e
nded
Dec
embe
r 31,
202
0
$ (3
72,6
32)
The
amou
nt o
f he
dgin
g in
stru
men
t se
ttlem
ents
rec
ogni
zed
as p
repa
ymen
ts f
or e
quip
men
t in
202
0 w
as
$81,
111
thou
sand
.
7.
FIN
AN
CIA
L IN
STR
UM
EN
TS
AT
FA
IR V
AL
UE
TH
RO
UG
H P
RO
FIT
OR
LO
SS (F
VTP
L)
Dec
embe
r 31
20
20
20
19
Fi
nanc
ial a
sset
s - c
urre
nt
Fi
nanc
ial a
sset
s man
dato
rily
clas
sifie
d at
FV
TPL
Der
ivat
ive
finan
cial
inst
rum
ents
(not
und
er h
edge
acc
ount
ing)
Fo
reig
n ex
chan
ge fo
rwar
d co
ntra
cts
$
-
$
43
4
Fina
ncia
l lia
bilit
ies -
cur
rent
Der
ivat
ive
finan
cial
inst
rum
ents
(not
und
er h
edge
acc
ount
ing)
Fo
reig
n ex
chan
ge fo
rwar
d co
ntra
cts
$
-
$
11,
749
- 27
-
At
the
end
of t
he r
epor
ting
perio
d, o
utst
andi
ng f
orei
gn e
xcha
nge
forw
ard
cont
ract
s no
t un
der
hedg
e ac
coun
ting
wer
e as
follo
ws:
C
urre
ncy
M
atur
ity D
ate
N
otio
nal A
mou
nt
(In
Tho
usan
ds)
D
ecem
ber 3
1, 2
019
B
uy fo
rwar
d co
ntra
cts
NTD
/USD
2020
.01.
15-2
020.
07.3
1 N
TD57
0,57
1/U
SD19
,000
8
. FI
NA
NC
IAL
ASS
ET
S A
T F
AIR
VA
LU
E T
HR
OU
GH
OTH
ER
CO
MPR
EHE
NSI
VE
INC
OM
E In
vest
men
ts in
Equ
ity In
stru
men
ts
Dec
embe
r 31
20
20
20
19
N
on-c
urre
nt
Fo
reig
n in
vest
men
ts
Unl
iste
d sh
ares
$ 1
17,4
57
$
80
,991
D
omes
tic in
vest
men
ts
U
nlis
ted
shar
es
29,7
04
26,8
65
$
147
,161
$ 1
07,8
56
Thes
e in
vest
men
ts i
n eq
uity
ins
trum
ents
are
not
hel
d fo
r tra
ding
. Ins
tead
, the
y ar
e he
ld f
or m
ediu
m-
to
long
-term
stra
tegi
c pu
rpos
es. A
ccor
ding
ly, t
he m
anag
emen
t ele
cted
to d
esig
nate
thes
e in
vest
men
ts in
equ
ity
inst
rum
ents
as
at F
VTO
CI a
s it
belie
ves
that
reco
gniz
ing
shor
t-ter
m fl
uctu
atio
ns in
thes
e in
vest
men
ts’ f
air
valu
es in
pro
fit o
r los
s w
ould
not
be
cons
iste
nt w
ith th
e C
ompa
ny’s
stra
tegy
of h
oldi
ng th
ese
inve
stm
ents
fo
r lon
g-te
rm p
urpo
ses.
9
. FI
NA
NC
IAL
ASS
ET
S A
T A
MO
RT
IZE
D C
OST
D
ecem
ber
31
2020
2019
Cur
rent
Tim
e de
posi
ts w
ith o
rigin
al m
atur
ities
of m
ore
than
3 m
onth
s
$ 5
,863
,137
$ 1
,460
,450
Th
e ra
nge
of i
nter
est
rate
s fo
r tim
e de
posi
ts w
ith o
rigin
al m
atur
ities
of
mor
e th
an 3
mon
ths
was
ap
prox
imat
ely
0.40
%-0
.53%
and
0.6
0%-2
.44%
per
ann
um a
s of D
ecem
ber 3
1, 2
020
and
2019
, res
pect
ivel
y.
- 28
-
207
10.
NO
TE
S R
EC
EIV
AB
LE
AN
D A
CC
OU
NT
S R
EC
EIV
AB
LE
Dec
embe
r 31
20
20
20
19
N
otes
rece
ivab
le
$
-
$
29
7,07
5
Acc
ount
s rec
eiva
ble
A
t am
ortiz
ed c
ost
Gro
ss c
arry
ing
amou
nt
9,36
3,77
7
7,
577,
460
Less
: Allo
wan
ce fo
r im
pairm
ent l
oss
(165
,722
)
(1
80,1
04)
9,
198,
055
7,39
7,35
6
$ 9
,198
,055
$ 7
,694
,431
Th
e av
erag
e cr
edit
perio
d w
as 7
to
55 d
ays.
In d
eter
min
ing
the
reco
vera
bilit
y of
a t
rade
rec
eiva
ble,
the
C
ompa
ny c
onsi
dere
d an
y ch
ange
in th
e cr
edit
qual
ity o
f th
e re
ceiv
able
sin
ce th
e da
te c
redi
t was
initi
ally
gr
ante
d to
the
end
of
the
repo
rting
per
iod,
and
any
allo
wan
ce f
or i
mpa
irmen
t lo
ss w
as b
ased
on
the
estim
ated
irre
cove
rabl
e am
ount
s det
erm
ined
by
refe
renc
e to
the
Com
pany
’s p
ast d
efau
lt ex
perie
nce
with
the
coun
terp
arty
and
an
anal
ysis
of
the
coun
terp
arty
’s c
urre
nt f
inan
cial
pos
ition
. Th
e C
ompa
ny a
dopt
ed a
po
licy
of o
nly
deal
ing
with
ent
ities
that
are
rate
d th
e eq
uiva
lent
of i
nves
tmen
t gra
de o
r hig
her a
nd o
btai
ning
su
ffic
ient
col
late
ral,
whe
re a
ppro
pria
te, a
s a
mea
ns o
f m
itiga
ting
the
risk
of f
inan
cial
loss
fro
m d
efau
lts.
Cre
dit r
atin
g in
form
atio
n is
obta
ined
from
inde
pend
ent r
atin
g ag
enci
es w
here
ava
ilabl
e or
, if n
ot a
vaila
ble,
th
e C
ompa
ny u
ses
othe
r pub
licly
ava
ilabl
e fin
anci
al in
form
atio
n or
its
own
tradi
ng re
cord
s to
rate
its
maj
or
cust
omer
s. Th
e C
ompa
ny’s
exp
osur
e an
d th
e cr
edit
ratin
gs o
f its
cou
nter
parti
es a
re c
ontin
uous
ly m
onito
red
and
the
aggr
egat
e va
lue
of t
rans
actio
ns c
oncl
uded
is
spre
ad a
mon
gst
appr
oved
cou
nter
parti
es.
Cre
dit
expo
sure
is
cont
rolle
d by
cou
nter
party
lim
its t
hat
are
revi
ewed
and
app
rove
d by
the
ris
k m
anag
emen
t co
mm
ittee
ann
ually
. Th
e C
ompa
ny a
pplie
s th
e si
mpl
ified
app
roac
h to
allo
win
g fo
r exp
ecte
d cr
edit
loss
es p
resc
ribed
by
IFR
S 9,
w
hich
per
mits
the
use
of
lifet
ime
expe
cted
los
s al
low
ance
for
all
trade
rec
eiva
bles
. The
exp
ecte
d cr
edit
loss
es o
n tra
de r
ecei
vabl
es a
re e
stim
ated
usi
ng a
pro
visi
on m
atrix
by
refe
renc
e to
pas
t def
ault
expe
rienc
e w
ith th
e de
btor
s an
d an
ana
lysi
s of
the
debt
ors’
cur
rent
fin
anci
al p
ositi
on, a
djus
ted
for
gene
ral e
cono
mic
co
nditi
ons
of th
e in
dust
ry in
whi
ch th
e de
btor
s op
erat
e an
d an
ass
essm
ent o
f bot
h th
e cu
rren
t as
wel
l as
the
fore
cast
ed d
irect
ion
of e
cono
mic
con
ditio
ns a
t the
rep
ortin
g da
te. A
s th
e C
ompa
ny’s
his
toric
al c
redi
t los
s ex
perie
nce
does
not
sho
w s
igni
fican
tly d
iffer
ent
loss
pat
tern
s fo
r di
ffer
ent
cust
omer
seg
men
ts,
the
loss
al
low
ance
bas
ed o
n th
e pa
st du
e st
atus
is n
ot fu
rther
dist
ingu
ishe
d ac
cord
ing
to th
e di
ffer
ent s
egm
ents
of t
he
Com
pany
’s c
usto
mer
bas
e.
The
Com
pany
writ
es o
ff a
trade
rec
eiva
ble
whe
n th
ere
is i
nfor
mat
ion
indi
catin
g th
at t
he d
ebto
r is
ex
perie
ncin
g se
vere
fin
anci
al d
iffic
ulty
and
the
re i
s no
rea
listic
pro
spec
t of
rec
over
y. F
or a
ccou
nts
rece
ivab
le th
at h
ave
been
writ
ten
off,
the
Com
pany
con
tinue
s to
eng
age
in e
nfor
cem
ent a
ctiv
ity to
atte
mpt
to
reco
ver t
he re
ceiv
able
s whi
ch a
re d
ue. W
here
reco
verie
s are
mad
e, th
ese
are
reco
gniz
ed in
pro
fit o
r los
s.
- 29
-
The
follo
win
g ta
ble
deta
ils t
he l
oss
allo
wan
ce o
f tra
de r
ecei
vabl
es b
ased
on
the
Com
pany
’s p
rovi
sion
m
atrix
. D
ecem
ber 3
1, 2
020
N
ot P
ast D
ue
Up
to 3
0 D
ays
31
to 6
0 D
ays
61
to 9
0 D
ays
Ove
r 90
Day
s
Tot
al
Ex
pect
ed c
redi
t los
s rat
e
-
1.04
%
47
.77%
100%
100%
-
Gro
ss c
arry
ing
amou
nt
$
9,1
67,2
02
$
29,4
63
$
3,36
6
$ 2,
887
$
160,
859
$
9,36
3,77
7 Lo
ss a
llow
ance
(life
time
ECLs
)
(5
9)
(3
09)
(1,6
08)
(2,8
87)
(160
,859
)
(1
65,7
22)
A
mor
tized
cos
t
$ 9
,167
,143
$ 29
,154
$ 1,
758
$
-
$ -
$
9,19
8,05
5 D
ecem
ber 3
1, 2
019
N
ot P
ast D
ue
Up
to 3
0 D
ays
31
to 6
0 D
ays
61
to 9
0 D
ays
Ove
r 90
Day
s
Tot
al
Ex
pect
ed c
redi
t los
s rat
e
0.03
%
0.
15%
15.8
9%
22
.14%
100%
-
Gro
ss c
arry
ing
amou
nt
$
6,0
70,7
53
$
1,24
1,76
6
$ 37
,891
$ 73
,058
$ 15
3,99
2
$ 7,
577,
460
Loss
allo
wan
ce (l
ifetim
e EC
Ls)
(2,0
52)
(1,8
62)
(6,0
20)
(16,
178)
(153
,992
)
(1
80,1
04)
A
mor
tized
cos
t
$ 6
,068
,701
$ 1,
239,
904
$
31,8
71
$
56,8
80
$
-
$ 7,
397,
356
The
mov
emen
ts o
f the
loss
allo
wan
ce o
f acc
ount
s rec
eiva
bles
wer
e as
follo
ws:
F
or th
e Y
ear
End
ed D
ecem
ber
31
2020
2019
Bal
ance
at J
anua
ry 1
$ 1
80,1
04
$
191
,079
A
dd: N
et re
mea
sure
men
t of l
oss a
llow
ance
3,
000
24,0
00
Less
: Am
ount
s writ
ten
off
(1
7,38
2)
(34,
975)
Fo
reig
n ex
chan
ge g
ains
and
loss
es
-
-
B
alan
ce a
t Dec
embe
r 31
$
165
,722
$ 1
80,1
04
11
. IN
VE
NT
OR
IES
D
ecem
ber
31
2020
2019
Airc
raft
spar
e pa
rts
$
7,2
51,3
53
$
7,3
90,9
81
Item
s for
in-fl
ight
sale
62
7,43
7
57
1,60
1 W
ork
in p
roce
ss -
mai
nten
ance
serv
ices
21
4,36
2
28
3,93
3
$ 8
,093
,152
$ 8
,246
,515
Th
e op
erat
ing
cost
s fo
r th
e ye
ars
ende
d D
ecem
ber
31,
2020
and
201
9 in
clud
ed l
osse
s fr
om i
nven
tory
w
rite-
dow
ns o
f 190
,548
thou
sand
and
$31
7,62
9 th
ousa
nd, r
espe
ctiv
ely.
- 30
-
208
12.
NO
N-C
UR
RE
NT
ASS
ET
S H
EL
D F
OR
SA
LE
Dec
embe
r 31
20
20
20
19
A
ircra
ft he
ld fo
r sal
e
$ 8
9,29
6
$
- To
enh
ance
its
com
petit
iven
ess,
the
Com
pany
pla
ns t
o in
trodu
ce n
ew a
ircra
ft an
d re
tire
old
airc
raft
acco
rdin
g to
a p
lann
ed sc
hedu
le. S
uch
airc
raft,
cla
ssifi
ed a
s non
-cur
rent
ass
ets
held
for s
ale,
had
an
orig
inal
bo
ok v
alue
whi
ch w
as h
ighe
r tha
n th
e ex
pect
ed sa
le p
rice
and
whi
ch w
as re
cogn
ized
as a
n im
pairm
ent l
oss.
How
ever
, the
act
ual l
oss s
hall
be id
entif
ied
by th
e ac
tual
sale
pric
e.
In 2
019,
the
Com
pany
com
plet
ed th
e di
spos
al p
roce
dure
s of s
ome
airc
raft
and
reco
gniz
ed a
loss
on
disp
osal
of
$10
,462
thou
sand
for t
he y
ear e
nded
Dec
embe
r 31,
201
9.
The
fair
valu
e w
as d
eter
min
ed b
y tra
nsac
tions
of t
he re
late
d m
arke
t, an
d th
e pr
opos
ed s
ale
pric
e w
as b
ased
on
the
curr
ent s
tatu
s of t
he a
ircra
ft. T
he fa
ir va
lue
is c
lass
ified
as L
evel
3.
13
. IN
VE
STM
EN
TS
AC
CO
UN
TE
D F
OR
USI
NG
TH
E E
QU
ITY
ME
TH
OD
Dec
embe
r 31
20
20
20
19
In
vest
men
ts in
subs
idia
ries
$
11
,155
,607
$
12,0
04,1
80
Inve
stm
ents
in a
ssoc
iate
s
28
2,47
1
47
1,26
7 In
vest
men
ts in
join
tly c
ontro
lled
entit
ies
883,
079
1,00
7,43
0
$
12,3
21,1
57
$
13
,482
,877
a.
Inve
stm
ent i
n su
bsid
iarie
s
Dec
embe
r 31
20
20
20
19
U
nlis
ted
com
pani
es
Ti
gera
ir Ta
iwan
Co.
, Ltd
.
$
2,30
4,11
3
$
1,94
6,32
8 C
AL
Park
1,
605,
033
1,55
2,31
0 M
anda
rin A
irlin
es
1,22
3,25
9
1,
494,
603
CA
L-D
ynas
ty In
tern
atio
nal
1,18
8,11
0
1,
276,
546
Taiw
an A
ir C
argo
Ter
min
al
1,55
6,13
3
1,
517,
946
Taoy
uan
Inte
rnat
iona
l Airp
ort S
ervi
ces
602,
688
737,
245
CA
L-A
sia
Inve
stm
ent
469,
979
559,
562
Sabr
e Tr
avel
Net
wor
k (T
aiw
an)
232,
883
460,
213
CA
L H
otel
40
5,35
3
47
9,25
9 Ta
iwan
Airp
ort S
ervi
ces
200,
794
276,
134
Dyn
asty
Aer
otec
h In
tern
atio
nal C
orp
136,
630
88,3
13
Taiw
an A
ircra
ft M
aint
enan
ce A
nd E
ngin
eerin
g C
o., L
td.
699,
793
921,
989
Yes
trip
10,2
70
25,2
68
Glo
bal S
ky E
xpre
ss
7,64
3
7,
294
Kao
hsiu
ng C
ater
ing
Serv
ices
51
2,92
6
66
1,17
0
$
11,1
55,6
07
$
12
,004
,180
- 31
-
At t
he e
nd o
f the
repo
rting
per
iod,
the
prop
ortio
n of
ow
ners
hip
and
votin
g rig
hts i
n su
bsid
iarie
s he
ld b
y th
e C
ompa
ny w
ere
as fo
llow
s:
D
ecem
ber
31
2020
2019
Tige
rair
Taiw
an C
o., L
td.
76
%
69
%
Taiw
an A
ir C
argo
Ter
min
al
54
%
54
%
CA
L Pa
rk
10
0%
10
0%
Man
darin
Airl
ines
94%
94%
C
AL-
Dyn
asty
Inte
rnat
iona
l
100%
100%
Ta
oyua
n In
tern
atio
nal A
irpor
t Ser
vice
s
49%
49%
C
AL-
Asi
a In
vest
men
t
100%
100%
Sa
bre
Trav
el N
etw
ork
(Tai
wan
)
94%
94%
Ta
iwan
Airp
ort S
ervi
ces
47
%
47
%
CA
L H
otel
100%
100%
D
ynas
ty A
erot
ech
Inte
rnat
iona
l Cor
p
100%
100%
Ta
iwan
Airc
raft
Mai
nten
ance
And
Eng
inee
ring
Co.
, Ltd
.
100%
100%
D
ynas
ty H
olid
ays
Yes
trip
10
0%
10
0%
Glo
bal S
ky E
xpre
ss
25
%
25
%
Kao
hsiu
ng C
ater
ing
Serv
ices
54%
54%
Ea
ch o
f th
e C
ompa
ny’s
hol
ding
s of
the
issu
ed s
hare
cap
ital o
f Ta
oyua
n In
tern
atio
nal A
irpor
t Ser
vice
, Ta
iwan
Airp
ort
Serv
ice
and
Glo
bal
Sky
Expr
ess
did
not
exce
ed 5
0%,
but
since
the
Com
pany
had
co
ntro
l ove
r the
se in
vest
ees,
they
wer
e lis
ted
as su
bsid
iarie
s. In
ord
er to
pre
pare
for t
he li
stin
g of
Tig
erai
r Tai
wan
Co.
, Ltd
. and
com
ply
with
the
rule
s re
latin
g to
the
exam
inat
ion
for
publ
ic l
istin
g, t
he r
elea
se o
f th
e sh
ares
of
Tige
rair
Taiw
an C
o.,
Ltd.
hel
d by
the
C
ompa
ny w
as re
solv
ed in
the
shar
ehol
ders
’ mee
ting
of th
e C
ompa
ny o
n Ju
ne 2
5, 2
019.
The
shar
es sh
all
be s
ubsc
ribed
by
all s
hare
hold
ers
of th
e C
ompa
ny o
n th
e ba
sis
of th
e pe
rcen
tage
of s
hare
hold
ings
. For
th
e w
aive
r of
sub
scrib
ed s
hare
s by
the
orig
inal
sha
reho
lder
s or
the
und
ersu
bscr
ibed
por
tion,
the
ch
airm
an w
as a
utho
rized
to d
esig
nate
spe
cific
per
sons
for s
ubsc
riptio
n. T
he s
ubsc
riptio
n pr
ice
was
set
at
$41
per
sha
re.
In O
ctob
er a
nd D
ecem
ber
2019
, th
e sh
ares
wer
e fu
lly p
aid
and
wer
e co
mpl
etel
y de
liver
ed a
nd t
rans
ferr
ed. T
he a
mou
nt o
f pr
ocee
ds f
rom
dis
posa
l w
as $
1,67
9,78
9 th
ousa
nd, a
nd t
he
rela
ted
gain
on
disp
osal
was
$1,
129,
080
thou
sand
and
reco
gniz
ed a
s cap
ital s
urpl
us.
To s
treng
then
the
capi
tal s
truct
ure
of T
iger
air T
aiw
an C
o., L
td.,
the
boar
d of
dire
ctor
s of
the
Com
pany
ap
prov
ed th
e pl
an to
issu
e or
dina
ry s
hare
s fo
r cas
h at
$25
per
sha
re o
n A
ugus
t 6, 2
020.
The
Com
pany
su
bscr
ibed
for 4
7,22
8 th
ousa
nd s
hare
s in
Oct
ober
202
0 an
d 26
,286
thou
sand
sha
res
in N
ovem
ber 2
020.
B
ecau
se th
e sh
ares
are
sub
scrib
ed a
t a p
erce
ntag
e di
ffer
ent f
rom
its
exis
ting
owne
rshi
p pe
rcen
tage
, the
C
ompa
ny’s
reta
ined
ear
ning
s dec
reas
ed b
y $1
69,2
72 th
ousa
nd.
Th
e sh
are
of p
rofit
or l
oss o
f sub
sidi
arie
s rec
ogni
zed
unde
r the
equ
ity m
etho
d w
as a
s fol
low
s:
20
20
20
19
Sh
are
of p
rofit
(los
s)
$
(1,
590,
853)
$ 1
,529
,721
- 32
-
209
b.
Inve
stm
ents
in a
ssoc
iate
s
Dec
embe
r 31
20
20
20
19
U
nlis
ted
com
pani
es
C
hina
Airc
raft
Serv
ices
$ 2
77,2
34
$
461
,263
D
ynas
ty H
olid
ays
5,23
7
10
,004
$ 2
82,4
71
$
471
,267
A
t the
end
of t
he re
porti
ng p
erio
d, th
e pr
opor
tion
of o
wne
rshi
p an
d vo
ting
right
s in
ass
ocia
tes
held
by
the
Com
pany
wer
e as
follo
ws:
D
ecem
ber
31
2020
2019
Chi
na A
ircra
ft Se
rvic
es
20
%
20
%
Dyn
asty
Hol
iday
s (N
ote)
20%
20%
N
ote:
Dyn
asty
Hol
iday
s was
list
ed a
s an
asso
ciat
e on
Janu
ary
31, 2
019.
Th
e re
cogn
ized
inve
stm
ent i
ncom
e of
ass
ocia
tes a
ccou
nted
for u
sing
the
equi
ty m
etho
d w
as a
s fol
low
s:
20
20
20
19
C
hina
Airc
raft
Serv
ices
$ (1
02,7
58)
$
10
,365
D
ynas
ty H
olid
ays
(4,7
40)
15
$
(107
,498
)
$
10,3
80
The
boar
d of
dire
ctor
s of
the
Com
pany
dec
ided
to s
ell a
por
tion
of th
e eq
uity
of i
ts s
ubsi
diar
y, D
ynas
ty
Hol
iday
s, to
H.I.
S. T
aiw
an C
o., L
td. o
n Ja
nuar
y 21
, 201
9 an
d co
mpl
eted
the
trans
actio
n on
Jan
uary
31,
21
09. A
fter t
he d
ispo
sal o
f the
equ
ity, t
he C
ompa
ny’s
issu
ed s
hare
cap
ital d
ecre
ased
from
51%
to 2
0%.
Dyn
asty
Hol
iday
s w
as c
lass
ified
as
an a
ssoc
iate
sin
ce t
he C
ompa
ny l
ost
cont
rol
of t
he s
ubsi
diar
y.
Ther
efor
e, th
e re
leva
nt a
sset
s an
d lia
bilit
ies
wer
e no
t con
solid
ated
in th
e cu
rren
t per
iod
and
only
the
prof
it an
d lo
ss f
rom
Jan
uary
1, 2
019
to J
anua
ry 3
1, 2
019
wer
e co
nsol
idat
ed. F
or in
form
atio
n on
the
disp
osal
of t
he su
bsid
iary
, ref
er to
Not
e 31
.
c.
Inve
stm
ents
in jo
intly
con
trolle
d en
titie
s Th
e in
vest
men
ts in
join
tly c
ontro
lled
entit
ies w
ere
as fo
llow
s:
D
ecem
ber
31
2020
2019
Chi
na P
acifi
c C
ater
ing
Serv
ices
$
695,
959
$
80
1,07
0 C
hina
Pac
ific
Laun
dry
Serv
ices
14
9,35
3
16
8,54
7 N
OR
DA
M A
sia
37,7
67
37,8
13
$
88
3,07
9
$ 1
,007
,430
- 33
-
At t
he e
nd o
f the
repo
rting
per
iod,
the
perc
enta
ges
of o
wne
rshi
p an
d vo
ting
right
s in
join
tly c
ontro
lled
entit
ies h
eld
by th
e C
ompa
ny w
ere
as fo
llow
s:
Dec
embe
r 31
20
20
20
19
C
hina
Pac
ific
Cat
erin
g Se
rvic
es
51
%
51
%
Chi
na P
acifi
c La
undr
y Se
rvic
es
55
%
55
%
NO
RD
AM
Asi
a
49%
49%
Th
e C
ompa
ny s
igne
d a
join
t ven
ture
agr
eem
ent w
ith th
e Ta
ikoo
Com
pany
to in
vest
in C
hina
Pac
ific
Cat
erin
g Se
rvic
es a
nd C
hina
Pac
ific
Laun
dry
Serv
ices
. Acc
ordi
ng to
the
agre
emen
t, bo
th p
artie
s ha
ve
the
maj
ority
of
votin
g po
wer
in
the
boar
d of
dire
ctor
s to
pas
s a
mot
ion
for
veto
, an
d th
eref
ore
the
Com
pany
doe
s not
hav
e co
ntro
l. To
enh
ance
the
Com
pany
’s m
aint
enan
ce c
apab
ilitie
s, th
e C
ompa
ny e
stab
lishe
d a
join
t ven
ture
with
the
US
NO
RD
AM
Aer
ospa
ce G
roup
in D
ecem
ber
2017
, to
prov
ide
thru
st r
ever
sers
and
com
posi
te r
epai
r se
rvic
es i
n A
sia
unde
r th
e N
OR
DA
M b
rand
. N
OR
DA
M h
as f
iled
for
Cha
pter
11
bank
rupt
cy
reor
gani
zatio
n in
the
USA
on
July
22,
201
8 to
solv
e th
e bu
sine
ss d
ispu
te w
ith it
s coo
pera
tive
partn
er, s
o its
ope
ratio
n w
as n
ot i
mpa
cted
. N
OR
DA
M A
sia
susp
ende
d its
ope
ratio
n fr
om O
ctob
er 5
, 20
18 t
o O
ctob
er 4
, 20
19 a
nd r
esum
ed b
usin
ess
on O
ctob
er 4
, 20
19.
The
Com
pany
inc
reas
ed t
he c
apita
l of
N
OR
DA
M A
sia
by $
35,5
25 th
ousa
nd in
Nov
embe
r 201
9.
Det
ails
of
the
inve
stm
ent
inco
me
attri
buta
ble
to i
nves
tmen
ts i
n jo
intly
con
trolle
d en
titie
s w
ere
as
follo
ws:
D
ecem
ber
31
2020
2019
Chi
na P
acifi
c C
ater
ing
Serv
ices
$ (1
36,4
59)
$
256
,899
C
hina
Pac
ific
Laun
dry
Serv
ices
(1
5,47
5)
15,0
30
NO
RD
AM
Asi
a
(4
6)
(70)
$ (1
51,9
80)
$
271
,859
Th
e C
ompa
ny’s
sha
res
of o
ther
com
preh
ensi
ve in
com
e of
sub
sidi
arie
s, as
soci
ates
and
join
tly c
ontro
lled
entit
ies w
ere
loss
es o
f $4,
890
thou
sand
and
$85
,977
thou
sand
in 2
020
and
2019
, res
pect
ivel
y.
The
finan
cial
sta
tem
ents
use
d as
a b
asis
of t
he a
mou
nts
of a
nd r
elat
ed in
form
atio
n on
the
inve
stm
ents
acco
unte
d fo
r usi
ng th
e eq
uity
met
hod
and
the
shar
e of
pro
fit o
r los
s an
d ot
her c
ompr
ehen
sive
inco
me
of th
ose
inve
stm
ents
for t
he y
ears
end
ed D
ecem
ber 3
1, 2
020
and
2019
wer
e al
l ind
epen
dent
ly a
udite
d,
exce
pt f
or C
hina
Airc
raft
Serv
ices
. How
ever
, the
man
agem
ent d
eter
min
ed th
at th
ere
wou
ld h
ave
been
no
sign
ifica
nt a
djus
tmen
ts h
ad th
is in
vest
ee’s
fina
ncia
l sta
tem
ents
bee
n in
depe
nden
tly a
udite
d.
For
deta
ils o
n se
rvic
es, m
ajor
bus
ines
s of
fices
and
the
coun
try w
here
the
abov
e as
soci
ates
and
join
tly
cont
rolle
d en
titie
s ar
e re
gist
ered
, re
fer
to T
able
6 “
Nam
es,
Loca
tions
, A
nd O
ther
Inf
orm
atio
n of
In
vest
ees
Ove
r W
hich
the
Com
pany
Exe
rcis
es S
igni
fican
t In
fluen
ce”,
and
Tab
le 7
“In
vest
men
ts I
n M
ainl
and
Chi
na”,
follo
win
g th
e no
tes t
o th
e fin
anci
al st
atem
ents
.
- 34
-
210
14.
PRO
PER
TY, P
LA
NT
AN
D E
QU
IPM
EN
T
Free
hold
Lan
d
Bui
ldin
gs
Fl
ight
E
quip
men
t
Equ
ipm
ent
unde
r Fi
nanc
e L
ease
s
Oth
ers
T
otal
Cos
t
Bal
ance
at J
anua
ry 1
, 20
19
$
19
3,01
3
$
7,33
5,53
7
$ 2
55,5
79,6
27
$
25
,211
,677
$
6,34
0,54
6
$ 2
94,6
60,4
00
Add
ition
s
-
37,7
25
2,21
1,32
1
-
148,
696
2,39
7,74
2 D
ispo
sals
-
(1
62 )
(20,
698,
042 )
(79,
866 )
(85,
852 )
(20,
863,
922 )
R
ecla
ssifi
catio
n
-
10,6
58
29,8
15,0
08
(25,
131,
811 )
106,
257
4,80
0,11
2
Bal
ance
at D
ecem
ber 3
1,
2019
$
193,
013
$
7,
383,
758
$
266
,907
,914
$
-
$
6,50
9,64
7
$ 2
80,9
94,3
32
A
ccum
ulat
ed d
epre
ciat
ion
an
d im
pairm
ent
B
alan
ce a
t Jan
uary
1,
2019
$
-
$
(3,8
80,6
02 )
$
(122
,357
,428
)
$
(14,
074,
608 )
$
(5
,318
,708
)
$ (1
45,6
31,3
46 )
Dep
reci
atio
n ex
pens
e
-
(175
,943
)
(1
8,18
6,43
4 )
(7
41,7
80 )
(284
,537
)
(1
9,38
8,69
4 )
Dis
posa
ls
-
162
14,8
99,5
62
79,8
66
76,5
86
15,0
56,1
76
Rec
lass
ifica
tion
-
-
(14,
692,
000 )
14,7
36,5
22
(45,
104 )
(582
)
Bal
ance
at D
ecem
ber 3
1,
2019
$
-
$
(4,0
56,3
83 )
$
(140
,336
,300
)
$
-
$
(5,5
71,7
63 )
$
(149
,964
,446
)
Bal
ance
at D
ecem
ber 3
1,
2019
, net
val
ue
$
19
3,01
3
$
3,32
7,37
5
$ 1
26,5
71,6
14
$
-
$
93
7,88
4
$ 1
31,0
29,8
86
C
ost
B
alan
ce a
t Jan
uary
1,
2020
$
193,
013
$
7,
383,
758
$
266
,907
,914
$
-
$
6,50
9,64
7
$ 2
80,9
94,3
32
Add
ition
s
-
19,4
64
621,
587
-
21
8,60
3
85
9,65
4 D
ispo
sals
(11,
420 )
(369
,651
)
(3
,718
,075
)
-
(171
,769
)
(4
,270
,915
) R
ecla
ssifi
catio
n
-
-
11
,792
,738
-
8,26
9
11
,801
,007
Bal
ance
at D
ecem
ber 3
1,
2020
$
181,
593
$
7,
033,
571
$
275
,604
,164
$
-
$
6,56
4,75
0
$ 2
89,3
84,0
78
A
ccum
ulat
ed d
epre
ciat
ion
an
d im
pairm
ent
B
alan
ce a
t Jan
uary
1,
2020
$
-
$
(4,0
56,3
83 )
$
(140
,336
,300
)
$
-
$
(5,5
71,7
63 )
$
(149
,964
,446
) D
epre
ciat
ion
expe
nse
-
(1
80,6
09 )
(17,
588,
803 )
-
(2
93,6
13 )
(18,
063,
025 )
D
ispo
sals
-
36
9,65
1
3,
446,
678
-
17
1,37
8
3,
987,
707
Impa
irmen
t los
ses
-
-
(424
,573
)
-
-
(4
24,5
73 )
Rec
lass
ifica
tion
-
-
1,48
9,15
8
-
5,56
3
1,
494,
721
B
alan
ce a
t Dec
embe
r 31,
20
20
$
-
$
(3
,867
,341
)
$ (1
53,4
13,8
40 )
$
-
$
(5
,688
,435
)
$ (1
62,9
69,6
16 )
B
alan
ce a
t Dec
embe
r 31,
20
20, n
et v
alue
$
181,
593
$
3,
166,
230
$
122
,190
,324
$
-
$
867,
315
$
126
,414
,462
R
ecla
ssifi
catio
n is
mai
nly
resu
lted
from
the
trans
fer o
f pre
paym
ents
for e
quip
men
t.
- 35
-
The
abov
e ite
ms o
f pro
perty
, pla
nt a
nd e
quip
men
t are
dep
reci
ated
on
a st
raig
ht-li
ne b
asis
ove
r the
est
imat
ed
usef
ul li
fe o
f the
ass
et:
Bui
ldin
g
M
ain
build
ings
45-5
5 ye
ars
Oth
ers
10
-25
year
s M
achi
nery
and
equ
ipm
ent
Elec
tro-m
echa
nica
l equ
ipm
ent
25
yea
rs
Oth
ers
3-
13 y
ears
O
ffic
e eq
uipm
ent
3-
15 y
ears
Le
aseh
old
impr
ovem
ents
B
uild
ing
impr
ovem
ents
5 ye
ars
Oth
ers
3-
5 ye
ars
Flig
ht e
quip
men
t and
equ
ipm
ent u
nder
fina
nce
leas
es
Airf
ram
es
18
-25
year
s A
ircra
ft ca
bins
10-2
0 ye
ars
Engi
nes
12
-20
year
s H
eavy
mai
nten
ance
on
airc
raft
6-
8 ye
ars
Engi
ne o
verh
auls
3-10
yea
rs
Land
ing
gear
ove
rhau
ls
8-12
yea
rs
Rep
aira
ble
spar
e pa
rts
3-
15 y
ears
Le
ased
airc
raft
impr
ovem
ents
5-
12 y
ears
R
egar
ding
cha
nges
in fl
eet c
ompo
sitio
n, c
urre
nt a
nd fo
reca
sted
mar
ket v
alue
s, an
d ot
her t
echn
ical
fact
ors,
the
Com
pany
reco
gniz
ed im
pairm
ent l
osse
s on
a pa
rt of
airc
raft
equi
pmen
t of $
424,
573
thou
sand
in 2
020.
R
efer
to
Not
e 32
for
the
car
ryin
g am
ount
s of
airc
raft
equi
pmen
t an
d rig
ht-o
f-us
e as
sets
ple
dged
by
the
Com
pany
. B
ased
on
the
parti
cula
rity
of ri
sk in
the
avia
tion
indu
stry
, all
of th
e C
ompa
ny’s
ass
ets
such
as
airc
raft,
real
es
tate
, and
mov
able
pro
perty
are
ade
quat
ely
insu
red
to d
iver
sify
the
pote
ntia
l ris
k re
late
d to
ope
ratio
ns.
15.
INV
EST
ME
NT
PR
OPE
RT
IES
D
ecem
ber
31
2020
2019
Car
ryin
g am
ount
In
vest
men
t pro
perti
es
$
2,0
47,4
48
$
2,0
47,4
48
The
inve
stm
ent p
rope
rties
hel
d by
the
Com
pany
wer
e la
nd lo
cate
d in
Nan
kan,
whi
ch w
ere
leas
ed to
oth
ers.
The
fair
valu
e of
the
inve
stm
ent p
rope
rties
hel
d by
the
Com
pany
was
$2,
456,
472
thou
sand
and
$2,
473,
771
thou
sand
as
of D
ecem
ber
31,
2020
and
201
9, r
espe
ctiv
ely.
The
fai
r va
lue
valu
atio
n w
as p
erfo
rmed
by
inde
pend
ent q
ualif
ied
prof
essi
onal
val
uers
, and
the
futu
re in
com
e ev
alua
ted
by m
anag
emen
t was
bas
ed o
n m
arke
t tra
nsac
tions
. All
of th
e C
ompa
ny’s
inve
stm
ent p
rope
rties
wer
e he
ld u
nder
free
hold
inte
rest
.
- 36
-
211
16.
OT
HE
R IN
TA
NG
IBL
E A
SSE
TS
Com
pute
r So
ftw
are
Cos
ts
Acc
umul
ated
A
mor
tizat
ion
N
et V
alue
B
alan
ce a
t Jan
uary
1, 2
019
$
2,0
60,7
85
$
(1,
081,
077)
$
979,
708
Add
ition
s
15
7,57
1
-
157,
571
Am
ortiz
atio
n ex
pens
e
-
(165
,981
)
(1
65,9
81)
Bal
ance
at D
ecem
ber 3
1, 2
019
$
2,2
18,3
56
$
(1,
247,
058)
$
971,
298
Bal
ance
at J
anua
ry 1
, 202
0
$ 2
,218
,356
$ (
1,24
7,05
8)
$
97
1,29
8 A
dditi
ons
95,2
17
-
95
,217
A
mor
tizat
ion
expe
nse
-
(1
69,1
58)
(169
,158
) R
ecla
ssifi
catio
n
(7
65,7
86)
735,
882
(2
9,90
4)
Bal
ance
at D
ecem
ber 3
1, 2
020
$
1,5
47,7
87
$
(6
80,3
34)
$
86
7,45
3 Th
e ab
ove
item
s of o
ther
inta
ngib
le a
sset
s are
am
ortiz
ed o
n a
stra
ight
-line
bas
is o
ver 2
-10
year
s.
17.
OT
HE
R A
SSE
TS
D
ecem
ber
31
2020
2019
Cur
rent
Tem
pora
ry p
aym
ents
$
19,1
11
$
94
,682
Pr
epay
men
ts
134,
055
1,55
1,11
3 O
ther
s
29
9,24
8
46
0,40
4
$
452,
414
$
2,1
06,1
99
N
on-c
urre
nt
Pr
epay
men
ts fo
r airc
raft
$
5,0
69,5
41
$
8,3
22,5
18
Prep
aym
ents
- lo
ng-te
rm
2,04
2,60
9
2,
264,
220
Ref
unda
ble
depo
sits
58
5,45
1
62
1,71
5 O
ther
fina
ncia
l ass
ets
18,0
78
19,1
03
$
7,7
15,6
79
$
11,2
27,5
56
The
prep
aym
ents
for
airc
raft
com
pris
ed th
e pr
epai
d de
posi
ts a
nd c
apita
lized
inte
rest
fro
m th
e pu
rcha
se o
f A
321n
eo a
nd B
777F
airc
raft.
For
det
ails
on
the
A32
1neo
and
B77
7F a
ircra
ft pu
rcha
se c
ontra
cts,
refe
r to
N
ote
33.
- 37
-
18.
BO
RR
OW
ING
S a.
Sh
ort-t
erm
bill
s pay
able
D
ecem
ber
31
2020
2019
Com
mer
cial
pap
er
$
8,1
00,0
00
$
-
Less
: Una
mor
tized
dis
coun
t on
bills
pay
able
11
,118
-
$
8,0
88,8
82
$
-
A
nnua
l dis
coun
t rat
e
0.99
%-1
.00%
-
b.
Long
-term
bor
row
ings
Dec
embe
r 31
20
20
20
19
U
nsec
ured
ban
k lo
ans
$
21
,650
,000
$
650,
000
Secu
red
bank
loan
s
32
,885
,883
30
,435
,870
C
omm
erci
al p
aper
Pr
ocee
ds fr
om is
sue
29,1
00,0
00
31,3
00,0
00
Less
: Una
mor
tized
dis
coun
t
22
,046
59
,382
83,6
13,8
37
62,3
26,4
88
Less
: Cur
rent
por
tion
14,7
98,4
42
13,7
08,3
20
$
68
,815
,395
$
48,6
18,1
68
In
tere
st ra
tes
0.
81%
-1.2
2%
1.
08%
-1.4
6%
For i
nfor
mat
ion
on se
cure
d ba
nk lo
ans w
hich
wer
e se
cure
d by
flig
ht e
quip
men
t, re
fer t
o N
ote
32.
Ban
k lo
ans
(New
Tai
wan
dol
lars
and
U.S
. dol
lars
) ar
e re
paya
ble
quar
terly
, sem
iann
ually
or
in lu
mp
sum
upo
n m
atur
ity. R
elat
ed in
form
atio
n is
sum
mar
ized
as f
ollo
ws:
Dec
embe
r 31
20
20
20
19
Pe
riods
2016
/6/2
7-
2032
/6/3
0
2008
/2/2
6-
2030
/4/2
5 Th
e C
ompa
ny h
as n
ote
issu
ance
faci
litie
s (N
IFs)
obt
aine
d fr
om c
erta
in fi
nanc
ial i
nstit
utio
ns. T
he N
IFs,
with
var
ious
mat
uriti
es u
ntil
Mar
ch 2
025,
wer
e us
ed b
y th
e C
ompa
ny to
gua
rant
ee c
omm
erci
al p
aper
w
hich
it is
sued
. The
com
mer
cial
pap
er w
as is
sued
at d
isco
unt r
ates
of
1.02
63%
-1.1
167%
in 2
020
and
1.13
00%
-1.1
680%
in 2
019.
In
acc
orda
nce
with
the
“R
egul
atio
ns o
n R
elie
f an
d R
evita
lizat
ion
Mea
sure
s fo
r In
dust
ries
and
Ente
rpris
es A
ffec
ted
by S
ever
e Pn
eum
onia
with
Nov
el P
atho
gens
” en
dors
ed b
y th
e M
inis
try o
f Tr
ansp
orta
tion
and
Com
mun
icat
ions
and
the
“Ope
ratio
nal G
uide
s on
Rel
ief L
oan
Gua
rant
ees f
or A
iling
A
viat
ion
Indu
stry
Aff
ecte
d by
Sev
ere
Pneu
mon
ia w
ith N
ovel
Pat
hoge
ns”,
the
Com
pany
app
lied
for
proj
ect
finan
ce l
oans
fro
m f
inan
cial
ins
titut
ions
to
mai
ntai
n its
ope
ratio
ns;
and
spec
ial
fund
s, cr
edit
guar
ante
es a
long
with
sub
sidi
zed
inte
rest
rate
s w
ere
prov
ided
by
the
gove
rnm
ent.
The
tota
l am
ount
of
the
loan
s is
$20
,000
,000
tho
usan
d, w
hich
sha
ll be
rep
aid
with
in 2
yea
rs f
rom
the
dat
e of
ini
tial
draw
dow
n. A
s of
Dec
embe
r 31
, 20
20,
the
Com
pany
had
mad
e a
draw
dow
n in
the
am
ount
of
$20,
000,
000
thou
sand
.
- 38
-
212
19
. B
ON
DS
PAY
AB
LE
D
ecem
ber
31
2020
2019
Uns
ecur
ed c
orpo
rate
bon
ds fi
rst-t
ime
issu
ed in
201
3
$
-
$
2,
750,
000
Uns
ecur
ed c
orpo
rate
bon
ds fi
rst-t
ime
issu
ed in
201
6
2,
500,
000
5,00
0,00
0 U
nsec
ured
cor
pora
te b
onds
seco
nd-ti
me
issu
ed in
201
6
2,
500,
000
5,00
0,00
0 U
nsec
ured
cor
pora
te b
onds
firs
t-tim
e is
sued
in 2
017
1,00
0,00
0
2,
350,
000
Uns
ecur
ed c
orpo
rate
bon
ds se
cond
-tim
e is
sued
in 2
017
2,60
0,00
0
3,
500,
000
Uns
ecur
ed c
orpo
rate
bon
ds fi
rst-t
ime
issu
ed in
201
8
4,
500,
000
4,50
0,00
0 U
nsec
ured
cor
pora
te b
onds
firs
t-tim
e is
sued
in 2
019
3,50
0,00
0
3,
500,
000
Con
verti
ble
bond
s - si
xth-
time
issu
e
5,
832,
859
5,75
2,62
5
22,4
32,8
59
32,3
52,6
25
Less
: Cur
rent
por
tion
and
put o
ptio
n of
con
verti
ble
bond
s
12,1
32,8
59
10,0
00,0
00
$
10
,300
,000
$
22,3
52,6
25
Rel
ated
issu
ance
con
ditio
ns w
ere
as fo
llow
s:
Cat
egor
y
Peri
od
C
ondi
tions
Rat
e (%
)
Se
ven-
year
priv
ate
unse
cure
d bo
nds -
issu
ed a
t pa
r in
Janu
ary
2013
; rep
ayab
le in
Janu
ary
2019
and
202
0; 1
.85%
inte
rest
p.a
., pa
yabl
e an
nual
ly
20
13.0
1.17
- 20
20.0
1.17
P
rinci
pal r
epay
able
in
Janu
ary
of 2
019
and
2020
; in
dica
tor r
ate;
pay
able
an
nual
ly
1.
85
Five
-yea
r uns
ecur
ed b
onds
- is
sued
at p
ar in
M
ay 2
016;
repa
yabl
e in
May
202
0 an
d 20
21; 1
.19%
inte
rest
p.a
., pa
yabl
e an
nual
ly
20
16.0
5.26
- 20
21.0
5.26
P
rinci
pal r
epay
able
in M
ay o
f 20
20 a
nd 2
021;
inte
rest
p.a
. pa
yabl
e an
nual
ly
1.
19
Five
-yea
r uns
ecur
ed b
onds
- is
sued
at p
ar in
Se
ptem
ber 2
016;
repa
yabl
e in
Se
ptem
ber 2
020
and
2021
; 1.0
8% in
tere
st
p.a.
, pay
able
ann
ually
20
16.0
9.27
- 20
21.0
9.27
P
rinci
pal r
epay
able
in
Sept
embe
r of 2
020
and
2021
; int
eres
t p.a
. pay
able
an
nual
ly
1.
08
Thre
e-ye
ar p
rivat
e un
secu
red
bond
s - is
sued
at
par i
n M
ay 2
017;
repa
yabl
e on
due
dat
e;
inte
rest
of 1
.2%
p.a
., pa
yabl
e an
nual
ly
20
17.0
5.19
- 20
20.0
5.19
P
rinci
pal r
epay
able
on
due
date
; ind
icat
or ra
te;
paya
ble
annu
ally
1.
20
Seve
n-ye
ar p
rivat
e un
secu
red
bond
s - is
sued
at
par i
n M
ay 2
017;
repa
yabl
e on
due
dat
e;
inte
rest
of 1
.75%
p.a
., pa
yabl
e an
nual
ly
20
17.0
5.19
- 20
24.0
5.19
P
rinci
pal r
epay
able
on
due
date
; ind
icat
or ra
te;
paya
ble
annu
ally
1.
75
Thre
e-ye
ar p
rivat
e un
secu
red
bond
s - is
sued
at
par i
n O
ctob
er 2
017;
repa
yabl
e on
due
dat
e;
inte
rest
of 1
.14%
p.a
., pa
yabl
e an
nual
ly
20
17.1
0.12
- 20
20.1
0.12
P
rinci
pal r
epay
able
on
due
date
; ind
icat
or ra
te;
paya
ble
annu
ally
1.
14
Five
-yea
r priv
ate
unse
cure
d bo
nds -
issu
ed a
t pa
r in
Oct
ober
201
7; re
paya
ble
in O
ctob
er
2021
and
202
2; 1
.45%
inte
rest
p.a
., pa
yabl
e an
nual
ly
20
17.1
0.12
- 20
22.1
0.12
P
rinci
pal r
epay
able
in
Oct
ober
of 2
021
and
2022
; in
dica
tor r
ate;
pay
able
an
nual
ly
1.
45
Five
-yea
r priv
ate
unse
cure
d bo
nds -
issu
ed a
t pa
r in
Nov
embe
r 201
8; re
paya
ble
in
Nov
embe
r 202
2 an
d 20
23; 1
.32%
inte
rest
p.
a., p
ayab
le a
nnua
lly
20
18.1
1.30
- 20
23.1
1.30
P
rinci
pal r
epay
able
in
Nov
embe
r of 2
022
and
2023
; ind
icat
or ra
te;
paya
ble
annu
ally
1.
32
(Con
tinue
d)
- 39
-
Cat
egor
y
Peri
od
C
ondi
tions
Rat
e (%
)
Se
ven-
year
priv
ate
unse
cure
d bo
nds -
issu
ed a
t pa
r in
Nov
embe
r 201
8; re
paya
ble
in
Nov
embe
r 202
2 an
d 20
23; 1
.45%
inte
rest
p.
a., p
ayab
le a
nnua
lly
20
18.1
1.30
- 20
25.1
1.30
P
rinci
pal r
epay
able
in
Nov
embe
r of 2
022
and
2023
; ind
icat
or ra
te;
paya
ble
annu
ally
1.
45
Five
-yea
r priv
ate
unse
cure
d bo
nds -
issu
ed a
t pa
r in
June
201
9; re
paya
ble
in Ju
ne 2
023
and
2024
; 1.1
0% in
tere
st p
.a.,
paya
ble
annu
ally
20
19.0
6.21
- 20
24.0
6.21
P
rinci
pal r
epay
able
in Ju
ne o
f 20
23 a
nd 2
024;
indi
cato
r ra
te; p
ayab
le a
nnua
lly
1.
10
Seve
n-ye
ar p
rivat
e un
secu
red
bond
s - is
sued
at
par i
n Ju
ne 2
019;
repa
yabl
e in
June
202
5 an
d 20
26; 1
.32%
inte
rest
p.a
., pa
yabl
e an
nual
ly
20
19.0
6.21
- 20
26.0
6.21
P
rinci
pal r
epay
able
in Ju
ne o
f 20
25 a
nd 2
026;
indi
cato
r ra
te; p
ayab
le a
nnua
lly
1.
32
Five
-yea
r con
verti
ble
bond
s - is
sued
at
disc
ount
in Ja
nuar
y 20
18; r
epay
able
in lu
mp
sum
upo
n m
atur
ity; 1
.382
1% d
isco
unt r
ate
p.a.
20
18.0
1.30
- 20
23.0
1.30
E
xcep
t for
con
verti
ng to
shar
e ca
pita
l or b
uyin
g ba
ck,
prin
cipa
l rep
ayab
le in
D
ecem
ber o
f 202
3
-
(Con
clud
ed)
The
Com
pany
issu
ed it
s 20
16 f
irst u
nsec
ured
cor
pora
te b
onds
with
a f
ace
valu
e of
$5,
000,
000
thou
sand
, an
d th
e pu
rcha
sers
of t
he b
onds
incl
uded
Man
darin
Airl
ines
Co.
, Ltd
. and
Sab
re T
rave
l Net
wor
k (T
aiw
an)
Co.
, Ltd
., w
hich
had
a fa
ce v
alue
of $
150,
000
thou
sand
, and
the
amou
nt w
as e
limin
ated
in th
e C
ompa
ny’s
fin
anci
al st
atem
ents
. Th
e C
ompa
ny is
sued
the
sixth
issu
e of
its u
nsec
ured
con
verti
ble
bond
s, an
d th
e is
suan
ce c
ondi
tions
wer
e as
fo
llow
s: a.
Th
e ho
lder
s may
dem
and
a lu
mp-
sum
pay
men
t for
the
bond
s upo
n m
atur
ity.
b.
The
hold
ers
can
requ
est t
hat t
he C
ompa
ny re
purc
hase
thei
r bon
ds a
t fac
e va
lue
on th
e th
ird a
nniv
ersa
ry
of th
e of
ferin
g da
te. T
he h
olde
rs c
an e
xerc
ise
the
right
to se
ll on
Janu
ary
30, 2
021.
c.
Th
e C
ompa
ny m
ay r
edee
m th
e bo
nds
at f
ace
valu
e be
twee
n A
pril
30, 2
018
and
Dec
embe
r 20
, 202
2 un
der c
erta
in c
ondi
tions
. d.
B
etw
een
Janu
ary
26, 2
014
and
Dec
embe
r 16,
201
8 (e
xcep
t for
the
perio
d be
twee
n th
e fo
rmer
div
iden
d da
te a
nd t
he d
ate
of t
he d
ivid
end
decl
arat
ion
on r
ecor
d),
hold
ers
may
con
vert
the
bond
s to
the
C
ompa
ny’s
ord
inar
y sh
ares
. Th
e in
itial
con
vers
ion
pric
e w
as s
et a
t N
T$13
.2,
whi
ch i
s su
bjec
t to
ad
just
men
t if t
here
is a
cap
ital i
njec
tion
by c
ash,
sha
re d
ivid
end
dist
ribut
ion,
and
the
prop
ortio
n of
cas
h di
vide
nds
per s
hare
in m
arke
t pric
e ex
ceed
ing
1.5%
. Bec
ause
the
Com
pany
dis
tribu
ted
cash
div
iden
ds
on Ju
ly 2
9, 2
019,
the
conv
ersi
on p
rice
was
adj
uste
d to
NT$
12.6
. Th
e co
nver
tible
bon
ds c
onta
in b
oth
liabi
lity
and
equi
ty c
ompo
nent
s. Th
e eq
uity
com
pone
nt w
as p
rese
nted
in
equ
ity u
nder
the
head
ing
of c
apita
l sur
plus
- op
tions
. The
eff
ectiv
e in
tere
st ra
te o
f the
liab
ility
com
pone
nt
was
1.3
821%
per
ann
um o
n in
itial
reco
gniti
on.
Pr
ocee
ds fr
om is
suan
ce
$
6,0
12,0
00
Equi
ty c
ompo
nent
(4
09,9
78)
Liab
ility
com
pone
nt a
t the
dat
e of
issu
ance
$ 5
,602
,022
- 40
-
213
The
seve
nth
issu
e of
the
Com
pany
’s u
nsec
ured
con
verti
ble
bond
s w
as re
solv
ed b
y th
e bo
ard
of d
irect
ors
of
the
Com
pany
on
Aug
ust
7, 2
019.
The
cum
ulat
ive
face
val
ue o
f th
e bo
nds
shal
l no
t ex
ceed
$3,
000,
000
thou
sand
. The
bon
ds a
re i
ssue
d at
100
%-1
00.5
% o
f th
e fa
ce v
alue
, and
the
iss
uanc
e pe
riod
is 5
yea
rs.
Dur
ing
the
perio
d of
pub
lic o
ffer
ings
, the
stoc
k m
arke
t and
the
dom
estic
cap
ital m
arke
t wer
e vo
latil
e du
e to
C
oron
aviru
s Pne
umon
ia a
nd th
e ch
ange
s in
the
shar
e pr
ice
of th
e C
ompa
ny w
ere
unfa
vora
ble
to th
e se
vent
h is
sue
of th
e C
ompa
ny’s
uns
ecur
ed c
onve
rtibl
e bo
nds.
Afte
r com
preh
ensi
ve c
onsi
dera
tion,
the
issu
ance
was
su
spen
ded
with
the
perm
issi
on o
f th
e co
mpe
tent
aut
horit
y ba
sed
on th
e be
st in
tere
st o
f th
e C
ompa
ny a
nd
the
shar
ehol
ders
’ equ
ity.
The
seve
nth
issu
e of
the
Com
pany
’s u
nsec
ured
con
verti
ble
bond
s w
as re
solv
ed b
y th
e bo
ard
of d
irect
ors
of
the
Com
pany
on
Aug
ust
6, 2
020.
The
cum
ulat
ive
face
val
ue o
f th
e bo
nds
shal
l no
t ex
ceed
$6,
000,
000
thou
sand
. The
bon
ds a
re is
sued
at 1
00%
-100
.5%
of t
he fa
ce v
alue
, and
the
issu
ance
per
iod
is 5
yea
rs.
20.
LE
ASE
AG
RE
EM
EN
TS
a.
Rig
ht-o
f-us
e as
sets
D
ecem
ber
31
2020
2019
Car
ryin
g am
ount
s
La
nd
$
3,
367,
875
$
3,
442,
366
Bui
ldin
gs
6,98
6,86
6
6,
950,
330
Flig
ht e
quip
men
t
44
,201
,020
53
,870
,134
$
54,5
55,7
61
$
64
,262
,830
For
the
Yea
r E
nded
Dec
embe
r 31
20
20
20
19
A
dditi
ons t
o rig
ht-o
f-use
ass
ets
$
2,
084,
799
$
5,
043,
409
D
epre
ciat
ion
for r
ight
-of-
use
asse
ts
La
nd
$
17
2,75
7
$
171,
147
Bui
ldin
gs
383,
898
767,
939
Flig
ht e
quip
men
t
9,
399,
066
9,07
0,85
5
$
9,95
5,72
1
$
10,0
09,9
41
b.
Leas
e lia
bilit
ies
Dec
embe
r 31
20
20
20
19
C
arry
ing
amou
nts
C
urre
nt
$
84
2,59
2
$
695,
215
Non
-cur
rent
$
10,0
55,7
76
$
10
,909
,262
- 41
-
Ran
ge o
f dis
coun
t rat
e fo
r lea
se li
abili
ties (
incl
ude
US
leas
e he
dgin
g in
stru
men
ts):
D
ecem
ber
31
2020
2019
La
nd
1.
09%
-1.6
5%
1.
09%
-1.6
5%
Bui
ldin
gs
0%
-3.5
6%
0%
-3.5
6%
Flig
ht e
quip
men
t
0.68
%-3
.16%
2.49
%-3
.16%
c.
Fina
ncia
l lia
bilit
ies u
nder
hed
ge a
ccou
ntin
g Th
e C
ompa
ny s
peci
fies
a pa
rt of
US
leas
e co
ntra
ct a
s he
dgin
g in
stru
men
ts t
o av
oid
exch
ange
rat
e flu
ctua
tions
is p
asse
nger
reve
nue,
and
app
lies t
he a
ccou
ntin
g tre
atm
ent o
f cas
h flo
w h
edgi
ng. T
he le
ase
info
rmat
ion
is a
s fol
low
s:
Mat
urity
Dat
e
Subj
ect
C
arry
ing
Val
ue
D
ecem
ber 3
1, 2
020
20
22.2
.9-2
028.
5.15
F
inan
cial
liab
ilitie
s for
hed
ging
- cu
rren
t
$
8,12
0,44
5
F
inan
cial
liab
ilitie
s for
hed
ging
- no
n-cu
rren
t
32
,455
,333
Dec
embe
r 31,
201
9
2021
.4.1
5-20
28.5
.15
Fin
anci
al li
abili
ties f
or h
edgi
ng -
curr
ent
8,57
7,48
2
F
inan
cial
liab
ilitie
s for
hed
ging
- no
n-cu
rren
t
42
,420
,205
Influ
ence
of c
ompr
ehen
sive
inco
me
Rec
ogni
zed
in
Oth
er
Com
preh
ensi
ve
Inco
me
R
ecla
ssifi
ed to
In
com
e
For t
he y
ear e
nded
Dec
embe
r 31,
202
0
$ 2
,099
,550
$
352,
674
For t
he y
ear e
nded
Dec
embe
r 31,
201
9
1,
457,
058
(24,
029)
d.
Mat
eria
l lea
sing
act
iviti
es a
nd te
rms
A
s le
ssee
, Chi
na A
irlin
es le
ased
ten
777-
300E
R p
lane
s, fif
teen
A33
0-30
0 pl
anes
and
fift
een
737-
800
plan
es fo
r ope
ratio
n, le
ase
perio
d ar
e 8
to 1
2 ye
ars f
rom
Feb
ruar
y 20
06 to
May
202
8. T
he re
ntal
pric
ing
met
hod
is p
artly
a f
ixed
am
ount
of
fund
s, an
d so
me
of t
hem
are
flo
atin
g re
nts,
float
ing
rent
s ar
e ac
cord
ing
to b
ench
mar
k ra
tio, t
he r
ent
is r
evis
ed e
very
hal
f ye
ar. W
hen
the
leas
e ex
pire
s, th
e le
ase
agre
emen
ts h
ave
no p
urch
ase
right
s. Th
e in
form
atio
n of
refu
ndab
le d
epos
its a
nd is
suan
ce o
f let
ter o
f cre
dit d
ue to
rent
al o
f pla
nes:
D
ecem
ber
31
2020
2019
Ref
unda
ble
depo
sits
$
438,
117
$
46
3,11
5 C
redi
t gua
rant
ees
1,
330,
772
1,40
6,70
2
e.
Leas
e ag
reem
ent
The
Com
pany
sign
ed a
rent
al c
ontra
ct fo
r six
A32
1neo
with
Air
Leas
e C
orpo
ratio
n on
Sep
tem
ber 2
019,
w
hich
is e
xpec
ted
to b
e in
trodu
ced
betw
een
2021
and
202
2.
- 42
-
214
The
Com
pany
sig
ned
a re
ntal
let
ter
of i
nten
t fo
r ei
ght
A32
1neo
with
CA
LC L
ease
Cor
pora
tion
on
Oct
ober
201
9, w
hich
is e
xpec
ted
to b
e in
trodu
ced
in 2
022.
Th
e C
ompa
ny a
lso
sign
ed re
late
d ai
rcra
ft pu
rcha
se a
gree
men
t, pl
ease
refe
r to
note
33
for d
etai
ls.
f. Sa
le a
nd le
aseb
ack
In
ord
er t
o re
vita
lize
asse
ts a
nd s
treng
then
the
finan
cial
stru
ctur
e, t
he C
ompa
ny s
old
five
of it
s ow
n A
330-
300
airc
raft
to A
ltava
ir L.
P. i
n Se
ptem
ber
2019
thr
ough
sal
e an
d le
aseb
ack
arra
ngem
ent
for
$4,9
05,6
60 th
ousa
nd. T
he le
ase
term
was
5 to
6 y
ears
and
a lo
ss o
f $1
03,7
75 th
ousa
nd w
as in
curr
ed.
The
leas
e ag
reem
ent h
ad n
o te
rms
for
leas
e re
new
al o
r of
ftake
rig
hts.
The
annu
al le
ase
paym
ents
for
ea
ch a
ircra
ft ar
e fr
om U
S$5,
389
thou
sand
to U
S$5,
437
thou
sand
. A
s les
see,
the
Com
pany
leas
ed o
ffic
e bu
ildin
gs a
nd e
quip
men
t fro
m C
AL
Park
. Lea
se p
erio
d is
2 y
ears
, an
d th
e fix
ed p
aym
ent (
tax
incl
uded
) is $
20,2
38 th
ousa
nd p
er m
onth
.
g.
Oth
er le
ase
info
rmat
ion
The
Com
pany
use
s ope
ratin
g le
ase
agre
emen
t for
inve
stm
ent p
rope
rties
, ref
er to
Not
e 15
.
Fo
r th
e Y
ear
End
ed D
ecem
ber
31
2020
2019
Shor
t-ter
m a
nd lo
w p
rice
leas
e pa
ymen
t
$
16,4
50
$
18
,144
To
tal o
f lea
se c
ash
outfl
ow
$
(10
,528
,143
)
$ (
11,5
83,3
49)
The
Com
pany
cho
oses
to w
aive
the
reco
gniti
on o
f the
con
tract
pro
visi
ons
for t
he s
hort-
term
leas
es a
nd
low
pric
e le
ase,
and
doe
s not
reco
gniz
e th
e re
late
d rig
ht-o
f-us
e as
sets
and
leas
e lia
bilit
ies f
or su
ch le
ase.
21.
OT
HE
R P
AY
AB
LE
S
Dec
embe
r 31
20
20
20
19
Fu
el c
osts
$
1,
718,
503
$
3,
419,
803
Shor
t-ter
m e
mpl
oyee
ben
efits
1,
592,
141
1,57
7,32
2 G
roun
d se
rvic
e ex
pens
es
956,
831
1,17
8,18
4 Te
rmin
al su
rcha
rges
34
6,95
2
91
4,42
8 R
epai
r exp
ense
s
28
5,14
6
1,
136,
588
Com
mis
sion
exp
ense
s
18
4,36
3
50
9,52
0 In
tere
st e
xpen
ses
116,
168
214,
089
Oth
ers
1,92
7,97
6
1,
942,
269
$
7,
128,
080
$
10
,892
,203
- 43
-
22.
CO
NT
RA
CT
LIA
BIL
ITIE
S/D
EFE
RR
ED
RE
VE
NU
E
D
ecem
ber
31
2020
2019
Con
trac
t L
iabi
litie
s
Con
trac
t L
iabi
litie
s
Freq
uent
flye
r pro
gram
s
$
2,65
7,94
2
$
2,88
4,12
2 A
dvan
ce ti
cket
sale
s
2,
322,
008
17,9
36,4
76
$
4,
979,
950
$
20
,820
,598
Cur
rent
$
3,21
8,84
6
$
18,5
84,2
87
Non
-cur
rent
1,
761,
104
2,23
6,31
1
$
4,97
9,95
0
$
20,8
20,5
98
23.
PRO
VIS
ION
S
Dec
embe
r 31
20
20
20
19
O
pera
ting
leas
es -
airc
raft
$
13
,741
,244
$
9,43
1,73
6
Cur
rent
$
-
$
- N
on-c
urre
nt
13,7
41,2
44
9,43
1,73
6
$
13,7
41,2
44
$
9,
431,
736
The
Com
pany
rent
ed fl
ight
equ
ipm
ent u
nder
ope
ratin
g le
ase
agre
emen
ts. U
nder
the
cont
ract
s (s
ome
of th
e le
ased
flig
ht e
quip
men
t’s le
ase
paym
ents
are
cal
cula
ted
mon
thly
), w
hen
the
leas
e ex
pire
s and
the
equi
pmen
t is
ret
urne
d to
the
less
or, t
he f
light
equ
ipm
ent h
as to
be
repa
ired
acco
rdin
g to
the
expe
cted
yea
rs o
f us
e,
num
ber
of f
light
hou
rs,
fligh
t cy
cle
and
the
num
ber
of e
ngin
e re
volu
tions
. Th
e C
ompa
ny h
ad e
xist
ing
oblig
atio
ns to
reco
gniz
e pr
ovis
ions
whe
n si
gnin
g a
leas
e or
dur
ing
the
leas
e te
rm.
Air
craf
t Lea
se
Con
trac
t
Bal
ance
at J
anua
ry 1
, 201
9
$
7,
999,
015
Add
ition
al p
rovi
sion
s rec
ogni
zed
3,
616,
519
Usa
ge
(1
,970
,226
) Ef
fect
of e
xcha
nge
rate
cha
nges
(213
,572
)
Bal
ance
at D
ecem
ber 3
1, 2
019
$
9,43
1,73
6
Bal
ance
at J
anua
ry 1
, 202
0
$
9,
431,
736
Add
ition
al p
rovi
sion
s rec
ogni
zed
5,
580,
416
Usa
ge
(7
05,1
17)
Effe
ct o
f exc
hang
e ra
te c
hang
es
(5
65,7
91)
B
alan
ce a
t Dec
embe
r 31,
202
0
$
13
,741
,244
- 44
-
215
24.
RE
TIR
EM
EN
T B
EN
EFI
T P
LA
NS
a.
Def
ined
con
tribu
tion
plan
s Th
e Co
mpa
ny a
dopt
ed a
pen
sion
pla
n un
der
the
Labo
r Pe
nsio
n A
ct (
LPA
), w
hich
is a
sta
te-m
anag
ed
defin
ed c
ontri
butio
n pl
an.
Und
er t
he L
PA,
an e
ntity
mak
es m
onth
ly c
ontri
butio
ns t
o em
ploy
ees’
in
divi
dual
pen
sion
acc
ount
s at 6
% o
f mon
thly
sala
ries a
nd w
ages
. b.
D
efin
ed b
enef
it pl
ans
The
Com
pany
ado
pted
the
defin
ed b
enef
it pl
an u
nder
the
Labo
r St
anda
rds
Law
, und
er w
hich
pen
sion
be
nefit
s ar
e ca
lcul
ated
on
the
basi
s of
the
len
gth
of s
ervi
ce a
nd a
vera
ge m
onth
ly s
alar
ies
of t
he s
ix
mon
ths
befo
re re
tirem
ent.
The
Com
pany
con
tribu
te a
mou
nts
equa
l to
15%
of t
otal
mon
thly
sal
arie
s an
d w
ages
to a
pen
sion
fund
adm
inis
tere
d by
the
pens
ion
fund
mon
itorin
g co
mm
ittee
. Pen
sion
con
tribu
tions
ar
e de
posi
ted
in th
e B
ank
of T
aiw
an in
the
com
mitt
ee’s
nam
e.
Bef
ore
the
end
of e
ach
year
, the
Com
pany
ass
esse
s the
bal
ance
in th
e pe
nsio
n fu
nd. I
f the
am
ount
of t
he
bala
nce
in t
he p
ensi
on f
und
is i
nade
quat
e to
pay
ret
irem
ent
bene
fits
for
empl
oyee
s w
ho c
onfo
rm t
o re
tirem
ent
requ
irem
ents
in
the
next
yea
r, th
e C
ompa
ny i
s re
quire
d to
fun
d th
e di
ffer
ence
in
one
appr
opria
tion
that
sho
uld
be m
ade
befo
re t
he e
nd o
f M
arch
of
the
next
yea
r. Th
e pe
nsio
n fu
nd i
s m
anag
ed b
y th
e B
urea
u of
Lab
or F
unds
, Min
istry
of L
abor
(the
“B
urea
u”);
the
Com
pany
has
no
right
to
influ
ence
the
inve
stm
ent p
olic
y an
d st
rate
gy.
Th
e am
ount
s in
clud
ed in
the
bala
nce
shee
ts in
resp
ect o
f the
Com
pany
’s d
efin
ed b
enef
it pl
ans
wer
e as
fo
llow
s:
D
ecem
ber
31
2020
2019
Pres
ent v
alue
of d
efin
ed b
enef
it ob
ligat
ion
$
14
,458
,016
$
13,9
32,5
11
Fair
valu
e of
pla
n as
sets
(6
,240
,621
)
(6
,343
,766
)
Net
def
ined
ben
efit
liabi
litie
s
$
8,
217,
395
$
7,
588,
745
Mov
emen
ts in
net
def
ined
ben
efit
liabi
litie
s (as
sets
) wer
e as
follo
ws:
Pres
ent V
alue
of
the
Def
ined
B
enef
it O
blig
atio
n
Fair
Val
ue o
f th
e Pl
an A
sset
s
Net
Def
ined
B
enef
it L
iabi
litie
s (A
sset
s)
Bal
ance
at J
anua
ry 1
, 201
9
$
13,1
17,2
55
$
(6
,184
,472
)
$
6,93
2,78
3 Se
rvic
e co
st
C
urre
nt se
rvic
e co
st
1,
187,
281
-
1,
187,
281
Net
inte
rest
exp
ense
(inc
ome)
11
8,51
7
(5
6,04
9)
62
,468
R
ecog
nize
d in
pro
fit o
r los
s
1,
305,
798
(56,
049)
1,24
9,74
9 R
emea
sure
men
t
Ret
urn
on p
lan
asse
ts (e
xclu
ding
am
ount
s in
clud
ed in
net
inte
rest
)
-
(219
,345
)
(2
19,3
45)
Act
uaria
l los
s - c
hang
es in
fina
ncia
l as
sum
ptio
ns
290,
044
-
29
0,04
4 A
ctua
rial l
oss -
exp
erie
nce
adju
stm
ents
491,
560
-
49
1,56
0 R
ecog
nize
d in
oth
er c
ompr
ehen
sive
inco
me
781,
604
(219
,345
)
56
2,25
9 C
ontri
butio
ns fr
om th
e em
ploy
er
-
(1
,038
,624
)
(1
,038
,624
) B
enef
its p
aid
(1,1
54,7
24)
1,15
4,72
4
-
(Con
tinue
d)
- 45
-
Pres
ent V
alue
of
the
Def
ined
B
enef
it O
blig
atio
n
Fair
Val
ue o
f th
e Pl
an A
sset
s
Net
Def
ined
B
enef
it L
iabi
litie
s (A
sset
s)
Dire
ct p
aym
ent t
o em
ploy
ees f
rom
the
empl
oyer
$
(117
,492
)
$
-
$
(117
,492
) Ef
fect
of e
xcha
nge
rate
cha
nges
70
-
70
Bal
ance
at D
ecem
ber 3
1, 2
019
13,9
32,5
11
(6,3
43,7
66)
7,58
8,74
5 Se
rvic
e co
st
C
urre
nt se
rvic
e co
st
1,
186,
945
-
1,
186,
945
Net
inte
rest
exp
ense
(inc
ome)
96
,038
(4
3,80
3)
52
,235
R
ecog
nize
d in
pro
fit o
r los
s
1,
282,
983
(43,
803)
1,23
9,18
0 R
emea
sure
men
t
Ret
urn
on p
lan
asse
ts (e
xclu
ding
am
ount
s in
clud
ed in
net
inte
rest
)
-
(213
,741
)
(2
13,7
41)
Act
uaria
l los
s - c
hang
es in
fina
ncia
l as
sum
ptio
ns
498,
254
-
49
8,25
4 A
ctua
rial l
oss -
exp
erie
nce
adju
stm
ents
209,
705
-
20
9,70
5 R
ecog
nize
d in
oth
er c
ompr
ehen
sive
inco
me
707,
959
(213
,741
)
49
4,21
8 C
ontri
butio
ns fr
om th
e em
ploy
er
-
(9
33,4
58)
(933
,458
) B
enef
its p
aid
(1,2
94,1
47)
1,29
4,14
7
-
Dire
ct p
aym
ent t
o em
ploy
ees
(1
54,0
58)
-
(1
54,0
58)
Effe
ct o
f exc
hang
e ra
te c
hang
es
(17,
232)
-
(1
7,23
2)
Bal
ance
at D
ecem
ber 3
1, 2
020
$
14
,458
,016
$
(6,2
40,6
21)
$
8,
217,
395
(Con
clud
ed)
Thro
ugh
the
defin
ed b
enef
it pl
ans
unde
r th
e La
bor
Stan
dard
s La
w,
the
Com
pany
is
expo
sed
to t
he
follo
win
g ris
ks:
1)
Inve
stm
ent
risk:
The
pla
n as
sets
are
inv
este
d in
dom
estic
and
for
eign
equ
ity a
nd d
ebt
secu
ritie
s, ba
nk d
epos
its,
etc.
The
inv
estm
ent
is c
ondu
cted
at
the
disc
retio
n of
the
Bur
eau
or u
nder
the
m
anda
ted
man
agem
ent.
Bas
ed o
n re
leva
nt r
egul
atio
ns, t
he r
etur
n ge
nera
ted
by p
lan
asse
ts s
houl
d no
t be
belo
w th
e in
tere
st ra
te fo
r a tw
o-ye
ar ti
me
depo
sit w
ith lo
cal b
anks
. 2)
In
tere
st ri
sk: A
dec
reas
e in
the
gove
rnm
ent b
ond
inte
rest
rate
will
incr
ease
the
pres
ent v
alue
of t
he
defin
ed b
enef
it ob
ligat
ion;
how
ever
, thi
s w
ill b
e pa
rtial
ly o
ffse
t by
an in
crea
se in
the
retu
rn o
n th
e pl
an’s
deb
t inv
estm
ents
. 3)
Sa
lary
ris
k: T
he p
rese
nt v
alue
of
the
defin
ed b
enef
it ob
ligat
ion
is c
alcu
late
d by
ref
eren
ce t
o th
e fu
ture
sal
arie
s of
pla
n pa
rtici
pant
s. Th
us, a
n in
crea
se i
n th
e sa
larie
s of
the
pla
n pa
rtici
pant
s w
ill
incr
ease
the
pres
ent v
alue
of t
he d
efin
ed b
enef
it ob
ligat
ions
. Th
e ac
tuar
ial
valu
atio
ns o
f th
e pr
esen
t va
lue
of t
he d
efin
ed b
enef
it ob
ligat
ion
wer
e ca
rrie
d ou
t by
qu
alifi
ed a
ctua
ries.
The
sign
ifica
nt a
ssum
ptio
ns u
sed
for t
he p
urpo
ses o
f the
act
uaria
l val
uatio
ns w
ere
as
follo
ws:
Dec
embe
r 31
20
20
20
19
D
isco
unt r
ate
0.
34%
0.71
%
Expe
cted
rate
of s
alar
y in
crea
se
1.
00%
1.00
%
- 46
-
216
If po
ssib
le r
easo
nabl
e ch
ange
in e
ach
of th
e si
gnifi
cant
act
uaria
l ass
umpt
ions
will
occ
ur a
nd a
ll ot
her
assu
mpt
ions
will
rem
ain
cons
tant
, the
pre
sent
val
ue o
f th
e de
fined
ben
efit
oblig
atio
n w
ould
inc
reas
e (d
ecre
ase)
as f
ollo
ws:
Dec
embe
r 31
20
20
20
19
D
isco
unt r
ate
0.25
%/0
.5%
incr
ease
$ (3
18,9
04)
$
(613
,408
) 0.
25%
/0.5
% d
ecre
ase
$
332
,769
$ 6
53,4
13
Expe
cted
rate
of s
alar
y in
crea
se
0.5%
incr
ease
$ 6
51,6
73
$
626
,743
0.
5% d
ecre
ase
$
(610
,077
)
$ (6
00,0
73)
The
sens
itivi
ty a
naly
sis
pres
ente
d ab
ove
may
not
be
repr
esen
tativ
e of
the
actu
al c
hang
e in
the
pres
ent
valu
e of
the
defin
ed b
enef
it ob
ligat
ion
as it
is u
nlik
ely
that
the
chan
ge in
ass
umpt
ions
wou
ld o
ccur
in
isol
atio
n of
one
ano
ther
as s
ome
of th
e as
sum
ptio
ns m
ay b
e co
rrel
ated
.
D
ecem
ber
31
2020
2019
The
expe
cted
con
tribu
tions
to th
e pl
an fo
r the
nex
t yea
r
$ 7
40,7
77
$
736
,056
The
aver
age
dura
tion
of th
e de
fined
ben
efit
oblig
atio
n
9.5
year
s
9.6
year
s 25
. E
QU
ITY
a.
Sh
are
capi
tal
Ord
inar
y sh
ares
D
ecem
ber
31
2020
2019
Num
ber o
f aut
horiz
ed sh
ares
(in
thou
sand
s)
7,00
0,00
0
7,
000,
000
Am
ount
of a
utho
rized
shar
es
$
70
,000
,000
$
70,0
00,0
00
Am
ount
of i
ssue
d sh
ares
$
54,2
09,8
46
$
54
,209
,846
b.
Cap
ital s
urpl
us
D
ecem
ber
31
2020
2019
Inco
me
of c
onve
rtibl
e bo
nds i
n ex
cess
of p
ar v
alue
and
co
nver
sion
pre
miu
m
$
14
6,35
1
$
315,
114
Div
iden
ds d
istri
bute
d to
subs
idia
ries
-
3,
909
Ret
irem
ent o
f tre
asur
y sh
ares
33
,513
33
,513
D
iffer
ence
in sa
le p
rice
of sh
are
of su
bsid
iarie
s and
boo
k va
lue
-
1,
129,
080
Expi
red
empl
oyee
shar
e op
tions
11
,747
11
,747
Lo
ng-te
rm in
vest
men
ts
119,
134
118,
962
Bon
ds p
ayab
le e
quity
com
pone
nt
409,
978
409,
978
Oth
ers
466,
604
466,
604
$
1,1
87,3
27
$
2,4
88,9
07
- 47
-
Th
e ca
pita
l su
rplu
s fr
om s
hare
s is
sued
in
exce
ss o
f pa
r (a
dditi
onal
pai
d-in
cap
ital
from
iss
uanc
e of
or
dina
ry s
hare
s) m
ay b
e us
ed to
off
set a
def
icit;
in a
dditi
on, w
hen
the
Com
pany
has
no
defic
it, s
uch
capi
tal
surp
lus
may
be
dist
ribut
ed a
s ca
sh d
ivid
ends
or
trans
ferr
ed t
o ca
pita
l (li
mite
d to
a c
erta
in
perc
enta
ge o
f the
Com
pany
’s p
aid-
in c
apita
l).
The
capi
tal s
urpl
us fr
om lo
ng-te
rm in
vest
men
ts, e
mpl
oyee
sha
res
optio
ns e
xpire
d, d
ivid
ends
dis
tribu
ted
to su
bsid
iarie
s and
retir
emen
t of t
reas
ury
shar
es m
ay n
ot b
e us
ed fo
r any
pur
pose
, exp
ect f
or o
ffse
tting
a
defic
it. A
s fo
r ca
pita
l sur
plus
fro
m c
onve
rsio
n of
con
verti
ble
bond
s pa
yabl
e m
ay n
ot b
e us
ed f
or a
ny
purp
ose.
c.
App
ropr
iatio
n of
ear
ning
s and
div
iden
d po
licy
Und
er t
he d
ivid
end
polic
y as
set
for
th i
n th
e C
ompa
ny’s
Arti
cles
of
Inco
rpor
atio
n (th
e “A
rticl
es”)
, w
here
the
Com
pany
mad
e a
prof
it in
a f
isca
l ye
ar, t
he p
rofit
sha
ll be
firs
t ut
ilize
d fo
r pa
ying
tax
es,
offs
ettin
g lo
sses
of
prev
ious
yea
rs, s
ettin
g as
ide
as le
gal r
eser
ve 1
0% o
f th
e re
mai
ning
pro
fit, s
ettin
g as
ide
or re
vers
ing
a sp
ecia
l res
erve
in a
ccor
danc
e w
ith th
e la
ws a
nd re
gula
tions
, and
then
any
rem
aini
ng
prof
it to
geth
er w
ith a
ny u
ndis
tribu
ted
reta
ined
ear
ning
s sh
all
be u
sed
by t
he C
ompa
ny’s
boa
rd o
f di
rect
ors
as th
e ba
sis
for
prop
osin
g a
dist
ribut
ion
plan
, whi
ch is
to d
istri
bute
div
iden
ds a
nd b
onus
no
less
tha
n 50
% o
f th
e re
mai
ning
pro
fit a
nd u
ndis
tribu
ted
reta
ined
ear
ning
s. Th
e di
vide
nds
and
bonu
s m
entio
ned
abov
e ca
n be
dis
tribu
ted
in th
e fo
rm o
f new
shar
es o
r cas
h, a
nd th
e ca
sh d
ivid
ends
shou
ld b
e no
less
than
30%
of t
he to
tal d
ivid
ends
. U
nder
the
Com
pany
Act
, if s
urpl
us e
arni
ngs
are
dist
ribut
ed in
the
form
of n
ew s
hare
s, th
e di
strib
utio
n of
sha
res
shal
l be
appr
oved
in th
e m
eetin
g of
the
boar
d of
dire
ctor
s; if
suc
h ea
rnin
gs a
re d
istri
bute
d in
th
e fo
rm o
f ca
sh, t
he c
ash
dist
ribut
ion
shal
l be
aut
horiz
ed a
fter
a re
solu
tion
has
been
ado
pted
by
a m
ajor
ity v
ote
at a
mee
ting
of t
he b
oard
of
dire
ctor
s at
tend
ed b
y tw
o-th
irds
of t
he t
otal
num
ber
of
dire
ctor
s; a
nd in
add
ition
, a re
port
of s
uch
dist
ribut
ion
shal
l be
subm
itted
to th
e sh
areh
olde
rs’ m
eetin
g.
If th
e C
ompa
ny h
as n
o lo
ss, a
ccor
ding
to la
ws
and
regu
latio
ns, t
he C
ompa
ny c
an d
istri
bute
its
capi
tal
rese
rve,
in w
hole
or i
n pa
rt, b
y is
suin
g ne
w sh
ares
or c
ash
base
d on
fina
ncia
l, bu
sine
ss a
nd m
anag
emen
t co
nsid
erat
ions
. If s
uch
surp
lus
earn
ings
is d
istri
bute
d in
the
form
of n
ew s
hare
s, it
shal
l be
appr
oved
by
a m
eetin
g of
the
boar
d of
dire
ctor
s; if
suc
h su
rplu
s ea
rnin
g is
dis
tribu
ted
in th
e fo
rm o
f cas
h, it
sha
ll be
au
thor
ized
afte
r a re
solu
tion
has
been
ado
pted
by
a m
ajor
ity v
ote
at a
mee
ting
of th
e bo
ard
of d
irect
ors
atte
nded
by
two-
third
s of
the
tot
al n
umbe
r of
dire
ctor
s; a
nd i
n ad
ditio
n th
eret
o a
repo
rt of
suc
h di
strib
utio
n sh
all b
e su
bmitt
ed to
the
shar
ehol
ders
’ mee
ting.
U
nder
the
divi
dend
pol
icy
as se
t for
th in
the
Com
pany
’s A
rticl
es o
f Inc
orpo
ratio
n (th
e “A
rticl
es”)
bas
ed
on th
e am
ende
d C
ompa
ny A
ct, w
here
the
Com
pany
mad
e pr
ofit
in a
fisc
al y
ear,
the
prof
it sh
all b
e fir
st ut
ilize
d fo
r pay
ing
taxe
s, of
fset
ting
loss
es o
f pre
viou
s ye
ars,
setti
ng a
side
as
a le
gal r
eser
ve 1
0% o
f the
re
mai
ning
pro
fit, s
ettin
g as
ide
or re
vers
ing
a sp
ecia
l res
erve
in a
ccor
danc
e w
ith th
e la
ws a
nd re
gula
tions
, an
d th
en a
ny r
emai
ning
pro
fit to
geth
er w
ith a
ny u
ndis
tribu
ted
reta
ined
ear
ning
s sh
all b
e us
ed b
y th
e C
ompa
ny’s
boa
rd o
f di
rect
ors
as th
e ba
sis
for
prop
osin
g a
dist
ribut
ion
plan
with
due
con
side
ratio
n of
an
y fu
ture
airc
raft
acqu
isiti
on p
lans
and
fun
d de
man
ds, w
hich
sho
uld
be r
esol
ved
in th
e sh
areh
olde
rs’
mee
ting
for t
he d
istri
butio
n of
div
iden
ds a
nd b
onus
es to
sha
reho
lder
s by
cas
h or
sha
res
(cas
h di
vide
nds
cann
ot b
e le
ss th
an 3
0% o
f tot
al d
ivid
ends
dis
tribu
ted)
. How
ever
, if t
he C
ompa
ny’s
pro
fit b
efor
e ta
x in
a
fisca
l yea
r af
ter
dedu
ctio
ns f
or th
e ab
ovem
entio
ned
item
s is
not
suf
ficie
nt f
or e
arni
ngs
dist
ribut
ion,
re
tain
ed e
arni
ngs c
an b
e us
ed a
s a su
pple
men
t for
the
defic
ienc
y.
The
Com
pany
sha
ll se
t asi
de p
rofit
s as
a le
gal r
eser
ve u
ntil
the
lega
l res
erve
am
ount
s to
the
auth
oriz
ed
capi
tal.
The
lega
l res
erve
cou
ld b
e us
ed fo
r of
fset
ting
defic
it of
the
Com
pany
. If
the
Com
pany
has
no
defic
it in
a f
isca
l yea
r, th
e C
ompa
ny c
an d
istri
bute
all
or p
art o
f th
e ca
pita
l sur
plus
by
cash
or
shar
es
with
due
con
side
ratio
n of
fin
ance
, m
arke
ting
and
man
agem
ent
requ
irem
ents
in
acco
rdan
ce w
ith t
he
law
s and
regu
latio
ns.
- 48
-
217
The
dist
ribut
ion
of d
ivid
ends
sho
uld
be r
esol
ved
and
reco
gniz
ed i
n th
e sh
areh
olde
rs’
mee
ting
in t
he
follo
win
g ye
ar.
1)
Off
setti
ng o
f def
icit
in 2
019
O
n Ju
ne 2
3, 2
020,
the
boar
d pr
opos
ed to
off
set t
he a
ccum
ulat
ed d
efic
it in
201
9. T
he d
efic
it in
clud
ed
a ne
t lo
ss o
f $1
,199
,798
tho
usan
d, n
egat
ive
adju
stm
ent
of o
ther
ret
aine
d ea
rnin
gs o
f $5
77,4
27
thou
sand
, the
rem
aini
ng a
mou
nt o
f ac
cum
ulat
ed d
efic
it w
as $
1,77
7,22
5 th
ousa
nd. T
he C
ompa
ny
cove
red
the
defic
it w
ith le
gal r
eser
ve o
f $4
66,4
16 th
ousa
nd, s
peci
al r
eser
ve o
f $1
2,96
7 th
ousa
nd
and
capi
tal r
eser
ve o
f $1,
297,
843
thou
sand
.
2)
Off
setti
ng o
f def
icit
in 2
020
O
n M
arch
18,
202
1, t
he b
oard
pro
pose
d to
off
set
the
accu
mul
ated
def
icit
in 2
020.
The
def
icit
incl
uded
a n
et i
ncom
e of
$14
0,00
0 th
ousa
nd a
nd th
e be
ginn
ing
bala
nce
of u
ndis
tribu
ted
reta
ined
ea
rnin
gs o
f $0,
neg
ativ
e ad
just
men
t of o
ther
reta
ined
ear
ning
s of
$49
0,58
1 th
ousa
nd, t
he re
mai
ning
am
ount
of
accu
mul
ated
def
icit
was
$35
0,58
1 th
ousa
nd a
nd w
as o
ffse
t by
cap
ital
rese
rve
of
$350
,581
thou
sand
. d.
O
ther
equ
ity it
ems
The
mov
emen
t of o
ther
equ
ity it
ems i
s as f
ollo
ws:
Exc
hang
e D
iffer
ence
s on
Tra
nsla
tion
of
the
Fina
ncia
l St
atem
ents
of
Fore
ign
Ope
ratio
ns
Unr
ealiz
ed G
ain
(Los
s) o
n Fi
nanc
ial A
sset
s at
FV
TO
CI
Gai
n (L
oss)
on
Hed
ging
In
stru
men
ts
T
otal
Bal
ance
at J
anua
ry 1
, 201
9
$
(9,6
64)
$
42
,619
$
25,2
68
$
58
,223
Ex
chan
ge d
iffer
ence
s on
trans
latio
n of
the
finan
cial
st
atem
ents
of f
orei
gn o
pera
tions
(5
9,17
4)
-
-
(59,
174)
C
umul
ativ
e lo
ss o
n ch
ange
s in
fair
valu
e of
hed
ging
inst
rum
ents
-
-
1,
398,
296
1,39
8,29
6 C
umul
ativ
e ga
in o
n ch
ange
s in
fair
valu
e of
hed
ging
inst
rum
ents
re
clas
sifie
d to
pro
fit o
r los
s
-
-
9,
305
9,30
5 U
nrea
lized
gai
n on
fina
ncia
l ass
ets
at F
VTO
CI
-
24
,490
-
24,4
90
Shar
e of
pro
fit o
r ass
ocia
tes
acco
unte
d fo
r usi
ng e
quity
m
etho
d
(6
,072
)
54
,902
(7
,187
)
41
,643
Ef
fect
s of i
ncom
e ta
x
11
,835
(1
4,85
4)
(281
,401
)
(2
84,4
20)
Oth
er c
ompr
ehen
sive
inco
me
(loss
) rec
ogni
zed
in th
e pe
riod
(53,
411)
64
,538
1,
119,
013
1,13
0,14
0 D
ispo
sal o
f sub
sidi
arie
s
8,
368
105
-
8,
473
Tran
sfer
s of i
nitia
l car
ryin
g am
ount
of h
edge
d ite
ms
-
-
(603
)
(6
03)
B
alan
ce a
t Dec
embe
r 31,
201
9
$
(54,
707)
$
107,
262
$
1,1
43,6
78
$
1,1
96,2
33
(Con
tinue
d)
- 49
-
Exc
hang
e D
iffer
ence
s on
Tra
nsla
tion
of
the
Fina
ncia
l St
atem
ents
of
Fore
ign
Ope
ratio
ns
Unr
ealiz
ed G
ain
(Los
s) o
n Fi
nanc
ial A
sset
s at
FV
TO
CI
Gai
n (L
oss)
on
Hed
ging
In
stru
men
ts
T
otal
Bal
ance
at J
anua
ry 1
, 202
0
$
(54,
707)
$
107,
262
$
1,1
43,6
78
$
1,1
96,2
33
Exch
ange
diff
eren
ces o
n tra
nsla
tion
of th
e fin
anci
al
stat
emen
ts o
f for
eign
ope
ratio
ns
(101
,142
)
-
-
(1
01,1
42)
Cum
ulat
ive
loss
on
chan
ges i
n fa
ir va
lue
of h
edgi
ng in
stru
men
ts
-
-
1,90
7,40
1
1,
907,
401
Cum
ulat
ive
gain
on
chan
ges i
n fa
ir va
lue
of h
edgi
ng in
stru
men
ts
recl
assi
fied
to p
rofit
or l
oss
-
-
(283
,210
)
(2
83,2
10)
Unr
ealiz
ed g
ain
on fi
nanc
ial a
sset
s at
FV
TOC
I
-
39,3
05
-
39
,305
Sh
are
of p
rofit
or a
ssoc
iate
s ac
coun
ted
for u
sing
equ
ity
met
hod
1,36
8
(8
4,89
3)
2,83
7
(8
0,68
8)
Effe
cts o
f inc
ome
tax
20,2
29
9,68
5
(3
65,0
36)
(335
,122
) O
ther
com
preh
ensi
ve in
com
e (lo
ss) r
ecog
nize
d in
the
perio
d
(7
9,54
5)
(35,
903)
1,
261,
992
1,14
6,54
4 Tr
ansf
ers o
f ini
tial c
arry
ing
amou
nt o
f hed
ged
item
s
-
-
20
0,98
9
20
0,98
9
Bal
ance
at D
ecem
ber 3
1, 2
020
$
(1
34,2
52)
$
71
,359
$ 2
,606
,659
$ 2
,543
,766
(C
oncl
uded
) e.
Tr
easu
ry sh
ares
Tr
easu
ry s
hare
s ar
e th
e C
ompa
ny’s
sha
res
held
by
its s
ubsi
diar
ies,
as o
f Dec
embe
r 31,
202
0 an
d 20
19
wer
e as
follo
ws:
(I
n T
hous
ands
of S
hare
s)
Peri
od o
f Tre
asur
y Sh
ares
N
umbe
r of
Sh
ares
, B
egin
ning
of
Yea
r
Red
uctio
n D
urin
g th
e Y
ear
Num
ber
of
Shar
es, E
nd o
f Y
ear
For t
he y
ear e
nded
Dec
embe
r 31,
202
0
2,
889
(814
)
2,
075
For t
he y
ear e
nded
Dec
embe
r 31,
201
9
2,
889
-
2,
889
S
ubsi
diar
y
Shar
es
(In
Tho
usan
ds)
C
arry
ing
Am
ount
Mar
ket V
alue
D
ecem
ber 3
1, 2
020
M
anda
rin A
irlin
es
2,07
5
$ 2
4,99
9
$ 2
4,99
9
Dec
embe
r 31,
201
9
Man
darin
Airl
ines
2,
075
$
18,
796
$
18,
796
Dyn
asty
Aer
otec
h In
tern
atio
nal C
orp
81
4
7,
376
7,37
6
$ 2
6,17
2
$ 2
6,17
2
- 50
-
218
The
abov
e ac
quis
ition
s by
sub
sidi
arie
s of
the
Com
pany
’s s
hare
s in
pre
viou
s ye
ars
was
due
to
inve
stm
ent p
lann
ing.
The
shar
es o
f the
Com
pany
hel
d by
its s
ubsi
diar
ies w
ere
treat
ed a
s tre
asur
y sh
ares
. Th
e su
bsid
iarie
s ca
n ex
erci
se s
hare
hold
ers’
rig
ht o
n th
ese
treas
ury
shar
es,
exce
pt f
or t
he r
ight
to
subs
crib
e fo
r the
Com
pany
’s n
ew sh
ares
and
vot
ing
right
s. D
ynas
ty A
erot
ech
Inte
rnat
iona
l Cor
p. s
old
a to
tal o
f 814
thou
sand
sha
res
of th
e C
ompa
ny in
202
0 an
d th
e di
spos
al p
rice
was
$6,
854
thou
sand
.
26.
NE
T IN
CO
ME
a.
R
even
ue
For
the
Yea
r E
nded
Dec
embe
r 31
20
20
20
19
Pa
ssen
ger
$
20
,508
,133
$
96,1
76,8
65
Car
go
81,6
92,5
74
43,4
06,4
87
Oth
ers
4,12
6,41
6
6,
789,
049
$
106
,327
,123
$ 1
46,3
72,4
01
b.
Oth
er in
com
e
F
or th
e Y
ear
End
ed D
ecem
ber
31
2020
2019
Inte
rest
inco
me
$
208
,081
$ 3
14,9
44
Div
iden
d in
com
e
8,
720
10,1
12
Subs
idy
inco
me
29,3
09
38,6
21
Oth
ers
194,
651
160,
556
$
440
,761
$ 5
24,2
33
c.
Oth
er g
ains
and
loss
es
For
the
Yea
r E
nded
Dec
embe
r 31
20
20
20
19
G
ain
on d
ispo
sal p
rope
rty, p
lant
and
equ
ipm
ent
$
8,
005
$
26
,377
N
et lo
ss o
n fin
anci
al a
sset
s as h
eld
for t
radi
ng
3,59
6
25
,700
G
ain
(loss
) on
fore
ign
exch
ange
, net
25
9,79
6
(2
62,6
10)
Impa
irmen
t los
s rec
ogni
zed
on n
on-c
urre
nt a
sset
s hel
d fo
r sal
e
(4
6,75
7)
- Im
pairm
ent l
oss r
ecog
nize
d on
flig
ht e
quip
men
t
(424
,573
)
-
Gai
n on
dis
posa
l of i
nves
tmen
t
-
7,65
6 Lo
ss o
n no
n-cu
rren
t ass
ets h
eld
for s
ale
-
(1
0,46
2)
Loss
on
sale
and
leas
ebac
k
-
(103
,775
) O
ther
s
(3
23,8
94)
(252
,468
)
$ (5
23,8
27)
$
(569
,582
)
- 51
-
d.
Fina
nce
cost
s
For
the
Yea
r E
nded
Dec
embe
r 31
20
20
20
19
In
tere
st e
xpen
se
Bon
ds p
ayab
le
$
34
4,03
4
$
431,
599
Ban
k lo
ans
834,
611
703,
681
Inte
rest
on
leas
e lia
bilit
ies
1,60
1,71
8
1,
898,
892
$
2,7
80,3
63
$
3,0
34,1
72
Info
rmat
ion
abou
t cap
italiz
ed in
tere
st w
as a
s fol
low
s:
For
the
Yea
r E
nded
Dec
embe
r 31
20
20
20
19
C
apita
lizat
ion
inte
rest
$
75
,701
$
36,4
04
Cap
italiz
atio
n ra
te
0.
71%
-1.4
5%
1.
01%
-1.2
8%
e.
Dep
reci
atio
n an
d am
ortiz
atio
n ex
pens
es
F
or th
e Y
ear
End
ed D
ecem
ber
31
2020
2019
Prop
erty
, pla
nt a
nd e
quip
men
t
$
18,0
63,0
25
$
19
,388
,694
R
ight
-of-
use
asse
ts
9,
955,
721
10,0
09,9
41
Inta
ngib
le a
sset
s
16
9,15
8
16
5,98
1
$
28,1
87,9
04
$
29
,564
,616
An
anal
ysis
of d
epre
ciat
ion
by fu
nctio
n
O
pera
ting
cost
s
$
27,3
60,9
11
$
28
,373
,597
O
pera
ting
expe
nses
65
7,83
5
1,
025,
038
$
28
,018
,746
$
29,3
98,6
35
A
n an
alys
is o
f am
ortiz
atio
n by
func
tion
Ope
ratin
g ex
pens
es
$
16
9,15
8
$
165,
981
f.
Empl
oyee
ben
efits
exp
ense
For
the
Yea
r E
nded
Dec
embe
r 31
20
20
20
19
Po
st-e
mpl
oym
ent b
enef
its
Def
ined
con
tribu
tion
plan
s
$
347,
320
$
37
3,18
7 D
efin
ed b
enef
it pl
ans
1,23
9,18
0
1,
249,
749
$
1,
586,
500
$
1,
622,
936
(Con
tinue
d)
- 52
-
219
For
the
Yea
r E
nded
Dec
embe
r 31
20
20
20
19
O
ther
em
ploy
ee b
enef
its
Sala
ry e
xpen
ses
$
12
,892
,488
$
14,4
75,1
15
Labo
r and
hea
lth in
sura
nce
1,14
9,06
5
1,
282,
461
Pers
onne
l ser
vice
exp
ense
s
3,
303,
051
4,58
9,29
9
$
17,3
44,6
04
$
20
,346
,875
An
anal
ysis
of e
mpl
oyee
ben
efits
exp
ense
by
func
tion
Ope
ratin
g co
sts
$
14
,918
,454
$
17,8
62,9
54
Ope
ratin
g ex
pens
es
4,01
2,65
0
4,
106,
857
$
18
,931
,104
$
21,9
69,8
11
(Con
clud
ed)
Acc
ordi
ng to
the
Com
pany
’s a
rticl
es, t
he C
ompa
ny a
ccru
es c
ompe
nsat
ion
of e
mpl
oyee
s at
rate
s of
no
less
than
3%
of
the
net p
rofit
bef
ore
inco
me
tax
and
com
pens
atio
n of
em
ploy
ees,
and
accr
ues
prof
it bo
nus a
t a c
erta
in ra
te o
f pro
fit b
efor
e ta
x on
the
basi
s of t
he c
olle
ctiv
e ag
reem
ent s
igne
d w
ith th
e C
hina
A
irlin
es E
mpl
oyee
s U
nion
. For
the
yea
rs e
nded
Dec
embe
r 31
, 202
0 an
d 20
19, t
he c
ompe
nsat
ion
of
empl
oyee
s was
not
est
imat
ed si
nce
it w
as a
loss
bef
ore
inco
me
tax.
M
ater
ial
diff
eren
ces
betw
een
such
est
imat
ed a
mou
nts
and
the
amou
nts
prop
osed
by
the
boar
d of
di
rect
ors
on o
r be
fore
the
date
the
annu
al f
inan
cial
sta
tem
ents
are
aut
horiz
ed f
or is
sue
are
adju
sted
in
the
year
that
the
bonu
s an
d re
mun
erat
ion
wer
e re
cogn
ized
. If t
here
is a
cha
nge
in th
e pr
opos
ed a
mou
nts
afte
r the
ann
ual f
inan
cial
sta
tem
ents
wer
e au
thor
ized
for i
ssue
, the
diff
eren
ces
are
reco
rded
as
a ch
ange
in
the
acco
untin
g es
timat
e.
Info
rmat
ion
on th
e co
mpe
nsat
ion
of e
mpl
oyee
s an
d re
mun
erat
ion
of d
irect
ors
and
supe
rvis
ors
reso
lved
by
the
Com
pany
’s b
oard
of d
irect
ors
is a
vaila
ble
at th
e M
arke
t Obs
erva
tion
Post
Sys
tem
web
site
of t
he
Taiw
an S
tock
Exc
hang
e.
27
. IN
CO
ME
TA
X
a.
In
com
e ta
x re
cogn
ized
in p
rofit
or l
oss
The
maj
or c
ompo
nent
s of t
ax e
xpen
se w
ere
as fo
llow
s:
For
the
Yea
r E
nded
Dec
embe
r 31
20
20
20
19
C
urre
nt ta
x
C
urre
nt y
ear
$
15,
676
$
8,
836
Prio
r yea
r adj
ustm
ent
280
(6,6
58)
Def
erre
d ta
x
C
urre
nt y
ear
(67,
746)
(1
6,21
8)
Adj
ustm
ents
to d
efer
red
tax
attri
buta
ble
to c
hang
es in
tax
rate
s an
d la
ws
82,8
85
26,5
12
In
com
e ta
x ex
pens
e re
cogn
ized
in p
rofit
or l
oss
$
31,
095
$
12,
472
- 53
-
A re
conc
iliat
ion
of a
ccou
ntin
g pr
ofit
and
inco
me
tax
expe
nse
is a
s fol
low
s:
For
the
Yea
r E
nded
Dec
embe
r 31
20
20
20
19
Pr
ofit
befo
re ta
x
$
171,
095
$
(1,
187,
326)
Inco
me
tax
expe
nse
calc
ulat
ed a
t the
stat
utor
y ra
te
$
34
,219
$
(237
,465
) A
dd (d
educ
t) ta
x ef
fect
s of:
Non
dedu
ctib
le e
xpen
ses i
n de
term
inin
g ta
xabl
e in
com
e
36
9,51
8
17
,900
Ta
x-ex
empt
inco
me
(334
,324
)
(3
47,3
38)
Ove
rsea
s inc
ome
tax
expe
nse
15,6
76
8,83
6 U
nrec
ogni
zed
loss
car
ryfo
rwar
ds a
nd in
vest
men
t tax
cre
dits
(137
,159
)
55
0,68
5 A
djus
tmen
ts fo
r prio
r yea
rs’ t
ax
280
(6,6
58)
Adj
ustm
ents
to d
efer
red
tax
attri
buta
ble
to c
hang
es in
tax
rate
s an
d la
ws
82,8
85
26,5
12
In
com
e ta
x ex
pens
e re
cogn
ized
in p
rofit
or l
oss
$
31
,095
$
12,4
72
b.
In
com
e ta
x re
cogn
ized
in o
ther
com
preh
ensi
ve in
com
e
For
the
Yea
r E
nded
Dec
embe
r 31
20
20
20
19
D
efer
red
tax
R
ecog
nize
d in
oth
er c
ompr
ehen
sive
inco
me
Tran
slat
ion
of fo
reig
n op
erat
ions
$
20,2
29
$
11
,835
Fa
ir va
lue
reva
luat
ion
of h
edgi
ng in
stru
men
ts fo
r cas
h flo
w
hedg
es
(365
,036
)
(2
81,4
01)
Act
uaria
l gai
n or
loss
on
defin
ed b
enef
it pl
an
98,8
44
112,
452
Fair
valu
e ch
ange
s of f
inan
cial
ass
ets a
t FV
TOC
I
9,
685
(14,
854)
Tota
l inc
ome
tax
reco
gniz
ed in
oth
er c
ompr
ehen
sive
inco
me
$
(236
,278
)
$ (1
71,9
68)
c.
Def
erre
d ta
x as
sets
and
liab
ilitie
s Fo
r the
yea
r end
ed D
ecem
ber 3
1, 2
020
Beg
inni
ng
Bal
ance
R
ecog
nize
d in
Pr
ofit
or L
oss
Rec
ogni
zed
in
Oth
er
Com
pre-
he
nsiv
e In
com
e
End
ing
Bal
ance
D
efer
red
tax
asse
ts
Tem
pora
ry d
iffer
ence
s
D
efin
ed b
enef
it pl
ans
$
1,5
27,2
11
$
30
,333
$
98,8
44
$
1,6
56,3
88
Freq
uent
flye
r pro
gram
s
59
0,69
4
(4
2,81
7)
-
547,
877
Mai
nten
ance
rese
rve
2,06
3,48
5
29
5,84
9
-
2,35
9,33
4 A
llow
ance
for r
educ
tion
of
inve
ntor
y
29
4,79
9
(4
1,59
0)
-
253,
209
Oth
ers
280,
953
(195
,593
)
79
,691
16
5,05
1
$
4,7
57,1
42
$
46
,182
$
178,
535
$
4,9
81,8
59
(Con
tinue
d)
- 54
-
220
Beg
inni
ng
Bal
ance
R
ecog
nize
d in
Pr
ofit
or L
oss
Rec
ogni
zed
in
Oth
er
Com
pre-
he
nsiv
e In
com
e
End
ing
Bal
ance
Def
erre
d ta
x lia
bilit
ies
Te
mpo
rary
diff
eren
ces
Unr
ealiz
ed fo
reig
n ex
chan
ge
gain
s
$
81
,778
$
61,3
22
$
-
$
14
3,10
0 O
ther
s (N
ote)
31
7,47
5
-
414,
813
732,
288
$
39
9,25
3
$
61,3
22
$
41
4,81
3
$
875,
388
(Con
clud
ed)
For t
he y
ear e
nded
Dec
embe
r 31,
201
9
B
egin
ning
B
alan
ce
Rec
ogni
zed
in
Prof
it or
Los
s R
ecog
nize
d in
O
ther
C
ompr
e-
hens
ive
Inco
me
E
ndin
g B
alan
ce
D
efer
red
tax
asse
ts
Tem
pora
ry d
iffer
ence
s
D
efin
ed b
enef
it pl
ans
$
1,3
96,0
33
$
18
,726
$
112,
452
$
1,5
27,2
11
Freq
uent
flye
r pro
gram
s
51
0,06
0
80
,634
-
590,
694
Mai
nten
ance
rese
rve
1,67
4,97
3
38
8,51
2
-
2,06
3,48
5 A
llow
ance
for r
educ
tion
of
inve
ntor
y
33
3,65
3
(3
8,85
4)
-
294,
799
Oth
ers
646,
627
(377
,534
)
11
,860
28
0,95
3
$ 4
,561
,346
$
71,4
84
$
12
4,31
2
$ 4
,757
,142
Def
erre
d ta
x lia
bilit
ies
Te
mpo
rary
diff
eren
ces
Unr
ealiz
ed fo
reig
n ex
chan
ge
gain
s
$
-
$
81
,778
$
-
$
81,7
78
Oth
ers (
Not
e)
21,1
95
-
29
6,28
0
31
7,47
5
$
21,1
95
$
81
,778
$
296,
280
$
39
9,25
3
- 55
-
Ded
uctib
le te
mpo
rary
diff
eren
ces,
unus
ed lo
ss c
arry
forw
ards
and
unu
sed
inve
stm
ent c
redi
ts fo
r w
hich
no
def
erre
d ta
x as
sets
hav
e be
en re
cogn
ized
in th
e ba
lanc
e sh
eets
are
as f
ollo
ws:
Dec
embe
r 31
20
20
20
19
Lo
ss c
arry
forw
ards
20
21
$
-
$
2,8
99,4
96
2022
-
619,
799
2026
-
202,
699
2028
49
5,77
9
1,
519,
941
2029
1,
439,
287
760,
157
$
1,9
35,0
66
$
6,0
02,0
92
O
ther
$ 4
,479
,141
$ 1
,097
,908
d.
Unu
sed
tax
loss
car
ryfo
rwar
ds a
s of D
ecem
ber 3
1, 2
020
wer
e as
follo
ws:
Exp
iry
Yea
r
Unu
sed
Am
ount
2028
$
49
5,77
9 20
29
1,
439,
287
$ 1
,935
,066
e.
Inco
me
tax
retu
rns
The
inco
me
tax
retu
rns o
f the
Com
pany
thro
ugh
2018
hav
e be
en e
xam
ined
by
the
tax
auth
oriti
es.
28.
EA
RN
ING
S PE
R S
HA
RE
For
the
Yea
r E
nded
Dec
embe
r 31
20
20
20
19
B
asic
ear
ning
s per
shar
e
$
0.03
$
(0.2
2)
Dilu
ted
earn
ings
per
shar
e
$
0.03
$
(0.2
2)
F
or th
e Y
ear
End
ed D
ecem
ber
31
2020
2019
Earn
ings
use
d in
the
com
puta
tion
of b
asic
ear
ning
s per
shar
e
$
140,
000
$
(1,
199,
798)
Ef
fect
of p
oten
tially
dilu
tive
ordi
nary
shar
es:
Inte
rest
on
conv
ertib
le b
onds
(afte
r tax
)
-
-
Earn
ings
use
d in
the
com
puta
tion
of d
ilute
d ea
rnin
gs p
er sh
are
$
140,
000
$
(1,
199,
798)
- 56
-
221
F
or th
e Y
ear
End
ed D
ecem
ber
31
2020
2019
Wei
ghte
d av
erag
e nu
mbe
r of o
rdin
ary
shar
es in
com
puta
tion
of b
asic
ea
rnin
gs p
er sh
are
(in th
ousa
nds)
5,4
18,7
76
5
,418
,096
Ef
fect
of p
oten
tially
dilu
tive
ordi
nary
shar
es:
Con
verti
ble
bond
s (in
thou
sand
s)
-
-
W
eigh
ted
aver
age
num
ber o
f ord
inar
y sh
ares
use
d in
the
com
puta
tion
of d
ilute
d ea
rnin
gs p
er sh
are
(in th
ousa
nds)
5,4
18,7
76
5
,418
,096
If
the
Com
pany
off
ers t
o se
ttle
com
pens
atio
n or
bon
uses
pai
d to
em
ploy
ees
in c
ash
or s
hare
s, th
e C
ompa
ny
assu
mes
the
ent
ire a
mou
nt o
f th
e co
mpe
nsat
ion
or b
onus
es w
ould
be
settl
ed i
n sh
ares
, and
the
res
ultin
g po
tent
ial
shar
es w
ere
incl
uded
in
the
wei
ghte
d av
erag
e nu
mbe
r of
sha
res
outs
tand
ing
used
in
the
com
puta
tion
of d
ilute
d ea
rnin
gs p
er s
hare
, if
the
effe
ct i
s di
lutiv
e. S
uch
dilu
tive
effe
ct o
f th
e po
tent
ial
shar
es w
as i
nclu
ded
in t
he c
ompu
tatio
n of
dilu
ted
earn
ings
per
sha
re u
ntil
the
num
ber
of s
hare
s to
be
dist
ribut
ed to
em
ploy
ees i
s res
olve
d in
the
follo
win
g ye
ar.
29
. C
API
TA
L M
AN
AG
EM
EN
T
The
Com
pany
man
ages
its
capi
tal t
o en
sure
that
ent
ities
in th
e C
ompa
ny w
ill b
e ab
le to
con
tinue
as
goin
g co
ncer
ns w
hile
max
imiz
ing
the
retu
rn t
o st
akeh
olde
rs t
hrou
gh t
he o
ptim
izat
ion
of t
he d
ebt
and
equi
ty
bala
nce.
The
cap
ital
stru
ctur
e of
the
Com
pany
con
sist
s of
net
deb
t (b
orro
win
gs o
ffse
t by
cas
h an
d ca
sh
equi
vale
nts)
and
equ
ity o
f the
Com
pany
com
pris
ing
issu
ed c
apita
l, re
serv
es, r
etai
ned
earn
ings
, oth
er e
quity
an
d no
n-co
ntro
lling
inte
rests
. To
sup
port
its o
pera
ting
activ
ities
and
pur
chas
e of
airc
raft,
the
Com
pany
nee
ds t
o m
aint
ain
suff
icie
nt
capi
tal.
Ther
efor
e, th
e go
al o
f cap
ital m
anag
emen
t is t
o en
sure
fina
ncia
l res
ourc
es a
nd o
pera
ting
plan
is a
ble
to su
ppor
t the
futu
re w
orki
ng c
apita
l, ca
pita
l exp
endi
ture
s, de
bt re
paym
ent a
nd d
ivid
end
expe
nses
and
oth
er
need
s.
30.
FIN
AN
CIA
L IN
STR
UM
EN
TS
a.
Fa
ir va
lues
of f
inan
cial
instr
umen
ts n
ot m
easu
red
at fa
ir va
lue
D
ecem
ber
31
2020
2019
Car
ryin
g A
mou
nt
Fa
ir V
alue
Car
ryin
g A
mou
nt
Fa
ir V
alue
Fina
ncia
l lia
bilit
ies
B
onds
pay
able
$ 22
,432
,859
$
22
,609
,683
$
32
,352
,625
$
32
,363
,301
Som
e lo
ng-te
rm b
orro
win
gs a
re fl
oatin
g-ra
te fi
nanc
ial l
iabi
litie
s, so
thei
r car
ryin
g am
ount
s are
thei
r fai
r va
lues
. The
fair
valu
es o
f bon
ds p
ayab
le a
re b
ased
on
thos
e w
hich
are
trad
ed in
the
stoc
k ex
chan
ge a
nd
base
d on
quo
ted
mar
ket p
rices
(Lev
el 1
).
- 57
-
b.
Fair
valu
e of
fina
ncia
l ins
trum
ents
mea
sure
d at
fair
valu
e on
a re
curr
ing
basi
s Th
e fo
llow
ing
tabl
e pr
ovid
es a
n an
alys
is o
f fin
anci
al in
stru
men
ts th
at a
re m
easu
red
subs
eque
nt to
initi
al
reco
gniti
on a
t fa
ir va
lue,
gro
uped
int
o Le
vels
1 t
o 3
base
d on
the
deg
ree
to w
hich
the
fai
r va
lue
is
obse
rvab
le:
1)
Leve
l 1
fair
valu
e m
easu
rem
ents
are
tho
se d
eriv
ed f
rom
quo
ted
pric
es (
unad
just
ed)
in a
ctiv
e m
arke
ts fo
r ide
ntic
al a
sset
s or l
iabi
litie
s; 2)
Le
vel 2
fai
r va
lue
mea
sure
men
ts a
re th
ose
deriv
ed f
rom
inpu
ts o
ther
than
quo
ted
pric
es in
clud
ed
with
in L
evel
1 t
hat
are
obse
rvab
le f
or t
he a
sset
or
liabi
lity,
eith
er d
irect
ly (
i.e.
as p
rices
) or
in
dire
ctly
(i.e
. der
ived
from
pric
es);
and
3)
Leve
l 3 fa
ir va
lue
mea
sure
men
ts a
re th
ose
deriv
ed fr
om v
alua
tion
tech
niqu
es th
at in
clud
e in
puts
for
the
asse
t or l
iabi
lity
that
are
not
bas
ed o
n ob
serv
able
mar
ket d
ata
(uno
bser
vabl
e in
puts
). D
ecem
ber 3
1, 2
020
Lev
el 1
Lev
el 2
Lev
el 3
Tot
al
Fi
nanc
ial a
sset
s at F
VTO
CI
Inve
stm
ents
in e
quity
inst
rum
ents
U
nlis
ted
shar
es -
dom
estic
$
-
$
-
$
29,7
04
$
29
,704
U
nlis
ted
shar
es -
fore
ign
-
-
117,
457
117,
457
$
-
$
-
$
14
7,16
1
$
147,
161
Fi
nanc
ial a
sset
s for
hed
ging
$
7,61
3,63
6
$
-
$
-
$
7,61
3,63
6
Fina
ncia
l lia
bilit
ies f
or h
edgi
ng
$
40,
575,
778
$
5,
794
$
-
$
40,
581,
572
Dec
embe
r 31,
201
9
L
evel
1
L
evel
2
L
evel
3
T
otal
Fina
ncia
l ass
ets a
t FV
TPL
Der
ivat
ive
inst
rum
ents
$
-
$
434
$
-
$
43
4
Fina
ncia
l ass
ets a
t FV
TOC
I
In
vest
men
ts in
equ
ity in
stru
men
ts
Unl
iste
d sh
ares
- do
mes
tic
$
-
$
-
$
26
,865
$
26,8
65
Unl
iste
d sh
ares
- fo
reig
n
-
-
80
,991
80
,991
$
-
$
-
$
107,
856
$
10
7,85
6
Fina
ncia
l lia
bilit
ies a
t FV
TPL
Der
ivat
ive
inst
rum
ents
$
-
$
11,7
49
$
-
$
11
,749
Fina
ncia
l ass
ets f
or h
edgi
ng
$
-
$
10
9
$
9,47
9
$
9,58
8
Fina
ncia
l lia
bilit
ies f
or h
edgi
ng
$
50,
997,
687
$
28
,578
$
3,95
5
$ 5
1,03
0,22
0 Th
ere
wer
e no
tran
sfer
s bet
wee
n Le
vel 2
and
3 in
the
curr
ent a
nd p
rior p
erio
ds.
- 58
-
222
4)
Val
uatio
n te
chni
ques
and
inpu
ts a
pplie
d fo
r Lev
el 2
fair
valu
e m
easu
rem
ent
Fina
ncia
l Ins
trum
ents
Val
uatio
n T
echn
ique
s and
Inpu
ts
D
eriv
ativ
e in
stru
men
ts
Th
e fa
ir va
lues
of d
eriv
ativ
es (e
xcep
t opt
ions
) hav
e be
en
dete
rmin
ed b
ased
on
disc
ount
ed c
ash
flow
ana
lyse
s usin
g in
tere
st y
ield
cur
ves a
pplic
able
for t
he d
urat
ion
of th
e de
rivat
ives
. The
est
imat
es a
nd a
ssum
ptio
ns th
at th
e C
ompa
ny
used
to d
eter
min
e th
e fa
ir va
lues
are
iden
tical
to th
ose
used
in
the
pric
ing
of fi
nanc
ial i
nstru
men
ts fo
r mar
ket p
artic
ipan
ts.
5)
Val
uatio
n te
chni
ques
and
inpu
ts a
pplie
d fo
r Lev
el 3
fair
valu
e m
easu
rem
ent
Th
e fa
ir va
lues
of
curr
ency
opt
ions
and
fue
l op
tions
are
det
erm
ined
usi
ng o
ptio
n pr
icin
g m
odel
s w
here
the
sig
nific
ant
unob
serv
able
inp
uts
are
impl
ied
fluct
uatio
n. A
n in
crea
se i
n th
e im
plie
d flu
ctua
tion
used
in is
olat
ion
wou
ld re
sult
in a
dec
reas
e in
the
fair
valu
e of
cur
renc
y op
tions
and
fuel
op
tions
. Th
e do
mes
tic u
nlis
ted
equi
ty in
vest
men
t is b
ased
on
the
com
para
tive
com
pany
val
uatio
n to
esti
mat
e th
e fa
ir va
lue.
The
mai
n as
sum
ptio
ns a
re b
ased
on
the
mul
tiplie
r of
the
mar
ket
pric
e of
the
co
mpa
rabl
e lis
ted
com
pany
and
the
net
val
ue p
er s
hare
, w
hich
hav
e co
nsid
ered
the
liq
uidi
ty
disc
ount
. The
hig
her
the
mul
tiplie
r or
the
low
er th
e liq
uidi
ty d
isco
unt,
the
high
er th
e fa
ir va
lue
of
the
rele
vant
fina
ncia
l ins
trum
ents
. Th
e m
ovem
ents
of L
evel
3 fi
nanc
ial i
nstru
men
ts a
re a
s fol
low
s:
M
ultip
licat
or
L
iqui
dity
D
isco
unt
D
ecem
ber 3
1, 2
020
0.
79-1
6.32
80%
D
ecem
ber 3
1, 2
019
0.
75-1
3.23
80%
Der
ivat
ive
Inst
rum
ents
Equ
ity
Inst
rum
ents
Bal
ance
at J
anua
ry 1
, 202
0
$
5,52
4
$ 1
07,8
56
Oth
er c
ompr
ehen
sive
inco
me
reco
gniz
ed d
urin
g th
e pe
riod
(5,5
24)
39,3
05
B
alan
ce a
t Dec
embe
r 31,
202
0
$
-
$ 1
47,1
61
Der
ivat
ive
Inst
rum
ents
Equ
ity
Inst
rum
ents
Bal
ance
at J
anua
ry 1
, 201
9
$
4,90
1
$
83,3
66
Rec
ogni
zed
in o
ther
com
preh
ensi
ve in
com
e
62
3
24
,490
Bal
ance
at D
ecem
ber 3
1, 2
019
$
5,
524
$
107
,856
B
ecau
se s
ome
finan
cial
ins
trum
ents
and
non
finan
cial
ins
trum
ents
may
not
hav
e th
eir
fair
valu
es
disc
lose
d, t
he t
otal
fai
r va
lue
disc
lose
d he
rein
is
not t
he t
otal
val
ue o
f th
e C
ompa
ny’s
col
lect
ive
inst
rum
ents
.
- 59
-
c.
Cat
egor
ies o
f fin
anci
al in
stru
men
ts
D
ecem
ber
31
2020
2019
Fina
ncia
l ass
ets
Fi
nanc
ial a
sset
s at F
VTP
L
$
-
$
434
Fina
ncia
l ass
ets f
or h
edgi
ng
7,61
3,63
6
9,
588
Fina
ncia
l ass
ets a
t am
ortiz
ed c
ost (
Not
e 1)
36
,153
,687
31
,214
,918
Fi
nanc
ial a
sset
s at F
VTO
CI -
equ
ity in
stru
men
t inv
estm
ent
147,
161
107,
856
Fi
nanc
ial l
iabi
litie
s
Fina
ncia
l lia
bilit
ies a
t FV
TPL
-
11
,749
Fi
nanc
ial l
iabi
litie
s for
hed
ging
40
,581
,572
51
,030
,220
Fi
nanc
ial l
iabi
litie
s at a
mor
tized
cos
t (N
ote
2)
148,
012,
657
129,
800,
759
Not
e 1:
Th
e ba
lanc
es in
clud
e fin
anci
al a
sset
s m
easu
red
at a
mor
tized
cos
t, w
hich
com
pris
e ca
sh a
nd
cash
equ
ival
ents
, tim
e de
posi
ts w
ith o
rigin
al m
atur
ities
of
mor
e th
an 3
mon
ths,
note
s an
d ac
coun
ts r
ecei
vabl
e, a
ccou
nts
rece
ivab
le -
rel
ated
par
ties,
othe
r re
ceiv
able
s, re
fund
able
de
posi
ts a
nd o
ther
rest
ricte
d fin
anci
al a
sset
s. N
ote
2:
The
bala
nce
of f
inan
cial
lia
bilit
ies
mea
sure
d at
am
ortiz
ed c
ost
com
pris
ed s
hort-
term
not
es
paya
ble,
not
es a
nd a
ccou
nts
paya
ble,
acc
ount
s pa
yabl
e - r
elat
ed p
artie
s, ot
her p
ayab
les,
bond
s pa
yabl
e an
d lo
ng-te
rm lo
ans,
leas
e lia
bilit
ies,
prov
isio
ns, p
arts
of o
ther
cur
rent
liab
ilitie
s, pa
rts
of o
ther
non
curr
ent l
iabi
litie
s and
gua
rant
ee d
epos
its.
d.
Fi
nanc
ial r
isk
man
agem
ent o
bjec
tives
and
pol
icie
s Th
e C
ompa
ny h
as r
isk
man
agem
ent
and
hedg
ing
stra
tegi
es t
o re
spon
d to
cha
nges
in
the
econ
omic
, fin
anci
al e
nviro
nmen
t and
in th
e fu
el m
arke
t. To
redu
ce th
e fin
anci
al ri
sks f
rom
cha
nges
in in
tere
st ra
tes,
in e
xcha
nge
rate
s an
d fu
el p
rices
, the
Com
pany
has
its
oper
atin
g co
sts
stay
with
in a
spe
cifie
d ra
nge
by
usin
g ap
prop
riate
fin
anci
al h
edgi
ng i
nstru
men
ts a
nd h
edgi
ng p
erce
ntag
es i
n ac
cord
ance
with
the
“P
roce
ssin
g Pr
ogra
m
of
Der
ivat
ive
Fina
ncia
l In
stru
men
t Tr
ansa
ctio
ns”
appr
oved
by
C
ompa
ny
shar
ehol
ders
to
redu
ce t
he i
mpa
ct o
f m
arke
t pr
ice
on e
arni
ngs.
Thes
e ris
ks i
nclu
de m
arke
t ris
k (in
clud
ing
fore
ign
curr
ency
risk
, int
eres
t rat
e ris
k an
d ot
her p
rice
risk)
, cre
dit r
isk
and
liqui
dity
risk
. In
add
ition
, the
Com
pany
has
a ri
sk m
anag
emen
t com
mitt
ee, w
hich
mee
ts p
erio
dica
lly to
eva
luat
e th
e pe
rfor
man
ce o
f de
rivat
ive
inst
rum
ents
and
det
erm
ine
the
appr
opria
te h
edgi
ng p
ortio
n. T
his
com
mitt
ee
info
rms
the
Com
pany
of
glob
al e
cono
mic
and
fin
anci
al c
ondi
tions
, co
ntro
ls t
he C
ompa
ny’s
ent
ire
finan
cial
ris
k re
sulti
ng f
rom
cha
nges
in
the
finan
cial
env
ironm
ent
and
fuel
pric
es, a
nd d
evel
ops
the
stra
tegy
and
res
pons
e to
avo
id f
inan
cial
ris
k w
ith th
e as
sist
ance
of
finan
cial
risk
exp
erts
to e
ffec
t ris
k m
anag
emen
t. 1)
M
arke
t ris
k Th
e C
ompa
ny is
prim
arily
exp
osed
to th
e fin
anci
al r
isks
of
chan
ges
in f
orei
gn c
urre
ncy
exch
ange
ra
tes
and
inte
rest
rat
es. T
he C
ompa
ny e
nter
ed in
to d
eriv
ativ
e fin
anci
al in
stru
men
ts to
man
age
its
expo
sure
to fo
reig
n cu
rren
cy ri
sk a
nd in
tere
st ra
te ri
sk.
The
Com
pany
ent
ers
into
for
war
d co
ntra
cts,
fore
ign
curr
ency
opt
ion
cont
ract
s, an
d in
tere
st s
wap
co
ntra
cts w
ith fa
ir va
lues
that
are
hig
hly
nega
tivel
y co
rrel
ated
to th
e fa
ir va
lues
of h
edge
d ite
ms a
nd
eval
uate
s the
hed
ging
eff
ectiv
enes
s of t
hese
inst
rum
ents
per
iodi
cally
.
- 60
-
223
a)
Fore
ign
curr
ency
risk
Th
e C
ompa
ny e
nter
s in
to c
urre
ncy
optio
n to
hed
ge a
gain
st t
he r
isks
of
chan
ges
in r
elat
ed
exch
ange
rate
s, an
d en
ters
into
fore
ign
exch
ange
forw
ard
cont
ract
s to
hed
ge a
gain
st th
e ris
ks o
f ch
ange
s in
the
rela
ted
exch
ange
rate
s of f
orei
gn-c
urre
ncy
asse
ts, l
iabi
litie
s and
com
mitm
ents
. Se
nsiti
vity
ana
lysi
s Th
e C
ompa
ny is
mai
nly
expo
sed
to th
e U
.S. d
olla
r. Th
e fo
llow
ing
deta
ils t
he C
ompa
ny’s
sen
sitiv
ity t
o a
one
dolla
r in
crea
se a
nd d
ecre
ase
in t
he
New
Tai
wan
dol
lar
(the
func
tiona
l cu
rren
cy)
agai
nst
the
U.S
. dol
lar.
The
sens
itivi
ty a
mou
nt
used
whe
n re
porti
ng f
orei
gn c
urre
ncy
risk
inte
rnal
ly to
key
man
agem
ent p
erso
nnel
and
whi
ch
repr
esen
ts m
anag
emen
t’s a
sses
smen
t of
the
rea
sona
bly
poss
ible
cha
nge
in f
orei
gn e
xcha
nge
rate
s is
one
dol
lar.
The
sens
itivi
ty a
naly
sis
incl
uded
onl
y ou
tsta
ndin
g fo
reig
n cu
rren
cy
deno
min
ated
mon
etar
y ite
ms
and
fore
ign
exch
ange
for
war
d co
ntra
cts
desi
gnat
ed a
s ca
sh f
low
he
dges
and
adj
usts
thei
r tra
nsla
tion
at th
e en
d of
the
repo
rting
per
iod
for t
he N
ew T
aiw
an d
olla
r st
reng
then
ing
or w
eake
ning
one
dol
lar a
gain
st th
e U
.S. d
olla
r. W
hen
New
Tai
wan
dol
lars
incr
ease
one
dol
lar a
gain
st U
.S. d
olla
rs a
nd a
ll ot
her v
aria
bles
wer
e he
ld c
onst
ant,
ther
e w
ould
be
an i
ncre
ase
in p
re-ta
x pr
ofit
of $
126,
947
thou
sand
and
oth
er
com
preh
ensi
ve i
ncom
e of
$1,
155,
267
thou
sand
for
the
yea
r en
ded
Dec
embe
r 31
, 20
20.
A
decr
ease
in
pre-
tax
prof
it of
$40
,775
tho
usan
d an
d in
crea
se i
n pr
e-ta
x ot
her
com
preh
ensi
ve
inco
me
of $
1,62
9,22
3 th
ousa
nd fo
r the
yea
r end
ed D
ecem
ber 3
1, 2
019.
Th
e C
ompa
ny’s
hed
ging
stra
tegy
is to
ent
er in
to f
orei
gn e
xcha
nge
forw
ard
cont
ract
s to
avo
id
exch
ange
rat
e ex
posu
re o
f its
for
eign
cur
renc
y de
nom
inat
ed r
ecei
pts
and
paym
ents
and
to
man
age
exch
ange
rate
exp
osur
e of
its
airc
raft
prep
aym
ents
in th
e ne
xt y
ear.
Thos
e tra
nsac
tions
ar
e de
sign
ated
as
cash
flo
w h
edge
s. W
hen
fore
cast
ed p
urch
ases
act
ually
tak
e pl
ace,
bas
is
adju
stm
ents
are
mad
e to
the
initi
al c
arry
ing
amou
nts o
f hed
ged
item
s. Fo
r th
e he
dges
of
high
ly p
roba
ble
airc
raft
prep
aym
ents
, as
the
criti
cal t
erm
s (i.
e. th
e no
tiona
l am
ount
, use
ful l
ife a
nd u
nder
lyin
g as
set)
of th
e fo
reig
n ex
chan
ge f
orw
ard
cont
ract
s an
d th
eir
corr
espo
ndin
g he
dged
item
s ar
e th
e sa
me,
the
Com
pany
per
form
s a
qual
itativ
e as
sess
men
t of
the
effe
ctiv
enes
s, an
d it
is e
xpec
ted
that
the
valu
e of
the
fore
ign
exch
ange
forw
ard
cont
ract
s and
th
e va
lue
of th
e co
rres
pond
ing
hedg
ed it
ems w
ill sy
stem
atic
ally
cha
nge
in th
e op
posi
te d
irect
ion
in re
spon
se to
mov
emen
ts in
the
unde
rlyin
g ex
chan
ge ra
tes.
The
follo
win
g ta
ble
sum
mar
izes
the
info
rmat
ion
rela
ting
to th
e he
dgin
g of
fore
ign
curr
ency
risk
. Fo
r the
info
rmat
ion
rela
ted
to le
ase
cont
ract
as h
edgi
ng in
stru
men
ts, p
leas
e re
fer t
o N
ote
20.
D
ecem
ber 3
1, 2
020
N
otio
nal
Line
Item
in
C
arry
ing
Am
ount
H
edgi
ng In
stru
men
ts
C
urre
ncy
A
mou
nt
M
atur
ity
Fo
rwar
d R
ate
B
alan
ce S
heet
Ass
et
Li
abili
ty
Ca
sh fl
ow h
edge
A
viat
ion
fuel
- fo
rwar
d ex
chan
ge c
ontra
cts
N
TD/U
SD
N
TD 1
42,0
45/
USD
5,0
00
20
21.1
.29-
20
21.5
.28
29
.4-2
9.8
Fi
nanc
ial a
sset
s for
he
dgin
g - c
urre
nt/
liabi
litie
s for
hed
ging
- cu
rren
t
$
-
$
5,
794
The
abov
emen
tione
d he
dgin
g in
stru
men
ts a
pplie
d he
dge
acco
untin
g. T
he b
ook
valu
e of
oth
er
equi
ty fo
r eac
h he
dgin
g ite
m (a
viat
ion
fuel
) was
$(5
,794
) tho
usan
d.
- 61
-
For t
he y
ear e
nded
Dec
embe
r 31,
202
0 C
ompr
ehen
sive
Inco
me
Hed
ging
Gai
n R
ecog
nize
d in
O
ther
C
ompr
ehen
sive
In
com
e
Am
ount
R
ecla
ssifi
ed to
Pr
ofit
and
Los
s an
d th
e A
djus
ted
Lin
e It
em
C
ash
flow
hed
ge
Avi
atio
n fu
el
$
4,
367
$
(1
6,61
6)
Airc
raft
prep
aym
ents
(101
,570
)
-
Mai
nten
ance
cos
t
-
5
$
(97,
203)
$
(16,
611)
Fo
r th
e ye
ar e
nded
Dec
embe
r 31
, 20
20,
the
amou
nt o
f he
dgin
g in
stru
men
ts r
ecla
ssifi
ed t
o pr
epay
men
ts fo
r equ
ipm
ent w
as $
119,
878
thou
sand
. D
ecem
ber 3
1, 2
019
N
otio
nal
Line
Item
in
C
arry
ing
Am
ount
H
edgi
ng In
stru
men
ts
C
urre
ncy
A
mou
nt
M
atur
ity
Fo
rwar
d R
ate
B
alan
ce S
heet
Ass
et
Li
abili
ty
Ca
sh fl
ow h
edge
A
viat
ion
fuel
- fo
rwar
d ex
chan
ge c
ontra
cts
N
TD/U
SD
N
TD66
0,66
1/
USD
22,0
00
20
20.2
.27-
20
20.1
1.30
29.7
-30.
7
Fina
ncia
l ass
ets f
or
hedg
ing
- cur
rent
/ lia
bilit
ies f
or h
edgi
ng -
curr
ent
$
32
$ 1
0,19
3
Airc
raft
rent
als -
fo
rwar
d ex
chan
ge
cont
ract
s
N
TD/U
SD
N
TD1,
411,
411/
U
SD47
,000
2020
.11.
4
29.6
-30.
5
Fina
ncia
l ass
ets f
or
hedg
ing
- cur
rent
/ lia
bilit
ies f
or h
edgi
ng -
curr
ent
77
18,3
85
The
abov
emen
tione
d he
dgin
g in
stru
men
ts a
pplie
d he
dge
acco
untin
g. T
he b
ook
valu
e of
oth
er
equi
ty f
or e
ach
hedg
ing
item
(av
iatio
n fu
el a
nd a
ircra
ft re
ntal
s in
U.S
. dol
lars
) w
as $
(10,
161)
th
ousa
nd a
nd $
(18,
308)
thou
sand
, res
pect
ivel
y.
For t
he y
ear e
nded
Dec
embe
r 31,
201
9 C
ompr
ehen
sive
Inco
me
Hed
ging
Gai
n R
ecog
nize
d in
O
ther
C
ompr
ehen
sive
In
com
e
Am
ount
R
ecla
ssifi
ed to
Pr
ofit
and
Los
s an
d th
e A
djus
ted
Lin
e It
em
C
ash
flow
hed
ge
A
ircra
ft re
ntal
s
$ (2
2,21
4)
$
28,
374
(N
ote)
A
viat
ion
fuel
(1
0,16
1)
(53)
Airc
raft
prep
aym
ents
(17,
705)
-
$
(50,
080)
$ 2
8,32
1
Not
e:
Dec
reas
e in
ope
ratin
g co
sts o
r for
eign
exc
hang
e lo
ss.
For
the
year
end
ed D
ecem
ber
31,
2019
, th
e am
ount
of
hedg
ing
inst
rum
ents
rec
lass
ified
to
prep
aym
ents
for e
quip
men
t was
$(6
03) t
hous
and.
- 62
-
224
b)
Inte
rest
rate
risk
Th
e C
ompa
ny e
nter
s in
to in
tere
st s
wap
con
tract
s to
hed
ge a
gain
st t
he r
isks
on
chan
ge i
n ne
t lia
bilit
ies i
nter
est r
ates
.
The
risk
is m
anag
ed b
y th
e C
ompa
ny t
hrou
gh m
aint
aini
ng a
n ap
prop
riate
mix
of
fixed
and
flo
atin
g ra
te b
orro
win
gs,
and
usin
g in
tere
st r
ate
swap
con
tract
s an
d fo
rwar
d in
tere
st r
ate
cont
ract
s. Th
e ca
rryi
ng a
mou
nt o
f the
Com
pany
’s fi
nanc
ial l
iabi
litie
s w
ith e
xpos
ure
to in
tere
st ra
tes
at th
e en
d of
the
repo
rting
per
iod
wer
e as
follo
ws.
Dec
embe
r 31
20
20
20
19
Fa
ir va
lue
inte
rest
rate
risk
$
63,0
08,6
37
$
83
,350
,312
C
ash
flow
inte
rest
rate
risk
10
2,60
1,08
7
73
,930
,965
Se
nsiti
vity
ana
lysi
s Th
e se
nsiti
vity
ana
lyse
s be
low
wer
e de
term
ined
bas
ed o
n th
e Co
mpa
ny’s
exp
osur
e to
inte
rest
rate
s fo
r bot
h de
rivat
ives
and
non
-der
ivat
ive
inst
rum
ents
at t
he e
nd o
f the
repo
rting
per
iod.
For
flo
atin
g ra
te l
iabi
litie
s, th
e an
alys
is w
as p
repa
red
assu
min
g th
e am
ount
of
the
liabi
lity
outs
tand
ing
at th
e en
d of
the
repo
rting
per
iod
was
out
stan
ding
for t
he w
hole
yea
r. O
ne y
ard
(25
basi
s) i
ncre
ase
or d
ecre
ase
was
use
d w
hen
repo
rting
int
eres
t ra
te r
isk
inte
rnal
ly t
o ke
y m
anag
emen
t pe
rson
nel
and
repr
esen
ts m
anag
emen
t’s a
sses
smen
t of
the
rea
sona
bly
poss
ible
ch
ange
in in
tere
st ra
tes.
H
ad in
tere
st r
ates
incr
ease
d by
one
yar
d (2
5 ba
sis)
and
all
othe
r va
riabl
es b
een
held
con
stan
t, th
e C
ompa
ny’s
pre
-tax
prof
it fo
r th
e ye
ar e
nded
Dec
embe
r 31
, 202
0 w
ould
hav
e de
crea
sed
by
$256
,503
thou
sand
. H
ad in
tere
st r
ates
incr
ease
d by
one
yar
d (2
5 ba
sis)
and
all
othe
r va
riabl
es b
een
held
con
stan
t, th
e C
ompa
ny’s
pre
-tax
prof
it fo
r th
e ye
ar e
nded
Dec
embe
r 31
, 201
9 w
ould
hav
e de
crea
sed
by
$184
,827
thou
sand
.
c)
Oth
er p
rice
risk
Th
e C
ompa
ny w
as e
xpos
ed t
o fu
el p
rice
risk
on i
ts p
urch
ase
of a
viat
ion
fuel
. The
Com
pany
en
ters
into
fuel
swap
con
tract
s to
hedg
e ag
ains
t adv
erse
risk
s on
fuel
pric
e ch
ange
s.
Dec
embe
r 31,
202
0
Not
iona
l
Li
ne It
em in
Car
ryin
g A
mou
nt
Hed
ging
Inst
rum
ent
C
urre
ncy
A
mou
nt
M
atur
ity
Fo
rwar
d R
ate
B
alan
ce S
heet
Ass
et
Li
abili
ty
Ca
sh fl
ow h
edge
s - fu
el
optio
ns
U
SD
-
-
-
Fi
nanc
ial a
sset
s for
he
dgin
g - c
urre
nt/
liabi
litie
s for
hed
ging
- cu
rren
t
$
-
$
-
The
abov
emen
tione
d he
dgin
g in
stru
men
ts a
pplie
d he
dge
acco
untin
g. T
he b
ook
valu
e of
oth
er
equi
ty fo
r eac
h he
dgin
g ite
m (f
uel p
aym
ents
) was
$0.
- 63
-
For t
he y
ear e
nded
Dec
embe
r 31,
202
0 C
ompr
ehen
sive
Inco
me
Hed
ging
Gai
n (L
oss)
R
ecog
nize
d in
O
ther
C
ompr
ehen
sive
In
com
e
Am
ount
R
ecla
ssifi
ed to
Pr
ofit
and
Los
s an
d th
e A
djus
ted
Lin
e It
em
C
ash
flow
hed
ges -
fuel
opt
ions
$
(5,5
24)
$
(52,
853)
(N
ote)
N
ote:
In
crea
se in
ope
ratin
g co
sts.
Dec
embe
r 31,
201
9
Not
iona
l
Li
ne It
em in
Car
ryin
g A
mou
nt
Hed
ging
Inst
rum
ent
C
urre
ncy
A
mou
nt
M
atur
ity
Fo
rwar
d R
ate
B
alan
ce S
heet
Ass
et
Li
abili
ty
Ca
sh fl
ow h
edge
s - fu
el
optio
ns
U
SD
N
TD5,
524
20
20.3
.31-
20
20.1
2.31
USD
49.6
5-
USD
80.7
5
Fina
ncia
l ass
ets f
or
hedg
ing
- cur
rent
/ lia
bilit
ies f
or h
edgi
ng -
curr
ent
$
9,47
9
$
3,
955
The
abov
emen
tione
d he
dgin
g in
stru
men
ts a
pplie
d he
dge
acco
untin
g. T
he b
ook
valu
e of
oth
er
equi
ty fo
r eac
h he
dgin
g ite
m (f
uel p
aym
ents
) was
$5,
524
thou
sand
. Fo
r the
yea
r end
ed D
ecem
ber 3
1, 2
019
Com
preh
ensi
ve In
com
e
Hed
ging
Gai
n (L
oss)
R
ecog
nize
d in
O
ther
C
ompr
ehen
sive
In
com
e
Am
ount
R
ecla
ssifi
ed to
Pr
ofit
and
Los
s an
d th
e A
djus
ted
Lin
e It
em
C
ash
flow
hed
ges -
fuel
opt
ions
$
623
$
(13,
597)
(N
ote)
N
ote:
In
crea
se in
ope
ratin
g co
sts.
Sens
itivi
ty a
naly
sis
The
sens
itivi
ty a
naly
sis
belo
w w
as d
eter
min
ed b
ased
on
the
expo
sure
to f
uel p
rice
risks
at t
he
end
of th
e re
porti
ng p
erio
d.
For
the
Yea
r E
nded
Dec
embe
r 31
20
20
20
19
Pr
e-ta
x Pr
ofit
Incr
ease
(D
ecre
ase)
Oth
er
Com
pre-
he
nsiv
e In
com
e In
crea
se
(Dec
reas
e)
Pre-
tax
Prof
it In
crea
se
(Dec
reas
e)
Oth
er
Com
pre-
he
nsiv
e In
com
e In
crea
se
(Dec
reas
e)
Fu
el p
rice
incr
ease
of
5%
$
1,
479
$
-
$
-
$
7,
973
Fuel
pric
e de
crea
se o
f 5%
(1
,479
)
-
-
-
- 64
-
225
2)
Cre
dit r
isk
C
redi
t ris
k re
fers
to th
e ris
k th
at a
cou
nter
party
will
def
ault
on it
s co
ntra
ctua
l obl
igat
ions
resu
lting
in
fin
anci
al l
oss
to t
he C
ompa
ny.
The
Com
pany
’s c
redi
t ris
k, p
rimar
ily c
omes
fro
m a
ccou
nts
rece
ivab
le g
ener
ated
fro
m o
pera
ting
activ
ities
, ban
k de
posi
ts g
ener
ated
fro
m i
nves
ting
activ
ities
, fix
ed in
vest
men
t inc
ome
and
othe
r fin
anci
al in
stru
men
ts. O
pera
tion
rela
ted
cred
it ris
k an
d fin
anci
al
cred
it ris
k ar
e m
anag
ed se
para
tely
.
Ope
ratio
n - r
elat
ed c
redi
t ris
k Th
e C
ompa
ny h
as e
stab
lishe
d pr
oced
ures
to m
anag
emen
t ope
ratio
ns re
late
d cr
edit
risk
to m
aint
ain
the
qual
ity o
f acc
ount
s rec
eiva
ble.
To
ass
ess i
ndiv
idua
l cus
tom
ers,
the
Com
pany
con
side
r int
o th
e fin
anci
al c
ondi
tion
of th
e cu
stom
ers,
the
cred
it ra
ting
agen
cy ra
ting,
the
Com
pany
’s in
tern
al c
redi
t rat
ing,
tran
sact
ion
hist
ory
and
curr
ent
econ
omic
con
ditio
ns a
nd m
any
othe
r fa
ctor
s th
at m
ay a
ffec
t th
e re
paym
ent.
Som
etim
es,
the
Com
pany
use
s cer
tain
cre
dit e
nhan
cem
ent t
ools
to re
duce
the
cred
it ris
k of
spec
ific
cust
omer
s. Si
nce
the
cust
omer
s of
the
indu
stry
is d
ispe
rsed
and
non
-rela
ted,
the
cred
it ris
k co
ncen
tratio
n is
not
cr
itica
l avi
atio
n.
Fina
ncia
l cre
dit r
isk
Cre
dit r
isk
on b
ank
depo
sits
, inv
estm
ents
inco
me
and
othe
r fin
anci
al in
stru
men
ts a
re m
easu
red
and
mon
itor
by th
e C
ompa
ny’s
fin
ance
dep
artm
ent.
The
Com
pany
’s tr
adin
g pa
rtner
s an
d ot
her
parti
es
wer
e w
ell-p
erfo
rmin
g ba
nks
and
finan
cial
inst
itutio
ns, c
orpo
ratio
ns, a
nd g
over
nmen
t age
ncie
s, an
d so
the
ris
k of
cou
nter
parti
es f
ailin
g to
dis
char
ge a
n ob
ligat
ion
is l
ow;
ther
efor
e, t
here
is
no
sign
ifica
nt c
redi
t ris
k.
Endo
rsem
ents
giv
en b
y th
e C
ompa
ny o
n be
half
of it
s sub
sidi
arie
s can
be
foun
d in
Not
es 3
1(g)
.
3)
Liqu
idity
risk
Th
e ob
ject
ive
of th
e C
ompa
ny’s
man
agem
ent o
f liq
uidi
ty is
to m
aint
ain
cash
and
cas
h eq
uiva
lent
s su
ffic
ient
for
ope
ratin
g pu
rpos
es, m
arke
tabl
e se
curit
ies
with
hig
h liq
uidi
ty a
nd lo
an c
omm
itmen
ts
that
are
suff
icie
nt to
ens
ure
that
the
Com
pany
has
ade
quat
e fin
anci
al fl
exib
ility
. Li
quid
ity a
nd in
tere
st ri
sk ra
te ta
ble
The
follo
win
g ta
ble
show
s th
e re
mai
ning
con
tract
ual m
atur
ity a
naly
sis
of th
e C
ompa
ny’s
fina
ncia
l lia
bilit
ies
with
agr
eed-
upon
repa
ymen
t per
iods
, whi
ch w
ere
base
d on
the
date
the
Com
pany
may
be
requ
ired
to p
ay th
e fir
st re
paym
ent a
nd fi
nanc
ial l
iabi
litie
s is
eva
luat
ed b
ased
on
undi
scou
nted
cas
h flo
ws,
incl
udin
g ca
sh fl
ows o
f int
eres
t and
prin
cipa
l.
Ban
k lo
ans
with
a r
epay
men
t on
dem
and
clau
se w
ere
incl
uded
in th
e se
cond
col
umn
of th
e ta
ble
belo
w r
egar
dles
s of
whe
ther
or
not
the
bank
s w
ould
cho
ose
to e
xerc
ise
early
the
ir rig
hts
to
repa
ymen
t. Th
e m
atur
ity d
ates
for
oth
er n
on-d
eriv
ativ
e fin
anci
al l
iabi
litie
s w
ere
base
d on
the
ag
reed
-upo
n re
paym
ent
date
s. Th
e C
ompa
ny’s
liq
uidi
ty a
naly
sis
for
its d
eriv
ativ
e fin
anci
al
inst
rum
ents
is
also
sho
wn
in t
he f
ollo
win
g ta
ble.
The
tab
le w
as b
ased
on
the
undi
scou
nted
co
ntra
ctua
l net
cas
h in
flow
s an
d ou
tflow
s on
der
ivat
ive
inst
rum
ents
that
set
tle o
n a
net b
asis
, and
th
e un
disc
ount
ed g
ross
cas
h in
flow
s and
out
flow
s on
thos
e de
rivat
ives
that
requ
ire g
ross
settl
emen
t. W
hen
the
amou
nt p
ayab
le o
r rec
eiva
ble
is n
ot fi
xed,
the
amou
nt d
iscl
osed
has
bee
n de
term
ined
by
refe
renc
e to
the
pro
ject
ed i
nter
est
rate
s as
illu
stra
ted
by y
ield
cur
ves
at t
he e
nd o
f th
e re
porti
ng
perio
d.
- 65
-
Dec
embe
r 31,
202
0
The
Wei
ghte
d A
vera
ge
Eff
ectiv
e In
tere
st R
ate
(%)
L
ess t
han
1 Y
ear
1
to 5
Yea
rs
O
ver
5 Y
ears
Fi
nanc
e le
ase
liabi
litie
s
0.13
55
$
91
5,89
7
$
2,77
8,98
4
$
9,92
9,84
2 Fl
oatin
g in
tere
st ra
te
liabi
litie
s
0.91
02
15,5
59,4
92
54,8
22,4
66
14,7
52,3
47
Hed
ging
inst
rum
ents
0.25
41
9,24
9,60
9
32
,978
,809
1,
815,
449
Bon
ds p
ayab
le
2.
4622
12
,685
,204
9,
303,
608
1,28
0,77
9
$
38,4
10,2
02
$
99
,883
,867
$
27,7
78,4
17
Dec
embe
r 31,
201
9
The
Wei
ghte
d A
vera
ge
Eff
ectiv
e In
tere
st R
ate
(%)
L
ess t
han
1 Y
ear
1
to 5
Yea
rs
O
ver
5 Y
ears
Fi
nanc
e le
ase
liabi
litie
s
0.14
48
$
91
4,41
9
$
3,36
2,18
1
$
10,4
51,0
21
Floa
ting
inte
rest
rate
lia
bilit
ies
0.
9576
14
,284
,090
34
,457
,400
14
,787
,869
H
edgi
ng in
stru
men
ts
3.
1131
10
,060
,822
39
,729
,062
6,
373,
333
Bon
ds p
ayab
le
2.
5273
10
,823
,905
19
,871
,174
3,
383,
401
$
36
,083
,236
$
97,4
19,8
17
$
34
,995
,624
Lo
an c
omm
itmen
ts
Dec
embe
r 31
20
20
20
19
U
nuse
d ba
nk lo
an li
mit
(uns
ecur
ed)
$
21
,559
,000
$
18,4
22,0
00
- 66
-
226
31.
RE
LA
TE
D-P
AR
TY
TR
AN
SAC
TIO
NS
Exce
pt f
or th
e di
sclo
sure
s st
ated
in o
ther
not
es, t
rans
actio
ns b
etw
een
the
Com
pany
and
its
rela
ted
parti
es
are
disc
lose
d be
low
: a.
R
elat
ed p
artie
s’ n
ames
and
rela
tions
hips
Nam
e
Rel
atio
nshi
p w
ith th
e C
ompa
ny
Taiw
an A
ircar
go T
erm
inal
Com
pany
S
ubsi
diar
y Ta
oyua
n In
tern
atio
nal A
irpor
t Ser
vice
Co.
, Ltd
. S
ubsi
diar
y Sa
bre
Trav
el N
etw
ork
(Tai
wan
), Lt
d.
Sub
sidi
ary
Taiw
an A
irpor
t Ser
vice
Co.
, Ltd
. S
ubsi
diar
y Ta
iwan
Airp
ort S
ervi
ce (S
amoa
) S
ubsi
diar
y D
ynas
ty A
erot
ech
Inte
rnat
iona
l Cor
p.
Sub
sidi
ary
Yes
trip
Sub
sidi
ary
Glo
bal S
ky E
xpre
ss
Sub
sidi
ary
Man
darin
Airl
ines
S
ubsi
diar
y C
AL
Park
S
ubsi
diar
y C
AL
Hot
el C
o., L
td.
Sub
sidi
ary
CA
L-A
sia
Inve
stm
ent
Sub
sidi
ary
Dyn
asty
Hol
iday
s, In
c.
Ass
ocia
te (b
ecom
e as
soci
ate
in Ja
nuar
y 20
19)
CA
L-D
ynas
ty In
tern
atio
nal I
nc.
Sub
sidi
ary
Tige
rair
Taiw
an C
o., L
td.
Sub
sidi
ary
Taiw
an A
ircra
ft M
aint
enan
ce a
nd E
ngin
eerin
g C
o., L
td.
Sub
sidi
ary
Kao
hsiu
ng C
ater
ing
Serv
ices
S
ubsi
diar
y
Chi
na A
ircra
ft Se
rvic
e A
ssoc
iate
A
irpor
t Air
Car
go T
erm
inal
(Xia
men
) Co.
, Ltd
. A
ssoc
iate
A
irpor
t Air
Car
go S
ervi
ce (X
iam
en) C
o., L
td.
Ass
ocia
te
East
ern
Uni
ted
Inte
rnat
iona
l Log
istic
s (H
ong
Kon
g)
Ass
ocia
te
Chi
na P
acifi
c C
ater
ing
Serv
ices
J
oint
ven
ture
inve
stm
ent
Chi
na P
acifi
c La
undr
y Se
rvic
es
Joi
nt v
entu
re in
vest
men
t N
OR
DA
M A
sia
Ltd.
J
oint
ven
ture
inve
stm
ent
Del
ica
Inte
rnat
iona
l Co.
, Ltd
. J
oint
ven
ture
inve
stm
ent
Chi
na A
viat
ion
Dev
elop
men
t Fou
ndat
ion
Dire
ctor
of t
he C
ompa
ny a
nd m
ajor
sh
areh
olde
r O
ther
s D
irect
or, k
ey m
anag
emen
t per
sonn
el,
chai
rman
, gen
eral
man
ager
of t
he
Com
pany
, spo
use
and
seco
nd-d
egre
e re
lativ
e b.
O
pera
ting
inco
me
Fo
r th
e Y
ear
End
ed D
ecem
ber
31
Acc
ount
Item
s
Rel
ated
Par
ty T
ype
20
20
20
19
Oth
er in
com
e S
ubsi
diar
y
$
696,
100
$
2,5
77,0
39
M
ajor
shar
ehol
der o
f the
C
ompa
ny
$
5,
097
$
25
,457
A
ssoc
iate
$
122
$
1,
239
J
oint
ven
ture
inve
stm
ent
$
22
,445
$
42,4
57
- 67
-
c.
Purc
hase
s
F
or th
e Y
ear
End
ed D
ecem
ber
31
Rel
ated
Par
ty T
ype
20
20
20
19
Su
bsid
iary
$ 2
,611
,679
$ 3
,915
,258
M
ajor
shar
ehol
der o
f the
Com
pany
$
11,4
17
$
56
,474
A
ssoc
iate
$
457,
005
$
41
4,10
6 Jo
int v
entu
re in
vest
men
t
$
516,
347
$
1,9
11,0
91
d.
A
ccou
nts r
ecei
vabl
e - r
elat
ed p
artie
s (ge
nera
ted
by o
pera
tions
)
Dec
embe
r 31
R
elat
ed P
arty
Typ
e
2020
2019
Subs
idia
ry
$
99
,757
$
222,
038
Join
t ven
ture
inve
stm
ent
1,66
7
7,
760
Maj
or sh
areh
olde
r of t
he C
ompa
ny
-
2,
588
$
10
1,42
4
$
232,
386
The
rece
ivab
les
are
not g
uara
ntee
d, a
nd th
ere
is n
o al
low
ance
for d
oubt
ful a
ccou
nts
rela
ted
to a
ccou
nts
rece
ivab
le -
rela
ted
parti
es. T
he p
aym
ent p
erio
ds o
f suc
h ac
coun
ts w
ere
with
in 3
0 to
90
days
, and
ther
e ar
e no
ove
rdue
pay
men
ts.
e.
A
ccou
nts p
ayab
le -
rela
ted
parti
es (g
ener
ated
by
oper
atio
ns)
D
ecem
ber
31
Rel
ated
Par
ty T
ype
20
20
20
19
Su
bsid
iary
$
459,
667
$
92
7,41
9 A
ssoc
iate
52
,187
51
,333
Jo
int v
entu
re in
vest
men
t
76
,380
48
4,70
0 M
ajor
shar
ehol
der o
f the
Com
pany
-
5,98
2
$
588,
234
$
1,4
69,4
34
The
rem
aini
ng b
alan
ce o
f not
es a
nd a
ccou
nts p
ayab
le -
rela
ted
parti
es w
ill b
e pa
id in
cas
h if
they
are
not
se
cure
d.
f.
Leas
es o
f pro
perti
es (o
pera
ting
leas
es)
The
Com
pany
ren
ted
out p
lane
s to
Man
darin
Airl
ines
und
er a
n op
erat
ing
leas
e co
ntra
ct. T
he m
onth
ly
rent
rec
eive
d is
bas
ed o
n fli
ght h
ours
. In
2020
and
201
9, th
e re
ntal
s re
ceiv
ed a
mou
nted
to $
384,
080
thou
sand
and
$1,
624,
568
thou
sand
, res
pect
ivel
y.
Und
er a
n op
erat
ing
leas
e ag
reem
ent,
the
Com
pany
rent
ed fl
ight
trai
ning
mac
hine
s an
d fli
ght s
imul
ator
s fr
om C
hina
Avi
atio
n D
evel
opm
ent F
ound
atio
n to
trai
n pi
lots
. The
Com
pany
pai
d th
e re
ntal
bas
ed o
n us
age
hour
s. In
202
0 an
d 20
19,
the
Com
pany
pai
d re
ntal
s of
abo
ut $
11,4
17 t
hous
and
and
$56,
474
thou
sand
, res
pect
ivel
y.
In M
arch
201
0, th
e C
ompa
ny s
igne
d a
year
ly re
new
able
ope
ratin
g le
ase
agre
emen
t to
use
the
Ope
ratin
g an
d A
viat
ion
Hea
dqua
rters
bui
ldin
g of
the
Taiw
an T
aoyu
an I
nter
natio
nal A
irpor
t with
CA
L Pa
rk. I
n 20
20 a
nd 2
019,
the
Com
pany
pai
d re
ntal
s of $
207,
003
and
$231
,288
thou
sand
, res
pect
ivel
y.
- 68
-
227
g.
Endo
rsem
ents
and
gua
rant
ees
D
ecem
ber
31
2020
2019
Aut
hori
zed
Am
ount
Act
ual
Am
ount
Use
d
Aut
hori
zed
Am
ount
Act
ual
Am
ount
Use
d Th
e C
ompa
ny
C
AL
Park
$ 3
,850
,000
$ 1
,892
,540
$ 3
,850
,000
$ 2
,129
,400
Ta
iwan
Air
Car
go T
erm
inal
-
-
1,
080,
000
- Ti
gera
ir Ta
iwan
2,
656,
591
265,
062
3,01
2,66
8
68
5,44
4 Ta
iwan
Air
Cra
ft M
aint
enan
ce
2,00
0,00
0
1,
336,
000
2,00
0,00
0
1,
279,
827
h.
Bon
ds p
ayab
le -
rela
ted
parti
es
R
elat
ed p
artie
s th
at in
vest
ed in
the
first
issu
e of
uns
ecur
ed b
onds
in 2
016
(Not
e 19
) are
sum
mar
ized
as
follo
ws:
Dec
embe
r 31
, 202
0
Rel
ated
Par
ty
U
nits
Agg
rega
te
Par/
Dol
lars
Th
e fir
st is
sue
of u
nsec
ured
bon
ds in
201
6
Man
darin
Airl
ines
125
$
12
5,00
0 Sa
bre
Trav
el N
etw
ork
(Tai
wan
)
25
25,0
00
In 2
020,
inte
rest
exp
ense
was
$2,
499
thou
sand
. Thi
s bon
ds p
ayab
le w
ill b
e pa
id o
ff in
May
202
1. A
s of
Dec
embe
r 31,
202
0 th
e in
tere
st p
ayab
le w
as $
1,07
1 th
ousa
nd.
i.
Com
pens
atio
n of
key
man
agem
ent p
erso
nnel
For
the
Yea
r E
nded
Dec
embe
r 31
20
20
20
19
Sh
ort-t
erm
em
ploy
ee b
enef
its
$
33
,376
$
39,6
93
Post
-em
ploy
men
t ben
efits
2,
525
2,36
2
$
35,9
01
$
42
,055
Th
e re
mun
erat
ion
of d
irect
ors
and
key
exec
utiv
es w
as d
eter
min
ed b
y th
e re
mun
erat
ion
com
mitt
ee
havi
ng re
gard
to th
e pe
rfor
man
ce o
f ind
ivid
uals
and
mar
ket t
rend
s.
32.
PLE
DG
ED
ASS
ET
S Th
e fo
llow
ing
asse
ts w
ere
pled
ged
or m
ortg
aged
as
colla
tera
l for
long
-term
ban
k lo
ans,
leas
e ob
ligat
ions
an
d bu
sine
ss tr
ansa
ctio
ns:
Dec
embe
r 31
20
20
20
19
Pr
oper
ty, p
lant
and
equ
ipm
ent
$
30,1
13,1
71
$
26
,956
,631
R
ight
-of-
use
asse
t
54
,555
,761
64
,262
,830
$
84,6
68,9
32
$
91
,219
,461
- 69
-
33
. C
OM
MIT
ME
NT
S A
ND
CO
NT
ING
EN
T L
IAB
ILIT
IES
As
of D
ecem
ber 3
1, 2
020,
exc
ept f
or th
e di
sclo
sure
s st
ated
in o
ther
not
es, t
he C
ompa
ny h
ad c
omm
itmen
ts
and
cont
inge
nt li
abili
ties a
s fol
low
s: a.
In
Oct
ober
201
9, t
he C
ompa
ny s
igne
d a
cont
ract
with
Airb
us S
.A.S
. to
pur
chas
e el
even
A32
1neo
ai
rcra
ft an
d an
opt
ion
to p
urch
ase
five
A32
1neo
airc
raft.
The
tot
al li
st p
rice
of t
he e
leve
n ai
rcra
ft is
U
S$1,
676,
413
thou
sand
, an
d th
e lis
t pr
ice
of t
he o
ptio
n to
pur
chas
e fiv
e ai
rcra
ft is
US$
769,
922
thou
sand
. The
exp
ecte
d de
liver
y pe
riods
of t
he e
leve
n ai
rcra
ft ar
e fr
om 2
024
to 2
026.
As
of D
ecem
ber
31, 2
020,
the
list
pric
e of
the
four
teen
airc
raft
had
been
pai
d in
the
amou
nt o
f U
S$32
,578
tho
usan
d (r
ecog
nize
d as
pre
paym
ents
for
airc
raft)
. In
Oct
ober
201
9, t
he C
ompa
ny s
igne
d a
cont
ract
with
In
tern
atio
nal A
ero
Engi
nes
Com
pany
to p
urch
ase
four
bac
kup
engi
nes
of A
321n
eo. T
he to
tal l
ist p
rice
of th
e fo
ur e
ngin
es is
US$
60,2
89 th
ousa
nd. T
he C
ompa
ny a
lso
sign
ed re
late
d ai
rcra
ft re
ntal
agr
eem
ent,
plea
se re
fer t
o N
ote
20 fo
r det
ails
. b.
In
Jul
y an
d A
ugus
t 201
9, th
e C
ompa
ny s
igne
d a
cont
ract
with
the
Boe
ing
Com
pany
to p
urch
ase
thre
e 77
7F a
ircra
ft an
d ex
erci
sed
the
optio
n to
pur
chas
e th
ree
777F
airc
raft.
The
tota
l lis
t pr
ice
of t
he s
ix
airc
raft
is U
S$2,
320,
315
thou
sand
, and
the
exp
ecte
d de
liver
y pe
riods
are
fro
m 2
020
to 2
023.
As
of
Dec
embe
r 31
, 202
0, tw
o ou
t of
the
six
airc
raft
has
been
del
iver
ed, t
he li
st p
rice
had
been
pai
d in
the
amou
nt o
f US$
122,
186
thou
sand
(rec
ogni
zed
as p
repa
ymen
ts fo
r airc
raft)
, and
the
tota
l lis
t pric
e of
the
rem
aini
ng fo
ur a
ircra
ft is
US$
1,55
2,87
9.
34
. IM
PAC
T O
F C
OV
ID-1
9
Sinc
e th
e ou
tbre
ak o
f th
e C
ovid
-19
in J
anua
ry 2
020,
the
cor
onav
irus
has
beco
me
a pa
ndem
ic.
The
pand
emic
has
now
spr
ead
arou
nd th
e w
orld
and
mos
t cou
ntrie
s ha
ve n
ot re
mov
ed th
eir t
rave
l res
trict
ions
. B
ecau
se th
e nu
mbe
r of i
nbou
nd a
nd o
utbo
und
pass
enge
rs h
as d
ecre
ased
sig
nific
antly
, the
Com
pany
adj
usts
the
prop
ortio
n be
twee
n pa
ssen
ger
airc
raft
and
carg
o ai
rcra
ft us
ed i
n op
erat
ions
to
com
ply
with
the
go
vern
men
t’s e
pide
mic
pre
vent
ion
polic
y an
d ca
ter t
o m
arke
t dem
and.
The
Com
pany
redu
ces t
he fr
eque
ncy
of p
asse
nger
air
serv
ices
that
hav
e be
en s
ever
ely
affe
cted
, use
s th
e pa
ssen
ger
airc
raft
to s
uppo
rt th
e ca
rgo
fligh
t ar
rang
emen
t an
d ex
pand
s th
e fu
nctio
n of
all-
carg
o ai
rcra
ft to
max
imiz
e th
e op
portu
nitie
s fr
om a
ir ca
rgo
busi
ness
. Sin
ce M
arch
202
0, c
argo
has
bec
ome
the
mai
n so
urce
of r
even
ue fo
r the
Com
pany
. Th
e C
ompa
ny c
ontin
ues
to a
djus
t the
res
pons
e m
easu
res
acco
rdin
g to
the
situ
atio
n. In
add
ition
, to
ensu
re
the
adeq
uate
liqu
idity
, the
Com
pany
als
o im
plem
ents
mea
sure
s fo
r hu
man
res
ourc
e m
anag
emen
t suc
h as
po
stpo
ning
the
hirin
g of
new
com
ers,
rela
the
appl
icat
ion
of s
peci
al le
ave,
loos
enin
g th
e re
stric
tions
on
leav
e w
ithou
t pa
y, e
ncou
ragi
ng e
mpl
oyee
s to
tak
e le
ave,
adj
ustin
g w
orki
ng h
ours
and
sal
arie
s, et
c. T
he
Com
pany
’s p
olic
ies
to c
ontro
l spe
ndin
g in
clud
e su
spen
sion
of n
on-u
rgen
t cap
ital e
xpen
ditu
res,
redu
ctio
n in
un
nece
ssar
y ex
pens
es fo
r adm
inis
trativ
e m
anag
emen
t and
sale
s, ne
gotia
tion
with
supp
liers
for a
low
er p
rice
and
post
pone
men
t of p
aym
ents
. In
202
0, b
ecau
se o
f th
e C
ovid
-19,
the
Com
pany
rec
eive
d su
bsid
y of
$1,
251,
632
thou
sand
for
the
airp
ort
land
ing
fees
and
par
king
fee
s, et
c. T
he s
ubsi
dy f
or h
ousi
ng a
nd l
and
rent
al,
and
sala
ry e
xpen
ses
was
$7
45,8
20 th
ousa
nd, r
ecog
nize
d as
ded
uctio
n fr
om o
ther
inco
me
and
expe
nses
.
The
Com
pany
has
obt
aine
d re
lief l
oan
from
the
gove
rnm
ent.
Ref
er to
Not
e 18
for d
etai
ls o
n th
e am
ount
of
loan
and
its a
lloca
tion.
- 70
-
228
35.
SIG
NIF
ICA
NT
ASS
ET
S A
ND
LIA
BIL
ITIE
S D
EN
OM
INA
TE
D IN
FO
RE
IGN
CU
RR
EN
CIE
S Th
e fo
llow
ing
info
rmat
ion
was
agg
rega
ted
by th
e fo
reig
n cu
rren
cies
oth
er th
an fu
nctio
nal c
urre
ncie
s of
the
Com
pany
ent
ities
and
the
exch
ange
rat
es b
etw
een
fore
ign
curr
enci
es a
nd r
espe
ctiv
e fu
nctio
nal c
urre
ncie
s w
ere
disc
lose
d. T
he si
gnifi
cant
ass
ets a
nd li
abili
ties d
enom
inat
ed in
fore
ign
curr
enci
es w
ere
as fo
llow
s: D
ecem
ber 3
1, 2
020
Fore
ign
Cur
renc
ies
(In
Tho
usan
ds)
E
xcha
nge
Rat
e
Car
ryin
g A
mou
nt
Fi
nanc
ial a
sset
s
Mon
etar
y ite
ms
USD
$ 64
0,41
1
28.4
091
$
18
,193
,504
EU
R
18,2
46
34
.843
2
63
5,75
2 H
KD
33
8,88
0
3.66
03
1,24
0,40
3 JP
Y
3,41
7,97
2
0.27
50
939,
942
RM
B
546,
452
4.
3440
2,
373,
786
Fi
nanc
ial l
iabi
litie
s
Mon
etar
y ite
ms
USD
1,
927,
625
28
.409
1
54
,762
,089
EU
R
6,51
3
34.8
432
226,
949
HK
D
72,3
97
3.
6603
26
4,99
4 JP
Y
2,98
6,25
6
0.27
50
821,
220
RM
B
136,
957
4.
3440
59
4,94
1 D
ecem
ber 3
1, 2
019
Fore
ign
Cur
renc
ies
(In
Tho
usan
ds)
E
xcha
nge
Rat
e
Car
ryin
g A
mou
nt
Fi
nanc
ial a
sset
s
Mon
etar
y ite
ms
USD
$
502,
608
30
.030
0
$
15,0
93,3
28
EUR
18
,401
33.6
700
619,
571
HK
D
225,
078
3.
8595
86
8,68
9 JP
Y
5,53
1,84
9
0.27
66
1,53
0,10
9 R
MB
37
1,64
2
4.30
48
1,59
9,84
6
Fina
ncia
l lia
bilit
ies
M
onet
ary
item
s
U
SD
2,17
9,05
6
30.0
300
65,4
37,0
49
EUR
7,
639
33
.670
0
25
7,21
1 H
KD
67
,529
3.85
95
260,
630
JPY
5,
706,
141
0.
2766
1,
578,
319
RM
B
132,
622
4.
3048
57
0,91
3
- 71
-
For t
he y
ears
end
ed D
ecem
ber 3
1, 2
020
and
2019
, the
Com
pany
’s n
et fo
reig
n ex
chan
ge (l
osse
s) g
ains
wer
e $2
59,7
96 th
ousa
nd a
nd $
(262
,610
) tho
usan
d, re
spec
tivel
y. It
is im
prac
tical
to d
iscl
ose
net f
orei
gn e
xcha
nge
gain
s (lo
sses
) by
each
sign
ifica
nt fo
reig
n cu
rren
cy d
ue to
the
varie
ty o
f the
fore
ign
curre
ncy
trans
actio
ns.
36.
AD
DIT
ION
AL
DIS
CL
OSU
RE
S
a.
Follo
win
g ar
e th
e ad
ditio
nal d
iscl
osur
es re
quire
d by
the
Secu
ritie
s and
Fut
ures
Bur
eau
for t
he C
ompa
ny
and
its in
vest
ees:
1) F
inan
cing
pro
vide
d: T
able
1 (a
ttach
ed).
2) E
ndor
sem
ents
/gua
rant
ees p
rovi
ded:
Tab
le 2
(atta
ched
). 3
) Mar
keta
ble
secu
ritie
s hel
d: T
able
3 (a
ttach
ed).
4) M
arke
tabl
e se
curit
ies
acqu
ired
and
disp
osed
of a
t cos
ts or
pric
es o
f at l
east
NT$
300
mill
ion
or 2
0%
of th
e pa
id-in
cap
ital:
Non
e.
5) A
cqui
sitio
ns o
f in
divi
dual
rea
l est
ates
at c
osts
or
pric
e of
at l
east
NT$
100
mill
ion
or 2
0% o
f th
e pa
id-in
cap
ital:
Non
e.
6) D
ispo
sals
of
indi
vidu
al r
eal
esta
tes
at c
osts
or
pric
es o
f at
lea
st N
T$10
0 m
illio
n or
20%
of
the
paid
-in c
apita
l: N
one.
7
) Tot
al p
urch
ases
from
or s
ales
to re
late
d pa
rties
am
ount
ing
to a
t lea
st N
T$10
0 m
illio
n or
20%
of t
he
paid
-in c
apita
l: Ta
ble
4 (a
ttach
ed).
8
) Rec
eiva
bles
fro
m r
elat
ed p
artie
s am
ount
ing
to a
t le
ast
NT$
100
mill
ion
or 2
0% o
f th
e pa
id-in
ca
pita
l: Ta
ble
5 (a
ttach
ed).
9
) Nam
es,
loca
tions
, an
d re
late
d in
form
atio
n of
inv
este
es o
ver
whi
ch t
he C
ompa
ny e
xerc
ises
si
gnifi
cant
influ
ence
: Tab
le 6
(atta
ched
). 10
) Der
ivat
ive
finan
cial
tran
sact
ions
: Not
es 7
and
30.
b.
Inve
stm
ent i
n m
ainl
and
Chi
na: T
able
7 (a
ttach
ed).
c.
Info
rmat
ion
of m
ajor
shar
ehol
ders
: Tab
le 8
(atta
ched
). 37
. SE
GM
EN
T IN
FOR
MA
TIO
N
The
Com
pany
mai
nly
enga
ges
in a
ir tra
nspo
rtatio
n se
rvic
es f
or p
asse
nger
s, ca
rgo
and
othe
rs. T
he m
ajor
re
venu
e-ge
nera
ting
asse
t is
the
fle
et,
whi
ch i
s jo
intly
use
d fo
r pa
ssen
ger
and
carg
o se
rvic
es.
Thus
, th
e C
ompa
ny’s
sol
e re
porta
ble
segm
ent i
s th
e fli
ght s
egm
ent.
For o
pera
ting
segm
ent r
epor
ting
in th
e fin
anci
al
stat
emen
ts,
the
Com
pany
’s
repo
rtabl
e se
gmen
t co
mpr
ises
th
e fli
ght
and
the
non-
fligh
t bu
sine
ss
depa
rtmen
ts.
- 72
-
229
TA
BL
E 1
C
HIN
A A
IRL
INE
S, L
TD
. AN
D S
UB
SID
IAR
IES
FIN
AN
CIN
G P
RO
VID
ED
TO
OT
HE
RS
FOR
TH
E Y
EA
R E
ND
ED
DE
CE
MB
ER
31,
202
0 (I
n T
hous
ands
of N
ew T
aiw
an D
olla
rs, U
nles
s Sta
ted
Oth
erw
ise)
No.
L
ende
r B
orro
wer
Fi
nanc
ial
Stat
emen
t A
ccou
nt
Rel
ated
Pa
rty
Hig
hest
B
alan
ce fo
r th
e Pe
riod
End
ing
Bal
ance
Act
ual
Bor
row
ing
Am
ount
Inte
rest
Rat
e (%
) N
atur
e of
Fi
nanc
ing
Bus
ines
s T
rans
actio
n A
mou
nt
Rea
sons
for
Shor
t-te
rm
Fina
ncin
g
Allo
wan
ce fo
r Im
pair
men
t L
oss
Col
late
ral
Fina
ncin
g L
imit
for
Eac
h B
orro
wer
Agg
rega
te
Fina
ncin
g L
imit
Not
e It
em
Val
ue
1 C
al-D
ynas
ty In
tern
atio
nal
Dyn
asty
Hot
el o
f H
awai
i, In
c.
Not
es re
ceiv
able
Y
$ 10
3,24
4
$ 99
,432
$ 28
,409
2.
25
Shor
t-ter
m
finan
cing
fa
cilit
y is
ne
cess
ary
$
- O
pera
ting
cycl
e ca
pita
l ex
pend
iture
$
-
$
-
$ 14
4,12
8
$ 28
8,25
6
Not
e 1:
Th
e m
axim
um a
mou
nt o
f loa
ns to
oth
ers b
y th
e C
ompa
ny is
up
to 4
0% o
f the
Com
pany
's ne
t wor
th a
s sta
ted
in it
s lat
est f
inan
cial
stat
emen
ts.
Not
e 2:
Th
e m
axim
um a
mou
nt o
f loa
ns to
an
indi
vidu
al c
ount
erpa
rty b
y th
e C
ompa
ny is
up
to 2
0% o
f the
Com
pany
's ne
t wor
th a
s sta
ted
in it
s lat
est f
inan
cial
stat
emen
ts.
230
TA
BL
E 2
C
HIN
A A
IRL
INE
S, L
TD
. AN
D S
UB
SID
IAR
IES
EN
DO
RSE
ME
NT
/GU
AR
AN
TE
E P
RO
VID
ED
FO
R T
HE
YE
AR
EN
DE
D D
EC
EM
BE
R 3
1, 2
020
(In
Tho
usan
ds o
f New
Tai
wan
Dol
lars
, Unl
ess S
tate
d O
ther
wis
e)
No.
E
ndor
sem
ent/
Gua
rant
ee
Prov
ider
Cou
nter
part
y L
imit
on E
ach
Cou
nter
part
y’s
End
orse
men
t/ G
uara
ntee
A
mou
nt
(Not
e 1)
Max
imum
B
alan
ce fo
r th
e Pe
riod
E
ndin
g B
alan
ce
Act
ual
Bor
row
ing
Am
ount
Val
ue o
f C
olla
tera
ls
Prop
erty
, Pla
nt
or E
quip
men
t
Rat
io o
f A
ccum
ulat
ed
Am
ount
of
Col
late
ral t
o N
et E
quity
of
the
Lat
est
Fina
ncia
l St
atem
ent (
%)
Max
imum
C
olla
tera
l/ G
uara
ntee
A
mou
nts
Allo
wab
le
(Not
e 2)
End
orse
men
t/ G
uara
ntee
G
iven
by
Pare
nt
on B
ehal
f of
Subs
idia
ries
End
orse
men
t/ G
uara
ntee
G
iven
by
Subs
idia
ries
on
Beh
alf o
f Par
ent
End
orse
men
t/ G
uara
ntee
G
iven
on
Beh
alf
of C
ompa
nies
in
Mai
nlan
d C
hina
Nam
e N
atur
e of
Rel
atio
nshi
p
0 C
hina
Airl
ines
C
AL
Park
10
0% su
bsid
iary
$ 11
,511
,896
$ 3,
850,
000
$
3,85
0,00
0
$ 1,
892,
540
$
- 6.
69
$
28,7
79,7
41
Y
N
N
(the
“Com
pany
”) T
iger
air T
aiw
an C
o., L
td.
75.8
6% su
bsid
iary
by
dire
ct a
nd in
dire
ct
hold
ings
11,5
11,8
96
3,03
8,19
7
2,
656,
591
265,
062
- 4.
62
28,7
79,7
41
Y
N
N
Taiw
an A
ircra
ft M
aint
enan
ce
and
Engi
neer
ing
Co.
, Ltd
. 10
0% su
bsid
iary
11
,511
,896
2,
000,
000
2,00
0,00
0
1,
336,
000
- 3.
47
28,7
79,7
41
Y
N
N
Not
e 1:
B
ased
on
the
Com
pany
’s g
uide
lines
, the
max
imum
am
ount
of g
uara
ntee
to a
n in
divi
dual
cou
nter
party
is u
p to
20%
of t
he C
ompa
ny’s
shar
ehol
ders
’ equ
ity.
Not
e 2:
B
ased
on
the
Com
pany
’s g
uide
lines
, the
allo
wab
le a
ggre
gate
am
ount
of c
olla
tera
l gua
rant
ee is
up
to 5
0% o
f the
Com
pany
’s sh
areh
olde
rs’ e
quity
. 231
TA
BL
E 3
C
HIN
A A
IRL
INE
S, L
TD
. AN
D S
UB
SID
IAR
IES
MA
RK
ET
AB
LE
SE
CU
RIT
IES
HE
LD
D
EC
EM
BE
R 3
1, 2
020
(In
Tho
usan
ds o
f New
Tai
wan
Dol
lars
, Unl
ess S
tate
d O
ther
wis
e)
Hol
ding
Com
pany
Nam
e M
arke
tabl
e Se
curi
ty T
ype
and
Issu
er/N
ame
Rel
atio
nshi
p w
ith th
e H
oldi
ng
Com
pany
Fi
nanc
ial S
tate
men
t Acc
ount
Dec
embe
r 31
, 202
0
Not
e N
umbe
r of
Sh
ares
/Uni
ts
Car
ryin
g A
mou
nt
Perc
enta
ge o
f O
wne
rshi
p (%
)
Mar
ket V
alue
or
Net
Ass
et
Val
ue
C
hina
Airl
ines
(“Pa
rent
com
pany
”)
Shar
es
Ever
est I
nves
tmen
t Hol
ding
s Ltd
. - o
rdin
ary
shar
es
- Fi
nanc
ial a
sset
s at F
VTO
CI -
non
-cur
rent
1,
359,
368
$
106,
779
13.5
9
$ 11
7,45
7 N
ote
1
Ever
est I
nves
tmen
t Hol
ding
s Ltd
. - p
refe
renc
e sh
ares
-
Fina
ncia
l ass
ets a
t FV
TOC
I - n
on-c
urre
nt
135,
937
10,6
78
-
Chu
ng H
ua E
xpre
ss C
o.
- Fi
nanc
ial a
sset
s at F
VTO
CI -
non
-cur
rent
1,
100,
000
29,7
04
11.0
0
29
,704
Ja
rdin
e A
ir Te
rmin
al S
ervi
ces
- Fi
nanc
ial a
sset
s at F
VTP
L - c
urre
nt
12,0
00,0
00
- 15
.00
-
Th
e G
rand
Hi L
ai H
otel
-
Fina
ncia
l ass
ets a
t FV
TPL
- cur
rent
4,
021
- 0.
02
-
M
anda
rin A
irlin
es
Shar
es
Chi
na A
irlin
es
Pare
nt c
ompa
ny
Fina
ncia
l ass
ets a
t FV
TOC
I - n
on-c
urre
nt
2,07
4,62
8
24
,999
-
24,9
99
-
Cal
-Asi
a In
vest
men
t Sh
ares
Ta
ikoo
(Xia
men
) Lan
ding
Gea
r Ser
vice
s -
Fina
ncia
l ass
ets a
t FV
TPL
- cur
rent
-
- 2.
59
- N
ote
2
HA
ECO
Com
posi
te S
truct
ures
(Jin
jiang
) -
Fina
ncia
l ass
ets a
t FV
TOC
I - n
on-c
urre
nt
-
16
,585
5.
45
16,5
85
Not
e 2
Sa
bre
Trav
el N
etw
ork
(Tai
wan
) B
enef
icia
ry c
ertif
icat
es
Fran
klin
Tem
plet
on S
inoA
m M
oney
Mar
ket F
und
- Fi
nanc
ial a
sset
s at F
VTP
L - c
urre
nt
4,05
1,15
3
42
,247
-
42,2
47
-
FSIT
C M
oney
Mar
ket F
und
- Fi
nanc
ial a
sset
s at F
VTP
L - c
urre
nt
308,
094
55,4
11
-
55
,411
Ta
iwan
Airp
ort S
ervi
ces
Shar
es
Tran
sAsi
a A
irway
s -
Fina
ncia
l ass
ets a
t FV
TPL
- cur
rent
2,
277,
786
- 0.
40
- -
D
ynas
ty A
erot
ech
Inte
rnat
iona
l Cor
p.
Ben
efic
iary
cer
tific
ates
Ta
ishi
n 16
99 M
oney
Mar
ket F
und
- Fi
nanc
ial a
sset
s at F
VTP
L - c
urre
nt
349,
523
4,77
1 -
4,77
1 -
K
aohs
iung
Cat
erin
g Se
rvic
es
Ben
efic
iary
cer
tific
ates
Pr
uden
tial F
inan
cial
Mon
ey M
arke
t Fun
d -
Fina
ncia
l ass
ets a
t FV
TPL
- cur
rent
5,
407,
832
86,2
81
-
86
,281
-
Pr
uden
tial F
inan
cial
Ret
urn
Fund
-
Fina
ncia
l ass
ets a
t FV
TPL
- cur
rent
4,
493,
628
70,9
49
-
70
,949
Ta
ishi
n 16
99 M
oney
Mar
ket F
und
- Fi
nanc
ial a
sset
s at F
VTP
L - c
urre
nt
1,10
6,80
7
15
,103
15,1
03
Not
e 1:
Th
e su
bsid
iary
’s n
et a
sset
val
ue w
as $
117,
457
thou
sand
, whi
ch in
clud
ed o
rdin
ary
shar
es a
nd p
refe
renc
e sh
ares
as o
f and
for t
he y
ear e
nded
Dec
embe
r 31,
202
0.
Not
e 2:
Th
e C
ompa
ny d
oes n
ot is
sue
shar
es b
ecau
se it
is a
lim
ited
com
pany
. N
ote
3:
The
tabl
e on
ly li
sts f
inan
cial
ass
ets t
hat a
re in
acc
orda
nce
with
IFR
S 9.
232
TA
BL
E 4
C
HIN
A A
IRL
INE
S, L
TD
. AN
D S
UB
SID
IAR
IES
TO
TA
L P
UR
CH
ASE
S FR
OM
OR
SA
LE
S T
O R
ELA
TE
D P
AR
TIE
S A
MO
UN
TIN
G T
O A
T L
EA
ST N
T$1
00 M
ILL
ION
OR
20%
OF
THE
PA
ID-I
N C
API
TA
L FO
R T
HE
YE
AR
EN
DE
D D
EC
EM
BE
R 3
1, 2
020
(In
Tho
usan
ds o
f New
Tai
wan
Dol
lars
, Unl
ess S
tate
d O
ther
wis
e)
Com
pany
Nam
e R
elat
ed P
arty
N
atur
e of
Rel
atio
nshi
p T
rans
actio
n D
etai
ls A
bnor
mal
Tra
nsac
tion
Not
e/A
ccou
nt P
ayab
le o
r R
ecei
vabl
e N
ote
Purc
hase
/ Sa
le
Am
ount
%
of
Tot
al
Paym
ent T
erm
s U
nit P
rice
Pa
ymen
t Ter
ms
End
ing
Bal
ance
%
of
Tot
al
Chi
na A
irlin
es, L
td.
Taiw
an A
ir C
argo
Ter
min
al
Subs
idia
ry
Purc
hase
$ 65
9,59
6 0.
69
30 d
ays
$ -
-
$ (6
7,46
5)
(3.3
9)
-
(“C
hina
Airl
ines
”)
Taiw
an A
irpor
t Ser
vice
s Su
bsid
iary
Pu
rcha
se
107,
482
0.11
40
day
s
-
-
(1
3,04
6)
(0.7
6)
-
Man
darin
Airl
ines
Su
bsid
iary
Sa
le
(221
,527
) (0
.21)
2
mon
ths
- -
69,1
79
0.71
-
Ti
gera
ir Ta
iwan
Su
bsid
iary
Sa
le
(240
,768
) (0
.23)
1
mon
th
12,0
08
0.12
Ta
oyua
n In
tern
atio
nal A
irpor
t Ser
vice
Su
bsid
iary
Pu
rcha
se
1,04
3,26
4 1.
10
40 d
ays
- -
(215
,542
) (1
2.56
) -
D
ynas
ty A
erot
ech
Inte
rnat
iona
l Cor
p.
Subs
idia
ry
Purc
hase
35
2,21
4 0.
37
2 m
onth
s
-
-
(4
9,10
8)
(2.8
6)
-
CA
L Pa
rk
Subs
idia
ry
Purc
hase
20
9,70
1 0.
22
2 m
onth
s
-
-
-
- -
G
loba
l Sky
Exp
ress
Su
bsid
iary
Sa
le
(139
,335
) (0
.13)
15
day
s
-
-
8,
180
0.
08
-
East
ern
Uni
ted
Inte
rnat
iona
l Log
istic
s Eq
uity
-met
hod
inve
stee
Pu
rcha
se
388,
451
0.41
2
mon
ths
- -
(41,
725)
(2
.43)
-
C
hina
Pac
ific
Cat
erin
g Se
rvic
es
Equi
ty-m
etho
d in
vest
ee
Purc
hase
47
3,46
0 0.
50
90 d
ays
- -
(71,
674)
(4
.18)
-
Man
darin
Airl
ines
Ta
iwan
Airp
ort S
ervi
ces
Sam
e pa
rent
com
pany
Pu
rcha
se
152,
475
4.14
1
mon
th
- -
(22,
407)
(5
.58)
-
Ti
gera
ir Ta
iwan
Sa
me
pare
nt c
ompa
ny
Purc
hase
14
9,04
8 4.
05
1 m
onth
-
-
(1
1,71
1)
(2.9
2)
C
al H
otel
C
AL
Park
Sa
me
pare
nt c
ompa
ny
Purc
hase
10
2,22
0 48
.59
1 m
onth
-
-
(7
6)
(0.2
5)
-
233
TA
BL
E 5
C
HIN
A A
IRL
INE
S, L
TD
. AN
D S
UB
SID
IAR
IES
RE
CE
IVA
BL
ES
FRO
M R
EL
AT
ED
PA
RT
IES
AM
OU
NT
ING
TO
AT
LEA
ST N
T$1
00 M
ILL
ION
OR
20%
OF
THE
PA
ID-I
N C
API
TA
L D
EC
EM
BE
R 3
1, 2
020
(In
Tho
usan
ds o
f New
Tai
wan
Dol
lars
, Unl
ess S
tate
d O
ther
wis
e)
Com
pany
Nam
e R
elat
ed P
arty
N
atur
e of
Rel
atio
nshi
p E
ndin
g B
alan
ce
Tur
nove
r R
ate
Ove
rdue
A
mou
nts R
ecei
ved
in S
ubse
quen
t Pe
riod
Allo
wan
ce fo
r B
ad D
ebts
A
mou
nt
Act
ion
Tak
en
M
anda
rin A
irlin
es
Chi
na A
irlin
es
Pare
nt c
ompa
ny
$
101
,725
N
ote
$
-
-
$
56,8
70
$
-
Ta
oyua
n In
tern
atio
nal A
irpor
t Ser
vice
C
hina
Airl
ines
Pa
rent
com
pany
21
5,54
2 3.
71
- -
215,
542
-
Not
e:
Acc
ount
s rec
eiva
ble
and
reve
nue
wer
e no
t dire
ctly
cor
rela
ted
beca
use
of th
e pa
rticu
lar i
ndus
try c
hara
cter
istic
s, an
d th
eref
ore
the
turn
over
rate
was
not
app
licab
le.
234
TA
BL
E 6
C
HIN
A A
IRL
INE
S, L
TD
. AN
D S
UB
SID
IAR
IES
NA
ME
S, L
OC
AT
ION
S, A
ND
OT
HE
R IN
FOR
MA
TIO
N O
F IN
VE
STE
ES
OV
ER
WH
ICH
TH
E C
OM
PAN
Y E
XE
RC
ISE
S SI
GN
IFIC
AN
T IN
FLU
EN
CE
FO
R T
HE
YE
AR
EN
DE
D D
EC
EM
BE
R 3
1, 2
020
(In
Tho
usan
ds o
f New
Tai
wan
Dol
lars
and
For
eign
Cur
renc
ies i
n T
hous
ands
, Unl
ess S
tate
d O
ther
wis
e)
Inve
stor
Com
pany
In
vest
ee C
ompa
ny
Loc
atio
n M
ain
Bus
ines
s and
Pro
duct
Inve
stm
ent A
mou
nt
Bal
ance
as o
f Dec
embe
r 31
, 202
0 N
et In
com
e (L
oss)
of t
he
Inve
stee
Inve
stm
ent
Inco
me
(Los
s)
Not
e D
ecem
ber
31,
2020
D
ecem
ber
31,
2019
N
umbe
r of
Sh
ares
/Uni
ts
Perc
enta
ge
of
Ow
ners
hip
(%)
Car
ryin
g A
mou
nt
Chi
na A
irlin
es, L
td.
CA
L Pa
rk
Taoy
uan,
Tai
wan
R
eal e
stat
e le
ase
and
inte
rnat
iona
l tra
de
$
1,50
0,00
0 $
1,
500,
000
15
0,00
0,00
0 10
0.00
$
1,
605,
033
$
9,35
0 $
53
,770
N
ote
4
Man
darin
Airl
ines
Ta
ipei
, Tai
wan
A
ir tra
nspo
rtatio
n an
d m
aint
enan
ce o
f airc
raft
2,
042,
368
2,
042,
368
18
8,15
4,02
5 93
.99
1,
223,
259
(3
76,2
55)
(3
53,6
42)
Not
es 1
and
4
Ta
iwan
Air
Car
go T
erm
inal
Ta
oyua
n, T
aiw
an
Air
carg
o an
d st
orag
e
1,35
0,00
0
1,35
0,00
0
135,
000,
000
54.0
0
1,55
6,13
3
318,
494
17
2,01
7 -
C
al-D
ynas
ty In
tern
atio
nal
Los A
ngel
es, U
SA
A h
oldi
ng c
ompa
ny, r
eal e
stat
e an
d ho
tel s
ervi
ces
U
S$
26,1
45
US$
26
,145
2,61
4,50
0 10
0.00
1,18
8,11
0
(21,
960)
(20,
542)
Not
e 2
Chi
na P
acifi
c C
ater
ing
Serv
ices
Ta
oyua
n, T
aiw
an
In-fl
ight
cat
erin
g
439,
110
43
9,11
0
43,9
11,0
00
51.0
0
695,
959
(2
67,5
66)
(1
36,4
59)
-
Taoy
uan
Inte
rnat
iona
l Airp
ort S
ervi
ces
Taoy
uan,
Tai
wan
A
irpor
t ser
vice
s
147,
000
14
7,00
0
34,3
00,0
00
49.0
0
602,
688
(2
58,8
94)
(1
26,8
58)
-
CA
L-A
sia
Inve
stm
ent
Terr
itory
of t
he B
ritis
h V
irgin
Isla
nds
Gen
eral
inve
stm
ent
US$
7,
172
US$
7,
172
7,
172,
346
100.
00
46
9,97
9
45,0
68
45
,068
-
Sa
bre
Trav
el N
etw
ork
(Tai
wan
) Ta
ipei
, Tai
wan
Sa
le a
nd m
aint
enan
ce o
f har
dwar
e an
d so
ftwar
e
52,2
00
52
,200
13,0
21,0
42
93.9
3
232,
883
(4
9,99
5)
(4
6,95
1)
-
Chi
na A
ircra
ft Se
rvic
e H
ong
Kon
g In
tern
atio
nal A
irpor
t A
irpor
t ser
vice
s H
K$
58,0
00
HK
$ 58
,000
28,4
00,0
00
20.0
0
277,
234
(5
13,7
90)
(1
02,7
58)
-
Taiw
an A
irpor
t Ser
vice
s Ta
ipei
, Tai
wan
A
irpor
t ser
vice
s
12,2
89
12
,289
20,6
26,6
44
47.3
5
200,
794
(1
56,7
39)
(7
4,21
4)
-
Kao
hsiu
ng C
ater
ing
Serv
ices
K
aohs
iung
, Tai
wan
In
-flig
ht c
ater
ing
38
3,84
6
383,
846
21
,494
,637
53
.67
51
2,92
6
9,12
9
(8,3
09)
Not
e 5
C
al H
otel
Co.
, Ltd
. Ta
oyua
n, T
aiw
an
Hot
el b
usin
ess
46
5,00
0
465,
000
46
,500
,000
10
0.00
405,
353
(7
3,58
6)
(7
3,90
6) N
ote
4
Chi
na P
acifi
c La
undr
y Se
rvic
es
Taoy
uan,
Tai
wan
C
lean
ing
and
leas
ing
of th
e to
wel
of a
irlin
es, h
otel
s, re
stau
rant
s and
hea
lth c
lubs
137,
500
13
7,50
0
13,7
50,0
00
55.0
0
149,
353
(2
8,13
7)
(1
5,47
5)
-
D
ynas
ty A
erot
ech
Inte
rnat
iona
l Cor
p.
Taoy
uan,
Tai
wan
C
lean
ing
of a
ircra
ft an
d m
aint
enan
ce o
f mac
hine
and
eq
uipm
ent
77,2
70
77
,270
77,2
70
100.
00
13
6,63
0
33,9
86
33
,967
N
ote
4
Y
estri
p
Taip
ei, T
aiw
an
Trav
el b
usin
ess
26
,265
26,2
65
1,
600,
000
100.
00
10
,270
(15,
067)
(14,
998)
Not
e 4
D
ynas
ty H
olid
ays
Toky
o, Ja
pan
Trav
el b
usin
ess
JPY
8,
000
JPY
20
,400
160
20.0
0
5,23
7
(23,
701)
(4,7
40)
-
Glo
bal S
ky E
xpre
ss
Taip
ei, T
aiw
an
Forw
ardi
ng a
nd st
orag
e of
air
carg
o
2,
500
2,
500
25
0,00
0 25
.00
7,
643
7,
796
1,
949
-
Tige
rair
Taiw
an C
o., L
td.
Taip
ei, T
aiw
an
Air
trans
porta
tion
and
mai
nten
ance
of a
ircra
ft
3,10
9,90
7
1,27
2,06
3
212,
420,
046
75.8
6
2,30
4,11
3
(1,3
71,0
56)
(9
56,0
08)
Not
e 4
Ta
iwan
Airc
raft
Mai
nten
ance
and
En
gine
erin
g C
o., L
td.
Taoy
uan,
Tai
wan
A
ircra
ft m
aint
enan
ce
1,
350,
000
1,
350,
000
13
5,00
0,00
0 10
0.00
699,
793
(2
22,2
23)
(2
22,1
96)
-
N
OR
DA
M A
sia
Ltd.
Ta
oyua
n, T
aiw
an
Airc
raft
mai
nten
ance
37,9
75
2,
450
3,
797,
500
49.0
0
37,7
67
(9
3)
(4
6)
-
M
anda
rin A
irlin
es
Tige
rair
Taiw
an C
o., L
td.
Taip
ei, T
aiw
an
Air
trans
porta
tion
and
mai
nten
ance
of a
ircra
ft
154,
330
15
4,33
0
15,4
33,0
00
5.51
167,
400
(1
,371
,056
)
(104
,501
) -
Ta
iwan
Airp
ort S
ervi
ces
Taip
ei, T
aiw
an
Airp
ort s
ervi
ces
11
,658
11,6
58
46
9,75
5 1.
08
4,
567
(1
56,7
39)
(1
,688
) -
CA
L-A
sia
Inve
stm
ent
East
ern
Uni
ted
Inte
rnat
iona
l Log
istic
s H
ong
Kon
g
Forw
ardi
ng a
nd st
orag
e of
air
carg
o H
K$
3,32
9 H
K$
3,32
9
1,05
0,00
0 35
.00
51
,116
39,8
29
13
,940
-
Taiw
an A
irpor
t Ser
vice
s Ta
iwan
Airp
ort S
ervi
ce (S
amoa
)
Sam
oa
Airp
ort s
ervi
ces a
nd in
vest
men
t
US$
5,
877
US$
5,
877
-
100.
00
37
3,44
2
22,3
55
22
,355
N
ote
3
K
aohs
iung
Cat
erin
g Se
rvic
es
Del
ica
Inte
rnat
iona
l Co.
, Ltd
. K
aohs
iung
, Tai
wan
C
ater
ing
busi
ness
10,2
00
10
,200
1,02
0,00
0 51
.00
7,
871
4
2
-
Not
e 1:
A
dopt
ed th
e tre
asur
y sh
ares
met
hod
in re
cogn
izin
g in
vest
men
t inc
ome
or lo
ss.
Not
e 2:
R
epre
sent
s the
fina
ncia
l inf
orm
atio
n of
the
fore
ign
hold
ing
com
pany
dis
clos
ed in
acc
orda
nce
with
loca
l reg
ulat
ions
. N
ote
3:
The
Com
pany
doe
s not
issu
e sh
ares
bec
ause
it is
a li
mite
d co
mpa
ny.
Not
e 4:
D
iffer
ence
cau
sed
by le
ase
arra
ngem
ent b
etw
een
cons
olid
ated
ent
ities
. N
ote
5:
Diff
eren
ce c
ause
d by
acq
uisi
tion.
235
TA
BL
E 7
C
HIN
A A
IRL
INE
S, L
TD
. AN
D S
UB
SID
IAR
IES
INV
EST
ME
NT
S IN
MA
INL
AN
D C
HIN
A
FOR
TH
E Y
EA
R E
ND
ED
DE
CE
MB
ER
31,
202
0 (I
n T
hous
ands
of N
ew T
aiw
an D
olla
rs/R
enm
inbi
/U.S
. Dol
lars
, Unl
ess S
tate
d O
ther
wis
e)
Chi
na A
irlin
es
Inve
stee
Com
pany
Nam
e M
ain
Bus
ines
s and
Pr
oduc
t
Tot
al A
mou
nt
of P
aid-
in
Cap
ital
Inve
stm
ent
Typ
e
Acc
umul
ated
O
utflo
w o
f In
vest
men
t fr
om T
aiw
an a
s of
Jan
uary
1,
2020
Inve
stm
ent F
low
A
ccum
ulat
ed
Out
flow
of
Inve
stm
ent
from
Tai
wan
as
of D
ecem
ber
31,
2020
Net
Inco
me
(Los
s) o
f th
e In
vest
ee
% O
wne
rshi
p of
Dir
ect o
r In
dire
ct
Inve
stm
ent
Inve
stm
ent
Gai
n (L
oss)
Car
ryin
g A
mou
nt
as o
f
Dec
embe
r 31
, 20
20
Acc
umul
ated
In
war
d R
emitt
ance
of
Ear
ning
s as o
f D
ecem
ber
31,
2020
Out
flow
In
flow
A
irpor
t Air
Car
go T
erm
inal
(X
iam
en) C
o., L
td.
Forw
ardi
ng a
nd st
orag
e of
air
carg
o $
1,
105,
474
(RM
B 25
4,48
0)
Indi
rect
(N
ote
1)
$
118,
920
(US$
4,
186)
$
- $
-
$
118,
920
(US$
4,
186)
$
91,3
11
(RM
B 21
,367
) 14
.00
$
12,7
94
(RM
B 2,
991)
$
238,
717
(RM
B 54
,953
) $
10
0,47
0 (U
S$
3,53
7)
(N
ote
2)
A
irpor
t Air
Car
go S
ervi
ce
(Xia
men
) Co.
, Ltd
. Fo
rwar
ding
and
stor
age
of a
ir ca
rgo
60
,817
(R
MB
14,0
00)
Indi
rect
(N
ote
1)
55
,325
(U
S$
1,94
7)
-
-
55,3
25
(US$
1,
947)
68
,272
(R
MB
15,9
76)
14.0
0
9,56
6 (R
MB
2,23
7)
134,
918
(RM
B 31
,058
)
44,3
33
(US$
1,
561)
(Not
e 2)
Taik
oo (X
iam
en) L
andi
ng
Gea
r Ser
vice
s
Land
ing
gear
m
aint
enan
ce se
rvic
es
2,36
0,51
1 (U
S$
83,0
90)
Indi
rect
(N
ote
1)
61
,114
(U
S$
2,15
1)
-
-
61,1
14
(US$
2,
151)
-
2.58
9
-
-
-
H
AEC
O C
ompo
site
St
ruct
ures
(Jin
jiang
) C
ompo
site
mat
eria
l
331,
335
(US$
11
,663
) In
dire
ct
(Not
e 1)
18,0
68
(US$
63
6)
-
-
18,0
68
(US$
63
6)
- 5.
45
-
16
,585
(R
MB
3,81
8)
10,1
28
(US$
35
7)
Acc
umul
ated
Inve
stm
ent i
n M
ainl
and
Chi
na a
s of
Dec
embe
r 31
, 202
0
Inve
stm
ent A
mou
nt
Aut
hori
zed
by In
vest
men
t C
omm
issi
on, M
OE
A
Lim
it on
Inve
stm
ent
$2
53,4
27
(US$
8,92
0)
$618
,216
(Not
e 3)
$3
4,53
5,69
0 (N
ote
4)
(C
ontin
ued)
236
Taiw
an A
irpor
t Ser
vice
s
Inve
stee
Com
pany
M
ain
Bus
ines
s and
Pr
oduc
t Pa
id-in
Cap
ital
Met
hod
of
Inve
stm
ent
Acc
umul
ated
O
utw
ard
Rem
ittan
ce fo
r In
vest
men
t fr
om T
aiw
an a
s of
Jan
uary
1,
2020
Rem
ittan
ce o
f Fun
ds
Acc
umul
ated
O
utw
ard
Rem
ittan
ce fo
r In
vest
men
t fr
om T
aiw
an a
s of
Dec
embe
r 31
, 20
20
Net
Inco
me
(Los
s) o
f the
In
vest
ee
% O
wne
rshi
p of
Dir
ect o
r In
dire
ct
Inve
stm
ent
Inve
stm
ent
Inco
me
(Los
s)
Car
ryin
g A
mou
nt a
s of
Dec
embe
r 31
, 20
20
Acc
umul
ated
R
epat
riat
ion
of
Inve
stm
ent
Inco
me
as o
f D
ecem
ber
31,
2020
Out
war
d In
war
d
A
irpor
t Air
Car
go T
erm
inal
(X
iam
en) C
o., L
td.
Forw
ardi
ng a
nd st
orag
e of
air
carg
o
$ 1,
105,
474
(RM
B 25
4,48
0 )
Indi
rect
(N
ote
5)
$
114,
158
(US$
4,
018)
$
- $
-
$
114,
158
(US$
4,
018)
$
91,3
11
(RM
B 21
,367
) 14
.00
$
12,7
84
(RM
B 2,
991)
$
237,
502
(RM
B 54
,673
) $
12
9,01
0 (U
S$
4,54
1)
A
irpor
t Air
Car
go S
ervi
ce
(Xia
men
) Co.
, Ltd
. Fo
rwar
ding
and
stor
age
of a
ir ca
rgo
60,8
17
(RM
B 14
,000
) In
dire
ct
(Not
e 5)
54,7
37
(US$
1,
927)
-
-
54
,737
(U
S$
1,92
7)
68,2
72
(RM
B 15
,976
) 14
.00
9,
558
(RM
B 2,
237)
13
5,12
8 (R
MB
31,1
07)
59
,426
(U
S$
2,09
2)
Acc
umul
ated
Out
war
d
Rem
ittan
ce fo
r In
vest
men
t in
M
ainl
and
Chi
na a
s of D
ecem
ber
31, 2
020
Inve
stm
ent A
mou
nts A
utho
rize
d by
In
vest
men
t Com
mis
sion
, MO
EA
Upp
er L
imit
on th
e A
mou
nt o
f In
vest
men
t Stip
ulat
ed b
y
Inve
stm
ent C
omm
issi
on, M
OE
A
$1
68,8
95
(US$
5,94
5)
$168
,895
(U
S$5,
945)
$2
54,4
38
(Not
e 6)
Not
e 1:
C
hina
Airl
ines
, Ltd
. the
“Co
mpa
ny”
inve
sted
in C
AL-
Asi
a In
vest
men
t, w
hich
, in
turn
, inv
este
d in
a c
ompa
ny lo
cate
d in
mai
nlan
d C
hina
. N
ote
2:
The
inw
ard
rem
ittan
ce o
f ear
ning
s in
2020
am
ount
ed to
US$
3,53
6,56
1 an
d U
S$1,
560,
538.
N
ote
3:
The
amou
nt c
ompr
ised
US$
19,8
28,3
24, R
MB
4,20
0,00
0 an
d N
T$36
,666
,667
. N
ote
4:
The
limit
stat
ed in
the
Inve
stm
ent C
omm
issi
on’s
regu
latio
n, “
Inve
stm
ent o
r Tec
hnic
al C
oope
ratio
n in
Mai
nlan
d C
hina
Adj
ustm
ent R
ule,
” is
the
larg
er o
f the
Com
pany
’s n
et a
sset
val
ue o
r 60%
of t
he c
onso
lidat
ed n
et a
sset
val
ue.
Not
e 5:
Ta
iwan
Airp
ort S
ervi
ces i
nves
ted
in T
aiw
an A
irpor
t Ser
vice
s (Sa
moa
), w
hich
in re
turn
, inv
este
d in
a c
ompa
ny lo
cate
d in
mai
nlan
d C
hina
. N
ote
6:
The
RM
B a
nd U
.S. d
olla
r am
ount
s of a
sset
s are
tran
slat
ed a
t yea
r-end
rate
s and
thos
e of
gai
ns (l
osse
s), a
t the
ave
rage
of t
he y
ear-e
nd ra
tes f
or th
e re
porti
ng p
erio
d.
(C
oncl
uded
) 237
TA
BL
E 8
C
HIN
A A
IRL
INE
S, L
TD
.
INFO
RM
AT
ION
OF
MA
JOR
ST
OC
KH
OL
DE
RS
FOR
TH
E Y
EA
R E
ND
ED
DE
CE
MB
ER
31,
202
0
Nam
e of
Maj
or S
hare
hold
er
Shar
es
Num
ber
of
Shar
es
Perc
enta
ge o
f O
wne
rshi
p (%
)
Chi
na A
viat
ion
Dev
elop
men
t Fou
ndat
ion
(CA
DF)
1,86
7,34
1,93
5 34
.44
Nat
iona
l Dev
elop
men
t Fun
d (N
DF)
519,
750,
519
9.59
Not
e 1:
Th
e in
form
atio
n of
maj
or sh
areh
olde
rs p
rese
nted
in th
is ta
ble
is p
rovi
ded
by th
e Ta
iwan
Dep
osito
ry &
C
lear
ing
Cor
pora
tion
base
d on
the
num
ber
of o
rdin
ary
shar
es a
nd p
refe
rred
sha
res
held
by
shar
ehol
ders
with
ow
ners
hip
of 5
% o
r gr
eate
r, th
at h
ave
been
iss
ued
with
out
phys
ical
reg
istra
tion
(incl
udin
g tre
asur
y sh
ares
) by
the
Com
pany
as
of th
e la
st b
usin
ess
day
for
the
curr
ent q
uarte
r. Th
e sh
are
capi
tal i
n th
e fin
anci
al s
tate
men
ts m
ay d
iffer
fro
m th
e ac
tual
num
ber
of s
hare
s th
at h
ave
been
is
sued
with
out p
hysi
cal r
egis
tratio
n be
caus
e of
diff
eren
t pre
para
tion
basi
s. N
ote
2:
If a
shar
ehol
der d
eliv
ers
the
shar
ehol
ding
s to
the
trust,
the
abov
e in
form
atio
n w
ill b
e di
sclo
sed
by th
e in
divi
dual
trus
ter
who
ope
ned
the
trust
acc
ount
. For
sha
reho
lder
s w
ho d
ecla
re in
side
r sh
areh
oldi
ngs
with
ow
ners
hip
grea
ter
than
10
%
in
acco
rdan
ce
with
th
e Se
curit
y an
d Ex
chan
ge
Act
, th
e sh
areh
oldi
ngs
incl
ude
shar
es h
eld
by s
hare
hold
ers
and
thos
e de
liver
ed t
o th
e tru
st o
ver
whi
ch
shar
ehol
ders
hav
e rig
hts
to d
eter
min
e th
e us
e of
tru
st p
rope
rty.
For
info
rmat
ion
rela
ting
to i
nsid
er
shar
ehol
ding
dec
lara
tion,
ple
ase
refe
r to
Mar
ket O
bser
vatio
n Po
st S
yste
m.
- 81
-
238
China Airlines Co., Ltd.
Chairman Hsieh, Su-Chien
Spokesperson & Deputy Spokesman
Name Spokesman Deputy Spokesman Lu, Shwu-Huoy Wang, Wei
Title Vice President, CORPORATE COMMUNICATIONS OFFICE Vice President, FINANCE DIV. Tel 886-3-399-8888 886-3-399-8888 Fax 886-3-399-8640 886-3-399-8313 Email [email protected] [email protected] Headquarter, Branches and Plant
Organiza on Unit Address Tel Headquarter No.1, Hangzhan S. Rd., Dayuan Dist., Taoyuan City 337, Taiwan 886-3-399-8888 Taipei Branch No.131, Sec on 3, Nanjing East Road, Taipei City 104, Taiwan 886-2-2715-2233 Cargo Sales & Service, Taiwan No.3, Aly. 123, Ln. 405, Dunhua N. Rd., Songshan Dist., Taipei City 105, Taiwan 886-2-2715-5151 Kaohsiung Branch 6 Floor, Asia-Paci c Financial Plaza, No.38 Of Xin Guang Road, Lingya District, Kaohsiung City 802, Taiwan 886-7-213-1200 Tainan Branch Room A, 6 Floor, No.358, Sec on 1, Tungmen Road, Tainan, Taiwan 886-6-235-8099 Taichung Branch Room 2, 15th Floor, No.218, Sec on 2, Taiwan Boulevard, West District, Taichung City 403, Taiwan 886-4-2325-9592 Maintenance Div. No.15, Hangqin S. Rd., Dayuan Dist., Taoyuan City 337, Taiwan 886-3-383-4251 Cargo Sales & Services Mainland China Suite 22i, No.726 Of West Yanan Road, Changning District, Shanghai, China 86-21-2220-3292 Beijing O ce Bright China Chang An Building, Tower2, Unit 1025, No.7 Jianguomen Nei Avenue, Beijing, China 86-10-6510-2671 Shanghai O ce Suite 22a, No.726 Of West Yanan Road, Changning District, Shanghai, China 86-21-2220-3333 Guangzhou O ce Room 1210, 12th Floor, Teem Tower, No.208 Of Tianhe Road, Tianhe District, Guangzhou, Guangdong, China 86-20-8527-2950 Shenzhen O ce Room 4805, O ce Tower, Shun Hing Di Wang Commercial Center, No.5002 Of Shen Nan East Road, Luohu District, Shenzhen,
Guangdong, China 86-755-8246-3560 Xian O ce Room 810, 8th Floor, Gaoxin Building 9, Gaoxin 4th Road, High-Tech Zone, Xi'an, Shaanxi, China 86-29-8985-1902 Chengdu O ce Room 1608, South Tower, Baoli Center Building, No.7, Consulate Rd. Chengdu, China 86-28-8602-7508 Zhengzhou O ce Rooms 1101-1102, Tower B, Yuhong Interna onal Building, No.59 Of Zijingshan Road, Zhengzhou, Henan, China 86-371-5562-9880 Changsha O ce Room 1207 Pinghetang business building, No.88, Huangxing Middle Road, Furong district, Changsha City, Hunan province, China 86-731-8224-0871 Shenyang O ce Room 1110, Tower E, Fortune Center, No. 59 of North Sta on Road, Shen He District, Shenyang, Liaoning, China 86-24-3128-7021 Xiamen O ce Unit 3310, 33rd Floor, Bank Center, No.189 Of Xiahe Road, Xiamen, Fujian, China 86-592-2388-388 Nanjing O ce Room B1-B2, Building 38, Nanjing Center Building, No.1 South Zhongshan Road, Qinhuai District, Nanjing, China 86-25-8467-1050 Ningbo O ce Room 1515, Zhongshan Building, No93 East Zhongshan Road, Haishu District, Ningbo, China 86-574-8775-4090 Hangzhou O ce Room 2307, Building 2, China Qian Tang Avia on Building, No.66, Shimin St., Jianggan District, Hangzhou, China 86-571-8668-4214 Fuzhou Sta om Room 2508, Zhonggeng Youth Plaza, No.83 Of East Road, Gulou District, Fuzhou, Fujian, China 86-591-8755-9705 Chongqing Sta on Room 2202, No.3 Building, Zhongyu Plaza, No.86 Of Hongjin Avenue, Yubei District, Chongqing, China 86-023-8828-0118 Haikou O ce 18E, Huanhai Business Building, No.15, Jinmao W. Rd., Haukuo Hainan, China 86-898-6853-9677 Nanchang Sta on Rm 511, o ce building 7, hengmaodreamwrold Square, 438 Beijing E. Rd, Nanchang, Jiangxi Province, China 86-0791-8378-0580 Sanya Sta on Room 306, Floor 3rd, Exit and entry administra on of Sanya comprehensive service center, Sanya Phoenix Int'l Airport, Hainan,
China 86-0898-8802-4956 Wenzhou Sta on Room 2310, Huameng Business Palace, No.2 Of Chezhan Road, Lucheng District, Wenzhou, Zhejiang, China 86-0577-8605-2181 Wuxi Sta on Room 1611-1612, 16th Floor, Columbus building, No 282, ChangJiang North Road, New District Wuxi, Jiangsu China 86-0510-8522-8710 Yancheng Sta on Room B1207, East Building High-End Business O ce (Hbo), Ren Min South Road No.1, Yancheng, Jiangsu, China 86-515-8996-6950 Qingdao O ce Unit 2801, O ce Tower, Shangri-La Centre, No.9 Xiang Gang Zhong Lu, Qingdao, China 86-532-6887-7106 Wuhan O ce Room 1315, 13F, New World Interna onal Trade Building,568 Jianshe Avenue, Wuhan, China 86-27-8555-8172 Changchun O ce Rooms 6006, 6th Floor, Bai-Nau Technology Building, No.1313 Of Gong Nong Road, Chaoyang District, Changchun, Jilin, China 86-431-8920-7672 Xuzhou Sta on Room 537, CUMT University Science Park, Jiefang S. Road, Xuzhou City, Jiangsu, China 86-516-8379-0550 Cargo Sales & Services, Japan Ni ochi-Uchisaiwaicho Bldg. 8F, 1-2-1 Uchisaiwaicho, Chiyoda-ku, Tokyo, 100-0011, Japan 81-3-6378-8860 Tokyo Branch Ni ochi-Uchisaiwaicho Bldg. 8F, 1-2-1 Uchisaiwaicho, Chiyoda-ku, Tokyo, 100-0011, Japan 81-3-6378-8855 Osaka Branch Nakanoshima Mitsui Bldg. 9F 3-3, 3-Chome Nakanoshima Kita-Ku Osaka-Shi, Osaka 530-0005, Japan 81-6-6459-5783 Sapporo Branch Kita 1 Jo Mitsui Building 3F, Kita 1, Jo Nishi 5, Chuo-ku, Sapporo-Shi Hokkaido, 060-0001, Japan 81-11-218-6766 Shizuoka Sta on Shizuoka Ariport Terminal Bldg. 1F, 3336-4, Sakaguchi, Makinohara-Shi, Shizuoka, 421-0411, Japan 81-548-29-2668 Toyama Sta on Toyama Airport Interna onal Terminal Building 3F, 191 Akigashima, Toyama-Shi, 939-8252, Japan 81-76-461-7200 Kagoshima Sta on Kagoshima Airport Interna anl Terminal Bldg. 1355-4 Fumoto, Kirishima, Kagoshima 899-6404, Japan 81-995-57-9898 Miyazaki Sta on Miyazaki Airport, Akae Miyazaki 880-0912, Japan 81-985-64-9811 Nagoya Branch 3F, NMF Nagoya-Fushimi Building, Nishiki 2-9-27, Naka-ku, Nagoya, Aichi, 460-0003, Japan 81-52-202-7253 Fukuoka Branch Daihakata Bldg. 8F, 2-20-1 Hakata Ekimae, Hakata-Ku, Fukuoka 812-0011, Japan 81-92-471-7788 Hiroshima Branch Hiroshima-Mitsui Bldg. 7F 2-7-10, Ote-Machi, Naka-Ku, Hiroshima-Shi, Hiroshima, 730-0051, Japan 81-82-542-0883 Takamatsu Sta on Takamatsu Airport Building, Oka, Konan-cho, Takamatsu, Kagawa, 761-1401, Japan 81-87-815-8702 Kumamoto Sta on Kumamoto Airport Int'l Terminal Bldg. 1802-2 Oyatsu, Mashiki-machi, Kamimashiki-gun, Kumamoto 861-2204, Japan 81-96-285-1814 Okinawa Branch Gojinsha Naha Matsuyama Bldg. 3F, 2-1-12 Matsuyama, Naha-Shi, Okinawa 900-0032, Japan 81-98-863-1013 Korea Branch 3F, eplaza Bldg., 25, Sejong-daero 4-gil, Jung-gu, Seoul, Republic of Korea 04527 82-2-317-8888 Busan Branch 3F, Kyo-Won B/D, Jungang Daero 216, Dong-Gu, Busan, Korea, 48733 82-51-462-8885 Hong Kong Branch Suites 2701-2705, 27F Devon House, Taikoo Place, 979 King's Road, Hong Kong 852-2843-9800 Thailand Branch 4Fl., The Peninsula Plaza Bangkok, 153 Rajadamri Rd., Bangkok 10330, Thailand 66-2-250-9898 Bali Branch Departure Int'l Terminal 2nd FL., No. A0-12B Ngurah Rai Airport. Tuban-Bali, Indonesia 62-361-935-7298 Malaysia Branch Unit 15.01, Level 15, AMODA Building, 22, Jalan Imbi, 55100 Kuala Lumpur, Malaysia 60-3-2142-7344 Penang Branch Unit 9.04, Level 9, Menara Boustead Penang, 39 Jalan Sultan Ahmad Shah, 10050 Penang, Malaysia 60-4-228-9227 Singapore Branch 302 Orchard Road, #14-01 Tong Building Singapore 238862 65-6-737-2144 Cambodia Branch #10, St.596 Toul Kork, Sangkat Beoung Kok II, Khan Toul Kork, Phnom Penh, Cambodia 855-23-883-696/686 Myanmar Branch No.353/355, Bo Aung Kyaw Street, Kyauktada Township, Yangon, Myanmar 95-1-839-2663 Philippines Branch G/F Unit-1 Golden Empire Tower 1322 Roxas Boulevard Cor. Padre Faura St., Ermita Manila, Philippines 63-2-8354-6700 to 09 Indonesia Branch In land Tower, M1 Floor, Jl. Jend. Sudirman Kav.32, Jakarta 10220, Indonesia 62-21-251-0788 Vietnam Branch 1B, 7F Crescent Plaza 105 Ton Dat Tien St., Dist.7, Ho Chi Minh City, Vietnam 84-28-5414-1008 Hanoi Branch 4th Floor, Opera Business Center, 60 Ly Thai To Street, Hoan Kiem District, Hanoi, Vietnam 84-24-3936-6364 Palau Branch P.O. BOX 10027 Koror, Republic of Palau 96940 680-488-8888 Australia Branch Suite 1, Level 1, Nigel Love Building, 10 Arrivals Crt. Sydney Interna onal Airport Mascot NSW 2020, Australia 61-2-8339-9188 Brisbane Branch 1G35, Brisbane International Terminal, Airport Drive, Brisbane Airport QLD 4008, Australia 61-7-3860-5611 Melbourne Branch Level 2, North End, Terminal 2, Melbourne Airport, Tullamarine 3045 61-3-9907-0910 New Zealand Branch GM60, Level 1, Auckland Interna onal Airport, Auckland 2150, New Zealand 64-9-256-8088 India Branch O ce No.323, 3rd Floor, MGF Metropolis, M.G. Road, Gurgaon 122001, Haryana, India 91-124-711-5000 Los Angeles Branch 200 N. Con nental Blvd., Suite 100, El Segundo, CA 90245, U.S.A. 1-310-322-2888 New York Branch 633 3rd Ave., 8th Fl., Suite 800, New York, NY 10017, U.S.A. 1-917-368-2000 San Francisco Branch 433 Airport Blvd., Suite 501 Burlingame, CA 94010, U.S.A. 1-650-931-8000 Honolulu Branch 1830 Ala Moana Blvd Room 212, Honolulu, Hawaii 96815, U.S.A. 1-808-955-0088 Canada Branch Suite 240-10451 Shellbridge Way, Richmond, Bri sh Columbia, V6X 2W8, Canada 1-604-242-1168 Cargo Sales & Services The Americas 5651 West 96th Street, Los Angeles, CA 90045, U.S.A. 1-310-646-1260 Guam Branch 518 Pale San Vitores Road, Suite 202-203, Concorde Center, Tumon, Guam 96913, U.S.A. 1-671-649-0861 Netherlands Branch O cia Gebouw I, De Boelelaan 7, 6th Floor, 1083 HJ Amsterdam, The Netherlands 31-20-646-1001 Germany Branch Kaiserstr. 53, 60329 Frankfurt, Germany 49-69-297-0580 Italy Branch Via Lucullo 3, 00187, Rome, Italy 39-06-474-5045 Cargo Sales & Services, Europe Cargo Center Luxair, L-1360, Luxembourg 352-348-363-9500 Austria Branch Mariahilfer Strasse 123/8 O.G. 1060 Vienna, Austria 43-1-8130-156 The United Kingdom Branch Minstrel House, 1F, 2 Chapel Place, Rivington Street, London, EC2A 3DQ 44-208-587-3688
Stock Transfer Agent: Name: Address: Website: Tel:
CTBC Bank Co., Ltd. 5F., No.83, Sec. 1, Chongqing S. Rd., Zhongzheng Dist., Taipei City 100, Taiwan h p://www.ctbcbank.com 886-2-6636-5566
Auditors: Name: Auditors: Address: Website: Tel:
Deloi e & Touche Huang, Jui-Chan ; Cheng, Shiuh-Ran 20F., No. 100, Songren Rd., Xinyi Dist., Taipei City 110, Taiwan
h p://www.deloi e.com.tw 886-2-2725-9988
Overseas Securities Exchange: N/A Corporate Website: http://www.china-airlines.com