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China Airlines Co., Ltd.
Chairman Hsieh, Su-Chien
Spokesperson & Deputy Spokesman
Name Spokesman Deputy Spokesman Liu, Tsao-Yang Chen, I-Chieh
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] je [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 O ce 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, Tower 2, 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 86-29-895-81909 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 3404, Building 2, Block C, Kaifu Wanda Plaza, No.589 Of Zhongshan Road, Changsha , Hunan, China 86-731-8224-0871 Shenyang O ce Room 2009, 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 1702, China Ci c Building, No.36 Of Zhenming Road, Haishu District, Ningbo, Zhejiang, 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 on 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 701, Unit A, Building 16, No.205 Guangchang S. Rd., Nanchang, Jiangxi Province, China 86-0791-8378-0580 Sanya Sta on Room No.110, 5F, Block B, Sanya Avia on City, Sanya Phoenix Int'l Airport, Hainan 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 A207, No.18 Airport Second Road, New District, Wuxi City, Jiangsu Province, China 86-0510-8522-8710 Qingdao O ce Unit 2801, O ce Tower, Shangri-La Centre, No.9 Xiang Gang Zhong Lu, Qingdao, China 86-532-6887-7106 Weihai Sta on 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 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 Bldg. 3F, Kita 1, Jo Nishi 5, Chuo-ku, Sapporo-Shi, Hokkaido, 060-0001, Japan 81-11-218-6766 Shizuoka Sta on Shizuoka Airport 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 81-995-57-6151 Miyazaki Sta on Miyazaki Airport, Akae Miyazaki 880-0912, Japan 81-985-64-9288 Nagoya Branch NMF Nagoya-Fushimi Bldg. 3F, Nishiki 2-9-27, Naka-ku, Nagoya-Shi, 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 Bldg. 1312-7, Oka, Konan-cho, Takamatsu-shi, 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 12F, Donghwa Bldg. Seosomun-Ro 106, Jung-Gu, Seoul, Korea 04513 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 Chiang Mai 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 62-361-9357-298 Malaysia Branch Unit 15.01-15.02, Level 15, AMODA Building, 22, Jalan Imbi, 55100 Kuala Lumpur, Malaysia 60-3-2148-9417 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 855-23-222-058 Myanmar Branch No.353/355, Bo Aung Kyaw Street, Kyauktada Township, Yangon, Myanmar 95-1-8392-663 Philippines Branch G/F Unit-1 Golden Empire Tower 1322 Roxas Boulevard Cor. Padre Faura St., Ermita Manila, Philippines 63-2-354-6700 to 09 Cebu Branch G/F Unit-1 Golden Empire Tower 1322 Roxas Boulevard Cor. Padre Faura St., Ermita Manila, Philippines 63-2-354-6700 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 1G 35, Brisbane Interna onal 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 Unit 023/025, 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 300 Rodgers Blvd., #14, Honolulu, HI 96819, U.S.A. 1-808-955-0088 Anchorage Branch 4600 Postmark Drive, Ste. NA 142, Anchorage, AK99502, U.S.A. 1-907-249-2300 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 Gutleutstrasse 80, 60329 Frankfurt, Germany 49-69-297-0580 Italy Branch Viale Marco Polo, 71, 3F, 00154 Roma, Italy 39-06-474-5045 Cargo Sales & Services, Europe Room G2045-G2050, 2nd Floor, Cargo Center Luxair, L-1360 Luxembourg, 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: CTBC Bank Co., Ltd. Address: 5F., No.83, Sec. 1, Chongqing S. Rd., Zhongzheng Dist., Taipei City 100, Taiwan Website: h p://www.ctbcbank.com Tel: 886-2-6636-5566
Auditors: Name: Deloi e & Touche Auditors: Huang, Jui-Chan ; Cheng, Shiuh-Ran Address: 20F., No. 100, Songren Rd., Xinyi Dist., Taipei City 110, Taiwan Website: h p://www.deloi e.com.tw Tel: 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........................................................................................................... 35 3.4 Information Regarding the Company’s Audit Fee and Independence ...................................................................76 3.5 Replacement of CPA.............................................................................................................................................. 77 3.6 Audit Independence.............................................................................................................................................. 77 3.7 Changes in Shareholding of Directors, Managers and Major Shareholders.......................................................... 78 3.8 Relationships among the Top Ten Shareholders ................................................................................................... 81 3.9 Ownership of Shares in Affiliated Enterprises ....................................................................................................... 82
IV. Capital Overview................................................................................................................................................... 83 4.1 Capital and Shares................................................................................................................................................. 84 4.2 Bonds .................................................................................................................................................................... 88 4.3 Other Securities‐Related Issues ............................................................................................................................ 90 4.4 Financing Plans and Implementation ................................................................................................................... 90
V. Operational Highlights ......................................................................................................................................... 91 5.1 Business Activities................................................................................................................................................. 92 5.2 Market and Sales Overview ................................................................................................................................ 100 5.3 Human Resources ............................................................................................................................................... 105 5.4 Environmental Protection Expenditure............................................................................................................... 105 5.5 Labor Relations ................................................................................................................................................... 110 5.6 Major Contracts .................................................................................................................................................. 113
VI. Financial Information........................................................................................................................................ 116 6.1 Five‐Year Financial Summary .............................................................................................................................. 117 6.2 Five‐Year Financial Analysis................................................................................................................................. 121 6.3 Consolidated Financial Statements for the Years Ended December 31, 2019 and 2018, and Independent
Auditors’ Report.................................................................................................................................................. 123 6.4 Parent Company Only Financial Statements for the Years Ended December 31, 2019 and 2018 and
Independent Auditors’ Report............................................................................................................................ 123 6.5 Audit Committee’s Report .................................................................................................................................. 124
VII. Review of Financial Conditions, Financial Performance, and Risk Management ........................ 125 7.1 Analysis of Financial Status ................................................................................................................................. 126 7.2 Analysis of Financial Performance .......................................................................................................................127 7.3 Analysis of Cash Flow...........................................................................................................................................127 7.4 Major Capital Expenditure Items ........................................................................................................................ 128 7.5 Investment Policy in the Last Year, Main Causes for Profits or Losses, Improvement Plans and
Investment Plans for the Coming Year................................................................................................................ 128 7.6 Analysis of Risk Management ............................................................................................................................. 128 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, 2019 and 2018 and Independent Auditors’ Report........................................................................ 142
(Appendix 2) Parent Company Only Financial Statements for the Years Ended December 31, 2019 and 2018 and Independent Auditors’ Report ..............................................................197
(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 1.1 Operating Performance in 2019
1.2 Business Plan for 2020
1.3 Development Strategies
Letter to Shareholders 1
I. Letter to Shareholders China Airlines develops its sustainable business strategies in six major directions: “safety, governance, fleet and flight network, products and services, group cooperation, and brand perception,” and adopts a quality policy of “discipline and safety, customer-orientation, green energy and environmental protection, and pursuit of excellence” to implement its strategic objectives. China Airlines is committed to providing a gratifying flight experience for every passenger. It is also devoted to making China Airlines a sustainable, eco-friendly enterprise that promotes the economic development of society.
Looking back on air transportation business promotion in 2019, we note that passenger flights have been increased on the existing Taoyuan-Nagoya, Taoyuan-Takamatsu, Taoyuan-Fukuoka, Taoyuan-Palau, and other routes in regional markets;On long-haul routes, next-generation fleets have been used to continually increase flights on routes such as Taoyuan-Los Angeles, Taoyuan-Honolulu, and Taoyuan-Melbourne, and inter-airline cooperation has been strengthened to deepen market layout. As for cargo transport, potential markets have been thoroughly developed, as in the multi-leg route for US west coast return flights to Nagoya, which was launched at the end of March, and the Mumbai-Amsterdam route, which was launched in November, to increase revenue;at the end of October, a second cargo flight to Chongqing was added to work with the shipping schedules of major customers; the loading performance was quite good;and to respond to the needs of postal customers, Zhengzhou customized charter service was implemented in Q4 to maximize the utilization efficiency of cargo aircraft.
In 2019, China Airlines’ sustainable operations continued to win important domestic and foreign awards: we were selected for the “Global Corporate Sustainability Awards” for the first time;selected for the “Top 5% in Corporate Governance Evaluation” and the “TW ESG Index” for the second time;selected for the “TWSE RAFI® Taiwan High Compensation 100 Index” and the “TWSE RA Taiwan Employment Creation 99 Index” for the third time;selected for the Dow Jones Sustainability Index (DJSI) and the FTSE4Good Index Series for the fourth time;winning the Taiwan Corporate Sustainability Awards (TCSA) for the sixth consecutive year. Other important awards include winning the 2020 APEX
Five Star Global Airline and the Top Service Awards held by Next Magazine for three consecutive years.
In recent years, to actively respond to global warming and to reduce the impact of climate change on the industry, China Airlines continues to formulate sound extreme climate response mechanisms and operating procedures, and implements greenhouse gas reduction through the establishment of short, medium and long-term carbon reduction targets for air and ground operations. In 2019, China Airlines was again ranked by the Carbon Disclosure Project (CDP) with an A-/Leadership level, a grade above that of global airlines.
With the concerted efforts of the management team and all of its employees, China Airlines continues to be recognized by the public for the results of its overall operations and various policies. In the future, China Airlines will continue to move towards sustainable development with proactive, stable, prudent, and flexible strategies.
1.1 Operating Performance in 2019
Operating revenue in NT dollars (same hereafter) was NT$146.372 billion, a 2.59% decrease over the past year, and after-tax net loss was NT$1.20 billion, for a basic after-tax net loss of NT$0.22 per share.
1.1.1 Results of the business strategy A. Fleet:
China Airlines completed the selection of cargo aircraft 777F and regional narrow-body passenger aircraft A321neo in 2019, which are expected to be introduced successively starting from 2020 and 2021, respectively. China Airlines actively optimized its fleet structure, completed the A330-300 sale-leaseback operation to reduce book losses and residual value risk, and was successful in leasing the 747-400F sealed cargo aircraft to activate asset utilization. As of the end of December, our fleet size was 91 vessels, including 70 passenger aircraft (including leased aircraft) and 21 cargo aircraft. China Airlines is committed to improving our fleet’s operating fitness. In the future, with the introduction of new aircraft and phasing out of old aircraft, our operating efficiency will more comprehensive and more fully improved.
2 Letter to Shareholders
B. Passenger flights:
Revenue from passenger business was NT$96.177 billion, a 2.05% increase over the past year and accounting for 65.71% of total operating revenue. As of the end of 2019, the China Airlines Group flew to 23 countries and 72 passenger destinations, spanning Asia, Europe, the Americas, and Oceania. On average, there are 712 round-trip flights per week.
C. Cargo flights:
Revenue from cargo business was NT$43.406 billion, a 12.17% decrease over the past year and accounting for 29.65% of total operating revenue. As of the end of 2019, the China Airlines Group flew 18 cargo planes in cargo operations to 15 countries and 37 destinations. On average, there were an average of 90 cargo flights per week.
D. Other operating income:
Other operating revenue included in-flight duty-free sales revenue, the total from which was NT$6.789 billion, a 2.96% increase over the past year and accounting for 4.64% of total operating revenue.
E. Investments and earnings:
As of the end of 2019, the Company had investment in a total of 32 companies, in areas of business such as air business, ground services, logistics, aircraft maintenance, air cargo station business, etc., which contributed NT$1.812 billion in revenue over the year.
1.1.2 Business cash-flow budget and profitability analysis
A. Cash flow:
Operating revenue was NT$146.372 billion, which is a reduction of 3.892 billion from last year.
Operating costs and expenses were NT$146.292 billion, which is a reduction of NT$2.125 billion from last year.
Pre-tax net loss was NT$1.187 billion, which is a reduction of NT$3.502 billion from the past year. After-tax net profit was NT$1.20 billion, which is a reduction of NT$2.990 billion from last year.
B. Budget execution:
Projected operating revenue was NT$154.121 billion, and actual operating revenue was NT$146.372 billion, for a 94.97% attainment; projected operating costs and fees were NT$151.887 billion, and actual operating costs were NT$146.292 billion, for a spend
rate of 96.32%. Projected losses from non-operating activities totalled NT$1.384 billion, with actual losses from non-operating activities at NT$1.267 billion. Projected annual pre-tax net profit was NT$0.85 billion, and actual pre-tax net loss was NT$1.187 billion.
C. Profitability: Return on assets 0.51% Return on equity -2.11% After-tax profit margin -0.82% After-tax earnings per share -NT$0.22
1.1.3 Research and development In 2019, China Airlines’ information strategy development focused on enhancing the operational competitiveness and industrial technology of the Company and the airlines group. Following the seven main themes of artificial intelligence, smart technology/vehicles, big data, mobile applications, cloud computing/edge computing, virtual reality/augmented reality, and information security, China Airlines continued to perceive the pulse of the industry, utilize technology to understand customer value, understand profit-earing trends, find opportunities for innovation, strengthen information security risk management, and enhance the company’s operational competitiveness.
In addition, China Airlines is committed to improving its website experience quality; expanding the development of website functions to optimize the ticket purchasing process; introducing 3D verification functions for credit card transactions to ensure the security of customer transactions and prevent credit card fraud; and building multiple payment tools and supporting multi-currency payments. To better service our passengers, new fare products were launched in September 2019. Passengers can choose additional products according to their travel needs, such as baggage allowance, preferred seats, and mileage accumulation standards, for them to select a la carte or package fares.
1.2 Business Plan for 2020 Benefiting from the government’s continued promotion of tourism policy in Taiwan and the relatively stable price of oil, the passenger load factor in 2019 was slightly higher by about 1% than that in 2018. However, the overall operation performance has been affected by the anti-China extradition movement in Hong Kong, restriction on Chinese tourists, and the rise of low-cost carriers, which have caused fierce industrial competition and a drop in rate of return. Cargo transport has been
Letter to Shareholders 3
affected by international trade protectionism and the US-China tariff dispute, and market growth has slowed down.
In order to respond to changes in the external business environment, China Airlines has been optimizing the aviation network for passenger transport through aircraft model adjustment and flexible capacity allocation, based on market conditions and to meet travel and transportation needs. For cargo transport, shifts were flexibly adjusted, and the shipping space allocation of each zone was flexibly used to increase revenue. For the delivery of special cargoes, such as precision machinery, cold chain products, and aviation materials, continuous development and shipping price segmentation were carried out to enhance the overall revenue.
1.2.1 Passenger Service
China Airlines actively cooperates with the government’s new southbound and foreign policies, and continuously evaluates the development of potential markets and increase of flights for Southeast Asian routes. At the same time, we concentrate our layout in Japanese and Korean markets in response to market demand. For the long-haul route markets of New Zealand, Australia, Europe, and America, we have adjusted the structure of the aviation network and strengthened the transit hub position of Taoyuan Airport; as for cross-strait routes, China Airlines will closely follow market dynamics and adjust transport capacity in a timely manner.
A. Northeast Asian Routes:
In response to the high demand of the Taiwanese people for travel in Japan and South Korean, China Airlines continues to expand routes in Japan and South Korea every year. Since the end of March 2019, Taoyuan-Nagoya flights were increased from 12 per week to 14 per week, Taoyuan-Takamatsu flights were increased from 4 per week to 5 per week, and Taoyuan-Fukuoka flights were increased from 17 per week to 18 per week. In addition, in order to meet the demand for people in central and southern Taiwan wanting to travel to Japan, Taichung-Okinawa flights were increased from 5 per week to 6 per week since the end of March 2019. To take the initiative in securing the increasing market demand, we further plan to increase Taoyuan-Takamatsu flights to 7 flights per week beginning March 2020, and increase Taoyuan-Fukuoka flights to 19 flights per week beginning April 2020. Seasonal, holiday/festival, and thematic charter flights have been continuously
arranged to meet seasonal demand, which strengthen China Airlines’ leading position in the market.
B. Southeast Asian Routes:
In line with the government’s new southbound and foreign policy, China Airlines continued its increase of flights to Bangkok, Penang, Hanoi, Phnom Penh, and other routes in 2018, and increased the Taoyuan-Palau flights from 2 to 3 per week since February 2019, and further increased such number to 4 flights per week since June 2019. In addition, in order to actively expand the Southeast Asian aviation network layout and to strengthen the aviation network transfer market, we have announced plans in 2020 to launch the Taoyuan-Cebu and Taoyuan-Chiang Mai routes.
C. Cross-Strait Routes:
Due to the impact of China’s policy of restricting Chinese tourists coming to Taiwan and the anti-China extradition movement in Hong Kong, cross-strait travel demand is not as robust as in previous years;China Airlines takes the initiative to respond to market movements according to market demand and passenger composition through aircraft model adjustment and flexible regulation of transportation capacity, which maintains profit margins for the routes. In the future, China Airlines will continue to flexibly adjust transportation capacity depending on the cross-strait policy development and market conditions.
D. Long-Haul Routes:
In order to actively increase the benefits of China Airlines’ Californian (North America) destinations and aviation network and to expand customer sources, beginning at the end of October 2019, we resumed having three CI006/CI005 Taoyuan-Los Angeles flights per week, increasing Taoyuan-Los Angeles flights to 10 per week, with the addition of 7 flights on the Taoyuan-Ontario route per week, totaling to 17 flights per week to and from the Greater Los Angeles area, making it easier for travelers to reach major inland cities in the United States. In addition, the aircraft model on the Taoyuan-Ontario route was adjusted from Airbus A350-900 to Boeing 777-300ER, providing more Premium Economy Class seats for passengers. Also, in order to continue to stimulate the North American tourism market, flights on the Taoyuan-Honolulu route were increased from 2 flights per week to 3 flights per week in the summer schedule, providing a variety of choices for visitors to the United States.
4 Letter to Shareholders
E. European Routes:
To stabilize China Airlines’ leading position in Taiwan’s Continental Europe flight market, beginning in 2018, flights on the Taoyuan-Vienna route have been increased from 3 flights per week to 5 flights per week, and we have maintained 5 flights per week throughout the year of 2019; meanwhile, during peak season from September to October, flights were increased to 6 per week. In addition, the enlarged aircraft model on Taoyuan-Amsterdam was changed to 777-300ER during the summer schedule in 2019 to increase the supply of seats. In the future, a more dense and convenient European aviation network will be provided to enhance the efficiency of China Airlines’ extension of the European aviation network.
F. Australia and New Zealand Routes:
In order to continuously improve the New Zealand and Australian aviation networks, China Airlines has increased the flights on the Taoyuan-Melbourne route to 4 flights per week from the end of October 2019. During the winter season, in addition to increasing flights to New Zealand and Australia to 22 flights per week, it has also expanded its seat supply to meet market demand. In addition to securing its market share, China Airlines will also actively expand bidirectional connections market among New Zealand, Australia, Europe and Northeast Asia, strengthening China Airlines’ travel services.
1.2.2 Cargo Service In 2019, due to the disturbance of US-China trade war and the slowdown in the growth of global trade, the overall air cargo transport market was full of challenges. The Company continues to cultivate potential cargo transport markets, and launched the Nagoya, Japan route at the end of March to provide direct import and export services for the manufacturing industries in Nagoya and Central Japan; also, taking advantage of the rapid growth of India’s emerging markets, the Mumbai-Amsterdam route was launched in mid-November and achieved impressive results. Fighting for cross-strait cargo aircraft traffic rights, the second cargo aircraft flight to Chongqing has been added since the end of October, and the flight loading performance was quite good.
To meet the needs of postal business clients, China Airlines plans to implement 15 customized charter flights to Zhengzhou in Q4, and continue the regular charter flights on Taoyuan-Columbus, Hong Kong-Chicago, and other routes from Asian cities to major U.S. cities.
Recently, in response to the impact of the pandemic situation and the uncertainty of US-China trade on cargo aircraft operations, short-term flight reduction measures have been adopted for cross-strait and Hong Kong routes; also, European and American flights were combined accordingly. The overall business plan is described as follows:
A. Long-Haul Routes
China Airlines plans 34 flights per week and strives for regular annual cargo charter flights to Columbus, USA. 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 will prioritize flights to US West Coast destinations to improve flight payload and optimize economic efficiency.
B. European Routes:
China Airlines will maintain the operation of 6 flights per week in cooperation with the Indian market development plan, and continue to promote the potential markets of Delhi and Mumbai in India, so as to achieve two-stage revenue benefits.
C. Regional routes:
China Airlines will optimize the transportation capacity of Singapore, Penang, Ho Chi Minh City, Hanoi, and other Southeast Asian routes. Weekly flights will be gradually increased to 55 flights in the summer schedule of 2020. Through the increase in the proportion of regional cargo sources, we look to improve the profitability of Southeast Asian cargo aircraft.
China Airlines will continue to evaluate the flight increase plan for potential destinations on the cross-strait cargo aircraft route (including Guangzhou, Chongqing, and Zhengzhou) to strengthen the cross-strait profitable route layout. For Hong Kong and Northeast Asia, in addition to maintaining the operation of 16 and 5 flights per week, respectively, China Airlines will strive to secure non-regular charter flight business and develop high-priced sources of goods.
D. Improving revenue management and extending chartered flight business and high-growth source of goods:
(1)Improving revenue management:
In order to meet the demand for machine driven by the emerging 5G industry, China Airlines will
Letter to Shareholders 5
take advantage of using Boeing 747-400F cargo-only aircraft to load large cargoes for the transport of large machinery, which will increase revenue by providing differentiated services.
(2)Customized charter flights business:
China Airlines will deeply cultivate emerging markets such as Southeast Asia, and promote customized charter flight business on a regular/irregular basis.
(3)Deepening cooperation with inter-airline express delivery companies:
Maintaining 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.
(4)Promoting cold chain cargoes:
China Airlines obtained CEIV Pharma certification from the International Air Transport Association (IATA CEIV Pharma) in April 2019. It is the first airline in Taiwan to receive this honor, and the certification can effectively increase the growth rate of the high-value cargo market.
1.3 Development Strategies As the aviation industry provides international passenger and cargo transportation services, its operations are susceptible to global economic growth and political and economic conditions. According to the economic forecast published by IHS Markit in February 2020, the estimated global economic growth rate is 2.5%, slightly lower than the 2.6% of 2019; the growth rate in Taiwan is 2.1%.
The International Air Transport Association (IATA) originally estimated in December 2019 that in 2020, the growth rate of demand for the air passenger transport market would be 4.1% globally, 4.8% in the Asia-Pacific region, and that air cargo transport volume would increase by 2.0%. However, as the COVID-19 pandemic has increased in severity, the IATA estimates that the growth rate of demand for the air passenger transport market in 2020 will become negative, and the passenger transport revenue will be reduced by about 63 billion to 113 billion USD due to the implementation of tourism restrictions on the grounds of epidemic prevention in various countries.
Faced with such a highly competitive external environment, political and economic ripple effects, climate change and environmental protection issues, geopolitical risks, changes in exchange rates and oil prices, various uncertainties with the added uncertainty of the epidemic that is currently affecting the air transport market, this year (2020) will be a very difficult year for airlines.
The Company will take a proactive and rigorous attitude to carry out risk management and control, and establish corresponding response strategies. For pandemic prevention operations, we will follow the guidance of the World Health Organization (WHO) and other public health authorities and implement disease prevention work to ensure passenger safety. For passenger transport, we will continue to flexibly adjust transport capacity to respond to changes in the market. Through the solid establishment of the aviation network and the deepening of inter-airline cooperation, we aim to expand benefits, increase revenue, optimize cabin products, and strengthen brand marketing, so as to optimize passenger experience and enhance customer loyalty. For cargo transport, we aim to increase the overall revenue through introducing next-generation aircraft, strengthening operational efficiency, implementing revenue management improvement, and promoting customized charter business and cold chain transportation services. In addition, to accommodate to digital technology trends, we will expand online sales to improve the efficiency of mobile business applications, and promote electronic services to improve the convenience of passenger and cargo transport.
Through professional operation and management, we will focus on businesses with niche and development potential, integrate group resources to strengthen our overall competitiveness, and expand economic scale and scope, so as to effect business synergy and thus reach business sustainability.
Chairman: Hsieh, Su-Chien
President: Hsieh, Su-Chien
Vice President, Finance Div.:
Chen, I-Chieh
6 Letter to Shareholders
Company Profile 2.1 Date of Incorporation
2.2 Company History
Company Profile 7
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 Division and Cargo Division to expand operations.
1988: Twenty-seven shareholders donated shares to establish the China Aviation Development Foundation, transferring the rights of supervision and management to 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 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 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 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.
8 Company Profile
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 with Airbus. 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 the cities of 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 the 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 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 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 our 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 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
Company Profile 9
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 National Industry Innovation Award for NexGen Aesthetics.
Other: Centers for Disease Control Epidemic Prevention Award 2015.
2016: Launched 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 2016 Best Airline Website by WebAward.
Corporate Social Responsibility: Passed third-party audits for ISO 14001 and ISO 50001 Environmental Management Systems. Received 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 in 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 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 a Gold Medal for reputation by Reader’s Digest for the 19th consecutive year. Awarded a 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 the 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’
10 Company Profile
in-flight magazine Dynasty received the 2018 APEX Awards for Publication Excellence in the US.
Corporate Governance: Ranked among 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: Awarded the “Best Premium Economy Class Amenities Kit” of the Onboard Hospitality Award by OBH Magazine.
2019: Flight addition to Taoyuan-Palau route. Developed cargo transport destination in Nagoya, Japan. Signed a letter of intent with Chung Yuan Christian University to jointly cultivate 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 to achieve international certification.
Corporate Governance: Placed in Top 5% of the Corporate Governance Ranking once again.
Corporate Social Responsibility: Evaluated as 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.
Company Profile 11
Corporate Governance Report 3.1 Organization
3.2 Directors and Management Team
3.3 Implementation of Corporate Governance
3.4 Information Regarding 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
12 Corporate Governance Report
III. Corporate Governance Report
3.1 Organization
3.1.1 Organizational Chart (APR 25, 2020)
Corporate Governance Report 13
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
FLIGHT
OPERATIONS 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 AIRLINES
2020 / 02 / 19
TAICHUNG BRANCH
BUSAN BRANCH
TECHNICALTRAINING CENTER
MELBOURNEBRANCH
KUMAMOTOSTATION
VICE PRESIDENT,OCEANIA
(VV)SENIOR VP
GUANGZHOU
OFFICE
SHENZHEN
OFFICE
CHENGDU OFFICE
ZHENGZHOU
OFFICE
SHENYANG
OFFICE
CHANGSHA
OFFICE
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 STATION
WUXI STATION
WEIHAI 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
3.1.2 Major Corporate Functions
Department Functions
General Audit Office Responsible for auditing the internal control system, results of 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 general 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; seeking 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 carries
out 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, organizing employee recreational activities, and setting 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 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
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.
14 Corporate Governance Report
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 each station,
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 the 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 the purchasing, warehousing, preparation
and loading of various in-flight service supplies; working on improving the quality of
in-flight service products based on customer feedbacks and market trends.
Data Protection &
Quality Management
Office
Implements personal information and quality management system, and reports the
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 the laws and the regulation
enforcement process in each country;establishes and implements the Company’s ISO
9001 quality management system, and implements service quality education,
internal quality auditor training and encourages further understanding of measures
regarding quality-related issues.
Passenger Sales &
Marketing Div. Responsible for supervising the passenger transport network planning and route
management of the entire route, 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,
establishment of a personnel management system, and setting 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 affiliated enterprises.
Occupational Safety &
Health Dept. Writes the Company’s Occupational Health and Safety Manual and regulations;
drafts, plans, supervises, and promotes health and safety matters and guides
implementation in relevant departments in order to prevent occupational hazards
and ensure employee health and safety. Received ISO45001:2018 and TOSHMS
occupational health and safety certification following SGS audit to effectively control
occupational incident risk and improve occupational health and safety performance.
Corporate Governance Report 15
Department Functions
Cargo Sales, Marketing
& Services Div.
Establishes the cargo development strategy, supervises cargo operations on all
routes, plans the cargo flight timetable and controls allocation of hold space, sets
cargo shipping rates and sales quotas, evaluates operating performance, drafts and
oversees cargo services and operating standards, and is responsible for passenger
and cargo plane loading control operations, cargo equipment controls and
replenishment, Taipei cargo terminal operations, and accounting for 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 crew and flight assignments, and
maintaining airplane flight manuals and flight simulators.
System Operation
Control Div.
Manages 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 reasons 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 implementation of airplane maintenance, 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 maintenance costs, and planning 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 the quality audit system. Established and implements the aircraft
quality management and on-site inspection systems, implements 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
Develops 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 each branch’s development and promotion of passenger and
freight-related operations.
16 Corporate Governance Report
3.2 Directors and Management Team 3.2.1 Directors
APR 25, 2020 Title Name
Nationality/ Country of
Origin Gender Date First
Elected Date
Elected Term
(Years)
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 3 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 3 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
President, China Airlines Ltd. Chairman, Mandarin Airlines, Ltd. Chairman, CAL Park Co., Ltd. Chairman, CAL Hotel Co., Ltd.. Chairman, CAL-Asia Investment Inc. Chairman, CAL-Dynasty International, Inc. Director, Dynasty Properties Co., Ltd. Director, Taoyuan International Airport Services Co., Ltd.
None None None Note 1
Director
China Aviation Developm
ent Foundation
R.O.C. - 07/07/1988 06/27/2018 3 1,867,341,935 34.13% 1,867,341,935 34.45% - - - - - - - - - -
Representative: Chen, Charles C.Y.
R.O.C. Male 07/01/2000 06/27/2018 3 190,166 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 3 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
Corporate Governance Report 17
Title Name Nationality/ Country of
Origin Gender Date First
Elected Date
Elected Term
(Years)
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, Han-M
ing
R.O.C. Male 07/26/2016 06/27/2018 3 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 3 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 3 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 None
Director
National
Development
Fund, Executive Yuan
R.O.C. - 06/15/2012 06/27/2018 3 519,750,519 9.50% 519,750,519 9.59% - - - - - - - - - -
Representative: Lin, Su-M
ing
R.O.C. Male 06/15/2012 06/27/2018 3 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. 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 3 0 0.00% 0 0.00% 0 0.00% 0 0.00%
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.
Deputy Mayor, Tainan City Government
None None None None
18 Corporate Governance Report
Title Name Nationality/ Country of
Origin Gender Date First
Elected Date
Elected Term
(Years)
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
Chung, Lo-Min
R.O.C. Male 06/15/2012 06/27/2018 3 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 G
en-Sen
R.O.C. Female 06/27/2018 06/27/2018 3 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
Independent Director
Shen, Hui-Ya
R.O.C. Female 06/27/2018 06/27/2018 3 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. Independent Director, Hua Nan Securities Co., Ltd.
None None None None
Note 1: In recent years, the industry competition in the aviation industry is fierce. In order to increase the operating efficiency and streamline the decision-making and implementation, Chairman Hsieh, Su-Chien is temporarily appointed as the President of the Company. However, the manager remains responsible for the implementation of all important proposals after the approval of the Board of Directors. In order to prevent the concurrent appointment from influencing the objectivity and supervision of the Board of Directors, except for Chairman Hsieh, Su-Chien and Director Wei, Yung-Yeh, who are concurrently Directors and employees, none of the other members of the 21st Board of Directors are concurrently employees 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 3 terms.
Corporate Governance Report 19
Major shareholders 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) donated 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”.
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 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 and its parent company, its subsidiary, or a subsidiary of the same parent).
Criteria
Name
Meets One of the Following Professional Qualification Requirements, Together with at Least Five Years 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 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 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 - - - - - - - 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 - 2
20 Corporate Governance Report
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 the 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.
Corporate Governance Report 21
3.2.2 Management Team APR 25, 2020
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
Chairman & President
Hsieh, Su-Chien R.O.C. Male 06/24/2016 48,517 0.00% 0 0.00% 0 0.00%
Senior Vice President of Marketing, China Airlines Ltd. General Manager, Australia Branch Office, China Airlines Ltd. Chairman, Taiwan Air Cargo Terminal Ltd. Bachelor’s Degree, Department of Economics, Soochow University
Chairman, Mandarin Airlines, Ltd. Chairman, CAL Park Co., Ltd. Chairman, CAL Hotel Co., Ltd.. Chairman, CAL-Asia Investment Inc. Chairman, CAL-Dynasty International, Inc. Director, Dynasty Properties Co., Ltd. Director, Taoyuan International Airport Services 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 (VF)
Chang, Young R.O.C. Male 06/24/2016 0 0.00% 0 0.00% 0 0.00%
Chairman & President, Taiwan Airport Services Co., Ltd. President, Taoyuan International Airport Services Co., Ltd. Bachelor’s Degree, Fu Jen University
Chairman, Kaohsiung Airport Catering Services Ltd. Chairman, Taiwan Airport Service Co., Ltd. Chairman, Taiwan Airport Service (Samoa) Co., Ltd. Director, Taoyuan International Airport Services Co., Ltd. Director, Tigerair Taiwan Co., Ltd. Director, Mandarin Airlines, Ltd. Vice Chairman, Arport Air Terminal (Xiamen) Co., Ltd. Vice Chairman, Arport Air Cargo Service (Xiamen) Co., Ltd. Director, Taiwan Aircraft Maintenance And Engineering Co., Ltd. Director & President, CAL Park Co., Ltd. Director, CAL-Asia Investment Inc.
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. Director, CAL-Dynasty International, Inc. Director & President, CAL-Asia Investment Inc.
None None None None
22 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 (VO)
Kao, Shing-Hwang
R.O.C. Male 05/01/2012 62,809 0.00% 0 0.00% 0 0.00%
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..
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..
None None None None
Data Protection Officer, Data Protection & Quality Management Office
Wu, Hsiao-Sui R.O.C. Male 07/21/2018 0 0.00% 52 0.00% 0 0.00%
General Manager, Korea Branch General Manager, Honolulu Branch Master’s Degree, Cranfield University, UK
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
None 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.
Lai, Ming-Hui R.O.C. Male 03/01/2016 19,127 0.00% 0 0.00% 0 0.00%
Vice President, Corporate Safety Office Assistant Vice President, Flight Operations Div. Bachelor’s Degree, National Cheng Kung University
None None None None None
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
Assistant Vice President, Flight Operations Div.
Chen, Chwen-Der
R.O.C. Male 08/01/2018 19,299 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
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
Corporate Governance Report 23
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, 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, Yestrip Co., 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
Vice President, Finance Div. (concurrently finance and accounting manager)
Chen, I-Chieh R.O.C. Male 02/16/2017 6,161 0.00% 0 0.00% 0 0.00%
Vice President, Investment Development & Management Div. General Manager, Vietnam Branch Concurrently, General Manager, Hanoi Branch Master’s Degree, National Taipei University
Supervisor, Dynasty Aerotech International Corp. Supervisor, CAL Hotel Co., Ltd.. Supervisor, Mandarin Airlines, Ltd. Supervisor, China Pacific Laundry Services Ltd. 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.
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
Chen, I-Ko R.O.C. Male 03/01/2016 23,541 0.00% 0 0.00% 0 0.00%
Assistant Vice President, Corporate Safety Office Vice President, Safety Office, Mandarin Airlines, Ltd. Associate’s Degree, United College of Engineering
None 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
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
Liu, Tsao-Yang R.O.C. Male 11/05/2018 60,488 0.00% 0 0.00% 0 0.00%
Vice President, Ground Services Div. Chief Representative, South China, Concurrently General Manager, Guangzhou Office Bachelor’s Degree, Chinese Culture 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. Master’s Degree, RMIT University, AU
None None None None None
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. (concurrently research and development manager)
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 Director, CAL Hotel Co., Ltd..
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, 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 11,803 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, Taiwan Airport Service Co., Ltd. Director, Global Sky Express Ltd. Director, Dynasty Hotel of Hawaii, Inc. Director, Dynasty Properties Co., Ltd. Director, China Aircraft Services Ltd. Director, Taiwan Air Cargo Terminal Ltd.
None None None None
Assistant Vice President, Corporate Development Office
Wang, Wei R.O.C. Female 02/02/2017 54,297 0.00% 0 0.00% 0 0.00%
General Manager, Austria Branch Assistant Vice President, Finance Div. Master’s Degree, George Washington University, U.S.A.
Supervisor, NORDAM Asia Ltd. Director, Kaohsiung Airport Catering Services Ltd.
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.
An, Long Chi R.O.C. Male 04/01/2020 77,308 0.00% 0 0.00% 0 0.00%
President, China Pacific
Catering Services Ltd.
General Manager, Xiamen
Office
Bachelor’s Degree,
Chinese Culture 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, Flight Operations Div. Bachelor’s Degree, Chinese Culture University
Director, China Pacific Laundry Services Ltd. Director, Taoyuan International Airport Services Co., Ltd.
None None None None
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
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
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.
Shann, Da-Sin R.O.C. Male 01/01/2018 29,818 0.00% 17,982 0.00% 0 0.00%
General Manager, Cargo Sales Management Department, Cargo Sales, Marketing & Services Div. General Manager, Cargo Revenue & Route Management Department, Cargo Sales, Marketing & Services Div. Master’s Degree, National Taipei University
Director, Global Sky Express Ltd. Director, Chung-Hwa Express Co., Ltd.
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 Master’s Degree, Chung Yuan Christian 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 Quality, Assurance Div.
Li, Chih-Wei R.O.C. Male 09/16/2017 10,295 0.00% 0 0.00% 0 0.00%
Assistant Vice President, Maintenance Div. General Manager, Line Operation Department, Maintenance Div. Master’s Degree, Kainan University
Director, NORDAM Asia Ltd.
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.
None None None None
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. Director, Yestrip Co., 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
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
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
Note1: In recent years, competition in the aviation industry has been fierce. In order to increase our operating efficiency and streamline our decision-making and implementation, Chairman Hsieh, Su-Chien has been temporarily appointed as the President of the Company. However, the manager remains responsible for the implementation of all important proposals after approval by the Board of Directors. In order to prevent concurrent appointment from influencing the objectivity and supervision of the Board of Directors, except for Chairman Hsieh, Su-Chien and Director Wei, Yung-Yeh, who are concurrently directors and employees, none of the other members of the 21st Board of Directors are concurrently employees 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.
28 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 10)
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 4,574 4,574 0 0 0 0 468 1,556 -0.42% -0.51%
Chairman Ho, Nuan-Hsuan 1,676 1,676 2,866 2,866 0 0 241 608 -0.40% -0.43%
Director Chen, Charles C.Y. 40 40 0 0 0 0 530 770 -0.05% -0.07%
Director Ting, Kwang-Hung 40 40 0 0 0 0 540 540 -0.05% -0.05%
Director Chen, Han-Ming 40 40 0 0 0 0 530 530 -0.05% -0.05%
Director Ko, Sun-Ta 40 40 0 0 0 0 530 530 -0.05% -0.05%
Director Wei, Yung-Yeh 40 40 0 0 0 0 530 530 -0.05% -0.05%
Director Lin, Su-Ming 40 40 0 0 0 0 545 545 -0.05% -0.05%
Director Wang, Shih-Szu 0 0 0 0 0 0 102 102 -0.01% -0.01%
Independent Director
Chung, Lo-Min 60 60 0 0 0 0 880 880 -0.08% -0.08%
Independent Director
Chang, Hsieh Gen-Sen
60 60 0 0 0 0 900 900 -0.08% -0.08%
Independent Director
Shen, Hui-Ya 60 60 0 0 0 0 900 900 -0.08% -0.08%
1.State the policy, system, standard and structure of independent directors’ remuneration, and the relationship 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 of relevant 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). Mr. Ho, Nuan-Hsuan was dismissed as Chairman on April 2, 2019; Mr. Hsieh, Su-Chien has been elected as Chairman on April 2, 2019.
Note 2: Refers to director remuneration over the past year (includes director salary, additional compensation, severance pay, 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, special disbursements, various allowances, living quarters, company car). If provided with housing, 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$970,000.
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, severance pay, various bonuses, incentive pay, travel expenses, special disbursements, various allowances, living quarters, and company car. If provided with housing, 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$196,000. As stipulated in IFRS 2 Share Based Payments including obtaining employee stock options and employee restricted stock awards and participation in a cash capital increase shall be calculated as remuneration.
* The content is provided for information disclosure, not tax purposes.
Corporate Governance Report 29
Unit: NT$ thousands Dec 31,2019 Relevant Remuneration Received by Directors Who are Also Employees Ratio of Total Compensation
(A+B+C+D+E+F+G) to Net Loss (%)
(Note 10)
Compensation Paid to
Directors from an
Invested Company or
Parent Company Other
than the Company’s
Subsidiary
(Note 11)
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
1,579 1,942 0 0 0 0 0 0 -0.55% -0.67% None
0 0 0 0 0 0 0 0 -0.40% -0.43% None
0 0 0 0 0 0 0 0 -0.05% -0.07% None
0 0 0 0 0 0 0 0 -0.05% -0.05% None
0 0 0 0 0 0 0 0 -0.05% -0.05% None
0 0 0 0 0 0 0 0 -0.05% -0.05% None
1,589 1,589 0 0 0 0 0 0 -0.18% -0.18% None
0 0 0 0 0 0 0 0 -0.05% -0.05% None
0 0 0 0 0 0 0 0 -0.01% -0.01% None
0 0 0 0 0 0 0 0 -0.08% -0.08% None
0 0 0 0 0 0 0 0 -0.08% -0.08% None
0 0 0 0 0 0 0 0 -0.08% -0.08% 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 2019, 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: The remuneration distributed to each member of the Company’s Board is disclosed as a range and the names of directors are disclosed by range of
compensation received. Note 9: The total remuneration provided by the Company and subsidiaries to directors is disclosed per the consolidated financial statement and names of
directors are disclosed by range of compensation received. Note 10: 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 2019 individual financial statement net loss (after tax) totaled NT$1,199,798,000.
Note 11: (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. (3) Compensation paid to directors from an invested company other than a Company subsidiary is included in Column I (Consolidated Subsidiaries of CAL)
of the Director Remuneration by Compensation Level Table. Note 12: (1) Aside from Chairman Ho, Nuan-Hsuan, and 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) Directors who also serve as employees of the Company are Chairman Hsieh, Su-Chien and Director Wei, Yung-Yeh.
30 Corporate Governance Report
Director Remuneration by Compensation Level
Range of Remuneration
Total of (A+B+C+D) Total of (A+B+C+D+E+F+G)
CAL (Note 8)
Consolidated Subsidiaries of CAL (H) (Note 9)
CAL (Note 8)
Consolidated Subsidiaries of CAL (I)
(Note 9)
Under NT$1,000,000
Chen, Charles C.Y.; Ting, Kwang-Hung;
Chen, Han-Ming; Ko, Sun-Ta; Wei, Yung-Yeh; Lin, Su-Ming;
Wang, Shih-Szu; Chung, Lo-Min;
Chang, Hsieh Gen-Sen; Shen, Hui-Ya
Chen, Charles C.Y.; Ting, Kwang-Hung;
Chen, Han-Ming; Ko, Sun-Ta; Wei, Yung-Yeh; Lin, Su-Ming;
Wang, Shih-Szu; Chung, Lo-Min;
Chang, Hsieh Gen-Sen; Shen, Hui-Ya
Chen, Charles C.Y.; Ting, Kwang-Hung;
Chen, Han-Ming; Ko, Sun-Ta; Lin, Su-Ming; Wang, Shih-Szu;
Chung, Lo-Min; Chang, Hsieh Gen-Sen;
Shen, Hui-Ya
Chen, Charles C.Y.; Ting, Kwang-Hung;
Chen, Han-Ming; Ko, Sun-Ta; Lin, Su-Ming; Wang, Shih-Szu;
Chung, Lo-Min; Chang, Hsieh Gen-Sen;
Shen, Hui-Ya
NT$1,000,000 - NT$1,999,999 - - - -
NT$2,000,000 - NT$3,499,999 - - Wei, Yung-Yeh Wei, Yung-Yeh
NT$3,500,000 - NT$4,999,999 Ho, Nuan-Hsuan - Ho, Nuan-Hsuan -
NT$5,000,000 - NT$9,999,999 Hsieh, Su-Chien Hsieh, Su-Chien; Ho, Nuan-Hsuan
Hsieh, Su-Chien Hsieh, Su-Chien; Ho, Nuan-Hsuan
Total 12 12 12 12
Corporate Governance Report 31
President and Senior Vice President 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)
President Hsieh, Su-Chien 1,403 1,403 0 0 176 539
Senior Vice President Lo, Ya-Mei(Note 10) 1,779 1,779 0 0 540 990
Senior Vice President Kao, Shing-Hwang 3,103 3,103 0 0 5,492 5,852
Senior Vice President Wang, Chen-Min (Note 11) 3,157 3,157 0 0 765 1,516
Senior Vice President Wang, Houng 3,314 3,314 0 0 841 1,358
Senior Vice President Chang, Young 3,363 3,363 0 0 791 2,107
President and Senior Vice President Remuneration by Compensation Level Range of Remuneration
Name of President and Senior Vice President CAL (Note 6) Consolidated Subsidiaries of CAL (E)(Note 7)
Under NT$1,000,000 - -
NT$1,000,000 - NT$1,999,999 Hsieh, Su-Chien Hsieh, Su-Chien
NT$2,000,000 - NT$3,499,999 Lo, Ya-Mei Lo, Ya-Mei
NT$3,500,000 - NT$4,999,999 Wang, Chen-Min; Wang, Houng; Chang, Young Wang, Chen-Min; Wang, Houng
NT$5,000,000 - NT$9,999,999 Kao, Shing-Hwang Kao, Shing-Hwang; Chang, Young
Total 6 6
Note 1: President Hsieh, Su-Chien concurrently serves as director. Their remuneration is listed above and also in the Remuneration of Directors table. 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, special disbursements, various allowances, living quarters, and company car
distributed to presidents and senior vice presidents over the past year. If provided with housing, 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$4,165,000. As stipulated in IFRS 2, Share Based Payments including obtaining employee stock options and employee restricted stock awards and participation in a cash capital increase shall be calculated as remuneration.
Note 4: Refers to employee compensation (including stock or cash) approved for distribution by the Board to presidents and senior vice presidents over the past year. Net income refers to net income (after tax) for the most recent year. For those already using IFRS, net income refers to net income (after tax) reported on the individual financial statement for the most recent year. The Company has no distributable earnings in 2019, so it does not plan to distribute employee compensation.
* The content is provided for information disclosure, not tax purposes.
32 Corporate Governance Report
Unit: NT$ thousands December 31, 2019
Employees’ Compensation (D) (Note 4)
Ratio of Total Compensation (A+B+C+D) to Net Loss (%)
(Note 8) Compensation paid to the Presidents and Senior Vice
Presidents from an Invested Company or Parent Company Other Than the Company’s Subsidiary
(Note 9) CAL
Consolidated Subsidiaries of CAL
(Note 5) CAL
Consolidated Subsidiaries of CAL (Note 5)
Cash Stock Cash Stock
0 0 0 0 -0.13% -0.16% None
0 0 0 0 -0.19% -0.23% None
0 0 0 0 -0.72% -0.75% None
0 0 0 0 -0.33% -0.39% None
0 0 0 0 -0.35% -0.39% None
0 0 0 0 -0.35% -0.46% None
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: The remuneration distributed to each president and senior vice president is disclosed as a range and the names of the presidents and senior vice presidents are disclosed by range of compensation received.
Note 7: The total remuneration provided by the Company and subsidiaries to presidents and senior vice presidents is disclosed per the consolidated financial statement and names of the presidents and senior vice presidents are disclosed by range of compensation received.
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 2019 individual financial statement net loss (after tax) totaled NT$1,199,798,000.
Note 9: The President and Senior Vice President of the Company do not receive any remuneration related to the reinvestment of enterprises other than subsidiaries.
Note 10: Miss Lo, Ya-Mei was dismissed from the position of Senior Vice President on August 1, 2019. Note 11: Mr. Wang, Chen-Min assumed the position of Senior Vice President on January 1, 2019.
Corporate Governance Report 33
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 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 2018 2019
CAL Consolidated Subsidiaries of CAL CAL Consolidated Subsidiaries of CAL
Directors 1.18% 1.33% -1.62% -1.79%
Presidents and Senior Vice Presidents 1.58% 1.82% -2.06% -2.37%
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 remuneration is set by 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 decisions are implemented after being submitted to the Board of Directors.
D. Linkage to business outcomes
The remuneration of the president has already taken into account his professional capability and the Company's operations and financial situation; the experienced senior vice presidents handle matters based on the Company's employee achievement provisions, using a linkage of individual performance on goals management and work evaluations, and assessing performance after overall consideration.
E. Linkage to future risk Major decision making for operational levels of this company always balances various risk factors;
major decision-making performance will be reflected in the Company's profits, and thereby is related to salaries and remuneration to management levels; specifically, the salaries and remuneration of the chairman of the board, the president, and senior vice presidents are related to the results of controlling and managing future risk.
34 Corporate Governance Report
3.3 Implementation of Corporate Governance 3.3.1 Board of Directors
A. From January 1, 2019, through April 25, 2020, a total of eleven meetings of the Board of Directors were held. Average attendance rate was 89%. 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 11 0 100% China Aviation Development Foundation
Elected as Chairman on April 2, 2019.
Director Chen, Charles C.Y. 8 3 73% China Aviation Development Foundation
On May 8, 2019, Hsieh, Su-Chien was entrusted to attend as a proxy; On July 3, 2019, Chen, Han-Ming was entrusted to attend as a proxy; On October 8, 2019, Hsieh, Su-Chien was entrusted to attend as a proxy.
Director Ting, Kwang-Hung 8 3 73% China Aviation Development Foundation
On April 2, 2019, Hsieh, Su-Chien was entrusted to attend as a proxy; On June 25, 2019, Hsieh, Su-Chien was entrusted to attend as a proxy; On November 7, 2019, Hsieh, Su-Chien was entrusted to attend as a proxy.
Director Chen, Han-Ming 11 0 100% China Aviation Development Foundation
None
Director Ko, Sun-Ta 10 1 91% China Aviation Development Foundation
On October 8, 2019, Chen, Han-Ming was entrusted to attend as a proxy.
Director Wei, Yung-Yeh 11 0 100% China Aviation Development Foundation
None
Director Lin, Su-Ming 10 1 91% National Development Fund (Executive Yuan)
On November 7, 2019, Wang, Shih-Szu was entrusted to attend as a proxy.
Director Wang, Shih-Szu 7 4 64% National Development Fund (Executive Yuan)
On January 21, 2019, Hsieh, Su-Chien was entrusted to attend as a proxy; On April 2, 2019, Lin, Su-Ming was entrusted to attend as a proxy; On June 25, 2019, Lin, Su-Ming was entrusted to attend as a proxy; On July 3, 2019, Lin, Su-Ming was entrusted to attend as a proxy.
Independent Director Chung, Lo-Min 10 1 91% - On March 18, 2020, Chang, Hsieh Gen-Sen was entrusted to attend as a proxy.
Independent Director Chang, Hsieh Gen-Sen 11 0 100% - None
Independent Director Shen, Hui-Ya 10 1 91% - On April 2, 2019, Chang, Hsieh Gen-Sen was entrusted to attend as a proxy.
Chairman Ho, Nuan-Hsuan 2 0 100% China Aviation Development Foundation
Dismissed as Chairman on April 2, 2019. Obligated to attend twice. Actual attendance was twice. Attendance rate is 100%.
Other mentionable items: 1. In the operation of the Board of Directors, should one of the below situations occur, the Board Meeting date, session, content of the resolution, opinions of all independent
directors, and the Company’s response to said opinions shall be properly recorded: (1) Matters listed in Article 14-3 of the Securities and Exchange Act.: The Company has set up an Audit Committee, thus this does not apply. (2) Other matters up for decision by the Board not listed in Article 14-3 of the Securities and Exchange Act but that were opposed by independent directors or about which
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
May 8, 2019: 6th meeting of the 21st Board of Directors
Proposal on salary and remuneration of Chairman Hsieh, Su-Chien Proposal to release the non-competition restriction on Chairman Hsieh, Su-Chien
Chairman Hsieh, Su-Chien Personal interest in this matter
Except for Chairman Hsieh, Su-Chien, who recused according to the law due to interests involved and did not participate in discussion or voting, the remaining 10 attending Directors approved the matter.
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
Except for Chairman Hsieh, Su-Chien, who recused according to the law due to interests involved and did not participate in discussion or voting, the remaining 10 attending Directors approved the matter.
3. Board of Director functional improvement goals for the last year and the current year (such as establishing an audit committee and improving information transparency) and implementation assessment: (1) In order to strengthen 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.
Corporate Governance Report 35
(2) In order to implement corporate governance and enhance the functions 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 the performance evaluation of the entire Board of Directors, individual Board members, and the functional committees. The Company has conducted performance evaluation in 2019. The self-evaluation results by the entire Board of Directors, individual Board members, and the functional committees are all 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 topics in their new or existing term of office in order 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 2019 through April 25, 2020: Dates
Name 01/21/2019 03/20/2019 04/02/2019 05/08/2019 06/25/2019 07/03/2019 08/07/2019 10/08/2019 11/07/2019 01/13/2020 03/18/2020
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 note the date of resignation and actual attendance rate (%) calculated based on the number
of meetings held during the period prior to resignation and the director’s actual number of meetings attended. (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 director’s actual number of meetings attended.
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.
(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, 2019
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 items, 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 items, 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 items, 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.
36 Corporate Governance Report
3.3.2 Audit Committee The Audit Committee convened night meetings from January 1, 2019, through April 25, 2020. Committee member attendance is detailed below:
Title Name Attendance in Person By Proxy Attendance Rate (%) Remarks Independent Director (Chairman)
Chang, Hsieh Gen-Sen 9 0 100% None
Independent Director Chung, Lo-Min 9 0 100% None
Independent Director Shen, Hui-Ya 9 0 100% None
Other mentionable items: 1. Key functions of the Audit Committee:
The Committee consists of three Independent Directors. The key functions of the year is to assist the Board of Directors in supervising the Company on the fair presentation of the relevant financial statements, the appointment (dismissal) of a CPA and its independence and performance, the auditing of the Company's internal control system, the 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 acquisitions related matters).
2. In the operation of the Audit Committee, should one of the below situations occur, the Board Meeting date, session, content of the resolution, result of the Audit Committee resolution, and the Company’s response to said opinions shall be properly recorded: (1) Matters listed in Article 14-5 of the Securities and Exchange Act:
Meeting Dates Agenda content
Results of the vote by the Board of Auditors
and company's handling of the Board's opinion
Results of Board of Directors decision
January 21, 2019 3rd Extraordinary Meeting of the Audit Committee of the 21st Board of Directors
Listing Application Plan of Tigerair Taiwan
Passed to the Board of Directors upon unanimous approval by all members in attendance.
Approved by all attending Directors in the 4th meeting of the 21st Board of Directors on January 21, 2019.
March 20, 2019 3rd Meeting of the Audit Committee of the 21st Board of Directors
2018 Financial Report and Consolidated Financial Report 2018 Surplus Earnings Distribution 2019 CPA Appointment and Remuneration Revision of “Procedures for the Acquisition or Disposal of Assets” Revision of “Procedures Governing Derivatives Trading” 2018 Internal Control System Effectiveness Audit and Statement
Approved by all attending Directors in the 5th meeting of the 21st Board of Directors on March 20, 2019.
May 8, 2019 4th Meeting of the Audit Committee of the 21st Board of Directors
Amendment to the “Operational Procedures for Lending Funds to Others” and the “Operational Procedures for Endorsements/Guarantees” Disposal of 5 A330-300 aircraft through sale and leaseback transaction Evaluation and selection of new narrow body passenger aircraft and introduction of new aircraft
Approved by all attending Directors in the 6th meeting of the 21st Board of Directors on May 8, 2019.
June 25, 2019 4th Extraordinary Meeting of the Audit Committee of the 21st Board of Directors
777F new cargo aircraft introduction case Introduction of A321neo new narrow body passenger aircraft
Approved by all attending Directors in the 6th Extraordinary meeting of the 21st Board of Directors on June 25, 2019.
July 3, 2019 5th Extraordinary Meeting of the Audit Committee of the 21st Board of Directors
Plan to handle the matters relevant to releasing shares of Tigerair Taiwan
Approved by all attending Directors in the 7th Extraordinary meeting of the 21st Board of Directors on July 3, 2019.
August 7, 2019 5th Meeting of the Audit Committee of the 21st Board of Directors
Issuing NT $3 billion in total face value of domestic unsecured convertible corporate bonds Carry out three 777F aircraft purchases to order
Approved by all attending Directors in the 7th meeting of the 21st Board of Directors on August 7, 2019.
October 8, 2019 6th Extraordinary Meeting of the Audit Committee of the 21st Board of Directors
Engine selection of A321neo new narrow body passenger aircraft
Approved by all attending Directors in the 8th Extraordinary meeting of the 21st Board of Directors on October 8, 2019.
November 7, 2019 6th Meeting of the Audit Committee of the 21st Board of Directors
2020 audit plan
Approved by all attending Directors in the 8th meeting of the 21st Board of Directors on November 7, 2019.
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
Approved by all attending Directors in the 10th meeting of the 21st Board of Directors on March 18, 2020.
Corporate Governance Report 37
(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, content of the resolution, 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 on a monthly basis, the audit officer submits the annual audit plan
and the implementation of the semi-annual audit work to 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 20, 2019 Audit Committee
Accountant to explain audit results of the 2017 financial report, and take questions from the attendees of the meeting for discussion.
To pay attention to the impact of rising oil prices on the operational aspect and the reasons for changes in operating expenses for two quarters; it was also recommended to adjust the expression of some financial statements according to the principle of consistency.
Approved by all attending Independent Directors.
1.The managerial department provided the explanation and response forthwith during the meeting.
2.Continued to submit for the Board of Directors’ approval, and completed the 2018 financial report announcement and declaration on April 1, 2019.
May 8, 2019 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 2019 and the amendment of laws and regulations, and discuss and communicate the issues raised by the participants.
For the expression of the impact of the IFRS16 Leases bulletin on the balance sheet, it is suggested to describe in the notes.
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 2019 financial report was completed on May 15, 2019.
August 7, 2019 Audit Committee
Before the meeting, the accountant separately reported and explained the review situation to the independent director. At the meeting, the financial director of the Company explained the review results of the financial report in the second quarter of 2019 and the impact of the new bulletin on financial statements, and discussed and communicated the issues raised by the participants.
After discussing the implementation of the new IFRS16 Leases bulletin, discussed the increase in operating expenses in the first half of the year, and inquired about the reasons for the difference between financial results and budget in the first half of the year.
Approved 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 2019 financial report announcement and declaration on August 14, 2019.
November 7, 2019 Audit Committee
Before the meeting, the accountant separately reported and explained the review situation to the independent director. At the meeting, the financial director of the company explained the review results of the financial report for the third quarter of 2019, the amendment of laws and regulations and the 2019
Discussed the impact of falling revenue from cargo transport on the company's overall business operations and asked the managerial department to explain the reasons and benefits of the recent cargo aircraft procurement plan. Also the management authorities are
Noted by all attending Independent Directors.
1. The managerial department has replied in the meeting immediately. The purchase of cargo aircraft is a strategy for phasing-out of old with new aircraft, which can effectively save costs and improve the overall fleet efficiency.
2. Continued to report to the Board of Directors, and completed the Q3 2019 financial report announcement and declaration on November 14, 2019.
38 Corporate Governance Report
financial report audit plan and key audit matters, and discussed and communicated the issues raised by the participants.
reminded to prepare countermeasures as soon as possible and adjust the operation mode of passenger and cargo transportation in time for the overall global economic situation, such as the China-US trade war.
March 18, 2020 Audit Committee
Before the meeting, the accountant separately reported and explained 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.
The impact of the COVID-19 pandemic on the Company's passenger revenue was addressed, and the adjustment to items of loss allocation were discussed.
Approved by all attending Independent Directors.
1. The managerial department provided the explanation and response forthwith during the meeting.
2. Continued to submit for the Board of Directors’ approval, and completed the 2019 financial report announcement and declaration on March 31, 2020.
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
January 21, 2019 Audit Committee
Internal audit business report for Q4 2018
To pay attention to whether there is a control mechanism for online sales.
Approved by all attending members and reported to the Board of Directors.
Reported to the Board of Directors on January 21, 2019.
March 22, 2019 Audit Committee
2018 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 20, 2019, and the 2018 Statement of Internal Control was announced and declared on March 22, 2019 and disclosed in the 2018 annual report.
Internal audit business report for January and February 2019
None Approved by all attending members and reported to the Board of Directors.
Reported to the Board of Directors on March 20, 2019.
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 7, 2019 Audit Committee
Internal audit business report for Q3 2019
None Approved by all attending members and reported to the Board of Directors.
Reported to the Board of Directors on November 7, 2019.
2020 Audit plan Sample the rationality of the passenger and freight pricing system.
1. As for the items inquired by committee member Chung, the audit officer replied on-site: after being included in the annual audit and spot check items, the finance division also has a complete audit mechanism for the expression of accounting rights and responsibilities.
2. Approved by all attending members and reported to the Board of Directors for discussion.
Resolved by the Board of Directors on November 7, 2019, and completed the announcement and declaration of 2020 internal audit plan on December 6.
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 Statement of Internal Control System was announced and declared on March 23 and disclosed 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 completed the announcement and declaration of 2020 internal audit plan on March 24.
Corporate Governance Report 39
3.3.3 Risk Committee The Risk Committee convened five meetings from January 1, 2019, through April 25, 2020. Committee member attendance is detailed below:
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 5 0 100% None
Director Lin, Su-Ming 4 1 80% On November 7, 2019, Chung, Lo-Min was entrusted to attend as a proxy.
Director Ting, Kwang-Hung 3 2 60%
On May 9, 2019, Lin, Su-Ming was entrusted to attend as a proxy; On November 7, 2019, Chang, Hsieh Gen-Sen was entrusted to attend as a proxy.
Other mentionable items: 1. Key functions of the Risk Committee:
The Committee assists the Board of Directors in reviewing the establishment, implementation results, and response measures of 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.
2. Professional competence of risk management committee members: Independent director Shen, Hui-Ya has the professional ability of legal affairs; Independent directors Chang, Hsieh Gen-Sen, Chung, Lo-Min, and director Lin, Su-Ming all have the professional ability of financial accounting and practical practice and management experience; Director Ting, Kwang-Hung has the ability to perform business judgments, leadership and decision making, operation and management, crisis handling, and has 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 opinions
Results of Board of Directors decision
March 20, 2019 3rd Meeting of the Risk Management Committee of the 21st Board of Directors
Safety management report 2019Q1-Q2 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 upon unanimous approval by all members in attendance.
Unanimously passed by all members of the Board of Directors in attendance.
May 9, 2019 4th Meeting of the Risk Management Committee of the 21st Board of Directors
Safety management report 2019Q2-Q3 Operations risk management analysis Financial status report Operations outlook and financing, crude oil market analysis Financial risk hedging strategy Oil risk hedging strategy
August 8, 2019 5th Meeting of the Risk Management Committee of the 21st Board of Directors
Safety management report 2019Q3 Operations risk management analysis Financial status report Operations outlook and financing, crude oil market analysis Financial risk hedging strategy Oil risk hedging strategy
November 7, 2019 6th Meeting of the Risk Management Committee of the 21st Board of Directors
Safety management report 2019Q4 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, 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
40 Corporate Governance Report
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 disclose those Principles?
The Corporate Governance Principles of the Company has been established in compliance with the Corporate Governance Best-Practice Principles for TSEC/TPEx Listed Companies; its amendment has been approved in the 6th meeting of the 21st Board of Directors on May 8, 2019 and disclosed 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 using 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 keep 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 maintains full communication and contact with the Company.
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 shall proceed 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 faults be discovered, an improvement deadline is set and the progress is tracked.
No Difference
(4)Did the Company establish internal standards to prevent insider trading on undisclosed information?
(4) The Company established the Directors 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 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 members of the
(1) China Airlines advocates and respects the director 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 capability and the diversification from different aspects shall also be 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 established the Corporate Governance Principles, Article 20 of which specifies the overall abilities the Board of Directors shall be equipped with, which are as follows: A. The ability to make operational judgment.
No Difference
Corporate Governance Report 41
Evaluation Item
Status of Implementation Deviations from the
Corporate Governance Best-Practice Principles for TWSE/TPEx
Listed Companies
and Reasons
Yes No Brief Explanation
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 conduct crisis management. 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 its progress are as follows: APR 25, 2020
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 - - - - - ○ - - ○ - - ○
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 - - - - - - ○ - - ○ ○ ○ -
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.
42 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
a. Considering that 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 has made significant contributions to public welfare; Independent director Shen, Hui-Ya, who is competent in legal affairs; Director Wang, Shih-Szu, current 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 accountant 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 less than 3 years; The term of office of independent director Chung, Lo-Min is 8 years, and the consecutive term of office of all independent directors does not exceed 3 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 2 directors aged 40-50, 5 directors aged 51-60, and 4 directors aged 61-70. In addition to the above, 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 which 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. The 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, in order 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 answers to the Board of Directors and assists the Board of Directors in reviewing the establishment, implementation results, and response measures of 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 established 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 results 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. The internal evaluation of Board performance shall be performed at the end of each year. The evaluation is divided into the performance evaluation of the entire Board of Directors, the individual Board members, and the functional committees. The evaluation shall be completed by the end of January of the following year, and the results of which shall be submitted by the Human Resources Department to be reported in the Board meeting held by the end of March and referred to in deciding directors' remuneration and nomination for renewal. In December 2019, the Company completed the 2019 Board Performance Evaluation in accordance with the above regulations; which has been reported at the 10th meeting of the 21st Board of Directors on March 18, 2020 and disclosed on the Company’s official website. The self-evaluation results are as follows: A.Entire Board of Directors
a.Evaluation items: 10 items in total, including 5 major aspects, i.e., the degree of participation in the Company's operations, the improvement of Board of Directors’ decision-making quality, the composition and structure of the Board of Directors, the continuing education of Directors, and internal control.
b.Results of self-evaluation: Above standards. B.Individual Board members
a.Evaluation items: 18 items in total, including 6 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: 10 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.
No Difference
(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 in 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 7th meeting of the 21st Audit Committee on March 18, 2020, a report will be made to the 10th meeting of the 21st Board of Directors on the appointment of accountants.
No Difference
Corporate Governance Report 43
Evaluation Item
Status of Implementation Deviations from the
Corporate Governance Best-Practice Principles for TWSE/TPEx
Listed Companies
and Reasons
Yes No Brief Explanation
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, assisting directors and supervisors in legal compliance, handling matters related to board meetings and shareholders’ meetings in accordance with the law, and producing minutes of the board and shareholders’ meetings)?
(1)The Company approved the establishment of the Chief Corporate Governance Officer in 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 the professional qualifications and conducts legal related affairs as head of 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 the law, producing meeting minutes of the Board meetings and Shareholders’ Meetings, assisting Directors in assuming their positions and continuing education, providing Directors with information required to perform their duties, assisting Directors in complying with the 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 the relevant units carrying out 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 conducting matters related to the Board of Directors and Committees (including the production meeting minutes), assisting Directors in assuming their positions, legal compliance and continuing education, and providing Directors with the information required to conduct business: a. Notifying respective members of meetings 7 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 after 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 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 for the Directors, maintaining smooth 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 conducting 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 the amendments to be resolved by the Board of Directors.
B. As for the Company’s registration and change of registration, the Administration Division shall be responsible for completing the relevant registration with the competent authority within the time limit for matters required to be registered or changes to registered matters of the Company.
C. In addition, the Finance Division shall be responsible for the handling of matters related to the shareholders' meetings (the planning and convening of the shareholders' meetings, the production of meeting minutes and other stock affairs related business). It shall provide 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 How will Taiwanese companies respond to and manage the huge risks caused by the China-US trade war 2019/08/07 3hr
Taiwan Corporate Governance Association Discussion on the responsibilities of directors and supervisors and corporate governance practices 2019/10/16 3hr
Taiwan Stock Exchange Inc. Promotional session for effective exercising of directors’ functions 2019/11/06 3hr
Taiwan Corporate Governance Association Corporate Governance Forum - strengthen corporate governance ecology and implement independent director system
2019/11/27 6hr
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 Company website? Does the Company respond appropriately to corporate social responsibility issues that stakeholders consider important?
The Company identifies stakeholders in accordance with the five principles of the AA1000 Stakeholder Engagement Standard (SES). In order to fully and effectively communicate with stakeholders, a spokesperson and “Stakeholders Section” have been established on the Company’s official website to provide contact information of the units associated with various issues, so as to facilitate stakeholders’ contact with corresponding personnel based on different issues (including contact personnel, e-mails, and telephone numbers); also, the webpage for communication with stakeholders has been disclosed 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 each year. The implementation results from 2019 have been reported at the 9th meeting of the 21st Board of Directors on January 13, 2020. Relevant content and frequency of the actual implementation show proper responses to various issues that include corporate social responsibility. See below 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 (3)Explanatory table:
Item Category
Focus of Communication Contact Person Channel of Communication Frequency Result of
Communication
Employees
•Labor/management relations and engagement •Governance and
business integrity
Human Resource Div. Miss Chi Tel: +886(0)-3-3998917
Labor-Management Conference Monthly
Employee satisfaction surveys are conducted every two years; the score in 2019 was 6.4 (Note: highest score is 10)
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
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
Item Category
Focus of Communication Contact Person Channel of Communication Frequency Result of
Communication
Customers
•Flight safety management • Passenger
services 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
2019: 1. Passenger
satisfaction rate was 87.70%
2. Cargo satisfaction rate was 88.6%
3. Maintenance factory satisfaction score was 8.76
(Note: highest score is 10)
Global business meetings Annually Taiwan district business meetings Annually
Discussions with travel agencies Quarterly
Company website, industry social responsibility network, Facebook, e-mail, and message
Real time
Customer-service hotline Real time
Corporate customer visits Occasional
Investors
•Financial performance
•Risk and crisis management
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)
•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. Miss Tseng Tel: +886(0)-3-3993913
Telephone, e-mail Occasional
A general supplier meeting was held at the end of 2019
Consultative conferences Occasional Business visits Occasional
Site inspections At least once every 6 months
Society
•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 activities in society
Occasional
A total of 157,701 individuals benefited in 2019
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 appointed to handle shareholder meeting matters. No Difference
7. Information disclosure (1)Has the Company
established 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
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
(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 who is responsible for gathering and disclosing company information on a monthly basis and for announcing 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 after 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 financial statement announcements of the first, second, third quarter and annual financial reports of the Company in 2019 have all been handled several days earlier than the prescribed registration time limit; the monthly operating status has also been registered within the time limit specified by the regulations.
No Difference
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 have 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 6 were handled in 2019, 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:
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
The Company website has a “Stakeholder Contact” and other diverse communications channels and platforms to appropriately and effectively address all manner of stakeholder complaints and wishes.
(6)Continuing education for directors and supervisors: see P.66 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.40 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 314,754 effective customer satisfaction questionnaires were completed in 2019, with a satisfaction rate of 87.70%. 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 purchase of liability insurance for directors and supervisors: The Company purchased liability insurance for all Directors in both 2019 and 2020 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 5th meeting of the 21st Board of Directors on March 20, 2019, and the 10th meeting of the 21st Board of Directors on March 18, 2020, respectively.
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, etc.), experience and skills (for example: aviation, sea freight, transportation, finance and accounting, law and insurance, 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 and 2019 performance self-evaluation of the Board of Directors. 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.
Corporate Governance Report 47
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 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
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 hold 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 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
48 Corporate Governance Report
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, 2019, through April 25, 2020). 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 regularly 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, 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, 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 21, 2019 4th Meeting of the Remuneration Committee of the 21st Board of Directors
Chairman and Managers' 2018 Year-end Bonus and 2019 Lunar New Year Incentive
Approved by all attending members to be reported to the Board of Directors for discussion.
No further business
May 8, 2019 5th Meeting of the Remuneration Committee of the 21st Board of Directors
Adjustment of travel expense for Directors (including Independent Directors)
Proposal for salary and remuneration of Chief Corporate Governance Manager
Proposal for salary and remuneration of Chairman Hsieh, Su-Chien
Proposal for the service pay of former Chairman Ho, Nuan-Hsuan
The inclusion of the Chief Corporate Governance Manager in the management of the Remuneration Committee was approved in accordance with regulations governing the Chief Corporate Governance Manager; this matter has been reported to the Board of Directors for discussion.
No further business
October 23, 2019 6th Meeting of the Remuneration Committee of the 21st Board of Directors
Amendment to the Remuneration Committee Foundation Policy
Amendment to the Regulations Governing the Board Performance Evaluation
Approved by all attending members to be reported to the Board of Directors for discussion.
No further business
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
Corporate Governance Report 49
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?
The Company has set up a “Risk Management Committee” under the Board of Directors to assist the Board of Directors in reviewing the formulation of Company’s various risk management strategies, their implementation results, and response measures on a quarterly basis, and requires each unit to be responsible for controlling each major type of risk. 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 2018 CSR operation and the 2019 CSR operation plan were reported in the 9th meeting of the 21st Board of Directors on January 13, 2020.
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 2011, 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
50 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
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
Corporate Governance Report 51
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
52 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
˙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
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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 operation 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 response ability, 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
˙ Carry out supply chain management guidance and strengthen supply chain fitness.
˙ Coordinate with the
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
reduce costs. ˙ Sign long-term
contracts with relevant supply partners to maintain stable services.
season to flexibly 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 process emergency situations properly, increasing the public's trust.
˙ 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.
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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 Scope of GHG 2018 2019
Scope 1 Aviation operations 7,229,903 7,059,083 Ground operations 3,511 4,981
Scope 2 Ground operations 19,949 18,169 Total (Tons CO2e) 7,253,363 7,082,233
B. Greenhouse gas management and reduction strategy The Company’s greenhouse gas management and reduction strategy takes into account 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 2019 Achievement rate
Aviation
2020 To increase aviation fuel efficiency by 1.5% every year on average
In 2019, the actual performance of fuel consumption efficiency was 0.2459 tons/thousand RTK, and the pre-established target value of 0.2147 tons/thousand RTK was not achieved. Follow CORSIA, carry out MRV operations on international routes in 2019.
2025
To increase aviation fuel efficiency by 1.5% every year on average Cooperate with CORSIA to promote CNG2020 operations
2030 Reduce carbon emissions by 50% by 2050
Ground
2020 38% reduction in carbon emissions
The actual ground emissions in 2019 amounted to 23,150 CO2e; when compared to the expected target value of 22,712 tons of CO2e for that year, the achievement rate is 97%.
2025 42.34% reduction in carbon emissions
2030 50% reduction in carbon emissions
Aviation operations was 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 a number of specific implementation measuresHowever, due to changes in the internal and external business environments in 2019, although total aviation fuel consumption decreased by 53,986 tons, a decrease of 2.36% compared with 2018, performance in revenue ton kilometer (RTK) decreased by 471,498 kiloton-kilometers, a decrease of 4.94% compared with 2018; the overall fuel consumption efficiency was 0.2459 tons/thousand RTK, which failed to reach the target value set in 2019 (0.2147 tons/thousand RTK). For ground operations, 57 environmental management KPIs and 15 fuel saving measures were promoted in 2019, which resulted in a total annual carbon reduction of 124,365 metric tons of CO2e; among which, carbon reduction in ground operations amounted to 1,747 metric tons of CO2e. Various data are as follows:
No Difference
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Evaluation Item
Implementation Status Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
Yes No Brief Explanation
Item Savings Unit Carbon reduction (Tons CO2e)
Aircraft fuel savings 48,447 Kiloliter 122,618 Ground fuel conservation 236 Kiloliter 620
Energy conservation 1,940 1,000 kilowatt hours 1,075
Water conservation 3 1,000 kilowatt hours 1
Paper conservation 12 Tons 51 2019 total carbon reduction 124,365
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 2019 targets Achievements 2020 expected targets
Aviation fuel efficiency
Improvement of 1.5% over 2018
Did not meet target (Note)
Improvement of 1.5% over 2018
Ground carbon emissions
Reduction of 36.7% over 2009 97% Reduction of 38% over
2009
Water resources Reduction of 0.75% over 2018 100% Reduction of 1.5% over
2018
Domestic waste Reduction of 1% over 2018 100% Reduction of 2% over
2018 Hazardous industrial waste
Recycling ratio reached 40% 100% Recycling ratio reached
40%
Photocopy paper Reduction of 2.5% over 2018 100% Reduction of 5% over
2018 Note: Affected by the operating environment, the efficiency of fuel
consumption is poor. 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 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. As of December 31, 2019, it has generated about 90,000 kWh of electricity and reduced emissions by about 48 tons of CO2e. The Company was awarded the Bureau of Energy’s (MOEA) Conservation Benchmark–Silver Award, Taipei Energy Conservation Leadership Award, and No. 1 in the Taoyuan Airport Energy Conservation and Carbon Reduction Reward Competition.
E.Water resource utilization increase The total water consumption of the Company in 2019 was 146,490 kWh, which is about 1.17% less than that in 2018. Among which, the China Airlines headquarters park is located 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 107 108 Tap water use volume Kilotons 148.22 146.49 Recycled water use volume Kilotons 31.94 17.41 Recycling percentage % (recycled volume/water use total volume) % 21.55% 11.88%
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Evaluation Item
Implementation Status Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
Yes No Brief Explanation
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 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.
Cooperate with 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 2019, the production of ground operation and domestic waste was 702,966 kg, which is about 5.9% less than that of 747,202 kg in 2018. In 2019, the amount of business waste also decreased by 5.9% compared with that in 2018.
Item Handling method 2018 2019
Ground Operational
Domestic waste
Non-recyclable Incineration
399,266 381,626
Recyclable: Resources recycled
347,936 321,340
Hazardous industrial waste
Non-toxic: Entrust qualified organization to remove/dispose
251,317 233,018
Toxic: solidification and burial/chemical treatment
16,434 18,815
In the air Service
General industrial/domestic waste
Non-recyclable Incineration
2,674,334 3,052,461
Recyclable: Resources recycled
995,369 1,116,396
Total waste (kg) 4,684,656 5,123,656
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
(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 a number of welfare measures, the Company allocates performance bonuses, annual bonuses, year-end bonuses, promotions, and employee compensation with reference to the performance of employees after the end of each fiscal year and based on the Company's annual profit situation. The Company takes this opportunity to care for its employees and treat them as the core of its sustainable operations. The average salary adjustment of all employees of the Company increased by about 2% in 2019.
No Difference
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Evaluation Item
Implementation Status Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
Yes No Brief Explanation
(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 available 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 to 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. Regular implementation of safety and health inspections to discover hazards and make improvements A total of 1,488 inspections were conducted in 2019, 402 deficiencies were found, and those 402 cases were improved, with an improvement rate of 100%; random checks on various necessary equipment or facilities of the Company’s leased transportation vehicles were performed, in addition, maternal health protection for employee workplace and operation hazard risk and management classification was conducted, with a total of 260 persons. The workplace environmental risk levels all belong to level-1 management.
D. Full AQD for comprehensive risk assessment Taking advantage of 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; in 2019, a total of 98 AQD safety and health related cases were received, and 98 cases were improved and settled, with an improvement rate of 100%.
E. Strengthening safety and health education and popularizing safety and health concepts We strengthen the promotion of safety and health education at all levels. Every three years, each person receives at least 3 hours of education and training. Education and training for supervisors will be held depending on the promotion and transferring of the supervisors. The members of the Occupational Safety and Health Committee must complete at least three hours of safety and health education and training every three years to cultivate correct attitudes towards safety and health work;assisting in the training of safety and health officers at all levels to disseminate safety and health knowledge;holding necessary education and training sessions for newly hired labor, transferred labor, safety and health management personnel, special operators, and supervisors to perform work and prevent disasters, as follows:
a.A total of 4 batches of new general personnel’s safety and health education and training sessions were implemented, with a total of 76 participants.
b.A total of 4 batches of industry-academia interns’ safety and health education and training sessions were implemented, with a total of 76 participants.
No Difference
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Evaluation Item
Implementation Status Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
Yes No Brief Explanation
c.A total of 2 batches of new supervisors’ safety and health education and training sessions were implemented, with a total of 59 participants.
d.One education and training session for all members of the Occupational Safety and Health Committee.
e.A total of 14 batches of occupational safety and health training sessions for in-service employees.
f.First-aid personnel training. g.A total of 21 batches of safety and health training sessions for special
operators. F. Hierarchical safety and health management, and the establishment of safety
and health officers at all levels Implementing safe and healthy work;initiating a safety and health hazard identification proposal system to extend the participation in safety and health to all personnel;regularly strengthening the on-the-job training for safety and health officers of various units, including how to identify hazards in the workplace, risk classification, how to compose management plans, and occupational accident identification process and operations. Guiding the risk assessment of units at all levels and conduct prevention and improvement to build the concept of a corporate community.
G. The Company held various health promotion activities in 2019. The topics included cardiovascular disease, infectious disease prevention, physical and mental stress relief, cancer screening, first aid education, pregnancy care, and vision care. The number of sessions and the number of participating employees are as follows: a. There were 5 health promotion activities in CAL Park, with a total of 252
participants. b. There were 6 health promotion activities at the Taipei branch, with a total
of 209 participants. c. There were 4 health promotion activities at the Kaohsiung branch, with a
total of 153 participants. d. Flu shots: A total of 1,622 persons vaccinated (including 217 persons in
Taipei, 1,325 persons in Taoyuan, and 80 persons in Kaohsiung). e. A total of 636 cabin crew and first-line ground staff have received MMR
vaccination. f. Providing a total of 4 issues of “Disease Management Information and
Business / Travel Suggestion” periodicals to enable colleagues to understand domestic and foreign health knowledge, enrich the knowledge of epidemic diseases, and establish disease prevention concepts.
(4)Has the Company established an effective career skill development training program for employees?
(4) In order to cultivate the Company's human resources, the Company 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. At the same time, 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 refine employees’ necessary knowledge and skills. In addition, since 2009, the Company has established a Management Talent Training and Development System to cultivate 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 cultivated 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)With regard to 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 established and disclosed 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 customer personal information. Also, to protect the rights and interests of the passengers, reservation and ticket-related rules upon flight changes have been clearly disclosed 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
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
(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 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 2019, a total of 118 suppliers were reviewed. According to the operation of Collaborative Value Task Force under the CSR policy of the Company, risk assessment of “Supply Chain Sustainability Questionnaire (SAQ)” is conducted annually for key first-tier suppliers. The questionnaire includes aspects such as legal, environmental, social and quality, and information security. Among them, the legal aspect includes questions concerning ethics, legal compliance and compliance practices. If high-risk vendors are identified, on-site inspection will be conducted and guidance will be given to reduce potential risks and improve existing impact. In 2019, the Company surveyed 72 suppliers (mainly key first-tier suppliers) according to the supplier’s sustainable supply chain mechanism. The questionnaire response rate reached 65%, and the average supply chain sustainability performance score was 88.88, showing that most of the Company’s suppliers have internalized the concept of sustainability in their management mechanisms. In addition, in accordance with the “Sustainable Supply Chain Management Policy Statement” of the Company, since 2016, we have requested that every supplier sign the “Supplier Code of Conduct” when making a tender, jointly undertaking to create a sustainable industrial environment;we have also continued to promote the procurement of Green Mark certified products: by the end of 2019, we have completed green procurement of approximately NT$19,258,000 in total.
No Difference
5. Does the Company make reference 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 2020, the Company’s limited level report verification was 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 in March 2017 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 to 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.
7. Other important information for facilitating the understanding of CSR and its implementation: (1)Promoting the internationalization of local education:
A. Strengthening education: 45,578 persons benefited in 2019 Educational exchange: The Company firmly believes that education is the only way to cultivate more future talent. Therefore, upholding the spirit of deeply cultivating the community, giving back to local neighborhoods, and caring for the disadvantaged and the society, we have been cultivating the reading habits of school children through educational volunteers since 2010, and starting from 2013, we began to have long-term cooperation with universities in Taiwan to provide opportunities to learn professional knowledge and practical skills, strengthening industry-academia collaboration to achieve the ultimate goal of talent cultivation. Lectures by volunteers: Since its establishment in 2011, the “China Airlines Volunteers Club” has been dedicated to supporting disadvantaged groups in society. Every year, it regularly visits neighboring schools to give lectures, encourage students to cultivate an international vision, and pass on aviation knowledge and English lessons. In 2019, 16 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 92 participating volunteers and 32 hours of service, benefiting 1,106 students. Upholding the spirit of mutual support and spreading love, the China Airlines Volunteers Club gives back to the society and community with actual actions. In order to realize remote students’ dreams to fly, Mandarin Airlines specially launched a charity dream-come-true journey, arranging for students from Hualian Tafalong Elementary School and Nantou Chin-ai Music Experimental School to take the Mandarin Airlines’ Taichung-Hualien flight to visit each other. It allows students from the two schools in eastern and central Taiwan to conduct educational and cultural exchanges and have a precious experience that will last as a lifetime memory 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 2019, 102 schools and about 44,472 students benefited. Continuing to hold the “Mandarin Airlines Flying Experience Camp” to provide localized flight training opportunities for young Taiwanese students.
B. Environmental coexistence: 552 participants in 2019 Responding to environmental protection: In response to international coastal cleanup activities, the Zhuwei Fishing Port Coastal Cleanup has been held on a yearly basis since 2011. For the first time, in 2019, we moved the activity to Shalun, Tamsui, where a total of 552 employees and their family
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
members from various units in the China Airlines Group participated. In addition, we extended the activity to be held in Cijin, Kaohsiung. We cherish the earth with concrete actions and playing our part in environmental protection. Animal conservation: Mandarin Airlines continued its blue-tailed bee-eater eggs incubation project with the Taipei Zoo, and Kinmen County assisted in air transporting these little VIP eggs to Taipei for incubation. Through the participation of Mandarin Airlines in the “Kinmen Blue-Tailed Bee-Eater Abandoned Eggs Incubation and Research Project,” this flock of cute “summer fairies,” i.e. the blue-tailed bee-eaters, was successfully born in the Taipei Zoo in 2019 and made their debut with the establishment of the Tropical Rainforest Area in July.
(2)Enhancing international visibility of local brands in Taiwan: A. Humanitarian relief: 419 persons benefited in 2019
In 2019, the Company continued to promote the “In-flight Doctors” project, combining the resources of aviation industry with medical professions, so that passengers can have safer and more protected flights. China Airlines has been cooperating with Chang Gung Hospital since 2017. In July 2018, we expanded such cooperation and established the “In-flight Doctors” project with the Taiwan Medical Association and the Paujar Charity Foundation, inviting doctors to volunteer and take the initiative to lend a helping hand during flight and assist China Airlines and the ground medical support team in jointly protecting the health of passengers with urgent medical needs. In 2019, based on the concept of “compassion for society and kindness for the country,” China Airlines’ “In-flight Doctors” project was actively joined by the Tzu Chi medical system.
B. Sports activist: 303 participants in 2019 The Company has supported the development of Taiwan’s sports for many years. Through our own air transportation expertise, we help Taiwanese athletes participate in international sports events, supporting Taiwanese athletes and teams to win international fame with concrete actions. In 2019, China Airlines sponsored a number of sports events to jointly improve the sports environment in Taiwan and enhance Taiwan’s international reputation. Moreover, China Airlines continued to support Taiwan’s local teams and players, and sincerely received many Taiwanese sports players. In the future, we will continue to support various sports activities with actual actions and help Taiwanese athletes to win international fame with concrete actions. Sports events supported in 2019: “2019 Taiwan Legends Championship”. Sports players and teams supported in 2019: “2019 Formosa Dreamers Basketball Team, Taoyuan Pauian Archiland Basketball Team, basketball player Jeremy Lin, baseball player Wei-Chung Wang / Wei-Yin Chen, tennis player Chun-Hsin Tseng, fencer Yi-Tong Chan, volleyball player Pei-Hung Huang, ultra marathon runner Tommy Chen, Rising Star RG, and others.”
(3)Charity support: 61,448 persons benefited in 2019 A. Disadvantaged students and the general public:
“Love All Around Team” is a spontaneous China Airlines volunteer group. On their days off, volunteers visit remote rural schools to spread love and flight knowledge to balance the urban-rural education gap. 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. In addition, colleagues from China Airlines also organized a group by themselves to visit remote rural schools in Taitung and have deep cultivation interactions with 345 students. Such efforts have broadened their understanding of the aviation industry in order to cultivate more future talent. In 2019, the cabin crew held a total of 15 fundraising and charity bazaar activities to provide assistance needed by disadvantaged groups, benefiting a total of 58,035 people. China Airlines plays its part in fulfilling corporate social responsibilities. Along with the sponsored sports players, we organize public welfare sharing sessions to benefit students from rural areas. In 2019, the “China Airlines 60 New GO Jeremy Lin Charity Sharing Session” was held;baseball stars back from the U.S. Wei-Yin Chen and Wei-Chung Wang were invited to hold the joint “China Airlines Charity Baseball Camp,” with expectations for fostering future stars in Taiwanese sports through charity sharing sessions. Mandarin Airlines has cared for disadvantaged groups in Hualien and Taitung for many years. Upon the 28th anniversary celebration, Mandarin Airlines especially held a charity bazaar carnival and donated all the income from the bazaar, amounting to NT$100,000, and 5 boxes of charity goods to Hannah’s Hope Home in Taitung, to build a warm new home for dispossessed children under the age of two in Hualien and Taitung. After more than two years of fundraising and construction by the Taitung Christian Hospital and public welfare partners, along with the help of kind people from all walks of life, Hsin Shih Hall, a place that can provide both day care for the disabled or elders with dementia and a better quality new home for dispossessed children under the age of two, was finally officially completed.
B. Elders: Upholding the spirit of “extending the same care for our own elders to all elders in general,” the Company has maintained long-term cooperation with the Huashan Social Welfare Foundation to care for local disadvantaged elders. In 2019, a total of three charity events were held: “Love the Elderly and Reunite,” “Love the Elderly and be Active on the Dragon Boat Festival,” and “Love the Elderly and Light Up the Mid-Autumn Festival.” A total of 400 elders were cared for. During holiday reunions, volunteers from the Volunteers Club visited the elders’ homes, from door to door, to give care and gifts and accompany the elders. China Airlines continues to invest in social care, bringing warmth to the cold winter.
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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 said program while also periodically reviewing and revising it?
(3) The Company's Procedures and Guidelines of Conduct for Ethical Management clearly sets 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 directly or indirectly provide, promise, demand, or accept any form of improper benefit. 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 2019 implementation status has been reported at the 8th meeting of the 21st Board of Directors on November 7, 2019.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 2019: 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 announced:
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 is implemented through scheduled and unscheduled annual inspection mechanisms to prevent fraud and corruption.
No Difference
Corporate Governance Report 63
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 dispatched 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. 2018:
a.Trainee(s): Current foreign branch office/agency staff (excluding foreign cabin crew members and personnel on leave of absence during training).
Number of trainees: 1,596 persons. Number of completions: 1,356 persons. Completion rate: 85%
b.Trainee(s): Taiwanese and foreign cabin crew members (excluding personnel on leave of absence during training).
Number of trainees: 3,439 persons. Number of completions: 3,439 persons. Completion rate: 100%
B. 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%
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 disclosed and announced on the Company's website and internal website for the use of Company’s internal personnel 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 improvement measures 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 set up 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 the details of the case. CAL also promises to protect the whistleblower from being improperly punished due to the 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 disclosed 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
64 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
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.
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 3 committees under the Board of Directors for audit, remuneration, and risk, and has established 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 April 25, 2020
Title Name Date of
Appointment Date of Dismissal
Reason for Resignation or Dismissal
Chairman Ho, Nuan-Hsuan 06/24/2016 04/02/2019 Removal of juridical person
director representative
Vice President, Information Management Div.
(concurrently research and development manager)
Lu, Shih-Ming 01/05/2015 11/18/2019 Transfer
Note: "Relevant persons in the Company" refers to the chairman, general manager, accounting management, financial management, internal audit management, corporate governance manager, R&D management, and others.
3.3.10 Other Important Information Regarding Corporate Governance A. The organization and operations of 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 include 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.
Corporate Governance Report 65
(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 Institute of Internal Auditors-Chinese Taiwan Internal Auditor Certificate: 1 person, International Internal Auditor Certificate: 1 person, R.O.C. Certified Public Accountant License: 2 people, R.O.C. Securities (Senior) Specialist: 1 person, R.O.C. Futures Specialist: 2 people, R.O.C. Financial Planning Personnel Proficiency Test Passing Certificate: 1 person, R.O.C. Stock Affairs Specialist Proficiency Test Passing Certificate: 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: 6 people, R.O.C. Securities Investment Trust and Consulting Professional: 5 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: 7 people, USA Certified Public Accountant License: 1 person, R.O.C. Basic Enterprise Internal Audit Proficiency Test Passing Certificate: 3 people.
D. Company Director Continuing Education From January 1, 2019, through April 25, 2020
Title Name Training
hours Date(s) Sponsoring Organization Course
Chairman Hsieh,
Su-Chien
3hr 05/08/2019 Training by: Taiwan Corporate Governance Association
Developing Trends and Prevention of Corporate Corruption
3hr 08/07/2019 Training by: Taiwan Corporate Governance Association
How Taiwanese companies respond to and manage the huge risks caused by the China-US trade war
Director Chen,
Charles C.Y. 3hr 08/07/2019
Training by: Taiwan Corporate Governance Association
How Taiwanese companies respond to and manage the huge risks caused by the China-US trade war
3hr 11/12/2019 Taiwan Institute of Directors The 8th Annual Chinese Family Businesses Forum
Director Ting,
Kwang-Hung
3hr 05/08/2019 Training by: Taiwan Corporate Governance Association
Developing Trends and Prevention of Corporate Corruption
3hr 08/07/2019 Training by: Taiwan Corporate Governance Association
How Taiwanese companies respond to and manage the huge risks caused by the China-US trade war
Director Chen,
Han-Ming
3hr 05/08/2019 Training by: Taiwan Corporate Governance Association
Developing Trends and Prevention of Corporate Corruption
3hr 08/07/2019 Training by: Taiwan Corporate Governance Association
How Taiwanese companies respond to and manage the huge risks caused by the China-US trade war
Director Ko, Sun-Ta 3hr 05/08/2019
Training by: Taiwan Corporate Governance Association
Developing Trends and Prevention of Corporate Corruption
3hr 08/07/2019 Training by: Taiwan Corporate Governance Association
How Taiwanese companies respond to and manage the huge risks caused by the China-US trade war
Director Wei,
Yung-Yeh
3hr 05/08/2019 Training by: Taiwan Corporate Governance Association
Developing Trends and Prevention of Corporate Corruption
3hr 08/07/2019 Training by: Taiwan Corporate Governance Association
How Taiwanese companies respond to and manage the huge risks caused by the China-US trade war
Director Lin, Su-Ming
3hr 05/08/2019 Training by: Taiwan Corporate Governance Association
Developing Trends and Prevention of Corporate Corruption
3hr 08/07/2019 Training by: Taiwan Corporate Governance Association
How Taiwanese companies respond to and manage the huge risks caused by the China-US trade war
2.5hr 10/01/2019 Taiwan Insurance Institute Analysis of Laws and Regulations related to Anti-Money Laundering and Counter-Financing of Terrorism (2019)
66 Corporate Governance Report
Title Name Training
hours Date(s) Sponsoring Organization Course
3hr 11/12/2019 Taiwan Insurance Institute Financial Consumer Protection Act and the Principle of Fair Hospitality
3hr 11/21/2019 Taiwan Insurance Institute Impact of IFRS17 on the business strategy of the Insurance Enterprise
3hr 12/24/2019 Taiwan Corporate Governance Association
IFRS17 Conversion and Insurance enterprise response strategy
Director Wang,
Shih-Szu
3hr 05/08/2019 Training by: Taiwan Corporate Governance Association
Developing Trends and Prevention of Corporate Corruption
3hr 08/07/2019 Training by: Taiwan Corporate Governance Association
How Taiwanese companies respond to and manage the huge risks caused by the China-US trade war
Independent Director
Chang, Hsieh Gen-Sen
3hr 05/08/2019 Training by: Taiwan Corporate Governance Association
Developing Trends and Prevention of Corporate Corruption
3hr 08/07/2019 Training by: Taiwan Corporate Governance Association
How Taiwanese companies respond to and manage the huge risks caused by the China-US trade war
Independent Director
Chung, Lo-Min
3hr 05/08/2019 Training by: Taiwan Corporate Governance Association
Developing Trends and Prevention of Corporate Corruption
3hr 08/07/2019 Training by: Taiwan Corporate Governance Association
How Taiwanese companies respond to and manage the huge risks caused by the China-US trade war
Independent Director
Shen, Hui-Ya
3hr 05/08/2019 Training by: Taiwan Corporate Governance Association
Developing Trends and Prevention of Corporate Corruption
3hr 05/24/2019 Taipei Foundation of Finance Corporate Governance - Analysis of Financial Crime Practices
3hr 09/20/2019 Taipei Foundation of Finance Corporate Governance Training - The UN Convention Against Corruption, Anti-Fraud and Whistleblower Protection
3hr 11/15/2019 Securities and Futures Institute Avoid Unintentionally Violating the Securities and Exchange Act - Starting with Untruthful Financial Statements and Insider Trading
E. Corporate Governance Related Training Attended by Company Managers From January 1, 2019 through April 25, 2020
Title Name Training hours Date(s) Sponsoring Organization Course
Vice President,
Finance Div.
Chen, I-Chieh 12hr 10/21/2019- 10/22/2019
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
Deputy Auditor General, General
Audit Office
Fang, Juo-Ling
6hr 07/19/2019 Accounting Research and Development Foundation
Internal Audit and Internal Control Practices of Reward Systems for Corporate Employees
6hr 10/21/2019 Institute of Internal Auditors-Chinese Taiwan
Internal Auditing Professional Course- How Audit Supervisors Assist the Board of Directors and Advisory Service
Deputy Auditor General, General
Audit Office
Ho, Hui-Fen
6hr 09/09/2019 Institute of Internal Auditors-Chinese Taiwan
Internal Auditing Professional Course- The Functions and Duties of Corporate Governance Personnel in the Corporate Governance Blueprint
6hr 10/21/2019 Institute of Internal Auditors-Chinese Taiwan
Internal Auditing Professional Course- How Audit Supervisors Assist the Board of Directors and Advisory Service
Corporate Governance Report 67
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 director successors, the director representative successors should generally have the required abilities stated in the chapter within China Airlines’ "Corporate Governance Principles" describing reinforced competencies of the Board of Directors. As required by the law, independent directors must have obtained certain professional qualification and work experience. Professionals who are experienced in the industry, including the governmental and academic fields, are the main direction of selection that forms the basis of succession planning (please refer to P.41 for diversification). In addition, the independence of all Board members is ensured in accordance with the law, and the results of its annual evaluation are an important reference for whether continued nomination is needed.
In order to enhance the directors' ability to exercise the powers of their posts and ensure that the Board's effectiveness is up-to-date, scheduled advanced studies are arranged every year to help elevate the professional competencies of the directors. The studies involve courses on corporate governance-related topics, including finance, accounting, business, commerce, legal affairs, information, risk management, internal control systems, and corporate social responsibility. To ensure that the succession plan is comprehensive, the study contents align with the updates of regulations and conditions of the internal and external environments, as well as topics applicable to future development needs.Furthermore, regarding the succession plan for important management, in addition to having excellent professional management ability, its behavior, ethics, and instructions shall be based on the resolutions of the Board of Directors, and be handled in accordance with the “China Airlines Executives Code of Ethical Conduct” and related laws and regulations to maintain the best interests of the Company, employees, and shareholders.
In the training plan for the Company's important management, regular senior management lectures are held every year, where there are invited personages from the fields of industry, public sector, and academia to give special lectures on the state of the global market and the development of the aviation industry, so that the Company's supervisors can better understand the state of the market and that the height and breadth of professional competence development may be improved. Periodic inter-agency transfers shall be handled according to the Company's rules to comprehensively cultivate diversified management capabilities of important management. In addition, to deepen the Company's various levels of management professionals and broaden the horizon of potential talent, strategic
68 Corporate Governance Report
and management occupational training sessions are held on a regular basis and talent training programs have been established to refine the necessary 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 been thus cultivated 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 established the China Airlines Ltd. Procedures for Handling Material Inside Information. In addition to announcing 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 so the Board, management, and employees can reference them at any time in order to avoid violations and the occurrence of insider trading.
Corporate Governance Report 69
3.3.11 Internal Control Systems A. Internal Control Statement
70 Corporate Governance Report
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.
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
No. Penalty Deficiency Improvement 1 A fine of
NT$1,000,000. The Company underwent labor inspection on January 16, 2019. There was a violation of Article 49, Paragraph 1 of the Labor Standards Act, because cabin crew members’ nighttime work had not been approved by the labor union.
(1)In the case of female workers' nighttime work, the Company union refused to acknowledge the provisions of the collective agreement; the Company believes that the outcome of the case was unfair, since the competent authority was biased towards the union’s claim and imposed the penalty.
(2)An administrative appeal has been filed for this case to protect the Company's rights and interests.
(3)The Company and the Company union have initiated negotiation, and will reconfirm the provisions allowing female workers' nighttime work.
2 A fine of NT$40,000.
The Company underwent labor inspection on February 13, 2019. There was a violation of Article 49, Paragraph 1 of the Labor Standards Act, because female workers’ nighttime work
(1) In the case of female workers' nighttime work, the Company union refused to acknowledge the provisions of the collective agreement; the Company believes that the outcome of the case was unfair, since the
Corporate Governance Report 71
No. Penalty Deficiency Improvement at the customer service center of the Taipei office had not been approved by the labor union. There was also a violation of Article 34, Paragraph 2, because the interval between two shifts was less than 11 hours.
competent authority was biased towards the union’s claim and imposed the penalty.
(2) An administrative appeal has been filed for this case to protect the Company's rights and interests.
(3) The Company and the Company union have initiated negotiation, and will reconfirm the provisions allowing female workers' nighttime work.
(4) As for the case in which the interval between two shifts was less than 11 hours, it was caused by the large influx of calls triggered by the short-notice strike by the Pilots Union. The Company has rectified this case, and an administrative appeal will be filed because the case was due to the need to respond to a particular emergency.
3 A fine of NT$1,000,000.
The Company underwent labor inspection on April 22, 2019. There was a violation of Article 49, Paragraph 1 of the Labor Standards Act, because cabin crew members’ nighttime work had not been approved by the labor union.
(1)In the case of female workers' nighttime work, the Company union refused to acknowledge the provisions of the collective agreement; the Company believes that the outcome of the case was unfair, since the competent authority was biased towards the union’s claim and imposed the penalty.
(2)An administrative appeal has been filed for this case to protect the Company's rights and interests.
(3)The Company and the Company union have initiated negotiation, and will reconfirm the provisions allowing female workers' nighttime work.
4 A fine of NT$1,000,000.
The Company underwent labor inspection on October 16, 2019. There was a violation of Article 49, Paragraph 1 of the Labor Standards Act, because cabin crew members’ nighttime work had not been approved by the labor union.
(1)In the case of female workers' nighttime work, the Company union refused to acknowledge the provisions of the collective agreement; the Company believes that the outcome of the case was unfair, since the competent authority was biased towards the union’s claim and imposed the penalty.
(2)An administrative appeal has been filed for this case to protect the Company's rights and interests.
(3)The Company and the Company union have initiated negotiation, and will reconfirm the provisions allowing female workers' nighttime work.
5 A fine of NT$20,000.
The Company underwent labor inspection on January 9, 2020. There was a violation of Article 38, Paragraph 2 of the Labor Standards Act (leave arranged by workers), because the request for paid leave raised by pilots in the Flight Operations Division was not granted due to worker allocation.
(1)In this case, paid leave could not be scheduled due to pilot allocation issues; the Company and the pilots had communicated to schedule the leave on other days. The competent authority insisted that the law stated the leave could only be arranged by workers and issued the penalty.
(2)An administrative appeal has been filed for this case to protect the Company's rights and interests.
(3)The Company will strengthen communication with employees to coordinate paid leave dates.
In addition, from 2019 to the printing of the annual report, the Company was fined NT$60,000 by the Ministry of Labor due to 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 statistics of cases and content of the disputes are as follows:
Number of cases Main dispute Total amount of fines
1 Dispute regarding granting of leave for union related business of the union’s cadre.
NT$60,000
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3.3.13 Major Resolutions of Shareholders’ Meeting and Board Meetings A. Major Resolutions of Shareholders’ Meeting in 2019
Item Major resolutions Execution 1. Business Report and Financial Statements
for the year 2018 This resolution was passed as proposed upon voting.
Announcement was made after resolution of Shareholders’ Meeting on June 25, 2019
2. 2018 Surplus Earnings Distribution This resolution was passed as proposed upon voting.
Announcement was made after resolution of Shareholders’ Meeting on June 25, 2019
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 25, 2019, and has been complied with since that day.
4. Amendment to the Procedures Governing the Election of Directors
This resolution was passed as proposed upon voting.
Announcement was made after resolution of Shareholders’ Meeting on June 25, 2019, and has been complied with since that day.
5. Amendment to the Procedures Governing the Acquisition and Disposal of Assets
This resolution was passed as proposed upon voting.
Announcement was made after resolution of Shareholders’ Meeting on June 25, 2019, and has been complied with since that day.
6. Amendment to the Operational Procedures for Derivatives Trading
This resolution was passed as proposed upon voting.
Announcement was made after resolution of Shareholders’ Meeting on June 25, 2019, and has been complied with since that day.
7. Amendment to the Operational Procedures for Lending Funds to Others
This resolution was passed as proposed upon voting.
Announcement was made after resolution of Shareholders’ Meeting on June 25, 2019, and has been complied with since that day.
8. Amendment to the Operational Procedures for Endorsements/Guarantees
This resolution was passed as proposed upon voting.
Announcement was made after resolution of Shareholders’ Meeting on June 25, 2019, and has been complied with since that day.
9. The Release of Tigerair Taiwan Stock This resolution was passed as proposed upon voting.
Announcement was made after resolution of Shareholders’ Meeting on June 25, 2019, and has been complied with since that day.
10. Proposal to release the non-competition restriction of holding concurrent positions on Chairman Hsieh, Su-Chien
This resolution was passed as proposed upon voting.
The non-competition restriction on Chairman Hsieh, Su-Chien was lifted based on the resolution of Shareholders’ Meeting on June 25, 2019, which was subsequently announced.
B. Major Resolutions of Board Meetings (January 1, 2019 to April 25, 2020)
Date Item Opinions of independent directors
Handling of Independent
Directors’ opinions by the Company
January 21, 2019 21st Board of Directors 4th Meeting
(1)The Selling of Two A340-300 Aircrafts: B-18806 and B-18807 (2)Selling of Shares in “Huachuan Travel Agency” (3)Listing Application Plan of Tigerair Taiwan (4)Provision of General Financing Limit and Financial Commodity
Trading Risk Limit by Five Financial Institutions, Including Mega International Commercial Bank
(5)Regular Review of Performance Evaluation Systems of Directors and Managers
(6)Regular Review of Policies, Systems, Standards, and Structures for Salary and Compensation of Directors and Managers
(7)2018 Employee Salary and 2019 Lunar New Year Incentive (8)2019 Employee Salary Adjustment (9)Chairman and Managers' 2018 Year-end Bonus and 2019 Lunar
New Year Incentive (10) Proposal of Salary and Compensation for the Senior Vice
President (VV) Wang, Chen-Min (11) Lifting of Non-competition Restriction on Holding Concurrent
Posts for Wang, Chen-Min, Senior Vice President
Approved by all attending Independent Directors
None
March 20, 2019 21st Board of Directors 5th Meeting
(1)2018 Internal Control System Effectiveness Audit and Statement (2)The Convening of the 2019 Annual General Meeting (3)Amendment to “Directors Election Regulations” (4)2018 Financial Report and Consolidated Financial Report (5)2018 Business Report
Approved by all attending Independent Directors
None
Corporate Governance Report 73
Date Item Opinions of independent directors
Handling of Independent
Directors’ opinions by the Company
(6)2018 Surplus Earnings Distribution (7)2019 CPA Appointment and Remuneration (8)Amendment to “Company’s Articles of Incorporation” (9)Revision of “Procedures for the Acquisition or Disposal of Assets” (10) Revision of “Procedures Governing Derivatives Trading” (11) Provision of General Financing Limit and Financial Commodity
Trading Risk Limit by Six Financial Institutions, Including the Bank of Taiwan
(12) Revision of Definition of Employee Compensation and 2018 Employee Compensation
(13) The handling status of four meetings between the Company and the Taoyuan Union of Pilots at the Ministry of Transportation and Communications and the signing of a collective agreement on February 21, 2019, at the meeting with the Department of Labor, Taoyuan City Government.
April 2, 2019 21st Board of Directors 5th Extraordinary Meeting
Election of new Chairman Approved by all attending Independent Directors
None
May 8, 2019 21st Board of Directors 6th Meeting
(1)Proposal on salary and remuneration of Chairman Hsieh, Su-Chien.
(2)Proposal to release the non-competition restriction of holding concurrent positions on Chairman Hsieh, Su-Chien.
(3)Proposal on the service pay of former Chairman Ho, Nuan-Hsuan. (4)Adjustment of travel expenses for Directors (including
Independent Directors). (5)Establishment of Corporate Governance Manager. (6)Proposal on Salary and Remuneration of Chief Corporate
Governance Officer. (7)Establishment of Domestic Tier-1 Division. (8)Amendment to “Rules of Procedure for Board of Directors
Meetings”. (9)Amendment to “Corporate Governance Principles”. (10) Amendment to “Operational Procedures for Loaning Funds to
Others” and “Procedures for Endorsement and Guarantee”. (11) The Plan for the Stock Release of “Tigerair Taiwan”. (12) Provision of General Financing Limit and Financial Commodity
Trading Risk Limit by Five Financial Institutions, Including Cathay United Bank.
(13) NT$5.5 Billion Five-year Non-guaranteed Commercial Paper Financing.
(14) The Sale-leaseback Operation of Five Company-owned A330-300 Aircrafts.
(15) Evaluation and Selection of New Narrow-body Passenger Aircraft and Introduction of New Aircraft.
Approved by all attending Independent Directors
None
June 25, 2019 21st Board of Directors 6th Extraordinary Meeting
(1)Introduction of new 777F cargo aircraft. (2)Introduction of the New A321neo Narrow-body Passenger
Aircraft. Approved by all attending Independent Directors
None
July 3, 2019 21st Board of Directors 7th Extraordinary Meeting
Plan to handle the relevant matters of releasing the shares of Tigerair Taiwan Approved by all
attending Independent Directors
None
August 7, 2019 21st Board of Directors 7th Meeting
(1)Dismissal of Senior Vice President (VW). (2)Issuing NT$3 Billion of Total Face Value of Domestic Unsecured
Convertible Corporate Bonds. (3)Provision of General Financing Limit and Financial Commodity
Approved by all attending Independent Directors
None
74 Corporate Governance Report
Date Item Opinions of independent directors
Handling of Independent
Directors’ opinions by the Company
Trading Risk Limit by Five Financial Institutions, Including Taishin International Bank.
(4)Execute the Conversion of Three Options for Boeing 777F into Firm Orders.
October 8, 2019 21st Board of Directors 8th Extraordinary Meeting
(1)The Case of “Engine Selection and the Procurement of 4 Backup Engines for the New A321neo Narrow-body Passenger Aircraft.”
(2)The Company’s provision of endorsement and guarantee to Tigerair Taiwan Co., Ltd.
Approved by all attending Independent Directors
None
November 7, 2019 21st Board of Directors 8th Meeting
(1)2020 Audit Plan (2)Decision on the Authorization of the Chairman to Pre-determine
the Transaction Limit of Contracts in which the Company Leases Real Estate to Subsidiaries.
(3)Amendment to the "Regulations Governing the Board Performance Evaluation"
(4)Amendment to the "Remuneration Committee Foundation Policy"
(5)2020 Business Plan and Budget (6)Stock Release of “Tigerair Taiwan” Prior to Emerging Stock
Market Registration (7)Provision of General Financing Limit and Financial Commodity
Trading Limit by Five Financial Institutions, Including CTBC Bank
Approved by all attending Independent Directors
None
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)The Convening of the 2020 Annual General Meeting (6)2019 Financial Report and Consolidated Financial Report (7)2019 Business Report (8)2019 Deficit Make-Up (9)2020 CPA Appointment and Remuneration (10) Issuance of Domestic Unsecured Ordinary Corporate Bonds (11) Provision of General Financing Limit and Financial Commodity
Trading Risk Limit by Three Financial Institutions, Including First Commercial Bank
(12) Amendment to “Company’s Articles of Incorporation” (13) Amendment to “Rules of Procedure for Shareholders Meetings” (14) Amendment to “Rules of Procedure for Board of Directors
Meetings” (15) Amendment to “Audit Committee Organizational Rules”
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.
Corporate Governance Report 75
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 01/01/2019-12/31/2019 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 - - - 5,829 5,829 01/01/2019- 12/31/2019
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.
76 Corporate Governance Report
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 method of accounting or accounting principles for specific transactions and consultation on possibility of signing and results of same
None.
Written opinions of successor accountants at odds with those of previous accountants
None.
3.6 Audit Independence: None.
Corporate Governance Report 77
3.7 Changes in Shareholding of Directors, Managers, and Major Shareholders
Unit: Shares
Title Name
2019 The current year through April 25, 2020
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
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 Hsieh, Su-Chien 0 0 0 0 Senior Vice 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 Chang, Young 0 0 0 0
Auditor General Fang, Juo-Ling 0 0 0 0 Data Protection Officer Wu, Hsiao-Sui 0 0 0 0
Vice President Chien, Feng-Nien 0 0 0 0 Vice President Chen, I-Ko 0 0 0 0 Vice President Lai, Ming-Hui 0 0 0 0 Vice President Peng, Pao Chu 0 0 0 0 Vice President Liu, Der-Chuan 0 0 0 0 Vice President Liu, Tsao-Yang 0 0 0 0 Vice President Yeah, Shao-Ting 0 0 0 0 Vice President Chen, Wei-Tau 0 0 0 0 Vice President Chen, I-Chieh 0 0 0 0 Vice President Hong, Tsu-Kuang 0 0 0 0 Vice President Chung, Wan-Chun (Assumed post on 11/23/2019) 0 0 0 0 Vice President Chou, Jyh-Shyan 0 0 0 0 Vice President Chu, Te-Hsiu (Assumed post on 11/18/2019) 0 0 0 0 Vice President Chang, Cheng-Hao (Assumed post on 01/21/2019) 0 0 0 0 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 Vice President Li, Chih-Wei 0 0 0 0 Deputy Auditor General Ho, Hui-Fen 0 0 0 0
Assistant Vice President Yu, Yueh-Han 0 0 0 0
78 Corporate Governance Report
Title Name
2019 The current year through April 25, 2020
Holding Increase
(Decrease)
Pledged Holding Increase
(Decrease)
Holding Increase
(Decrease)
Pledged Holding Increase
(Decrease) Assistant Vice President Chen, Chwen-Der 0 0 0 0
Assistant Vice President Tung, Hsing-Hua 0 0 0 0
Assistant Vice President Huang, Hsiang-Piao 0 0 0 0
Assistant Vice President He, Cheng (Assumed post on 11/01/2019) 0 0 0 0
Assistant Vice President Chen, Pei-Ti 0 0 0 0
Assistant Vice President Mao, Li-Chung (Assumed post on 12/20/2019) 0 0 0 0
Assistant Vice President Sheu, Yuh-Shy (Assumed post on 01/22/2019) 0 0 0 0
Assistant Vice President Shann, Da-Sin 0 0 0 0
Assistant Vice President Lin, Herng Shan (Assumed post on 04/16/2019) 0 0 0 0
Assistant Vice President Lee, Pei-Chen (Assumed post on 04/01/2019) 46,455 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 An, Long-Chi (Assumed post on 04/01/2020) 0 0 0 0
Assistant Vice President Huang, Chin-Feng (Assumed post on 10/16/2019) 0 0 0 0
Assistant Vice President Hsu, Hsueh-Wen (Assumed post on 02/01/2020) 0 0 0 0
Assistant Vice President Wang, Wei 0 0 0 0
Assistant Vice President Liu, Shou-Shu 0 0 0 0
Assistant Vice President Liu, Duan-Shiuh 0 0 0 0
Assistant Vice President Hsiao, Jui-Fu 0 0 0 0
Assistant Vice President Wei, Shi-Jong (Dismissed on 01/21/2019) 0 0 0 0
Assistant Vice President Ouyang, John (Dismissed on 01/24/2019) 0 0 0 0
Assistant Vice President Hung, I-Lan (Dismissed on 03/21/2019) 0 0 0 0
Vice President Chen, Kang-Reuy (Dismissed on 03/31/2019) 0 0 0 0
Chairman China Aviation Development Foundation Representative: Ho, Nuan-Hsuan (Dismissed on 04/02/2019)
0 0 0 0
Vice President Chiu, Chang-Hsin (Dismissed on 08/01/2019) 0 0 0 0 Senior Vice President Lo, Ya-Mei (Dismissed on 08/01/2019) 0 0 0 0
Assistant Vice President Hsiao, Kuo-Chih (Dismissed on 08/05/2019) 0 0 0 0
Corporate Governance Report 79
Title Name
2019 The current year through April 25, 2020
Holding Increase
(Decrease)
Pledged Holding Increase
(Decrease)
Holding Increase
(Decrease)
Pledged Holding Increase
(Decrease) Assistant Vice President Yu, Yau (Dismissed on 10/01/2019) 0 0 0 0
Assistant Vice President Fang, Cheng-Ru (Dismissed on 10/01/2019) 0 0 0 0
Assistant Vice President Jeng, Jong-Shinn (Dismissed on 10/31/2019) 0 0 0 0
Vice President Lu, Shih-Ming (Dismissed on 11/18/2019) 0 0 0 0 Assistant Vice President
Chiu, Wei-Tuan (Assumed post on 08/10/2019)(Dismissed on 03/19/2020) 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
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.
80 Corporate Governance Report
3.8 Relationships among the Top Ten Shareholders April 25, 2020
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. Chen, Mei-Ling)
519,750,519 9.59% 0 0% 0 0% None None None
Chunghwa Telecom Co. Ltd.
(Representative: Sheih, Chi-Mau) 263,622,116 4.86% 0 0% 0 0% None None None
China Airlines Ltd. Employee Stock
Ownership Trust Plan 63,333,017 1.17% NA NA 0 0% None None None
New Labor Pension Fund 60,727,000 1.12% NA NA 0 0% None None None
Vanguard Total International Stock Index
Fund, a series of Vanguard Star Funds 53,130,442 0.98% NA NA 0 0% None None None
Ocean Investment Holding Co., Ltd.
(Representative: Wang, Yun-E) 48,727,000 0.90% 0 0% 0 0% None None None
Vanguard Emerging Markets Stock Index
Fund, a Series of Vanguard International
Equity Index Funds
35,442,146 0.65% NA NA 0 0% None None None
JPMorgan Chase Bank N.A. Taipei Branch
in custody for Norges Bank 35,300,821 0.65% NA NA 0 0% None None None
iShares MSCI Taiwan Index 33,591,761 0.62% NA NA 0 0% None None None
Corporate Governance Report 81
3.9 Ownership of Shares in Affiliated Enterprises Dec 31, 2019
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 Arport Air Terminal (Xiamen) Co., Ltd. - - (Note1)
28.00 (Note2)
(Note1) 28.00
(Note2) 2C Arport Air Cargo Service
(Xiamen) Co., Ltd. - - (Note1) 28.00
(Note2) (Note1)
28.00 (Note2)
2D Taikoo (Xiamen) Landing Gear Services Co., Ltd. - - (Note1) 2.59 (Note1) 2.59
2E Haeco Composite Structures (Jinjiang) Co., Ltd. - - (Note1) 5.45 (Note1) 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. 138,906,275 69.45 15,433,000 7.72 154,339,275 77.17 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 51.00 1,020,000 51.00 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. - - (Note1) 100.00 (Note1) 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. (Note3) 13.59 - - (Note3) 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: Includes 1,359,368 shares of common stock and 135,937 shares of preferred stock.
82 Corporate Governance Report
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 APR 25, 2020 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: There was no “Capital Increase by Assets Other than Cash.”
B. Type of Stock: APR 25, 2020; Unit: Thousand shares Share Type Authorized Capital Remarks Issued Shares Un-issued Shares Total Shares
Common Stock Inscribed 5,420,985 1,579,015 7,000,000 Listed Stocks
4.1.2 Status of Shareholders APR 25, 2020; Unit: shares
Item Government Agencies
Financial Institutions
Other Juridical Persons
Foreign Institutions & Natural Persons
Domestic Natural Persons
Treasury Stock Total
Number of Shareholders 4 19 217 711 143,275 0 144,226
Shareholding 519,754,485 67,439,391 2,484,721,933 728,144,422 1,620,924,419 0 5,420,984,650 % 9.59% 1.24% 45.84% 13.43% 29.90% 0.00% 100.00%
4.1.3 Shareholding Distribution Status APR 25, 2020; Unit: shares Class of Shareholding Number of Shareholders Shareholding Percentage
1-999 33,523 10,849,315 0.20% 1,000-5,000 66,491 160,343,416 2.96% 5,001-10,000 18,991 154,440,495 2.85%
10,001-15,000 6,602 83,509,579 1.54% 15,001-20,000 5,091 95,134,934 1.75% 20,001-30,000 4,461 115,451,031 2.13% 30,001-40,000 2,139 76,948,793 1.42% 40,001-50,000 1,698 80,038,450 1.48%
50,001-100,000 2,859 208,967,105 3.85% 100,001-200,000 1,290 185,797,043 3.43% 200,001-400,000 516 146,905,639 2.71% 400,001-600,000 201 98,028,565 1.81% 600,001-800,000 80 54,717,582 1.01%
800,001-1,000,000 50 45,051,240 0.83% 1,000,001 or over 234 3,904,801,463 72.03%
Total 144,226 5,420,984,650 100.00%
84 Capital Overview
4.1.4 List of Major Shareholders APR 25, 2020; 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%
Chunghwa Telecom Co. Ltd.
263,622,116 4.86% China Airlines Ltd. Employee Stock Ownership Trust Plan 63,333,017 1.17% New Labor Pension Fund 60,727,000 1.12%
Vanguard Total International Stock Index Fund, a series of Vanguard Star Funds 53,130,442 0.98%
Ocean Investment Holding Co., Ltd.
48,727,000 0.90% Vanguard Emerging Markets Stock Index Fund, a Series of Vanguard International Equity Index Funds
35,442,146 0.65%
JPMorgan Chase Bank N.A. Taipei Branch in custody for Norges Bank 35,300,821 0.65% iShares MSCI Taiwan Index 33,591,761 0.62%
4.1.5 Market Price, Net Worth, Earnings, and Dividends per Share Unit: Thousand shares; NT$
Year
Items
2018 (Distributed in 2019)
(Note 10)
2019 (Distributed in 2020)
(Note 11)
2020 (As of APR 25)
(Note 9) Market
Price per Share
(Note 1)
Highest Market Price 12.90 11.25 9.12
Lowest Market Price 8.97 9.00 5.50
Average Market Price 10.44 9.69 7.40 Net Worth per Share (Note 2)
Before Distribution 10.54 10.44 9.68
After Distribution 10.44 10.44 -
Earnings per Share
Weighted Average Shares 5,456,579 5,418,096 5,418,367 Diluted Earnings Per Share (Note 3) 0.33 (0.22) (0.70)
Dividends per Share (Note 8)
Cash Dividends 0.20960737 - - Stock Dividends
Dividends from Related Earnings - - - Dividends from Capital Surplus - - -
Accumulated Undistributed Dividends (Note 4) - - -
Return on Investment
Price / Earnings Ratio (Note 5) 31.21 NA - Price / Dividend Ratio (Note 6) 49.14 NA - Cash Dividend Yield Rate (Note 7) 2.04% 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. As of publication of this report, the Q1 2020 financial information has not yet been reviewed by Deloitte & Touche.
Note 10: 2018 surplus allocation plan resolution passed at the 5th meeting of the 21st Board of Directors on March 20, 2019, and it will be sent to the 2019 shareholders' meeting for recognition.
Note 11: 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 12: The Company's 2019 final daily closing price was NT$9.06.
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 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 2019; 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.
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 10th meeting of the 21st Board of Directors on March 18, 2020, that the Company will not pay dividends for 2019.
(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.
86 Capital Overview
D. The actual employee compensation and director bonuses distributed for the previous year (2018) (including 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: There is no difference between the proposed employee compensation
approved by the Board of Directors and the actual amount paid. (2) Director bonuses: Not Applicable.
4.1.9 Buyback of Treasury Stock: None.
Capital Overview 87
4.2 Bonds 4.2.1 Corporate Bonds
APR 25, 2020
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$5,000,000,000 NT$5,000,000,000 NT$2,350,000,000 NT$3,500,000,000
Terms of redemption or advance repayment None None None None
Restrictive clause None None None None Name of 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
88 Capital Overview
APR 25, 2020
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$6,000,000,000 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 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
Not yet converted
Not applicable Not applicable 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 April 25, 2020, 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.
Capital Overview 89
4.2.2 Corporate Bonds Undergoing Private Placement A. At the 7th meeting of the 21st Board of Directors on August 7, 2019, the
Company’s seventh issuance of 30,000 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$3,015,000 thousand. It has been reported and put into effect by the approval of Financial Supervisory Commission letter Jin-Guan-Zheng-Fa-Zi No. 1080341270 dated January 3, 2020.
B. Due to the recent changes in the domestic capital market conditions and the COVID-19 pandemic’s continuing impact on the air transport industry, and considering that rash pricing and non-ideal issuance conditions might damage shareholders’ rights, we applied for a three-month extension of the offering period for the seventh issuance of domestic unsecured convertible corporate bonds. It was approved and filed for future reference in letter Jin-Guan-Zheng-Fa-Zi No. 1090334953 dated March 20, 2020, and the offering period was extended to July 3, 2020. Once the market stabilizes, we will find the correct timing for pricing in order to protect the Company’s interests and shareholders’ rights.
4.2.3 Convertible Bonds Unit: NT$ Types of Corporate Bonds Domestic Unsecured 6th convertible bond
Year Item 2019 The current year through April 25, 2020
Convertible Bond Market Price
Highest 102.00 100.00 Lowest 99.15 98.55 Average 99.91 99.21
Conversion Price 12.90 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 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$12.60.
Conversion method Issue new shares.
4.2.4 Exchangeable Bond, Shelf Registration, Shelf Registration: None.
4.3 Other Securities-Related Issues 4.3.1 Preferred shares: None.
4.3.2 Global Depository Receipts: None.
4.3.3 Employee Stock Options: None.
4.3.4 Employee Restricted Stock: None.
4.3.5 Status of New Shares Issuance in Connection with Mergers and Acquisitions: None.
4.4 Financing Plans and Implementation As of April 25, 2020, the use of funds earned through previously issued securities are progressing as planned and are in accordance with expected results.
90 Capital Overview
Operational Highlights 5.1 Business Activities
5.2 Market and Sales Overview
5.3 Human Resources
5.4 Environmental Protection Expenditure
5.5 Labor Relations
5.6 Important Contracts
Operational Highlights 91
V. Operational Highlights 5.1 Business Activities 5.1.1 Business Scope
A. Main areas of business operations (1)Civil air transport business: Air passenger transport, regular and irregular contracting of
international charter flights business, and training of civil aviation personnel.
(2)General aviation business: In-flight commodity sales.
(3)Airport ground service business: Ground services for civil international airports and transit
aircraft.
(4)Air cargo terminal entrepot operation: Air cargo transport services.
(5)Aircraft and parts maintenance and manufacturing business: Aircraft body maintenance.
(6)Inflight catering service: Provision of in-flight catering or other related supplies.
(7)Laundry, dyeing, printing and finishing, and wholesale and retail of dyeing mills and dyestuff
cleaning supplies: Washing of cloth and clothing inside the aircraft and general washing business
in the hospitality industry.
(8)Warehouse and storage: Warehousing services for import, export, and entrepot air cargo.
(9)Other: All business items that are not prohibited or restricted by law, except for those that are
subject to special approval.
B. Revenue distribution Unit: NT$ thousands Proportion of Overall Business
Item 2019
Net Revenue Proportion of Revenue Passenger Revenue 111,413,435 66% Cargo Revenue 43,793,256 26% Other 13,237,469 8% Total 168,444,160 100%
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: Provide maintenance training courses, develop professional
maintenance personnel.
92 Operational Highlights
D. Product Development (1)Website optimization
The Company is committed to improving its website experience quality; expanding the development of website functions to optimize the ticket purchasing process; introducing 3D verification functions for credit card transactions to ensure the security of customer transaction and prevent credit card fraud; and building multiple payment tools and supporting multi-currency payments.
(2)New fare products To better service the passengers, new fare products were launched in September 2019. Passengers can choose additional products according to their travel needs, such as baggage allowance, preferred seats, and mileage accumulation standards, for them to select a la carte or package fares.
(3)Developing potential destinations and optimizing the aviation network extension In order to actively expand the Southeast Asian aviation network layout and to strengthen the aviation network transfer market, the Company plans to launch several routes in 2020, including the Taoyuan-Cebu and Taoyuan-Chiang Mai routes.
5.1.2 Industry Overview A. State of the industry and future development
(1)Economic growth According to the economic forecast published by IHS Markit in February 2020, the estimated global economic growth rate is 2.5%; Taiwan’s economic growth rate has been revised down to 2.1% (originally 2.4%) due to the impact of COVID-19 pandemic situation on consumption and trade. The economic growth rates of other major economies and countries are as follows: United States at 2.1% and the Eurozone at 0.9%. Affected by the COVID-19 pandemic, countries have adopted unprecedented measures for isolation, quarantine, and control, resulting in the stagnation of production and consumption activities in many regions. Therefore, in 2020, Japan’s economic growth rate has been revised down to 0.5% (originally 0.6%), and China’s to 5.4% (originally 5.8%).
(2)Oil prices The price of aviation fuel has been kept stable, at around US$80 per barrel at the beginning of 2018, and began to rise at the end of Q1, with an increase of more than 20%, reaching the highest price of US$96 per barrel in October 2018. However, in November and December, sharp market decline, subpar global economic performance, along with the strong supply of oil shale manufacturers in the United States led to a rapid decline in prices, a decline more than 25% by the end of 2019. The average oil price in December was about US$72. In 2020, the aviation industry was affected by the pandemic, which resulted in the declined demand for oil. The fuel price is estimated to be US$48.60 per barrel on average.
(3)Air passenger market The IATA originally estimated in December 2019 that in 2020, the growth rate of demand for the air passenger transport market would be 4.1% globally, and 4.8% in the Asia-Pacific region. However, as the COVID-19 pandemic has increased in severity, the IATA estimates that the growth rate of demand in the air passenger transport market in 2020 will turn negative, and passenger transport revenue will be reduced by about US$63 billion to US$113 billion due to the implementation of tourism restrictions on the grounds of pandemic prevention in various countries.
(4)Air cargo market Demand in the global cargo transport market shrank by 3.3% in 2019, which was the first year of cargo transport volume decline since 2012 and the weakest performance since the global financial crisis in 2009. The tense international trade situation leading to insufficient global economic growth momentum was the key factor in the 2019 air cargo transport volume decline. Cargo supply volume has increased slightly by 2.1%, resulting in a decrease in the loading rate by 2.6%. The IATA estimated in December 2019 that in 2020, benefiting from the revival of trade, the growth rate of demand for the air cargo transport market would be around 2%. However, due to the uncertain geographical distribution and duration of the pandemic at this stage, its impact on the air cargo transport market can not yet be accurately estimated.
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.
Operational Highlights 93
(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 terms of 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. There being limited resources, airlines provide passenger transportation services in the form of alliance teams, with such mechanisms as code-sharing, extended route agency systems, and combined mileage cumulation frequent flyer programs. Aviation alliance cooperation 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. Benefiting from alliance cooperation, passengers can 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 less transfers, making it easier for passengers to reach their destination. 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 SkyTeam. Through extensive global network cooperation, we provide transportation services in 170 countries and 1,036 destinations.
(2)Joint Venture (JV) In order to establish a closer strategic alliance relationship, airlines further share their route network with business partners and perform joint marketing and bear risks together in order to obtain 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 cooperation. 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 cargoes loading services with its Boeing 747-400 cargo-only aircraft. In addition, having obtained IATA CEIV Pharma certification, we are strongly developing the potential markets for special goods, such as the temperature-controlled cold chain and biotechnology and pharmaceutical markets. In response to the development of cross-border e-commerce, we are strengthening cooperation with express delivery companies and inter-airline cooperation, developing e-commerce postal air-bridge service transport, so as to expand business and increase the added value of transportation services.
D. Product competition The Company is mainly engaged in international passenger and cargo transport services. Due to our continuous commitment to stable revenue and controlling costs, we not only stand in the leading position in the domestic aviation market, but are also fairly representative world-wide;according to the statistics of the Civil Aeronautics Administration (CAA), the Company’s share in the passenger and cargo transport market is ahead of its peers;According to the IATA’s 2018 international passenger and cargo transport volume rankings published in 2019, the Company ranked 34th in the world, with a passenger transport volume reaching 41,390 million Revenue Passenger Kilometers ( RPK);In terms of cargo transport, the Company ranked 12th in the world, with a cargo transport volume reaching 5,804 million Freight Revenue Ton Kilometers (FRTK).
94 Operational Highlights
Taiwan National Airlines International and Cross-Strait Market Share for Passengers and Cargo in 2019 Airline Passenger Cargo
China Airlines 23.45% 37.37% EVA Air 21.70% 24.12%
Mandarin Airlines 2.17% 0.64% UNI Air 1.43% 0.56%
Far Eastern Air Transport 0.46% - Tigerair Taiwan 4.70% 0.04%
Other-Foreign Carriers 46.09% 37.27% Source: Civil Aeronautics Administration Monthly Statistics from January to December 2019-Taiwan National Airlines
International and Cross-Strait Market Share for Passengers and Cargo
IATA Global International Route Passenger and Cargo Rankings 2018 Passenger (Passenger-Kilometers) Rankings
Unit: 1 million Cargo (Ton-Kilometer) Rankings
Unit: 1 million 1 Emirates 302,298 1 Emirates 12,713 2 Ryanair(4) 170,900 2 Qatar Airways 12,695 3 United Airlines 155,178 3 Cathay Pacific Airways 11,284 4 Lufthansa(3) 153,639 4 Federal Express 8,455 5 Qatar Airways 152,210 5 Korean Air 7,815 6 British Airways(3) 148,477 6 Lufthansa(3) 7,391 7 Delta Air Lines 136,647 7 Cargolux 7,322 8 Air France(3) 136,476 8 Singapore Airlines 6,491 9 Turkish Airlines(3) 125,229 9 United Parcel Service 6,252
10 American Airlines 121,416 10 Air China 5,912 11 Cathay Pacific Airways 114,699 11 Turkish Airlines 5,860 12 KLM(3) 107,676 12 China Airlines 5,804 13 Singapore Airlines 100,492 13 AirBridgeCargo Airlines 5,511 14 easyJet(3) 93,609 14 China Southern Airlines 5,309 15 Air Canada 86,069 15 British Airways 4,270 16 Etihad Airways 84,252 16 All Nippon Airways(4) 4,113 17 Norwegian(3)(4) 79,825 17 United Airlines 4,064 18 Korean Air 77,327 18 Asiana Airlines 4,052 19 Air China 74,611 19 Polar Air Cargo 4,010 20 LATAM Airlines Group(3) 67,335 20 Atlas Air 3,792 21 Thai Airways International 66,263 21 Air France(4) 3,672 22 Aeroflot Russian Airlines 64,019 22 KLM(4) 3,604 23 China Southern Airlines(3) 63,016 23 EVA Air 3,580 24 China Eastern Airlines 62,463 24 American Airlines 3,550 25 Qantas Airways 59,056 25 Etihad Airways 3,471 26 Saudi Arabian Airlines 55,652 26 Kalitta Air(2)(3) 3,121 27 Iberia(3) 52,340 27 LATAM Group(3) 3,044 28 All Nippon Airways(3) 50,747 28 AeroLogic(1) 2,803 29 EVA Air 48,281 29 China Cargo Airlines 2,702 30 Wizz Air(1)(5) 45,050 30 Saudi Arabian Airlines 2,487 31 Asiana Airlines 44,220 31 Thai Airways International 2,438 32 Japan Airlines 44,175 32 Delta Air Lines 2,417 33 Ethiopian Airlines 41,804 33 Japan Airlines 2,410 34 China Airlines 41,390 34 Silk Way West Airlines 2,354
Source: IATA WATS 2019
E. Intellectual Property The Company has internal regulations governing corporate identity system management and has a brand management platform to perform 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 matters, in-flight 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 the 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 shall upload the audit samples on the brand management platform for the responsible unit to review (or an on-site audit shall be performed) to maintain the Company’s trademark rights being under the protection of the law.
Operational Highlights 95
5.1.3 Research and Development A. Costs of R&D investment and successfully developed technologies or products
From January 1, 2019, through the publication date of this report, the Company invested approximately NT$95 million in research and development. The following table summarizes the technologies and products developed:
Project R&D Project Description
Robotic Process Automation, RPA
To improve employee productivity and efficiency, we have built a robotic process automation platform, using robots to simulate the work flow of human beings at the computer to replace the repetitive operations of manual data input and reduce the omissions caused by manual input errors, thereby allowing employees more time to focus on creativity and decision-making judgments and thinking, and use manpower for high yield work. The platform was completed and went live in May 2019.
Ticket purchasing instant marketing platform
Completion in the stage of online ticket purchasing user log collecting and tracking, instantly grasping online user activities and conducting customer analysis, and cooperating with online sales activities to achieve marketing models, such as targeting and remarketing. Integration and application with Artificial Intelligence (AI) and Big Data technologies and systems can be planned in the future. This was completed and went live in June 2019.
New generation crew member shift arrangement system
In response to the substantial growth in the number of Company’s flights and crew members, as well as the needs of passenger and cargo flight dispatch, we planned to build a next generation crew member dispatch system, to quickly meet the requirements of civil aviation regulations, optimize manpower dispatch, and fairly and efficiently allocate crew members’ shifts, ensuring crew members’ dispatch quality. The system was completed and went live in June 2019.
In-Flight Equipment Management System, IEMS
The system was built to implement the systematic management of the cabin in-flight service supplies data, promptly provide external agents with complete and accurate loading information, and use data analysis to further improve the loading efficiency and operation quality. The system was completed and went live in August 2019.
New sub-accounting system
In order to respond to the significant changes in the industry’s prorating rules for joint venture account settlement in the future and be able to make modifications in due course, the new prorating system introduces interfacing with the passenger transport revenue system, to reduce manual intervention in fare prorating, improve prorating accuracy and account settlement quality of joint ventures. New prorating system uses the cloud construction method, which can reduce the use cost and maintenance risk of the Company’s own physical facilities. The system was completed and went live in December 2019.
Flight Control & Monitoring System, FCMS
To enable flight control personnel to fully grasp the Company’s flight transport capacity and current flight status and to produce the most appropriate flight operation decisions, through the automated analysis of the system, flight operation decision-making supplementary information was generated, such as flight on-time, late departure or arrival status, current and estimated flight transportation capacity, airport airworthiness, flight schedule surveillance and real-time flight trajectory. In addition to taking into account the flight operation cost and service quality, emergencies can be responded to at all times to ensure that flights arrive on time and safely. The system was completed and went live in December 2019.
B. Future R&D Projects In order to meet future development needs, China Airlines will continue to invest in R&D projects. Over 2020, we plan to invest a total of NT$61 million into R&D. The following table summarizes future projects:
Project Future R&D Project Description Estimated Completion Date
Customer Relationship Management, CRM
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.
December 2020 The implementation progress was 12% as of the annual report printing date
Robotic Process Automation, RPA
Promoting 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 improve operating performance. Related projects carried out in 2020 include: (1)Audit tool improvement-establishment of automatic pricing function robotic
system (2)Establishment of IATA account settlement, receipt, and disbursement automated
system (3)Establish the automatic fare-downloading function.
December 2020 The implementation progress was 17% as of the annual report printing date
96 Operational Highlights
Project Future R&D Project Description Estimated Completion Date
Establish the
relevant mechanism of Cyber Security
Management Act
The Cyber Security Management Act will be the focus of information security protection work in 2020. Annual protection operations will be implemented according to the Company’s information security protection plan. Plans to obtain the PCI DSS certification will be implemented; reinspections on the information security management system against the international standard ISO27001:2013 and the certification of the privacy information management system against the international standard ISO27701:2019 will be performed. These will ensure the security of the Company’s credit card transaction environment as well as the legality and effectiveness of the Company's privacy protection system.
December 2020
The implementation progress was 30% as of the annual report printing date
iCabin Service 2.0, iCS 2.0
The cabin team leader/manager/head attendant can obtain information about passengers/flights/team members right away through mobile devices. They can write up cabin reports with flexibility, regardless of time or location. In addition, the digitized cabin manual is not only available for team members to read at any time, it also ensures that the content is kept up-to-date at all times. This effectively achieves synergy across improved passenger service quality, cabin management, and flight safety.
June 2020
The implementation progress was 86% as of the annual report printing date
e-Shopping
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.
November 2020
The implementation progress was 10% as of the annual report printing date
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.
December 2020
The implementation progress was 30% as of the annual report printing date
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. In addition, continue to utilize AI services and AI’s continuously-growing sematic understanding to enhance passenger experience and improve service quality.
March 2020
Implementation progress was 100% as of the annual report printing date
OnlineCC
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 equipment of the system must keep up with the times to cope with today’s multifaceted business environment. In response to 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.
May 2020
The implementation progress was 96% as of the annual report printing date
Operational Highlights 97
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 COVID-19 in late January 2020, the cross-strait and Hong Kong routes have been heavily impacted, and the passenger loads and booking volumes of Northeast Asian routes continue to decline due to the spread of the disease. The pandemic continues to worsen as it inflicts heavy losses on the aviation and tourism industries in the Asia-Pacific region. In addition to cancelling some flights, China Airlines proactively adjusted ASK according to market conditions in response to the sharp decline in passenger volume and revenue. Considering that the pandemic has yet to ebb, the China Airlines Group will continue to review market demand trends, adjust ASK accordingly, and reduce operational costs with the intention of minimizing losses. Cooperate with the government in promoting the New Southbound Policy; expand the aviation
network in the ASEAN market through inter-airline cooperation. China Airlines has formulated plans to start flight routes in potential destinations in Southeast Asia (such as Cebu, Philippines; Chiang Mai, Thailand). In addition, as visa benefits for travelers from Southeast Asia are in place and the demand for exchange between Taiwan and ASEAN countries has been increasing, the Company will continue to review the potential of expanding in the markets of Southeast Asia routes for ASEAN countries(including Thailand, Malaysia, and Vietnam) and increasing flights. At the same time, increasing the number of charter flights for specific seasons, holidays, and themes will be arranged according to different needs to increase revenue. Through inter-airline cooperation (such as: code sharing, SPAs), China Airlines will expand its aviation network in the ASEAN market. Open up new routes and explore market potential.
Open up Cebu and Chiang Mai flight routes to seize business opportunities in the Southeast Asia travel market, and strengthen the positioning of transfers to North America. For many years, Taiwanese people have frequently travelled to Southeast Asia, and with the support of the government’s New Southbound Policy, the number of tourists from Southeast Asia to Taiwan has increased year by year. According to statistics recorded by the Tourism Bureau, Ministry of Transportation and Communications, 5.57 million tourists travelled between Taiwan and Southeast Asia in 2019. They made up 19% of Taiwan's travel demand, which showed an annual growth rate of 12%. Among which, the number of Taiwanese people who travelled to Southeast Asia grew by 17%, while the number of people who travelled from Southeast Asia to Taiwan grew by 6.7%. Both numbers are higher than the growth rate of the overall market, showing promising future prospects. Taking these into consideration, in 2020, China Airlines Group 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 travelling between Southeast Asia and North America.
(2) Cargo Make adjustments to market layout in response to the impact of the COVID-19 pandemic.
Due to the impact of the global COVID-19 outbreak at the start of 2020, most factories in Mainland China delayed resumption of production, resulting in a slow recovery of production capacity. The transportation of goods has also been restricted due to the restrictions on the passage of people and vehicles at different key import and export destinations. In addition, different airlines' passenger flights flying into Mainland China have been reduced or canceled. This has also significantly impacted the airfreight market connected to Mainland China's imports and exports. Furthermore, the impact of last year's (2019) China-US trade war still continues, resulting in many uncertainties in the airfreight market this year. Regarding this matter, China Airlines has begun planning and successively adjusting the market strategy for the Southeast Asia region to strengthen the company's foothold in the export markets of Taiwan and Southeast Asia. At the same time, China Airlines continues to closely observe changes in market capacity and demands, and it will flexibly adjust its ASK and freight rate strategy accordingly. The Company is making an effort to secure urgent orders of goods and short-notice charter flight demands that are coming up in the short period of time after production resumed in Mainland China.
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 aircrafts. In addition, in recent years, the promotion of the charter business has been strengthened. Customized charter services have been tailored to meet the needs of individual customers, which has contributed significantly to the increase in revenue. In 2020, we will continue to deepen our development in emerging markets, such as Southeast Asia, secure the efficiency of the overall aviation network in response to market changes, promote the customized routine and regular charter flight business, and maximize the benefits of the cargo fleet.
98 Operational Highlights
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 aircrafts, which will gradually replace the narrow-body aircrafts 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 Improve revenue management and promote charter flight business.
Continuing efforts made in 2019, we will continue to improve revenue management. Regarding the different transportation needs of special cargo, such as time limit, volume, special ground treatment, and machinery requirements brought about by emerging 5G technology products, we will continue to enhance price differentiation and increase the added value of transportation services by utilizing our Boeing 747-400 all-cargo aircrafts, which not only provide advantages in large cargo loading and professional services, but also meet the standards of carrying large machinery cargo.We will also strengthen the promotion of bidding mechanisms for shipping space in peak seasons to enhance unit revenue. In response to customer demand, we will continue to promote scheduled and non-scheduled customized charter flight business. Fifty-five such flights were operated in 2019. In 2020, we will continue to deepen our development in emerging markets, such as Southeast Asia, flexibly adjust the aviation network in response to market changes, promote the customized charter flight business, and maximize the benefits of the cargo fleet. Work with inter-airline express delivery companies and promote cold chain cargo.
Strengthen and deepen cooperation with inter-airline express delivery companies and mutual benefits; continue to work with international express delivery companies, including UPS, DHL, FedEx, and SF Express. This includes cooperation with UPS in regard to the shipping space at flight destinations on the Taoyuan-Shenzhen freighter route as well as charter flights to the United States. We will also strengthen our partnerships with Japanese and American airlines operating in the Asia region. We hope that, through inter-airline cooperation, we will be able to provide more diversified products, generate mutual benefits from the aviation network, and prosper together with our partners. Furthermore, to innovate cargo transportation, we have upgraded our cold chain services. China Airlines has been actively promoting IATA’s CEIV Pharma certification. In April 2019, China Airlines officially obtained certification, becoming the first aviation company in Taiwan to have such honorable achievement and become one of the 17 internationally certified airline companies in the world. We have significantly improved our cold chain transportation capability. We hope that the international certification will enable us to enhance our service quality and provide clients with more sophisticated cold-chain transportation services. Start cargo fleet renewal.
In 2019, the Board of Directors of China Airlines approved the plan to bring in six new 777F cargo aircrafts between 2020 and 2023. Since the fuel efficiency of the aircraft can increase payload capacity, after they are acquired, they will be prioritized to fly transoceanic routes and replace parts of the 747-400F cargo fleet. This will effectively increase fuel efficiency, increase the carrying capacity of transoceanic flights, improve operational efficiency, and significantly reduce operational noise, reaching environmental sustainability goals.
Operational Highlights 99
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
2018 2019 No. of
Passengers RPK
(Million) Revenue
(NT$ Million) No. of
Passengers RPK
(Million) Revenue
(NT$ Million) Trans-Pacific 984,161 10,404 14,478 1,017,031 10,780 15,282 Europe 603,342 5,678 9,661 623,389 5,863 10,209 South-East Asia 3,769,593 9,334 18,396 3,890,748 9,604 18,685 Domestic 1,239,130 292 1,967 1,467,638 344 2,252 Hong Kong/Macau 2,687,782 2,136 7,730 2,532,308 2,033 7,567 North-East Asia 6,805,685 12,129 35,454 7,023,173 12,589 36,752 Oceania 662,302 3,808 5,954 651,793 3,832 6,279 Mainland China 2,642,732 2,475 14,706 2,624,929 2,417 14,387 Total 19,394,727 46,256 108,346 19,831,009 47,462 111,413
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 2018 2019
FRTK(Million) Revenue(NT$ Million) FRTK(Million) Revenue(NT$ Million) Trans-Pacific 3,764 27,742 3,358 23,896 Europe 779 6,106 717 5,284 South-East Asia 814 8,879 756 7,901 North-East Asia 255 3,250 229 2,907 Oceania 156 794 161 780 Mainland China 147 3,076 149 3,025 Total 5,915 49,847 5,370 43,793
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
2018 2019 2018 2019 China Airlines 24.23% 23.45% 38.60% 37.37% EVA Air 22.13% 21.70% 24.44% 24.12% Mandarin Airlines 2.34% 2.17% 0.71% 0.64% UNI Air 1.52% 1.43% 0.52% 0.56% Far Eastern Air Transport 0.40% 0.46% - - Tigerair Taiwan 4.52% 4.70% 0.05% 0.04% Other-Foreign Carriers 44.86% 46.09% 35.68% 37.27%
Source: Civil Aeronautics Administration Monthly Statistics from January to December 2018 and 2019-Taiwan National Airlines International and Cross-Strait Market Share for Passengers and Cargo
C. Market Analysis of Major Product Categories (1) Passenger
According to statistics on the Taiwanese passenger transport market in 2019 published by the Tourism Bureau of the Ministry of Transportation and Communications, approximately 11.86 million foreigners entered Taiwan (a growth rate of 7.2%) and 17.1 million Taiwanese people went abroad (a growth rate of 2.7%). The growth rate of the number of foreigners entering Taiwan increased, showing that Taiwan’s tourism market has potential for development. However, as the COVID-19 pandemic has been growing more sever since late January 2020, the IATA estimates that the air passenger transport market will see negative growth in demand in 2020, and global passenger transport revenue will drop by 11% to 19%, which is equivalent to 63 billion to 113 billion USD. The twists and turns in COVID-19's unfolding are almost unprecedented. Within approximately two months, the implementation of tourism restrictions on the grounds of pandemic response in various countries caused a significant drop in passenger traffic, which in turn resulted in flight cancellations and decline in ASK. The aviation industry is experiencing dramatic downturn in most parts of the world. While airlines are performing the important job of connecting the world economy, they are also doing their best to sustain their operations. The COVID-19 outbreak will be a global crisis which tests not only the aviation industry, but also the resilience of the global economy.
100 Operational Highlights
(2)Cargo In 2019, the global economy was affected by factors such as protectionism, the China–US trade war, and the slow down in airfreight businesses growth. January 2020 was the 10th consecutive month in which the global freight volume was less than that of the same period in the previous year. Global freight supply increased by 0.9% compared to the same period in the previous year, marking the 21st consecutive month in which the supply growth exceeded demand growth. It was originally expected that the signing of the US-China trade deal on January 15, 2020, would effectively boost market demand. However, the global supply chain was disrupted by the COVID-19 pandemic. Due to the overly-significant changes in the unfolding of the pandemic, at this stage the IATA remains unable to forecast future impacts on airfreight businesses.
D. Competitive Niche (1) The new-generation fleet can help to enhance service quality.
All aircrafts of China Airlines' new-generation long-haul fleet, which includes 10 Boeing 777-300ER and 14 Airbus A350-900, were delivered at the end of 2018 and were all allocated to fly long-haul routes. Flights for several routes, including the Taoyuan-Los Angeles, Taoyuan-Honolulu, and Taoyuan-Melbourne routes, will continue to increase. The overall cabin design concept was formulated from the perspective of passengers. It combines ideas of environmental protection, life aesthetics, and cultural creativity. The design has won recognition from many Taiwanese and foreign awards, including Japan's Good Design Award, Red Dot Design Award, Golden Pin Design Award, and Taiwan International Creative Design Competition. In the future, as the plan to phase out and renew the narrow-body aircraft fleet is implemented, the diversified, advanced, thoughtful, consistent hardware and software plan for the new-generation products will once again introduce a new look and new concept for the aviation industry, enabling China Airlines' passengers to have premium in-flight experiences.
(2) Highly-efficient cargo aircrafts to be introduced. In June 2019, China Airlines’ Board of Directors confirmed the purchase of three 777F cargo aircrafts from Boeing. Then, in August, the Board of Directors converted three option orders for 777F into firm orders. Six Boeing 777F cargo aircraft are expected to be introduced into the fleet between 2020 and 2023. Between 2014 and 2016, ten 777-300ER passenger aircrafts were introduced, and the benefits generated from their fuel efficiency are significant. Those aircraft are in the same series as the 777F cargo aircraft that China Airlines has discussed with Boeing. The 777F cargo aircraft is installed with the GE90 engine, which is the same as that used in passenger aircraft. This helps with engine management optimization and the lowering of maintenance costs. After the aircrews complete training on aircraft differences, they will be able to perform flight missions. This will enable flexible crew allocation. In addition, China Airlines' Board of Directors agreed in 2019 that new A321neo passenger aircrafts will be introduced successively starting in 2021. Detailed cabin and system designs are underway. We look forward to providing products that better meet market demands and the most comfortable flying experience. China Airlines has also started selecting new-generation regional wide-body passenger aircrafts, which will provide the Company with the final puzzle piece for its new-generation product provision and give passengers a more consistent service standard.
(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 an honorable achievement and become one of the 17 internationally certified airline companies in the world. 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 not only enhances the Company’s competitiveness and benefits generated in the highly valued freight market, but also strengthens the Company’s leading position in the airfreight market in the Asia-Pacific region.
(4) Steady development of aviation networks. In February 2019, the flight frequency for the Taoyuan-Palau route increased from 2 flights a week to 3 flights a week; in June, it further increased to 4 flights a week. In addition, in order to actively expand the Southeast Asian aviation network and strengthen the aviation network transfer market, China Airlines announced plans in 2020 to open up several routes, including the Taoyuan-Cebu and Taoyuan-Chiang Mai routes. As of the end of December 2019, China Airlines (including Mandarin Airlines) flew to a total of 23 countries across Asia, Europe, America, and Oceania, 72 passenger flight destinations, and operated an average of 712 flights a week.
(5) The Group’s integrated resources increase 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 its own positioning in different segments, providing consumers with a diversity of product options.
(6) Taken a leading position in the inter-airline cooperation 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. The Company is active in its global market layout and provides more convenient and comprehensive services for passengers to travel between Taiwan and major cities around the world through the tightly-woven aviation network of China Airlines.
Operational Highlights 101
E. Corporate Policies (1) Corporate Human Rights Policy
To implement the concept of corporate respect for human rights, the Company formulates human rights policies and management mechanisms based on the UN Guiding Principles on Business and Human Rights (hereinafter referred to as “UN Human Rights Guiding Principles”), international human rights trends, and local laws and regulations. The scope of application covers the members in 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 mutual understanding with the union through equal and respectful negotiation procedures, to create a more harmonious and friendly working environment, one 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 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; give priority to fair protection of the labor rights of every employee; and perform the obligation to stay neutral in accordance with the law, showing the unions consistent respect and providing them with equal resources.
(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 deeply understand 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 established 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.
(3) Environmental Sustainability Management The Company adheres to the belief of environmental sustainable management and regards “environment” as one of the key elements for 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 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 announced by the Board of Directors. The Company also referred to the UN’s SDGs when devising instructional strategies, to ensure the business operation direction is towards sustainable development, namely environmental friendliness, low-carbon emissions, and energy conservation.
(4) Corporate Social Responsibility China Airlines is deeply aware that its achievements come from the support of the society, and “social support” is the key to promoting China Airlines’ success. The Company continues to make contributions and adheres to its core concept of “giving back to society” to build a loving society and fulfill its corporate responsibilities as a member of Taiwan. As a leader in Taiwan’s aviation industry and a corporate citizen of Taiwan, the Company takes “continuous creation of social value” as an important commitment for sustainable development. In 2019, China Airlines continued to use “brand perception,” one of the major directions in its sustainable strategy blueprint, to extend its development strategy to give back to the society: with “promoting the internationalization of local education” and “enhancing international visibility of local brands in Taiwan” as its main directions, and adding “promoting disadvantaged groups to obtain equal opportunities in society,” it looks to create co-prosperity and common good with the society through specific actions, such as “improving the overall quality of Taiwan’s education,” “strengthening Taiwan’s international visibility,” and “helping disadvantaged groups ameliorate their difficulties”.
102 Operational Highlights
(5) Enterprise Risk Management Architecture and Process China Airlines understands the importance of risk management, and places great emphasis on possible interactions between risks. It refers to Enterprise Risk Management (ERM) and other publications and practical methods while also considering the environment and operational characteristics of the industry. The airline industry is currently facing three major risk sources: security, operations, and financial risk management structures, and uses four major steps, identification, risk analysis, risk assessment, and risk management”. The Company identifies potential risks in these three areas and, based on frequency of occurrence and seriousness of the risk, performs analysis and assessment, distinguishing the degree of risk and finally developing response plans for high-risk items to reduce the impact on company operations.
F. Favorable and Unfavorable Factors in the Long Term (1) Favorable Factors The government strongly develops a diversified market, continues to promote the simplification of visa
process for New Southbound countries, and combines local resources to complete transportation and ticket services, effectively increasing the number of international tourists visiting Taiwan.
Global aviation has benefited from the growth of emerging economies and the middle class. The growth in the passenger transportation volume is most prominent in the Asia-Pacific region. The total number of passengers in Taiwan has grown steadily and is dominated by passengers on international routes.
With increasingly updated technology, transportation has become convenient, online security trading platforms have matured, cross-border e-commerce has changed business models, and the demand for logistics networks is increasing.
(2) Unfavorable Factors Labor awareness is rising. Striving for labor rights through strikes not only causes inconvenience to
passengers, but also affects company’s business performance. Geopolitical conflicts and economic and trade disputes will affect the global supply chain layout, which in
turn will affect the overall aviation industry operations. Most air traffic rights lean towards the Treaty on Open Skies, in addition to allowing existing operators to
increase flights, it also provides new operators with opportunities to join and LCCs with opportunities to have significant growth, intensifying competition in the route market.
The development of air transport infrastructure is not as fast as that of the aviation industry, making it difficult to obtain or adjust time slots in airports at various locations. The airlines’ route planning and aviation network expansion are thus limited, which is not conducive to business.
International aviation environmental protection related regulations have developed rapidly. For example, ICAO CORSIA has been officially implemented, and many countries have also planned to levy aviation environment related taxes and promote sustainable aviation fuel policies, which will all affect the operation and operating costs of airlines.
(3) Response Measures We adapt to the unpredictable passenger transport market by increasing the passenger load factor and
profit margins for the routes through the flexible adjustment of flights, deployment of aircrafts, and regulation of transportation capacity. Furthermore, based on the seasonal market demand in various places, adding extra flights or irregular charter flights for potential profitable destinations can grasp business opportunities and increase revenue.
Through inter-airline cooperation, extending destinations, expanding the global aviation network and increasing the number of passengers, deepening resource sharing with alliance member airlines, and in turn reduce operating costs.
Faced with the growth of new operators and low-cost carriers (LCC) in Asia, China Airlines Group will also combine the transportation capacity of Tigerair Taiwan’s fleet to provide differentiated aviation service products to target customers based on market positioning, so as to consolidate the overall interests of the Group.
It is planned to launch various marketing activities and improve the quality of website experience; expand the development of website functions to optimize the ticket purchasing process; and build multiple payment tools and support multi-currency payments. In addition, new fare products were launched. Passengers can choose fares and additional products on their own, such as baggage allowance, preferred seats, and mileage accumulation standards, to meet the different needs of passengers.
In response to the development of cross-border e-commerce, for air cargo transport, we strengthen cooperation with express delivery companies and inter-airline cooperation to expand the air-bridge service transport for e-commerce postal services, providing more diversified products through cooperation to achieve mutual benefit and common prosperity in the aviation network.
Through the development of the CEMS system, continuing to review and correct to comply with the CORSIA management measures and operational procedures, and continuing to promote the TCFD project to deepen carbon management operations and enhance resilience to the climate change. Continuing to pay attention to the development of SAF related policies to respond to the international trend of carbon reduction and sustainable energy that are growing in seriousness as early as possible.
Operational Highlights 103
5.2.2 Production Procedures 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.
5.2.3 Supply Status of Main Materials CAL is a member of the airline industry, not a manufacturer. Therefore, there is no need for production 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 general public. B. Major Suppliers in the Last Two Calendar Years
CPC Corporation, Formosa Petrochemical Corporation, and Chevron Corporation, etc. Unit: NT$ thousands
Item
2018 2019 2020 (as of March 31)
Company Name Amount %
Relation with
Issuer
Company Name Amount %
Relation with
Issuer
Company Name Amount %
Relation with
Issuer
1 CPC Corporation 18,413,016 12.00 None CPC
Corporation 17,197,546 11.33 None CPC Corporation 3,337,695 10.32 None
2 Formosa
Petrochemical Corporation
5,372,889 3.50 None Chevron Corporation 5,126,545 3.38 None Chevron
Corporation 1,024,781 3.17 None
3 Chevron Corporation 5,117,227 3.33 None
Formosa Petrochemical Corporation
4,939,381 3.25 None Formosa
Petrochemical Corporation
857,008 2.65 None
Other 127,600,944 81.17 Other 124,493,760 82.04 Other 27,116,778 83.86 Net Total 153,504,076 100.00 Net Total 151,757,232 100.00 Net Total 32,336,262 100.00
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 2018 2019 Rate of Increase
(Decrease) Available Seat Kilometers (ASK) 58,043,562 58,590,098 0.94% Revenue Passenger Kilometers (RPK) 46,256,379 47,462,113 2.61% Load Factor (%) 79.69% 81.01% 1.32 ppt Freight Available Ton Kilometers (FATK) 8,290,378 8,012,739 -3.35% Freight Revenue Ton Kilometers (FRTK) 5,914,889 5,370,078 -9.21% Load Factor (%) 71.35% 67.02% -4.33 ppt Available Ton Kilometers (ATK) 13,498,780 13,269,365 -1.70% Revenue Ton Kilometers (RTK) 10,065,315 9,627,913 -4.35% Load Factor (%) 74.56% 72.56% -2.00 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.
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Reasons for Changes: In 2019, the Company had new transportation capacity of passenger transport put into the market, and the available seat kilometer (thousand) and the revenue passenger kilometer (thousand) increased compared with 2018; in response to the decrease in demand for cargo transport, the FTK (thousand) of FRTK (thousand) also decreased compared with 2018.
5.2.6 Shipments and Sales in the Last Two Years Unit: thousand kilometers; NT$ thousands
Item 2018 2019
RPK/FRTK Amount RPK/FRTK Amount Passenger Revenue 46,256,379 108,345,648 47,462,113 111,413,435 Cargo Revenue 5,914,889 49,847,065 5,370,078 43,793,256 Other Operating Revenue - 12,518,894 - 13,237,469 Total - 170,711,607 - 168,444,160 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: The sales volume of the Company’s passenger transportation business in 2019 has increased compared to 2018, mainly due to the introduction of additional passenger transportation capacity into the market in 2019, which led to the increase in the Revenue Passenger Kilometer (RPK) and sales;however, due to the continued downturn of the cargo transport market in 2019 and the slowdown in international trade demand, the cargo transport sales in the entire year of 2019 has declined.
5.3 Human Resources Year 2018 2019 APR 25, 2020
Number of Employees
Male 6,379 6,302 6,048 Female 6,030 5,937 5,126 Total 12,409 12,239 11,174
Average Age 41.10 41.40 42.44 Average Years of Service 13.90 14.00 15.00
Education
PhDs 0.10% 0.09% 0.10% Master’s Degrees 10.94% 11.10% 11.99%
Bachelor’s Degrees 82.71% 82.63% 81.83% Senior High School 5.94% 5.89% 5.77%
Below Senior High School 0.31% 0.29% 0.31%
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 a number of 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
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energy performance indicators, to fit with the international enterprise benchmark mode of thinking on sustainable development and governance.
(2)Value chain and outstation environment management In order to fully grasp the global operational risks, the Company has initiated outstation risk/opportunity investigation and evaluation operation since 2018, strengthening the grasp of international environmental protection control trends, and entrenching 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 cultivated Group’s corporate environmental energy risk management capacity through environmental risk/opportunity investigation and communication meetings
(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. Its operating unit performs declaration and 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 is the second airline in the world and the first Taiwanese airline to pass certification for ISO14001 and ISO50001 at the same time. The scope of certification is also the most complete in the domestic service industry. It has continued to complete the annual third party audit and verification operations for ISO 14001 and ISO 50001 on December 20, 2019.
B. Environmental KPI Controls The Company has followed the United Nations’ SDGs and set a number of 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 72 KPIs in 2019 and reduced carbon emissions by 124,365 tons CO2e. 69 KPIs are further planned in 2020, and it is expected to reduce emissions by 58,106 tons CO2e.
C. Strengthening adaptability to climate risks and opportunitiesIn order to strengthen our grasp of climate-related risks and opportunities, in 2018, the Company signed the initiative 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.
D. Solidifying environmental management supervision mechanismThe Company promotes environmental management supervision mechanisms. Each unit independently implements the first-level audit of environmental management; second-level audit of environmental management is
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implemented by the headquarters. The double audit mechanism ensures that environmental management is implemented in the basic level operations of all units. The Company has completed the second-level audit in 2019 Q2 and Q4. In addition to the checklist items, the audit items conducted also included the improvement on the previous audit findings, the degree of implementation of external stakeholders’ concerns and annual KPI implementation review.
E. Entrenching environmental education and training for all employees To implement the corporate environmental and energy policy 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 up an annual “environmental protection education campaign” to implement online or in-class environmental management education and training in Taiwan. The implementation 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 system is 100%. (3)A total of 151 participants in the environmental protection forum for all employees on the
theme of climate change. (4)A total of 2,229 participants in interactive employee activities. (5)Published 35 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 has conducted third-party verification operations in accordance with the requirements of “Reasonable Assurance”. The greenhouse gas emissions in 2018 and 2019 were 7,253,363 tons CO2e and 7,082,233 tons CO2e, respectively, a decrease of approximately 2.36%.
(2)EU ETS (European Emission Trading Scheme) operations According to the EU regulations, because the CO2e emissions of the Company’s 2019 Intra-EU Flights were all less than 3,000 metric tons, carbon emissions may be calculated by the EUROCONTROL tool; the calculation result for 2019 is as follows: CO2e emissions of 988 tons from 26 flights in total. The carbon credit allocated by the EU to the Company between the period from 2017 to 2020 is 7,157 metric tons per year. Therefore, in 2019, the Company’s carbon credit account balance was 23,781 metric tons. We will continue to conduct trading operations based on market demand and pricing trends.
G. Improving business eco-efficiency After obtaining the “Diamond Green Buildings Label” certification in 2017, in 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, we further responded to the government’s green energy policy and completed the installation of 99kW of solar photovoltaic facilities grid-connected power generation on the rooftop of the simulator training building. As of December 31, 2019, it had generated 90,000 kWh of electricity and reduced CO2e emissions by approximately 48 tons; Relevant actions have been recognized by the Energy
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Conservation Benchmark - Silver Award of the Ministry of Economic Affairs, Bureau of Energy; Energy Conservation Leadership Award of Taipei City; No. 1 in the Carbon Reduction and Electricity Conservation Reward Competition of Taoyuan Airport. Moreover, to reduce the risk 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 resources and water consumption hot spots, and has promoted water reduction and recycling measures, including: purchasing water conservation label products, promoting water conservation advocacy, setting up a rainwater recovery system, promoting cooling water recycling and introducing Eco-Shine environmentally friendly cleaning solution;The amount of tap water used dropped from 148.22 kilotons in 2018 to 146.49 kilotons in 2019, a decrease of about 1.17%. Data relevant to this has been disclosed in the Company’s 2019 CSR report and assured by third parties. In terms of 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 established 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 and discuss response strategies. Domestic waste output from employees in 2018 and 2019 were 747,202 kg and 702,966, respectively, showing a decrease of approximately 5.9%.Data relevant to this has been disclosed in the Company’s 2019 CSR report and assured by a third party.
H. Promote Green Consumption The Company actively reveals its environmentalism philosophy and implementation performance irregularly through different platforms, such as social networks and in-flight magazines, with the intention of establishing and promoting the awareness of green consumption.In 2017, in a further effort to follow international trends, the Company started promoting the 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 2019, a total of 156 people took part in the carbon offsetting program, in which a total of 258.45 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 12 environmental films to play on airplanes. (2) Presenting 5 posts about environmental topics and reports on social media. (3) Interactive educational work, such as promoting closing windows in summer. (4) Adding environmentalism products in the catalogue of home-delivery duty-free goods, and
include China Airlines' sustainability logo. The heating boilers in the engine plant and the electroplate plant of the companies’ repair factory are inspected yearly against relevant regulations for air pollutant emissions; air pollution control fees are also reported and paid quarterly (the repair factory uses super diesel, so it is exempted from inspections, but reports are required).
I. Continue to Support International Environmental Protection Research Projects The Company is working with several environmental protection organizations, including the 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 onto the Company’s B-18806, B-18317 and B-18316 aircrafts, respectively. Since then, atmospheric gas data have been automatically collected during flights. The data is observed by important Taiwanese and foreign
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research organizations to gain 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 the period from July 1, 2012 to December 31, 2019, atmospheric data collected from a total of 11,254 flights was collected, contributing to the ecosystems on Earth and Taiwan's image in the environmentalism field.
J. Transparent Disclosure of Environmental Protection Responses and Performances Since 2012, the Company has been publishing its Corporate Social Responsibility (CSR) Report every year (former titles include the 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 the environmental, social, and financial aspects of its operations. The reports are an important tool and channel that facilitates discussions with stakeholders.
5.4.3 Countermeasures Unit: NT$ thousands Item
Year 2019 2020 2021 2022
Environmental protection equipment and maintenance costs (does not include depreciation) 13,969 14,000 14,000 14,000
Fees for wastewater equipment regular sampling inspections by inspection agencies and permitting 123 100 100 100
Waste disposal costs 4,062 4,000 4,000 4,000 Aviation noise control fees (paid to the terminal based on airplane model and number of flights) 188,787 193,318 193,318 193,318
Fees for establishment of an environmental control system and strategic research project 2,541 4,000 4,000 4,000
Green procurement 19,258 20,000 20,000 20,000
5.4.4 Effect of Environmental Expenditures on Earnings Energy-saving equipment and improved management expenditures reduce both Company energy use and operating costs.
5.4.5 Effect of Environmental Expenditures on Competitiveness Environmental performance has already become an important benchmark in achieving corporate social responsibility. With the rise of green consumers, actively investing in environmental improvements can positively affect our competitive position and improve brand image.
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5.5 Labor Relations 5.5.1 List of 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 past years, the appropriation and payment of pensions in the old system of the Labor Standards Act were handled according to the Labor Standards Act. In 2019, employees who may claim from the old system pension account accounts for approximately 51.2% of the employees of the Company (56.3% of Company employees are subject to both the new and old systems). The monthly appropriation rate of old system 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 responsible unit shall take the initiative to settle the pension, and shall apply to the local government for expenditure approval and reference or submit to the Taiwan Bank for payment application according to the relevant regulations of the government; it shall notify the employees to receive the payment once the check is produced. 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 every three months to report the use of the pension reserve funds to the members, including the estimated result of the next year’s appropriation, number of retirements of 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 order Zong-Tong-Hua-Zong-(I)-Yi-Zi No. 09300121821, for employees who are subject to the statutes, new system pensions shall be appropriated on a monthly basis to the Bureau of Labor Insurance according to the statutes starting from July 2005. In 2019, employees who may claim from the new system pension account accounts for approximately 67.2% of the employees of the Company (37.8% of Company employees are subject to both the 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 shall apply for payment to the Bureau of Labor Insurance.
C. Labor-Management Communications (1) Units within 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 stipulated in
the Regulations Governing Employee Complaints, employees can lodge a complaint with the responsible operating unit or the Human Resources Division. If the employee objects to the response, he or she can file an appeal with the Human Resources Division. Use of employee complaint channels: a total of 9 written complaints were handled in 2019.
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 employee position, is deducted directly from their monthly salary. Through the end of 2019, a total of 2,063 employees participated.
(3) Profit sharing As per the Company charter, if the Company posts a profit in a given year, it must allocate 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 the deficiency.
(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, the effective period being 3 years and 6 months. Since signing the collective agreement with the China Airlines Corporate Union in 2002, the agreement is 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 employee personal growth, the Company has employed professional counselors and psychiatrists to provide counseling services to employees. In 2019, there was a total of 58 counseling visits totaling 58 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 to 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 after work-relate courses are successfully completed by an employee.
(2) Obtained the ROC Ministry of Labor Workforce Development Agency's 2019 training subsidy of NT$950,000.
(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 174 in-person classes and 158 e-classes, and total of 17,745 people trained. Professional technical classes:
including enterprise safety/inspection work, flight services, joint management and EMO, with a total of 2,069 in-person classes and 265 e-classes, and a total of 72,479 people trained. Service:
including service quality assurance, introduction to public relations, service business, ground services operations, and in-flight products, with a total of 533 in-person classes and 316 e-classes, and a total of 26,109 people trained. Other:
including investment management unit business, law and insurance, financial, information technology, and human resources management, with a total of 182 in-person classes and 26 e-classes, and a total of 13,925 people trained.
5.5.2 CAL has established 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 the foregoing items of workplace behavior in its annual results; employees unable to respect or who violate the foregoing regulations governing workplace behavior are penalized based on 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 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 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. Formulate and follow the Occupational Safety and Health Management Manual; 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
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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 safe, healthy and comfortable working environment for employees, and promote industrial competitiveness; proactively promote the occupational safety and health management system; strengthen the promotion of safety and health education at all levels. Every three years, each person receives at least 3 hours of education and training. Education and training for supervisors is held depending on the promotion and transferring of the supervisors. The members of the Occupational Safety and Health Committee must complete at least three hours of safety and health education and training every three years to cultivate the correct attitude towards safety and health work;assist in the training of safety and health officers at all levels to implement safety and health work;initiate a safety and health hazard identification proposal system to extend the participation in safety and health to all personnel;regularly strengthen the on-the-job training for safety and health officers of various units, including how to identify hazards in the workplace, risk classification, how to compose management plans, and occupational accident identification process and operations; guide the risk assessment of units at all levels and conduct prevention and improvement to build the concept of corporate community.
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 2019 to April 25, 2020, the Company was fined a total of NT$3.12 million by the government labor authorities for labor disputes or imperfections after labor inspections. As for matters that the Company is not at fault for, the Company has proposed procedures for administrative remedies through appropriate channels to protect the Company’s rights and interest.In addition, if labor disputes turn into petitions and protest activities, they will cause losses that cannot be estimated in the Company’s operations and reputation. In regard to this matter, the Company will continue to maintain a genial interaction mechanism through diversified communication channels to achieve the goal of caring for employees’ welfare and improving the quality of the work environment, and through comprehensive improvement of the satisfaction of employees in all categories, eliminating the issues that may arise from unnecessary labor disputes.
5.6 Major Contracts Agreement Counterparty Period Major Contents Restrictions
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 Zhong Hang Co., Ltd. 04/2007-04/2019 Aircraft Type:A330-300/No.:B-18315 - 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 - 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 -
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Agreement Counterparty Period Major Contents Restrictions 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 First Commercial Bank 05/2007-05/2019 Aircraft Type:A330-300/No.:B-18316 - Loan Cathay United Bank 08/2007-08/2019 Aircraft Type:747-400F/No.:B-18725 - 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 Bank of America Corporation 01/2016-01/2019 Unsecured Loan - Loan E.SUN Commercial Bank 06/2016-06/2019 Unsecured Loan - 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 02/202002/2021 Unsecured Loan Loan Bank SinoPac 02/2020-02/2023 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 Mega International Commercial Bank 05/2017-08/2019 Unsecured Loan - 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 Bank of Taiwan 04/2020-10/2022 Partial Credit Guarantee Loan -
Bills International Bills Finance Corp. and syndicate
12/2015-03/2019 FRCP Joint Underwriting, -
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 and syndicate
12/2016-12/2020 FRCP Joint Underwriting, -
Bills China Bills Finance Corporation and syndicate
10/2017-04/2022 FRCP Joint Underwriting, -
114 Operational Highlights
Agreement Counterparty Period Major Contents Restrictions
Bills Mega Bills and syndicate 11/2017-05/2021 FRCP Joint Underwriting, -
Bills International Bills Finance Corp. and syndicate 07/2019-8/2024 FRCP Joint Underwriting, -
Surface Rights Registration Contract of Taipei CAL Building
Northern Region Branch of National Property Administration of the Ministry of Finance
2016/12/31-2026/12/30
According to the original contract, it was agreed that the contract would be renewed for 10 years (the third period); rent is adjusted according to the government assessed land value and government published land value of the land authority, and is collected at an annual rent rate of 5%.
-
Taipei CAL Building Lease Contract
FX Hotels Taiwan 99/09/01-2026/12/30
Leasing premises: Part of floor B1 of the CAL Building, which is located at No. 131, Sec. 3, Nanjing E. Rd., Taipei City, the area is 169.6 ping (approximately 561 square meters); 1st floor, an area of 142.5 ping (approximately 471 square meters); 4 floors from the 10th floor to 13th floor, a total area of 2,145 ping (approximately 7,091 square meters). The total area of the above-mentioned is 2,457.1 ping (approximately 8,123 square meters). Leasing of 11 parking spaces on the 1st floor and floor B1.
-
Taipei CAL Building Lease Contract
OEC Freight Worldwide Co., Ltd. of the OEC Group 2016/03/01-115/12/31
Leasing premises: Entire area of the 7th floor of the CAL Building, which is located at No.131, Sec. 3, Nanjing E. Rd., Taipei City; the total area is 543.54 ping (approximately 1,797 square meters); part of floor B1, an area of 15.25 ping (approximately 50 square meters); 1 parking space on floor B1 and 12 parking spaces on floor B2.
-
Nankan CAL Park Land Lease Contract
Costco President Taiwan Inc.
Inception of the lease: 2012/08/30
Period of leasing: 20 years since the leasing start date.
Leasing premises: One parcel of land at Jinzhong Section, Luzhu District, Taoyuan City with parcel number of 705, and one parcel of land used for road facing Nankan Road with parcel number 705-1 and total area of 8,382.05 ping (27,709.21 square meters).
In accordance
with notarized
text
Kaohsiung CAL Building Lease Contract
FX Hotels Taiwan 2012/12/31-2032/12/30
Leasing premises: CAL Building, which is located at No.81, Zhonghua 3rd Rd., Qianjin Dist., Kaohsiung City Floor B1, an area of 115.91 ping (approximately 471 square meters); 1st floor, an area of 101.89 ping (approximately 337 square meters); double layer of 24.07 ping (approximately 80 square meters); 11 floors from 2nd floor to 12th floor, total area of 1,083.94 ping (approximately 3,583 square meters); penthouse of 35.45 ping (approximately 117 square meters). The total area of the aforementioned is 1,361.26 ping (approximately 4,500 square meters).
-
CAL Park Building Lease Contract
CAL Park Co., Ltd.
2019/01/01-2021/12/31 The contract will be
automatically renewed for 1 year upon expiration of this period and contract renewal
shall be made every two years.
Leasing premises: Administration Center Building of the corporate headquarters, Crew Center Building, Flight Training Center Building, Basement (Parking Lot). The total area is 25,140 ping (approximately 83,107 square meters).
-
Engineering consulting company commissioned technical service category
T.Y.Lin Taiwan Consulting Engineers. inc. 2019/03/01-2020/11/30
Operating space requirements and interface management for China Airlines Group’s stationing in the terminal 3 area of the Taoyuan International Airport.
-
Operational Highlights 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, 2019 and 2018, and
Independent Auditors’ Report
6.4 Parent Company Only Financial Statements for the
Years Ending December 31, 2019 and 2018 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) 2020 (As of March 31)
(Note 2) 2015 (Note 3) 2016 (Note 4) 2017 (Note 5) 2018 (Note 6) 2019 (Note 7) Current assets 45,642,615 47,338,201 47,411,834 52,827,560 51,822,342 59,527,646 Property, plant and equipment 129,628,866 140,136,737 153,617,531 163,107,718 145,886,971 142,531,989 Intangible assets 1,009,678 1,137,115 1,019,345 1,210,796 1,182,692 1,151,247 Other assets 45,645,150 35,888,706 23,850,922 12,990,508 94,155,974 92,025,311 Total assets 221,926,309 224,500,759 225,899,632 230,136,582 293,047,979 295,236,193 Current liabilities
Before distribution 68,220,452 68,605,724 60,289,113 60,949,892 76,351,527 82,993,316 After distribution 70,728,977 68,605,724 61,482,783 62,086,170 - Not yet allocated
Non-current liabilities 93,149,314 98,027,837 106,453,000 109,139,606 156,564,335 156,248,299
Total liabilities
Before distribution
161,369,766 166,633,561 166,742,113 170,089,498 232,915,862 239,241,615
After distribution 163,878,291 166,633,561 167,935,783 171,225,776 - Not yet allocated Equity attributable to shareholders of the parent
58,269,896 55,783,817 57,023,237 57,081,572 56,553,772 52,453,446
Capital stock 54,708,901 54,708,901 54,709,846 54,209,846 54,209,846 54,209,846 Capital surplus 798,415 799,932 799,999 1,241,214 2,488,907 2,484,998 Retained earnings
Before distribution 2,872,235 206,092 1,664,405 1,615,661 (1,297,842) (5,072,909) After distribution 363,710 206,092 470,735 479,383 - Not yet allocated
Other equity interest (66,283) 112,264 (107,641) 58,223 1,196,233 862,386 Treasury shares (43,372) (43,372) (43,372) (43,372) (43,372) (30,875) Non-controlling interest 2,286,647 2,083,381 2,134,282 2,965,512 3,578,345 3,541,132 Total equity
Before distribution 60,556,543 57,867,198 59,157,519 60,047,084 60,132,117 55,994,578 After distribution 58,048,018 57,867,198 57,963,849 58,910,806 - Not yet allocated
Note 1: 2015-2019 annual financial information was verified by Deloitte & Touche. Note 2: As of the date of printing of this annual report, Q1 2020 financial information has not yet been reviewed by Deloitte & Touche. Note 3: The 2015 Earnings Distribution Proposal resolution was passed by the Shareholders’ General Meeting held on June 24, 2016. As required by law, the
Company appropriated a legal reserve of NT$287,224,000 and special reserve of NT$76,486,000 and distributed cash dividends totaling NT$2,508,525,000.
Note 4: 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 5: For the matter of 2017 surplus earnings distribution, after approved by the resolution of 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$1,193,670,000.
Note 6: For the matter of 2018 surplus earnings distribution, after approval by the resolution of the general meeting on June 25, 2019, the legal reserve appropriated was NT$ 114,493,000, the cash dividend distributed was NT$1,136,278,000, and reversal of special reserve of 105,843,000.
Note 7: The 2019 deficit make-up plan was approved by the resolution of the 10th meeting of the 21st Board of Directors on March 18, 2020, but has yet to be approved at the shareholders’ general meeting.
Financial Information 117
6.1.2 Consolidated Condensed Statement of Comprehensive Income – Based on IFRS
Unit: NT$ thousands; EPS (net) = NT$ Year
Item Financial Summary for the Last Five Years (Note 1) 2020 (As of March 31)
(Note 3) 2015 2016 2017 2018 2019 Revenue 145,056,217 141,079,107 156,121,785 170,711,607 168,444,160 32,557,130 Gross profit 20,268,374 18,005,906 21,972,411 17,207,531 16,686,928 220,868 Operating profit 8,129,197 4,564,687 8,826,160 4,022,383 2,665,821 (2,970,856) Non-operating income and expenses (994,312) (2,684,836) (5,302,197) (941,134) (2,762,638) (835,626) Pretax profit (loss) 7,134,885 1,879,851 3,523,963 3,081,249 (96,817) (3,806,482) Income from operations of continued segments - after tax
5,926,210 710,940 2,490,792 2,272,684 (675,002) (3,810,565)
Income from discontinued operations - - - - - - Net income (loss) 5,926,210 710,940 2,490,792 2,272,684 (675,002) (3,810,565) Other comprehensive income (income/loss after taxes)
1,269,760 (681,669) (1,113,176) (578,363) 462,758 (333,828)
Total comprehensive gain (loss) for the year
7,195,970 29,271 1,377,616 1,694,321 (212,244) (4,144,393)
Net income attributable to shareholders of the parent
5,763,714 571,540 2,208,066 1,790,361 (1,199,798) (3,773,333)
Net income attributable to non-controlling interest
162,496 139,400 282,726 482,323 524,796 (37,232)
Comprehensive income attributable to Shareholders of the parent
7,072,042 26,103 1,240,677 1,258,035 (647,085) (4,107,180)
Comprehensive income attributable to non-controlling interest
123,928 3,168 136,939 436,286 434,841 (37,213)
Earnings (Loss) per share 1.06 0.10 0.40 0.33 (0.22) (0.70) Note 1: 2015-2019 annual financial information was verified by Deloitte & Touche. Note 2: As of the date of printing of this annual report, the Q1 2020 financial information has not yet been reviewed 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) 2020 (As of March 31) (Note 2) 2015 (Note 3) 2016 (Note 4) 2017 (Note 5) 2018 (Note 6) 2019 (Note 7)
Current assets 34,477,533 37,904,039 39,908,492 37,933,696 42,932,859 - Property, plant and equipment 131,178,428 118,446,472 129,121,632 142,265,548 149,029,054 - Intangible assets 649,614 990,307 1,115,101 989,327 979,708 - Other assets 51,594,035 51,802,032 41,394,218 30,729,421 21,972,600 - Total assets 217,899,610 209,142,850 211,539,443 211,917,992 214,914,221 -
Current liabilities
Before distribution
59,079,846 64,725,525 64,339,805 54,925,364 55,179,834 -
After distribution 59,079,846 67,234,050 64,339,805 56,119,034 - - Non-current liabilities 110,155,489 86,147,429 91,415,821 99,969,391 102,652,815 -
Total liabilities
Before distribution
169,235,335 150,872,954 155,755,626 154,894,755 157,832,649 - After distribution 169,235,335 153,381,479 155,755,626 156,088,425 - -
Equity attributable to shareholders of the parent
48,664,275 58,269,896 55,783,817 57,023,237 57,081,572 -
Capital stock 52,491,666 54,708,901 54,708,901 54,709,846 54,209,846 - Capital surplus 480,462 798,415 799,932 799,999 1,241,214 -
Retained earnings
Before distribution
(3,870,736) 2,872,235 206,092 1,664,405 1,615,661 -
After distribution (2,358,783) 363,710 206,092 470,735 - - Other equity interest (1,905,698) (66,283) 112,264 (107,641) 58,223 - Treasury shares (43,372) (43,372) (43,372) (43,372) (43,372) - Non-controlling interest - - - - - -
Total equity
Before distribution
48,664,275 58,269,896 55,783,817 57,023,237 57,081,572 -
After distribution 48,664,275 55,761,371 55,783,817 55,829,567 - - Note 1: 2015-2019 annual financial information was verified by Deloitte & Touche. Note 2: The Company has not prepared an individual financial statement for Q1 2020. Note 3: The 2015 Earnings Distribution Proposal resolution was passed by the Shareholders’ General Meeting held on June 24, 2016. As required by law, the
Company appropriated a legal reserve of NT$287,224,000 and special reserve of NT$76,486,000 and distributed cash dividends totaling NT$2,508,525,000.
Note 4: The 2016 Deficit Compensation Proposal was passed by the Shareholders’ General Meeting held on June 22, 2017, using a legal reserve of NT$81,132,000 and reversal of special reserve of 76,486,000 to cover the deficit.
Note 5: For the matter of 2017 surplus earnings distribution, after approved by the resolution of 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$1,193,670,000.
Note 6: For the matter of 2018 surplus earnings distribution, after approval by the resolution of the general meeting on June 25, 2019, the legal reserve appropriated was NT$ 114,493,000, the cash dividend distributed was NT$1,136,278,000, and reversal of special reserve of 105,843,000.
Note 7: The 2019 deficit make-up plan was approved by the resolution of the 10th meeting of the 21st Board of Directors on March 18, 2020, but has yet to be approved at the shareholders’ general meeting.
Financial Information 119
6.1.4 Condensed Statement of Comprehensive Income – Based on IFRS (Parent Company Only)
Unit: NT$ thousands; EPS (net) = NT$ Year
Item Financial Summary for the Last Five Years (Note 1) 2020 (As of March 31)
(Note 2) 2015 2016 2017 2018 2019 Revenue 133,441,725 127,524,864 139,815,211 150,264,792 146,372,401 - Gross profit 17,623,801 15,275,980 17,966,397 12,649,836 11,364,235 - Operating profit 7,885,097 4,475,707 7,358,114 1,847,567 80,235 - Non-operating income and expenses
(1,047,275) (2,938,456) (4,269,911) 468,064 (1,267,561) - Pretax profit (loss) 6,837,822 1,537,251 3,088,203 2,315,631 (1,187,326) - Income from operations of continued segments - after tax
5,763,714 571,540 2,208,066 1,790,361 (1,199,798) - Income from discontinued operations
- - - - - - Net income (loss) 5,763,714 571,540 2,208,066 1,790,361 (1,199,798) - Other comprehensive income (income/loss after tax)
1,308,328 (545,437) (967,389) (532,326) 552,713 - Total comprehensive gain (loss) for the tear
7,072,042 26,103 1,240,677 1,258,035 (647,085) - Net income attributable to shareholders of the parent
1.06 0.10 0.40 0.33 (0.22) - Note 1: 2015-2019 annual financial information was verified by Deloitte & Touche. Note 2: The Company has not prepared an individual financial statement for Q1 2020.
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 2019 Year Accounting Firm Name of CPA Audit Opinion
2015 Deloitte & Touche Huang, Jui-chan; Chen, Li-Chi Qualified Opinion (Note1) 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 (Note2) 2019 Deloitte & Touche Huang, Jui-chan; Cheng, Shiuh-Ran Unqualified opinions and other matters (Note2)
Note1: In 2015, the Company began implementing the revised Regulations Governing the Preparation of Financial Reports by Securities Issuers and the 2013 version of IFRS, International Accounting Standards, IFRIC and SIC Interpretations recognized by the Financial Supervisory Commission. Therefore, the aforementioned standards and interpretations have been applied retroactively to affected sections of the previous period’s financial statement.
Note 2: 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 for "other matters".
120 Financial Information
6.2 Five-Year Financial Analysis 6.2.1 Consolidated Financial Analysis – Based on IFRS
Year
Item (Note 3)
Financial Summary for the Last Five Years (Note 1) 2020 (As of March 31) (Note 2) 2015 2016 2017 2018 2019
Financial structure (%)
Debt ratio 72.71 74.22 73.81 73.91 79.48 81.03 Ratio of long-term capital to property, plant, and equipment
118.57 111.24 107.81 103.73 148.54 148.91
Solvency (%) Current ratio 66.90 69.00 78.64 86.67 67.87 71.73 Quick ratio 53.06 53.16 59.46 67.50 54.57 60.60 Interest earned ratio (times) 496.25 265.40 369.02 338.05 103.79 (334.02)
Operating performance
Accounts receivable turnover (times) 16.98 17.67 18.40 18.30 18.13 16.71 Average collection period 21.49 20.66 19.84 19.95 20.13 21.84 Inventory turnover (times) - - - - - - Accounts payable turnover (times) - - - - - - Average days in sales - - - - - - Property, plant, and equipment turnover (times)
1.07 1.05 1.06 1.08 1.09 0.90
Total assets turnover (times) 0.64 0.63 0.69 0.75 0.64 0.44
Profitability
Return on total assets (%) 3.28 0.80 1.60 1.48 0.76 (4.29) Return on stockholders' equity (%) 10.63 1.20 4.26 3.81 (1.12) (26.25) Pre-tax income to paid-in capital (%) 13.04 3.44 6.44 5.68 (0.18) (28.09) Profit ratio (%) 4.09 0.50 1.60 1.33 (0.40) (11.70) Earnings per share (NT$) 1.06 0.10 0.40 0.33 (0.22) (0.70)
Cash flow Cash flow ratio (%) 46.60 25.71 47.35 44.34 49.15 (32.48) Cash flow adequacy ratio (%) 233.25 303.17 351.58 366.94 518.35 399.31 Cash reinvestment ratio (%) 10.56 4.83 8.82 8.17 12.24 (9.02)
Leverage Operating leverage 3.21 4.99 3.16 6.00 14.20 (1.94) Financial leverage 1.28 1.40 1.18 1.52 (3.95) 0.78
Analysis of financial ratio differences for the last two years. (Not required if the difference does not exceed 20%) 1. Degree of operating leverage: Mainly due to the decrease in the operating margin in 2019 compared with the same period of the previous year, IFRS 16 was
implemented to recognize depreciation. This caused the decrease in variable costs, and in turn resulted in the increase in the degree of operating leverage. 2. Degree of financial leverage: Mainly due to the decrease in the operating margin in 2019 compared with the same period of the previous year, IFRS 16 was
implemented to recognize the increase in interest expenses. This resulted in the negative value of the degree of operating leverage. 3. Due to the start of IFRS 16 Leases implementation in 2019, items such as right-of-use asset and lease liabilities were added. This increased the ratios related
to the financial structure and cash flow from the previous year; the current ratio and quick ratio decreased from the previous year.Also, factors such as the China-US trade war, protests over the Hong Kong extradition bill, and limits on Chinese tour groups caused a decline in profits and affected profitability and ratios related to degrees of leverage.The reduction in interest protection multiples was also affected by IFRS 16 and the decrease in profits.
Financial Information 121
6.2.2 Financial Analysis – Based on IFRS (Parent Company Only) Year
Item (Note 3)
Financial Summary for the Last Five Years (Note 1) 2020 (As of March 31) (Note 2) 2015 2016 2017 2018 2019
Financial structure (%)
Debt ratio 72.14 73.63 73.09 73.44 78.97 - Ratio of long-term capital to fixed assets
121.93 114.00 110.35 107.18 153.31 -
Solvency (%) Current ratio 58.56 62.03 69.06 77.81 60.28 - Quick ratio 44.54 45.82 49.03 57.87 45.87 - Interest earned ratio (times) 495.43 246.03 350.56 292.02 60.78 -
Operating performance
Accounts receivable turnover (times)
15.56 15.92 16.62 16.57 16.72 -
Average collection period 23.46 22.92 21.96 22.46 21.83 - Inventory turnover (times) - - - - - - Accounts payable turnover (times) - - - - - - Average days in sales - - - - - - Fixed assets turnover (times) 1.07 1.03 1.03 1.03 1.05 - Total assets turnover (times) 0.62 0.61 0.66 0.70 0.61 -
Profitability
Return on total assets (%) 3.36 0.75 1.54 1.33 0.51 - Return on stockholders' equity (%) 10.78 1.00 3.91 3.14 (2.11) - Pre-tax income to paid-in capital (%) 12.50 2.81 5.64 4.27 (2.19) - Profit ratio (%) 4.32 0.45 1.58 1.19 (0.82) - Earnings per share (NT$) 1.06 0.10 0.40 0.33 (0.22) -
Cash flow Cash flow ratio (%) 47.38 26.71 47.41 43.61 48.16 - Cash flow adequacy ratio (%) 232.93 309.01 357.86 381.09 557.30 - Cash reinvestment ratio (%) 10.74 4.94 8.48 7.68 11.34 -
Leverage Operating leverage 3.15 4.85 3.46 11.25 372.72 - Financial leverage 1.28 1.38 1.21 3.45 (0.03) -
Analysis of financial ratio differences for the last two years. (Not required if the difference does not exceed 20%) 1. Degree of operating leverage: Mainly due to the decrease in the operating margin in 2019 compared with the same period of the previous year, IFRS 16 was
implemented to recognize depreciation. This caused the decrease in variable costs, and in turn resulted in the increase in the degree of operating leverage. 2. Degree of financial leverage: Mainly due to the decrease in the operating margin in 2019 compared with the same period of the previous year, IFRS 16 was
implemented to recognize the increase in interest expenses. This resulted in the negative value of the degree of operating leverage. 3. Due to the start of IFRS 16 Leases implementation in 2019, items such as right-of-use asset and lease liabilities were added. This increased the ratios related
to the financial structure and cash flow from the previous year; the current ratio and quick ratio decreased from the previous year.Also, factors such as the China-US trade war, protests over the Hong Kong extradition bill, and limits on Chinese tour groups caused a decline in profits and affected profitability and ratios related to degrees of leverage.The reduction in interest protection multiples was also affected by IFRS 16 and the decrease in profits.
Note 1: 2015-2019 annual financial information was verified by Deloitte & Touche. Note 2: As of printing of this annual report, Q1 2020 consolidated financial information has not yet been reviewed by Deloitte & Touche. The Company has not prepared
an individual financial statement for Q1 2020. Note 3: The calculations of the above financial ratios utilize the formulas listed below:
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, 2019 and 2018, and Independent Auditors’ Report: Please refer to Appendix 1.
6.4 Parent Company Only Financial Statements for the Years Ended December 31, 2019 and 2018, and Independent Auditors’ Report: Please refer to Appendix 2.
Financial Information 123
6.5 Audit Committee’s Report Audit Committee Report
The Board of Directors shall create and send (1) the 2019 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, 2020, and (2) the 2019
business report and Earnings Distribution Statement, after having been 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, 2020
124 Financial Information
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 in Last Year, Main Causes for Profits or Losses, Improvement Plans and the 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 2019 2018
Difference
Amount %
Current assets 51,822,342 52,827,560 (1,005,218) (1.90)
Property, plant and equipment 145,886,971 163,107,718 (17,220,747) (10.56)
Intangible assets 1,182,692 1,210,796 (28,104) (2.32)
Other assets 94,155,974 12,990,508 81,165,466 624.81
Total assets 293,047,979 230,136,582 62,911,397 27.34
Current liabilities 76,351,527 60,949,892 15,401,635 25.27
Non-current liabilities 156,564,335 109,139,606 47,424,729 43.45
Total liabilities 232,915,862 170,089,498 62,826,364 36.94
Capital stock 54,209,846 54,209,846 - -
Capital surplus 2,488,907 1,241,214 1,247,693 100.52
Retained earnings (1,297,842) 1,615,661 (2,913,503) (180.33)
Other equity 1,196,233 58,223 1,138,010 (1,954.57)
Treasury shares (43,372) (43,372) - -
Non-controlling interests 3,578,345 2,965,512 612,833 20.67
Total equity 60,132,117 60,047,084 85,033 0.14 Analysis of changes in financial ratios: 1. Other assets: Mainly due to the start of IFRS 16 Leases implementation in 2019, a total of NT$71.034 billion was added in right-of-use assets. 2. Liabilities: Mainly due to the start of IFRS 16 Leases implementation in 2019, a total of NT$18.143 billion was added in lease liabilities.The lease
agreement valued in US dollars is used as a hedging instrument to avoid future exchange rate fluctuations in passenger and cargo incomes; financial liabilities for hedging purposes increased by NT$50.998 billion.
3. Capital surplus: In 2019, parts of the shares held by subsidiary company Tigerair Taiwan were sold. The relevant gain on disposal is recognized under capital reserves and non-controlling interest.
4. Other equity: Mainly due to the changes in the fair value of financial assets and hedging instruments measured by fair value through other comprehensive income.
5. Non-controlling interest: In 2019, parts of the shares held by subsidiary company Tigerair Taiwan were sold. The relevant gain on disposal is recognized under capital reserves and non-controlling interest.
Future response actions: The above changes do not significantly affect the Company.
126 Review of Financial Conditions, Financial Performance, and Risk Management
7.2 Analysis of Financial Performance (Consolidated) Financial Performance Analysis Table Unit: NT$ thousands
Year Item 2019 2018
Difference Amount %
Revenue 168,444,160 170,711,607 (2,267,447) (1.33)
Cost 151,757,232 153,504,076 (1,746,844) (1.14)
Gross profit 16,686,928 17,207,531 (520,603) (3.03)
Operating expenses 14,021,107 13,185,148 835,959 6.34
Operating income (loss) 2,665,821 4,022,383 (1,356,562) (33.73)
Non-operating income and expenses (2,762,638) (941,134) (1,821,504) (193.54)
Pretax profit (loss) (96,817) 3,081,249 (3,178,066) (103.14)
Income tax expense 578,185 808,565 (230,380) (28.49)
Net income (loss) (675,002) 2,272,684 (2,947,686) (129.70)
Other comprehensive income 462,758 (578,363) 1,041,121 180.01
Total comprehensive gain (loss) for the year (212,244) 1,694,321 (1,906,565) (112.53) Analysis of changes in financial ratios: 1. Operating income, pretax profit, and net income for the period: All profits in 2019 decreased from the previous year mainly due to factors
such as the China-US trade war, protests over the Hong Kong extradition bill, and limits on Chinese tour groups. 2. Non-operating income and expenses: In 2019, the implementation of IFRS 16 Leases started and interest expenses was added under lease
liability. This caused an increase of NT$1.96 billion in financial costs compared with the previous year. 3. Other comprehensive income (net): Mainly due to the changes in the fair value of financial assets and hedging instruments measured by
fair value of other comprehensive profit and loss cases. 4. Total comprehensive income for the period: The combined effects of the above descriptions 1, 2, and 3.
7.3 Analysis of Cash Flow (Consolidated) 7.3.1 Cash Flow Analysis for the Current Year
Unit: NT$ thousands Year
Item 2019 2018 Difference
Amount % Cash and Cash Equivalents, Beginning of Year 24,937,537 22,585,332 2,352,205 10.41 Net Cash Flow from Operating Activities 37,526,612 27,026,957 10,499,655 38.85 Net Cash Flow from Investing Activities (16,053,122) (20,279,612) 4,226,490 20.84 Net Cash Flow from Financing Activities (17,614,558) (4,386,909) (13,227,649) (301.53) Exchange Rate Adjustment (336,941) (8,231) (328,710) 3,993.56 Cash and Cash Equivalents, End of Year 28,459,528 24,937,537 3,521,991 14.12
Analysis of change in cash flow in the current year: 1. The difference in cash flow from operating activities was mainly due to the new implementation of IFRS 16 Leases in 2019. The
“rights-of-use assets” item was added, causing the increase in depreciation compared with the previous year. 2. The difference in cash flow from investment activities was mainly due to factors such as the payments received from selling parts of the
shares held by subsidiary company Tigerair Taiwan in 2019. 3. The reasons for the difference in cash flow from financing activities were mainly the issuance of corporate bonds and long-term loan
amount in 2019, which were both lower than the previous year.
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 year was around NT$20.6 billion and estimated net cash flow from operating activity for the year is NT$23.6 billion. However, the Company’s operations have been affected by the COVID-19 pandemic that started at the end of January 2020. Assuming that the pandemic will start to ebb in June, it is estimated that the financing needs of the year will increase by NT$12 billion to NT$35.6 billion. After the COVID-19 outbreak, the Company quickly used credit to increase cash levels, and simultaneously planned to apply for mortgage loans and obtain mid- and long-term funds from the issuance of corporate bonds. A total of NT$45.3 billion (Note) has been used as funds to respond to the pandemic. Also, depending on the development of the pandemic, other financing tools will be used to obtain funds and keep the end-of-period cash balance at NT$30.3 billion. Note: In 2020, the Company was received additional NT$20 billion loan with 80% credit guarantees from
government.
Review of Financial Conditions, Financial Performance, and Risk Management 127
7.4 Major Capital Expenditure Items (Parent Company Only) Major capital expenditures primarily include purchases of new airplanes as part of operational expansion, which does not have a significant impact on the Company’s financial operations.
7.5 Investment Policy in the Last Year, Main Causes for Profits or Losses, Improvement Plans and Investment Plans for the Coming Year In order to support our primary airline operations and enhance competitiveness of the CAL Group, investments are 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. Calculated under the equity method, reinvestment revenues for 2019 totaled NT$1.812 billion. In the coming year, the Company will continue to carry out NORDAM Asia’s hangar construction. We will also evaluate various potential investment possibilities in aspects such as passenger transport, cargo transport, 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 do have a level of impact on Company income, effective control on the impact is limited.
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 aware of 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 achieve proper risk management.
7.6.2 Policies, Main Causes of Gain or Loss and Future Response Measures with Respect to High-risk, High-leveraged Investments, Lending or Endorsement Guarantees, and Derivatives Transactions A. The Company does not engage 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 lead to profits or losses for the Company.
C. Company 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 96.
128 Review of Financial Conditions, Financial Performance, and Risk Management
7.6.4 Effects of and Response to Changes in Policies and Regulations Relating to Corporate Finance and Sales: None.
7.6.5 Effects of and Response to Changes in Technology and the Industry Relating to Corporate Finance and Sales: 1. Information Security and Governance System
To continuously improve the information security governance system, strengthen protection capabilities, and cultivate a positive information security awareness among staff, all of the Company’s information operations are to comply with international information security standards as well as Taiwan’s information security law. Relevant security policies and operating procedures are formulated, and they are implemented in daily business operations. Also, information security management review meetings are held periodically to assess and reflect on the appropriateness of the relevant policies and procedures. In order to improve its information security governance system and organization operations, and to avoid being subjected to internal or external deliberate or accidental threats, an information security promotion team was established. The team is responsible for jobs including the formulation of the Company’s information security policies, the implementation of information security training, assessing information and intelligence of information security, emergency notification/handling contingencies. In addition, the deputy general manager of the Information Management Department, who is also the convener, is responsible for supervising the Company’s information security governance system planning, promotion, and implementation. The deputy general manager also reports the status of information security implementation to the Board of Directors every year.
2. Information Security Management Mechanism
The major directions of the Company's information security strategy have been focused on three aspects, including information security governance, daily maintenance and operation, and infrastructure protection, in which there are contained risk management, legal compliance, and corporate policies; the strategy fully enhances the Company's information security protection capabilities from internal systems to external regulations, and from the level of personnel to that of organization. In each stage of system development and maintenance, weakness identification and repair are performed with various testing technologies to ensure the safety of service usage. In
Review of Financial Conditions, Financial Performance, and Risk Management 129
response to various external attack methods, such as DDoS, APT, and social engineering attacks, the Company has adopted relevant defense mechanisms. Every year, the Company commissions external information security experts to assist in penetration testing and information security assessment. The Company also regularly stays informed of information security issues and plans responses accordingly. In addition, the Company performs information security incident reporting and carries out response drills on its own. These are performed to examine the effectiveness of defense and the ability to respond to incidents, with the hope of being able to immediately detect incidents and complete the handling. Per examination by the Information Management Division in 2019, neither the monitoring or 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. In order to enhance employees' awareness of information security, every employee in the Company receives basic information security training so that they understand information security risks and the discipline and principles of self-management. Every year, information security policies and goals are promoted to every internal company employee through different methods, including education and training, internal meetings, and announcements.
3. Information Security Verification and Audit The Company's core information system obtained the ISO/IEC 27001: 2013 certification for ISMS in 2019, and the credit card processing system obtained the PCI DDS certification in December 2018. In addition, in order to ensure the security of transaction data and transmission accuracy, message confidentiality, integrity, usability, and security design in data transmission and processing measures are strengthened. The Company also complies with the Cyber Security Management Act to strengthen security control mechanisms. The information security promotion team performs at least one internal audit every year to not only confirm that employees are complying with these standards and the Company's requirements for management procedures, but also to effectively apply and maintain the management system.
4. 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 laws and different foreign laws related to personal information, in 2014 the Company established the Personal Information Management Committee and established the personal information management system. The system explains the standards for the collection and usage of customer data, passengers' personal information rights, revision of privacy protection/declaration of security, and the commitment to maintaining data confidentiality. In order to comply with the General Data Protection Regulation (GDPR) put into effect by the European Union on May 25, 2018, the role of data protection officer (DPO) has been established in the Company. Externally, on the website of China Airlines, we publicly disclose relevant privacy protection policies and statements. Internally, we revise SOPs, hold personal data event drills on an annual basis, comprehensively strengthen employee data protection notions and code of conduct through education and training, finalize a personal data auditing system, and continue to take inventory of annual personal data work. Report the implementation results and improvement measures of the personal data management system to the Board of Directors every year, and maintain customer privacy in accordance with high standards.
130 Review of Financial Conditions, Financial Performance, and Risk Management
7.6.6 The Impact of Changes in Corporate Image on Corporate Risk Management, and the Company’s Response Measures The Company continues to improve its navigational matters and aircraft maintenance, guard flight safety, and implement various service details in the SOP+ spirit; actively invest in social welfare and fulfill the responsibilities of corporate citizenship; incorporate environmental management into our operational focuses. If there is any untrue or negative news, message, or incident that affects the Company’s image, we will respond immediately and explain and clarify to the public, and post explanations on our website or social media platform if necessary, to reduce the negative effects.
For example, in the ongoing case of the controversy over chartered flights carrying duty-free cigarettes, in the future, the Company will not allow the pre-sale of duty-free cigarettes but will operate in the same manner as that in ordinary flights. The number of cigarettes loaded will be limited to the total number of passengers who can carry them. We have also established a mechanism to control the number of duty-free products on chartered flights, to accurately carry out loading of duty-free goods within the limits of aircraft space and load, and complete the delivery of goods on board the aircraft.
7.6.7 Expected Benefits from, Risks Relating to, and Response to Merger and Acquisition Plans: None.
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.
More than 1.2 billion
Plaintiff: China Airlines Defendant: Civil Aeronautics Administration
This case has gone through the first and second instance trials. The court agreed that there was an overpayment of rent in this case and that the amount of overpayment is NT$258,073,030. However, due to incorrect logic used in the calculation, it mistakenly recognized that the Company had offset NT$363,027,179 in the final rent payment, so it was judged that the Company had no reason to request the CAAC to return the overpayment of rent. In order to fully protect the rights and interests of the Company and investors, the Company filed all appeals in the third instance on November 27, 2019. They are now being adjudicated.
Review of Financial Conditions, Financial Performance, and Risk Management 131
7.6.13 Other Major Risks: 1.CAL fully understands the importance of risk management and the potential for interaction
between different types of risk. We established the 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. 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 incidents can have a huge impact on company operations. The Corporate Development Office analyses 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. Aiming at internal and external operation risks, such as navigation, maintenance, air service, and ground operation, the Company maintains operational risk within the 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.
The domestic and global economy affects the operating results of the Company. Primary operating costs for airlines include interest rate, exchange rate, and fuel, and influence by outside factors 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 establishes relevant strategies and measures to effectively manage financial risk.
2. By the end of January 2020, the Coronavirus that originated from Wuhan, the capital city of Hubei province in China became a pandemic. The Company has complied and continues to comply with the travel alerts issued by the Taiwan Centers for Disease Control and has cancelled flights between several countries like China, Hong Kong, Japan and Korea. Other flights have flexible capacity depending on the demand. So far, the air transport services for passengers have been severely affected. In addition to adjusting the operation, the Company also takes measures about funding assistance, human resources, reducing expenditure, and asks the government for help in three main areas including guarantee for its operation, relief from the burden, and a recovery plan.
7.7 Other Important Matters: None.
132 Review of Financial Conditions, Financial Performance, and Risk Management
Special Disclosure 8.1 Summary of Affiliated Companies
8.2 Private Placement Securities in the Most Recent
Years
8.3 The 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
Special Disclosure 133
VIII. Special Disclosure 8.1 Summary of Affiliated Companies 8.1.1 Basic information of Affiliated Companies
A. Affiliated Companies Chart Dec 31, 2019
Note: 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.
100%
China Airlines
CAL-Dynasty
100%
CAL-Asia Investment
100%
Dynasty Aerotech
100%
Nordam
Asia
49%
Yestrip
100%
Dynasty Properties
100%
Dynasty Hotel of Hawaii
CAL Park
100%
Sabre Travel Network
93.93%
Tigerair Taiwan
69.45%
Taiwan Air Cargo Terminal
54%
China Pacific Catering Services
51%
Taiwan Airport Service
47.35%
Cal Hotel
100%
Mandarin Airlines
93.99%
Global Sky Express
25%
2.5%
2.5%
Taiwan Airport Service (Sam
oa)
100%
Delica International
51%
7.72%
1.08%
Taiwan A
ircraft Maintenance
and Engineering
100%
China Pacific Laundry Services
55%
Kaohsiung Airport Catering Services
53.67%
Taoyuan International Airport Services
49%
134 Special Disclosure
B. Basic information of Affiliated Company Dec 31, 2019/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.
785,135 Holding & investing
1A Dynasty Properties Co., Ltd. 08/15/1973 200 Continental Blvd. Suite #101 El Segundo, CA90245, U.S.A.
15,015 Real estate investing, property leasing
1B Dynasty Hotel of Hawaii, Inc. 12/10/1973 1830 Ala Moana Blvd. Honolulu, Hawaii 96815, U.S.A.
120,120 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
215,386 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 10F, No.9, 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.1, Hangzhan S. Rd., Dayuan District, Taoyuan City
2,000,000 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
176,486 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: Capital was calculated using the exchange rate at the end of 2019: 1TWD=0.0333 USD, 3.6156 JPY, 0.2323 CNY.
Special Disclosure 135
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 Arport Air Cargo Terminal (Xiamen) Co., Ltd. and Arport 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 the 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.
136 Special Disclosure
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) Lee, Hsien-Kuang (Note 1) 1A Dynasty Properties Co., Ltd. Chairman (President) Lee, Hsien-Kuang (Note 2) 5,000 100 Director Hsieh, Su-Chien; Chang, Cheng-Hao (Note 2) (USD100, share) 1B Dynasty Hotel of Hawaii,
Inc. Chairman Lee, Hsien-Kuang (Note 2) 400,000 100
Director Chang, Cheng-Hao (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 Chao, Lin (Note 1) 77,270 100
Director Liu, Der-Chuan; Sun, Jia-Min; Chen, Wei-Tau (Note 1) Supervisor Chen, I-Chieh (Note 1) Director (President) Lu, Yung-Nan (Note 1)
4. Yestrip Co., Ltd. Chairman Chou, Ling-wen (Note 1) 1,600,000 100 Director Tong, Huai-Ming; Peng, Pao-Chu (Note 1) Supervisor Huang, Hui-Na (Note 1) President Lo, Chun-Ying (Nominated by China Airlines)
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)
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; Tong, Huai-Ming; Peng, Pao-Chu (Note 1) Director Alan Chen (Representing Sabre Travel Network Asia Pacific) Supervisor Ho, Hui-Fen President Ouyang, Yinchi (Nominated by China Airlines) 10. Tigerair Taiwan Co., Ltd. Chairman Chang, Horng-Jong (Note 1) 138,906,275
69.45
Director Chang, Young; Wang, Chen-Min; Chang, Cheng-Hao; Chen, I-Chieh; Chen, Han-Ming (Note 1)
Director Hsiao, Po Jen; Hsu, Yang Che; Jao, Shih-Chen; Yen, Sin-Hui Independent Director
Chen, I-Heng(Independent director undertaking public welfare); Fan, Hung-Shu; Yang, David
President Chang, Horng-Jong 11. China Pacific Laundry Services
Ltd. Chairman Hong, Tsu-Kuang (Acting) (Note 1) 13,750,000 55 Director Chu, Te-Hsiu; Chung, Wan-Chun (Note 1) Director Chan, Derrick (Representing Hendriz Holding) 3,750,000 15 Director Yeung, Maggie (Representing Heathlee Int’l) 3,750,000 15 Supervisor Xu, Martin (Representing Merton Lake) 3,750,000
15
Supervisor Chen, I-Chieh President Lo, Tao-Wei (Nominated by China Airlines)
12. Taiwan Air Cargo Terminal Ltd.
Chairman Chen, Chong-Yi (Note 1) 135,000,000 54
Deputy Chairman Chen, Charles C.Y. (Representing Eyon Industrial Co.) 6,000,000 2.40 Director Wang, Chen-Min; Chang, Cheng-Hao; Liu, Der-Chuan (Note 1) Director UPS 20,000,000 8
Special Disclosure 137
Company Title Name Shareholding
Shares % Director Michael Shea (Representing Hsin Feng Corp.) 7,000,000 2.80 Supervisor Ho, Hui-Fen Supervisor Chen, Jyi-Fu (Representing Express Container Terminal Corp.) 15,000,000 6 President Lin, Hsiao-Feng (Nominated by China Airlines)
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 40.40
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 Wong, Andy; Yau Algernon (Representing Aldeburgh Limited) 21,045,500 24.50 Supervisor Fang, Juo-Ling Supervisor Xu, Martin (Representing Deli Holdings Limited) 21,045,500 24.50 President An, Long-Chi (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 Kuo June-Tsung (Representing Motc) 31,500,000 45
Director (President) Lee, Chih-Chiang (Note 1) 34,300,000 49
Director Hsieh, Su-Chien; Chang, Young; Wang, Houng; Chu, Te-Hsiu (Note 1)
Director Chen, Yen-Po; Chang, Chang-Chi; Li, Hung-Sheng; Lee, Chun-Hsiung (Representing Motc)
Director Hung, Ngai (Representing 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 Chung, Ting-Chun (Representing juridical person shareholder Rih Hsin Asset Management Company)
9,405,300 21.59
Director Chang, Chieh-Tang (Representing 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 (Representing Taiwan Airport Service Co.) 5,876,976
(USD1, 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 (Representing Leader Mutual Freight System) 20,000 2 Supervisor Huang, Hui-Na Supervisor Yeh, Chien-Tien 10,000 1 Supervisor Chiang, Ming-Fang (Representing 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.
138 Special Disclosure
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. 785,135 1,451,427 174,881 1,276,546 363,339 51,974 41,262 15.78 1A Dynasty Properties Co., Ltd. 15,015 745,297 238,802 506,496 101,661 28,191 19,468 3,893.54 1B Dynasty Hotel of Hawaii, Inc. 120,120 524,683 96,567 428,116 262,051 20,698 14,204 35.51
2. CAL-Asia Investment Inc. 215,386 559,562 0 559,562 0 (1,189) 30,820 4.30 3. Dynasty Aerotech International
Corp. 77,270 210,237 114,567 95,670 400,060 22,089 17,008 220.12
4. Yestrip Co., Ltd. 16,000 67,653 42,480 25,173 31,652 (684) (480) (0.30)
5. CAL Park Co., Ltd. 1,500,000 5,429,229 3,923,450 1,505,779 345,569 66,268 1,163 0.008
6. CAL Hotel Co., Ltd.. 465,000 769,916 291,890 478,026 617,826 22,166 16,787 0.36
7. Taiwan Aircraft Maintenance and Engineering Co., Ltd.
1,350,000 3,515,478 2,593,492 921,986 31,717 (178,019) (206,151) (1.53)
8. Mandarin Airlines, Ltd. 2,001,825 7,557,633 5,948,601 1,609,032 8,607,182 118,378 204,018 1.02
9. Sabre Travel Network (Taiwan)
Ltd. 138,618 612,793 122,840 489,953 388,315 236,096 195,347 14.09
10. Tigerair Taiwan Co., Ltd. 2,000,000 13,337,093 10,534,749 2,802,344 9,513,321 1,087,316 808,718 4.04
11. China Pacific Laundry Services
Ltd. 250,000 383,410 76,962 306,448 257,661 33,761 27,327 1.09
12. Taiwan Air Cargo Terminal Ltd. 2,500,000 4,980,713 2,169,708 2,811,005 2,030,229 361,916 271,552 1.09
13. Kaohsiung Airport Catering Services Ltd.
400,500 1,419,764 476,446 943,318 2,186,765 360,827 292,632 7.31
13A Delica International Co., Ltd. 20,000 15,646 219 15,427 0 (1) (4) 0.003
15. China Pacific Catering Services
Ltd. 861,000 2,995,989 1,425,262 1,570,727 3,072,795 632,111 511,121 5.94
16. NORDAM Asia Ltd. 77,500 77,314 145 77,169 0 (152) (144) (0.02)
17. Taoyuan International Airport
Services Co., Ltd. 700,000 2,890,698 1,386,116 1,504,582 3,430,485 342,970 291,522 4.16
18. Taiwan Airport Service Co., Ltd. 435,600 1,415,951 832,774 583,177 1,117,038 158,607 156,861 3.60
18A Taiwan Airport Service (Samoa) Co., Ltd.
176,486 347,551 0 347,551 0 (11) 23,107 3.93
19. Global Sky Express Ltd. 10,000 36,442 7,266 29,176 121,543 7,987 6,392 6.39
Note 1: Capital, total assets, total liabilities, total equity were calculating using the exchange rate at the end of 2019.
Note 2: Operating revenue, operating profit, and income for the period were calculated using the 2019 quarterly average exchange rates. Note 3: Exchange rates at the end of 2019 were 1TWD=0.0333 USD, 3.6156 JPY, 0.2323 CNY.
Note 4: Quarterly average exchange rates in 2019 were as following:
Q1: 1TWD=0.0325USD, 3.5784JPY, 0.2196CNY. Q2: 1TWD=0.0321USD, 3.5542JPY, 0.2183CNY.
Q3: 1TWD=0.0321USD, 3.4490JPY, 0.2235CNY.
Q4: 1TWD=0.0326USD, 3.5453JPY, 0.2304CNY.
(2) Affiliated Company Consolidated Financial Statements: Information required to be disclosed regarding affiliated company 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.
Special Disclosure 139
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:
APR 25, 2020 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 of
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%
02/20/2020 - 152 220
0 shares 0
- 02/21/2020 - 300,000 485,539
02/25/2020 - 300,000 398,925
02/26/2020 - 214,000 270,365
Mandarin Airlines, Ltd. 2,001,825,000 Equity
Fund 93.99% - - - - 2,074,628 shares 14,585,000 -
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. On April 2, 2019, the Company dismissed Mr. Ho, Nuan-Hsuan as juridical person director representative of the China Aviation Development Foundation in the Company. The Board of Directors of the Company elected Mr. Hsieh, Su-Chien as the new Chairman and concurrently as the President.
8.5.2 Signing of major memoranda, strategic alliances or other plans for business cooperation or major contracts A.On January 21, 2019, the Company approved the listing plan of its subsidiary, Tigerair Taiwan,
by a resolution of the Board of Directors. Since its establishment in 2014, Tigerair Taiwan has developed into a Low Cost Carrier (LCC) with a stable business model and sound financial structure. Considering the benefits of convenient fund raising in the future, financial autonomy and equity value enhancement, the Board of Directors resolved to carry out the listing plan of Tigerair Taiwan. In order to meet the requirements of listing review standards, the Board of Directors deliberated and resolved on May 8, 2019 to sell equity shares of Tigerair Taiwan held by the Company, and submitted it to the Shareholders' Annual General Meeting for deliberation and resolution on June 25 of the same year.
B. On June 19, 2019, the Company began negotiations with Airbus (France) to purchase A321neo aircrafts. In order to lock-in the delivery time, the Company signed a memorandum of agreement and continued to discuss business conditions.
C. On December 31, 2019, the Company renewed its housing and land lease contract with Taiwan Air Cargo Terminal Ltd.
140 Special Disclosure
8.5.3 Lawsuits, non-contentious matters, administrative actions, administrative disputes, injunctive procedures, or compulsory enforcement matters A. The Taoyuan Union of Pilots announced that it would go on strike at 6:00 a.m. on February 8
and that the strike would last until February 14. Under the witness of the Executive Yuan, the Ministry of Labor, the Ministry of Transportation and Communications, and the Taoyuan City Government, the Company reached an agreement with the Taoyuan Union of Pilots through the labor-management conference and signed the collective agreement. The union immediately announced the termination of the strike. The compensation for customers’ losses and various derivative expenses was preliminarily estimated to be around NT$154 million. According to the fifth appeal of the Agreement between the two parties, it was promised that the full salary of the 13th month will be changed to a flight safety bonus. The amount of the bonus was agreed to at the negotiation meeting on February 21. It was estimated that the annual expenditure will increase by around NT$190 million.
B. The Department of Labor of the Taoyuan City Government performed a labor inspection. On February 25, 2019, June 21, 2019, and December 4, 2019, the Company was fined NT$1 million in each instance because female worker nighttime work had not been approved by the labor union, which was in violation of Article 49, Paragraph 1 of the Labor Standards Act.
C. On October 2, 2019, the Department of Finance of the Taoyuan City Government imposed a fine of NT$6 million on the Company for violating Article 46, Paragraph 1 of the Tobacco and Alcohol Administration Act. The Company will implement and follow relevant laws and regulations and strengthen the legal education of its employees
8.5.4 Lawsuits, non-contentious matters, administrative actions, administrative disputes, injunctive procedures, or compulsory enforcement matters A. On July 26, 2019, the Company cooperated with the inspection and investigation unit to
conduct investigation on the sale of duty-free cigarettes on chartered flights of the Company.
B. 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. And 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.
Special Disclosure 141
- 1
-
DE
CL
AR
AT
ION
OF
CO
NS
OL
IDA
TIO
N O
F F
INA
NC
IAL
ST
AT
EM
EN
TS
OF
AF
FIL
IAT
ES
The
com
pani
es r
equi
red
to b
e in
clud
ed in
the
cons
olid
ated
fin
anci
al s
tate
men
ts o
f af
fili
ates
in
acco
rdan
ce
wit
h th
e “C
rite
ria
Gov
erni
ng P
repa
rati
on o
f A
ffil
iati
on R
epor
ts,
Con
soli
date
d B
usin
ess
Rep
orts
and
Con
soli
date
d F
inan
cial
Sta
tem
ents
of
Aff
ilia
ted
Ent
erpr
ises
” fo
r th
e ye
ar e
nded
Dec
embe
r 31
, 20
19 a
re
all
the
sam
e as
the
com
pani
es r
equi
red
to b
e in
clud
ed i
n 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 F
inan
cial
Rep
orti
ng S
tand
ard
10 “
Con
soli
date
d
Fin
anci
al S
tate
men
ts.”
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
fili
ates
has
all
bee
n di
sclo
sed
in t
he c
onso
lida
ted
fina
ncia
l st
atem
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 co
nsol
idat
ed f
inan
cial
sta
tem
ents
of
affi
liat
es.
Ver
y tr
uly
your
s,
CH
INA
AIR
LIN
ES
, LT
D.
By
Mar
ch 1
8, 2
020
(App
endi
x 1)
- 2
-
IND
EP
EN
DE
NT
AU
DIT
OR
S’
RE
PO
RT
The
Boa
rd o
f D
irec
tors
and
Sha
reho
lder
s C
hina
Air
line
s, L
td.
Op
inio
n
We
have
aud
ited
the
acc
ompa
nyin
g co
nsol
idat
ed f
inan
cial
sta
tem
ents
of
Chi
na A
irli
nes,
Ltd
. an
d it
s su
bsid
iari
es (
coll
ecti
vely
ref
erre
d to
as
the
“Gro
up”)
, w
hich
com
pris
e th
e co
nsol
idat
ed b
alan
ce
shee
ts a
s of
Dec
embe
r 31
, 20
19 a
nd 2
018,
and
the
con
soli
date
d st
atem
ents
of
com
preh
ensi
ve
inco
me,
ch
ange
s in
eq
uity
an
d ca
sh
flow
s fo
r th
e ye
ars
then
en
ded,
an
d th
e no
tes
to
the
cons
olid
ated
fi
nanc
ial
stat
emen
ts,
incl
udin
g a
sum
mar
y of
si
gnif
ican
t ac
coun
ting
po
lici
es.
(col
lect
ivel
y re
ferr
ed to
as
the
“con
soli
date
d fi
nanc
ial s
tate
men
ts”)
In o
ur o
pini
on,
the
acco
mpa
nyin
g co
nsol
idat
ed f
inan
cial
sta
tem
ents
pre
sent
fai
rly,
in
all
mat
eria
l re
spec
ts,
the
cons
olid
ated
fin
anci
al p
ositi
on o
f th
e G
roup
as
of D
ecem
ber
31,
2019
and
201
8, a
nd
its
cons
olid
ated
fin
anci
al p
erfo
rman
ce a
nd i
ts c
onso
lida
ted
cash
flo
ws
for
the
year
s th
en e
nded
in
acco
rdan
ce w
ith
the
Reg
ulat
ions
Gov
erni
ng t
he P
repa
rati
on o
f F
inan
cial
Rep
orts
by
Sec
urit
ies
Issu
ers,
an
d In
tern
atio
nal
Fin
anci
al
Rep
orti
ng
Sta
ndar
ds
(IF
RS
),
Inte
rnat
iona
l A
ccou
ntin
g S
tand
ards
(IA
S),
IF
RIC
Int
erpr
etat
ions
(IF
RIC
), a
nd S
IC I
nter
pret
atio
ns (
SIC
) en
dors
ed a
nd is
sued
in
to e
ffec
t by
the
Fin
anci
al S
uper
viso
ry C
omm
issi
on o
f th
e R
epub
lic o
f C
hina
.
Bas
is f
or O
pin
ion
We
cond
ucte
d ou
r au
dits
in
acco
rdan
ce w
ith
the
Reg
ulat
ions
Gov
erni
ng A
uditi
ng a
nd A
ttes
tati
on
of F
inan
cial
Sta
tem
ents
by
Cer
tifi
ed P
ubli
c A
ccou
ntan
ts a
nd a
udit
ing
stan
dard
s ge
nera
lly
acce
pted
in
the
Rep
ubli
c of
Chi
na.
Our
res
pons
ibil
itie
s un
der
thos
e st
anda
rds
are
furt
her
desc
ribe
d in
the
A
udit
ors’
Res
pons
ibil
itie
s fo
r th
e A
udit
of t
he C
onso
lida
ted
Fin
anci
al S
tate
men
ts s
ecti
on o
f ou
r re
port
. W
e ar
e in
depe
nden
t of
the
Gro
up i
n ac
cord
ance
wit
h T
he N
orm
of
Pro
fess
iona
l E
thic
s fo
r C
erti
fied
Pub
lic
Acc
ount
ant
of t
he R
epub
lic
of C
hina
, an
d w
e ha
ve f
ulfi
lled
our
oth
er e
thic
al
resp
onsi
bili
ties
in a
ccor
danc
e w
ith
thes
e re
quir
emen
ts. W
e be
liev
e th
at t
he a
udit
evid
ence
we
have
ob
tain
ed is
suf
fici
ent a
nd a
ppro
pria
te to
pro
vide
a b
asis
for
our
opi
nion
.
Key
Au
dit
Mat
ters
Key
aud
it m
atte
rs a
re th
ose
mat
ters
that
, in
our
prof
essi
onal
judg
men
t, w
ere
of m
ost s
igni
fica
nce
in
our
audi
t of
the
con
soli
date
d fi
nanc
ial
stat
emen
ts f
or t
he y
ear
ende
d D
ecem
ber
31,
2019
. T
hese
m
atte
rs w
ere
addr
esse
d in
the
con
text
of
our
audi
t of
the
con
soli
date
d fi
nanc
ial
stat
emen
ts a
s a
who
le,
and
in f
orm
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
.
Hsi
eh, S
u-C
hien
142
- 3
-
The
key
aud
it m
atte
rs i
n th
e au
dit
of t
he c
onso
lida
ted
fina
ncia
l st
atem
ents
of
the
Gro
up a
re s
tate
d be
low
: P
asse
nger
Rev
enue
Rec
ogni
tion
In
acc
orda
nce
wit
h IF
RS
15
“Rev
enue
fro
m C
ontr
acts
wit
h C
usto
mer
s”,
pass
enge
r sa
les
are
acco
unte
d fo
r as
con
trac
t li
abil
itie
s be
fore
rel
evan
t tr
ansp
orta
tion
ser
vice
s ar
e pr
ovid
ed.
Aft
er
prov
idin
g th
e re
late
d se
rvic
es, c
ontr
act l
iabi
liti
es a
re r
ecla
ssif
ied
to p
asse
nger
rev
enue
. For
the
year
en
ded
Dec
embe
r 31
, 201
9, p
asse
nger
rev
enue
was
NT
$111
,413
,435
thou
sand
. Ref
er to
Not
es 4
and
27
to th
e ac
com
pany
ing
cons
olid
ated
fin
anci
al s
tate
men
ts f
or r
elat
ed d
etai
led
info
rmat
ion.
S
ince
rel
evan
t sa
les
can
only
be
reco
gniz
ed a
s pa
ssen
ger
reve
nue
whe
n pa
ssen
gers
act
ually
bo
arde
d, c
onfi
rmat
ion
from
eac
h pa
ssen
ger
hold
ing
the
tick
et w
ho a
ctua
lly
boar
ded
invo
lves
a
com
plic
ated
pro
cess
; the
refo
re, w
e id
enti
fied
pas
seng
er r
even
ue r
ecog
niti
on a
s a
key
audi
t mat
ter.
T
he m
ain
audi
t pro
cedu
res
that
we
perf
orm
ed in
clud
ed th
e fo
llow
ing:
1.
W
e un
ders
tood
and
test
ed th
e in
tern
al c
ontr
ol r
elat
ed to
the
proc
ess
of r
even
ue f
rom
pas
seng
er,
incl
udin
g m
anua
l and
aut
omat
ic c
ontr
ol.
2.
We
unde
rsto
od a
nd t
este
d th
e ef
fect
iven
ess
of t
he i
nfor
mat
ion
syst
em r
elat
ed t
o th
e pr
oces
s of
pa
ssen
ger
reve
nue.
3.
W
e sa
mpl
ed s
ever
al f
ligh
t ti
cket
s, w
hich
wer
e fl
own
and
reco
gniz
ed a
s re
venu
e, t
o ve
rify
w
heth
er t
he b
oard
ing
date
mat
ched
the
dat
e re
cord
ed o
n th
e ti
cket
s, f
rom
adv
ance
d sa
les
tick
ets.
In
itia
l App
lica
tion
of
IFR
S 1
6 (L
ease
s) -
Air
craf
t In
acc
orda
nce
wit
h IF
RS
16
“Lea
ses”
, air
craf
t lea
ses
init
ially
cla
ssif
ied
as f
inan
ce le
ases
und
er I
AS
17
sho
uld
be r
ecog
nize
d as
Rig
ht-o
f-us
e as
sets
and
lea
se l
iabi
liti
es i
n th
e co
nsol
idat
ed b
alan
ces
shee
t. A
s of
Dec
embe
r 31
, 20
19,
the
carr
ying
am
ount
of
Rig
ht-o
f-us
e as
sets
and
lea
se l
iabi
liti
es
(inc
ludi
ng f
inan
cial
lia
bili
ties
for
hed
ging
) re
lati
ng t
o ai
rcra
ft l
ease
s ar
e N
T$6
2,05
2,70
1 th
ousa
nd
and
NT
$60,
114,
778
thou
sand
, re
spec
tive
ly.
Ref
er
to
Not
es
4 an
d 21
to
th
e ac
com
pany
ing
cons
olid
ated
fin
anci
al s
tate
men
ts f
or r
elat
ed d
etai
led
info
rmat
ion.
C
hina
Air
line
s, M
anda
rin
Air
line
s an
d T
iger
air
Tai
wan
lea
sed
ten
777-
300E
R p
lane
s, f
ifte
en
A33
0-30
0 pl
anes
, fi
ftee
n 73
7-80
0 pl
anes
, te
n A
320-
200
plan
es,
six
ER
J190
pla
nes
and
thre
e A
RT
72-6
00 p
lane
s fo
r op
erat
ion.
Bec
ause
the
lea
se t
erm
of
airc
raft
is
high
er a
nd t
he a
mou
nt o
f re
ntal
is
high
er,
the
perc
enta
ge o
f ri
ght-
of-u
se a
sset
s an
d le
ase
liab
ilit
ies
of t
he a
ircr
aft
in t
he
cons
olid
ated
bal
ance
she
ets
is h
igh.
The
par
amet
ers
and
leas
e te
rms
are
dete
rmin
ed b
y th
e m
anag
emen
t, an
d th
e ca
lcul
atio
n of
the
lea
se l
iabi
liti
es w
ill
affe
ct t
he c
arry
ing
amou
nt a
nd
depr
ecia
tion
exp
ense
of
the
righ
t-of
-use
ass
ets
and
leas
e li
abil
itie
s (i
nclu
ding
fin
anci
al li
abil
itie
s fo
r he
dgin
g) r
elat
ing
to a
ircr
afts
. The
refo
re, w
e id
enti
fied
init
ial a
ppli
cati
on o
f IF
RS
16 -
Air
craf
ts a
s a
key
audi
t mat
ter.
T
he m
ain
audi
t pro
cedu
res
that
we
perf
orm
ed in
clud
ed th
e fo
llow
ing:
1.
W
e un
ders
tood
and
test
ed th
e ef
fect
iven
ess
of th
e in
form
atio
n sy
stem
rel
ated
to th
e ca
lcul
atio
n of
leas
e li
abil
itie
s.
- 4
-
2.
We
sele
cted
one
of
the
rent
al p
aym
ents
sch
edul
e of
the
air
craf
t fr
om t
he l
ease
cal
cula
tion
sy
stem
, to
re
calc
ulat
e am
ount
of
th
e le
ase
liab
ilit
ies
bala
nce
and
fina
ncia
l co
st
and
amor
tiza
tion
of
righ
t-of
-use
, an
d re
late
d ca
rryi
ng a
mou
nt.
Als
o, w
e se
lect
ed s
ever
al a
ircr
aft
leas
e co
ntra
cts
from
the
car
ryin
g am
ount
s of
air
craf
t le
ase
liab
ilit
y, a
nd c
heck
ed i
f th
ere
was
an
y di
ffer
ence
bet
wee
n re
ntal
in
the
airc
raft
ren
tal
paym
ent
sche
dule
and
lea
se t
erm
in
the
cont
ract
ed r
enta
ls.
And
we
chec
ked
if t
he l
ease
ter
m u
sed
the
rent
al p
aym
ent
sche
dule
was
co
nsis
tent
wit
h th
e co
ntra
ct.
Oth
er M
atte
r A
ud
it b
y O
ther
In
dep
end
ent
Au
dit
ors
We
did
not
audi
t so
me
subs
idia
ries
whi
ch w
ere
incl
uded
in
the
cons
olid
ated
fin
anci
al s
tate
men
ts.
The
fin
anci
al s
tate
men
ts a
nd d
iscl
osed
info
rmat
ion
wer
e au
dite
d by
oth
er in
depe
nden
t aud
itors
, and
ou
r au
dit o
pini
on is
bas
ed s
olel
y on
the
audi
t rep
ort o
f ot
her
inde
pend
ent a
udit
ors.
A
s of
Dec
embe
r 31
, 20
19,
tota
l as
sets
of
thes
e su
bsid
iari
es a
mou
nted
to
NT
$13,
337,
093
thou
sand
do
llar
s, r
epre
sent
ing
4.55
% o
f th
e to
tal
asse
ts.
For
the
yea
r en
ded
Dec
embe
r 31
, 20
19,
reve
nue
from
the
se s
ubsi
diar
ies
amou
nted
to
NT
$9,5
13,3
21th
ousa
nd d
olla
rs,
repr
esen
ting
5.6
5% o
f th
e
tota
l rev
enue
. O
ther
Mat
ter
Par
ent
Com
pan
y O
nly
Fin
anci
al S
tate
men
ts
We
have
als
o au
dite
d th
e pa
rent
com
pany
onl
y fi
nanc
ial
stat
emen
ts o
f C
hina
Air
line
s, L
td.
as o
f an
d fo
r th
e ye
ars
ende
d D
ecem
ber
31,
2019
and
201
8 on
whi
ch w
e ha
ve i
ssue
d an
unm
odif
ied
opin
ion.
R
esp
onsi
bil
itie
s of
Man
agem
ent
and
Th
ose
Ch
arge
d w
ith
Gov
ern
ance
for
th
e C
onso
lid
ated
F
inan
cial
Sta
tem
ents
M
anag
emen
t is
res
pons
ible
for
the
pre
para
tion
and
fai
r pr
esen
tati
on o
f th
e co
nsol
idat
ed f
inan
cial
st
atem
ents
in
acco
rdan
ce w
ith
the
Reg
ulat
ions
Gov
erni
ng t
he P
repa
rati
on o
f F
inan
cial
Rep
orts
by
Sec
urit
ies
Issu
ers,
an
d In
tern
atio
nal
Fin
anci
al
Rep
orti
ng
Stan
dard
s (I
FR
S),
In
tern
atio
nal
Acc
ount
ing
Sta
ndar
ds
(IA
S),
IF
RIC
In
terp
reta
tions
(I
FR
IC),
an
d S
IC
Inte
rpre
tati
ons
(SIC
) en
dors
ed a
nd is
sued
into
eff
ect b
y th
e F
inan
cial
Sup
ervi
sory
Com
mis
sion
of
the
Rep
ubli
c of
Chi
na,
and
for
such
int
erna
l co
ntro
l as
man
agem
ent
dete
rmin
es i
s ne
cess
ary
to e
nabl
e th
e pr
epar
atio
n of
co
nsol
idat
ed f
inan
cial
sta
tem
ents
tha
t ar
e fr
ee f
rom
mat
eria
l m
isst
atem
ent,
whe
ther
due
to
frau
d or
er
ror.
In
pre
pari
ng t
he c
onso
lida
ted
fina
ncia
l st
atem
ents
, m
anag
emen
t is
res
pons
ible
for
ass
essi
ng t
he
Gro
up’s
abi
lity
to c
onti
nue
as a
goi
ng c
once
rn,
disc
losi
ng,
as a
ppli
cabl
e, m
atte
rs r
elat
ed t
o go
ing
conc
ern
and
usin
g th
e go
ing
conc
ern
basi
s of
acc
ount
ing
unle
ss m
anag
emen
t ei
ther
int
ends
to
liqu
idat
e th
e G
roup
or
to c
ease
ope
rati
ons,
or
has
no r
eali
stic
alt
erna
tive
but
to d
o so
. T
hose
cha
rged
wit
h go
vern
ance
, inc
ludi
ng th
e au
dit
com
mit
tee
and
supe
rvis
ors,
are
res
pons
ible
for
ov
erse
eing
the
Gro
up’s
fin
anci
al r
epor
ting
pro
cess
. A
ud
itor
s’ R
esp
onsi
bil
itie
s fo
r th
e A
ud
it o
f th
e C
onso
lid
ated
Fin
anci
al S
tate
men
ts
Our
ob
ject
ives
ar
e to
ob
tain
re
ason
able
as
sura
nce
abou
t w
heth
er
the
cons
olid
ated
fi
nanc
ial
stat
emen
ts a
s a
who
le a
re f
ree
from
mat
eria
l m
isst
atem
ent,
whe
ther
due
to
frau
d or
err
or,
and
to
issu
e an
aud
itor
s’ r
epor
t th
at i
nclu
des
our
opin
ion.
Rea
sona
ble
assu
ranc
e is
a h
igh
leve
l of
as
sura
nce,
but
is
not
a gu
aran
tee
that
an
audi
t co
nduc
ted
in a
ccor
danc
e w
ith
the
audi
ting
sta
ndar
ds
gene
rall
y ac
cept
ed i
n th
e R
epub
lic
of C
hina
wil
l al
way
s de
tect
a m
ater
ial
mis
stat
emen
t w
hen
it ex
ists
. Mis
stat
emen
ts c
an a
rise
fro
m f
raud
or
erro
r an
d ar
e co
nsid
ered
mat
eria
l if,
indi
vidu
ally
or
in
the
aggr
egat
e, t
hey
coul
d re
ason
ably
be
expe
cted
to
infl
uenc
e th
e ec
onom
ic d
ecis
ions
of
user
s ta
ken
on th
e ba
sis
of th
ese
cons
olid
ated
fin
anci
al s
tate
men
ts.
143
- 5
-
As
part
of
an a
udit
in
acco
rdan
ce w
ith
the
audi
ting
sta
ndar
ds g
ener
ally
acc
epte
d in
the
Rep
ublic
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
enti
fy a
nd a
sses
s th
e ri
sks
of m
ater
ial
mis
stat
emen
t of
the
con
soli
date
d fi
nanc
ial
stat
emen
ts,
whe
ther
due
to
frau
d or
err
or,
desi
gn a
nd p
erfo
rm a
udit
pro
cedu
res
resp
onsi
ve t
o th
ose
risk
s,
and
obta
in a
udit
evi
denc
e th
at i
s su
ffic
ient
and
app
ropr
iate
to
prov
ide
a ba
sis
for
our
opin
ion.
T
he r
isk
of n
ot d
etec
ting
a m
ater
ial
mis
stat
emen
t re
sult
ing
from
fra
ud i
s hi
gher
tha
n fo
r on
e re
sult
ing
from
er
ror,
as
fr
aud
may
in
volv
e co
llus
ion,
fo
rger
y,
inte
ntio
nal
omis
sion
s,
mis
repr
esen
tati
ons,
or
the
over
ride
of
inte
rnal
con
trol
. 2.
O
btai
n an
und
erst
andi
ng o
f in
tern
al c
ontr
ol r
elev
ant
to t
he a
udit
in
orde
r to
des
ign
audi
t pr
oced
ures
tha
t ar
e ap
prop
riat
e in
the
cir
cum
stan
ces,
but
not
for
the
pur
pose
of
expr
essi
ng a
n op
inio
n on
the
effe
ctiv
enes
s of
the
Gro
up’s
inte
rnal
con
trol
. 3.
E
valu
ate
the
appr
opri
aten
ess
of a
ccou
ntin
g po
lici
es u
sed
and
the
reas
onab
lene
ss o
f ac
coun
ting
es
tim
ates
and
rel
ated
dis
clos
ures
mad
e by
man
agem
ent.
4.
Con
clud
e on
th
e ap
prop
riat
enes
s of
m
anag
emen
t’s
use
of
the
goin
g co
ncer
n ba
sis
of
acco
unti
ng a
nd,
base
d on
the
aud
it e
vide
nce
obta
ined
, w
heth
er a
mat
eria
l un
cert
aint
y ex
ists
re
late
d to
eve
nts
or c
ondi
tion
s th
at m
ay c
ast
sign
ific
ant
doub
t on
the
Gro
up’s
abi
lity
to
cont
inue
as
a go
ing
conc
ern.
If
we
conc
lude
tha
t a
mat
eria
l un
cert
aint
y ex
ists
, we
are
requ
ired
to
dra
w a
tten
tion
in
our
audi
tors
’ re
port
to
the
rela
ted
disc
losu
res
in t
he c
onso
lidat
ed f
inan
cial
st
atem
ents
or,
if
such
dis
clos
ures
are
ina
dequ
ate,
to
mod
ify
our
opin
ion.
Our
con
clus
ions
are
ba
sed
on t
he a
udit
evi
denc
e ob
tain
ed u
p to
the
dat
e of
our
aud
itor
s’ r
epor
t. H
owev
er,
futu
re
even
ts o
r co
ndit
ions
may
cau
se th
e G
roup
to c
ease
to c
onti
nue
as a
goi
ng c
once
rn.
5.
Eva
luat
e th
e ov
eral
l pre
sent
atio
n, s
truc
ture
and
con
tent
of
the
cons
olid
ated
fin
anci
al s
tate
men
ts,
incl
udin
g th
e di
sclo
sure
s, a
nd w
heth
er t
he c
onso
lida
ted
fina
ncia
l st
atem
ents
rep
rese
nt t
he
unde
rlyi
ng tr
ansa
ctio
ns a
nd e
vent
s in
a m
anne
r th
at a
chie
ves
fair
pre
sent
atio
n.
6.
Obt
ain
suff
icie
nt a
nd a
ppro
pria
te a
udit
evi
denc
e re
gard
ing
the
fina
ncia
l in
form
atio
n of
ent
itie
s or
bus
ines
s ac
tivi
ties
wit
hin
the
Gro
up t
o ex
pres
s an
opi
nion
on
the
cons
olid
ated
fin
anci
al
stat
emen
ts.
We
are
resp
onsi
ble
for
the
dire
ctio
n, s
uper
visi
on,
and
perf
orm
ance
of
the
grou
p au
dit.
We
rem
ain
sole
ly r
espo
nsib
le f
or o
ur a
udit
opin
ion.
W
e co
mm
unic
ate
wit
h th
ose
char
ged
wit
h go
vern
ance
reg
ardi
ng, a
mon
g ot
her
mat
ters
, the
pla
nned
sc
ope
and
timin
g of
the
aud
it a
nd s
igni
fica
nt a
udit
fin
ding
s, i
nclu
ding
any
sig
nifi
cant
def
icie
ncie
s in
inte
rnal
con
trol
that
we
iden
tify
dur
ing
our
audi
t. W
e al
so p
rovi
de t
hose
cha
rged
wit
h go
vern
ance
wit
h a
stat
emen
t th
at w
e ha
ve c
ompl
ied
wit
h re
leva
nt
ethi
cal
requ
irem
ents
re
gard
ing
inde
pend
ence
, an
d to
co
mm
unic
ate
wit
h th
em
all
rela
tion
ship
s an
d ot
her
mat
ters
tha
t m
ay r
easo
nabl
y be
tho
ught
to
bear
on
our
inde
pend
ence
, an
d w
here
app
lica
ble,
rel
ated
saf
egua
rds.
F
rom
the
mat
ters
com
mun
icat
ed w
ith
thos
e ch
arge
d w
ith
gove
rnan
ce,
we
dete
rmin
e th
ose
mat
ters
th
at w
ere
of m
ost
sign
ific
ance
in
the
audi
t of
the
con
soli
date
d fi
nanc
ial
stat
emen
ts f
or t
he y
ear
ende
d D
ecem
ber
31, 2
019
and
are
ther
efor
e th
e ke
y au
dit m
atte
rs. W
e de
scri
be th
ese
mat
ters
in o
ur
audi
tors
’ re
port
unl
ess
law
or
regu
lati
on p
recl
udes
pub
lic
disc
losu
re a
bout
the
mat
ter
or w
hen,
in
extr
emel
y ra
re c
ircu
mst
ance
s, w
e de
term
ine
that
a m
atte
r sh
ould
not
be
com
mun
icat
ed in
our
rep
ort
beca
use
the
adve
rse
cons
eque
nces
of
doin
g so
wou
ld r
easo
nabl
y be
exp
ecte
d to
out
wei
gh t
he
publ
ic in
tere
st b
enef
its
of s
uch
com
mun
icat
ion.
- 6
-
The
eng
agem
ent
part
ners
on
the
audi
t re
sult
ing
in t
his
inde
pend
ent
audi
tors
’ re
port
are
Jui
-Cha
n H
uang
and
Shi
uh-R
an, C
heng
. D
eloi
tte
& T
ouch
e T
aipe
i, T
aiw
an
Rep
ubli
c of
Chi
na
Mar
ch 1
8, 2
020
N
otic
e to
Rea
ders
T
he a
ccom
pany
ing
cons
olid
ated
fin
anci
al s
tate
men
ts a
re i
nten
ded
only
to
pres
ent
the
cons
olid
ated
fi
nanc
ial
posi
tion
, fin
anci
al p
erfo
rman
ce a
nd c
ash
flow
s in
acc
orda
nce
wit
h ac
coun
ting
pri
ncip
les
and
prac
tice
s ge
nera
lly
acce
pted
in
the
Rep
ubli
c of
Chi
na a
nd n
ot t
hose
of
any
othe
r ju
risd
icti
ons.
T
he s
tand
ards
, pro
cedu
res
and
prac
tice
s to
aud
it s
uch
cons
olid
ated
fin
anci
al s
tate
men
ts a
re t
hose
ge
nera
lly
appl
ied
in th
e R
epub
lic
of C
hina
. F
or
the
conv
enie
nce
of
read
ers,
th
e in
depe
nden
t au
dito
rs’
repo
rt
and
the
acco
mpa
nyin
g co
nsol
idat
ed f
inan
cial
sta
tem
ents
hav
e be
en t
rans
late
d in
to E
ngli
sh f
rom
the
ori
gina
l C
hine
se
vers
ion
prep
ared
and
use
d in
the
Rep
ubli
c of
Chi
na.
If t
here
is
any
conf
lict
bet
wee
n th
e E
ngli
sh
vers
ion
and
the
orig
inal
Chi
nese
ver
sion
or
any
diff
eren
ce in
the
inte
rpre
tati
on o
f the
two
vers
ions
, th
e C
hine
se-l
angu
age
inde
pend
ent
audi
tors
’ re
port
and
con
soli
date
d fi
nanc
ial
stat
emen
ts s
hall
pr
evai
l.
144
- 7
-
CH
INA
AIR
LIN
ES
, LT
D. A
ND
SU
BS
IDIA
RIE
S
CO
NS
OL
IDA
TE
D B
AL
AN
CE
SH
EE
TS
D
EC
EM
BE
R 3
1, 2
019
AN
D 2
018
(In
Th
ousa
nd
s of
New
Tai
wan
Dol
lars
)
2019
2018
A
SS
ET
S
Am
oun
t
%
A
mou
nt
%
CU
RR
EN
T A
SS
ET
S
Cas
h an
d ca
sh e
quiv
alen
ts (
Not
es 4
, 6, 1
9 an
d 33
)
$
28
,459
,528
10
$
24,9
37,5
37
11
F
inan
cial
ass
ets
at f
air
valu
e th
roug
h pr
ofit
or
loss
- c
urre
nt (
Not
es 4
, 7 a
nd 3
2)
51
2,19
2
-
206,
001
-
Fin
anci
al a
sset
s at
am
orti
zed
cost
(N
otes
9 a
nd 3
2)
2,
355,
095
1
3,
856,
660
2
Fin
anci
al a
sset
s fo
r he
dgin
g -
curr
ent (
Not
es 4
and
32)
9,62
6
-
32,9
06
-
Not
es a
nd a
ccou
nts
rece
ivab
le, n
et (
Not
es 4
, 10
and
32)
8,
520,
834
3
10
,038
,528
4 N
otes
and
acc
ount
s re
ceiv
able
- r
elat
ed p
arti
es (
Not
es 3
2 an
d 33
)
10,3
48
-
9,
043
-
Oth
er r
ecei
vabl
es (
Not
es 4
and
32)
774,
206
-
87
9,19
1
- C
urre
nt ta
x as
sets
(N
otes
4 a
nd 2
9)
54
,689
-
18,9
48
-
Inve
ntor
ies,
net
(N
otes
4 a
nd 1
1)
8,
470,
113
3
8,
654,
710
4
Non
-cur
rent
ass
ets
held
for
sal
e (N
otes
4, 5
and
12)
-
-
46,1
54
-
Oth
er a
sset
s -
curr
ent (
Not
es 6
and
18)
2,65
5,71
1
1
4,14
7,88
2
2
Tot
al c
urre
nt a
sset
s
51,8
22,3
42
18
52,8
27,5
60
23
NO
N-C
UR
RE
NT
AS
SE
TS
F
inan
cial
ass
ets
at f
air
valu
e th
roug
h ot
her
com
preh
ensi
ve in
com
e -
non-
curr
ent (
Not
es 8
and
32)
209,
221
-
13
2,19
1
- F
inan
cial
ass
ets
at a
mor
tize
d co
st (
Not
es 4
and
9)
10
5,58
6
-
-
- In
vest
men
ts a
ccou
nted
for
usi
ng th
e eq
uity
met
hod
(Not
es 4
and
14)
2,22
3,79
3
1
2,20
0,14
9
1 P
rope
rty,
pla
nt a
nd e
quip
men
t (N
otes
4, 5
, 15
and
35)
14
5,88
6,97
1
50
16
3,10
7,71
8
71
Rig
ht-o
f-us
e as
sets
(N
otes
4, 2
1 an
d 35
)
71,0
33,6
17
24
-
- In
vest
men
t pro
pert
ies
(Not
es 4
and
16)
2,07
5,06
8
1
2,07
5,34
5
1 O
ther
inta
ngib
le a
sset
s (N
otes
4 a
nd 1
7)
1,
182,
692
-
1,
210,
796
1
Def
erre
d in
com
e ta
x as
set (
Not
es 4
, 5 a
nd 2
9)
5,
337,
626
2
5,
152,
070
2
Oth
er a
sset
s -
non-
curr
ent (
Not
es 1
8, 2
1, 3
2 an
d 34
)
13,1
71,0
63
4
3,
430,
753
1
T
otal
non
-cur
rent
ass
ets
24
1,22
5,63
7
82
17
7,30
9,02
2
77
T
OT
AL
$
293
,047
,979
100
$ 2
30,1
36,5
82
10
0
L
IAB
ILIT
IES
AN
D E
QU
ITY
C
UR
RE
NT
LIA
BIL
ITIE
S
Sho
rt-t
erm
deb
ts (
Not
e 19
)
$
38
0,00
0
-
$
-
-
Fin
anci
al li
abil
itie
s at
fai
r va
lue
thro
ugh
prof
it or
loss
- c
urre
nt (
Not
es 4
, 5, 7
and
32)
11,7
49
-
221
- F
inan
cial
liab
ilit
ies
for
hedg
ing
- cu
rren
t (N
otes
4, 2
1 an
d 32
)
8,61
8,50
6
3
56
0
-
Not
es a
nd a
ccou
nts
paya
ble
(Not
e 32
)
1,49
5,60
6
1
1,
594,
487
1 A
ccou
nts
paya
ble
- re
late
d pa
rtie
s (N
otes
32
and
33)
54
2,01
5
-
53
2,81
5
-
Oth
er p
ayab
les
(Not
es 2
2 an
d 32
)
13,1
87,9
72
5
14,1
46,1
98
6 C
urre
nt ta
x lia
bili
ties
(Not
es 4
and
29)
374,
178
-
164,
181
- L
ease
liab
ilitie
s -
curr
ent (
Not
es 3
, 4 a
nd 2
1)
2,
340,
873
1
-
-
Pro
visi
ons
- cu
rren
t (N
otes
4 a
nd 2
4)
36
0,39
3
-
32
1,07
5
-
Con
trac
t lia
bili
ties
- c
urre
nt (
Not
e 23
)
21,0
60,7
73
7
19,5
46,4
55
9 B
onds
pay
able
and
put
opt
ion
of c
onve
rtib
le b
onds
- c
urre
nt p
orti
on (
Not
es 4
, 20,
27
and
32)
10
,000
,000
3
4,
445,
900
2 L
oans
and
deb
ts -
cur
rent
por
tion
(N
otes
19,
32
and
35)
14
,148
,892
5
15
,709
,487
7
Cap
ital
leas
e ob
ligat
ions
- c
urre
nt p
orti
on (
Not
es 4
, 21,
32
and
35)
-
-
633,
398
- O
ther
cur
rent
liab
iliti
es (
Not
e 33
)
3,83
0,57
0
1
3,
855,
115
2
Tot
al c
urre
nt li
abil
ities
76,3
51,5
27
26
60
,949
,892
27
NO
N-C
UR
RE
NT
LIA
BIL
ITIE
S
D
eriv
ativ
e fi
nanc
ial l
iabi
litie
s fo
r he
dgin
g -
non-
curr
ent (
Not
es 3
, 4, 2
1 an
d 33
)
42,4
20,2
05
15
-
- B
onds
pay
able
- n
on-c
urre
nt (
Not
es 4
, 20,
27
and
32)
22
,052
,625
8
28
,473
,710
12
L
oans
and
deb
ts -
non
-cur
rent
(N
otes
19,
32
and
35)
53
,514
,891
18
60,6
86,1
48
26
Con
trac
t lia
bili
ties
- n
on-c
urre
nt (
Not
es 4
and
23)
2,23
6,31
1
1
1,
903,
665
1 P
rovi
sion
s -
non-
curr
ent (
Not
es 4
and
24)
10,0
11,4
64
3
8,47
3,46
4
4
Def
erre
d ta
x li
abil
ities
(N
otes
4 a
nd 2
9)
55
7,14
2
-
18
8,44
7
-
Lea
se li
abili
ties
- no
n-cu
rren
t (N
otes
3, 4
, 21
and
25)
15
,801
,724
5
-
- C
apit
al le
ase
obli
gati
ons
- no
n-cu
rren
t (N
otes
4, 2
1, 3
2 an
d 35
)
-
-
2,
945
- A
ccru
ed p
ensi
on c
osts
(N
otes
4, 5
and
25)
9,43
5,03
5
3
8,
803,
382
4 O
ther
non
-cur
rent
liab
ilit
ies
(Not
e 32
)
534,
938
-
607,
845
-
Tot
al n
on-c
urre
nt li
abil
itie
s
156,
564,
335
53
10
9,13
9,60
6
47
Tot
al li
abil
itie
s
232,
915,
862
79
17
0,08
9,49
8
74
EQ
UIT
Y A
TT
RIB
UT
AB
LE
TO
OW
NE
RS
OF
TH
E C
OM
PA
NY
(N
otes
20
and
26)
Shar
e ca
pita
l
54,2
09,8
46
19
54
,209
,846
24
C
apit
al s
urpl
us
2,
488,
907
1
1,24
1,21
4
-
Ret
aine
d ea
rnin
gs
Leg
al r
eser
ve
46
6,41
6
-
35
1,92
3
-
Spe
cial
res
erve
12,9
67
-
118,
810
- U
napp
ropr
iate
d re
tain
ed e
arni
ngs
(acc
umul
ated
def
icit
s)
(1
,777
,225
)
-
1,
144,
928
1 T
otal
ret
aine
d ea
rnin
gs
(1
,297
,842
)
-
1,
615,
661
1 O
ther
equ
ity
1,
196,
233
-
58,2
23
- T
reas
ury
shar
es
(4
3,37
2 )
-
(43,
372)
-
T
otal
equ
ity
attr
ibut
able
to o
wne
rs o
f th
e C
ompa
ny
56
,553
,772
20
57,0
81,5
72
25
N
ON
-CO
NT
RO
LL
ING
IN
TE
RE
ST
S (
Not
e 26
)
3,57
8,34
5
1
2,
965,
512
1
Tot
al e
quit
y
60,1
32,1
17
21
60
,047
,084
26
TO
TA
L
$ 2
93,0
47,9
79
100
$ 2
30,1
36,5
82
100
The
acc
ompa
nyin
g no
tes
are
an in
tegr
al p
art o
f th
e co
nsol
idat
ed f
inan
cial
sta
tem
ents
.
- 8
-
CH
INA
AIR
LIN
ES
, LT
D. A
ND
SU
BS
IDIA
RIE
S
CO
NS
OL
IDA
TE
D S
TA
TE
ME
NT
S O
F C
OM
PR
EH
EN
SIV
E I
NC
OM
E
FO
R T
HE
YE
AR
S E
ND
ED
DE
CE
MB
ER
31,
201
9 A
ND
201
8 (I
n T
hou
san
ds
of N
ew T
aiw
an D
olla
rs, E
xcep
t E
arn
ings
Per
Sh
are)
20
19
20
18
Am
oun
t
%
A
mou
nt
%
RE
VE
NU
E (
Not
es 4
, 27
and
34)
$
168
,444
,160
100
$ 1
70,7
11,6
07
1
00
C
OS
TS
(N
otes
4, 9
, 11,
17,
24,
25,
27
and
34)
151,
757,
232
90
153,
504,
076
90
G
RO
SS
PR
OF
IT
16,6
86,9
28
10
17,2
07,5
31
10
O
PE
RA
TIN
G E
XP
EN
SE
S (
Not
es 4
, 25
and
27)
14,0
21,1
07
8
13
,185
,148
8
O
PE
RA
TIN
G P
RO
FIT
2,
665,
821
2
4,
022,
383
2
NO
N-O
PE
RA
TIN
G I
NC
OM
E A
ND
LO
SS
O
ther
inco
me
(Not
es 4
, 8 a
nd 2
7)
718,
988
-
60
6,45
3
1
Oth
er g
ains
and
loss
es (
Not
es 1
0, 1
2, 1
4, 1
5, 2
7
and
31)
(473
,812
)
-
(534
,848
)
-
Fin
ance
cos
ts (
Not
es 9
, 27
and
32)
(3,3
40,1
19)
(2)
(1,3
79,9
85)
(1)
Sha
re o
f th
e pr
ofit
of
asso
ciat
es a
nd jo
int v
entu
res
(Not
e 14
)
33
2,30
5
-
367,
246
-
Tot
al n
on-o
pera
ting
inco
me
and
loss
(2
,762
,638
)
(2
)
(9
41,1
34)
-
PR
ET
AX
PR
OF
IT (
LO
SS
)
(9
6,81
7)
-
3,08
1,24
9
2
IN
CO
ME
TA
X E
XP
EN
SE
(N
otes
4, 5
and
29)
57
8,18
5
-
808,
565
1
NE
T (
LO
SS
) IN
CO
ME
(6
75,0
02)
-
2,
272,
684
1
OT
HE
R C
OM
PR
EH
EN
SIV
E I
NC
OM
E (
LO
SS
)
It
ems
that
wil
l not
be
recl
assi
fied
sub
sequ
entl
y to
pr
ofit
or
loss
:
(L
oss)
gai
n on
hed
ging
inst
rum
ents
sub
ject
to
basi
s ad
just
men
t (N
otes
4, 2
7 an
d 33
)
(1
7,70
5)
-
23,8
84
- U
nrea
lize
d ga
in o
n in
vest
men
ts in
equ
ity
inst
rum
ents
des
igna
ted
as a
t fai
r va
lue
thro
ugh
othe
r co
mpr
ehen
sive
inco
me
(Not
e 8)
79
,392
-
930
- R
emea
sure
men
t of
defi
ned
bene
fit p
lans
(N
otes
4
and
26)
(781
,793
)
-
(851
,866
)
-
Sha
re o
f ot
her
com
preh
ensi
ve lo
ss o
f as
soci
ates
an
d jo
int v
entu
res
acco
unte
d fo
r us
ing
the
equi
ty m
etho
d (N
otes
4, 1
5 an
d 31
)
(3
2,10
2)
-
(33,
242)
- In
com
e ta
x re
lati
ng to
item
s th
at w
ill n
ot b
e re
clas
sifi
ed s
ubse
quen
tly to
pro
fit o
r lo
ss
(Not
e 28
)
14
5,16
6
-
187,
881
-
(607
,042
)
-
(672
,413
)
-
(Con
tinu
ed)
145
- 9
-
CH
INA
AIR
LIN
ES
, LT
D. A
ND
SU
BS
IDIA
RIE
S
CO
NS
OL
IDA
TE
D S
TA
TE
ME
NT
S O
F C
OM
PR
EH
EN
SIV
E I
NC
OM
E
FO
R T
HE
YE
AR
S E
ND
ED
DE
CE
MB
ER
31,
201
9 A
ND
201
8 (I
n T
hou
san
ds
of N
ew T
aiw
an D
olla
rs, E
xcep
t E
arn
ings
Per
Sh
are)
20
19
20
18
Am
oun
t
%
A
mou
nt
%
Item
s th
at m
ay b
e re
clas
sifi
ed s
ubse
quen
tly
to p
rofi
t or
loss
:
E
xcha
nge
diff
eren
ces
on tr
ansl
atin
g fo
reig
n op
erat
ions
(N
otes
4 a
nd 2
7)
$
(7
2,95
2)
-
$
26
,567
-
Gai
n on
hed
ging
inst
rum
ents
not
sub
ject
to b
asis
ad
just
men
t (N
otes
4, 2
7 an
d 33
)
1,
411,
623
-
85
,341
-
Inco
me
tax
rela
ting
to it
ems
that
may
be
recl
assi
fied
sub
sequ
ently
to p
rofi
t or
loss
(N
ote
28)
(268
,871
)
-
(17,
858)
-
1,06
9,80
0
-
94,0
50
-
Oth
er c
ompr
ehen
sive
gai
n (l
oss)
for
the
year
, ne
t of
inco
me
tax
462,
758
-
(5
78,3
63)
-
TO
TA
L C
OM
PR
EH
EN
SIV
E (
LO
SS
) IN
CO
ME
FO
R
TH
E Y
EA
R
$
(2
12,2
44)
-
$
1,69
4,32
1
1
N
ET
IN
CO
ME
AT
TR
IBU
TA
BL
E T
O:
Ow
ners
of
the
Com
pany
$
(1,1
99,7
98)
(1)
$
1,
790,
361
1 N
on-c
ontr
ollin
g in
tere
sts
524,
796
1
48
2,32
3
-
$
(6
75,0
02)
-
$
2,27
2,68
4
1
T
OT
AL
CO
MP
RE
HE
NS
IVE
IN
CO
ME
A
TT
RIB
UT
AB
LE
TO
:
O
wne
rs o
f th
e C
ompa
ny
$
(6
47,0
85)
-
$
1,25
8,03
5
1
Non
-con
trol
ling
inte
rest
s
43
4,84
1
-
436,
286
-
$
(212
,244
)
-
$
1,
694,
321
1 E
AR
NIN
GS
PE
R S
HA
RE
(N
EW
TA
IWA
N
DO
LL
AR
S; N
ote
30)
Bas
ic
$
(0
.22 )
$
0.
33
D
ilut
ed
$
(0
.22 )
$
0.
32
T
he a
ccom
pany
ing
note
s ar
e an
inte
gral
par
t of
the
cons
olid
ated
fin
anci
al s
tate
men
ts.
(Con
clud
ed)
146
- 10
-
CH
INA
AIR
LIN
ES
, LT
D. A
ND
SU
BS
IDIA
RIE
S
CO
NS
OL
IDA
TE
D S
TA
TE
ME
NT
S O
F C
HA
NG
ES
IN
EQ
UIT
Y
FO
R T
HE
YE
AR
S E
ND
ED
DE
CE
MB
ER
31,
201
9 A
ND
201
8 (I
n T
hou
san
ds
of N
ew T
aiw
an D
olla
rs)
Eq
uit
y A
ttri
bu
tab
le t
o O
wn
ers
of t
he
Com
pan
y
O
ther
Eq
uit
y
U
nre
aliz
ed G
ain
on
R
etai
ned
Ear
nin
gs
F
inan
cial
Ass
et a
t
U
nap
pro
pri
ated
Exc
han
ge
U
nre
aliz
ed G
ain
Fai
r V
alu
e
E
arn
ings
Dif
fere
nce
s on
(Los
s) o
n
T
hro
ugh
Oth
er
G
ain
(L
oss)
on
Tre
asu
ry S
har
es
(Acc
um
ula
ted
Tra
nsl
atin
g
Ava
ilab
le-f
or-s
ale
C
omp
reh
ensi
ve
H
edgi
ng
H
eld
by
N
on-C
ontr
olli
ng
Sh
are
Cap
ital
Cap
ital
Su
rplu
s
Leg
al R
eser
ve
S
pec
ial R
eser
ve
D
efic
its)
For
eign
Op
erat
ion
s
Fin
anci
al A
sset
s
Inco
me
C
ash
Flo
w H
edge
s
Inst
rum
ents
Su
bsi
dia
ries
Tot
al
In
tere
sts
T
otal
Eq
uity
BA
LA
NC
E A
T J
AN
UA
RY
1, 2
018
$
54,7
09,8
46
$
799,
999
$
206,
092
$
-
$
1,
458,
313
$
(34,
986
)
$
1,
774
$
-
$
(7
4,42
9 )
$
-
$
(4
3,37
2 )
$
57,0
23,2
37
$
2,13
4,28
2
$
59
,157
,519
Eff
ect o
f re
tros
pect
ive
appl
icat
ion
and
retr
ospe
ctiv
e re
stat
emen
t
-
-
-
-
60
-
(1
,774
)
42,3
51
74
,429
(74,
429
)
-
40,6
37
-
40
,637
BA
LA
NC
E A
T J
AN
UA
RY
1, 2
018
AS
RE
ST
AT
ED
54,7
09,8
46
79
9,99
9
206,
092
-
1,
458,
373
(3
4,98
6 )
-
42
,351
-
(74,
429
)
(43,
372
)
57,0
63,8
74
2,
134,
282
59
,198
,156
Issu
ance
of
conv
erti
ble
bond
s
-
409,
978
-
-
-
-
-
-
-
-
-
40
9,97
8
-
409,
978
B
asis
adj
ustm
ents
to g
ain
on h
edgi
ng in
stru
men
ts
-
-
-
-
-
-
-
-
-
12
,118
-
12,1
18
-
12
,118
App
ropr
iati
on o
f 20
17 e
arni
ngs
Leg
al r
eser
ve
-
-
14
5,83
1
-
(145
,831
)
-
-
-
-
-
-
-
-
- S
peci
al r
eser
ve
-
-
-
11
8,81
0
(118
,810
)
-
-
-
-
-
-
-
-
- C
ash
divi
dend
s -
$0.2
1818
2008
6 pe
r sh
are
-
-
-
-
(1
,193
,670
)
-
-
-
-
-
-
(1,1
93,6
70 )
-
(1
,193
,670
)
Cha
nges
in c
apit
al s
urpl
us f
rom
div
iden
ds d
istr
ibut
ed to
su
bsid
iari
es
-
63
0
-
-
-
-
-
-
-
-
-
630
-
63
0
Net
inco
me
for
the
year
end
ed D
ecem
ber
31, 2
018
-
-
-
-
1,
790,
361
-
-
-
-
-
-
1,
790,
361
48
2,32
3
2,27
2,68
4
Oth
er c
ompr
ehen
sive
inco
me
(los
s) f
or th
e ye
ar e
nded
D
ecem
ber
31, 2
018,
net
of
inco
me
tax
-
-
-
-
(6
45,4
95 )
25
,322
-
268
-
87
,579
-
(532
,326
)
(46,
037
)
(578
,363
)
Tot
al c
ompr
ehen
sive
inco
me
for
the
year
end
ed
Dec
embe
r 31
, 201
8
-
-
-
-
1,14
4,86
6
25,3
22
-
26
8
-
87,5
79
-
1,
258,
035
43
6,28
6
1,69
4,32
1
Gai
n or
loss
on
non-
cont
roll
ing
inte
rest
-
-
-
-
-
-
-
-
-
-
-
-
565,
963
56
5,96
3
Tre
asur
y sh
ares
acq
uire
d
-
-
-
-
-
-
-
-
-
-
(469
,393
)
(469
,393
)
-
(469
,393
)
Tre
asur
y sh
ares
ret
ired
(500
,000
)
30,6
07
-
-
-
-
-
-
-
-
46
9,39
3
-
-
-
Cas
h di
vide
nds
from
sub
sidi
arie
s pa
id to
non
-con
trol
ling
in
tere
sts
-
-
-
-
-
-
-
-
-
-
-
-
(1
71,0
19 )
(1
71,0
19 )
B
AL
AN
CE
AT
DE
CE
MB
ER
31,
201
8
54,2
09,8
46
1,
241,
214
35
1,92
3
118,
810
1,
144,
928
(9
,664
)
-
42,6
19
-
25
,268
(43,
372
)
57,0
81,5
72
2,
965,
512
60
,047
,084
Bas
is a
djus
tmen
t to
loss
on
hedg
ing
inst
rum
ents
-
-
-
-
-
-
-
-
-
(603
)
-
(603
)
-
(603
)
App
ropr
iati
on o
f 20
18 e
arni
ngs
Leg
al r
eser
ve
-
-
11
4,49
3
-
(114
,493
)
-
-
-
-
-
-
-
-
- S
peci
al r
eser
ve
-
-
-
(1
05,8
43 )
10
5,84
3
-
-
-
-
-
-
-
-
- C
ash
divi
dend
s -
$0.2
0960
737
per
shar
e
-
-
-
-
(1,1
36,2
78 )
-
-
-
-
-
-
(1
,136
,278
)
-
(1,1
36,2
78 )
C
hang
es in
cap
ital
sur
plus
fro
m d
ivid
ends
dis
trib
uted
to
subs
idia
ries
-
606
-
-
-
-
-
-
-
-
-
60
6
-
606
A
ctua
l dis
posa
l of
inte
rest
s in
sub
sidi
arie
s
-
1,24
7,08
7
-
-
-
-
-
-
-
-
-
1,24
7,08
7
7,54
6
1,25
4,63
3
Net
pro
fit (
loss
) fo
r th
e ye
ar 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
ensi
ve in
com
e (l
oss)
for
the
year
end
ed
Dec
embe
r 31
, 201
9 ne
t of
inco
me
tax
-
-
-
-
(5
77,4
27 )
(5
3,41
1 )
-
64
,538
-
1,11
9,01
3
-
552,
713
(8
9,95
5 )
46
2,75
8
Tot
al c
ompr
ehen
sive
inco
me
(los
s) f
or th
e ye
ar e
nded
D
ecem
ber
31, 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
from
sub
sidi
arie
s pa
id to
non
-con
trol
ling
in
tere
sts
-
-
-
-
-
-
-
-
-
-
-
-
61
1,84
1
611,
841
N
on-c
ontr
olli
ng in
tere
sts
aris
ing
from
acq
uisi
tion
of
subs
idia
ries
-
-
-
-
-
-
-
-
-
-
-
-
(416
,438
)
(416
,438
)
Los
s of
con
trol
of
subs
idia
ries
-
-
-
-
-
8,36
8
-
105
-
-
-
8,
473
(2
4,95
7 )
(1
6,48
4 )
B
AL
AN
CE
AT
DE
CE
MB
ER
31,
201
9
$
54
,209
,846
$
2,
488,
907
$
466,
416
$
12,9
67
$
(1,7
77,2
25 )
$
(54,
707
)
$
-
$
107,
262
$
-
$
1,
143,
678
$
(43,
372
)
$
56
,553
,772
$
3,
578,
345
$
60,1
32,1
17
The
acc
ompa
nyin
g no
tes
are
an in
tegr
al p
art o
f th
e co
nsol
idat
ed f
inan
cial
sta
tem
ents
.
147
- 11
-
CH
INA
AIR
LIN
ES
, LT
D. A
ND
SU
BS
IDIA
RIE
S
CO
NS
OL
IDA
TE
D S
TA
TE
ME
NT
S O
F C
AS
H F
LO
WS
F
OR
TH
E Y
EA
RS
EN
DE
D D
EC
EM
BE
R 3
1, 2
019
AN
D 2
018
(In
Th
ousa
nd
s of
New
Tai
wan
Dol
lars
)
20
19
20
18
C
AS
H F
LO
WS
FR
OM
OP
ER
AT
ING
AC
TIV
ITIE
S
(Los
s) I
ncom
e be
fore
inco
me
tax
$
(9
6,81
7)
$
3,
081,
249
Adj
ustm
ents
for
ope
rati
ng a
ctiv
itie
s:
Dep
reci
atio
n ex
pens
es
32,6
01,4
00
19,3
25,0
83
Am
orti
zati
on e
xpen
ses
198,
237
191,
979
Exp
ecte
d cr
edit
loss
rec
ogni
zed
on tr
ade
rece
ivab
les
24,0
96
49,8
24
Net
gai
n on
fai
r va
lue
chan
ges
of f
inan
cial
ass
ets
and
liab
ilit
ies
held
fo
r tr
adin
g
(2
7,58
0)
(11,
168)
In
tere
st in
com
e
(4
17,4
46)
(330
,710
) D
ivid
end
inco
me
(21,
422)
(9
,603
) S
hare
of
prof
it of
ass
ocia
tes
and
join
t ven
ture
s
(3
32,3
05)
(367
,246
) (G
ain)
loss
on
disp
osal
of
prop
erty
, pla
nt a
nd e
quip
men
t
(3
2,46
0)
270,
597
Gai
n on
dis
posa
l of
inve
stm
ents
acc
ount
ed f
or u
sing
the
equi
ty
met
hod
(7,6
56)
(450
,195
) L
oss
on d
ispo
sal o
f no
n-cu
rren
t ass
ets
held
for
sal
e
10
,462
36
8,99
2 Im
pair
men
t los
s on
non
-cur
rent
ass
ets
held
for
sal
e
-
75,4
37
Impa
irm
ent l
oss
reco
gniz
ed o
n pr
oper
ty, p
lant
, equ
ipm
ent
-
50
,000
L
oss
on in
vent
orie
s an
d pr
oper
ty, p
lant
and
equ
ipm
ent
572,
026
623,
022
Net
(ga
in)
loss
on
fore
ign
curr
ency
exc
hang
e
(5
9,98
7)
298,
787
Fin
ance
cos
ts
3,34
0,11
9
1,
379,
985
Rec
ogni
tion
of
prov
isio
ns
4,60
8,92
4
3,
386,
052
Am
orti
zati
on o
f un
real
ized
on
sale
- le
aseb
acks
10
3,77
5
-
Oth
ers
(1,4
84)
- A
mor
tiza
tion
of
unre
aliz
ed g
ain
on s
ale-
leas
ebac
ks
-
(1
3,88
8)
Cha
nges
in o
pera
ting
ass
ets
and
liab
ilit
ies
Fin
anci
al a
sset
s m
anda
tori
ly c
lass
ifie
d as
at f
air
valu
e th
roug
h pr
ofit
or
loss
(2
78,7
41)
269,
682
Fin
anci
al li
abil
itie
s m
anda
tori
ly c
lass
ifie
d as
at f
air
valu
e th
roug
h pr
ofit
or
loss
11
,528
(9
,359
) N
otes
and
acc
ount
s re
ceiv
able
1,
564,
298
(1,3
04,9
48)
Acc
ount
s re
ceiv
able
- r
elat
ed p
arti
es
66,5
38
253,
540
Oth
er r
ecei
vabl
es
(49,
138)
(1
00,4
00)
Inve
ntor
ies
(118
,317
)
(2
88,9
41)
Oth
er c
urre
nt a
sset
s
54
8,15
6
15
,763
N
otes
and
acc
ount
s pa
yabl
e
(1
4,32
6)
993,
434
Acc
ount
s pa
yabl
e -
rela
ted
part
ies
(224
,931
)
(9
7,75
3)
Oth
er p
ayab
les
(832
,288
)
53
5,21
1 C
ontr
act l
iabi
liti
es
1,84
7,28
6
3,
256,
101
Pro
visi
ons
(2,7
99,3
14)
(3,3
10,0
89)
Oth
er c
urre
nt li
abil
itie
s
20
2,81
5
73
,958
A
ccru
ed p
ensi
on li
abil
itie
s
(1
49,6
78)
(205
,340
) O
ther
liab
ilit
ies
(5,1
55)
2,69
8 C
ash
gene
rate
d fr
om o
pera
tion
s
40
,230
,615
28
,001
,754
In
tere
st r
ecei
ved
401,
190
301,
465
Div
iden
ds r
ecei
ved
355,
311
228,
636
(Con
tinu
ed)
- 12
-
CH
INA
AIR
LIN
ES
, LT
D. A
ND
SU
BS
IDIA
RIE
S
CO
NS
OL
IDA
TE
D S
TA
TE
ME
NT
S O
F C
AS
H F
LO
WS
F
OR
TH
E Y
EA
RS
EN
DE
D D
EC
EM
BE
R 3
1, 2
019
AN
D 2
018
(In
Th
ousa
nd
s of
New
Tai
wan
Dol
lars
)
20
19
20
18
In
tere
st p
aid
$
(3
,124
,960
)
$
(1,3
19,6
90)
Inco
me
tax
paid
(3
35,5
44)
(185
,208
)
Net
cas
h ge
nera
ted
from
ope
rati
ng a
ctiv
itie
s
37
,526
,612
27
,026
,957
CA
SH
FL
OW
S F
RO
M I
NV
ES
TIN
G A
CT
IVIT
IES
A
cqui
siti
on o
f am
orti
zed
cost
fin
anci
al a
sset
s
(2
,089
,871
)
(3
,460
,496
) D
ispo
sal o
f am
orti
zed
cost
fin
anci
al a
sset
s
3,
447,
202
1,62
1,54
6 P
roce
eds
from
dis
posa
l of
non-
curr
ent a
sset
s he
ld f
or s
ale
35,6
92
688,
427
Pay
men
ts f
or p
rope
rty,
pla
nt a
nd e
quip
men
t
(3
,316
,078
)
(4
,608
,600
) P
roce
eds
from
dis
posa
l of
prop
erty
, pla
nt a
nd e
quip
men
t
71
,194
33
3,28
4 In
crea
se in
ref
unda
ble
depo
sits
(4
40,4
43)
(265
,335
) D
ecre
ase
in r
efun
dabl
e de
posi
ts
218,
547
391,
487
Incr
ease
in p
repa
ymen
ts f
or e
quip
men
t
(1
5,65
8,89
8)
(14,
991,
412)
In
crea
se in
long
-ter
m le
ase
rece
ivab
le
-
(7
85)
Incr
ease
in c
ompu
ter
soft
war
e co
sts
(172
,639
)
(1
84,2
23)
Dec
reas
e in
res
tric
ted
asse
ts
38,6
36
59,7
26
Pro
ceed
s fr
om d
ispo
sal o
f as
soci
ates
acc
ount
ed f
or u
sing
the
equi
ty
met
hod
1,86
6,47
4
-
Pro
ceed
s fr
om a
cqui
siti
on o
f jo
int v
entu
res
acco
unte
d fo
r us
ing
the
equi
ty m
etho
d
(3
5,52
5)
- N
et c
ash
outf
low
on
disp
osal
of
subs
idia
ries
(N
ote
31)
(17,
413)
-
Acq
uisi
tion
of
subs
idia
ries
(N
ote
30)
-
13
6,76
9
Net
cas
h us
ed in
inve
stin
g ac
tivi
ties
(1
6,05
3,12
2)
(20,
279,
612)
CA
SH
FL
OW
S F
RO
M F
INA
NC
ING
AC
TIV
ITIE
S
Pay
men
ts f
or b
uy-b
ack
of o
rdin
ary
shar
es
-
(4
69,3
93)
Dec
reas
e in
sho
rt-t
erm
deb
ts
380,
000
(120
,000
) P
roce
eds
from
issu
ance
of
bond
s pa
yabl
e
3,
500,
000
10,5
12,0
00
Rep
aym
ents
of
bond
s pa
yabl
e
(4
,445
,900
)
(2
,700
,000
) P
roce
eds
from
long
-ter
m b
orro
win
gs
9,07
8,69
0
18
,285
,457
R
epay
men
ts o
f lo
ng-t
erm
bor
row
ings
and
cap
ital
leas
e ob
liga
tion
s
(1
7,81
9,75
0)
(28,
587,
288)
R
epay
men
ts o
f th
e pr
inci
pal p
orti
on o
f le
ase
liab
ilit
ies
(11,
692,
310)
-
Pro
ceed
s fr
om g
uara
ntee
dep
osit
s re
ceiv
ed
180,
360
126,
578
Ref
unds
of
guar
ante
e de
posi
ts r
ecei
ved
(149
,198
)
(7
0,20
4)
Pro
ceed
s fr
om s
ale
- le
aseb
acks
4,
905,
660
- D
ivid
ends
pai
d to
ow
ners
of
the
Com
pany
(1
,135
,672
)
(1
,193
,040
) C
ash
divi
dend
s pa
id to
non
-con
trol
ling
inte
rest
s
(4
16,4
38)
(171
,019
)
Net
cas
h us
ed in
fin
anci
ng a
ctiv
itie
s
(1
7,61
4,55
8)
(4,3
86,9
09)
E
FF
EC
TS
OF
EX
CH
AN
GE
RA
TE
CH
AN
GE
S O
N T
HE
BA
LA
NC
E
OF
CA
SH
HE
LD
IN
FO
RE
IGN
CU
RR
EN
CIE
S
(336
,941
)
(8
,231
) (C
onti
nued
)
148
- 13
-
CH
INA
AIR
LIN
ES
, LT
D. A
ND
SU
BS
IDIA
RIE
S
CO
NS
OL
IDA
TE
D S
TA
TE
ME
NT
S O
F C
AS
H F
LO
WS
F
OR
TH
E Y
EA
RS
EN
DE
D D
EC
EM
BE
R 3
1, 2
019
AN
D 2
018
(In
Th
ousa
nd
s of
New
Tai
wan
Dol
lars
)
20
19
20
18
N
ET
IN
CR
EA
SE
IN
CA
SH
AN
D C
AS
H E
QU
IVA
LE
NT
S
$
3,
521,
991
$
2,
352,
205
C
AS
H A
ND
CA
SH
EQ
UIV
AL
EN
TS
AT
TH
E B
EG
INN
ING
OF
TH
E
YE
AR
24
,937
,537
22
,585
,332
CA
SH
AN
D C
AS
H E
QU
IVA
LE
NT
S A
T T
HE
EN
D O
F T
HE
YE
AR
$
28,4
59,5
28
$
24
,937
,537
T
he a
ccom
pany
ing
note
s ar
e an
inte
gral
par
t of
the
cons
olid
ated
fin
anci
al s
tate
men
ts.
(Con
clud
ed)
- 14
-
CH
INA
AIR
LIN
ES
, LT
D. A
ND
SU
BS
IDIA
RIE
S
NO
TE
S T
O C
ON
SO
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,
201
9 A
ND
201
8 (I
n T
hou
san
ds
of N
ew T
aiw
an D
olla
rs, U
nle
ss S
tate
d O
ther
wis
e)
1.
GE
NE
RA
L I
NF
OR
MA
TIO
N
Chi
na A
irli
nes,
Ltd
. (t
he “
Com
pany
”) w
as f
ound
ed i
n 19
59 a
nd i
ts s
hare
s ha
ve b
een
list
ed o
n th
e T
aiw
an
Sto
ck E
xcha
nge
sinc
e F
ebru
ary
26,
1993
. T
he C
ompa
ny p
rim
aril
y pr
ovid
es a
ir t
rans
port
ser
vice
s fo
r pa
ssen
gers
and
car
go. I
ts o
ther
ope
rati
ons
incl
ude
(a)
mai
l ser
vice
s; (
b) g
roun
d se
rvic
es a
nd r
outi
ne a
ircr
aft
mai
nten
ance
; (c
) m
ajor
mai
nten
ance
of
flig
ht e
quip
men
t; (
d) c
omm
unic
atio
ns a
nd d
ata
proc
essi
ng s
ervi
ces
to o
ther
air
line
s; (
e) th
e sa
le o
f ai
rcra
ft p
arts
, equ
ipm
ent a
nd th
e en
tire
air
craf
t; a
nd (
f) le
asin
g of
air
craf
t. T
he m
ajor
sha
reho
lder
s of
the
Com
pany
are
the
Chi
na A
viat
ion
Dev
elop
men
t F
ound
atio
n (C
AD
F)
and
the
Nat
iona
l Dev
elop
men
t Fun
d (N
DF
), E
xecu
tive
Yua
n. A
s of
Dec
embe
r 31
, 201
9 an
d 20
18, C
AD
F a
nd N
DF
bo
th h
eld
44.0
3% o
f th
e C
ompa
ny’s
sha
res.
2.
AP
PR
OV
AL
OF
FIN
AN
CIA
L S
TA
TE
ME
NT
S
The
con
soli
date
d fi
nanc
ial
stat
emen
ts o
f th
e C
ompa
ny a
nd i
ts s
ubsi
diar
ies
(col
lect
ivel
y re
ferr
ed t
o as
the
“G
roup
”) w
ere
appr
oved
by
the
Com
pany
’s b
oard
of
dire
ctor
s on
Mar
ch 1
8, 2
020.
3
. A
PP
LIC
AT
ION
OF
NE
W, A
ME
ND
ED
AN
D R
EV
ISE
D S
TA
ND
AR
DS
AN
D I
NT
ER
PR
ET
AT
ION
S
a.
In
itia
l app
lica
tion
of
the
amen
dmen
ts to
the
Reg
ulat
ions
Gov
erni
ng th
e P
repa
rati
on o
f F
inan
cial
Rep
orts
by
Sec
urit
ies
Issu
ers
(FS
C)
and
the
Inte
rnat
iona
l F
inan
cial
Rep
orti
ng S
tand
ards
(IF
RS
), I
nter
nati
onal
A
ccou
ntin
g S
tand
ards
(I
AS
),
Inte
rpre
tati
ons
of
IFR
S
(IF
RIC
),
and
Inte
rpre
tati
ons
of
IAS
(S
IC)
endo
rsed
and
issu
ed in
to e
ffec
t by
the
FSC
E
xcep
t fo
r th
e fo
llow
ing,
the
ini
tial
app
lica
tion
of
the
amen
dmen
ts t
o th
e R
egul
atio
ns G
over
ning
the
P
repa
rati
on o
f F
inan
cial
Rep
orts
by
Sec
urit
ies
Issu
ers
and
the
IFR
Ss
endo
rsed
and
iss
ued
into
eff
ect
by
the
FS
C d
id n
ot h
ave
mat
eria
l im
pact
on
the
Gro
up’s
acc
ount
ing
polic
ies:
IF
RS
16
“Lea
ses”
IF
RS
16
prov
ides
a c
ompr
ehen
sive
mod
el f
or t
he i
dent
ific
atio
n of
lea
se a
rran
gem
ents
and
the
ir
trea
tmen
t in
the
fin
anci
al s
tate
men
ts o
f bo
th l
esse
e an
d le
ssor
. It
supe
rsed
es I
AS
17
“Lea
ses”
, IF
RIC
4
“Det
erm
inin
g w
heth
er a
n A
rran
gem
ent c
onta
ins
a L
ease
”, a
nd a
num
ber
of r
elat
ed in
terp
reta
tion
s. R
efer
to
Not
e 4
for
info
rmat
ion
rela
ting
to th
e re
leva
nt a
ccou
ntin
g po
lici
es.
Def
init
ion
of a
leas
e T
he G
roup
ele
cted
to a
pply
the
guid
ance
of
IFR
S 1
6 in
det
erm
inin
g w
heth
er c
ontr
acts
are
, or
cont
ain,
a
leas
e on
ly t
o co
ntra
cts
ente
red
into
(or
cha
nged
) on
or
afte
r Ja
nuar
y 1,
201
9. C
ontr
acts
ide
ntif
ied
as
cont
aini
ng a
lea
se u
nder
IA
S 1
7 an
d IF
RIC
4 a
re n
ot b
e re
asse
ssed
and
acc
ount
ed f
or i
n ac
cord
ance
w
ith
the
tran
siti
onal
pro
visi
ons
unde
r IF
RS
16.
149
- 15
-
The
Gro
up a
s le
ssee
T
he G
roup
rec
ogni
zes
righ
t-of
-use
ass
ets,
or
inve
stm
ent
prop
ertie
s if
the
rig
ht-o
f-us
e as
sets
mee
t th
e de
fini
tion
of
inve
stm
ent
prop
erti
es, a
nd l
ease
lia
bili
ties
for
all
lea
ses
on t
he c
onso
lida
ted
bala
nce
shee
ts
exce
pt f
or t
hose
who
se p
aym
ents
und
er l
ow-v
alue
and
sho
rt-t
erm
lea
ses
are
reco
gniz
ed a
s ex
pens
es o
n a
stra
ight
-lin
e ba
sis.
On
the
cons
olid
ated
sta
tem
ents
of
com
preh
ensi
ve i
ncom
e, t
he G
roup
pre
sent
s th
e de
prec
iati
on e
xpen
se c
harg
ed o
n ri
ght-
of-u
se a
sset
s se
para
tely
fro
m t
he i
nter
est
expe
nse
accr
ued
on
leas
e li
abil
itie
s; in
tere
st is
com
pute
d us
ing
the
effe
ctiv
e in
tere
st m
etho
d. O
n th
e co
nsol
idat
ed s
tate
men
ts
of c
ash
flow
s, c
ash
paym
ents
for
the
pri
ncip
al p
orti
on o
f le
ase
liab
ilit
ies
are
clas
sifi
ed w
ithi
n fi
nanc
ing
acti
viti
es;
cash
pay
men
ts f
or t
he i
nter
est
port
ion
are
clas
sifi
ed w
ithi
n op
erat
ing
acti
viti
es.
Pri
or t
o th
e ap
plic
atio
n of
IF
RS
16,
pay
men
ts u
nder
ope
rati
ng l
ease
con
trac
ts,
incl
udin
g pr
oper
ty i
nter
est
qual
ifie
d as
inve
stm
ent p
rope
rtie
s, w
ere
reco
gniz
ed a
s ex
pens
es o
n a
stra
ight
-lin
e ba
sis.
Cas
h fl
ows
for
oper
atin
g le
ases
wer
e cl
assi
fied
wit
hin
oper
atin
g ac
tivi
ties
on
the
cons
olid
ated
sta
tem
ents
of
cash
flo
ws.
Lea
sed
asse
ts a
nd f
inan
ce l
ease
pay
able
s w
ere
reco
gniz
ed o
n th
e co
nsol
idat
ed b
alan
ce s
heet
s fo
r co
ntra
cts
clas
sifi
ed a
s fi
nanc
e le
ases
.
Lea
se l
iabi
liti
es w
ere
reco
gniz
ed o
n Ja
nuar
y 1,
201
9 fo
r le
ases
cla
ssif
ied
as o
pera
ting
lea
ses
unde
r IA
S
17.
Lea
se l
iabi
liti
es a
re m
easu
red
at t
he p
rese
nt v
alue
of
the
rem
aini
ng l
ease
pay
men
ts,
disc
ount
ed
usin
g th
e le
ssee
’s i
ncre
men
tal
borr
owin
g ra
te o
n Ja
nuar
y 1,
201
9. R
ight
-of-
use
asse
ts a
re m
easu
red
at
an a
mou
nt e
qual
to
the
leas
e li
abil
itie
s, a
djus
ted
by t
he a
mou
nt o
f an
y pr
epai
d or
acc
rued
lea
se
paym
ents
. The
Gro
up a
pplie
s IA
S 3
6 to
all
rig
ht-o
f-us
e as
sets
. F
or le
ases
cla
ssif
ied
as f
inan
ce le
ases
und
er I
AS
17,
the
carr
ying
am
ount
of
righ
t-of
-use
ass
ets
and
leas
e li
abil
itie
s on
Jan
uary
1,
2019
was
det
erm
ined
as
the
carr
ying
am
ount
of
the
leas
ed a
sset
s an
d fi
nanc
e le
ase
paya
bles
as
of D
ecem
ber
31, 2
018.
If
the
Gro
up d
eter
min
es t
hat
a sa
le a
nd l
ease
back
tra
nsac
tion
doe
s no
t sa
tisf
y th
e re
quir
emen
ts o
f IF
RS
15
to
be a
ccou
nted
for
as
a sa
le o
f an
ass
et,
it i
s ac
coun
ted
for
as a
fin
anci
ng t
rans
acti
on.
If i
t sa
tisf
ies
the
requ
irem
ents
to
be a
ccou
nted
for
as
a sa
le o
f an
ass
et, t
he G
roup
rec
ogni
zes
only
the
am
ount
of
any
gain
or
loss
whi
ch r
elat
es t
o th
e ri
ghts
tra
nsfe
rred
to
the
buye
r-le
ssor
. P
rior
to
the
appl
icat
ion
of I
FR
S
16,
the
leas
ebac
k po
rtio
n is
cla
ssif
ied
as e
ithe
r a
fina
nce
leas
e or
an
oper
atin
g le
ase
and
acco
unte
d fo
r di
ffer
entl
y.
The
Gro
up d
oes
not
reas
sess
sal
e an
d le
aseb
ack
tran
sact
ions
ent
ered
int
o be
fore
Jan
uary
1,
2019
to
dete
rmin
e w
heth
er t
he t
rans
fer
of a
n un
derl
ying
ass
et s
atis
fies
the
req
uire
men
ts i
n IF
RS
15
to b
e ac
coun
ted
for
as a
sal
e. U
pon
init
ial
appl
icat
ion
of I
FR
S 1
6, t
he a
fore
men
tion
ed t
rans
itio
nal
prov
isio
n fo
r a
less
ee i
s ap
plie
d to
the
lea
seba
ck p
ortio
n. I
n ad
diti
on,
for
asse
t ac
coun
ted
for
as a
sal
e an
d a
fina
nce
leas
e un
der
IAS
17,
the
Gro
up c
onti
nues
to a
mor
tize
any
gai
ns o
n sa
les
over
the
leas
e te
rm.
- 16
-
The
les
see’
s w
eigh
ted
aver
age
incr
emen
tal
borr
owin
g ra
te a
ppli
ed t
o le
ase
liab
ilit
ies
reco
gniz
ed o
n Ja
nuar
y 1,
201
9 w
as 2
.58%
. The
dif
fere
nce
betw
een
the
(i)
leas
e li
abil
itie
s re
cogn
ized
and
(ii)
ope
rati
ng
leas
e co
mm
itm
ents
on
Dec
embe
r 31
, 201
8 is
exp
lain
ed a
s fo
llow
s:
The
fut
ure
min
imum
leas
e pa
ymen
ts o
f no
n-ca
ncel
labl
e op
erat
ing
leas
e co
mm
itm
ents
on
Dec
embe
r 31
, 201
8
$
78,0
30,3
70
Und
isco
unte
d am
ount
on
Janu
ary
1, 2
019
$
78
,030
,370
D
isco
unte
d am
ount
usi
ng th
e in
crem
enta
l bor
row
ing
rate
on
Janu
ary
1, 2
019
$
67
,420
,164
A
dd: F
inan
ce le
ase
paya
ble
on D
ecem
ber
31, 2
018
633,
775
Add
: Adj
ustm
ents
as
a re
sult
of
a di
ffer
ent t
reat
men
t of
exte
nsio
n an
d te
rmin
atio
n op
tion
s
8,
191,
127
Add
: Oth
er
1,97
0,82
9 L
ess:
Der
ivat
ive
fina
ncia
l ins
trum
ents
for
hed
ging
(4
1,91
9,50
8 )
Lea
se li
abil
itie
s re
cogn
ized
on
Janu
ary
1, 2
019
$
36
,296
,387
T
he G
roup
as
less
or
The
Gro
up d
oes
not m
ake
any
adju
stm
ents
to le
ases
in w
hich
it is
a le
ssor
and
acc
ount
s fo
r th
ose
leas
es
unde
r IF
RS
16
star
ting
fro
m J
anua
ry 1
, 201
9.
The
impa
ct o
n as
sets
, lia
bili
ties
and
equ
ity
as o
f Ja
nuar
y 1,
201
9 fr
om th
e in
itia
l app
lica
tion
of
IFR
S 1
6 is
set
out
as
foll
ows:
As
Ori
gin
ally
S
tate
d o
n
Jan
uar
y 1,
201
9
Ad
just
men
ts
Ari
sin
g fr
om
Init
ial
Ap
pli
cati
on
R
esta
ted
on
Ja
nu
ary
1, 2
019
Pre
paym
ents
for
leas
es
$
86
1,04
5
$
(861
,045
)
$
- R
efun
dabl
e de
posi
ts
1,08
9,69
0
(2
5,61
7)
1,
064,
073
Rig
ht-o
f-us
e as
sets
-
78,4
99,3
74
78,4
99,3
74
Pro
pert
y, p
lant
and
equ
ipm
ent
163,
107,
718
(30,
682)
163,
077,
036
Tot
al e
ffec
t on
asse
ts
$
165
,058
,453
$
77,5
82,0
30
$
242
,640
,483
L
ease
liab
ilit
ies
- cu
rren
t
$
-
$
3,92
4,77
6
$
3,92
4,77
6 L
ease
liab
ilit
ies
- no
n-cu
rren
t
-
32,3
71,6
11
32,3
71,6
11
Fin
ance
leas
e pa
yabl
es
633,
775
(633
,775
)
-
Acc
rued
ren
t pay
able
90
(9
0)
-
Fin
anci
al li
abil
itie
s fo
r he
dgin
g -
curr
ent
560
5,94
7,44
9
5,
948,
009
Fin
anci
al li
abil
itie
s fo
r he
dgin
g -
non-
curr
ent
-
35
,972
,059
35
,972
,059
T
otal
eff
ect o
n li
abil
itie
s
$
634,
425
$
77
,582
,030
$
78,2
16,4
55
150
- 17
-
b.
New
IF
RS
s in
issu
e bu
t not
yet
end
orse
d an
d is
sued
into
eff
ect b
y th
e F
SC
New
IF
RS
s
Eff
ecti
ve D
ate
An
nou
nce
d b
y IA
SB
A
men
dmen
ts to
IF
RS
3 “
Def
init
ion
of B
usin
ess”
J
anua
ry 1
, 202
0 (N
ote
1)
Am
endm
ents
to I
FR
S 9
, IA
S 3
9 an
d IF
RS
7 “
Inte
rest
Rat
e B
ench
mar
k R
efor
m”
J
anua
ry 1
, 202
0 (N
ote
2)
Am
endm
ents
to I
AS
1 a
nd I
AS
8 “
Def
init
ion
of M
ater
iali
ty”
Jan
uary
1, 2
020
(Not
e 3)
N
ote
1:
Unl
ess
stat
ed o
ther
wis
e, t
he a
bove
New
IF
RS
s ar
e ef
fect
ive
for
annu
al p
erio
ds b
egin
ning
on
or a
fter
thei
r re
spec
tive
eff
ecti
ve d
ates
. N
ote
2:
Bus
ines
s co
mbi
nati
ons
that
beg
an a
fter
Jan
uary
1,
2020
and
acq
uisi
tion
of
asse
ts a
fter
the
af
ores
aid
date
are
sub
ject
ed to
the
amen
dmen
t. N
ote
3:
The
am
endm
ent i
s ap
plie
d fo
r th
e an
nual
per
iod
begi
nnin
g af
ter
Janu
ary
1, 2
020.
A
s of
th
e da
te
the
cons
olid
ated
fi
nanc
ial
stat
emen
ts
wer
e au
thor
ized
fo
r is
sue,
th
e G
roup
is
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
int
erpr
etat
ions
w
ill
have
on
the
Gro
up’s
fin
anci
al p
osit
ion
and
fina
ncia
l pe
rfor
man
ce a
nd w
ill
disc
lose
the
rel
evan
t im
pact
whe
n th
e as
sess
men
t is
com
plet
ed.
c.
N
ew I
FR
Ss
in is
sue
but n
ot y
et e
ndor
sed
and
issu
ed in
to e
ffec
t by
the
FS
C
New
IF
RS
s
Eff
ecti
ve D
ate
An
nou
nce
d b
y IA
SB
(N
ote)
A
men
dmen
ts to
IF
RS
10
and
IAS
28
“Sal
e or
Con
trib
utio
n of
Ass
ets
betw
een
an I
nves
tor
and
its
Ass
ocia
te o
r Jo
int V
entu
re”
To
be d
eter
min
ed b
y IA
SB
IFR
S 1
7 “I
nsur
ance
Con
trac
ts”
Jan
uary
1, 2
021
Am
endm
ents
to I
AS
1 “
Cla
rify
the
Cla
ssif
icat
ion
of L
iabi
liti
es a
s C
urre
nt o
r N
on-c
urre
nt”
Jan
uary
1, 2
022
Not
e:
Unl
ess
stat
ed o
ther
wis
e, t
he a
bove
New
IF
RS
s ar
e ef
fect
ive
for
annu
al r
epor
ting
per
iods
be
ginn
ing
on o
r af
ter
thei
r re
spec
tive
eff
ecti
ve d
ates
. T
he a
ppli
cati
on o
f ne
w I
FRS
s in
issu
e bu
t not
yet
end
orse
d an
d is
sued
into
eff
ect b
y th
e F
SC
wou
ld n
ot
have
any
mat
eria
l im
pact
on
the
Gro
up’s
acc
ount
ing
poli
cies
. A
s of
the
dat
e th
e co
nsol
idat
ed f
inan
cial
st
atem
ents
wer
e au
thor
ized
for
iss
ue,
the
Gro
up 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
int
erpr
etat
ions
wil
l ha
ve o
n th
e G
roup
’s f
inan
cial
pos
itio
n an
d 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 co
mpl
eted
. 4
. S
IGN
IFIC
AN
T A
CC
OU
NT
ING
PO
LIC
IES
S
tate
men
t of
Com
pli
ance
T
he c
onso
lida
ted
fina
ncia
l st
atem
ents
hav
e be
en p
repa
red
in a
ccor
danc
e w
ith
the
Reg
ulat
ions
Gov
erni
ng
the
Pre
para
tion
of
Fin
anci
al R
epor
ts b
y S
ecur
itie
s Is
suer
s an
d IF
RS
s as
end
orse
d an
d is
sued
int
o ef
fect
by
the
FS
C.
- 18
-
Bas
is o
f P
rep
arat
ion
T
he c
onso
lida
ted
fina
ncia
l st
atem
ents
hav
e be
en p
repa
red
on t
he h
isto
rica
l co
st b
asis
exc
ept
for
fina
ncia
l in
stru
men
ts w
hich
are
mea
sure
d at
fai
r va
lue.
T
he f
air
valu
e m
easu
rem
ents
, w
hich
are
gro
uped
int
o L
evel
s 1
to 3
bas
ed o
n th
e de
gree
to
whi
ch t
he f
air
valu
e m
easu
rem
ent
inpu
ts a
re o
bser
vabl
e an
d ba
sed
on t
he s
igni
fica
nce
of t
he i
nput
s to
the
fai
r va
lue
mea
sure
men
t in
its
enti
rety
, are
des
crib
ed a
s fo
llow
s:
1)
Lev
el 1
inpu
ts a
re q
uote
d pr
ices
(un
adju
sted
) in
act
ive
mar
kets
for
iden
tica
l ass
ets
or li
abil
itie
s;
2)
Lev
el 2
inp
uts
are
inpu
ts o
ther
tha
n qu
oted
pri
ces
incl
uded
wit
hin
Lev
el 1
tha
t ar
e ob
serv
able
for
an
asse
t or
liab
ilit
y, e
ithe
r di
rect
ly (
i.e. a
s pr
ices
) or
indi
rect
ly (
i.e. d
eriv
ed f
rom
pri
ces)
; and
3)
L
evel
3 in
puts
are
uno
bser
vabl
e in
puts
for
an
asse
t or
liab
ility
. C
urr
ent
and
Non
-cu
rren
t A
sset
s an
d L
iab
ilit
ies
Cur
rent
ass
ets
incl
ude:
1)
A
sset
s he
ld p
rim
aril
y fo
r th
e pu
rpos
e of
trad
ing;
2)
A
sset
s ex
pect
ed to
be
real
ized
wit
hin
12 m
onth
s af
ter
the
repo
rtin
g pe
riod
; and
3)
C
ash
and
cash
equ
ival
ents
unl
ess
the
asse
t is
rest
rict
ed f
rom
bei
ng e
xcha
nged
or
used
to s
ettl
e a
liab
ilit
y fo
r at
leas
t 12
mon
ths
afte
r th
e re
port
ing
peri
od.
Cur
rent
liab
ilit
ies
incl
ude:
1)
L
iabi
liti
es h
eld
prim
aril
y fo
r th
e pu
rpos
e of
trad
ing;
2)
L
iabi
liti
es d
ue t
o be
set
tled
wit
hin
12 m
onth
s af
ter
the
repo
rtin
g pe
riod
, ev
en i
f an
agr
eem
ent
to
refi
nanc
e, o
r to
res
ched
ule
paym
ents
, on
a l
ong-
term
bas
is i
s co
mpl
eted
aft
er t
he r
epor
ting
per
iod
and
befo
re th
e co
nsol
idat
ed f
inan
cial
sta
tem
ents
are
aut
hori
zed
for
issu
e; a
nd
3)
Lia
bili
ties
for
whi
ch t
he G
roup
doe
s no
t ha
ve a
n un
cond
itio
nal
righ
t to
def
er s
ettl
emen
t fo
r at
lea
st 1
2 m
onth
s af
ter
the
repo
rtin
g pe
riod
. Ter
ms
of a
liab
ilit
y th
at c
ould
, at t
he o
ptio
n of
the
coun
terp
arty
, res
ult
in it
s se
ttle
men
t by
the
issu
e of
equ
ity
inst
rum
ents
do
not a
ffec
t its
cla
ssif
icat
ion.
A
sset
s an
d li
abil
itie
s th
at a
re n
ot c
lass
ifie
d as
cur
rent
are
cla
ssif
ied
as n
on-c
urre
nt.
Bas
is o
f C
onso
lid
atio
n
The
con
soli
date
d fi
nanc
ial
stat
emen
ts i
ncor
pora
te t
he f
inan
cial
sta
tem
ents
of
the
Com
pany
and
the
ent
itie
s co
ntro
lled
by
the
Com
pany
. Inc
ome
and
expe
nses
of
subs
idia
ries
acq
uire
d or
dis
pose
d of
dur
ing
the
peri
od
are
incl
uded
in
the
cons
olid
ated
sta
tem
ents
of
prof
it o
r lo
ss a
nd o
ther
com
preh
ensi
ve i
ncom
e fr
om t
he
effe
ctiv
e da
tes
of a
cqui
siti
ons
up t
o th
e ef
fect
ive
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 t
he f
inan
cial
sta
tem
ents
of
subs
idia
ries
to
brin
g th
eir
acco
unti
ng p
olic
ies
into
lin
e w
ith
thos
e us
ed
by
the
Com
pany
. A
ll
intr
a-gr
oup
tran
sact
ions
, ba
lanc
es,
inco
me
and
expe
nses
ar
e el
imin
ated
in
full
upo
n co
nsol
idat
ion.
Tot
al c
ompr
ehen
sive
inc
ome
of s
ubsi
diar
ies
is a
ttri
bute
d to
the
ow
ners
of
the
Com
pany
and
to
the
non-
cont
roll
ing
inte
rest
s ev
en i
f th
is r
esul
ts i
n th
e no
n-co
ntro
lling
in
tere
sts
havi
ng a
def
icit
bal
ance
.
151
- 19
-
Cha
nges
in
the
Gro
up’s
ow
ners
hip
inte
rest
s in
sub
sidi
arie
s th
at d
o no
t re
sult
in
the
Gro
up l
osin
g co
ntro
l ov
er t
he s
ubsi
diar
ies
are
acco
unte
d fo
r as
equ
ity
tran
sact
ions
. T
he c
arry
ing
amou
nts
of t
he i
nter
ests
of
the
Gro
up a
nd t
he n
on-c
ontr
olli
ng i
nter
ests
are
adj
uste
d to
ref
lect
the
cha
nges
in
thei
r re
lati
ve i
nter
ests
in
the
subs
idia
ries
. Any
dif
fere
nce
betw
een
the
amou
nt b
y w
hich
the
non-
cont
roll
ing
inte
rest
s ar
e ad
just
ed a
nd th
e fa
ir v
alue
of
the
cons
ider
atio
n pa
id o
r re
ceiv
ed i
s re
cogn
ized
dir
ectl
y in
equ
ity
and
attr
ibut
ed t
o th
e ow
ners
of
the
Com
pany
. W
hen
the
Gro
up l
oses
con
trol
of
a su
bsid
iary
, a g
ain
or l
oss
is r
ecog
nize
d in
pro
fit
or l
oss
and
is c
alcu
late
d as
the
dif
fere
nce
betw
een
(i)
the
aggr
egat
e of
the
fai
r va
lue
of t
he c
onsi
dera
tion
rec
eive
d an
d an
y in
vest
men
t re
tain
ed i
n th
e fo
rmer
sub
sidi
ary
at i
ts f
air
valu
e at
the
dat
e w
hen
cont
rol
is l
ost
and
(ii)
the
as
sets
(in
clud
ing
any
good
wil
l) a
nd l
iabi
litie
s an
d an
y no
n-co
ntro
llin
g in
tere
sts
of t
he f
orm
er s
ubsi
diar
y at
th
eir
carr
ying
am
ount
s at
the
dat
e w
hen
cont
rol
is l
ost.
The
Gro
up a
ccou
nts
for
all
amou
nts
reco
gniz
ed i
n ot
her
com
preh
ensi
ve i
ncom
e in
rel
atio
n to
tha
t su
bsid
iary
on
the
sam
e ba
sis
as w
ould
be
requ
ired
had
the
G
roup
dir
ectl
y di
spos
ed o
f th
e re
late
d as
sets
or
liab
ilit
ies.
F
orei
gn C
urr
enci
es
In p
repa
ring
the
con
soli
date
d fi
nanc
ial
stat
emen
ts o
f th
e G
roup
, tr
ansa
ctio
ns i
n cu
rren
cies
oth
er t
han
the
Com
pany
’s f
unct
iona
l cu
rren
cy (
i.e.
fore
ign
curr
enci
es)
are
reco
gniz
ed a
t th
e ra
tes
of e
xcha
nge
prev
aili
ng
at th
e da
tes
of th
e tr
ansa
ctio
ns. A
t the
end
of
each
rep
orti
ng p
erio
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
ilin
g at
tha
t da
te.
Non
-mon
etar
y it
ems
that
are
mea
sure
d at
hi
stor
ical
cos
t in
a fo
reig
n cu
rren
cy a
re n
ot r
etra
nsla
ted.
Non
-mon
etar
y it
ems
mea
sure
d at
fai
r va
lue
that
are
de
nom
inat
ed in
for
eign
cur
renc
ies
are
retr
ansl
ated
at t
he r
ates
pre
vail
ing
at th
e da
te w
hen
the
fair
val
ue w
as
dete
rmin
ed.
Exc
hang
e di
ffer
ence
s on
mon
etar
y it
ems
aris
ing
from
set
tlem
ent
or t
rans
lati
on a
re r
ecog
nize
d in
pro
fit
or
loss
in th
e pe
riod
in w
hich
they
ari
se e
xcep
t for
: a.
E
xcha
nge
diff
eren
ces
on f
orei
gn c
urre
ncy
borr
owin
gs r
elat
ing
to a
sset
s un
der
cons
truc
tion
for
fut
ure
prod
ucti
ve u
se, w
hich
are
inc
lude
d in
the
cos
t of
tho
se a
sset
s w
hen
they
are
reg
arde
d as
an
adju
stm
ent
to in
tere
st c
osts
on
thos
e fo
reig
n cu
rren
cy b
orro
win
gs;
b.
Exc
hang
e di
ffer
ence
s on
tran
sact
ions
ent
ered
into
in o
rder
to h
edge
cer
tain
for
eign
cur
renc
y ri
sks.
E
xcha
nge
diff
eren
ces
aris
ing
on t
he r
etra
nsla
tion
of
non-
mon
etar
y it
ems
are
incl
uded
in
prof
it o
r lo
ss f
or
the
peri
od e
xcep
t fo
r ex
chan
ge d
iffe
renc
es a
risi
ng f
rom
the
ret
rans
lati
on o
f no
n-m
onet
ary
item
s in
res
pect
of
whi
ch g
ains
and
los
ses
are
reco
gniz
ed d
irec
tly
in o
ther
com
preh
ensi
ve i
ncom
e, i
n w
hich
cas
e, t
he
exch
ange
dif
fere
nces
are
als
o re
cogn
ized
dir
ectl
y in
oth
er c
ompr
ehen
sive
inco
me.
F
or t
he p
urpo
se o
f pr
esen
ting
con
soli
date
d fi
nanc
ial
stat
emen
ts,
the
asse
ts a
nd l
iabi
liti
es o
f th
e 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 pr
evai
ling
at t
he e
nd o
f ea
ch
repo
rtin
g pe
riod
. In
com
e an
d ex
pens
e it
ems
are
tran
slat
ed a
t th
e av
erag
e ex
chan
ge r
ates
for
the
per
iod.
E
xcha
nge
diff
eren
ces
are
reco
gniz
ed i
n ot
her
com
preh
ensi
ve i
ncom
e (a
ttri
bute
d to
the
ow
ners
of
the
Com
pany
and
non
-con
trol
ling
inte
rest
s as
app
ropr
iate
).
On
the
disp
osal
of
a fo
reig
n op
erat
ion,
all
of
the
exch
ange
dif
fere
nces
acc
umul
ated
in
equi
ty i
n re
spec
t of
th
at o
pera
tion
att
ribu
tabl
e to
the
owne
rs o
f th
e C
ompa
ny a
re r
ecla
ssif
ied
to p
rofi
t or
loss
.
- 20
-
Bu
sin
ess
Com
bin
atio
ns
Whe
re t
he c
onsi
dera
tion
the
Gro
up t
rans
fers
in
a bu
sine
ss c
ombi
nati
on i
nclu
des
asse
ts o
r li
abil
itie
s re
sult
ing
from
a c
onti
ngen
t co
nsid
erat
ion
arra
ngem
ent,
the
cont
inge
nt c
onsi
dera
tion
is
mea
sure
d at
its
ac
quis
itio
n-da
te f
air
valu
e an
d co
nsid
ered
as
part
of
the
cons
ider
atio
n tr
ansf
erre
d in
a b
usin
ess
com
bina
tion
. C
hang
es i
n th
e fa
ir v
alue
of
the
cont
inge
nt c
onsi
dera
tion
tha
t qu
alif
y as
mea
sure
men
t pe
riod
adj
ustm
ents
ar
e ad
just
ed r
etro
spec
tive
ly,
wit
h th
e co
rres
pond
ing
adju
stm
ents
bei
ng m
ade
agai
nst
good
wil
l or
gai
ns o
n ba
rgai
n pu
rcha
ses.
Mea
sure
men
t pe
riod
adj
ustm
ents
are
adj
ustm
ents
tha
t ar
ise
from
add
itio
nal
info
rmat
ion
obta
ined
dur
ing
the
mea
sure
men
t pe
riod
abo
ut f
acts
and
cir
cum
stan
ces
that
exi
sted
as
of t
he a
cqui
siti
on
date
.
Whe
n a
busi
ness
com
bina
tion
is
achi
eved
in
stag
es,
the
Gro
up’s
pre
viou
sly
held
equ
ity i
nter
est
in a
n ac
quir
ee i
s re
mea
sure
d to
fai
r va
lue
at t
he a
cqui
siti
on d
ate,
and
the
res
ulti
ng i
s re
cogn
ized
in
prof
it or
los
s or
oth
er c
ompr
ehen
sive
inco
me.
Am
ount
s ar
isin
g fr
om in
tere
sts
in th
e ac
quir
ee p
rior
to th
e ac
quis
itio
n da
te
that
hav
e pr
evio
usly
bee
n re
cogn
ized
in
othe
r co
mpr
ehen
sive
inc
ome
are
reco
gniz
ed o
n th
e sa
me
basi
s as
w
ould
be
requ
ired
if th
ose
inte
rest
s w
ere
dire
ctly
dis
pose
d of
by
the
Gro
up
If t
he i
niti
al a
ccou
ntin
g fo
r a
busi
ness
com
bina
tion
is
inco
mpl
ete
by t
he e
nd o
f th
e re
port
ing
peri
od i
n w
hich
th
e co
mbi
nati
on
occu
rs,
the
Gro
up
repo
rts
prov
isio
nal
amou
nts
for
the
item
s fo
r w
hich
th
e ac
coun
ting
is
inco
mpl
ete.
Tho
se p
rovi
sion
al a
mou
nts
are
adju
sted
ret
rosp
ecti
vely
dur
ing
the
mea
sure
men
t pe
riod
, or
addi
tion
al a
sset
s or
lia
bili
ties
are
rec
ogni
zed,
to
refl
ect
new
inf
orm
atio
n ob
tain
ed a
bout
fac
ts a
nd
circ
umst
ance
s th
at e
xist
ed a
s of
the
acq
uisi
tion
dat
e th
at,
if k
now
n, w
ould
hav
e af
fect
ed t
he a
mou
nts
reco
gniz
ed a
s of
that
dat
e.
Inve
nto
ries
In
vent
orie
s ar
e pr
imar
ily
expe
ndab
le a
nd n
onex
pend
able
par
ts a
nd m
ater
ials
, su
ppli
es u
sed
in o
pera
tion
s an
d it
ems
for
in-f
ligh
t sa
les
and
are
stat
ed a
t th
e lo
wer
of
cost
or
net
real
izab
le v
alue
. T
he c
osts
of
inve
ntor
ies
sold
or
cons
umed
are
det
erm
ined
usi
ng th
e w
eigh
ted-
aver
age
met
hod.
N
on-c
urr
ent
Ass
ets
Hel
d f
or S
ale
Non
-cur
rent
ass
ets
are
clas
sifi
ed a
s he
ld-f
or-s
ale
if t
heir
car
ryin
g am
ount
wil
l be
rec
over
ed p
rinc
ipal
ly
thro
ugh
a sa
le t
rans
acti
on r
athe
r th
an t
hrou
gh c
onti
nuin
g us
e. T
his
cond
itio
n is
reg
arde
d as
met
onl
y w
hen
the
sale
is
high
ly p
roba
ble
and
the
non-
curr
ent
asse
t is
ava
ilab
le f
or i
mm
edia
te s
ale
in i
ts p
rese
nt c
ondi
tion.
T
o m
eet
the
crit
eria
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
mit
ted
to t
he s
ale,
whi
ch s
houl
d be
exp
ecte
d to
qua
lify
for
rec
ogni
tion
as a
com
plet
ed s
ale
wit
hin
one
year
fro
m th
e da
te o
f cl
assi
fica
tion
. N
on-c
urre
nt a
sset
s cl
assi
fied
as
held
-for
-sal
e ar
e m
easu
red
at t
he l
ower
of
thei
r pr
evio
us c
arry
ing
amou
nt
and
fair
val
ue le
ss c
osts
to s
ell.
Rec
ogni
tion
of
depr
ecia
tion
of
thos
e as
sets
wou
ld c
ease
. In
vest
men
ts in
Ass
ocia
tes
and
Joi
nt
Ven
ture
s A
n as
soci
ate
is a
n en
tity
ove
r w
hich
the
Gro
up h
as s
igni
fica
nt i
nflu
ence
and
tha
t is
nei
ther
a s
ubsi
diar
y no
r an
int
eres
t in
a j
oint
ven
ture
. A
joi
nt v
entu
re i
s a
join
t ar
rang
emen
t w
here
by t
he G
roup
and
oth
er p
arti
es
that
hav
e jo
int c
ontr
ol o
f th
e ar
rang
emen
t and
the
righ
ts to
the
net a
sset
s of
the
arra
ngem
ent.
The
Gro
up u
ses
the
equi
ty m
etho
d to
acc
ount
for
its
inve
stm
ents
in a
ssoc
iate
s an
d jo
int v
entu
res.
U
nder
the
equi
ty m
etho
d, in
vest
men
ts in
an
asso
ciat
e an
d a
join
t ven
ture
are
init
iall
y re
cogn
ized
at c
ost a
nd
adju
sted
the
reaf
ter
to r
ecog
nize
the
Gro
up’s
sha
re o
f pr
ofit
or
loss
and
oth
er c
ompr
ehen
sive
inc
ome
of t
he
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
att
ribu
tabl
e to
the
Gro
up.
152
- 21
-
Any
exc
ess
of t
he c
ost
of a
cqui
siti
on o
ver
the
Gro
up’s
sha
re o
f ne
t fa
ir v
alue
of
the
iden
tifi
able
ass
ets
and
liab
ilit
ies
of a
n as
soci
ate
reco
gniz
ed a
t th
e da
te o
f ac
quis
itio
n is
rec
ogni
zed
as g
oodw
ill,
whi
ch i
s in
clud
ed
wit
hin
the
carr
ying
am
ount
of
the
inve
stm
ent
and
is n
ot a
mor
tize
d. A
ny e
xces
s of
the
Gro
up’s
sha
re o
f ne
t fa
ir v
alue
of
the
iden
tifi
able
ass
ets
and
liab
ilit
ies
over
the
cos
t of
acq
uisi
tion
, af
ter
reas
sess
men
t, is
re
cogn
ized
imm
edia
tely
in p
rofi
t or
loss
. W
hen
the
Gro
up s
ubsc
ribe
s fo
r ad
diti
onal
new
sha
res
of a
n as
soci
ate
and
join
t ve
ntur
e at
a p
erce
ntag
e di
ffer
ent
from
its
exi
stin
g ow
ners
hip
perc
enta
ge,
the
resu
ltin
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
the
Gro
up’s
pro
port
iona
te in
tere
st in
the
asso
ciat
e an
d jo
int v
entu
re. T
he G
roup
rec
ords
su
ch a
dif
fere
nce
as a
n ad
just
men
t to
inv
estm
ents
wit
h th
e co
rres
pond
ing
amou
nt c
harg
ed o
r cr
edit
ed t
o 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
the
Gro
up’s
ow
ners
hip
inte
rest
is
redu
ced
due
to t
he s
ubsc
ript
ion
of a
ddit
iona
l ne
w s
hare
s of
the
ass
ocia
te a
nd j
oint
ve
ntur
e, t
he p
ropo
rtio
nate
am
ount
of
the
gain
s or
los
ses
prev
ious
ly r
ecog
nize
d in
oth
er c
ompr
ehen
sive
in
com
e in
rel
atio
n to
tha
t as
soci
ate
and
join
t ve
ntur
e is
rec
lass
ifie
d to
pro
fit
or l
oss
on t
he s
ame
basi
s as
w
ould
be
requ
ired
had
the
inve
stee
dir
ectl
y di
spos
ed o
f th
e re
late
d as
sets
or
liab
ilit
ies.
Whe
n th
e ad
just
men
t sh
ould
be
debi
ted
to c
apita
l su
rplu
s, b
ut t
he c
apit
al s
urpl
us r
ecog
nize
d fr
om i
nves
tmen
ts a
ccou
nted
for
us
ing
the
equi
ty m
etho
d is
insu
ffic
ient
, the
sho
rtag
e is
deb
ited
to r
etai
ned
earn
ings
. W
hen
the
Gro
up’s
sha
re o
f lo
sses
of
an a
ssoc
iate
and
a j
oint
ven
ture
equ
als
or e
xcee
ds i
ts i
nter
est
in t
hat
asso
ciat
e an
d jo
int
vent
ure
(whi
ch i
nclu
des
any
carr
ying
am
ount
of
the
inve
stm
ent
acco
unte
d fo
r us
ing
the
equi
ty m
etho
d an
d lo
ng-t
erm
int
eres
ts t
hat,
in s
ubst
ance
, fo
rm p
art
of t
he G
roup
’s n
et i
nves
tmen
t in
the
as
soci
ate
and
join
t ve
ntur
e),
the
Gro
up d
isco
ntin
ues
reco
gniz
ing
its
shar
e of
fur
ther
los
ses.
Add
itio
nal
loss
es a
nd l
iabi
liti
es a
re r
ecog
nize
d on
ly t
o th
e ex
tent
tha
t th
e G
roup
has
inc
urre
d le
gal
obli
gati
ons,
or
cons
truc
tive
obl
igat
ions
, or
mad
e pa
ymen
ts o
n be
half
of
that
ass
ocia
te a
nd jo
int v
entu
re.
The
ent
ire
carr
ying
am
ount
of
the
inve
stm
ent (
incl
udin
g go
odw
ill)
is te
sted
for
impa
irm
ent a
s a
sing
le a
sset
by
com
pari
ng it
s re
cove
rabl
e am
ount
wit
h it
s ca
rryi
ng a
mou
nt. A
ny im
pair
men
t los
s re
cogn
ized
is d
educ
ted
from
the
car
ryin
g am
ount
of
the
inve
stm
ent.
Any
rev
ersa
l of
tha
t im
pair
men
t lo
ss i
s re
cogn
ized
to
the
exte
nt th
at th
e re
cove
rabl
e am
ount
of
the
inve
stm
ent s
ubse
quen
tly in
crea
ses.
T
he G
roup
dis
cont
inue
s th
e us
e of
the
equ
ity m
etho
d fr
om t
he d
ate
on w
hich
its
inv
estm
ent
ceas
es t
o be
an
asso
ciat
e an
d a
join
t ve
ntur
e. A
ny r
etai
ned
inve
stm
ent
is m
easu
red
at f
air
valu
e at
tha
t da
te a
nd t
he f
air
valu
e is
reg
arde
d as
its
fai
r va
lue
on i
niti
al r
ecog
niti
on a
s a
fina
ncia
l as
set.
The
dif
fere
nce
betw
een
the
prev
ious
car
ryin
g am
ount
of
the
asso
ciat
e an
d th
e jo
int
vent
ure
attr
ibut
able
to
the
reta
ined
int
eres
t an
d it
s fa
ir v
alue
is
incl
uded
in
the
dete
rmin
atio
n of
the
gai
n or
los
s on
dis
posa
l of
the
ass
ocia
te a
nd t
he j
oint
ve
ntur
e. T
he G
roup
acc
ount
s fo
r al
l am
ount
s pr
evio
usly
rec
ogni
zed
in o
ther
com
preh
ensi
ve i
ncom
e in
re
lati
on t
o th
at a
ssoc
iate
and
the
joi
nt v
entu
re o
n th
e sa
me
basi
s as
wou
ld b
e re
quir
ed h
ad t
hat
asso
ciat
e di
rect
ly d
ispo
sed
of t
he r
elat
ed a
sset
s or
lia
bili
ties
. If
an i
nves
tmen
t in
an
asso
ciat
e be
com
es a
n in
vest
men
t in
a j
oint
ven
ture
or
an i
nves
tmen
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
app
ly th
e eq
uity
met
hod
and
does
not
rem
easu
re th
e re
tain
ed in
tere
st.
Pro
per
ty, P
lan
t an
d E
qu
ipm
ent
Pro
pert
y, p
lant
and
equ
ipm
ent
are
tang
ible
ite
ms
that
are
hel
d fo
r us
e in
the
pro
duct
ion
or s
uppl
y of
goo
ds
or s
ervi
ces,
for
ren
tal
to o
ther
s, o
r fo
r ad
min
istr
ativ
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
an it
em o
f pr
oper
ty, p
lant
and
equ
ipm
ent s
hall
be
reco
gniz
ed a
s an
ass
et if
, and
onl
y if
, it
is p
roba
ble
that
fut
ure
econ
omic
ben
efit
s as
soci
ated
wit
h th
e it
em w
ill
flow
to
the
Gro
up a
nd t
he c
ost
of t
he i
tem
can
be
mea
sure
d re
liab
ly.
Pro
pert
y, p
lant
and
equ
ipm
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
irm
ent l
oss.
F
reeh
old
land
is n
ot d
epre
ciat
ed.
Dep
reci
atio
n is
rec
ogni
zed
usin
g th
e st
raig
ht-l
ine
met
hod.
Eac
h si
gnif
ican
t pa
rt i
s de
prec
iate
d se
para
tely
. T
he e
stim
ated
use
ful
live
s, r
esid
ual
valu
es a
nd d
epre
ciat
ion
met
hods
are
rev
iew
ed a
t th
e en
d of
eac
h re
port
ing
peri
od, w
ith
the
effe
cts
of a
ny c
hang
es in
the
esti
mat
es a
ccou
nted
for
on
a pr
ospe
ctiv
e ba
sis.
- 22
-
Ass
ets
held
und
er f
inan
ce le
ases
are
dep
reci
ated
ove
r th
eir
expe
cted
use
ful l
ives
on
the
sam
e ba
sis
as o
wne
d as
sets
. Ass
ets
are
depr
ecia
ted
over
the
sho
rter
of
the
leas
e te
rm a
nd t
heir
use
ful
live
s us
ing
the
stra
ight
-lin
e m
etho
d.
Any
gai
n or
los
s ar
isin
g on
the
dis
posa
l or
ret
irem
ent
of a
n it
em o
f pr
oper
ty,
plan
t an
d eq
uipm
ent
is
dete
rmin
ed a
s th
e di
ffer
ence
bet
wee
n th
e sa
les
proc
eeds
and
the
car
ryin
g am
ount
of
the
asse
t an
d is
re
cogn
ized
in p
rofi
t or
loss
. In
vest
men
t P
rop
erti
es
Inve
stm
ent
prop
erti
es a
re p
rope
rtie
s he
ld t
o ea
rn r
enta
ls o
r fo
r ca
pita
l ap
prec
iati
on.
Inve
stm
ent
prop
erti
es
also
incl
ude
land
hel
d fo
r a
curr
entl
y un
dete
rmin
ed f
utur
e us
e.
Inve
stm
ent
prop
erti
es a
re m
easu
red
init
iall
y at
cos
t, in
clud
ing
tran
sact
ion
cost
s. S
ubse
quen
t to
ini
tial
re
cogn
itio
n, i
nves
tmen
t pr
oper
ties
are
mea
sure
d at
cos
t le
ss a
ccum
ulat
ed d
epre
ciat
ion
and
accu
mul
ated
im
pair
men
t los
s.
Dep
reci
atio
n is
rec
ogni
zed
usin
g th
e st
raig
ht-l
ine
met
hod.
The
est
imat
ed u
sefu
l liv
es a
nd r
esid
ual v
alue
s ar
e re
view
ed a
t the
end
of
each
rep
orti
ng p
erio
d.
Any
gai
n or
los
s ar
isin
g on
the
der
ecog
niti
on o
f in
vest
men
t pr
oper
ties
is
calc
ulat
ed a
s th
e di
ffer
ence
be
twee
n th
e ne
t di
spos
al p
roce
eds
and
the
carr
ying
am
ount
of
the
asse
t an
d is
inc
lude
d in
pro
fit
or l
oss
in
the
peri
od in
whi
ch th
e pr
oper
ty is
der
ecog
nize
d.
Inta
ngi
ble
Ass
ets
Inta
ngib
le a
sset
s w
ith
fini
te u
sefu
l li
ves
that
are
acq
uire
d se
para
tely
are
ini
tial
ly m
easu
red
at c
ost
and
subs
eque
ntly
m
easu
red
at
cost
le
ss
accu
mul
ated
am
orti
zati
on
and
accu
mul
ated
im
pair
men
t lo
ss.
Am
orti
zati
on i
s re
cogn
ized
on
a st
raig
ht-l
ine
basi
s. T
he e
stim
ated
use
ful
live
s, r
esid
ual
valu
es,
and
amor
tiza
tion
met
hods
are
rev
iew
ed a
t th
e en
d of
eac
h re
port
ing
peri
od,
wit
h th
e ef
fect
s of
any
cha
nges
in
the
esti
mat
es b
eing
acc
ount
ed f
or o
n a
pros
pect
ive
basi
s. T
he r
esid
ual
valu
e of
an
inta
ngib
le a
sset
wit
h a
fini
te u
sefu
l lif
e sh
all b
e as
sum
ed z
ero
unle
ss th
e G
roup
exp
ects
to d
ispo
se o
f th
e in
tang
ible
ass
et b
efor
e th
e en
d of
its
econ
omic
life
. Im
pai
rmen
t of
Tan
gib
le a
nd
In
tan
gibl
e A
sset
s O
ther
Th
an G
ood
wil
l A
t th
e en
d of
eac
h re
port
ing
peri
od,
the
Gro
up r
evie
ws
the
carr
ying
am
ount
s of
its
tan
gibl
e an
d in
tang
ible
as
sets
, ex
clud
ing
good
wil
l, to
det
erm
ine
whe
ther
the
re i
s an
y in
dica
tion
tha
t th
ose
asse
ts h
ave
suff
ered
an
impa
irm
ent
loss
. If
any
suc
h in
dica
tion
exi
sts,
the
rec
over
able
am
ount
of
the
asse
t is
est
imat
ed i
n or
der
to
dete
rmin
e th
e ex
tent
of
the
impa
irm
ent
loss
. W
hen
it i
s no
t po
ssib
le t
o es
tim
ate
the
reco
vera
ble
amou
nt o
f an
ind
ivid
ual
asse
t, th
e G
roup
est
imat
es t
he r
ecov
erab
le a
mou
nt o
f th
e ca
sh-g
ener
atin
g un
it t
o w
hich
the
as
set
belo
ngs.
Cor
pora
te a
sset
s ar
e al
loca
ted
to t
he i
ndiv
idua
l ca
sh-g
ener
atin
g un
its
on a
rea
sona
ble
and
cons
iste
nt b
asis
; oth
erw
ise,
cor
pora
te a
sset
s ar
e al
loca
ted
to th
e sm
alle
st g
roup
of
cash
-gen
erat
ing
unit
s on
a
reas
onab
le a
nd c
onsi
sten
t all
ocat
ion
basi
s.
Inta
ngib
le a
sset
s w
ith
inde
fini
te u
sefu
l li
ves
and
inta
ngib
le a
sset
s no
t ye
t av
aila
ble
for
use
are
test
ed f
or
impa
irm
ent a
t lea
st a
nnua
lly,
and
whe
neve
r th
ere
is a
n in
dica
tion
that
the
asse
t may
be
impa
ired
. T
he r
ecov
erab
le a
mou
nt i
s th
e hi
gher
of
fair
val
ue l
ess
cost
s to
sel
l an
d va
lue
in u
se.
In a
sses
sing
val
ue i
n us
e, t
he G
roup
use
s th
e es
tim
ated
cas
h fl
ows
disc
ount
ed b
y th
e fu
ture
pre
-tax
dis
coun
t ra
te,
and
the
disc
ount
rat
e re
flec
ts th
e cu
rren
t mar
ket t
ime
valu
e of
mon
ey a
nd th
e sp
ecif
ic r
isks
to th
e as
set f
or e
stim
ated
fu
ture
cas
h fl
ows
not y
et a
djus
ting
to th
e m
arke
t. If
the
rec
over
able
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
the
asse
t or
cash
-gen
erat
ing
unit
is r
educ
ed to
its
reco
vera
ble
amou
nt.
153
- 23
-
Whe
n an
impa
irm
ent l
oss
is s
ubse
quen
tly
reve
rsed
, the
car
ryin
g am
ount
of
the
asse
t or
cash
-gen
erat
ing
unit
is i
ncre
ased
to
the
revi
sed
esti
mat
e of
its
rec
over
able
am
ount
, but
onl
y to
the
ext
ent
of t
he c
arry
ing
amou
nt
that
wou
ld h
ave
been
det
erm
ined
had
no
impa
irm
ent
loss
bee
n re
cogn
ized
for
the
ass
et o
r ca
sh-g
ener
atin
g un
it in
pri
or y
ears
. A r
ever
sal o
f an
impa
irm
ent l
oss
is r
ecog
nize
d in
pro
fit o
r lo
ss.
Fin
anci
al I
nst
rum
ents
F
inan
cial
ass
ets
and
fina
ncia
l li
abil
itie
s ar
e re
cogn
ized
whe
n th
e G
roup
bec
omes
a p
arty
to
the
cont
ract
ual
prov
isio
ns o
f th
e in
stru
men
ts.
F
inan
cial
ass
ets
and
fina
ncia
l li
abil
itie
s ar
e in
itia
lly
mea
sure
d at
fai
r va
lue.
Tra
nsac
tion
cos
ts t
hat
are
dire
ctly
att
ribu
tabl
e to
the
acq
uisi
tion
or
issu
ance
of
fina
ncia
l as
sets
and
fin
anci
al l
iabi
liti
es (
othe
r th
an
fina
ncia
l as
sets
and
fin
anci
al l
iabi
liti
es a
t F
VT
PL
) ar
e ad
ded
to o
r de
duct
ed f
rom
the
fai
r va
lue
of t
he
fina
ncia
l as
sets
or
fina
ncia
l li
abil
itie
s, a
s ap
prop
riat
e, o
n in
itia
l re
cogn
itio
n. T
rans
acti
on c
osts
dir
ectl
y at
trib
utab
le
to
the
acqu
isit
ion
of
fina
ncia
l as
sets
or
fi
nanc
ial
liab
ilit
ies
at
FV
TP
L
are
reco
gniz
ed
imm
edia
tely
in p
rofi
t or
loss
. a.
F
inan
cial
ass
ets
All
reg
ular
pur
chas
es o
r sa
les
of f
inan
cial
ass
ets
are
reco
gniz
ed a
nd d
erec
ogni
zed
on a
tra
de d
ate
basi
s.
All
reg
ular
pur
chas
es o
r sa
les
of f
inan
cial
ass
ets
are
buy
or s
ell
of f
inan
cial
ass
ets
in t
he p
erio
d se
t by
re
gula
tion
or
mar
ket c
onve
ntio
n.
1)
Mea
sure
men
t cat
egor
y
Fin
anci
al a
sset
s ar
e cl
assi
fied
int
o th
e fo
llow
ing
cate
gori
es:
Fin
anci
al a
sset
s at
FV
TP
L,
fina
ncia
l as
sets
at a
mor
tize
d co
st, a
nd in
vest
men
ts in
equ
ity
inst
rum
ents
at F
VT
OC
I.
a)
Fin
anci
al a
sset
s at
FV
TP
L
Fin
anci
al a
sset
s ar
e cl
assi
fied
as
at F
VT
PL
whe
n su
ch a
fin
anci
al a
sset
is m
anda
tori
ly c
lass
ifie
d or
des
igna
ted
as a
t F
VT
PL
. F
inan
cial
ass
ets
man
dato
rily
cla
ssif
ied
as a
t F
VT
PL
inc
lude
in
vest
men
ts i
n eq
uity
ins
trum
ents
whi
ch a
re n
ot d
esig
nate
d as
at
FV
TO
CI
and
debt
ins
trum
ents
th
at d
o no
t mee
t the
am
orti
zed
cost
cri
teri
a or
the
FV
TO
CI
crit
eria
. F
inan
cial
ass
ets
at F
VT
PL
are
sub
sequ
ently
mea
sure
d at
fai
r va
lue,
wit
h an
y ga
ins
or l
osse
s ar
isin
g on
rem
easu
rem
ent
reco
gniz
ed i
n pr
ofit
or l
oss.
Fai
r va
lue
is d
eter
min
ed i
n th
e m
anne
r de
scri
bed
in N
ote
33.
b)
F
inan
cial
ass
ets
at a
mor
tize
d co
st
Fin
anci
al a
sset
s th
at m
eet
the
foll
owin
g co
ndit
ions
are
sub
sequ
entl
y m
easu
red
at a
mor
tize
d co
st:
i. T
he f
inan
cial
ass
et i
s he
ld w
ithi
n a
busi
ness
mod
el w
hose
obj
ecti
ve i
s to
hol
d fi
nanc
ial
asse
ts in
ord
er to
col
lect
con
trac
tual
cas
h fl
ows;
and
ii
. T
he c
ontr
actu
al te
rms
of th
e fi
nanc
ial a
sset
giv
e ri
se o
n sp
ecif
ied
date
s to
cas
h fl
ows
that
are
so
lely
pay
men
ts o
f pr
inci
pal a
nd in
tere
st o
n th
e pr
inci
pal a
mou
nt o
utst
andi
ng.
Sub
sequ
ent
to i
niti
al r
ecog
niti
on,
fina
ncia
l as
sets
at
amor
tize
d co
st,
incl
udin
g ca
sh a
nd c
ash
equi
vale
nts,
tra
de r
ecei
vabl
es,
othe
r re
ceiv
able
s an
d ot
her
fina
ncia
l as
sets
, ar
e m
easu
red
at
amor
tize
d co
st,
whi
ch e
qual
s th
e gr
oss
carr
ying
am
ount
det
erm
ined
usi
ng t
he e
ffec
tive
int
eres
t m
etho
d le
ss a
ny im
pair
men
t los
s. E
xcha
nge
diff
eren
ces
are
reco
gniz
ed in
pro
fit o
r lo
ss.
- 24
-
Inte
rest
inc
ome
is c
alcu
late
d by
app
lyin
g th
e ef
fect
ive
inte
rest
rat
e to
the
gro
ss c
arry
ing
amou
nt
of a
fin
anci
al a
sset
. C
ash
equi
vale
nts
incl
ude
tim
e de
posi
ts w
ith
orig
inal
mat
urit
ies
wit
hin
3 m
onth
s fr
om th
e da
te o
f ac
quis
itio
n, w
hich
are
hig
hly
liqui
d, r
eadi
ly c
onve
rtib
le t
o a
know
n am
ount
of
cash
and
are
su
bjec
t to
an
insi
gnif
ican
t ri
sk o
f ch
ange
s in
val
ue.
The
se c
ash
equi
vale
nts
are
held
for
the
pu
rpos
e of
mee
ting
sho
rt-t
erm
cas
h co
mm
itm
ents
.
c)
Inve
stm
ents
in e
quit
y in
stru
men
ts a
t FV
TO
CI
On
init
ial
reco
gnit
ion,
the
Gro
up m
ay m
ake
an i
rrev
ocab
le e
lect
ion
to d
esig
nate
inv
estm
ents
in
equi
ty i
nstr
umen
ts a
s at
FV
TO
CI.
Des
igna
tion
as
at F
VT
OC
I is
not
per
mit
ted
if a
n eq
uity
in
vest
men
t is
hel
d fo
r tr
adin
g or
if
it i
s co
ntin
gent
con
side
rati
on r
ecog
nize
d by
an
acqu
irer
in
a bu
sine
ss c
ombi
nati
on.
Inve
stm
ents
in
equi
ty i
nstr
umen
ts a
t F
VT
OC
I ar
e su
bseq
uent
ly m
easu
red
at f
air
valu
e w
ith
gain
s an
d lo
sses
ari
sing
fro
m c
hang
es i
n fa
ir v
alue
rec
ogni
zed
in o
ther
com
preh
ensi
ve i
ncom
e an
d ac
cum
ulat
ed in
oth
er e
quit
y. T
he c
umul
ativ
e ga
in o
r lo
ss w
ill n
ot b
e re
clas
sifi
ed to
pro
fit o
r lo
ss o
n di
spos
al o
f th
e eq
uity
inve
stm
ents
; ins
tead
, the
y w
ill b
e tr
ansf
erre
d to
ret
aine
d ea
rnin
gs.
Div
iden
ds o
n th
ese
inve
stm
ents
in
equi
ty i
nstr
umen
ts a
re r
ecog
nize
d in
pro
fit
or l
oss
whe
n th
e G
roup
’s r
ight
to
rece
ive
the
divi
dend
s is
est
abli
shed
, un
less
the
div
iden
ds c
lear
ly r
epre
sent
a
reco
very
of
part
of
the
cost
of
an in
vest
men
t.
2)
Impa
irm
ent o
f fi
nanc
ial a
sset
s T
he G
roup
rec
ogni
zes
a lo
ss a
llow
ance
for
exp
ecte
d cr
edit
los
ses
on f
inan
cial
ass
ets
at a
mor
tize
d co
st (
incl
udin
g tr
ade
rece
ivab
les)
, as
wel
l as
cont
ract
ass
ets.
T
he G
roup
alw
ays
reco
gniz
es l
ifet
ime
expe
cted
cre
dit
loss
es (
EC
Ls)
for
tra
de r
ecei
vabl
es a
nd o
ther
re
ceiv
able
s. F
or a
ll o
ther
fin
anci
al i
nstr
umen
ts, t
he G
roup
rec
ogni
zes
life
tim
e E
CL
s w
hen
ther
e ha
s be
en a
sig
nifi
cant
inc
reas
e in
cre
dit
risk
sin
ce i
niti
al r
ecog
niti
on.
If,
on t
he o
ther
han
d, t
he c
redi
t ri
sk o
n a
fina
ncia
l in
stru
men
t ha
s no
t in
crea
sed
sign
ific
antly
sin
ce i
niti
al r
ecog
niti
on,
the
Gro
up
mea
sure
s th
e lo
ss a
llow
ance
for
that
fin
anci
al in
stru
men
t at a
n am
ount
equ
al to
12-
mon
th E
CL
s.
Exp
ecte
d cr
edit
los
ses
refl
ect
the
wei
ghte
d av
erag
e of
cre
dit
loss
es w
ith
the
resp
ecti
ve r
isks
of
a de
faul
t oc
curr
ing
as t
he w
eigh
ts. L
ifet
ime
EC
L r
epre
sent
s th
e ex
pect
ed c
redi
t lo
sses
tha
t w
ill
resu
lt
from
all
pos
sibl
e de
faul
t ev
ents
ove
r th
e ex
pect
ed l
ife
of a
fin
anci
al i
nstr
umen
t. In
con
tras
t, 12
-mon
th E
CL
rep
rese
nts
the
port
ion
of l
ifet
ime
EC
L t
hat
is e
xpec
ted
to r
esul
t fr
om d
efau
lt e
vent
s on
a f
inan
cial
inst
rum
ent t
hat a
re p
ossi
ble
wit
hin
12 m
onth
s af
ter
the
repo
rtin
g da
te.
The
im
pair
men
t lo
ss o
f al
l fi
nanc
ial
asse
ts i
s re
cogn
ized
in
prof
it o
r lo
ss b
y a
redu
ctio
n in
the
ir
carr
ying
am
ount
s th
roug
h a
loss
all
owan
ce a
ccou
nt, e
xcep
t fo
r in
vest
men
ts i
n de
bt i
nstr
umen
ts t
hat
are
mea
sure
d at
FV
TO
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
of s
uch
fina
ncia
l ass
ets
are
not r
educ
ed.
3)
D
erec
ogni
tion
of
fina
ncia
l ass
ets
The
Gro
up d
erec
ogni
zes
a fi
nanc
ial
asse
t on
ly w
hen
the
cont
ract
ual
righ
ts t
o th
e ca
sh f
low
s fr
om
the
asse
t ex
pire
or
whe
n it
tra
nsfe
rs t
he f
inan
cial
ass
et a
nd s
ubst
anti
ally
all
the
ris
ks a
nd r
ewar
ds o
f ow
ners
hip
of th
e as
set t
o an
othe
r pa
rty.
154
- 25
-
On
dere
cogn
itio
n of
a f
inan
cial
ass
et i
n it
s en
tire
ty,
the
diff
eren
ce b
etw
een
the
asse
t’s
carr
ying
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
rec
ogni
zed
in p
rofi
t or
loss
.
b.
Equ
ity in
stru
men
ts
Deb
t an
d eq
uity
ins
trum
ents
iss
ued
by t
he G
roup
ent
ity
are
clas
sifi
ed a
s ei
ther
fin
anci
al l
iabi
liti
es o
r as
eq
uity
in
acco
rdan
ce w
ith
the
subs
tanc
e of
the
con
trac
tual
arr
ange
men
ts a
nd t
he d
efin
itio
ns o
f a
fina
ncia
l lia
bili
ty a
nd a
n eq
uity
inst
rum
ent.
Equ
ity i
nstr
umen
ts i
ssue
d by
the
Gro
up e
ntity
are
rec
ogni
zed
at t
he p
roce
eds
rece
ived
, ne
t of
dir
ect
issu
e co
sts.
R
epur
chas
e of
the
Gro
up’s
ow
n eq
uity
ins
trum
ents
is
reco
gniz
ed i
n an
d de
duct
ed d
irec
tly f
rom
equ
ity.
N
o ga
in o
r lo
ss i
s re
cogn
ized
in
prof
it o
r lo
ss o
n th
e pu
rcha
se,
sale
, is
sue
or c
ance
llat
ion
of t
he
Com
pany
’s o
wn
equi
ty in
stru
men
ts.
c.
F
inan
cial
liab
ilit
ies
1)
Sub
sequ
ent m
easu
rem
ent
E
xcep
t fo
r fi
nanc
ial
liab
ilit
ies
at F
VT
PL
, al
l fi
nanc
ial
liab
ilit
ies
are
mea
sure
d at
am
orti
zed
cost
us
ing
the
effe
ctiv
e in
tere
st m
etho
d.
2)
D
erec
ogni
tion
of
fina
ncia
l lia
bili
ties
T
he
diff
eren
ce
betw
een
the
carr
ying
am
ount
of
a
fina
ncia
l li
abil
ity
dere
cogn
ized
an
d th
e co
nsid
erat
ion
paid
, inc
ludi
ng a
ny n
on-c
ash
asse
ts tr
ansf
erre
d or
liab
ilit
ies
assu
med
, is
reco
gniz
ed in
pr
ofit
or
loss
.
d.
Con
vert
ible
bon
ds
The
com
pone
nt p
arts
of
com
poun
d in
stru
men
ts (
i.e.
conv
erti
ble
bond
s) i
ssue
d by
the
Com
pany
are
cl
assi
fied
se
para
tely
as
fi
nanc
ial
liab
ilit
ies
and
equi
ty
in
acco
rdan
ce
wit
h th
e su
bsta
nce
of
the
cont
ract
ual a
rran
gem
ents
and
the
defi
nitio
ns o
f a
fina
ncia
l lia
bili
ty a
nd a
n eq
uity
inst
rum
ent.
On
init
ial
reco
gnit
ion,
the
fai
r va
lue
of t
he l
iabi
lity
com
pone
nt i
s es
tim
ated
usi
ng t
he p
reva
ilin
g m
arke
t in
tere
st r
ate
for
sim
ilar
non
-con
vert
ible
ins
trum
ents
. T
his
amou
nt i
s re
cord
ed a
s a
liab
ility
on
an
amor
tize
d co
st b
asis
usi
ng t
he e
ffec
tive
int
eres
t m
etho
d un
til
exti
ngui
shed
upo
n co
nver
sion
or
the
inst
rum
ent’
s m
atur
ity
date
. Any
em
bedd
ed d
eriv
ativ
e li
abil
ity is
mea
sure
d at
fai
r va
lue.
T
he c
onve
rsio
n op
tion
clas
sifi
ed a
s eq
uity
is
dete
rmin
ed b
y de
duct
ing
the
amou
nt o
f th
e li
abil
ity
com
pone
nt f
rom
the
fair
val
ue o
f th
e co
mpo
und
inst
rum
ent a
s a
who
le. T
his
is r
ecog
nize
d an
d in
clud
ed
in e
quity
, ne
t of
inc
ome
tax
effe
cts,
and
is
not
subs
eque
ntly
rem
easu
red.
In
addi
tion
, th
e co
nver
sion
op
tion
cla
ssif
ied
as e
quity
wil
l re
mai
n in
equ
ity u
ntil
the
con
vers
ion
opti
on i
s ex
erci
sed,
in
whi
ch c
ase,
th
e ba
lanc
e re
cogn
ized
in
equi
ty w
ill
be t
rans
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
mat
urit
y, t
he b
alan
ce r
ecog
nize
d in
equ
ity w
ill
be t
rans
ferr
ed
to c
apit
al s
urpl
us -
sha
re p
rem
ium
s.
Tra
nsac
tion
cos
ts t
hat
rela
te t
o th
e is
sue
of t
he c
onve
rtib
le n
otes
are
all
ocat
ed t
o th
e li
abili
ty a
nd e
quity
co
mpo
nent
s in
pro
port
ion
to t
he a
lloc
atio
n of
the
gro
ss p
roce
eds.
Tra
nsac
tion
cos
ts r
elat
ing
to t
he
equi
ty c
ompo
nent
are
rec
ogni
zed
dire
ctly
in e
quity
. Tra
nsac
tion
cos
ts r
elat
ing
to th
e li
abili
ty c
ompo
nent
ar
e in
clud
ed in
the
carr
ying
am
ount
of
the
liab
ility
com
pone
nt.
- 26
-
e.
Der
ivat
ive
fina
ncia
l ins
trum
ents
T
he G
roup
ent
ers
into
a v
arie
ty o
f de
riva
tive
fin
anci
al i
nstr
umen
ts t
o m
anag
e it
s ex
posu
re t
o in
tere
st
rate
, fo
reig
n ex
chan
ge r
ate
and
fuel
pri
ce r
isks
, in
clud
ing
fore
ign
exch
ange
for
war
d co
ntra
cts,
int
eres
t ra
te s
wap
s, c
urre
ncy
opti
ons
swap
s an
d fu
el s
wap
s.
Der
ivat
ives
are
ini
tial
ly r
ecog
nize
d at
fai
r va
lue
at t
he d
ate
the
deri
vati
ve c
ontr
acts
are
ent
ered
int
o an
d ar
e su
bseq
uent
ly r
emea
sure
d to
thei
r fa
ir v
alue
at t
he e
nd o
f ea
ch r
epor
ting
per
iod.
The
res
ulti
ng g
ain
or
loss
is
reco
gniz
ed i
n pr
ofit
or
loss
im
med
iate
ly u
nles
s th
e de
riva
tive
is
desi
gnat
ed a
nd e
ffec
tive
as
a he
dgin
g in
stru
men
t, in
whi
ch e
vent
, the
tim
ing
of th
e re
cogn
itio
n in
pro
fit o
r lo
ss d
epen
ds o
n th
e na
ture
of
the
hed
ging
rel
atio
nshi
p. W
hen
the
fair
val
ue o
f a
deri
vati
ve f
inan
cial
ins
trum
ent
is p
osit
ive,
the
de
riva
tive
is
reco
gniz
ed a
s a
fina
ncia
l as
set;
whe
n th
e fa
ir v
alue
of
a de
riva
tive
fin
anci
al i
nstr
umen
t is
ne
gati
ve, t
he d
eriv
ativ
e is
rec
ogni
zed
as a
fin
anci
al li
abil
ity.
H
edge
Acc
oun
tin
g T
he C
ompa
ny e
nter
s in
to s
ome
deri
vati
ve t
rans
acti
ons
that
aim
to
man
age
inte
rest
rat
es,
fore
ign
exch
ange
ra
tes,
fu
el
pric
es,
and
othe
r fa
ctor
s af
fect
ing
gain
s or
lo
sses
on
as
sets
an
d li
abil
itie
s.
The
he
dgin
g tr
ansa
ctio
ns a
re d
efin
ed a
s ca
sh f
low
hed
ges.
Whe
n en
teri
ng i
nto
hedg
ing
tran
sact
ions
, th
e C
ompa
ny h
as
prep
ared
off
icia
l do
cum
ents
tha
t de
scri
be t
he h
edgi
ng r
elat
ions
hip
betw
een
hedg
ing
inst
rum
ents
and
ite
ms
whi
ch h
ave
been
hed
ged,
the
obj
ecti
ve o
f ri
sk m
anag
emen
t, th
e he
dgin
g st
rate
gy,
and
the
way
to
eval
uate
th
e ef
fect
iven
ess
of th
e he
dgin
g in
stru
men
t.
The
eff
ecti
ve p
orti
on o
f ch
ange
s in
the
fair
val
ue o
f de
riva
tive
s th
at a
re d
esig
nate
d an
d qu
alif
y as
cas
h fl
ow
hedg
es i
s re
cogn
ized
in
othe
r co
mpr
ehen
sive
inc
ome.
The
gai
n or
los
s re
lati
ng t
o th
e in
effe
ctiv
e po
rtio
n is
re
cogn
ized
imm
edia
tely
in p
rofi
t or
loss
. T
he a
ssoc
iate
d ga
ins
or l
osse
s th
at w
ere
reco
gniz
ed i
n ot
her
com
preh
ensi
ve i
ncom
e ar
e re
clas
sifi
ed f
rom
eq
uity
to
prof
it o
r lo
ss a
s a
recl
assi
fica
tion
adj
ustm
ent
in t
he l
ine
item
rel
atin
g to
the
hed
ged
item
in
the
sam
e pe
riod
as
whe
n th
e he
dged
ite
m a
ffec
ts p
rofi
t or
los
s. I
f a
hedg
e of
a f
orec
aste
d tr
ansa
ctio
n su
bseq
uent
ly r
esul
ts i
n th
e re
cogn
itio
n of
a n
on-f
inan
cial
ass
et o
r a
non-
fina
ncia
l li
abil
ity,
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
itia
l cos
t of
the
non-
fina
ncia
l ass
et o
r no
n-fi
nanc
ial l
iabi
lity
. S
tart
ing
from
201
8, t
he G
roup
dis
cont
inue
s he
dge
acco
unti
ng o
nly
whe
n th
e he
dgin
g re
lati
onsh
ip c
ease
s to
m
eet
the
qual
ifyi
ng c
rite
ria;
for
ins
tanc
e, w
hen
the
hedg
ing
inst
rum
ent
expi
res
or i
s so
ld,
term
inat
ed o
r ex
erci
sed.
The
cum
ulat
ive
gain
or
loss
on
the
hedg
ing
inst
rum
ent
that
has
bee
n pr
evio
usly
rec
ogni
zed
in
othe
r co
mpr
ehen
sive
inc
ome
from
the
per
iod
in w
hich
the
hed
ge w
as e
ffec
tive
rem
ains
sep
arat
ely
in e
quit
y un
til
the
fore
cast
ed t
rans
acti
on o
ccur
s. W
hen
a fo
reca
sted
tra
nsac
tion
is
no l
onge
r ex
pect
ed t
o oc
cur,
the
ga
in o
r lo
ss a
ccum
ulat
ed in
equ
ity is
rec
ogni
zed
imm
edia
tely
in p
rofi
t or
loss
. P
rovi
sion
s T
he G
roup
rec
ogni
zes
prov
isio
ns w
hen
the
Gro
up h
as a
pre
sent
obl
igat
ion
(leg
al o
r co
nstr
ucti
ve)
aris
ing
from
pas
t ev
ents
(le
gal
or c
onst
ruct
ive
obli
gati
on),
pay
men
t fo
r th
e ob
liga
tion
is
prob
able
, an
d th
e ex
pend
itur
e fo
r se
ttli
ng th
e ob
liga
tion
can
be
esti
mat
ed r
elia
bly.
T
he a
mou
nt r
ecog
nize
d as
a p
rovi
sion
is
the
best
est
imat
e of
the
exp
endi
ture
req
uire
d to
set
tle t
he p
rese
nt
obli
gati
on, t
akin
g in
to a
ccou
nt th
e ri
sks
and
unce
rtai
ntie
s su
rrou
ndin
g th
e ob
ligat
ion
as o
f th
e ba
lanc
e sh
eet
date
. W
hen
a pr
ovis
ion
is m
easu
red
usin
g th
e ca
sh f
low
s es
tim
ated
to
sett
le t
he p
rese
nt o
blig
atio
n, i
ts
carr
ying
am
ount
is th
e pr
esen
t val
ue o
f th
ose
cash
flo
ws.
155
- 27
-
Air
craf
t lea
se c
ontr
acts
W
hen
an a
ircr
aft
leas
e co
ntra
cts
expi
res
and
the
leas
ed i
tem
wil
l be
ret
urne
d to
the
les
sor,
the
Gro
up w
ill
asse
ss i
f th
ere
are
exis
ting
obl
igat
ions
exi
st a
nd i
f it
is
requ
ired
to
reco
gniz
e a
prov
isio
n w
hen
sign
ing
the
leas
e co
ntra
ct.
Rev
enu
e R
ecog
nit
ion
W
hen
appl
ying
IF
RS
15
duri
ng 2
018,
the
Gro
up r
ecog
nize
s re
venu
e by
app
lyin
g th
e fo
llow
ing
step
s:
Iden
tify
ing
the
cont
ract
wit
h th
e cu
stom
er;
Iden
tify
ing
the
perf
orm
ance
obl
igat
ions
in th
e co
ntra
ct;
Det
erm
ine
the
tran
sact
ion
pric
e;
All
ocat
e th
e tr
ansa
ctio
n pr
ice
to th
e pe
rfor
man
ce o
blig
atio
ns in
the
cont
ract
; and
R
ecog
nize
rev
enue
whe
n th
e G
roup
sat
isfi
es a
per
form
ance
obl
igat
ion.
S
hipp
ing
serv
ice
reve
nue
Pas
seng
er a
nd c
argo
rev
enue
are
rec
ogni
zed
as r
even
ue w
hen
the
pass
enge
rs a
nd g
oods
are
act
uall
y ca
rrie
d.
Whe
n th
e ti
cket
s ar
e so
ld, d
ue to
the
fact
that
the
fulf
illm
ent o
blig
atio
ns o
f th
e sh
ipm
ent h
ave
not b
een
met
, th
e re
leva
nt a
mou
nt o
f re
venu
e is
fir
st r
ecor
ded
as c
ontr
act l
iabi
liti
es u
ntil
pas
seng
ers
actu
ally
boa
rd.
L
easi
ng
2019
A
t the
ince
ptio
n of
a c
ontr
act,
the
Gro
up a
sses
ses
whe
ther
the
cont
ract
is, o
r co
ntai
ns, a
leas
e.
The
Gro
up a
s le
ssee
T
he G
roup
rec
ogni
zes
righ
t-of
-use
ass
ets
and
leas
e li
abil
itie
s fo
r al
l le
ases
at
the
com
men
cem
ent
date
of
a le
ase,
ex
cept
fo
r sh
ort-
term
le
ases
an
d lo
w-v
alue
as
set
leas
es
acco
unte
d fo
r ap
plyi
ng a
re
cogn
itio
n ex
empt
ion
whe
re le
ase
paym
ents
are
rec
ogni
zed
as e
xpen
ses
on a
str
aigh
t-li
ne b
asis
ove
r th
e le
ase
term
s.
Rig
ht-o
f-us
e as
sets
are
ini
tial
ly m
easu
red
at c
ost,
whi
ch c
ompr
ises
the
ini
tial
mea
sure
men
t of
lea
se
liab
ilit
ies
adju
sted
for
lea
se p
aym
ents
mad
e at
or
befo
re t
he c
omm
ence
men
t da
te,
plus
any
ini
tial
dir
ect
cost
s in
curr
ed a
nd a
n es
tim
ate
of c
osts
nee
ded
to r
esto
re th
e un
derl
ying
ass
ets,
and
less
any
leas
e in
cent
ives
re
ceiv
ed.
Rig
ht-o
f-us
e as
sets
ar
e su
bseq
uent
ly
mea
sure
d at
co
st
less
ac
cum
ulat
ed
depr
ecia
tion
an
d im
pair
men
t lo
sses
and
adj
uste
d fo
r an
y re
mea
sure
men
t of
the
lea
se l
iabi
liti
es.
Rig
ht-o
f-us
e as
sets
are
pr
esen
ted
on a
sep
arat
e li
ne in
the
cons
olid
ated
bal
ance
she
ets.
R
ight
-of-
use
asse
ts a
re d
epre
ciat
ed u
sing
the
str
aigh
t-li
ne m
etho
d fr
om t
he c
omm
ence
men
t da
tes
to t
he
earl
ier
of t
he e
nd o
f th
e us
eful
liv
es o
f th
e ri
ght-
of-u
se a
sset
s or
the
end
of
the
leas
e te
rms.
How
ever
, if
le
ases
tra
nsfe
r ow
ners
hip
of t
he u
nder
lyin
g as
sets
to
the
Gro
up b
y th
e en
d of
the
lea
se t
erm
s or
if
the
cost
s of
rig
ht-o
f-us
e as
sets
ref
lect
tha
t th
e G
roup
wil
l ex
erci
se a
pur
chas
e op
tion
, th
e G
roup
dep
reci
ates
the
ri
ght-
of-u
se a
sset
s fr
om th
e co
mm
ence
men
t dat
es to
the
end
of th
e us
eful
live
s of
the
unde
rlyi
ng a
sset
s.
Lea
se l
iabi
liti
es a
re i
niti
ally
mea
sure
d at
the
pre
sent
val
ue o
f th
e le
ase
paym
ents
, w
hich
com
pris
e fi
xed
paym
ents
, in
-sub
stan
ce f
ixed
pay
men
ts,
vari
able
lea
se p
aym
ents
whi
ch d
epen
d on
an
inde
x or
a r
ate,
re
sidu
al v
alue
gua
rant
ees,
the
exe
rcis
e pr
ice
of a
pur
chas
e op
tion
if
the
less
ee i
s re
ason
ably
cer
tain
to
exer
cise
tha
t op
tion
, an
d pa
ymen
ts o
f pe
nalt
ies
for
term
inat
ing
a le
ase
if t
he l
ease
ter
m r
efle
cts
such
te
rmin
atio
n, l
ess
any
leas
e in
cent
ives
pay
able
. T
he l
ease
pay
men
ts a
re d
isco
unte
d us
ing
the
inte
rest
rat
e im
plic
it i
n a
leas
e, i
f th
at r
ate
can
be r
eadi
ly d
eter
min
ed.
If t
hat
rate
can
not
be r
eadi
ly d
eter
min
ed,
the
Gro
up u
ses
the
less
ee’s
incr
emen
tal b
orro
win
g ra
te.
- 28
-
Sub
sequ
ently
, le
ase
liab
ilit
ies
are
mea
sure
d at
am
orti
zed
cost
usi
ng t
he e
ffec
tive
int
eres
t m
etho
d, w
ith
inte
rest
exp
ense
rec
ogni
zed
over
the
lea
se t
erm
s. W
hen
ther
e is
a c
hang
e in
a l
ease
ter
m,
a ch
ange
in
the
amou
nts
expe
cted
to b
e pa
yabl
e un
der
a re
sidu
al v
alue
gua
rant
ee, a
cha
nge
in th
e as
sess
men
t of
an o
ptio
n to
pu
rcha
se a
n un
derl
ying
ass
et, o
r a
chan
ge i
n fu
ture
lea
se p
aym
ents
res
ulti
ng f
rom
a c
hang
e in
an
inde
x or
a
rate
use
d to
det
erm
ine
thos
e pa
ymen
ts,
the
Gro
up r
emea
sure
s th
e le
ase
liab
ilit
ies
wit
h a
corr
espo
ndin
g ad
just
men
t to
the
rig
ht-o
f-us
e-as
sets
. L
ease
lia
bili
ties
are
pre
sent
ed o
n a
sepa
rate
lin
e in
the
con
soli
date
d ba
lanc
e sh
eets
. V
aria
ble
leas
e pa
ymen
ts t
hat
do n
ot d
epen
d on
an
inde
x or
a r
ate
are
reco
gniz
ed a
s ex
pens
es i
n th
e pe
riod
s in
whi
ch th
ey a
re in
curr
ed.
For
sal
e an
d le
aseb
ack
tran
sact
ions
, if
the
tra
nsfe
r of
an
asse
t sa
tisf
ies
the
requ
irem
ents
of
IFR
S 1
5 to
be
acco
unte
d fo
r as
a s
ale,
the
Gro
up r
ecog
nize
s on
ly th
e am
ount
of
any
gain
or
loss
whi
ch r
elat
es to
the
righ
ts
tran
sfer
red
to t
he b
uyer
-les
sor,
and
adj
usts
the
off
-mar
ket
term
s to
mea
sure
the
sal
e pr
ocee
ds a
t fa
ir v
alue
. If
the
tra
nsfe
r do
es n
ot s
atis
fy th
e re
quir
emen
ts o
f IF
RS
15
to b
e ac
coun
ted
for
as a
sal
e, i
t is
acc
ount
ed f
or
as a
fin
anci
ng tr
ansa
ctio
n.
2018
L
ease
s ar
e cl
assi
fied
as
fina
nce
leas
es w
hene
ver
the
term
s of
the
leas
e tr
ansf
er s
ubst
anti
ally
all
the
risk
s an
d re
war
ds o
f ow
ners
hip
to th
e le
ssee
. All
oth
er le
ases
are
cla
ssif
ied
as o
pera
ting
leas
es.
a.
Fin
anci
al le
ases
T
he G
roup
as
less
ee
Ass
ets
held
und
er f
inan
ce l
ease
s ar
e in
itia
lly
reco
gniz
ed a
s as
sets
of
the
Com
pany
at
the
low
er o
f th
eir
fair
val
ue a
t th
e in
cept
ion
of t
he l
ease
or
the
pres
ent
valu
e of
the
min
imum
lea
se p
aym
ents
. T
he
corr
espo
ndin
g li
abil
ity to
the
less
ee is
incl
uded
in th
e ba
lanc
e sh
eets
as
a fi
nanc
e le
ase
obli
gati
on.
Min
imum
lea
se p
aym
ents
are
app
ortio
ned
betw
een
fina
nce
expe
nses
and
red
ucti
ons
of t
he l
ease
ob
liga
tion
so
as t
o ac
hiev
e a
cons
tant
rat
e of
int
eres
t on
the
rem
aini
ng b
alan
ce o
f th
e li
abil
ity.
Fin
ance
ex
pens
es a
re r
ecog
nize
d im
med
iate
ly i
n pr
ofit
or
loss
, unl
ess
they
are
dir
ectl
y at
trib
utab
le t
o qu
alif
ying
as
sets
, in
whi
ch c
ase,
the
y ar
e ca
pita
lize
d in
acc
orda
nce
wit
h th
e C
ompa
ny’s
gen
eral
pol
icy
on
borr
owin
g co
sts.
Con
ting
ent
rent
als
are
reco
gniz
ed a
s ex
pens
es i
n th
e pe
riod
s in
whi
ch t
hey
are
incu
rred
.
b.
Sal
es a
nd le
aseb
acks
F
or a
sal
e an
d le
aseb
ack
tran
sact
ion,
if
it m
eets
the
con
ditio
n w
here
by a
ll t
he r
isks
and
rew
ards
of
owne
rshi
p of
the
lea
sed
asse
t ar
e es
sent
iall
y tr
ansf
erre
d to
the
les
see,
the
sal
e an
d le
aseb
ack
tran
sact
ion
is c
lass
ifie
d as
a f
inan
ce l
ease
. If
par
t of
the
sig
nifi
cant
ris
ks a
nd r
ewar
ds o
f ow
ners
hip
of t
he l
ease
d as
set
rem
ain
wit
h th
e le
ssor
(i.e
. th
e bu
yer)
, th
e sa
le a
nd l
ease
back
tra
nsac
tion
is
clas
sifi
ed a
s an
op
erat
ing
leas
e.
1)
Fin
anci
al le
ases
T
his
tran
sact
ion
does
not
act
uall
y di
spos
e of
the
asse
ts. T
he a
ccou
ntin
g tr
eatm
ent u
sed
is to
trea
t the
tr
ansa
ctio
n as
if it
did
not
occ
ur, a
nd th
e as
sets
are
con
tinu
ousl
y re
cogn
ized
at t
he b
ook
valu
e of
the
asse
t bef
ore
sale
.
156
- 29
-
2)
Ope
rati
ng le
ases
If
the
sel
ling
pri
ce i
s eq
ual
to t
he f
air
valu
e, t
he t
rans
acti
on g
ain
or l
oss
shou
ld b
e re
cogn
ized
im
med
iate
ly.
If t
he s
elli
ng p
rice
is
abov
e fa
ir v
alue
, th
e di
ffer
ence
bet
wee
n th
e fa
ir v
alue
and
the
bo
ok v
alue
of
the
gain
or
loss
sho
uld
be r
ecog
nize
d im
med
iate
ly;
only
the
par
t of
the
sel
ling
pri
ce
whi
ch is
abo
ve f
air
valu
e sh
all b
e de
ferr
ed a
nd a
mor
tize
d ov
er th
e pe
riod
of
the
leas
e.
c.
O
pera
ting
leas
es
1)
The
Gro
up a
s le
ssor
R
enta
l in
com
e fr
om o
pera
ting
lea
ses
is r
ecog
nize
d on
a s
trai
ght-
line
bas
is o
ver
the
term
of
the
rele
vant
lea
se u
nles
s an
othe
r sy
stem
atic
bas
is i
s re
pres
enta
tive
of
the
tim
e pa
tter
n of
the
les
see’
s be
nefi
t fro
m th
e us
e of
the
leas
ed a
sset
.
2)
The
Gro
up a
s le
ssee
O
pera
ting
lea
se p
aym
ents
are
rec
ogni
zed
as e
xpen
ses
on a
str
aigh
t-li
ne b
asis
ove
r th
e le
ase
term
, ex
cept
whe
re a
noth
er s
yste
mat
ic b
asis
is
mor
e re
pres
enta
tive
of
the
tim
e pa
tter
n in
whi
ch e
cono
mic
be
nefi
ts f
rom
the
lea
sed
asse
t ar
e co
nsum
ed.
Con
ting
ent
rent
als
aris
ing
unde
r op
erat
ing
leas
es a
re
reco
gniz
ed a
s ex
pens
es in
the
peri
od in
whi
ch th
ey a
re in
curr
ed.
In t
he e
vent
tha
t le
ase
ince
ntiv
es a
re r
ecei
ved
whe
n en
teri
ng i
nto
oper
atin
g le
ases
, su
ch i
ncen
tive
s ar
e re
cogn
ized
as
a li
abil
ity.
The
agg
rega
te b
enef
it o
f in
cent
ives
is
reco
gniz
ed a
s a
redu
ctio
n of
re
ntal
exp
ense
on
a st
raig
ht-l
ine
basi
s, e
xcep
t w
here
ano
ther
sys
tem
atic
bas
is i
s m
ore
repr
esen
tati
ve
of th
e ti
me
patt
ern
in w
hich
eco
nom
ic b
enef
its
from
the
leas
ed a
sset
are
con
sum
ed.
E
mp
loye
e B
enef
its
a.
Sho
rt-t
erm
em
ploy
ee b
enef
its
Lia
bili
ties
rec
ogni
zed
in r
espe
ct o
f sh
ort-
term
em
ploy
ee b
enef
its
are
mea
sure
d at
the
und
isco
unte
d am
ount
of
the
bene
fits
exp
ecte
d to
be
paid
in e
xcha
nge
for
the
rela
ted
serv
ices
. b.
R
etir
emen
t ben
efit
s P
aym
ents
to
th
e de
fine
d co
ntri
buti
on
reti
rem
ent
bene
fit
plan
ar
e re
cogn
ized
as
ex
pens
es
whe
n em
ploy
ees
have
ren
dere
d se
rvic
es e
ntit
ling
them
to th
e co
ntri
buti
ons.
D
efin
ed b
enef
it c
osts
(in
clud
ing
serv
ice
cost
, ne
t in
tere
st a
nd r
emea
sure
men
t) u
nder
the
def
ined
co
ntri
butio
n re
tire
men
t be
nefi
t pl
an a
re d
eter
min
ed u
sing
the
pro
ject
ed u
nit
cred
it m
etho
d. S
ervi
ce c
ost
(inc
ludi
ng c
urre
nt s
ervi
ce c
ost
and
past
ser
vice
cos
t) a
nd n
et i
nter
est
on t
he n
et d
efin
ed b
enef
it li
abil
itie
s (a
sset
s) a
re r
ecog
nize
d as
em
ploy
ee b
enef
its
expe
nse
in t
he p
erio
d in
whi
ch t
hey
occu
r.
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 (e
xclu
ding
inte
rest
),
is
reco
gniz
ed
in
othe
r co
mpr
ehen
sive
in
com
e in
th
e pe
riod
in
whi
ch
it
occu
rs.
Rem
easu
rem
ent
reco
gniz
ed in
oth
er c
ompr
ehen
sive
inco
me
is r
efle
cted
imm
edia
tely
in r
etai
ned
earn
ings
and
wil
l not
be
recl
assi
fied
to p
rofi
t or
loss
.
Net
def
ined
ben
efit
liab
ilit
ies
(ass
ets)
rep
rese
nt th
e ac
tual
def
icit
in th
e G
roup
’s d
efin
ed b
enef
it p
lans
.
- 30
-
Bor
row
ing
Cos
ts
Bor
row
ing
cost
s di
rect
ly a
ttri
buta
ble
to t
he a
cqui
siti
on,
cons
truc
tion
or
prod
ucti
on o
f qu
alif
ying
ass
ets
(ass
ets
whi
ch a
re s
ubst
anti
ally
rea
dy f
or th
eir
inte
nded
use
or
sale
thro
ugh
a fa
irly
long
per
iod)
are
add
ed to
th
e co
st o
f th
ose
asse
ts, u
ntil
suc
h ti
me
as th
e as
sets
are
sub
stan
tial
ly r
eady
for
thei
r in
tend
ed u
se o
r sa
le.
Inve
stm
ent i
ncom
e ea
rned
on
the
tem
pora
ry in
vest
men
t of
spec
ific
bor
row
ings
pen
ding
thei
r ex
pend
itur
e on
qu
alif
ying
ass
ets
is d
educ
ted
from
the
borr
owin
g co
sts
elig
ible
for
cap
ital
izat
ion.
O
ther
than
that
whi
ch is
sta
ted
abov
e, a
ll o
ther
bor
row
ing
cost
s ar
e re
cogn
ized
in p
rofi
t or
loss
in th
e pe
riod
in
whi
ch th
ey a
re in
curr
ed.
Fre
qu
ent
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 a
ccum
ulat
ed
mil
eage
to
a ca
bin
upgr
ade,
fre
e ti
cket
s an
d ot
her
mem
ber
rew
ards
and
ope
rate
s a
“Tig
ercl
ub M
embe
r P
rivi
lege
Pro
gram
” to
pro
vide
mem
bers
wit
h ac
cum
ulat
ed t
icke
t re
war
d bo
nuse
s, w
hich
can
be
used
to
offs
et t
he p
aym
ents
for
air
fare
, lu
ggag
e fe
es,
prio
rity
che
ck-i
ns,
and
orde
ring
of
mea
ls i
n fl
ight
cab
ins.
A
port
ion
of p
asse
nger
rev
enue
att
ribu
tabl
e to
the
rew
ards
for
the
fre
quen
t fl
yer
prog
ram
is
defe
rred
. 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
ulfi
lled
its
ob
liga
tion
s on
the
gra
ntin
g of
rew
ards
or
whe
n th
e pe
riod
for
con
vert
ing
the
mil
eage
to
rew
ards
has
ex
pire
d.
Sh
are-
bas
ed P
aym
ent
Arr
ange
men
ts
Equ
ity-
sett
led
shar
e-ba
sed
paym
ents
to
empl
oyee
s ar
e m
easu
red
at t
he f
air
valu
e of
the
equ
ity
inst
rum
ents
at
the
gran
t dat
e.
The
fai
r va
lue
dete
rmin
ed a
t th
e gr
ant
date
of
the
equi
ty-s
ettl
ed s
hare
-bas
ed p
aym
ents
is
expe
nsed
on
a st
raig
ht-l
ine
basi
s ov
er t
he v
esti
ng p
erio
d, b
ased
on
the
Gro
up’s
est
imat
e of
equ
ity
inst
rum
ent
that
wil
l ev
entu
ally
ves
t, w
ith
a co
rres
pond
ing
incr
ease
in
capi
tal
surp
lus
- em
ploy
ee s
hare
opt
ions
. T
he f
air
valu
e de
term
ined
at
the
gran
t da
te o
f th
e eq
uity
-set
tled
sha
re-b
ased
pay
men
ts i
s re
cogn
ized
as
an e
xpen
se i
n fu
ll at
the
gran
t dat
e w
hen
the
gran
ted
shar
e op
tion
s ar
e ve
sted
imm
edia
tely
. T
axat
ion
In
com
e ta
x ex
pens
e re
pres
ents
the
sum
of
the
curr
ent t
ax a
nd d
efer
red
tax.
a.
C
urre
nt ta
x
The
cur
rent
tax
lia
bili
ties
are
bas
ed o
n cu
rren
t ta
xabl
e pr
ofit
. Sin
ce p
art
of t
he i
ncom
e an
d ex
pens
es a
re
taxa
ble
or d
educ
tibl
e in
oth
er p
erio
ds,
or i
n ac
cord
ance
wit
h th
e re
leva
nt t
ax l
aws
are
taxa
ble
or
dedu
ctib
le,
curr
ent
taxa
ble
prof
it d
iffe
rs f
rom
net
pro
fit
repo
rted
in
the
cons
olid
ated
sta
tem
ents
of
com
preh
ensi
ve in
com
e.
The
Gro
up’s
cur
rent
tax
liab
ilit
ies
are
calc
ulat
ed b
y th
e ta
x ra
te w
as le
gisl
ated
or
subs
tant
iall
y le
gisl
ated
at
the
bala
nce
shee
t dat
e.
Acc
ordi
ng t
o th
e In
com
e T
ax L
aw, a
n ad
diti
onal
tax
at
10%
of
unap
prop
riat
ed e
arni
ngs
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
prio
r ye
ars’
tax
liab
iliti
es a
re a
dded
to o
r de
duct
ed f
rom
the
curr
ent y
ear’
s ta
x pr
ovis
ion.
157
- 31
-
b.
Def
erre
d ta
x D
efer
red
tax
is r
ecog
nize
d on
tem
pora
ry d
iffe
renc
es b
etw
een
the
carr
ying
am
ount
s of
ass
ets
and
liab
ilit
ies
in
the
cons
olid
ated
fi
nanc
ial
stat
emen
ts
and
the
corr
espo
ndin
g ta
x ba
ses
used
in
th
e co
mpu
tati
on o
f ta
xabl
e pr
ofit
. Def
erre
d ta
x li
abili
ties
are
gene
rall
y re
cogn
ized
for
all
tax
able
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
iffe
renc
es,
unus
ed
loss
ca
rryf
orw
ards
an
d un
used
ta
x cr
edit
s fo
r pu
rcha
ses
of
mac
hine
ry,
equi
pmen
t an
d te
chno
logy
, re
sear
ch a
nd d
evel
opm
ent
expe
ndit
ures
, an
d pe
rson
nel
trai
ning
exp
endi
ture
s to
the
ext
ent
that
it
is p
roba
ble
that
tax
able
pro
fit
wil
l be
ava
ilab
le a
gain
st w
hich
tho
se d
educ
tibl
e te
mpo
rary
di
ffer
ence
s ca
n be
uti
lize
d.
Def
erre
d ta
x li
abil
itie
s ar
e re
cogn
ized
for
tax
able
tem
pora
ry d
iffe
renc
es a
ssoc
iate
d w
ith
inve
stm
ents
in
subs
idia
ries
and
ass
ocia
tes
and
inte
rest
s in
joi
nt v
entu
res,
exc
ept
whe
re t
he G
roup
is
able
to
cont
rol
the
reve
rsal
of
the
tem
pora
ry d
iffe
renc
e an
d it
is
prob
able
tha
t th
e te
mpo
rary
dif
fere
nce
wil
l no
t re
vers
e in
th
e fo
rese
eabl
e fu
ture
. D
efer
red
tax
asse
ts a
risi
ng f
rom
ded
ucti
ble
tem
pora
ry d
iffe
renc
es a
ssoc
iate
d w
ith
such
inve
stm
ents
and
inte
rest
s ar
e on
ly r
ecog
nize
d to
the
exte
nt th
at it
is p
roba
ble
that
ther
e w
ill b
e su
ffic
ient
tax
able
pro
fit
agai
nst
whi
ch t
o ut
iliz
e th
e be
nefi
ts o
f th
e te
mpo
rary
dif
fere
nces
and
the
y ar
e ex
pect
ed to
rev
erse
in th
e fo
rese
eabl
e fu
ture
. T
he c
arry
ing
amou
nt o
f de
ferr
ed t
ax a
sset
s is
rev
iew
ed a
t th
e en
d of
eac
h re
port
ing
peri
od a
nd r
educ
ed
to t
he e
xten
t th
at i
t is
no
long
er p
roba
ble
that
suf
fici
ent
taxa
ble
prof
it w
ill
be a
vail
able
to
allo
w a
ll o
r pa
rt o
f th
e as
sets
to
be r
ecov
ered
. A
pre
viou
sly
unre
cogn
ized
def
erre
d ta
x as
set
is a
lso
revi
ewed
at
the
end
of e
ach
repo
rtin
g pe
riod
and
rec
ogni
zed
to th
e ex
tent
that
it h
as b
ecom
e pr
obab
le th
at f
utur
e ta
xabl
e pr
ofit
wil
l all
ow th
e de
ferr
ed ta
x as
set t
o be
rec
over
ed.
Def
erre
d ta
x li
abil
itie
s an
d as
sets
are
mea
sure
d at
the
tax
rate
s th
at a
re e
xpec
ted
to a
pply
in th
e pe
riod
in
whi
ch t
he l
iabi
liti
es a
re s
ettl
ed o
r th
e as
sets
are
rea
lize
d, b
ased
on
tax
rate
s (a
nd t
ax l
aws)
tha
t ha
ve
been
ena
cted
or
subs
tant
ivel
y en
acte
d by
the
end
of
the
repo
rtin
g pe
riod
. The
mea
sure
men
t of
def
erre
d ta
x li
abil
itie
s an
d as
sets
ref
lect
s th
e ta
x co
nseq
uenc
es t
hat
wou
ld f
ollo
w f
rom
the
man
ner
in w
hich
the
G
roup
exp
ects
, at
the
end
of
the
repo
rtin
g pe
riod
, to
rec
over
or
sett
le t
he c
arry
ing
amou
nt o
f it
s as
sets
an
d li
abil
itie
s.
c.
Cur
rent
and
def
erre
d ta
xes
for
the
year
Cur
rent
and
def
erre
d ta
xes
are
reco
gniz
ed i
n pr
ofit
or
loss
, ex
cept
whe
n th
ey r
elat
e to
ite
ms
that
are
re
cogn
ized
in o
ther
com
preh
ensi
ve in
com
e or
dir
ectl
y in
equ
ity, i
n w
hich
cas
e, th
e cu
rren
t and
def
erre
d ta
xes
are
also
rec
ogni
zed
in o
ther
com
preh
ensi
ve in
com
e or
dir
ectl
y in
equ
ity, r
espe
ctiv
ely.
M
ain
ten
ance
an
d O
verh
aul C
osts
R
outi
ne m
aint
enan
ce c
osts
are
rec
ogni
zed
in p
rofi
t or
loss
in th
e pe
riod
in w
hich
they
are
incu
rred
. T
he o
verh
aul
cost
s of
an
owne
d or
lea
sed
airc
raft
tha
t m
eet
the
crit
eria
for
fix
ed a
sset
cap
ital
izat
ion
are
capi
tali
zed
as r
epla
cem
ents
for
air
craf
t an
d en
gine
s an
d ar
e de
prec
iate
d on
a s
trai
ght-
line
bas
is o
ver
the
expe
cted
ann
ual o
verh
aul c
ycle
.
5.
CR
ITIC
AL
AC
CO
UN
TIN
G J
UD
GE
ME
NT
S A
ND
KE
Y S
OU
RC
ES
OF
ES
TIM
AT
ION
U
NC
ER
TA
INT
Y
In t
he a
ppli
cati
on o
f th
e G
roup
’s a
ccou
ntin
g po
lici
es a
s di
sclo
sed
in N
ote
4, m
anag
emen
t is
req
uire
d to
m
ake
judg
men
ts,
esti
mat
ions
and
ass
umpt
ions
abo
ut t
he c
arry
ing
amou
nts
of a
sset
s an
d li
abil
itie
s th
at a
re
not
read
ily
appa
rent
fro
m o
ther
sou
rces
. T
he e
stim
ates
and
ass
ocia
ted
assu
mpt
ions
are
bas
ed o
n hi
stor
ical
ex
peri
ence
and
oth
er f
acto
rs th
at a
re c
onsi
dere
d re
leva
nt. A
ctua
l res
ults
may
dif
fer
from
thes
e es
tim
ates
.
- 32
-
The
est
imat
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
unti
ng
esti
mat
es a
re r
ecog
nize
d in
the
per
iod
in w
hich
the
est
imat
es a
re r
evis
ed i
f th
e re
visi
ons
affe
ct o
nly
that
pe
riod
or
in t
he p
erio
d of
the
rev
isio
ns a
nd f
utur
e pe
riod
s if
the
rev
isio
ns a
ffec
t bo
th c
urre
nt a
nd f
utur
e pe
riod
s.
Key
Sou
rces
of
Est
imat
ion
Un
cert
ain
ty
The
key
ass
umpt
ions
con
cern
ing
the
futu
re a
nd o
ther
key
sou
rces
of
esti
mat
ion
unce
rtai
nty
at th
e en
d of
the
repo
rtin
g pe
riod
tha
t ha
ve a
sig
nifi
cant
ris
k ca
usin
g a
mat
eria
l ad
just
men
t to
the
car
ryin
g am
ount
s of
ass
ets
and
liab
ilit
ies
wit
hin
the
next
fin
anci
al y
ear
are
disc
usse
d be
low
. D
epre
ciat
ion
of
Pro
per
ty, P
lan
t an
d E
qu
ipm
ent
- F
ligh
t E
qu
ipm
ent
Fli
ght
equi
pmen
t is
dep
reci
ated
on
a st
raig
ht-l
ine
basi
s at
rat
es t
hat
can
be u
sed
to w
rite
dow
n th
eir
cost
to
thei
r es
tim
ated
res
idua
l va
lues
at
the
end
of t
heir
use
ful
live
s. T
he e
stim
ates
of
the
usef
ul l
ives
and
res
idua
l va
lues
of
the
flig
ht e
quip
men
t ar
e m
ade
by t
he G
roup
on
the
basi
s of
pas
t ex
peri
ence
and
fle
et o
pera
tion
perf
orm
ance
in
the
indu
stry
. D
ue t
o ch
ange
s in
the
fle
et p
lan,
the
boa
rd o
f di
rect
ors
of t
he C
ompa
ny h
as
deci
ded
to c
hang
e th
e ex
pect
ed u
sefu
l li
ves
of f
our
747-
400
(GE
) fr
om 2
0 to
16-
17 y
ears
sin
ce J
anua
ry 1
, 20
18 i
n or
der
to m
eet
the
econ
omic
ben
efit
s an
d nu
mbe
r of
yea
rs o
f co
nsum
ptio
n. I
t is
est
imat
ed t
hat
the
depr
ecia
tion
exp
ense
wil
l inc
reas
e by
app
roxi
mat
ely
NT
$770
mil
lion
ann
ually
. D
efin
ed B
enef
it O
bli
gati
ons
The
pre
sent
val
ue o
f de
fine
d be
nefi
t ob
liga
tion
s at
the
end
of
the
repo
rtin
g pe
riod
are
cal
cula
ted
usin
g ac
tuar
ial
assu
mpt
ions
. T
hose
ass
umpt
ions
, w
hich
are
bas
ed o
n m
anag
emen
t’s
judg
men
t an
d es
tim
ates
, co
mpr
ise
the
disc
ount
rat
e an
d ex
pect
ed r
etur
n on
pla
n as
sets
. Cha
nges
in a
ctua
rial
ass
umpt
ions
may
hav
e a
mat
eria
l im
pact
on
the
amou
nt o
f de
fine
d be
nefi
t obl
igat
ions
.
6.
CA
SH
AN
D C
AS
H E
QU
IVA
LE
NT
S
Dec
emb
er 3
1
20
19
20
18
C
ash
on h
and
and
revo
lvin
g fu
nds
$
48
3,95
1
$
413,
139
Che
ckin
g ac
coun
ts a
nd d
eman
d de
posi
ts
7,20
6,93
8
7,
770,
200
Cas
h eq
uiva
lent
s
T
ime
depo
sits
wit
h or
igin
al m
atur
itie
s of
less
than
thre
e m
onth
s
16
,565
,821
15
,784
,323
R
epur
chas
e ag
reem
ents
col
late
rali
zed
by b
onds
4,
202,
818
969,
875
$
28
,459
,528
$
24,9
37,5
37
The
mar
ket
rate
int
erva
ls o
f ca
sh i
n ba
nks
and
cash
equ
ival
ents
at
the
end
of t
he r
epor
ting
per
iod
wer
e as
fo
llow
s:
Dec
emb
er 3
1
20
19
20
18
B
ank
bala
nce
0%
-1.9
%
0%
-1.9
%
Tim
e de
posi
ts w
ith
orig
inal
mat
urit
ies
of le
ss th
an th
ree
mon
ths
0.
59%
-3.5
5%
0.
59%
-3.5
5%
Rep
urch
ase
agre
emen
ts c
olla
tera
lize
d by
bon
ds
0.
47%
-0.7
%
0.
63%
-3.3
0%
158
- 33
-
7.
FIN
AN
CIA
L I
NS
TR
UM
EN
TS
AT
FA
IR V
AL
UE
TH
RO
UG
H P
RO
FIT
OR
LO
SS
(F
VT
PL
)
D
ecem
ber
31
2019
2018
Fin
anci
al a
sset
s -
curr
ent
F
inan
cial
ass
ets
man
dato
rily
cla
ssif
ied
at F
VT
PL
D
eriv
ativ
e fi
nanc
ial i
nstr
umen
ts (
not u
nder
hed
ge a
ccou
ntin
g)
For
eign
exc
hang
e fo
rwar
d co
ntra
cts
$
43
4
$
- N
on-d
eriv
ativ
e fi
nanc
ial a
sset
s
B
enef
icia
l cer
tifi
cate
s
51
1,75
8
20
6,00
1
$
512,
192
$
20
6,00
1
Fin
anci
al li
abil
itie
s he
ld f
or tr
adin
g
Der
ivat
ive
fina
ncia
l ins
trum
ents
(no
t und
er h
edge
acc
ount
ing)
-
fore
ign
exch
ange
for
war
d co
ntra
cts
$
11
,749
$
221
At
the
end
of t
he r
epor
ting
peri
od,
outs
tand
ing
fore
ign
exch
ange
for
war
d co
ntra
cts
not
unde
r he
dge
acco
unti
ng w
ere
as f
ollo
ws:
C
urr
ency
Mat
uri
ty D
ate
N
otio
nal
Am
oun
t (I
n T
hou
san
ds)
D
ecem
ber
31, 2
019
B
uy f
orw
ard
cont
ract
s N
TD
/US
D
20
20.0
1.15
-202
0.07
.31
NT
D57
0,57
1/U
SD
19,0
00
D
ecem
ber
31, 2
018
B
uy f
orw
ard
cont
ract
s N
TD
/US
D
20
19.0
1.02
-201
9.01
.31
NT
D30
,923
/US
D1,
000
8.
FIN
AN
CIA
L A
SS
ET
S A
T F
VT
OC
I In
vest
men
ts in
Eq
uit
y In
stru
men
ts
Dec
emb
er 3
1
20
19
20
18
N
on-c
urre
nt
F
orei
gn in
vest
men
ts
Unl
iste
d sh
ares
$
182,
356
$
11
0,44
5 D
omes
tic
inve
stm
ents
U
nlis
ted
shar
es
26,8
65
21,7
46
$
20
9,22
1
$
132,
191
The
se i
nves
tmen
ts i
n eq
uity
ins
trum
ents
are
not
hel
d fo
r tr
adin
g. I
nste
ad,
they
are
hel
d fo
r m
ediu
m-
to
long
-ter
m s
trat
egic
pur
pose
s. 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
VT
OC
I as
it
beli
eves
tha
t re
cogn
izin
g sh
ort-
term
flu
ctua
tion
s in
the
se i
nves
tmen
ts’
fair
va
lues
in
prof
it o
r lo
ss w
ould
not
be
cons
iste
nt w
ith
the
Gro
up’s
str
ateg
y of
hol
ding
the
se i
nves
tmen
ts f
or
long
-ter
m p
urpo
ses.
- 34
-
9
. F
INA
NC
IAL
AS
SE
TS
AT
AM
OR
TIZ
ED
CO
ST
Dec
emb
er 3
1
20
19
20
18
C
urre
nt
T
ime
depo
sits
wit
h or
igin
al m
atur
itie
s of
mor
e th
an 3
mon
ths
$
2,
355,
095
$
3,
856,
660
N
on-c
urre
nt
T
ime
depo
sits
wit
h or
igin
al m
atur
itie
s of
mor
e th
an 1
yea
r
$
105,
586
$
-
The
int
eres
t ra
tes
for
tim
e de
posi
ts w
ith
orig
inal
mat
urit
ies
of m
ore
than
3 m
onth
s ra
nged
fro
m 0
.60%
to
1.30
% a
nd 0
.40%
to 1
.36%
as
of 2
019
and
2018
.
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
2019
2018
Not
es r
ecei
vabl
e
$
299,
245
$
59
8,82
4
Acc
ount
s re
ceiv
able
Acc
ount
s re
ceiv
able
8,
440,
254
9,66
7,01
0 L
ess:
All
owan
ce f
or im
pair
men
t los
s
(2
18,6
65)
(227
,306
)
8,22
1,58
9
9,
439,
704
$
8,
520,
834
$
10
,038
,528
T
he a
vera
ge c
redi
t pe
riod
was
7 t
o 55
day
s. I
n de
term
inin
g th
e re
cove
rabi
lity
of
a tr
ade
rece
ivab
le,
the
Gro
up c
onsi
dere
d an
y ch
ange
in
the
cred
it q
uali
ty o
f th
e re
ceiv
able
sin
ce t
he d
ate
cred
it w
as i
niti
ally
gr
ante
d to
the
end
of
the
repo
rtin
g pe
riod
, an
d an
y al
low
ance
for
im
pair
men
t lo
ss w
as b
ased
on
the
esti
mat
ed i
rrec
over
able
am
ount
s de
term
ined
by
refe
renc
e to
the
Gro
up’s
pas
t de
faul
t ex
peri
ence
wit
h th
e co
unte
rpar
ty a
nd a
n an
alys
is o
f th
e co
unte
rpar
ty’s
cur
rent
fin
anci
al p
osit
ion.
The
Gro
up a
dopt
ed a
pol
icy
of
only
dea
ling
wit
h en
titi
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,
as a
mea
ns o
f m
itig
atin
g th
e ri
sk o
f fi
nanc
ial
loss
fro
m d
efau
lts.
C
redi
t ra
ting
inf
orm
atio
n is
obt
aine
d fr
om i
ndep
ende
nt r
atin
g ag
enci
es w
here
ava
ilab
le o
r, i
f no
t av
aila
ble,
th
e G
roup
use
s ot
her
publ
icly
ava
ilab
le f
inan
cial
inf
orm
atio
n or
its
ow
n tr
adin
g re
cord
s to
rat
e it
s m
ajor
cu
stom
ers.
The
Gro
up’s
exp
osur
e an
d th
e cr
edit
rat
ings
of
its
coun
terp
arti
es a
re c
onti
nuou
sly
mon
itor
ed a
nd
the
aggr
egat
e va
lue
of t
rans
acti
ons
conc
lude
d is
spr
ead
amon
gst
appr
oved
cou
nter
part
ies.
Cre
dit
expo
sure
is
con
trol
led
by c
ount
erpa
rty
lim
its
that
are
rev
iew
ed a
nd a
ppro
ved
by t
he r
isk
man
agem
ent
com
mit
tee
annu
ally
. T
he G
roup
app
lies
the
sim
plif
ied
appr
oach
to
allo
win
g fo
r ex
pect
ed c
redi
t lo
sses
pre
scri
bed
by I
FR
S 9
, w
hich
per
mit
s th
e us
e of
lif
etim
e ex
pect
ed l
oss
allo
wan
ce f
or a
ll t
rade
rec
eiva
bles
. T
he e
xpec
ted
cred
it
loss
es o
n tr
ade
rece
ivab
les
are
esti
mat
ed u
sing
a p
rovi
sion
mat
rix
by r
efer
ence
to
past
def
ault
exp
erie
nce
wit
h th
e de
btor
s an
d an
ana
lysi
s of
the
deb
tors
’ cu
rren
t fi
nanc
ial
posi
tion
, ad
just
ed f
or g
ener
al e
cono
mic
co
ndit
ions
of
the
indu
stry
in
whi
ch t
he d
ebto
rs o
pera
te a
nd a
n as
sess
men
t of
bot
h th
e cu
rren
t as
wel
l as
the
fo
reca
sted
dir
ecti
on o
f ec
onom
ic c
ondi
tion
s at
the
rep
orti
ng d
ate.
As
the
Gro
up’s
his
tori
cal
cred
it l
oss
expe
rien
ce d
oes
not
show
sig
nifi
cant
ly d
iffe
rent
los
s pa
tter
ns f
or d
iffe
rent
cus
tom
er s
egm
ents
, th
e lo
ss
allo
wan
ce b
ased
on
the
past
due
sta
tus
is n
ot f
urth
er d
isti
ngui
shed
acc
ordi
ng to
the
diff
eren
t seg
men
ts o
f th
e G
roup
’s c
usto
mer
bas
e.
159
- 35
-
The
Gro
up w
rite
s of
f a
trad
e re
ceiv
able
whe
n th
ere
is in
form
atio
n in
dica
ting
that
the
debt
or is
exp
erie
ncin
g se
vere
fin
anci
al d
iffi
culty
and
the
re i
s no
rea
list
ic p
rosp
ect
of r
ecov
ery.
For
acc
ount
s re
ceiv
able
tha
t ha
ve
been
w
ritt
en
off,
th
e G
roup
co
ntin
ues
to
enga
ge
in
enfo
rcem
ent
acti
vity
to
at
tem
pt
to
reco
ver
the
rece
ivab
les
whi
ch a
re d
ue. W
here
rec
over
ies
are
mad
e, th
ese
are
reco
gniz
ed in
pro
fit o
r lo
ss.
The
fol
low
ing
tabl
e de
tail
s th
e lo
ss a
llow
ance
of
trad
e re
ceiv
able
s ba
sed
on th
e G
roup
’s p
rovi
sion
mat
rix.
D
ecem
ber
31, 2
019
N
ot P
ast
Du
e U
p t
o 30
Day
s
31 t
o 60
Day
s
61 t
o 90
Day
s
Ove
r 90
Day
s
Tot
al
E
xpec
ted
cred
it lo
ss 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
$
1,3
32,6
40
$
97
,700
$
113,
716
$
19
0,53
6
$ 8
,440
,254
L
oss
allo
wan
ce (
life
time
EC
Ls)
(8
,123
)
(2
,019
)
(6
,021
)
(1
7,34
0)
(1
85,1
62)
(218
,665
)
Am
orti
zed
cost
$ 6
,697
,539
$ 1
,330
,621
$
91,6
79
$
96
,376
$
5,37
4
$ 8
,221
,589
D
ecem
ber
31, 2
018
N
ot P
ast
Du
e U
p t
o 30
Day
s
31 t
o 60
Day
s
61 t
o 90
Day
s
Ove
r 90
Day
s
Tot
al
E
xpec
ted
cred
it lo
ss r
ate
0.
06%
0.06
%
3.
67%
21.7
8%
97
.5%
Gro
ss c
arry
ing
amou
nt
$
7,8
56,0
48
$
1,4
24,4
21
$
10
3,49
8
$
76,4
15
$
20
6,62
8
$ 9
,667
,010
L
oss
allo
wan
ce (
life
time
EC
Ls)
(4
,546
)
(8
56)
(3,7
96)
(16,
642)
(2
01,4
66)
(227
,306
)
A
mor
tize
d co
st
$
7,8
51,5
02
$
1,4
23,5
65
$
99
,702
$
59,7
73
$
5,
162
$
9,4
39,7
04
The
mov
emen
ts o
f th
e lo
ss a
llow
ance
of
trad
e re
ceiv
able
s w
ere
as f
ollo
ws:
F
or t
he
Yea
r E
nd
ed D
ecem
ber
31
2019
2018
Bal
ance
at J
anua
ry 1
$
227,
306
$
18
1,86
8 A
dd: N
et r
emea
sure
men
t of
loss
all
owan
ce
24,0
96
49,8
24
Les
s: A
mou
nts
wri
tten
off
(3
2,71
7)
(2,9
75)
For
eign
exc
hang
e ga
ins
and
loss
es
(3)
(1,4
11)
Los
s of
con
trol
of
subs
idia
ries
(1
7 )
-
Bal
ance
at D
ecem
ber
31, 2
018
$
21
8,66
5
$
227,
306
11
. IN
VE
NT
OR
IES
Dec
emb
er 3
1
20
19
20
18
A
ircr
aft s
pare
par
ts
$
7,
578,
125
$
7,
847,
082
Item
s fo
r in
-fli
ght s
ale
571,
601
556,
365
Wor
k in
pro
cess
- m
aint
enan
ce s
ervi
ces
283,
933
227,
975
Oth
ers
36
,454
23
,288
$
8,47
0,11
3
$
8,65
4,71
0 T
he o
pera
ting
cos
ts r
ecog
nize
d fo
r th
e ye
ars
ende
d D
ecem
ber
31,
2019
and
201
8 in
clud
ed l
osse
s fr
om
- 36
-
inve
ntor
y w
rite
-dow
ns o
f $3
27,9
19 th
ousa
nd a
nd $
371,
275
thou
sand
, res
pect
ivel
y.
12
. N
ON
-CU
RR
EN
T A
SS
ET
S H
EL
D F
OR
SA
LE
Dec
emb
er 3
1
20
19
20
18
L
ong-
term
equ
ity in
vest
men
ts h
eld
for
sale
- A
sian
Com
pres
sor
Tec
hnol
ogy
Ser
vice
s
$
-
$
46,1
54
To
enha
nce
its
com
peti
tive
ness
, th
e C
ompa
ny p
lans
to
intr
oduc
e ne
w a
ircr
aft
and
reti
re o
ld a
ircr
aft
acco
rdin
g to
a p
lann
ed s
ched
ule.
Suc
h ai
rcra
ft, c
lass
ifie
d as
non
-cur
rent
ass
ets
held
for
sal
e, h
ad a
n or
igin
al
book
val
ue w
hich
was
hig
her
than
the
expe
cted
sal
e pr
ice
and
whi
ch w
as r
ecog
nize
d as
an
impa
irm
ent l
oss.
H
owev
er, t
he a
ctua
l los
s sh
all b
e id
enti
fied
by
the
actu
al s
ale
pric
e.
In 2
019
and
2018
, th
e C
ompa
ny r
ecog
nize
d im
pair
men
t lo
sses
of
$0 t
hous
and
and
$75,
436
thou
sand
, re
spec
tive
ly. I
n 20
19 a
nd 2
018,
the
Com
pany
rec
ogni
zed
disp
osal
loss
es o
f $1
0,46
2 th
ousa
nd a
nd $
368,
992
thou
sand
, re
spec
tive
ly.
The
fai
r va
lue
was
det
erm
ined
by
tran
sact
ions
of
the
rela
ted
mar
ket,
and
the
prop
osed
sal
e pr
ice
was
bas
ed o
n th
e cu
rren
t sta
tus
of th
e ai
rcra
ft. T
he f
air
valu
e is
cla
ssif
ied
as le
vel 3
.
13.
SU
BS
IDIA
RIE
S
Sub
sidi
ary
incl
uded
in th
e co
nsol
idat
ed f
inan
cial
sta
tem
ents
:
Pro
por
tion
of
Ow
ner
ship
(%
)
Dec
embe
r 31
In
vest
or C
omp
any
In
vest
ee C
omp
any
M
ain
Bu
sin
esse
s an
d P
rod
uct
s
2019
2018
C
hina
Air
line
s, L
td.
T
iger
air
Tai
wan
Co.
, Ltd
. (N
ote)
A
ir tr
ansp
orta
tion
77
100
Tai
wan
Air
craf
t Mai
nten
ance
A
nd E
ngin
eeri
ng C
o., L
td.
Air
craf
t mai
nten
ance
100
100
CA
L-D
ynas
ty I
nter
nati
onal
A h
oldi
ng c
ompa
ny, r
eal e
stat
e an
d ho
tel
serv
ices
100
100
CA
L-A
sia
Inve
stm
ent
Gen
eral
inve
stm
ent
10
0 10
0
D
ynas
ty A
erot
ech
Inte
rnat
iona
l C
orp.
Cle
anin
g of
air
craf
t and
mai
nten
ance
of
mac
hine
and
equ
ipm
ent
10
0 10
0
Yes
trip
Tra
vel b
usin
ess
10
0 10
0
C
al P
ark
Rea
l est
ate
leas
e an
d in
tern
atio
nal t
rade
100
100
Cal
Hot
el C
o., L
td.
H
otel
bus
ines
s
100
100
Sab
re T
rave
l Net
wor
k (T
aiw
an)
S
ale
and
mai
nten
ance
of
hard
war
e an
d so
ftw
are
94
94
Man
dari
n A
irli
nes
A
ir tr
ansp
orta
tion
and
mai
nten
ance
of
airc
raft
94
94
Tai
wan
Air
Car
go T
erm
inal
(N
ote)
Air
car
go a
nd s
tora
ge
59
59
Kao
hsiu
ng C
ater
ing
Ser
vice
s,
Ltd
.
In-f
ligh
t cat
erin
g
54
54
Dyn
asty
Hol
iday
s
T
rave
l bus
ines
s
20
51
Tao
yuan
Int
erna
tion
al A
irpo
rt
Serv
ices
Air
port
ser
vice
s
49
49
Tai
wan
Air
port
Ser
vice
s (N
ote)
Air
port
ser
vice
s
48
48
Glo
bal S
ky E
xpre
ss
F
orw
ardi
ng a
nd s
tora
ge o
f ai
r ca
rgo
25
25
Cal
-Dyn
asty
Dyn
asty
Pro
pert
ies
Co.
, Ltd
.
Rea
l est
ate
man
agem
ent
10
0 10
0
Inte
rnat
iona
l
Dyn
asty
Hot
el o
f H
awai
i, In
c.
H
otel
bus
ines
s
100
100
Tai
wan
Air
port
Ser
vice
s
Tai
wan
Air
port
Ser
vice
(S
amoa
)
Air
port
sup
port
ing
serv
ice
and
inve
stm
ent
10
0 10
0 N
ote:
P
ropo
rtio
n of
ow
ners
hip
is c
onsi
dere
d fr
om th
e pe
rspe
ctiv
e of
the
Gro
up.
Exc
ept
that
the
Com
pany
has
con
trol
ove
r T
aoyu
an I
nter
nati
onal
Air
port
Ser
vice
, T
aiw
an A
irpo
rt S
ervi
ce
160
- 37
-
and
Glo
bal
Sky
Exp
ress
, th
e ot
hers
are
inv
este
es t
hat
the
Com
pany
had
mor
e th
an 5
0% o
f th
eir
voti
ng
shar
es.
The
abo
ve f
inan
cial
inf
orm
atio
n of
the
sub
sidi
arie
s fo
r th
e ye
ars
ende
d D
ecem
ber
31,
2019
and
20
18 o
f th
ese
subs
idia
ries
was
rep
orte
d ac
cord
ing
to r
epor
ts t
hat
wer
e no
t re
view
ed b
y in
depe
nden
t au
dito
rs.
The
Gro
up p
aid
$243
,743
tho
usan
d on
Mar
ch 7
, 20
18 t
o ac
quir
e an
add
itio
nal
18%
of
the
issu
ed s
hare
ca
pita
l of
Kao
hsiu
ng C
ater
ing,
Ltd
. (K
aohs
iung
Cat
erin
g). T
he G
roup
’s h
oldi
ng o
f th
e is
sued
sha
re c
apit
al
of K
aohs
iung
Cat
erin
g ex
ceed
s 50
%;
ther
efor
e, K
aohs
iung
Cat
erin
g is
lis
ted
as a
sub
sidi
ary
beca
use
the
Gro
up h
as c
ontr
ol o
ver
the
inve
stee
. F
or t
he d
iscl
osur
e of
the
Gro
up’s
acq
uisi
tion
of
Kao
hsiu
ng C
ater
ing,
pl
ease
ref
er to
Not
e 30
. T
he b
oard
of
dire
ctor
s of
the
Com
pany
dec
ided
to
sell
par
t of
the
equ
ity
of D
ynas
ty H
olid
ays
to H
.I.S
. T
aiw
an C
o., L
td. o
n Ja
nuar
y 21
, 201
9, a
nd c
ompl
eted
the
tran
sact
ion
on J
anua
ry 3
1, 2
109.
Aft
er th
e sa
le o
f th
e eq
uity
, th
e G
roup
’s h
oldi
ng o
f th
e is
sued
sha
re c
apit
al d
ecre
ased
fro
m 5
1% t
o 20
%.
Dyn
asty
Hol
iday
s w
as c
lass
ifie
d as
an
asso
ciat
e si
nce
the
Gro
up l
ost
cont
rol
of t
he s
ubsi
diar
y. T
here
fore
, th
e re
leva
nt a
sset
s an
d li
abil
itie
s w
ere
not c
onso
lida
ted
in th
e cu
rren
t per
iod,
and
onl
y th
e pr
ofit
and
loss
fro
m J
anua
ry 1
, 201
9 to
Jan
uary
31,
201
9 w
as c
onso
lida
ted.
For
the
inf
orm
atio
n ab
out
the
disp
osal
of
the
subs
idia
ry, p
leas
e re
fer
to N
ote
31.
In o
rder
to
prep
are
the
list
ing
of T
iger
air
Tai
wan
Co.
, L
td.
and
com
ply
wit
h th
e ru
les
rela
ting
to
the
exam
inat
ion
for
publ
ic l
istin
g, t
he r
elea
se o
f th
e sh
ares
of
Tig
erai
r T
aiw
an C
o.,
Ltd
. he
ld b
y th
e C
ompa
ny
and
Man
dari
n A
irli
nes
was
res
olve
d in
the
shar
ehol
ders
’ m
eeti
ng o
f th
e C
ompa
ny o
n Ju
ne 2
5, 2
019,
and
in
the
shar
ehol
ders
’ m
eeti
ng o
f M
anda
rin
Air
line
s on
Jun
e 27
, 20
19.
The
sha
res
shal
l be
sub
scri
bed
by a
ll
shar
ehol
ders
of
the
Com
pany
and
Man
dari
n A
irli
nes
on t
he b
asis
of
the
perc
enta
ge o
f sh
areh
oldi
ngs.
For
th
e su
bscr
ibed
sha
res
that
the
orig
inal
sha
reho
lder
s w
aive
d or
for
the
unde
rsub
scri
bed
port
ion,
the
chai
rman
w
as a
utho
rize
d to
con
tact
spe
cifi
c pe
rson
s to
sub
scri
be. T
he s
ubsc
ript
ion
pric
e w
as s
et a
t $4
1 pe
r sh
are.
In
Oct
ober
201
9, t
he s
tock
pri
ce w
as f
ully
pai
d an
d th
e sh
ares
wer
e co
mpl
etel
y de
liver
ed a
nd t
rans
ferr
ed. T
he
proc
eeds
fro
m d
ispo
sal
wer
e $1
,866
,474
tho
usan
d, a
nd t
he r
elat
ed g
ain
on d
ispo
sal
was
$1,
254,
633
thou
sand
and
rec
ogni
zed
in th
e ca
pita
l sur
plus
acc
ount
. 14
. IN
VE
ST
ME
NT
S A
CC
OU
NT
ED
FO
R U
SIN
G T
HE
EQ
UIT
Y M
ET
HO
D
D
ecem
ber
31
2019
2018
Inve
stm
ents
in a
ssoc
iate
s
$
1,20
8,49
5
$
1,21
7,86
3 In
vest
men
ts in
join
tly c
ontr
olle
d en
titi
es
1,01
5,29
8
98
2,28
6
$
2,22
3,79
3
$
2,20
0,14
9 a.
T
he a
mou
nt o
f in
vest
men
t in
asso
ciat
es w
ere
as f
ollo
ws:
Dec
emb
er 3
1
20
19
20
18
Unl
iste
d co
mpa
nies
Chi
na A
ircr
aft S
ervi
ces
$
46
1,26
3
$
497,
362
Kao
hsiu
ng C
ater
ing
Ser
vice
s
10
,004
-
Air
port
Air
Car
go T
erm
inal
(X
iam
en)
446,
161
442,
891
Air
port
Air
Car
go S
ervi
ce (
Xia
men
)
24
8,35
0
23
3,41
7 E
aste
rn U
nite
d In
tern
atio
nal L
ogis
tics
(H
oldi
ngs)
Ltd
.
42
,717
44
,193
$
1,20
8,49
5
$
1,21
7,86
3 A
t th
e en
d of
the
rep
ortin
g pe
riod
, th
e pr
opor
tion
of
owne
rshi
p an
d vo
ting
righ
ts i
n as
soci
ates
hel
d by
- 38
-
the
Gro
up w
ere
as f
ollo
ws:
P
rop
orti
on o
f O
wn
ersh
ip a
nd
V
otin
g R
igh
ts
Dec
emb
er 3
1 N
ame
of A
ssoc
iate
2019
2018
Chi
na A
ircr
aft S
ervi
ces
20
%
20%
D
ynas
ty H
olid
ays
(Not
e)
20
%
51%
A
irpo
rt a
ir C
argo
Ter
min
al (
Xia
men
)
28%
28
%
Air
port
air
Car
go S
ervi
ce (
Xia
men
)
28%
28
%
Eas
tern
Uni
ted
Inte
rnat
iona
l Log
isti
cs (
Hol
ding
s) L
td.
35
%
35%
N
ote:
Dyn
asty
Hol
iday
s w
as li
st a
s an
ass
ocia
te o
n Ja
nuar
y 1,
201
9.
The
inve
stm
ent i
ncom
e of
ass
ocia
tes
acco
unte
d fo
r us
ing
the
equi
ty m
etho
d w
ere
as f
ollo
ws:
20
19
20
18
C
hina
Air
craf
t Ser
vice
s
$
10,3
65
$
6,
402
Kao
hsiu
ng C
ater
ing
Ser
vice
s
-
15,1
13
Dyn
asty
Hol
iday
s
15
-
Air
port
air
Car
go T
erm
inal
(X
iam
en)
21,5
35
22,5
71
Air
port
air
Car
go S
ervi
ce (
Xia
men
)
25
,146
32
,196
E
aste
rn U
nite
d In
tern
atio
nal L
ogis
tics
(H
oldi
ngs)
Ltd
.
3,
387
6,89
5
$
60,4
48
$
83
,177
O
ther
com
preh
ensi
ve in
com
e of
ass
ocia
tes
acco
unte
d fo
r us
ing
the
equi
ty m
etho
d in
201
9 an
d 20
18 a
re
both
loss
es in
the
amou
nts
of $
0 th
ousa
nd.
The
fin
anci
al s
tate
men
ts u
sed
as a
bas
is o
f th
e am
ount
s of
and
rel
ated
inf
orm
atio
n on
the
inv
estm
ents
ac
coun
ted
for
usin
g th
e eq
uity
met
hod
and
the
shar
e of
pro
fit
or l
oss
and
othe
r co
mpr
ehen
sive
inc
ome
of t
hose
inv
estm
ents
for
the
yea
rs e
nded
Dec
embe
r 31
, 201
9 an
d 20
18 w
ere
all
inde
pend
ently
aud
ited
, ex
cept
tho
se o
f C
hina
Air
craf
t S
ervi
ces
and
Eas
tern
Uni
ted
Inte
rnat
iona
l L
ogis
tics
(H
oldi
ng)
Ltd
. H
owev
er,
the
man
agem
ent
dete
rmin
ed t
hat
ther
e w
ould
hav
e be
en n
o si
gnif
ican
t ad
just
men
ts h
ad t
his
inve
stee
’s f
inan
cial
sta
tem
ents
bee
n in
depe
nden
tly
audi
ted.
b.
Inve
stm
ents
in jo
intly
con
trol
led
enti
ties
T
he in
vest
men
ts in
join
tly c
ontr
olle
d en
titie
s w
ere
as f
ollo
ws:
D
ecem
ber
31
2019
2018
Chi
na P
acif
ic C
ater
ing
Ser
vice
s
$
801,
071
$
80
5,15
7 C
hina
Pac
ific
Lau
ndry
Ser
vice
s
16
8,54
7
16
6,90
1 N
OR
DA
M A
sia
Ltd
.
37
,813
2,
358
Del
ica
Inte
rnat
iona
l Co.
, Ltd
.
7,
867
7,87
0
$
1,01
5,29
8
$
982,
286
161
- 39
-
At
the
end
of t
he r
epor
ting
per
iod,
the
pro
port
ion
of o
wne
rshi
p an
d vo
ting
righ
ts i
n jo
intly
con
trol
led
enti
ties
hel
d by
the
Gro
up w
ere
as f
ollo
ws:
Pro
por
tion
of
Ow
ner
ship
an
d
Vot
ing
Rig
hts
D
ecem
ber
31
2019
2018
Chi
na P
acif
ic C
ater
ing
Ser
vice
s
51%
51%
C
hina
Pac
ific
Lau
ndry
Ser
vice
s
55%
55%
N
OR
DA
M A
sia
Ltd
.
49%
49%
D
elic
a In
tern
atio
nal C
o., L
td.
51
%
51
%
The
Gro
up e
nter
ed i
nto
a jo
int
vent
ure
agre
emen
t w
ith
the
Tai
koo
Gro
up t
o in
vest
in
Chi
na P
acif
ic
Cat
erin
g S
ervi
ces
and
Chi
na P
acif
ic L
aund
ry S
ervi
ces.
Acc
ordi
ng t
o th
e ag
reem
ent,
both
par
ties
hav
e th
e m
ajor
ity
pow
er in
the
boar
d of
dir
ecto
rs to
pos
e a
mot
ion
for
veto
, and
ther
efor
e th
e G
roup
doe
s no
t ha
ve c
ontr
ol.
To
enha
nce
the
Gro
up’s
mai
nten
ance
cap
abil
itie
s, t
he C
ompa
ny e
stab
lish
ed a
joi
nt v
entu
re w
ith
the
US
NO
RD
AM
Aer
ospa
ce G
roup
in
Dec
embe
r 20
17,
plan
ning
to
prov
ide
thru
st r
ever
sers
and
com
posi
te
repa
ir s
ervi
ces
in 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
zati
on i
n th
e U
SA
on
July
22,
201
8 to
sol
ve t
he b
usin
ess
disp
utat
ion
wit
h th
eir
coop
erat
ive
part
ner,
so
thei
r co
mpa
ny o
pera
tion
was
not
im
pact
ed.
As
a re
sult
, N
OR
DA
M A
sia
susp
ende
d it
s op
erat
ion
from
Oct
ober
5,
2018
to
Oct
ober
4,
2019
and
res
umed
bus
ines
s on
Oct
ober
4,
2019
. T
he
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
2019
. T
o ex
pand
the
Gro
up’s
cat
erin
g bu
sine
ss,
Kao
hsiu
ng C
ater
ing
ente
red
into
a j
oint
ven
ture
agr
eem
ent
wit
h a
Japa
nese
bra
nd c
ompa
ny t
o in
vest
in
Del
ica
Inte
rnat
iona
l C
o, L
td.,
wit
h th
e Ja
pane
se b
rand
co
mpa
ny h
avin
g th
e ri
ght
to m
ake
deci
sion
s on
ope
rati
ons,
and
the
refo
re,
the
Gro
up d
oes
not
have
co
ntro
l. D
etai
ls o
f in
vest
men
t inc
ome
attr
ibut
able
to in
vest
men
t in
join
tly c
ontr
olle
d en
titie
s w
ere
as f
ollo
ws:
F
or t
he
Yea
r E
nd
ed D
ecem
ber
31
2019
2018
Chi
na P
acif
ic C
ater
ing
Ser
vice
s
$
256,
899
$
26
7,41
3 C
hina
Pac
ific
Lau
ndry
Ser
vice
s
15
,030
16
,695
N
OR
DA
M A
sia
Ltd
.
(7
0)
(41)
D
elic
a In
tern
atio
nal C
o., L
td.
(2)
2
$
271,
857
$
284,
069
Oth
er c
ompr
ehen
sive
inco
me
of a
ssoc
iate
s ac
coun
ted
for
usin
g th
e eq
uity
met
hod
in 2
019
and
2018
are
lo
sses
in th
e am
ount
s of
$(3
2,10
1) th
ousa
nd a
nd $
(33,
242)
thou
sand
, res
pect
ivel
y.
The
fin
anci
al s
tate
men
ts u
sed
as a
bas
is o
f th
e am
ount
s of
and
rel
ated
inf
orm
atio
n on
the
inv
estm
ents
ac
coun
ted
for
usin
g th
e eq
uity
met
hod
and
the
shar
e of
pro
fit
or l
oss
and
othe
r co
mpr
ehen
sive
inc
ome
of t
hose
inv
estm
ents
for
the
yea
rs e
nded
Dec
embe
r 31
, 201
9 an
d 20
18 w
ere
all
inde
pend
ently
aud
ited
, ex
cept
of
NO
RD
AM
Asi
a L
imit
ed.
How
ever
, th
e m
anag
emen
t de
term
ined
tha
t th
ere
wou
ld h
ave
been
no
sig
nifi
cant
adj
ustm
ents
had
this
inve
stee
’s f
inan
cial
sta
tem
ents
bee
n in
depe
nden
tly
audi
ted.
F
or d
etai
ls o
n se
rvic
es,
maj
or b
usin
ess
offi
ces
and
the
coun
try
whe
re t
he a
bove
ass
ocia
tes
and
join
tly
cont
roll
ed e
ntit
ies
are
regi
ster
ed,
refe
r to
Tab
le 6
, “N
ames
, L
ocat
ions
, A
nd O
ther
Inf
orm
atio
n of
In
vest
ees
Ove
r W
hich
the
Com
pany
Exe
rcis
es S
igni
fica
nt I
nflu
ence
”, a
nd T
able
7,
“Inv
estm
ents
In
Mai
nlan
d C
hina
”, f
ollo
win
g th
ese
note
s to
con
soli
date
d fi
nanc
ial s
tate
men
ts.
- 40
-
15.
PR
OP
ER
TY
, PL
AN
T A
ND
EQ
UIP
ME
NT
Fre
ehol
d L
and
Bu
ild
ings
Fli
ght
Eq
uip
men
t
Eq
uip
men
t u
nd
er F
inan
ce
Lea
ses
O
ther
s
Tot
al
C
ost
B
alan
ce a
t Jan
uary
1,
2018
$
922,
626
$
13
,698
,308
$ 2
63,4
27,1
44
$
26
,187
,556
$
16,2
30,0
11
$
320
,465
,645
A
ddit
ions
-
57,9
98
2,68
4,33
7
-
1,86
8,21
2
4,
610,
547
Dis
posa
ls
-
(1
1,80
3 )
(2
0,30
7,37
5 )
(1
,811
,222
)
(3
13,7
27 )
(22,
444,
127 )
R
ecla
ssif
icat
ion
-
(2
27 )
13,6
61,6
40
1,42
8,46
3
10
3,29
6
15
,193
,172
N
et e
xcha
nge
diff
eren
ce
16,2
34
28,9
91
-
21
1
3,
003
48,4
39
Gai
n of
acq
uisi
tion
s th
roug
h bu
sine
ss
com
bina
tion
s
76,7
04
220,
318
229,
384
-
26
,985
55
3,39
1
Bal
ance
at D
ecem
ber
31,
2018
$
1,01
5,56
4
$
13,9
93,5
85
$
259
,695
,130
$
25,8
05,0
08
$
17
,917
,780
$ 3
18,4
27,0
67
A
ccum
ulat
ed d
epre
ciat
ion
an
d im
pair
men
t
Bal
ance
at J
anua
ry 1
, 20
18
$
-
$
(6
,137
,495
)
$ (1
36,5
94,7
65 )
$
(1
4,14
2,87
2 )
$
(9,9
72,9
82 )
$
(166
,848
,114
) D
epre
ciat
ion
expe
nse
-
(4
33,4
50 )
(15,
960,
477 )
(2,0
23,9
24 )
(906
,953
)
(1
9,32
4,80
4 )
Dis
posa
ls
-
10
,049
19
,814
,544
1,
532,
046
292,
136
21,6
48,7
75
Impa
irm
ent l
oss
-
-
(50,
000 )
-
-
(50,
000 )
R
ecla
ssif
icat
ion
-
-
9,28
3,04
1
-
(11,
655 )
9,27
1,38
6 N
et e
xcha
nge
diff
eren
ce
-
(1
3,97
7 )
-
(72 )
(2,5
43 )
(16,
592 )
Bal
ance
at D
ecem
ber
31,
2018
$
-
$
(6,5
74,8
73 )
$
(123
,507
,657
)
$
(14,
634,
822 )
$
(1
0,60
1,99
7 )
$ (1
55,3
19,3
49 )
Bal
ance
at D
ecem
ber
31,
2018
, net
val
ue
$
1,
015,
564
$
7,
418,
712
$
136
,187
,473
$
11,1
70,1
86
$
7,
315,
783
$
163
,107
,718
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
ddit
ions
-
209,
413
2,24
8,85
6
-
864,
223
3,32
2,49
2 D
ispo
sals
-
(1,1
30 )
(20,
698,
042 )
(668
,721
)
(3
93,0
58 )
(21,
760,
951 )
R
ecla
ssif
icat
ion
-
1,
906,
078
30,8
31,7
48
(25,
131,
813 )
(1,5
37,4
94 )
6,06
8,51
9 N
et e
xcha
nge
diff
eren
ce
(13,
065 )
(23,
883 )
-
-
(2,4
58 )
(39,
406 )
L
oss
of c
ontr
ol o
f su
bsid
iari
es
-
-
-
(4
,474
)
(2
,158
)
(6
,632
)
Bal
ance
at D
ecem
ber
31,
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
irm
ent
B
alan
ce a
t Jan
uary
1,
2019
$
-
$
(6,5
74,8
73 )
$
(123
,507
,657
)
$
(14,
634,
822 )
$
(1
0,60
1,99
7 )
$ (1
55,3
19,3
49 )
Dep
reci
atio
n ex
pens
e
-
(466
,943
)
(1
8,57
1,99
2 )
(7
41,8
52 )
(921
,246
)
(2
0,70
2,03
3 )
Dis
posa
ls
-
1,
014
14,8
99,5
62
79,8
66
355,
222
15,3
35,6
64
Rec
lass
ific
atio
n
-
-
(1
4,70
6,08
3 )
15
,294
,696
(4
5,10
3 )
54
3,51
0 N
et e
xcha
nge
diff
eren
ce
-
12
,262
-
-
1,
989
14,2
51
Los
s of
con
trol
of
subs
idia
ries
-
-
-
2,11
2
1,
727
3,83
9 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 )
Bal
ance
at D
ecem
ber
31,
2019
, net
val
ue
$
1,
002,
499
$
9,
055,
523
$
130
,191
,522
$
-
$
5,63
7,42
7
$ 1
45,8
86,9
71
162
- 41
-
Pro
pert
y, p
lant
and
equ
ipm
ent
are
depr
ecia
ted
on a
str
aigh
t-li
ne b
asis
ove
r th
e es
tim
ated
use
ful
life
of
the
asse
t:
Bui
ldin
g
M
ain
buil
ding
s
45-5
5 ye
ars
Oth
ers
10
-25
year
s M
achi
nery
and
equ
ipm
ent
Ele
ctro
-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
Lea
seho
ld im
prov
emen
ts
Bui
ldin
g im
prov
emen
ts
5
year
s O
ther
s
3-5
year
s A
sset
s le
ased
to o
ther
s
3-5
year
s F
ligh
t equ
ipm
ent a
nd e
quip
men
t und
er f
inan
ce le
ases
A
irfr
ames
15-2
5 ye
ars
Air
craf
t cab
ins
7-
20 y
ears
E
ngin
es
10
-20
year
s H
eavy
mai
nten
ance
on
airc
raft
6-8
year
s E
ngin
e ov
erha
uls
3-
10 y
ears
L
andi
ng g
ear
over
haul
s
7-
12 y
ears
R
epai
rabl
e sp
are
part
s
3-15
yea
rs
Lea
sed
airc
raft
impr
ovem
ents
5-12
yea
rs
Reg
ardi
ng c
hang
es i
n fl
eet
com
posi
tion
, cu
rren
t an
d fo
reca
sted
mar
ket
valu
e, a
nd o
ther
tec
hnic
al f
acto
rs,
the
Gro
up r
ecog
nize
d im
pair
men
t lo
sses
on
airc
raft
equ
ipm
ent
in 2
018
of $
50,0
00 t
hous
and.
The
fai
r va
lue
was
det
erm
ined
bas
ed o
n ai
rcra
ft c
ondi
tion
s an
d m
arke
t est
imat
es.
Ref
er to
Not
e 35
for
the
carr
ying
am
ount
s of
pro
pert
y, p
lant
and
equ
ipm
ent p
ledg
ed b
y th
e G
roup
. B
ased
on
the
part
icul
arit
y of
ris
k in
the
avi
atio
n in
dust
ry,
all
of t
he G
roup
’s a
sset
s su
ch a
s ai
rcra
ft,
real
es
tate
, and
mov
able
pro
pert
y ar
e ad
equa
tely
insu
red
to d
iver
sify
the
pote
ntia
l ris
k re
late
d to
ope
rati
ons.
T
he G
roup
gen
erat
ed th
e fo
llow
ing
non-
cash
inve
stm
ent a
ctiv
itie
s re
late
d to
the
purc
hase
of
prop
erty
, pla
nt
and
equi
pmen
t in
2019
and
201
8:
Dec
emb
er 3
1
20
19
20
18
In
crea
se in
pro
pert
y, p
lant
and
equ
ipm
ent
$
3,
322,
492
$
4,
610,
547
Cap
ital
ized
inte
rest
pai
d
(6
,414
)
(1
,947
)
Pur
chas
e of
pro
pert
y, p
lant
and
equ
ipm
ent p
aid
$
3,
316,
078
$
4,
608,
600
16
. IN
VE
ST
ME
NT
PR
OP
ER
TIE
S
D
ecem
ber
31
2019
2018
Car
ryin
g am
ount
In
vest
men
t pro
pert
ies
$
2,
075,
068
$
2,
075,
345
The
inv
estm
ent
prop
erti
es h
eld
by t
he G
roup
wer
e la
nd l
ocat
ed i
n N
anka
n an
d bu
ildin
gs i
n T
aipe
i, w
hich
w
ere
all l
ease
d to
oth
ers.
The
bui
ldin
gs a
re d
epre
ciat
ed o
n a
stra
ight
-lin
e ba
sis
over
55
year
s.
- 42
-
The
fai
r va
lue
of t
he i
nves
tmen
t pr
oper
ties
hel
d by
the
Gro
up w
as $
2,50
6,23
0 th
ousa
nd a
s of
bot
h D
ecem
ber
31,
2019
and
201
8, r
espe
ctiv
ely.
In
addi
tion,
man
agem
ent
asse
ssed
tha
t th
ere
is n
o si
gnif
ican
t di
ffer
ence
in th
e fa
ir v
alue
of
Dec
embe
r 31
, 201
9 an
d 20
18.
The
abo
ve f
air
valu
e va
luat
ion
was
per
form
ed b
y in
depe
nden
t qua
lifie
d pr
ofes
sion
al v
alue
rs, a
nd th
e fu
ture
in
com
e ev
alua
ted
by m
anag
emen
t was
bas
ed o
n m
arke
t tra
nsac
tion
s.
All
of
the
Gro
up’s
inve
stm
ent p
rope
rtie
s w
ere
held
und
er f
reeh
old
inte
rest
.
C
ost
A
ccu
mu
late
d
N
et V
alu
e
B
alan
ce a
t Jan
uary
1, 2
018
$
2,
082,
390
$
(6
,766
)
$
2,07
5,62
4 D
epre
ciat
ion
expe
nse
-
(2
79)
(279
)
B
alan
ce a
t Dec
embe
r 31
, 201
8
$
2,08
2,39
0
$
(7,0
45)
$
2,
075,
345
Bal
ance
at J
anua
ry 1
, 201
9
$
2,08
2,39
0
$
(7,0
45)
$
2,
075,
345
Dep
reci
atio
n ex
pens
e
-
(277
)
(2
77)
Bal
ance
at D
ecem
ber
31, 2
019
$
2,
082,
390
$
(7
,322
)
$
2,07
5,06
8 17
. O
TH
ER
IN
TA
NG
IBL
E A
SS
ET
S
Com
pu
ter
Sof
twar
e C
ost
Rel
atio
nsh
ip
Bet
wee
n
Cli
ents
Acc
um
ula
ted
A
mor
tiza
tion
Net
Val
ue
B
alan
ce a
t Jan
uary
1, 2
018
$
2,
039,
602
$
-
$
(1,
020,
257)
$
1,01
9,34
5 A
ddit
ions
18
4,22
3
-
-
18
4,22
3 A
mor
tiza
tion
exp
ense
s
-
-
(1
81,9
43)
(181
,943
) A
cqui
siti
ons
thro
ugh
busi
ness
co
mbi
nati
ons
686
186,
197
(10,
036)
17
6,84
7 R
ecla
ssif
icat
ion
12,8
71
-
(5
40)
12,3
31
Eff
ects
of
exch
ange
rat
e ch
ange
s
-
-
(7)
(7)
B
alan
ce a
t Dec
embe
r 31
, 201
8
$
2,23
7,38
2
$
186,
197
$
(1,
212,
783)
$
1,21
0,79
6
Bal
ance
at J
anua
ry 1
, 201
9
$
2,23
7,38
2
$
186,
197
$
(1,
212,
783)
$
1,21
0,79
6 A
ddit
ions
17
2,63
9
-
-
17
2,63
9 A
mor
tiza
tion
exp
ense
s
-
-
(1
98,2
37)
(198
,237
) D
ispo
sal o
f su
bsid
iari
es
(3,8
58)
-
1,
357
(2,5
01)
Eff
ects
of
exch
ange
rat
e ch
ange
s
-
-
(5)
(5)
B
alan
ce a
t Dec
embe
r 31
, 201
9
$
2,40
6,16
3
$
186,
197
$
(1,
409,
668)
$
1,18
2,69
2 T
he a
bove
oth
er in
tang
ible
ass
ets
are
amor
tize
d on
a s
trai
ght-
line
bas
is o
ver
2-16
yea
rs.
163
- 43
-
18.
OT
HE
R A
SS
ET
S
D
ecem
ber
31
2019
2018
C
urre
nt
T
empo
rary
pay
men
ts
$
29
6,75
9
$
556,
860
Pre
paym
ents
1,
690,
368
3,02
8,80
8 R
estr
icte
d as
sets
14
,618
18
,623
O
ther
s
65
3,96
6
54
3,59
1
$
2,65
5,71
1
$
4,14
7,88
2
Non
-cur
rent
Pre
paym
ents
for
air
craf
t
$
8,86
3,86
1
$
529,
963
Pre
paym
ents
- lo
ng-t
erm
2,
819,
575
1,60
3,40
0 R
efun
dabl
e de
posi
ts
1,26
1,61
1
1,
089,
690
Res
tric
ted
asse
ts
64,2
13
100,
141
Oth
er f
inan
cial
ass
ets
19,1
03
19,3
35
Oth
ers
14
2,70
0
88
,224
$
13,1
71,0
63
$
3,
430,
753
The
pre
paym
ents
for
air
craf
t co
mpr
ised
the
pre
paid
dep
osit
s an
d ca
pita
lize
d in
tere
st f
rom
the
pur
chas
e of
A
350-
900,
AT
R72
-600
, A
321n
eo,
A32
0neo
and
B77
7F a
ircr
afts
. F
or d
etai
ls o
n th
e ai
rcra
ft p
urch
ase
cont
ract
s, r
efer
to N
ote
36.
19
. B
OR
RO
WIN
GS
a.
Sho
rt-t
erm
deb
ts
D
ecem
ber
31
2019
2018
Ban
k lo
ans
- un
secu
red
$
38
0,00
0
$
-
Inte
rest
rat
es
0.
95%
-1.0
7%
-
b.
L
ong-
term
bor
row
ings
D
ecem
ber
31
2019
2018
Uns
ecur
ed b
ank
loan
s
$
1,92
9,82
7
$
9,35
4,45
7 S
ecur
ed b
ank
loan
s
34
,064
,099
36
,330
,211
C
omm
erci
al p
aper
P
roce
eds
from
issu
e
31
,730
,000
30
,770
,000
L
ess:
Una
mor
tize
d di
scou
nt
60,1
43
59,0
33
67
,663
,783
76
,395
,635
L
ess:
Cur
rent
por
tion
14
,148
,892
15
,709
,487
$
53,5
14,8
91
$
60
,686
,148
Inte
rest
rat
es
0
.55%
-1.7
3%
0
.92%
-1.4
6%
- 44
-
For
inf
orm
atio
n on
sec
ured
ban
k lo
ans
whi
ch w
ere
secu
red
by b
uild
ings
, m
achi
nery
equ
ipm
ent
and
flig
ht e
quip
men
t, re
fer
to N
ote
35.
Ban
k lo
ans
(New
Tai
wan
dol
lars
) ar
e re
paya
ble
quar
terl
y, s
emia
nnua
lly o
r in
lum
p su
m u
pon
mat
urit
y.
Rel
ated
info
rmat
ion
is s
umm
ariz
ed a
s fo
llow
s:
Dec
emb
er 3
1
20
19
20
18
Per
iods
2008
.2.2
6-
2030
.4.2
5
2007
.5.2
4-
2030
.4.2
5 T
he G
roup
has
not
e is
suan
ce f
acil
itie
s (N
IFs)
obt
aine
d fr
om c
erta
in f
inan
cial
ins
titu
tion
s. T
he N
IFs,
w
ith
vari
ous
mat
urit
ies
unti
l D
ecem
ber
2021
, w
ere
used
by
the
Gro
up t
o gu
aran
tee
com
mer
cial
pap
ers
issu
ed.
As
of D
ecem
ber
31,
2019
and
201
8, t
he c
omm
erci
al p
aper
s w
ere
issu
ed a
t di
scou
nt r
ates
of
1.13
00%
-1.3
380%
and
1.0
693%
-1.2
960%
, res
pect
ivel
y.
20.
BO
ND
S P
AY
AB
LE
Dec
emb
er 3
1
20
19
20
18
U
nsec
ured
cor
pora
te b
onds
fir
st-t
ime
issu
ed in
201
3
$
2,
750,
000
$
5,
500,
000
Uns
ecur
ed c
orpo
rate
bon
ds f
irst
-tim
e is
sued
in 2
016
4,70
0,00
0
4,
700,
000
Uns
ecur
ed c
orpo
rate
bon
ds s
econ
d-ti
me
issu
ed in
201
6
5,
000,
000
5,00
0,00
0 U
nsec
ured
cor
pora
te b
onds
fir
st-t
ime
issu
ed in
201
7
2,
350,
000
2,35
0,00
0 U
nsec
ured
cor
pora
te b
onds
sec
ond-
tim
e is
sued
in 2
017
3,50
0,00
0
3,
500,
000
Uns
ecur
ed c
orpo
rate
bon
ds f
irst
-tim
e is
sued
in 2
018
4,50
0,00
0
4,
500,
000
Uns
ecur
ed c
orpo
rate
bon
ds f
irst
-tim
e is
sued
in 2
019
3,50
0,00
0
-
Con
vert
ible
bon
ds -
fif
th-t
ime
issu
es
-
1,
695,
900
Con
vert
ible
bon
ds -
six
th-t
ime
issu
es
5,75
2,62
5
5,
673,
710
32
,052
,625
32
,919
,610
L
ess:
Cur
rent
por
tion
and
put
opt
ion
of c
onve
rtib
le b
onds
10
,000
,000
4,
445,
900
$
22
,052
,625
$
28,4
73,7
10
Rel
ated
issu
ance
con
diti
ons
wer
e as
fol
low
s:
Cat
egor
y
Per
iod
Con
dit
ion
s
Rat
e (%
)
F
ive-
year
pri
vate
uns
ecur
ed b
onds
- is
sued
at p
ar
in J
anua
ry 2
013;
rep
ayab
le in
Jan
uary
201
7 an
d 20
18; 1
.6%
inte
rest
p.a
., pa
yabl
e an
nual
ly.
20
13.0
1.17
- 20
18.0
1.17
P
rinc
ipal
rep
ayab
le in
Ja
nuar
y of
201
7 an
d 20
18; i
ndic
ator
rat
e;
paya
ble
annu
ally
.
1.
60
Sev
en-y
ear
priv
ate
unse
cure
d bo
nds
- is
sued
at
par
in J
anua
ry 2
013;
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
rinc
ipal
rep
ayab
le in
Ja
nuar
y of
201
9 an
d 20
20; i
ndic
ator
rat
e;
paya
ble
annu
ally
.
1.
85
Fiv
e-ye
ar u
nsec
ured
bon
ds -
issu
ed a
t par
in
May
201
6; r
epay
able
in M
ay 2
020
and
2021
; 1.
19%
inte
rest
p.a
., pa
yabl
e an
nual
ly.
20
16.0
5.26
- 20
21.0
5.26
P
rinc
ipal
rep
ayab
le in
May
of
202
0 an
d 20
21; i
nter
est
p.a.
pay
able
ann
ually
.
1.
19
(Con
tinu
ed)
164
- 45
-
Cat
egor
y
Per
iod
Con
dit
ion
s
Rat
e (%
)
F
ive-
year
uns
ecur
ed b
onds
- is
sued
at p
ar in
S
epte
mbe
r 20
16; r
epay
able
in S
epte
mbe
r 20
20
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
rinc
ipal
rep
ayab
le in
S
epte
mbe
r of
202
0 an
d 20
21; i
nter
est p
.a. p
ayab
le
annu
ally
.
1.
08
Thr
ee-y
ear
priv
ate
unse
cure
d bo
nds
- is
sued
at
par
in M
ay 2
017;
rep
ayab
le o
n du
e da
te;
inte
rest
of
1.2%
p.a
., pa
yabl
e an
nual
ly.
20
17.0
5.19
- 20
20.0
5.19
P
rinc
ipal
rep
ayab
le o
n du
e da
te; i
ndic
ator
rat
e;
paya
ble
annu
ally
.
1.
20
Sev
en-y
ear
priv
ate
unse
cure
d bo
nds
- is
sued
at
par
in M
ay 2
017;
rep
ayab
le o
n du
e da
te;
inte
rest
of
1.75
% p
.a.,
paya
ble
annu
ally
.
20
17.0
5.19
- 20
24.0
5.19
P
rinc
ipal
rep
ayab
le o
n du
e da
te; i
ndic
ator
rat
e;
paya
ble
annu
ally
.
1.
75
Thr
ee-y
ear
priv
ate
unse
cure
d bo
nds
- is
sued
at
par
in O
ctob
er 2
017;
rep
ayab
le o
n du
e da
te;
inte
rest
of
1.14
% p
.a.,
paya
ble
annu
ally
.
20
17.1
0.12
- 20
20.1
0.12
P
rinc
ipal
rep
ayab
le o
n du
e da
te; i
ndic
ator
rat
e;
paya
ble
annu
ally
.
1.
14
Fiv
e-ye
ar p
riva
te u
nsec
ured
bon
ds -
issu
ed a
t par
in
Oct
ober
201
7; r
epay
able
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
rinc
ipal
rep
ayab
le in
O
ctob
er o
f 20
21 a
nd
2022
; ind
icat
or r
ate;
pa
yabl
e an
nual
ly.
1.
45
Fiv
e-ye
ar p
riva
te u
nsec
ured
bon
ds -
issu
ed a
t par
in
Nov
embe
r 20
18; r
epay
able
in
Nov
embe
r 20
22 a
nd 2
023;
1.3
2% in
tere
st p
.a.,
paya
ble
annu
ally
20
18.1
1.30
- 20
23.1
1.30
P
rinc
ipal
rep
ayab
le in
N
ovem
ber
of 2
022
and
2023
; ind
icat
or r
ate;
pa
yabl
e an
nual
ly
1.
32
Fiv
e-ye
ar p
riva
te u
nsec
ured
bon
ds -
issu
ed a
t par
in
Nov
embe
r 20
18; r
epay
able
in
Nov
embe
r 20
22 a
nd 2
023;
1.4
5% in
tere
st p
.a.,
paya
ble
annu
ally
20
18.1
1.30
- 20
25.1
1.30
P
rinc
ipal
rep
ayab
le in
N
ovem
ber
of 2
022
and
2023
; ind
icat
or r
ate;
pa
yabl
e an
nual
ly
1.
45
Fiv
e-ye
ar p
riva
te u
nsec
ured
bon
ds -
issu
ed a
t par
in
Jun
e 20
19; r
epay
able
in J
une
2023
and
20
24; 1
.10%
inte
rest
p.a
., pa
yabl
e an
nual
ly
20
19.0
6.21
- 20
24.0
6.21
P
rinc
ipal
rep
ayab
le in
Jun
e of
202
3 an
d 20
24;
indi
cato
r ra
te; p
ayab
le
annu
ally
1.
10
Sev
en-y
ear
priv
ate
unse
cure
d bo
nds
- is
sued
at
par
in J
une
2019
; rep
ayab
le in
Jun
e 20
25 a
nd
2026
; 1.3
2% in
tere
st p
.a.,
paya
ble
annu
ally
20
19.0
6.21
- 20
26.0
6.21
P
rinc
ipal
rep
ayab
le in
Jun
e of
202
5 an
d 20
26;
indi
cato
r ra
te; p
ayab
le
annu
ally
1.
32
Fiv
e-ye
ar c
onve
rtib
le b
onds
- is
sued
at d
isco
unt
in D
ecem
ber
2013
; rep
ayab
le in
lum
p su
m
upon
mat
urit
y; 1
.824
5% d
isco
unt r
ate
p.a.
20
13.1
2.26
- 20
18.1
2.26
E
xcep
t for
con
vert
ing
to
shar
e ca
pita
l or
buyi
ng
back
, pri
ncip
al r
epay
able
in
Dec
embe
r of
201
8
-
Fiv
e-ye
ar c
onve
rtib
le b
onds
- is
sued
at d
isco
unt
in D
ecem
ber
2013
; rep
ayab
le in
lum
p su
m
upon
mat
urit
y; 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
vert
ing
to
shar
e ca
pita
l or
buyi
ng
back
, pri
ncip
al r
epay
able
in
Dec
embe
r of
202
3
-
(Con
clud
ed)
The
Com
pany
iss
ued
its
2016
fir
st u
nsec
ured
cor
pora
te b
onds
wit
h a
face
val
ue o
f $5
,000
,000
tho
usan
d,
and
the
purc
hase
rs o
f th
e bo
nds
incl
uded
Man
dari
n A
irli
nes
Co.
, L
td.
and
Sab
re T
rave
l N
etw
ork
(Tai
wan
) C
o., L
td.,
whi
ch h
eld
a fa
ce v
alue
of
$300
,000
thou
sand
, and
the
amou
nt w
as e
lim
inat
ed in
the
cons
olid
ated
fi
nanc
ial s
tate
men
ts.
- 46
-
The
Com
pany
iss
ued
the
fift
h is
sue
of u
nsec
ured
con
vert
ible
bon
ds,
and
the
issu
ance
con
diti
ons
wer
e as
fo
llow
s:
a.
The
hol
ders
may
dem
and
a lu
mp-
sum
pay
men
t for
the
bond
s up
on m
atur
ity.
b.
T
he h
olde
rs c
an r
eque
st t
hat
the
Com
pany
rep
urch
ase
thei
r bo
nds
at 1
00.7
5% f
ace
valu
e on
the
thi
rd
anni
vers
ary
of t
he o
ffer
ing
date
. Bec
ause
the
hol
ders
can
exe
rcis
e se
llin
g ri
ghts
on
Dec
embe
r 26
, 201
6,
the
Com
pany
rec
lass
ifie
d th
e bo
nds
paya
ble
to “
curr
ent
port
ion
of b
onds
pay
able
” in
Dec
embe
r 20
15.
The
Com
pany
pai
d $9
94,7
05 t
hous
and
to t
he h
olde
rs o
f th
e bo
nds
paya
ble
who
exe
rcis
ed t
he p
ut
opti
ons,
and
the
diff
eren
ce b
etw
een
the
paym
ent
amou
nt a
nd c
arry
ing
amou
nt r
ecog
nize
d w
as a
los
s on
th
e bo
nds
paya
ble
buy
back
of
$41,
943
thou
sand
, fo
r w
hich
the
Com
pany
rec
lass
ifie
d th
e re
mai
ning
fa
ce v
alue
to n
on-c
urre
nt a
sset
s.
c.
The
Com
pany
may
red
eem
the
bon
ds a
t fa
ce v
alue
bet
wee
n M
arch
26,
201
4 an
d N
ovem
ber
16,
2018
un
der
cert
ain
cond
itio
ns.
d.
Bet
wee
n Ja
nuar
y 26
, 201
4 an
d D
ecem
ber
16, 2
018
(exc
ept
for
the
peri
od b
etw
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 t
he b
onds
to
the
Com
pany
’s o
rdin
ary
shar
es.
The
ini
tial
con
vers
ion
pric
e w
as s
et a
t N
T$1
2.24
, w
hich
is
subj
ect
to
adju
stm
ent
if t
here
is
a ca
pita
l in
ject
ion
by c
ash,
sha
re d
ivid
end
dist
ribu
tion
, and
the
pro
port
ion
of c
ash
divi
dend
s pe
r sh
are
in m
arke
t pr
ice
exce
edin
g 1.
5%.
Bec
ause
the
Com
pany
dis
trib
uted
cas
h di
vide
nds
as o
f A
ugus
t 14
, 201
8, t
here
was
adj
ustm
ent
the
conv
ersi
on p
rice
to
NT
$11.
38, c
orpo
rate
bon
ds w
ith
a fa
ce v
alue
of
$3,3
16,8
00 th
ousa
nd h
ad b
een
conv
erte
d to
270
,985
thou
sand
uni
ts o
f or
dina
ry s
hare
s.
e.
The
con
vert
ible
bon
ds h
as e
xpir
ed o
n D
ecem
ber
26, 2
018,
the
Com
pany
has
ful
ly r
epay
able
in
Janu
ary
8, 2
019,
the
rela
ted
capi
tal s
urpl
us -
sha
re o
ptio
n ha
s re
clas
sifi
ed a
s ca
pita
l sur
plus
- o
ther
. T
he c
onve
rtib
le b
onds
con
tain
bot
h li
abil
ity a
nd e
quity
com
pone
nts.
The
equ
ity c
ompo
nent
was
pre
sent
ed
in e
quity
und
er th
e he
adin
g of
cap
ital
sur
plus
- o
ptio
ns. T
he e
ffec
tive
inte
rest
rat
e of
the
liab
ility
com
pone
nt
was
1.8
245%
per
ann
um o
n in
itia
l rec
ogni
tion
. P
roce
eds
from
issu
ance
$
6,00
0,00
0 E
quity
com
pone
nt
(518
,621
)
L
iabi
lity
com
pone
nt a
t the
dat
e of
issu
ance
$
5,48
1,37
9 T
he C
ompa
ny is
sued
the
sixt
h is
sue
of it
s un
secu
red
conv
erti
ble
bond
s, a
nd th
e is
suan
ce c
ondi
tion
s w
ere
as
foll
ows:
a.
T
he h
olde
rs m
ay d
eman
d a
lum
p-su
m p
aym
ent f
or th
e bo
nds
upon
mat
urit
y.
b.
The
hol
ders
can
req
uest
tha
t th
e C
ompa
ny r
epur
chas
e th
eir
bond
s at
fac
e va
lue
on t
he t
hird
ann
iver
sary
of
the
offe
ring
dat
e. T
he h
olde
rs c
an e
xerc
ise
the
righ
t to
sell
on
Janu
ary
30, 2
021.
c.
T
he C
ompa
ny m
ay r
edee
m t
he b
onds
at
face
val
ue b
etw
een
Apr
il 3
0, 2
018
and
Dec
embe
r 20
, 20
22
unde
r ce
rtai
n co
ndit
ions
. d.
B
etw
een
Janu
ary
26, 2
014
and
Dec
embe
r 16
, 201
8 (e
xcep
t fo
r th
e pe
riod
bet
wee
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
bon
ds t
o th
e C
ompa
ny’s
ord
inar
y sh
ares
. T
he i
niti
al c
onve
rsio
n pr
ice
was
set
at
NT
$13.
2, w
hich
is
subj
ect
to
adju
stm
ent
if t
here
is
a ca
pita
l in
ject
ion
by c
ash,
sha
re d
ivid
end
dist
ribu
tion
, and
the
pro
port
ion
of c
ash
divi
dend
s pe
r sh
are
in m
arke
t pr
ice
exce
edin
g 1.
5%.
Bec
ause
the
Com
pany
dis
trib
uted
cas
h di
vide
nds
as o
f Ju
ly 2
9, 2
019,
the
conv
ersi
on p
rice
was
adj
uste
d to
NT
$12.
6.
165
- 47
-
The
con
vert
ible
bon
ds c
onta
in b
oth
liab
ility
and
equ
ity c
ompo
nent
s. T
he e
quity
com
pone
nt w
as p
rese
nted
in
equ
ity u
nder
the
head
ing
of c
apit
al s
urpl
us -
opt
ions
. The
eff
ecti
ve in
tere
st r
ate
of th
e li
abili
ty c
ompo
nent
w
as 1
.382
1% p
er a
nnum
on
init
ial r
ecog
niti
on.
P
roce
eds
from
issu
ance
$
6,01
2,00
0 E
quity
com
pone
nt
(409
,978
)
L
iabi
lity
com
pone
nt a
t the
dat
e of
issu
ance
$
5,60
2,02
2 T
he s
even
th i
ssue
of
the
Com
pany
’s u
nsec
ured
con
vert
ible
bon
ds w
as r
esol
ved
by t
he b
oard
of
dire
ctor
s of
th
e C
ompa
ny o
n A
ugus
t 7,
201
9. T
he c
umul
ativ
e fa
ce v
alue
of
the
bond
s sh
all
not
exce
ed $
3,00
0,00
0 th
ousa
nd. T
he b
onds
are
issu
ed a
t 100
%-1
00.5
% o
f th
e fa
ce v
alue
, and
the
issu
ance
per
iod
is 5
yea
rs.
21
. L
EA
SIN
G
2019
a.
R
ight
-of-
use
asse
ts -
201
9
Dec
emb
er 3
1,
2019
C
arry
ing
amou
nts
Lan
d
$
8,
153,
382
Bui
ldin
gs
82
4,95
5 F
ligh
t equ
ipm
ent
62
,052
,701
O
ther
equ
ipm
ent
2,
579
$
71,0
33,6
17
F
or Y
ear
En
ded
D
ecem
ber
31,
20
19
A
ddit
ions
to r
ight
-of-
use
asse
ts
$
5,86
3,62
5
Dep
reci
atio
n fo
r ri
ght-
of-u
se a
sset
s
L
and
$
376,
425
Bui
ldin
gs
79
8,93
3 F
ligh
t equ
ipm
ent
10
,721
,575
O
ther
equ
ipm
ent
2,15
7
$
11
,899
,090
b.
L
ease
liab
ilit
ies
- 20
19
D
ecem
ber
31,
20
19
C
arry
ing
amou
nts
C
urre
nt
$
2,34
0,87
3 N
on-c
urre
nt
$
15,8
01,7
24
- 48
-
Ran
ge o
f di
scou
nt r
ate
for
leas
e li
abil
itie
s (i
nclu
de U
S le
ase
hedg
ing
inst
rum
ents
):
Dec
emb
er 3
1,
2019
Lan
d
1.09
%-1
.65%
B
uild
ings
0%-3
.56%
F
ligh
t equ
ipm
ent
2.
49%
-3.3
4%
Oth
er e
quip
men
t
1.06
%-1
.50%
c.
Fin
anci
al li
abil
itie
s un
der
hedg
e ac
coun
ting
T
he G
roup
spe
cifi
cs a
par
t of
US
leas
e co
ntra
ct a
s a
hedg
ing
inst
rum
ents
to a
void
exc
hang
e fl
uctu
atio
ns
is U
S d
olla
r pa
ssen
ger
reve
nue,
and
app
lies
the
acc
ount
ing
trea
tmen
t of
cas
h fl
ow h
edgi
ng.
The
lea
se
info
rmat
ion
is a
s fo
llow
s:
Mat
uri
ty D
ate
S
ub
ject
C
arry
ing
Val
ue
Dec
embe
r 31
, 201
9 2
021.
4.15
-202
8.5.
15
Fin
anci
al li
abil
itie
s fo
r he
dgin
g -
curr
ent
$
8,
577,
482
Fin
anci
al li
abil
itie
s fo
r he
dgin
g -
non-
curr
ent
42,4
20,2
05
Infl
uenc
e of
com
preh
ensi
ve in
com
e
Rec
ogn
ized
in
Oth
er
Com
pre
hen
sive
In
com
e
Rec
lass
ifie
d t
o In
com
e
For
the
year
end
ed D
ecem
ber
31, 2
019
$
1,45
7,05
8
$
(24,
029)
d.
As
less
ees,
Chi
na A
irli
nes,
Man
dari
n A
irli
nes
and
Tig
erai
r T
aiw
an l
ease
d te
n 77
7-30
0ER
pla
nes,
fi
ftee
n A
330-
300
plan
es,
fift
een
737-
800
plan
es,
ten
A32
0-20
0 pl
anes
, si
x E
RJ1
90 p
lane
s an
d th
ree
AR
T72
-600
pla
nes
for
oper
atio
n, l
ease
per
iod
are
6 to
12
year
s fr
om F
ebru
ary
2006
to
May
202
8. T
he
rent
al p
rici
ng m
etho
d is
par
tly
a fi
xed
amou
nt o
f fu
nds,
and
som
e of
the
m a
re f
loat
ing
rent
s, f
loat
ing
rent
s ar
e ac
cord
ing
to b
ench
mar
k ra
tio,
the
ren
t is
rev
ised
eve
ry h
alf
year
. W
hen
the
leas
e ex
pire
s, t
he
leas
e ag
reem
ents
hav
e no
pur
chas
e ri
ghts
. T
he in
form
atio
n of
ref
unda
ble
depo
sits
and
ope
ning
of
cred
it le
tter
due
to r
enta
l of
plan
es:
Dec
emb
er 3
1,
2019
Ref
unda
ble
depo
sits
$
73
7,89
5 C
redi
t gua
rant
ees
1,71
7,95
3 C
AL
Par
k, a
nd T
aoyu
an I
nter
nati
onal
Air
port
Ser
vice
sig
ned
a B
OT
con
trac
t w
ith
a la
nd l
ease
ag
reem
ent,
for
the
deta
ils
for
the
leas
e ag
reem
ent,
plea
se r
efer
to
Not
e 35
. The
lea
se i
nclu
des
an o
ptio
n to
ext
end
the
leas
e, a
s it
is n
ot p
ossi
ble
to e
xten
d th
e le
ase,
the
amou
nt o
f th
e le
ase
rela
ted
to t
he p
erio
d co
vere
d by
the
opti
on i
s no
t in
clud
ed i
n th
e le
ase
liab
ility
. If
the
amou
nt o
f th
e ex
tend
ed l
ease
per
iod
is
incl
uded
in
the
leas
e li
abil
ity,
the
leas
e li
abil
ity w
ill
incr
ease
by
$873
,293
tho
usan
d on
Dec
embe
r 31
, 20
19.
Tai
wan
Air
Car
go T
erm
inal
Co.
and
CA
A s
igne
d a
BO
T c
ontr
act
wit
h a
land
lea
se a
gree
men
t. F
or
deta
ils,
ple
ase
refe
r to
Not
e 36
.
166
- 49
-
e.
T
he C
ompa
ny s
igne
d a
rent
al c
ontr
act
for
six
A32
1neo
wit
h A
ir L
ease
Cor
pora
tion
, w
hich
is
expe
cted
to
be
intr
oduc
ed b
etw
een
2021
and
202
2.
The
Com
pany
sig
ned
a re
ntal
lett
er o
f in
tent
for
eig
ht A
321n
eo w
ith C
AL
C L
ease
Cor
pora
tion
, whi
ch is
ex
pect
ed to
be
intr
oduc
ed in
202
2.
Tig
erai
r T
aiw
an
Co.
, L
td.
sign
ed
a re
ntal
le
tter
of
in
tent
fo
r ei
ght
A32
1neo
w
ith
ICB
C
Lea
se
Cor
pora
tion
, whi
ch is
exp
ecte
d to
be
intr
oduc
ed in
202
1.
f.
In
ord
er t
o re
vita
lize
ass
ets
and
stre
ngth
en t
he f
inan
cial
str
uctu
re,
the
Com
pany
sol
d fi
ve o
f it
s ow
n A
330-
300
airc
raft
to
Alt
avai
r L
.P.
in S
epte
mbe
r 20
19 b
y sa
le-a
nd-l
ease
back
for
$4,
905,
660
thou
sand
. 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. T
he le
ase
agre
emen
t had
no
ter
ms
for
leas
e re
new
al o
r of
ftak
e ri
ghts
. The
ann
ual
leas
e pa
ymen
ts f
or e
ach
airc
raft
are
US
$5,3
89
thou
sand
to U
S$5
,437
thou
sand
.
g.
Oth
er le
ase
info
rmat
ion
The
Gro
up u
ses
oper
atin
g le
ase
agre
emen
t for
inve
stm
ent p
rope
rtie
s, r
efer
to N
ote
16.
For
th
e Y
ear
En
ded
D
ecem
ber
31,
20
19
S
hort
-ter
m a
nd lo
w p
rice
leas
e pa
ymen
t
$
52
,675
T
otal
of
leas
e ca
sh o
utfl
ow
$ (
13,8
84,3
67)
The
Gro
up c
hoos
es to
wai
ve th
e re
cogn
ition
of
the
cont
ract
pro
visi
ons
for
the
shor
t-te
rm le
ases
and
low
pr
ice
leas
e, a
nd d
oes
not r
ecog
nize
the
rela
ted
righ
t-of
-use
ass
ets
and
leas
e li
abil
itie
s fo
r su
ch le
ase.
20
18
1)
Sal
e-le
aseb
ack
fina
nce
leas
es
Dec
emb
er 3
1,
2018
Min
imum
leas
e pa
ymen
ts -
fli
ght e
quip
men
t
Wit
hin
one
year
$
59
6,00
0 B
eyon
d on
e ye
ar a
nd w
ithi
n fi
ve y
ears
-
Pre
sent
val
ue o
f m
inim
um le
ase
paym
ents
$
59
6,00
0
Inte
rest
rat
es
1.
0680
%
The
Gro
up h
ad l
ease
d on
e A
330-
300
airc
raft
und
er s
ale-
leas
ebac
k fi
nanc
e le
ases
as
of D
ecem
ber
31, 2
018.
The
lea
se t
erm
s st
arte
d fr
om J
une
2006
to
Apr
il 2
019.
Dur
ing
the
leas
e te
rms,
the
Gro
up
reta
ined
all
ris
ks a
nd r
ewar
ds a
ttac
hed
to t
he a
ircr
aft
and
engi
nes
and
enjo
yed
the
sam
e su
bsta
ntiv
e ri
ghts
as
thos
e pr
ior
to t
he t
rans
acti
ons.
The
int
eres
t ra
tes
unde
rlyi
ng a
ll o
blig
atio
ns u
nder
the
se
fina
nce
leas
es w
ere
floa
ting
. T
here
fore
, th
e m
inim
um l
ease
pay
men
ts u
nder
the
sal
e-le
aseb
ack
airc
raft
con
trac
ts d
o no
t inc
lude
inte
rest
exp
ense
s.
- 50
-
2)
Fin
ance
leas
es
Tai
wan
Air
Car
go T
erm
inal
Co.
(“T
AC
T”)
ent
ered
int
o a
term
inal
con
stru
ctio
n co
ntra
ct.
Ref
er t
o N
ote
36 f
or th
e te
rms
of th
e co
ntra
ct. D
ynas
ty H
olid
ay C
o., L
td. s
igne
d a
long
-ter
m e
quip
men
t lea
se
cont
ract
, and
the
leas
e co
ntra
ct is
a f
inan
ce le
ase
cont
ract
.
D
ecem
ber
31,
20
18
M
inim
um le
ase
paym
ents
- c
argo
term
inal
and
oth
er
W
ithi
n on
e ye
ar
$
37,9
98
Bey
ond
one
year
and
wit
hin
five
yea
rs
2,
974
40,9
72
Les
s: F
inan
ce c
osts
(629
)
Pre
sent
val
ue o
f m
inim
um le
ase
paym
ents
$
40
,343
Pre
sent
val
ue o
f m
inim
um le
ase
paym
ents
-
ca
rgo
term
inal
and
oth
er
Wit
hin
one
year
$
37
,398
B
eyon
d on
e ye
ar a
nd w
ithi
n fi
ve y
ears
2,94
5
$
40
,343
Dis
coun
t rat
e
4.
756%
Tot
al a
mou
nt o
f pr
esen
t val
ue o
f m
inim
um le
ase
paym
ents
C
urre
nt
$
633,
398
Non
curr
ent
2,
945
$
636,
343
3)
O
pera
ting
leas
e ar
rang
emen
ts (
incl
ude
sale
-lea
seba
ck o
pera
ting
leas
es)
For
the
ope
rati
ng l
ease
arr
ange
men
ts,
plea
se r
efer
to
the
cons
olid
ated
fin
anci
al s
tate
men
ts f
or t
he
year
end
ed D
ecem
ber
31, 2
018.
A
s of
Dec
embe
r 31
, 20
18,
the
refu
ndab
le d
epos
its
paid
by
the
Gro
up u
nder
ope
rati
ng l
ease
co
ntra
cts
wer
e $6
93,4
66 t
hous
and.
Som
e of
the
gua
rant
ees
wer
e se
cure
d by
cre
dit
guar
ante
es,
and
outs
tand
ing
cred
it g
uara
ntee
s as
of
Dec
embe
r 31
, 201
8 w
ere
$1,6
82,7
74 th
ousa
nd.
The
fut
ure
min
imum
lea
se p
aym
ents
for
the
non
-can
cela
ble
oper
atin
g le
ase
com
mit
men
ts w
ere
as
foll
ows:
D
ecem
ber
31,
20
18
U
p to
1 y
ear
$
11,7
85,4
42
Ove
r 1
year
to 5
yea
rs
44
,559
,429
O
ver
5 ye
ars
21
,685
,499
$
78
,030
,370
167
- 51
-
The
leas
e pa
ymen
ts r
ecog
nize
d in
exp
ense
for
the
curr
ent p
erio
d w
ere
as f
ollo
ws:
For
th
e Y
ear
En
ded
D
ecem
ber
31,
20
18
M
inim
um le
ase
paym
ents
$
11
,735
,495
22.
OT
HE
R P
AY
AB
LE
S
D
ecem
ber
31
2019
2018
Fue
l cos
ts
$
3,
723,
213
$
3,
822,
018
Gro
und
serv
ice
expe
nses
1,
262,
878
1,16
7,21
4 R
epai
r ex
pens
es
1,20
8,87
5
1,
031,
700
Inte
rest
exp
ense
21
9,66
0
26
6,26
8 S
hort
-ter
m e
mpl
oyee
ben
efit
s
2,
040,
718
2,23
7,40
9 T
erm
inal
sur
char
ges
1,12
2,53
2
1,
151,
578
Com
mis
sion
exp
ense
s
50
9,52
0
48
4,34
1 O
ther
s
3,
100,
576
3,98
5,67
0
$
13,1
87,9
72
$
14
,146
,198
23
. C
ON
TR
AC
T L
IAB
ILIT
IES
/DE
FE
RR
ED
RE
VE
NU
E
D
ecem
ber
31
2019
2018
Con
trac
t L
iab
ilit
ies
C
ontr
act
Lia
bil
itie
s
Fre
quen
t fly
er p
rogr
ams
$
2,
895,
535
$
2,
493,
551
Adv
ance
tick
et s
ales
20
,401
,549
18
,956
,569
$
23,2
97,0
84
$
21
,450
,120
Cur
rent
$
21,0
60,7
73
$
19
,546
,455
N
on-c
urre
nt
2,23
6,31
1
1,
903,
665
$
23
,297
,084
$
21,4
50,1
20
24.
PR
OV
ISIO
NS
Dec
emb
er 3
1
20
19
20
18
O
pera
ting
leas
es -
air
craf
t
$
10,3
71,8
57
$
8,
794,
539
C
urre
nt
$
36
0,39
3
$
321,
075
Non
-cur
rent
10
,011
,464
8,
473,
464
$
10
,371
,857
$
8,79
4,53
9
- 52
-
Air
craf
t L
ease
C
ontr
act
B
alan
ce a
t Jan
uary
1, 2
018
$
8,48
9,30
8 A
ddit
iona
l pro
visi
ons
reco
gniz
ed
3,
386,
052
Usa
ge
(3
,310
,089
) E
ffec
t of
exch
ange
rat
e ch
ange
s
229,
268
B
alan
ce a
t Dec
embe
r 31
, 201
8
$
8,
794,
539
B
alan
ce a
t Jan
uary
1, 2
019
$
8,79
4,53
9 A
ddit
iona
l pro
visi
ons
reco
gniz
ed
4,
608,
924
Usa
ge
(2
,799
,314
) E
ffec
t of
exch
ange
rat
e ch
ange
s
(232
,292
)
Bal
ance
at D
ecem
ber
31, 2
019
$
10,3
71,8
57
The
Gro
up l
ease
d fl
ight
equ
ipm
ent
unde
r op
erat
ing
leas
e ag
reem
ents
. Und
er t
he c
ontr
acts
, whe
n th
e le
ases
ex
pire
and
the
equ
ipm
ent
is r
etur
ned
to t
he l
esso
r, t
he f
ligh
t eq
uipm
ent
has
to b
e re
pair
ed a
ccor
ding
to
the
expe
cted
yea
rs o
f us
e, n
umbe
r of
fli
ght
hour
s, f
light
cyc
les
and
the
num
ber
of e
ngin
e re
volu
tions
. T
he
Gro
up h
ad e
xist
ing
oblig
atio
ns t
o re
cogn
ize
prov
isio
ns w
hen
sign
ing
a le
ase
or d
urin
g th
e le
ase
term
. T
iger
air
Tai
wan
Co.
, L
td.
also
lea
sed
flig
ht e
quip
men
t un
der
oper
atin
g le
ase
agre
emen
ts.
In a
ccor
danc
e to
th
e co
ntra
ct,
Tig
erai
r m
ust
pay
mai
nten
ance
res
erve
s m
onth
ly a
ccor
ding
to
the
actu
al n
umbe
r of
fli
ght
hour
s.
25.
RE
TIR
EM
EN
T B
EN
EF
IT P
LA
NS
a.
D
efin
ed c
ontr
ibut
ion
plan
s T
he G
roup
ado
pted
a p
ensi
on p
lan
unde
r th
e L
abor
Pen
sion
Act
(th
e “L
PA
”), w
hich
is
a st
ate-
man
aged
de
fine
d co
ntri
buti
on p
lan.
Und
er t
he L
PA
, an
ent
ity
mak
es m
onth
ly c
ontr
ibut
ions
to
empl
oyee
s’
indi
vidu
al p
ensi
on a
ccou
nts
at 6
% o
f m
onth
ly s
alar
ies
and
wag
es.
Em
ploy
ees
base
d in
the
Uni
ted
stat
es a
nd J
apan
of
Chi
na A
irli
nes
Co.
, L
td.
and
subs
idia
ries
are
m
embe
rs o
f th
e U
nite
d st
ates
and
Jap
an g
over
nmen
t re
tire
men
t be
nefi
t pl
ans.
Sub
sidi
arie
s sh
ould
ap
prop
riat
e a
spec
ific
por
tion
to
reti
rem
ent
bene
fit
plan
s. T
he o
blig
atio
n to
the
gov
ernm
ent
reti
rem
ent
bene
fit p
lans
of
Chi
na A
irli
nes
Co.
, Ltd
. and
sub
sidi
arie
s is
to a
ppro
pria
te a
spe
cifi
c po
rtio
n am
ount
.
b.
Def
ined
ben
efit
pla
ns
The
def
ined
ben
efit
pla
n ad
opte
d by
the
Com
pany
and
in
acco
rdan
ce w
ith
the
Lab
or S
tand
ards
Law
is
oper
ated
by
the
gove
rnm
ent.
Pen
sion
ben
efit
s ar
e ca
lcul
ated
on
the
basi
s of
the
len
gth
of s
ervi
ce a
nd
aver
age
mon
thly
sal
arie
s of
the
six
mon
ths
befo
re r
etir
emen
t. T
he C
ompa
ny a
nd s
ubsi
diar
y co
ntri
bute
am
ount
s eq
ual
to 2
%-1
5% o
f to
tal
mon
thly
sal
arie
s an
d w
ages
to
a pe
nsio
n fu
nd a
dmin
iste
red
by t
he
pens
ion
fund
mon
itor
ing
com
mit
tee.
Pen
sion
con
trib
utio
ns a
re d
epos
ited
in
the
Ban
k of
Tai
wan
in
the
com
mit
tee’
s na
me.
Bef
ore
the
end
of e
ach
year
, th
e G
roup
ass
esse
s th
e ba
lanc
e in
the
pen
sion
fun
d. I
f th
e am
ount
of
the
bala
nce
in t
he p
ensi
on f
und
is i
nade
quat
e to
pay
ret
irem
ent
bene
fits
for
em
ploy
ees
who
con
form
to r
etir
emen
t req
uire
men
ts in
the
next
yea
r, th
e G
roup
is r
equi
red
to f
und
the
diff
eren
ce in
on
e ap
prop
riat
ion
that
sho
uld
be m
ade
befo
re t
he e
nd o
f M
arch
of
the
next
yea
r. T
he p
ensi
on f
und
is
man
aged
by
the
Bur
eau
of L
abor
Fun
ds,
Min
istr
y of
Lab
or (
the
“Bur
eau”
); t
he G
roup
has
no
righ
t to
in
flue
nce
the
inve
stm
ent p
olic
y an
d st
rate
gy.
168
- 53
-
The
am
ount
s in
clud
ed in
the
cons
olid
ated
bal
ance
she
ets
in r
espe
ct o
f th
e G
roup
’s d
efin
ed b
enef
it p
lans
w
ere
as f
ollo
ws:
D
ecem
ber
31
2019
2018
Pre
sent
val
ue o
f fu
nded
def
ined
ben
efit
obl
igat
ion
$
18
,457
,304
$
17,4
64,8
56
Fai
r va
lue
of p
lan
asse
ts
(9,0
22,2
69)
(8,6
61,4
74)
D
efic
it (
net d
efin
ed b
enef
it li
abil
itie
s)
$
9,
435,
035
$
8,
803,
382
Mov
emen
ts in
net
def
ined
ben
efit
liab
ilit
ies
(ass
ets)
wer
e as
fol
low
s:
Pre
sen
t V
alu
e of
th
e D
efin
ed
Ben
efit
O
bli
gati
on
F
air
Val
ue
of
the
Pla
n A
sset
s
Net
Def
ined
B
enef
it
Lia
bil
itie
s (A
sset
s)
Bal
ance
at J
anua
ry 1
, 201
8
$
16,1
49,3
82
$
(8
,047
,817
)
$
8,10
1,56
5 S
ervi
ce c
ost
Cur
rent
ser
vice
cos
t
1,
384,
213
-
1,
384,
213
Net
inte
rest
exp
ense
(in
com
e)
163,
283
(82,
595)
80
,688
R
ecog
nize
d in
pro
fit o
r lo
ss
1,54
7,49
6
(8
2,59
5)
1,46
4,90
1 R
emea
sure
men
t
Ret
urn
on p
lan
asse
ts (
excl
udin
g am
ount
s in
clud
ed in
net
inte
rest
)
-
(236
,287
)
(2
36,2
87)
Act
uari
al (
gain
) lo
ss -
cha
nges
in
dem
ogra
phic
ass
umpt
ions
15
,538
-
15,5
38
Act
uari
al (
gain
) lo
ss -
cha
nges
in f
inan
cial
as
sum
ptio
ns
344,
716
-
344,
716
A
ctua
rial
(ga
in)
loss
- e
xper
ienc
e ad
just
men
ts
727,
899
-
72
7,89
9 R
ecog
nize
d in
oth
er c
ompr
ehen
sive
inco
me
1,08
8,15
3
(2
36,2
87)
851,
866
Con
trib
utio
ns f
rom
the
empl
oyer
-
(1,4
86,5
50)
(1,4
86,5
50)
Ben
efit
s pa
id
(1,2
10,8
39)
1,21
0,83
9
-
Oth
ers
(109
,336
)
(1
9,06
4)
(128
,400
) B
alan
ce a
t Dec
embe
r 31
, 201
8
17
,464
,856
(8
,661
,474
)
8,
803,
382
Cur
rent
ser
vice
cos
t
1,
321,
600
-
1,
321,
600
Net
inte
rest
exp
ense
(in
com
e)
161,
808
(86,
234)
75
,574
R
ecog
nize
d in
pro
fit o
r lo
ss
1,48
3,40
8
(8
6,23
4)
1,39
7,17
4 R
emea
sure
men
t
Ret
urn
on p
lan
asse
ts (
excl
udin
g am
ount
s in
clud
ed in
net
inte
rest
)
-
(308
,223
)
(3
08,2
23)
Act
uari
al (
gain
) lo
ss -
cha
nges
in
dem
ogra
phic
ass
umpt
ions
15
,959
-
15,9
59
Act
uari
al (
gain
) lo
ss -
cha
nges
in f
inan
cial
as
sum
ptio
ns
440,
374
-
44
0,37
4 A
ctua
rial
(ga
in)
loss
- e
xper
ienc
e ad
just
men
ts
633,
683
-
63
3,68
3 R
ecog
nize
d in
oth
er c
ompr
ehen
sive
inco
me
1,09
0,01
6
(3
08,2
23)
781,
793
Con
trib
utio
ns f
rom
the
empl
oyer
-
(1,4
18,9
70)
(1,4
18,9
70)
Ben
efit
s pa
id
(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
$
18,4
57,3
04
$
(9
,022
,269
)
$
9,43
5,03
5
- 54
-
Thr
ough
the
def
ined
ben
efit
pla
ns u
nder
the
Lab
or S
tand
ards
Law
, th
e G
roup
is
expo
sed
to t
he
foll
owin
g ri
sks:
1)
In
vest
men
t ri
sk:
The
pla
n as
sets
are
inv
este
d in
dom
esti
c an
d fo
reig
n eq
uity
and
deb
t se
curi
ties
, ba
nk d
epos
its,
etc.
The
inv
estm
ent
is c
ondu
cted
at
the
disc
reti
on o
f th
e B
urea
u or
und
er t
he
man
date
d m
anag
emen
t. H
owev
er,
in a
ccor
danc
e w
ith
rele
vant
reg
ulat
ions
, th
e re
turn
gen
erat
ed b
y pl
an a
sset
s sh
ould
not
be
belo
w th
e in
tere
st r
ate
for
a 2-
year
tim
e de
posi
t wit
h lo
cal b
anks
. 2)
In
tere
st r
isk:
A d
ecre
ase
in t
he g
over
nmen
t bo
nd i
nter
est
rate
wil
l in
crea
se t
he p
rese
nt v
alue
of
the
defi
ned
bene
fit
obli
gati
on;
how
ever
, th
is w
ill
be p
arti
ally
off
set
by a
n in
crea
se i
n th
e re
turn
on
the
plan
’s d
ebt i
nves
tmen
ts.
3)
Sal
ary
risk
: T
he p
rese
nt v
alue
of
the
defi
ned
bene
fit
obli
gati
on i
s ca
lcul
ated
by
refe
renc
e to
the
fu
ture
sal
arie
s of
pla
n pa
rtic
ipan
ts.
As
such
, an
inc
reas
e in
the
sal
ary
of t
he p
lan
part
icip
ants
wil
l in
crea
se th
e pr
esen
t val
ue o
f th
e de
fine
d be
nefi
t obl
igat
ion.
T
he a
ctua
rial
val
uati
ons
of t
he p
rese
nt v
alue
of
the
defi
ned
bene
fit
obli
gati
on w
ere
carr
ied
out
by
qual
ifie
d ac
tuar
ies.
The
sig
nifi
cant
ass
umpt
ions
use
d fo
r th
e pu
rpos
es o
f th
e ac
tuar
ial v
alua
tion
s w
ere
as
foll
ows:
D
ecem
ber
31
2019
2018
Dis
coun
t rat
e(s)
0.63
%-1
.10%
0.86
%-1
.35%
E
xpec
ted
rate
(s)
of s
alar
y in
crea
se
1.
00%
-2.5
0%
1.
00%
-2.5
0%
If p
ossi
ble
reas
onab
le c
hang
e in
eac
h of
the
sig
nifi
cant
act
uari
al a
ssum
ptio
ns w
ill
occu
r an
d al
l ot
her
assu
mpt
ions
wil
l re
mai
n co
nsta
nt,
the
pres
ent
valu
e of
the
def
ined
ben
efit
obl
igat
ion
wou
ld i
ncre
ase
(dec
reas
e) a
s fo
llow
s:
Dec
emb
er 3
1
20
19
20
18
D
isco
unt r
ate(
s)
0.5%
incr
ease
$
(939
,308
)
$
(777
,193
) 0.
5% d
ecre
ase
1,00
0,77
1
84
1,48
8 E
xpec
ted
rate
(s)
of s
alar
y in
crea
se
0.5%
incr
ease
96
9,32
4
81
1,48
5 0.
5% d
ecre
ase
(927
,180
)
(7
60,7
93)
The
sen
siti
vity
ana
lysi
s pr
esen
ted
abov
e m
ay n
ot b
e re
pres
enta
tive
of
the
actu
al c
hang
e in
the
pre
sent
va
lue
of t
he d
efin
ed b
enef
it o
blig
atio
n as
it
is u
nlik
ely
that
the
cha
nge
in a
ssum
ptio
ns w
ould
occ
ur i
n is
olat
ion
of o
ne a
noth
er a
s so
me
of th
e as
sum
ptio
ns m
ay b
e co
rrel
ated
.
D
ecem
ber
31
2019
2018
The
exp
ecte
d co
ntri
butio
ns to
the
plan
for
the
next
yea
r
$
930,
963
$
91
6,92
7
The
ave
rage
dur
atio
n of
the
defi
ned
bene
fit o
blig
atio
n
8-11
yea
rs
8-
12 y
ears
169
- 55
-
26.
EQ
UIT
Y
a.
Sha
re c
apit
al
Ord
inar
y sh
ares
D
ecem
ber
31
2019
2018
Num
bers
of
auth
oriz
ed s
hare
s (i
n th
ousa
nds)
7,
000,
000
6,00
0,00
0 A
mou
nt o
f au
thor
ized
sha
res
$
70
,000
,000
$
60,0
00,0
00
Am
ount
of
issu
ed s
hare
s
$
54,2
09,8
46
$
54
,209
,846
b.
Cap
ital
sur
plus
Dec
emb
er 3
1
20
19
20
18
Is
suan
ce o
f co
nver
tibl
e bo
nds
in e
xces
s of
par
val
ue a
nd
conv
ersi
on p
rem
ium
$
315,
114
$
31
5,11
4 D
ivid
end
dist
ribu
ted
to s
ubsi
diar
ies
3,
909
3,30
3 R
etir
emen
t of
trea
sury
sha
res
33
,513
33
,513
E
xpir
ed e
mpl
oyee
sha
re o
ptio
ns
11,7
47
11,7
47
Lon
g-te
rm in
vest
men
ts
118,
962
955
Bon
ds p
ayab
le e
quity
com
pone
nt
409,
978
409,
978
Dif
fere
nce
in s
ale
pric
e of
sha
res
of s
ubsi
diar
ies
and
book
val
ue
1,12
9,08
0
-
Oth
ers
466,
604
466,
604
$
2,
488,
907
$
1,
241,
214
The
cap
ital
sur
plus
fro
m s
hare
s is
sued
in
exce
ss o
f pa
r (i
nclu
ding
add
itio
nal
paid
-in
capi
tal
from
is
suan
ce o
f or
dina
ry s
hare
s an
d tr
easu
ry s
hare
tra
nsac
tion
s) a
nd t
he d
iffe
renc
e in
sal
e pr
ice
of s
hare
s of
su
bsid
iari
es a
nd b
ook
valu
e m
ay b
e us
ed t
o of
fset
def
icit
s; i
n ad
diti
on,
whe
n th
e C
ompa
ny h
as n
o de
fici
t, su
ch c
apit
al s
urpl
us m
ay b
e di
stri
bute
d as
cas
h di
vide
nds
or tr
ansf
erre
d to
cap
ital
(bu
t lim
ited
to
a ce
rtai
n pe
rcen
tage
of
the
Com
pany
’s p
aid-
in c
apit
al o
n ye
arly
bas
is).
T
he c
apit
al s
urpl
us f
rom
lon
g-te
rm i
nves
tmen
ts,
empl
oyee
sha
re o
ptio
ns e
xpir
ed,
divi
dend
s di
stri
bute
d to
sub
sidi
arie
s an
d re
tire
men
t of
tre
asur
y sh
ares
may
not
be
used
for
any
pur
pose
. B
esid
es,
capi
tal
surp
lus
from
con
vers
ion
of e
mpl
oyee
sha
res
and
conv
erti
ble
bond
s pa
yabl
e m
ay n
ot b
e us
ed f
or a
ny
purp
ose.
c.
App
ropr
iati
on o
f ea
rnin
gs a
nd d
ivid
end
poli
cy
Acc
ordi
ng t
o am
ende
d C
ompa
ny A
ct,
whe
re t
he C
ompa
ny m
ade
prof
it i
n a
fisc
al y
ear,
the
pro
fit
shal
l be
fir
st u
tili
zed
for
payi
ng t
axes
, of
fset
ting
los
ses
of p
revi
ous
year
s, s
etti
ng a
side
as
lega
l re
serv
e 10
%
of t
he r
emai
ning
pro
fit,
sett
ing
asid
e or
rev
ersi
ng a
spe
cial
res
erve
in
acco
rdan
ce w
ith
the
law
s an
d re
gula
tion
s, a
nd t
hen
any
rem
aini
ng p
rofi
t to
geth
er w
ith
any
undi
stri
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
trib
utio
n pl
an w
ith
due
cons
ider
atio
n of
any
fut
ure
airc
raft
acq
uisi
tion
pla
ns a
nd f
und
dem
and,
whi
ch s
houl
d be
res
olve
d in
the
sh
areh
olde
rs’
mee
ting
for
the
dis
trib
utio
n of
div
iden
ds a
nd b
onus
es t
o sh
areh
olde
rs b
y ca
sh o
r sh
ares
(c
ash
divi
dend
s ca
nnot
be
less
tha
n 30
% o
f to
tal
divi
dend
s di
stri
bute
d).
How
ever
, if
the
Com
pany
’s
prof
it b
efor
e ta
x in
a f
isca
l ye
ar a
fter
ded
ucti
ons
for
the
abov
emen
tion
ed i
tem
s is
not
suf
fici
ent
for
earn
ings
dis
trib
utio
n, r
etai
ned
earn
ings
can
be
used
as
a su
pple
men
t for
the
defi
cien
cy.
- 56
-
The
Com
pany
sha
ll s
et a
side
pro
fits
as
a le
gal
rese
rve
unti
ll th
e le
gal
rese
rve
amou
nts
to t
he a
utho
rize
d ca
pita
l. T
he l
egal
res
erve
cou
ld b
e us
ed f
or m
akin
g go
od t
he d
efic
it o
f th
e C
ompa
ny.
If t
he C
ompa
ny
has
no d
efic
it i
n a
fisc
al y
ear,
the
Com
pany
can
dis
trib
ute
all
or p
art
of t
he c
apit
al s
urpl
us b
y ca
sh o
r sh
ares
wit
h du
e co
nsid
erat
ion
of f
inan
ce,
mar
ketin
g an
d m
anag
emen
t re
quir
emen
ts i
n ac
cord
ance
wit
h th
e la
ws
and
regu
lati
ons.
T
he d
istr
ibut
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
the
foll
owin
g ye
ar.
1)
App
ropr
iati
on o
f ea
rnin
gs in
201
7 T
he a
ppro
pria
tion
of
earn
ings
for
201
7 w
as r
esol
ved
in th
e sh
areh
olde
rs’
mee
ting
on
June
27,
201
8.
The
app
ropr
iati
ons
and
divi
dend
s pe
r sh
are
wer
e as
fol
low
s:
Ap
pro
pri
atio
n
of E
arn
ings
Div
iden
ds
Per
S
har
e (N
T$)
Leg
al r
eser
ve
$
14
5,83
1
Spe
cial
res
erve
11
8,81
0
C
ash
divi
dend
s
1,
193,
670
$0
.218
1820
086
2)
A
ppro
pria
tion
of
earn
ings
in 2
018
The
app
ropr
iati
on o
f ea
rnin
gs f
or 2
018
was
res
olve
d in
the
shar
ehol
ders
’ m
eeti
ng o
n Ju
ne 2
5, 2
019.
T
he a
ppro
pria
tion
and
div
iden
ds p
er s
hare
wer
e as
fol
low
s:
Ap
pro
pri
atio
n
of E
arn
ings
Div
iden
ds
Per
S
har
e (N
T$)
Leg
al r
eser
ve
$
11
4,49
3
Cas
h di
vide
nds
1,13
6,27
8
$0.2
0960
737
Com
pany
rev
erse
d sp
ecia
l res
erve
of
$105
,843
thou
sand
.
3)
Off
sett
ing
defi
cits
in 2
019
O
n M
arch
18,
202
0, t
he b
oard
pro
pose
d to
off
set
the
accu
mul
ated
def
icit
in
2019
. T
he d
efic
it
incl
uded
a n
et l
oss
of $
1,19
9,79
8 th
ousa
nd,
nega
tive
adju
stm
ent
of o
ther
ret
aine
d ea
rnin
gs o
f $5
77,4
27 th
ousa
nd, t
he r
emai
ning
am
ount
of
accu
mul
ated
def
icit
was
$1,
777,
225
thou
sand
.
The
of
fset
ting
of
de
fici
ts
for
2019
is
su
bjec
t to
th
e re
solu
tion
of
th
e sh
areh
olde
rs
in
the
shar
ehol
der’
s m
eeti
ng to
be
held
on
June
23,
202
0.
170
- 57
-
d.
Oth
er e
quity
item
s T
he m
ovem
ent o
f ot
her
equi
ty it
ems
is a
s fo
llow
s:
Exc
han
ge
Dif
fere
nce
s on
T
ran
slat
ing
For
eign
O
per
atio
ns
Un
real
ized
G
ain
(L
oss)
on
A
vail
able
-for
- sa
le F
inan
cial
A
sset
s
Un
real
ized
G
ain
(L
oss)
on
F
inan
cial
A
sset
s at
F
VT
OC
I
Cas
h F
low
H
edge
s
Gai
n (
Los
s) o
n
Hed
gin
g In
stru
men
ts
T
otal
Bal
ance
at J
anua
ry 1
, 20
18
$ (3
4,98
6 )
$ 1,
774
$ -
$ (7
4,42
9 )
$ -
$ (1
07,6
41 )
Adj
ustm
ents
on
init
ial
appl
icat
ion
of I
FR
S 9
-
(1,7
74 )
42
,351
74,4
29
(7
4,42
9 )
40
,577
B
alan
ce a
t Jan
uary
1,
2018
aft
er I
FR
S 9
ad
just
men
ts
(3
4,98
6 )
-
42
,351
-
(74,
429 )
(67,
064 )
E
xcha
nge
diff
eren
ces
on
tran
slat
ing
fore
ign
oper
atio
ns
29
,897
-
-
-
-
29,8
97
Cum
ulat
ive
loss
on
chan
ges
in f
air
valu
e of
he
dgin
g in
stru
men
ts
-
-
-
-
77
,435
77,4
35
Cum
ulat
ive
gain
on
chan
ges
in f
air
valu
e of
he
dgin
g in
stru
men
ts
recl
assi
fied
to p
rofi
t or
loss
-
-
-
-
31,7
31
31
,731
U
nrea
lize
d ga
in o
n fi
nanc
ial a
sset
s at
F
VT
OC
I
-
-
930
-
-
93
0
Eff
ect o
f ch
ange
in ta
x ra
te
1,
198
-
(1
,209
)
-
2,53
0
2,51
9 E
ffec
ts o
f in
com
e ta
x
(5,7
73 )
-
54
7
-
(24,
117 )
(29,
343 )
O
ther
com
preh
ensi
ve
inco
me
(los
s)
reco
gniz
ed in
the
peri
od
25
,322
-
268
-
87
,579
113,
169
T
rans
fers
of
init
ial
carr
ying
am
ount
of
hedg
ed it
ems
-
-
-
-
12
,118
12,1
18
B
alan
ce a
t Dec
embe
r 31
, 20
18
$ (9
,664
)
$
-
$
42,6
19
$ -
$ 25
,268
$
58,2
23
B
alan
ce a
t Jan
uary
1,
2019
$
(9,6
64 )
$ -
$ 42
,619
$
-
$
25,2
68
$ 58
,223
E
xcha
nge
diff
eren
ces
on
tran
slat
ing
fore
ign
oper
atio
ns
(6
5,24
6 )
-
-
-
-
(6
5,24
6 )
Cum
ulat
ive
loss
on
chan
ges
in f
air
valu
e of
he
dgin
g in
stru
men
ts
-
-
-
-
1,
378,
603
1,
378,
603
Cum
ulat
ive
gain
on
chan
ges
in f
air
valu
e of
he
dgin
g in
stru
men
ts
recl
assi
fied
to p
rofi
t or
loss
-
-
-
-
20,0
14
20
,014
U
nrea
lize
d ga
in o
n fi
nanc
ial a
sset
s at
F
VT
OC
I
-
-
79,3
92
-
-
79
,392
E
ffec
ts o
f in
com
e ta
x
11,8
35
-
(1
4,85
4 )
-
(2
79,6
04 )
(2
82,6
23 )
Oth
er c
ompr
ehen
sive
in
com
e (l
oss)
re
cogn
ized
in th
e pe
riod
(53,
411 )
-
64,5
38
-
1,
119,
013
1,
130,
140
Dis
posa
l of
subs
idia
ries
8,36
8
105
-
8,
473
Tra
nsfe
rs o
f in
itia
l ca
rryi
ng a
mou
nt o
f he
dged
item
s
-
-
-
-
(603
)
(603
)
Bal
ance
at D
ecem
ber
31,
2019
$
(54,
707 )
$
-
$
107,
262
$ -
$ 1,
143,
678
$ 1,
196,
233
- 58
-
e.
Non
-con
trol
ling
inte
rest
s
F
or t
he
Yea
r E
nd
ed D
ecem
ber
31
2019
2018
Beg
inni
ng b
alan
ce
$
2,
965,
512
$
2,
134,
282
Net
inco
me
attr
ibut
able
to n
on-c
ontr
ollin
g in
tere
sts
52
4,79
6
48
2,32
3 F
orei
gn e
xcha
nge
diff
eren
ces
(7,7
06)
(3,3
30)
Act
uari
al g
ains
and
loss
es o
n de
fine
d be
nefi
t pla
ns
(100
,136
)
(6
9,65
4)
Cas
h fl
ow h
edge
on
chan
ges
in f
air
valu
e of
hed
ging
inst
rum
ents
(1
3,22
7)
(46)
C
umul
ativ
e ga
in (
loss
) ar
isin
g on
cha
nges
in f
air
valu
e of
he
dgin
g in
stru
men
ts r
ecla
ssif
ied
to p
rofi
t or
loss
8,
528
105
Eff
ect o
n in
com
e ta
x
22,5
86
26,8
88
(8
9,95
5)
(72,
925)
D
ispo
sal o
f su
bsid
iari
es
(24,
957)
-
Dis
posa
l of
part
equ
ity o
f su
bsid
iari
es
619,
387
- A
cqui
siti
on o
f no
n-co
ntro
lling
inte
rest
s in
sub
sidi
arie
s
-
565,
963
Div
iden
ds p
aid
by s
ubsi
diar
ies
(4
16,4
38)
(171
,019
)
End
ing
bala
nce
$
3,
578,
345
$
2,
965,
512
f.
Tre
asur
y sh
ares
T
reas
ury
shar
es a
re t
he C
ompa
ny’s
sha
res
held
by
its
subs
idia
ries
as
of D
ecem
ber
31,
2019
and
201
8 w
ere
as f
ollo
ws:
(Sh
ares
in T
hou
san
ds)
P
urp
ose
of T
reas
ury
Sh
ares
Bu
y B
ack
to
Wri
te o
ff
Com
pan
y’s
Sh
ares
Hel
d b
y It
s S
ub
sid
iari
es
T
otal
N
umbe
r of
sha
res,
Jan
uary
1, 2
018
-
2,
889
2,88
9 A
ddit
ion
duri
ng th
e ye
ar
50,0
00
-
50
,000
R
educ
tion
dur
ing
the
year
(5
0,00
0 )
-
(5
0,00
0)
Num
ber
of s
hare
s, D
ecem
ber
31, 2
018
-
2,
889
2,88
9
N
umbe
r of
sha
res,
Jan
uary
1, 2
019
-
2,
889
2,88
9 A
ddit
ion
duri
ng th
e ye
ar
-
-
- R
educ
tion
dur
ing
the
year
-
-
-
Num
ber
of s
hare
s, D
ecem
ber
31, 2
019
-
2,
889
2,88
9
Su
bsi
dia
ry
S
har
es
(In
Th
ousa
nd
s)
C
arry
ing
Am
oun
t
Mar
ket
Val
ue
Dec
embe
r 31
, 201
9
Man
dari
n A
irli
nes
2,
075
$
18
,796
$
18,7
96
Dyn
asty
Aer
otec
h In
tern
atio
nal C
orp.
81
4
7,
376
7,37
6
$
26,1
72
$
26
,172
(C
onti
nued
)
171
- 59
-
S
ub
sid
iary
Sh
ares
(I
n T
hou
san
ds)
Car
ryin
g A
mou
nt
M
ark
et V
alu
e
D
ecem
ber
31, 2
018
M
anda
rin
Air
line
s
2,07
5
$
22,8
21
$
22
,821
D
ynas
ty A
erot
ech
Inte
rnat
iona
l Cor
p.
814
8,95
6
8,
956
$
31
,777
$
31,7
77
(Con
clud
ed)
The
ab
ove
acqu
isit
ions
by
su
bsid
iari
es
of
the
Com
pany
’s
shar
es
in
prev
ious
ye
ars
was
du
e to
in
vest
men
t pla
nnin
g.
The
sha
res
of th
e C
ompa
ny h
eld
by it
s su
bsid
iari
es w
ere
trea
ted
as tr
easu
ry s
hare
s. T
he s
ubsi
diar
ies
can
exer
cise
sh
areh
olde
rs’
righ
t on
th
ese
trea
sury
sh
ares
, ex
cept
fo
r th
e ri
ght
to
subs
crib
e fo
r th
e C
ompa
ny’s
new
sha
res
and
votin
g ri
ghts
. T
o m
aint
ain
the
Com
pany
’s c
redi
t sta
ndin
g an
d sh
areh
olde
rs’
righ
ts a
nd in
tere
sts,
the
boar
d of
dir
ecto
rs
deci
ded
to b
uy b
ack
shar
es o
f th
e C
ompa
ny f
rom
Tai
wan
Sto
ck E
xcha
nge
at a
pri
ce f
rom
$9
to $
14 p
er
shar
e. T
he e
xpec
ted
peri
od o
f pu
rcha
se i
s fr
om A
ugus
t 10
, 20
18 t
o O
ctob
er 9
, 20
18.
As
of 5
0,00
0 th
ousa
nd s
hare
s ha
d be
en r
epur
chas
ed.
The
tre
asur
y sh
ares
hel
d by
the
Com
pany
has
ret
ired
on
Dec
embe
r 18
, 20
18,
shar
e ca
pita
l de
crea
ses
$500
,000
tho
usan
d, a
ddit
iona
l pa
id-i
n ca
pita
l in
exc
ess
of
par-
ordi
nary
sha
re d
ecre
ases
$2,
906
thou
sand
and
add
itio
nal
paid
-in
capi
tal
- tr
easu
ry s
hare
inc
reas
es
$33,
513
thou
sand
. Und
er t
he S
ecur
itie
s E
xcha
nge
Act
, the
tre
asur
y sh
ares
hel
d by
the
Com
pany
can
not
be p
ledg
ed a
nd a
re n
ot e
ntitl
ed to
div
iden
ds d
istr
ibut
ion
and
voti
ng r
ight
s, e
tc.
27.
NE
T I
NC
OM
E
a.
Rev
enue
For
th
e Y
ear
En
ded
Dec
emb
er 3
1
20
19
20
18
P
asse
nger
$ 1
11,4
13,4
35
$
108
,345
,648
C
argo
43
,793
,256
49
,847
,065
O
ther
s
13
,237
,469
12
,518
,894
$ 1
68,4
44,1
60
$
170
,711
,607
b.
O
ther
inco
me
For
th
e Y
ear
En
ded
Dec
emb
er 3
1
20
19
20
18
In
tere
st in
com
e
$
417,
446
$
33
0,71
0 S
ubsi
dy in
com
e
38
,621
11
,200
D
ivid
end
inco
me
21,4
22
9,60
3 O
ther
s
241,
499
254,
940
$
71
8,98
8
$
606,
453
- 60
-
c.
Oth
er g
ains
and
loss
es
For
th
e Y
ear
En
ded
Dec
emb
er 3
1
20
19
20
18
(L
oss)
gai
n on
dis
posa
l pro
pert
y, p
lant
and
equ
ipm
ent
$
32
,460
$ (
270,
597)
(L
oss)
gai
n on
non
-cur
rent
ass
ets
held
for
sal
e
(1
0,46
2)
(368
,992
) N
et g
ain
(los
s) o
n fi
nanc
ial a
sset
s at
FV
TP
L
27,5
80
11,1
68
Gai
n (l
oss)
on
disp
osal
of
inve
stm
ents
7,
656
450,
195
Gai
n (l
oss)
on
fore
ign
exch
ange
, net
(1
41,6
11)
41,8
43
Impa
irm
ent l
oss
on n
on-c
urre
nt a
sset
s he
ld f
or s
ale
-
(7
5,43
7)
Impa
irm
ent l
oss
on p
rope
rty,
pla
nt a
nd e
quip
men
t
-
(50,
000)
L
oss
on s
ale
and
- le
aseb
ack
(103
,775
)
-
Oth
ers
(285
,660
)
(2
73,0
28)
$
(47
3,81
2 )
$
(53
4,84
8)
d.
F
inan
ce c
osts
For
th
e Y
ear
En
ded
Dec
emb
er 3
1
20
19
20
18
In
tere
st e
xpen
se
Bon
ds p
ayab
le
$
42
9,45
7
$
412,
422
Ban
k lo
ans
771,
280
949,
483
Inte
rest
on
obli
gati
ons
unde
r fi
nanc
ial l
ease
s
-
18
,080
L
oss
on d
eriv
ativ
es d
esig
nate
d as
hed
ging
inst
rum
ents
in c
ash
flow
hed
ge a
ccou
ntin
g re
lati
onsh
ips
recl
assi
fied
fro
m e
quit
y to
pro
fit o
r lo
ss
2,13
9,38
2
-
$
3,
340,
119
$
1,
379,
985
C
apit
aliz
atio
n in
tere
st
$
46
,528
$
41,9
25
C
apit
aliz
atio
n ra
te
1.
01%
-1.3
5%
1.
16%
-1.4
5%
e.
D
epre
ciat
ion
and
amor
tiza
tion
exp
ense
F
or t
he
Yea
r E
nd
ed D
ecem
ber
31
2019
2018
Pro
pert
y, p
lant
, equ
ipm
ent
$
20,7
02,0
33
$
19
,324
,804
R
ight
of
use
asse
ts
11,8
99,0
90
- In
vest
men
t pro
pert
ies
277
279
Inta
ngib
le a
sset
s
198,
237
191,
979
D
epre
ciat
ion
and
amor
tiza
tion
exp
ense
$
32,7
99,6
37
$
19
,517
,062
An
anal
ysis
of
depr
ecia
tion
by
func
tion
O
pera
ting
cos
ts
$
30
,927
,997
$
18,6
48,1
42
Ope
rati
ng e
xpen
ses
1,
673,
403
676,
941
$
32
,601
,400
$
19,3
25,0
83
(Con
tinu
ed)
172
- 61
-
For
th
e Y
ear
En
ded
Dec
emb
er 3
1
20
19
20
18
A
n an
alys
is o
f am
orti
zati
on b
y fu
ncti
on
Ope
rati
ng c
osts
$
12,3
80
$
10
,597
O
pera
ting
exp
ense
s
185,
857
181,
382
$
19
8,23
7
$
191,
979
(Con
clud
ed)
f.
Em
ploy
ee b
enef
its
expe
nse
For
th
e Y
ear
En
ded
Dec
emb
er 3
1
20
19
20
18
P
ost-
empl
oym
ent b
enef
its
Def
ined
con
trib
utio
n pl
an
$
57
4,80
9
$
538,
915
Def
ined
ben
efit
pla
n
1,
397,
174
1,46
4,90
1
$
1,97
1,98
3
$
2,00
3,81
6
Oth
er e
mpl
oyee
ben
efit
s
S
alar
y ex
pens
es
$
20
,813
,757
$
20,9
10,6
04
Per
sonn
el s
ervi
ce e
xpen
ses
5,50
6,86
7
5,
791,
627
$
26
,320
,624
$
26,7
02,2
31
A
n an
alys
is o
f em
ploy
ee b
enef
its
expe
nse
by f
unct
ion
Ope
rati
ng c
osts
$
23,6
99,6
85
$
23
,857
,265
O
pera
ting
exp
ense
s
4,59
2,92
2
4,
848,
782
$
28
,292
,607
$
28,7
06,0
47
Acc
ordi
ng t
o th
e C
ompa
ny’s
art
icle
s, t
he C
ompa
ny a
ccru
ed e
mpl
oyee
s’ c
ompe
nsat
ion
at r
ates
of
no
less
tha
n 3%
of
the
net
prof
it b
efor
e in
com
e ta
x an
d em
ploy
ees’
com
pens
atio
n, a
nd a
ccru
ed p
rofi
t bo
nus
at a
cer
tain
rat
e of
pro
fit b
efor
e ta
x on
the
basi
s of
the
coll
ecti
ve a
gree
men
t sig
ned
wit
h th
e C
hina
A
irli
nes
Em
ploy
ees
Uni
on.
The
em
ploy
ees’
co
mpe
nsat
ion
and
prof
it
bonu
s fo
r th
e ye
ar
ende
d D
ecem
ber
31,
2018
was
$51
,656
tho
usan
d an
d $5
94,8
10 t
hous
and.
For
the
yea
r en
ded
Dec
embe
r 31
, 20
19, t
he C
ompa
ny h
as e
xper
ienc
ed a
def
icit
, and
ther
efor
e, n
o em
ploy
ee’s
com
pens
atio
n is
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
befo
re t
he d
ate
that
the
ann
ual
cons
olid
ated
fin
anci
al s
tate
men
ts a
re a
utho
rize
d fo
r is
sue
are
adju
sted
in
the
year
tha
t th
e bo
nuse
s an
d re
mun
erat
ion
wer
e re
cogn
ized
. If
the
re i
s a
chan
ge i
n th
e pr
opos
ed a
mou
nts
afte
r th
e an
nual
con
soli
date
d fi
nanc
ial
stat
emen
ts w
ere
auth
oriz
ed f
or i
ssue
, th
e di
ffer
ence
s ar
e re
cord
ed a
s a
chan
ge in
the
acco
unti
ng e
stim
ate.
In
form
atio
n on
the
empl
oyee
s’ c
ompe
nsat
ion
and
rem
uner
atio
n of
dir
ecto
rs a
nd s
uper
viso
rs r
esol
ved
by
the
Com
pany
’s b
oard
of
dire
ctor
s in
201
9 an
d 20
18 is
ava
ilab
le o
n th
e M
arke
t Obs
erva
tion
Pos
t Sys
tem
w
ebsi
te o
f th
e T
aiw
an S
tock
Exc
hang
e.
- 62
-
28.
INC
OM
E T
AX
a.
In
com
e ta
x ex
pens
e re
cogn
ized
in p
rofi
t or
loss
T
he m
ajor
com
pone
nts
of ta
x ex
pens
e w
ere
as f
ollo
ws:
F
or t
he
Yea
r E
nd
ed D
ecem
ber
31
2019
2018
Cur
rent
tax
Cur
rent
yea
r
$
523,
670
$
26
4,52
7 P
rior
yea
r ad
just
men
t
(5,5
46)
10,5
92
Inco
me
tax
on u
napp
ropr
iate
d ea
rnin
gs
378
35
Def
erre
d ta
x
C
urre
nt y
ear
35,1
49
1,46
5,48
2 A
djus
tmen
ts to
def
erre
d ta
x at
trib
utab
le to
cha
nges
in ta
x ra
tes
and
law
s
24
,534
1,
861
Eff
ect o
f in
com
e ta
x
-
(9
33,9
32)
Inco
me
tax
expe
nse
reco
gniz
ed in
pro
fit o
r lo
ss
$
578,
185
$
80
8,56
5 A
rec
onci
liat
ion
of a
ccou
ntin
g pr
ofit
and
inco
me
tax
expe
nse
is a
s fo
llow
s:
For
th
e Y
ear
En
ded
Dec
emb
er 3
1
20
19
20
18
P
rofi
t bef
ore
tax
$
(96,
817 )
$
3,08
1,24
9
Inco
me
tax
expe
nse
calc
ulat
ed a
t the
sta
tuto
ry r
ate
(% f
or 2
019,
20
% f
or 2
018)
$
(19,
362)
$
616,
250
Eff
ect o
n di
ffer
ent t
ax o
f su
bsid
iari
es g
over
n by
oth
er r
egio
n
1,68
0
7,
391
Eff
ect o
n ad
just
men
t to
inco
me
tax
N
on-d
educ
tibl
e ex
pens
es in
det
erm
inin
g ta
xabl
e in
com
e
16,9
36
20,6
62
Tax
-exe
mpt
inco
me
(45,
861)
(2
5,73
0)
Inco
me
tax
on u
napp
ropr
iate
d ea
rnin
gs (
5%)
378
35
Inco
me
basi
c ta
x
8,
468
- O
vers
ea in
com
e ta
x ex
pens
e
11
,157
22
,786
U
nrec
ogni
zed
loss
car
ryfo
rwar
ds, i
nves
tmen
t tax
cre
dits
and
te
mpo
rary
dif
fere
nce
586,
135
1,08
8,65
0 A
djus
tmen
ts f
or p
rior
yea
rs’
tax
(5,5
46)
10,5
92
Adj
ustm
ents
to d
efer
red
tax
attr
ibut
able
to c
hang
es in
tax
rate
s an
d la
ws
24,5
34
1,86
1 A
djus
tmen
ts to
cha
nges
in ta
x ra
tes
and
law
s
-
(933
,932
) O
ther
(3
34)
-
Inco
me
tax
expe
nse
reco
gniz
ed in
pro
fit o
r lo
ss
$
57
8,18
5
$
808,
565
The
Inc
ome
Tax
Law
of
the
RO
C w
as a
men
ded
and,
sta
rtin
g fr
om 2
018,
the
cor
pora
te i
ncom
e ta
x ra
te
was
ad
just
ed
from
17
%
to
20%
. In
ad
diti
on,
the
rate
of
th
e co
rpor
ate
surt
ax
appl
icab
le
to
unap
prop
riat
ed e
arni
ngs
was
red
uced
fro
m 1
0% to
5%
.
173
- 63
-
b.
Inco
me
tax
reco
gniz
ed in
oth
er c
ompr
ehen
sive
inco
me
20
19
20
18
D
efer
red
tax
R
ecog
nize
d in
oth
er c
ompr
ehen
sive
inco
me
T
rans
lati
on o
f fo
reig
n op
erat
ions
$
13,4
54
$
(4
,657
) F
air
valu
e ch
ange
s of
fin
anci
al a
sset
s at
FV
TO
CI
(14,
854)
54
7 H
edgi
ng in
stru
men
ts f
air
valu
e re
valu
atio
n fo
r ca
sh f
low
he
dgin
g
(2
78,6
64)
(24,
128)
A
ctua
rial
gai
n or
loss
on
defi
ned
bene
fit p
lan
156,
359
187,
368
Eff
ect o
f in
com
e ta
x
-
10,8
93
T
otal
inco
me
tax
reco
gniz
ed in
oth
er c
ompr
ehen
sive
inco
me
$ (
123,
705)
$
170,
023
c.
D
efer
red
tax
asse
ts a
nd li
abil
itie
s F
or th
e ye
ar e
nded
Dec
embe
r 31
, 201
9
B
egin
nin
g B
alan
ce
R
ecog
niz
ed in
P
rofi
t or
Los
s
Rec
ogn
ized
in
Oth
er
Com
pre
hen
sive
In
com
e
Exc
han
ge
Dif
fere
nce
En
din
g B
alan
ce
D
efer
red
tax
asse
ts
T
empo
rary
dif
fere
nces
D
efin
ed b
enef
it p
lans
$
1,76
5,05
2
$
(29,
560 )
$
156,
359
$ -
$ 1,
891,
851
Fre
quen
t fly
er p
rogr
ams
51
0,06
0
82,9
17
-
-
59
2,97
7 M
aint
enan
ce r
eser
ves
1,
811,
848
42
8,15
5
-
-
2,24
0,00
3 A
llow
ance
for
red
ucti
on o
f 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 li
abil
itie
s
T
empo
rary
dif
fere
nces
U
nrea
lize
d fo
reig
n ex
chan
ge g
ains
$
17
$ 81
,760
$
-
$
-
$
81,7
77
Oth
ers
(Not
e)
18
8,43
0
(8,9
99 )
29
5,17
7
757
47
5,36
5
$
188,
447
$ 72
,761
$
295,
177
$ 75
7
$
557,
142
- 64
-
For
the
year
end
ed D
ecem
ber
31, 2
018
Beg
inn
ing
Bal
ance
Rec
ogn
ized
in
Pro
fit
or L
oss
Rec
ogn
ized
in
Oth
er
Com
pre
hen
sive
In
com
e
Exc
han
ge
Dif
fere
nce
Acq
uis
itio
n
Con
soli
dat
ed
E
nd
ing
Bal
ance
Def
erre
d ta
x as
sets
Tem
pora
ry d
iffe
renc
es
Def
ined
ben
efit
pla
ns
$ 1,
381,
538
$ 18
0,56
0
$
195,
742
$ -
$ 7,
212
$ 1,
765,
052
Fre
quen
t fly
er
prog
ram
s
426,
106
83
,954
-
-
-
510,
060
Mai
nten
ance
res
erve
s
1,50
7,28
5
304,
563
-
-
-
1,
811,
848
All
owan
ce f
or
redu
ctio
n of
in
vent
ory
23
9,11
5
96,5
96
-
-
33
5,71
1 O
ther
s
1,14
3,87
1
(397
,832
)
(18,
546 )
479
1,42
7
72
9,39
9 L
oss
carr
yfor
war
ds
82
1,41
7
(821
,417
)
-
-
-
-
$ 5,
519,
332
$ (5
53,5
76 )
$ 17
7,19
6
$ 47
9
$ 8,
639
$
5,15
2,07
0
Def
erre
d ta
x li
abil
itie
s
T
empo
rary
dif
fere
nces
U
nrea
lize
d fo
reig
n ex
chan
ge g
ains
$
915
$
(898
)
$
-
$
-
$
-
$
17
Dep
reci
atio
n di
ffer
ence
fr
om f
ixed
ass
ets
31
,010
(31,
010 )
-
-
-
- O
ther
s (N
ote)
165,
630
11
,743
7,17
3
3,
884
-
18
8,43
0
$
197,
555
$ (2
0,16
5 )
$ 7,
173
$
3,88
4
$ -
$
188,
447
Not
e:
Incl
uded
adj
ustm
ents
on
init
ial
appl
icat
ion
due
to t
ax r
ate
chan
ges
$6,8
73 t
hous
and
from
IF
RS
9.
Ded
ucti
ble
tem
pora
ry d
iffe
renc
es, a
nd u
nuse
d lo
ss c
arry
forw
ards
for
whi
ch n
o de
ferr
ed t
ax a
sset
s ha
ve
been
rec
ogni
zed
in th
e co
nsol
idat
ed b
alan
ce s
heet
s.
D
ecem
ber
31
2019
2018
Los
s ca
rryf
orw
ards
20
19
$
-
$
11
,790
,770
20
21
2,89
9,49
6
2,
899,
496
2022
61
9,79
9
62
0,76
9 20
25
18,1
24
18,1
24
2026
54
6,89
9
81
8,19
8 20
27
68,4
15
68,4
15
2028
1,
706,
913
1,51
3,00
1 20
29
955,
250
-
$
6,81
4,89
6
$
17,7
28,7
73
D
iffe
renc
e in
dep
reci
atio
n
$
1,34
8,09
6
$
90,3
50
174
- 65
-
d.
Unu
sed
tax
loss
car
ryfo
rwar
ds a
s of
Dec
embe
r 31
, 201
9 w
ere
as f
ollo
ws:
Exp
iry
Yea
r
Un
use
d
Am
oun
t
Chi
na A
irli
nes,
Ltd
.
2021
$
2,
899,
496
2022
619,
799
2026
202,
699
2028
1,51
9,94
1 20
29
76
0,15
7
$
6,
002,
092
M
anda
rin
Air
line
Co.
, Ltd
.
2026
$
31
2,72
4 20
28
83
,821
$
39
6,54
5
Tai
wan
Air
craf
t Mai
nten
ance
And
Eng
inee
ring
Co.
, Ltd
.
2025
$
18
,124
20
26
31
,476
20
27
68
,415
20
28
10
3,15
1 20
29
19
5,09
3
$
41
6,25
9
e.
Inco
me
tax
asse
ssm
ent
The
inc
ome
tax
retu
rns
for
2017
of
the
Com
pany
and
its
sub
sidi
arie
s ha
ve b
een
exam
ined
by
the
tax
auth
orit
ies.
29
. E
AR
NIN
G P
ER
SH
AR
E
The
num
erat
ors
and
deno
min
ator
s us
ed in
cal
cula
ting
ear
ning
s pe
r sh
are
wer
e as
fol
low
s:
F
or t
he
Yea
r E
nd
ed D
ecem
ber
31
2019
2018
Bas
ic e
arni
ngs
per
shar
e
$
(0.2
2)
$
0.
33
Dil
uted
ear
ning
s pe
r sh
are
$
(0
.22 )
$
0.32
Ear
ning
s us
ed in
the
com
puta
tion
of
basi
c ea
rnin
gs p
er s
hare
$ (
1,19
9,79
8)
$
1,
790,
361
Eff
ect o
f po
tent
iall
y di
luti
ve o
rdin
ary
shar
es:
Inte
rest
on
conv
erti
ble
bond
s (a
fter
tax)
-
81,4
63
E
arni
ngs
used
in th
e co
mpu
tati
on o
f di
lute
d ea
rnin
gs p
er s
hare
$ (
1,19
9,79
8 )
$
1,
871,
824
- 66
-
For
th
e Y
ear
En
ded
Dec
emb
er 3
1
20
19
20
18
T
hous
and
unit
W
eigh
ted
aver
age
num
ber
of o
rdin
ary
shar
es in
com
puta
tion
of
basi
c ea
rnin
gs p
er s
hare
5,
418,
096
5,45
3,57
9 E
ffec
t of
pote
ntia
lly
dilu
tive
ord
inar
y sh
ares
:
C
onve
rtib
le b
onds
-
457,
481
Em
ploy
ees’
com
pens
atio
n or
bon
uses
issu
ed to
em
ploy
ees
-
8,82
1
Wei
ghte
d av
erag
e nu
mbe
r of
ord
inar
y sh
ares
use
d in
the
com
puta
tion
of
dilu
ted
earn
ings
per
sha
re
5,41
8,09
6
5,
919,
881
If t
he G
roup
off
ered
to
sett
le c
ompe
nsat
ion
or b
onus
es p
aid
to e
mpl
oyee
s in
cas
h or
sha
res,
the
Gro
up
assu
med
the
ent
ire
amou
nt o
f th
e co
mpe
nsat
ion
or b
onus
es w
ould
be
sett
led
in s
hare
s an
d th
e re
sult
ing
pote
ntia
l sh
ares
w
ere
incl
uded
in
th
e w
eigh
ted
aver
age
num
ber
of
shar
es
outs
tand
ing
used
in
th
e co
mpu
tati
on o
f di
lute
d ea
rnin
gs p
er s
hare
, if
the
eff
ect
is d
ilut
ive.
Suc
h di
luti
ve e
ffec
t of
the
pot
entia
l sh
ares
was
inc
lude
d in
the
com
puta
tion
of
dilu
ted
earn
ings
per
sha
re u
ntil
the
num
ber
of s
hare
s to
be
dist
ribu
ted
to e
mpl
oyee
s is
res
olve
d in
the
foll
owin
g ye
ar.
30
. B
US
INE
SS
CO
MB
INA
TIO
NS
A
s st
ated
in
Not
e 14
, th
e ot
her
disc
losu
res
of t
he G
roup
’s a
cqui
siti
on o
f K
aohs
iung
Cat
erin
g on
Mar
ch 7
, 20
18 a
re a
s fo
llow
s:
a.
Acq
uisi
tion
-rel
ated
cas
h am
ount
ing
to $
243,
743
thou
sand
. b.
A
sset
s ac
quir
ed a
nd li
abil
itie
s as
sum
ed a
t the
dat
e of
acq
uisi
tion
.
Ass
ets
C
urre
nt a
sset
s (i
nclu
ded
cash
and
cas
h eq
uiva
lent
s of
$38
0,51
2)
$
91
8,03
3 P
rope
rty,
pla
nt a
nd e
quip
men
t
55
3,39
0 In
tang
ible
ass
ets
186,
883
Oth
er a
sset
s
49
,479
T
otal
ass
ets
1,70
7,78
5 L
iabi
liti
es
(486
,356
)
Id
enti
fiab
le n
et a
sset
s
$
1,22
1,42
9 c.
T
he C
ompa
ny a
cqui
red
the
cont
rol
of K
aohs
iung
Cat
erin
g (t
he d
ate
of a
cqui
siti
on),
and
the
35.
78%
eq
uity
hel
d by
the
equ
ity m
etho
d w
as r
emea
sure
d at
the
fai
r va
lue
of t
he a
cqui
siti
on d
ate
and
the
diff
eren
ce r
ecog
nize
d in
gai
n on
dis
posa
l of
inve
stm
ent i
s $6
9,67
1 th
ousa
nd.
d.
The
non
-con
trol
ling
int
eres
t of
Kao
hsiu
ng C
ater
ing
(46.
33%
of
equi
ty)
was
val
ued
$565
,888
tho
usan
d;
at t
he f
air
valu
e of
the
ide
ntif
iabl
e ne
t as
sets
att
ribu
ted
to t
he n
on-c
ontr
olli
ng i
nter
est
on t
he d
ate
of
acqu
isit
ion.
e.
T
he b
arga
in p
urch
ase
bene
fit
of $
26,6
15 t
hous
and
of K
aohs
iung
Cat
erin
g (t
he d
ate
of a
cqui
siti
on)
was
m
easu
red
as t
he e
xces
s of
the
sum
of
the
cons
ider
atio
n tr
ansf
erre
d an
d th
e fa
ir v
alue
of
the
acqu
irer
’s
prev
ious
ly h
eld
equi
ty i
nter
ests
in
the
acqu
iree
ove
r th
e ne
t of
the
acq
uisi
tion
-dat
e am
ount
s of
the
id
enti
fiab
le a
sset
s ac
quir
ed a
nd th
e li
abil
itie
s as
sum
ed.
175
- 67
-
f.
Impa
ct o
f ac
quis
itio
ns o
f th
e G
roup
F
rom
the
acq
uisi
tion
dat
e, t
he o
pera
ting
res
ults
fro
m t
he a
cqui
red
Com
pany
, w
hich
are
inc
lude
d in
the
co
nsol
idat
ed s
tate
men
ts o
f co
mpr
ehen
sive
inco
me,
are
as
foll
ows:
K
aoh
siu
ng
Cat
erin
g
R
even
ue
$
1,
823,
950
Pro
fit
$
22
9,66
5 H
ad t
hese
bus
ines
s co
mbi
nati
ons
been
in
effe
ct a
t th
e be
ginn
ing
of t
he a
nnua
l re
port
ing
peri
od,
the
Gro
up’s
rev
enue
fro
m c
onti
nuin
g op
erat
ions
wou
ld h
ave
been
$17
1,03
9,10
2 th
ousa
nd a
nd t
he p
rofi
t fr
om c
onti
nuin
g op
erat
ions
wou
ld h
ave
been
$2,
310,
159
thou
sand
. T
his
pro-
form
a in
form
atio
n is
for
il
lust
rati
ve p
urpo
ses
only
and
is n
ot n
eces
sari
ly a
n in
dica
tion
of
the
reve
nue
and
resu
lts
of o
pera
tion
s of
th
e G
roup
tha
t ac
tual
ly w
ould
hav
e be
en a
chie
ved
had
the
acqu
isit
ion
been
com
plet
ed o
n Ja
nuar
y 1,
20
18, n
or is
it in
tend
ed to
be
a pr
ojec
tion
of
futu
re r
esul
ts.
31
. D
ISP
OS
AL
OF
SU
BS
IDIA
RIE
S
On
Janu
ary
21,
2019
, th
e bo
ard
of d
irec
tors
of
the
Com
pany
dec
ided
to
sell
par
t of
Dyn
asty
Hol
iday
s to
H
.I.S
. Tai
wan
Co.
, Ltd
. for
dis
posa
l pr
ice
of $
34,0
36 t
hous
and
and
a di
spos
itio
n of
$7,
656
thou
sand
. Aft
er
the
disp
osal
, the
pro
port
ion
of o
wne
rshi
p de
crea
se f
rom
51%
to 2
0%, l
oss
cont
rol t
o th
e su
bsid
iary
. a.
C
onsi
dera
tion
rec
eive
d fr
om d
ispo
sals
C
onsi
dera
tion
rec
eive
d in
cas
h an
d ca
sh e
quiv
alen
ts
$
34,0
36
b.
A
naly
sis
of a
sset
s an
d li
abil
itie
s on
the
date
con
trol
was
lost
C
urre
nt a
sset
s
C
ash
and
cash
equ
ival
ents
$
51
,449
O
ther
cur
rent
ass
ets
47
,510
N
on-c
urre
nt a
sset
s
17,0
35
Cur
rent
liab
ilit
ies
(4
9,74
2)
Non
-cur
rent
liab
ilit
ies
(1
5,31
8 )
N
et a
sset
s di
spos
ed o
f
$
50
,934
c.
Gai
n on
dis
posa
ls o
f su
bsid
iari
es
Con
side
rati
on r
ecei
ved
$
34
,036
N
et a
sset
s di
spos
ed o
f
(5
0,93
4)
Fai
r va
lue
of e
quity
10
,187
N
on-c
ontr
ollin
g in
tere
sts
24,9
57
Rec
lass
ific
atio
n of
oth
er c
ompr
ehen
sive
inco
me
in r
espe
ct o
f su
bsid
iari
es
(10,
590 )
G
ain
on d
ispo
sal
$
7,
656
d.
N
et c
ash
infl
ow o
n di
spos
al o
f su
bsid
iari
es
Con
side
rati
on r
ecei
ved
in c
ash
and
cash
equ
ival
ents
$
34,0
36
Les
s: C
ash
and
cash
equ
ival
ent b
alan
ces
disp
osed
of
(51,
449 )
$
(17
,413
)
- 68
-
32
. C
AP
ITA
L M
AN
AG
EM
EN
T
The
Gro
up m
anag
es i
ts c
apit
al t
o en
sure
tha
t en
titi
es i
n th
e G
roup
wil
l be
abl
e to
con
tinu
e as
goi
ng
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
apit
al s
truc
ture
of
the
Gro
up c
onsi
sts
of n
et d
ebt
(bor
row
ings
off
set
by c
ash
and
cash
eq
uiva
lent
s) a
nd e
quity
of
the
Gro
up c
ompr
isin
g is
sued
cap
ital
, res
erve
s, r
etai
ned
earn
ings
, oth
er e
quity
and
no
n-co
ntro
llin
g in
tere
sts.
T
o su
ppor
t it
s op
erat
ing
acti
viti
es a
nd p
urch
ase
of a
ircr
aft,
the
Gro
up n
eeds
to
mai
ntai
n su
ffic
ient
cap
ital
. T
here
fore
, th
e go
al o
f ca
pita
l m
anag
emen
t is
to
ensu
re f
inan
cial
res
ourc
es a
nd o
pera
ting
pla
n is
abl
e to
su
ppor
t th
e fu
ture
wor
king
cap
ital
, ca
pita
l ex
pend
itur
es,
debt
rep
aym
ent
and
divi
dend
exp
ense
s an
d ot
her
need
s.
33
. F
INA
NC
IAL
IN
ST
RU
ME
NT
S
a.
F
air
valu
es o
f fi
nanc
ial i
nstr
umen
ts
1)
F
inan
cial
inst
rum
ents
not
eva
luat
ed a
t fai
r va
lue
Exc
ept
as d
etai
led
in t
he f
ollo
win
g ta
ble,
the
man
agem
ent
cons
ider
s th
e ca
rryi
ng a
mou
nts
of
fina
ncia
l ass
ets
and
fina
ncia
l lia
bili
ties
rec
ogni
zed
in th
e fi
nanc
ial s
tate
men
ts a
s ap
prox
imat
ing
thei
r fa
ir v
alue
s.
Dec
emb
er 3
1
20
19
20
18
Car
ryin
g A
mou
nt
F
air
Val
ue
C
arry
ing
Am
oun
t
Fai
r V
alu
e F
inan
cial
liab
ilit
ies
B
onds
pay
able
$
32,0
52,6
25
$
32
,062
,874
$
33,9
19,6
10
$
31
,651
,865
L
oans
and
deb
t
67
,663
,783
67
,663
,783
76
,395
,635
74
,404
,225
S
ome
long
-ter
m b
orro
win
gs a
nd c
apit
al l
ease
obl
igat
ions
are
flo
atin
g-ra
te f
inan
cial
lia
bili
ties,
so
thei
r ca
rryi
ng a
mou
nts
are
thei
r fa
ir v
alue
s. A
s of
Dec
embe
r 31
, 20
19 a
nd 2
018,
the
fai
r va
lues
of
long
-ter
m b
orro
win
gs a
nd p
riva
te b
onds
wit
h fi
xed
inte
rest
rat
es a
re e
stim
ated
at
the
pres
ent
valu
e of
exp
ecte
d ca
sh f
low
s di
scou
nted
at
rate
s of
0.6
7% a
nd 0
.68%
, re
spec
tive
ly,
prev
aili
ng i
n th
e m
arke
t fo
r lo
ng-t
erm
bor
row
ings
(L
evel
2).
Fai
r va
lues
of
bond
pay
able
tra
ding
in
OT
C a
nd b
ased
on
quo
ted
mar
ket p
rice
s (L
evel
1).
2)
Fai
r va
lue
mea
sure
men
ts r
ecog
nize
d in
the
bala
nce
shee
ts
The
fol
low
ing
tabl
e pr
ovid
es a
n an
alys
is o
f fi
nanc
ial
inst
rum
ents
tha
t ar
e m
easu
red
subs
eque
nt t
o in
itia
l re
cogn
itio
n at
fai
r va
lue,
gro
uped
int
o L
evel
s 1
to 3
bas
ed o
n th
e de
gree
to
whi
ch t
he f
air
valu
e is
obs
erva
ble:
a)
L
evel
1 f
air
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 f
or id
enti
cal a
sset
s or
liab
ilit
ies;
b)
L
evel
2 f
air
valu
e m
easu
rem
ents
are
thos
e de
rive
d fr
om in
puts
oth
er th
an q
uote
d pr
ices
incl
uded
w
ithi
n L
evel
1 t
hat
are
obse
rvab
le f
or t
he a
sset
or
liab
ilit
y, e
ithe
r di
rect
ly (
i.e.
as p
rice
s) o
r in
dire
ctly
(i.e
. der
ived
fro
m p
rice
s); a
nd
176
- 69
-
c)
Lev
el 3
fai
r va
lue
mea
sure
men
ts a
re th
ose
deri
ved
from
val
uati
on te
chni
ques
that
incl
ude
inpu
ts
for
the
asse
t or
liab
ility
that
are
not
bas
ed o
n ob
serv
able
mar
ket d
ata
(uno
bser
vabl
e in
puts
).
Dec
embe
r 31
, 201
9
L
evel
1
L
evel
2
L
evel
3
T
otal
Fin
anci
al a
sset
s at
F
VT
PL
D
omes
tic
mon
ey
mar
ket f
unds
$
511,
758
$
-
$
-
$
51
1,75
8 F
orei
gn e
xcha
nge
agre
emen
t
-
434
-
43
4
$
511,
758
$
43
4
$
-
$
512,
192
F
inan
cial
ass
ets
at
FV
TO
CI
Inve
stm
ents
in e
quity
in
stru
men
ts
Uni
ted
shar
es -
do
mes
tic
$
-
$
-
$
26
,865
$
26,8
65
Unl
iste
d sh
ares
-
fore
ign
-
-
182,
356
182,
356
$
-
$
-
$
20
9,22
1
$
209,
221
F
inan
cial
liab
ilit
ies
at
FV
TP
L
Der
ivat
ive
inst
rum
ents
$
-
$
11,7
49
$
-
$
11
,749
Fin
anci
al a
sset
s fo
r he
dgin
g
$
-
$
147
$
9,
479
$
9,
626
F
inan
cial
liab
ilit
ies
for
hedg
ing
$
50
,997
,687
$
37,0
69
$
3,
955
$
51
,038
,711
D
ecem
ber
31, 2
018
Lev
el 1
Lev
el 2
Lev
el 3
Tot
al
F
inan
cial
ass
ets
at
FV
TP
L
Dom
esti
c m
oney
m
arke
t fun
ds
$
20
6,00
1
$
-
$
-
$
206,
001
(Con
tinu
ed)
- 70
-
Lev
el 1
Lev
el 2
Lev
el 3
Tot
al
F
inan
cial
ass
ets
at
FV
TO
CI
Inve
stm
ents
in e
quity
in
stru
men
ts
Uni
ted
shar
es -
do
mes
tic
$
-
$
-
$
21
,746
$
21,7
46
Unl
iste
d sh
ares
-
fore
ign
-
-
110,
445
110,
445
$
-
$
-
$
13
2,19
1
$
132,
191
F
inan
cial
liab
ilit
ies
at
FV
TP
L
Der
ivat
ive
inst
rum
ents
$
-
$
221
$
-
$
22
1
Fin
anci
al a
sset
s fo
r he
dgin
g
$
-
$
28,0
05
$
4,
901
$
32
,906
Fin
anci
al li
abil
itie
s fo
r he
dgin
g
$
-
$
560
$
-
$
56
0 (C
oncl
uded
) T
here
wer
e no
tran
sfer
s be
twee
n L
evel
s 1
and
2 in
the
curr
ent p
erio
ds.
d)
V
alua
tion
tech
niqu
es a
nd in
puts
app
lied
for
Lev
el 2
fai
r va
lue
mea
sure
men
t
Fin
anci
al I
nst
rum
ents
Val
uat
ion
Tec
hn
iqu
es a
nd
In
pu
ts
D
eriv
ativ
es -
for
eign
exc
hang
e fo
rwar
d co
ntra
cts
and
inte
rest
rat
e sw
aps
D
isco
unte
d ca
sh f
low
s.
Fut
ure
cash
flo
ws
are
esti
mat
ed b
ased
on
obse
rvab
le f
orw
ard
exch
ange
rat
es a
t the
end
of
the
repo
rtin
g pe
riod
and
co
ntra
ct f
orw
ard
rate
s, d
isco
unte
d at
a r
ate
that
ref
lect
s th
e cr
edit
ris
k of
var
ious
cou
nter
part
ies.
e)
V
alua
tion
tech
niqu
es a
nd in
puts
app
lied
for
Lev
el 3
fai
r va
lue
mea
sure
men
t T
he f
air
valu
es o
f fo
reig
n ex
chan
ges
and
fuel
opt
ions
are
det
erm
ined
usi
ng o
ptio
n pr
icin
g m
odel
s w
here
the
sig
nifi
cant
uno
bser
vabl
e in
puts
are
im
plie
d fl
uctu
atio
n. C
hang
es i
n th
e im
plie
d fl
uctu
atio
ns u
sed
in i
sola
tion
wou
ld r
esul
t in
an
incr
ease
or
decr
ease
in
the
fair
val
ue o
f th
e fo
reig
n ex
chan
ge f
orw
ard
cont
ract
s an
d fu
el o
ptio
ns.
The
dom
esti
c un
list
ed e
quit
y in
vest
men
t is
bas
ed o
n th
e co
mpa
rati
ve c
ompa
ny v
alua
tion
to
esti
mat
e th
e fa
ir v
alue
. The
mai
n as
sum
ptio
ns a
re b
ased
on
the
mul
tipl
ier
of t
he m
arke
t pr
ice
of
the
com
para
ble
list
ed c
ompa
ny a
nd t
he n
et v
alue
per
sha
re, w
hich
hav
e co
nsid
ered
the
liq
uidi
ty
disc
ount
. T
he h
ighe
r th
e m
ulti
plie
r or
the
low
er t
he l
iqui
dity
dis
coun
t, th
e hi
gher
the
fai
r va
lue
of th
e re
leva
nt f
inan
cial
inst
rum
ents
.
177
- 71
-
The
mov
emen
ts o
f L
evel
3 f
inan
cial
inst
rum
ents
are
as
foll
ows:
Mu
ltip
lica
tor
L
iqu
idit
y D
isco
un
t
Dec
embe
r 31
, 201
9
0.75
-13.
23
80
%
Dec
embe
r 31
, 201
8
0.74
-15.
29
80
%
Der
ivat
ive
Inst
rum
ents
Eq
uit
y In
stru
men
ts
B
alan
ce a
t Jan
uary
1, 2
019
$
4,
901
$
13
2,19
1 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
$
209,
221
B
alan
ce a
t Jan
uary
1, 2
018
$
-
$
84
,075
A
djus
tmen
ts o
n in
itia
l app
licat
ion
of I
FRS
9
-
47
,510
O
ther
com
preh
ensi
ve in
com
e re
cogn
ized
dur
ing
the
peri
od
4,90
1
60
6
Bal
ance
at D
ecem
ber
31, 2
018
$
4,
901
$
13
2,19
1 B
ecau
se s
ome
fina
ncia
l ins
trum
ents
and
non
fina
ncia
l ins
trum
ents
may
not
hav
e th
eir
fair
val
ues
disc
lose
d, t
he t
otal
fai
r va
lue
disc
lose
d he
rein
is
not
the
tota
l va
lue
of t
he G
roup
’s c
olle
ctiv
e in
stru
men
ts.
b.
C
ateg
orie
s of
fin
anci
al in
stru
men
ts
D
ecem
ber
31
2019
2018
Fin
anci
al a
sset
s
Fin
anci
al a
sset
s at
FV
TP
L
$
51
2,19
2
$
206,
001
Fin
anci
al a
sset
s fo
r he
dgin
g
9,
626
32,9
06
Fin
anci
al a
sset
s at
am
orti
zed
cost
(N
ote
1)
41,4
79,5
56
40,4
96,6
18
Fin
anci
al a
sset
s at
FV
TP
CI
- eq
uity
inst
rum
ent i
nves
tmen
t
20
9,22
1
13
2,19
1
Fin
anci
al li
abil
itie
s
Fin
anci
al li
abil
itie
s at
FV
TP
L
11,7
49
221
Fin
anci
al li
abil
itie
s fo
r he
dgin
g
51
,038
,711
56
0 F
inan
cial
liab
ilit
ies
at a
mor
tize
d co
st (
Not
e 2)
13
4,24
0,99
3
12
7,27
1,89
2 N
ote
1:
The
bal
ance
s in
clud
e lo
ans
and
rece
ivab
les
mea
sure
d at
am
orti
zed
cost
, 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
, ot
her
rece
ivab
les,
ref
unda
ble
depo
sits
, ot
her
fina
ncia
l as
sets
and
oth
er r
estr
icte
d fi
nanc
ial
asse
ts.
Not
e 2:
T
he
bala
nces
in
clud
e fi
nanc
ial
liab
ilit
ies
mea
sure
d at
am
orti
zed
cost
, w
hich
co
mpr
ise
shor
t-te
rm d
ebts
, sh
ort-
term
not
es p
ayab
le,
note
s an
d ac
coun
ts p
ayab
le,
acco
unts
pay
able
-
rela
ted
part
ies,
oth
er p
ayab
les,
bon
ds p
ayab
le, l
ong-
term
loa
ns, l
ease
lia
bili
ties
pay
able
, lea
se
liab
ilit
ies,
pro
visi
ons,
par
t of
oth
er c
urre
nt l
iabi
liti
es,
part
of
othe
r no
n-cu
rren
t li
abil
itie
s an
d gu
aran
tee
depo
sits
.
- 72
-
c.
Fin
anci
al r
isk
man
agem
ent o
bjec
tive
s an
d po
lici
es
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
fi
nanc
ial
envi
ronm
ent
and
in t
he f
uel
mar
ket.
To
redu
ce t
he f
inan
cial
ris
ks f
rom
cha
nges
in
inte
rest
ra
tes,
in
exch
ange
rat
es a
nd i
n fu
el p
rice
s, t
he G
roup
has
its
ope
rati
ng c
osts
sta
y w
ithi
n a
spec
ifie
d ra
nge
by u
sing
app
ropr
iate
fin
anci
al h
edgi
ng i
nstr
umen
ts a
nd h
edgi
ng p
erce
ntag
es i
n ac
cord
ance
wit
h th
e “P
roce
ssin
g P
rogr
am o
f D
eriv
ativ
e F
inan
cial
Ins
trum
ent
Tra
nsac
tion
s” a
ppro
ved
by t
he G
roup
sh
areh
olde
rs t
o re
duce
the
im
pact
of
mar
ket
pric
e ch
ange
s on
ear
ning
s. T
hese
ris
ks i
nclu
de m
arke
t ri
sk
(inc
ludi
ng f
orei
gn c
urre
ncy
risk
, int
eres
t rat
e ri
sk a
nd o
ther
pri
ce r
isk)
, cre
dit r
isk
and
liqu
idit
y ri
sk.
In a
ddit
ion,
the
Gro
up h
as a
ris
k m
anag
emen
t co
mm
itte
e, w
hich
mee
ts p
erio
dica
lly
to e
valu
ate
the
perf
orm
ance
of
de
riva
tive
inst
rum
ents
an
d de
term
ine
the
appr
opri
ate
hedg
ing
perc
enta
ge.
Thi
s co
mm
itte
e in
form
s th
e G
roup
of
glob
al e
cono
mic
and
fin
anci
al c
ondi
tion
s, c
ontr
ols
the
enti
re f
inan
cial
ri
sk r
esul
ting
fro
m c
hang
es i
n th
e fi
nanc
ial
envi
ronm
ent
and
fuel
pri
ces,
and
dev
elop
s th
e st
rate
gy a
nd
resp
onse
to a
void
fin
anci
al r
isk
wit
h th
e as
sist
ance
of
fina
ncia
l ris
k ex
pert
s to
eff
ect r
isk
man
agem
ent.
1)
Mar
ket r
isk
The
Gro
up i
s pr
imar
ily
expo
sed
to t
he f
inan
cial
ris
ks o
f ch
ange
s in
for
eign
cur
renc
y ex
chan
ge r
ates
an
d in
tere
st r
ates
. The
Gro
up e
nter
ed in
to d
eriv
ativ
e fi
nanc
ial i
nstr
umen
ts to
man
age
its
expo
sure
to
fore
ign
curr
ency
ris
k an
d in
tere
st r
ate
risk
. T
he G
roup
ent
ers
into
for
eign
exc
hang
e fo
rwar
d co
ntra
cts,
for
eign
cur
renc
y op
tion
con
trac
ts,
and
inte
rest
sw
ap c
ontr
acts
wit
h fa
ir v
alue
s th
at a
re
high
ly
nega
tivel
y co
rrel
ated
to
th
e fa
ir
valu
es
of
hedg
ed
item
s an
d ev
alua
tes
the
hedg
ing
effe
ctiv
enes
s of
thes
e in
stru
men
ts p
erio
dica
lly.
a)
F
orei
gn c
urre
ncy
risk
T
he G
roup
ent
ers
into
for
eign
cur
renc
y op
tion
con
trac
ts t
o he
dge
agai
nst
the
risk
s on
cha
nge
in
rela
ted
exch
ange
rat
es,
ente
rs i
nto
forw
ard
cont
ract
s to
hed
ge a
gain
st t
he r
isks
on
chan
ges
in
fore
ign-
curr
ency
ass
ets,
liab
ilit
ies
and
com
mit
men
ts in
the
rela
ted
exch
ange
rat
es.
Sen
siti
vity
ana
lysi
s T
he G
roup
was
mai
nly
expo
sed
to th
e U
S d
olla
r.
The
fol
low
ing
deta
ils
the
Gro
up’s
sen
siti
vity
to
a on
e do
llar
inc
reas
e or
dec
reas
e in
the
New
T
aiw
an d
olla
r (t
he f
unct
iona
l cu
rren
cy)
agai
nst
the
rele
vant
for
eign
cur
renc
ies
(i.e
. th
e U
S
doll
ar).
Thi
s is
the
sen
siti
vity
rat
e us
ed w
hen
repo
rtin
g fo
reig
n cu
rren
cy 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
asse
ssm
ent
of t
he r
easo
nabl
y po
ssib
le
chan
ge i
n fo
reig
n ex
chan
ge r
ates
. T
he s
ensi
tivi
ty a
naly
sis
incl
uded
onl
y ou
tsta
ndin
g fo
reig
n cu
rren
cy d
enom
inat
ed m
onet
ary
item
s an
d fo
reig
n cu
rren
cy f
orw
ard
cont
ract
s de
sign
ated
as
cash
flo
w h
edge
s an
d ad
just
s th
eir
tran
slat
ion
at t
he e
nd o
f th
e re
port
ing
peri
od f
or a
one
US
do
llar
s in
crea
se/d
ecre
ase
agai
nst t
he N
ew T
aiw
an d
olla
r.
Whe
n N
ew T
aiw
an d
olla
rs i
ncre
ase
one
doll
ar a
gain
st U
.S. d
olla
rs a
nd a
ll o
ther
var
iabl
es w
ere
held
co
nsta
nt,
ther
e w
ould
be
a
incr
ease
in
pr
e-ta
x pr
ofit
an
d in
crea
se
in
pre-
tax
othe
r co
mpr
ehen
sive
inc
ome
gain
and
los
ses
for
the
year
end
ed D
ecem
ber
31,
2019
of
$105
,266
th
ousa
nd a
nd $
1,61
2,25
6 th
ousa
nd a
nd a
dec
reas
e in
pre
-tax
pro
fit a
nd d
ecre
ase
in p
re-t
ax o
ther
co
mpr
ehen
sive
inc
ome
gain
and
los
s fo
r th
e ye
ar e
nded
Dec
embe
r 31
, 20
18 o
f $9
1,39
7 th
ousa
nd a
nd $
13,6
20 th
ousa
nd, r
espe
ctiv
ely.
T
he G
roup
’s h
edgi
ng s
trat
egy
is t
o en
ter
into
for
eign
exc
hang
e fo
rwar
d co
ntra
cts
to a
void
ex
chan
ge r
ate
expo
sure
of
its
fore
ign
curr
ency
den
omin
ated
rec
eipt
s an
d pa
ymen
ts a
nd t
o m
anag
e ex
chan
ge r
ate
expo
sure
of
its
airc
raft
pre
paym
ents
in
the
next
yea
r. T
hose
tra
nsac
tion
s ar
e de
sign
ated
as
cash
flo
w h
edge
s. W
hen
fore
cast
ed p
urch
ases
act
uall
y ta
ke p
lace
, ba
sis
adju
stm
ents
are
mad
e to
the
init
ial c
arry
ing
amou
nts
of h
edge
d it
ems.
178
- 73
-
For
the
hed
ges
of h
ighl
y pr
obab
le a
ircr
aft
prep
aym
ents
, as
the
cri
tica
l te
rms
(i.e
. th
e no
tion
al
amou
nt,
usef
ul l
ife
and
unde
rlyi
ng a
sset
) of
the
for
eign
exc
hang
e fo
rwar
d co
ntra
cts
and
thei
r co
rres
pond
ing
hedg
ed i
tem
s ar
e th
e sa
me,
the
Gro
up p
erfo
rms
a qu
alit
ativ
e as
sess
men
t of
the
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 f
orw
ard
cont
ract
s an
d th
e va
lue
of t
he c
orre
spon
ding
hed
ged
item
s w
ill
syst
emat
ical
ly c
hang
e in
the
opp
osit
e di
rect
ion
in
resp
onse
to m
ovem
ents
in th
e un
derl
ying
exc
hang
e ra
tes.
T
he f
ollo
win
g ta
ble
sum
mar
izes
the
info
rmat
ion
rela
ting
to th
e he
dges
of
fore
ign
curr
ency
ris
k.
Dec
embe
r 31
, 201
9
Not
ion
al
L
ine
Item
in
C
arry
ing
Am
oun
t H
edgi
ng
Inst
rum
ents
Cu
rren
cy
A
mou
nt
M
atu
rity
For
war
d R
ate
B
alan
ce S
hee
t
Ass
et
L
iab
ility
Cas
h fl
ow h
edge
A
ircr
aft r
enta
ls -
fo
rwar
d ex
chan
ge
cont
ract
s
N
TD
/US
D
N
TD
509,
507/
U
SD
16,9
67
20
20.1
.21-
20
20.1
2.24
29.5
-30.
8
Fina
ncia
l ass
ets
for
hedg
ing
- cu
rren
t/
liab
ilit
ies
for
hedg
ing
- cu
rren
t
$
38
$
8,49
1
Avi
atio
n fu
el -
for
war
d ex
chan
ge c
ontr
acts
NT
D/U
SD
NT
D66
0,66
1/
US
D22
,000
2020
.2.2
7-
2020
.11.
30
29
.7-3
0.7
Fi
nanc
ial a
sset
s fo
r he
dgin
g -
curr
ent/
li
abil
itie
s fo
r he
dgin
g -
curr
ent
32
10,1
93
Air
craf
t pre
paym
ents
- fo
rwar
d ex
chan
ge
cont
ract
s
N
TD
/US
D
N
TD
1,41
1,41
1/
US
D47
,000
2020
.11.
4
29.6
-30.
5
Fina
ncia
l ass
ets
for
hedg
ing
- cu
rren
t/
liab
ilit
ies
for
hedg
ing
- cu
rren
t
77
18,3
85
The
abo
vem
enti
oned
hed
ging
ins
trum
ents
con
tinu
e to
be
appl
ied
to h
edgi
ng a
ccou
ntin
g. T
he
book
val
ue o
f ot
her
equi
ty w
hich
bel
ongs
to
each
hed
ging
ite
m (
airc
raft
ren
tals
in
U.S
. dol
lars
, av
iati
on
fuel
an
d ai
rcra
ft
prep
aym
ents
) ar
e $(
8,45
3)
thou
sand
, $(
10,1
61)
thou
sand
an
d $(
18,3
08)
thou
sand
, res
pect
ivel
y.
Dec
embe
r 31
, 201
8
Not
ion
al
L
ine
Item
in
C
arry
ing
Am
oun
t H
edgi
ng
Inst
rum
ents
Cu
rren
cy
A
mou
nt
M
atu
rity
For
war
d R
ate
B
alan
ce S
hee
t
Ass
et
L
iab
ility
Cas
h fl
ow h
edge
A
ircr
aft r
enta
ls -
fo
rwar
d ex
chan
ge
cont
ract
s
N
TD
/US
D
N
TD
2,26
5,23
1/
US
D13
,620
2019
.1.7
- 20
19.1
2.26
28.3
-30.
9
Fina
ncia
l ass
ets
for
hedg
ing/
liab
ilit
ies
for
hedg
ing
$ 2
8,00
5
$
56
0
The
abo
ve m
enti
oned
hed
ging
ins
trum
ents
con
tinu
e to
be
appl
ied
to h
edgi
ng a
ccou
ntin
g. T
he
book
val
ue o
f ot
her
equi
ty w
hich
bel
ongs
to
each
hed
ging
ite
m (
airc
raft
ren
tals
in
U.S
. do
llar
s an
d A
ircr
aft p
repa
ymen
t) a
re $
27,4
45 th
ousa
nd.
For
the
year
end
ed D
ecem
ber
31, 2
019
Com
pre
hen
sive
In
com
e
Hed
gin
g G
ain
(L
oss)
R
ecog
niz
ed in
O
ther
C
omp
reh
ensi
ve
Inco
me
Am
oun
t R
ecla
ssif
ied
to
Pro
fit
and
Los
s an
d t
he
Ad
just
ed L
ine
Item
Cas
h fl
ow h
edge
Air
craf
t ren
tals
$ (
35,8
97)
$
9,
137
(Not
e)
Avi
atio
n fu
el
(10,
161)
(5
3)
A
ircr
aft p
repa
ymen
ts
(17,
705 )
-
$
(63
,763
)
$
9,08
4
Not
e:
Incr
ease
in o
pera
ting
cos
ts o
r ex
chan
ge lo
ss.
- 74
-
And
the
am
ount
of
gain
s an
d lo
sses
on
hedg
ing
inst
rum
ents
for
the
yea
r en
ded
Dec
embe
r 31
, 20
19 r
ecla
ssif
ied
from
pro
fit o
r lo
ss to
pre
paym
ents
for
equ
ipm
ent w
as $
(603
) th
ousa
nd.
For
the
year
end
ed D
ecem
ber
31, 2
018
Com
pre
hen
sive
In
com
e
Hed
gin
g G
ain
(L
oss)
R
ecog
niz
ed in
O
ther
C
omp
reh
ensi
ve
Inco
me
Am
oun
t R
ecla
ssif
ied
to
Pro
fit
and
Los
s an
d t
he
Ad
just
ed L
ine
Item
Cas
h fl
ow h
edge
Air
craf
t ren
tals
$
80,4
40
$
(2
2,41
5)
(Not
e)
Air
craf
t pre
paym
ents
23
,884
-
$
10
4,32
4
$
(22,
415)
Not
e:
Incr
ease
in o
pera
ting
cos
ts.
And
the
am
ount
of
gain
s an
d lo
sses
on
hedg
ing
inst
rum
ents
for
the
yea
r en
ded
Dec
embe
r 31
, 20
18 r
ecla
ssif
ied
from
pro
fit o
r lo
ss to
pre
paym
ents
for
equ
ipm
ent w
as $
12,1
18 th
ousa
nd.
b)
In
tere
st r
ate
risk
T
he G
roup
ent
ers
into
int
eres
t sw
ap c
ontr
acts
to
hedg
e ag
ains
t th
e ri
sks
on c
hang
e in
net
li
abil
itie
s in
tere
st r
ates
. The
ris
k is
man
aged
by
the
Gro
up b
y m
aint
aini
ng a
n ap
prop
riat
e m
ix o
f fi
xed
and
floa
ting
rat
e bo
rrow
ings
, an
d us
ing
inte
rest
rat
e sw
ap c
ontr
acts
and
for
war
d in
tere
st
rate
con
trac
ts.
T
he c
arry
ing
amou
nt o
f th
e G
roup
’s f
inan
cial
ass
ets
and
fina
ncia
l li
abil
itie
s w
ith
expo
sure
to
inte
rest
rat
es a
t the
end
of
the
repo
rtin
g pe
riod
wer
e as
fol
low
s.
Dec
emb
er 3
1
20
19
20
18
F
air
valu
e in
tere
st r
ate
risk
$
91,4
14,8
06
$
34
,919
,610
C
ash
flow
inte
rest
rat
e ri
sk
77,8
21,8
87
75,0
31,9
78
Sen
siti
vity
ana
lysi
s T
he s
ensi
tivi
ty a
naly
ses
belo
w w
ere
dete
rmin
ed b
ased
on
the
Gro
up’s
exp
osur
e to
int
eres
t ra
tes
for
both
der
ivat
ives
and
non
-der
ivat
ive
inst
rum
ents
at
the
end
of t
he r
epor
ting
peri
od.
For
floa
ting
ra
te
liab
ilit
ies,
th
e an
alys
is
was
pr
epar
ed
assu
min
g th
e am
ount
of
th
e li
abil
ity
outs
tand
ing
at t
he e
nd o
f th
e re
port
ing
peri
od w
as o
utst
andi
ng f
or t
he w
hole
yea
r. A
one
yar
d (2
5 ba
sis)
poi
nt i
ncre
ase
or d
ecre
ase
was
use
d w
hen
repo
rtin
g in
tere
st r
ate
risk
int
erna
lly
to k
ey
man
agem
ent
pers
onne
l an
d re
pres
ents
man
agem
ent’
s as
sess
men
t of
the
rea
sona
bly
poss
ible
ch
ange
in in
tere
st r
ates
.
Had
int
eres
t ra
tes
incr
ease
d on
e ya
rd (
25 b
asis
) po
ints
hig
her
and
had
all
othe
r va
riab
les
been
he
ld c
onst
ant,
the
Gro
up’s
pre
-tax
pro
fit
for
the
year
end
ed D
ecem
ber
31,
2019
wou
ld h
ave
decr
ease
d by
$19
4,55
5 th
ousa
nd.
Had
int
eres
t ra
tes
incr
ease
d on
e ya
rd (
25 b
asis
) po
ints
hig
her
and
had
all
othe
r va
riab
les
been
he
ld c
onst
ant,
the
Gro
up’s
pre
-tax
pro
fit
for
the
year
end
ed D
ecem
ber
31,
2018
wou
ld h
ave
decr
ease
d by
$18
7,58
0 th
ousa
nd.
179
- 75
-
c)
O
ther
pri
ce r
isk
The
Gro
up w
as e
xpos
ed to
fue
l pri
ce r
isk
on it
s pu
rcha
se o
f av
iati
on f
uel.
The
Gro
up e
nter
s in
to
fuel
sw
ap c
ontr
acts
to h
edge
aga
inst
adv
erse
ris
ks o
n fu
el p
rice
cha
nges
.
Dec
embe
r 31
, 201
9
Not
ion
al
L
ine
Item
in
C
arry
ing
Am
oun
t H
edgi
ng
Inst
rum
ent
C
urr
ency
Am
oun
t
Mat
uri
ty
F
orw
ard
Rat
e
Bal
ance
Sh
eet
A
sset
Lia
bili
ty
C
ash
flow
hed
ges
-
fuel
opt
ions
US
D
N
T$5
,524
2020
.3.3
1-
2020
.12.
31
U
S$4
9.65
- U
S$8
0.75
Fina
ncia
l ass
ets
for
hedg
ing
$
9,47
9
$
3,
955
Hed
ge a
ccou
ntin
g is
con
tinue
d to
be
appl
ied
to t
he a
bove
men
tion
ed h
edgi
ng i
nstr
umen
ts
cont
inue
to
be a
ppli
ed t
o he
dgin
g ac
coun
ting
. T
he c
arry
ing
amou
nt o
f ot
her
equi
ty w
hich
be
long
s to
eac
h he
dgin
g ite
m (
fuel
pay
men
ts)
is $
5,52
4 th
ousa
nd.
Dec
embe
r 31
, 201
8
Not
ion
al
L
ine
Item
in
C
arry
ing
Am
oun
t H
edgi
ng
Inst
rum
ent
C
urr
ency
Am
oun
t
Mat
uri
ty
F
orw
ard
Rat
e
Bal
ance
Sh
eet
A
sset
Lia
bili
ty
C
ash
flow
hed
ges
-
fuel
opt
ions
US
D
N
T$4
,901
2019
.1.3
1-
2019
.12.
31
U
S$7
2-U
S$8
8
Fina
ncia
l ass
ets
for
hedg
ing
$
4,90
1
$
-
Hed
ge a
ccou
ntin
g is
con
tinue
d to
be
appl
ied
to t
he a
bove
men
tion
ed h
edgi
ng i
nstr
umen
ts
cont
inue
to
be a
ppli
ed t
o he
dgin
g ac
coun
ting
. T
he c
arry
ing
amou
nt o
f ot
her
equi
ty w
hich
be
long
s to
eac
h he
dgin
g ite
m (
fuel
pay
men
ts)
is $
4,90
1 th
ousa
nd.
For
the
year
end
ed D
ecem
ber
31, 2
019
Com
pre
hen
sive
In
com
e
Hed
gin
g G
ain
(L
oss)
R
ecog
niz
ed in
O
ther
C
omp
reh
ensi
ve
Inco
me
Am
oun
t R
ecla
ssif
ied
to
Pro
fit
and
Los
s an
d t
he
Ad
just
ed L
ine
Item
Cas
h fl
ow h
edge
s -
fuel
opt
ions
$
623
$
(13
,597
) (N
ote)
N
ote:
In
crea
se in
ope
rati
ng c
osts
. F
or th
e ye
ar e
nded
Dec
embe
r 31
, 201
8 C
omp
reh
ensi
ve I
nco
me
Hed
gin
g G
ain
(L
oss)
R
ecog
niz
ed in
O
ther
C
omp
reh
ensi
ve
Inco
me
Am
oun
t R
ecla
ssif
ied
to
Pro
fit
and
Los
s an
d t
he
Ad
just
ed L
ine
Item
Cas
h fl
ow h
edge
s -
fuel
opt
ions
$
4,90
1
$
(9,4
21)
(Not
e)
Not
e:
Incr
ease
in o
pera
ting
cos
ts.
- 76
-
Sen
siti
vity
ana
lysi
s T
he s
ensi
tivi
ty a
naly
sis
belo
w w
as d
eter
min
ed b
ased
on
the
expo
sure
to
fuel
pri
ce r
isks
at
the
end
of th
e re
port
ing
peri
od.
For
th
e Y
ear
En
ded
Dec
emb
er 3
1
20
19
20
18
Pre
-tax
Pro
fit
Incr
ease
(D
ecre
ase)
Oth
er
Com
pre
- h
ensi
ve
Inco
me
Incr
ease
(D
ecre
ase)
Pre
-tax
Pro
fit
Incr
ease
(D
ecre
ase)
Oth
er
Com
pre
- h
ensi
ve
Inco
me
Incr
ease
(D
ecre
ase)
Fue
l pri
ce in
crea
se o
f 5%
$
-
$
7,97
3
$
-
$
- F
uel p
rice
dec
reas
e of
5%
-
-
-
-
2)
Cre
dit r
isk
C
redi
t ri
sk r
efer
s to
the
ris
k th
at a
cou
nter
part
y w
ill
defa
ult
on i
ts c
ontr
actu
al o
blig
atio
ns r
esul
ting
in
fin
anci
al l
oss
to t
he G
roup
. T
he G
roup
’s c
redi
t ri
sk,
prim
aril
y co
mes
fro
m a
ccou
nts
rece
ivab
le
gene
rate
d fr
om o
pera
ting
act
ivit
ies
and
bank
dep
osit
s ge
nera
ted
from
inv
esti
ng a
ctiv
itie
s, f
ixed
in
vest
men
t in
com
e an
d ot
her
fina
ncia
l in
stru
men
ts, o
pera
tion
rel
ated
cre
dit
risk
and
fin
anci
al c
redi
t ri
sk a
re m
anag
ed s
epar
atel
y.
Ope
rati
on -
rel
ated
cre
dit r
isk
The
Gro
up h
as e
stab
lish
ed p
roce
dure
s to
man
agem
ent
oper
atio
ns r
elat
ed c
redi
t ri
sk t
o m
aint
ain
the
qual
ity o
f ac
coun
ts r
ecei
vabl
e.
To
asse
ss i
ndiv
idua
l cu
stom
ers,
the
Gro
up c
onsi
der
into
the
fin
anci
al c
ondi
tion
of t
he c
usto
mer
s,
the
cred
it r
atin
g ag
ency
rat
ing,
the
Gro
up’s
int
erna
l cr
edit
rat
ing,
tra
nsac
tion
his
tory
and
cur
rent
ec
onom
ic c
ondi
tion
s an
d m
any
othe
r fa
ctor
s th
at m
ay a
ffec
t th
e re
paym
ent.
Som
etim
es,
the
Gro
up
uses
cer
tain
cre
dit
enha
ncem
ent
tool
s to
red
uce
the
cred
it r
isk
of s
peci
fic
cust
omer
s. S
ince
the
cu
stom
ers
of t
he i
ndus
try
is d
ispe
rsed
and
non
-rel
ated
, th
e cr
edit
ris
k co
ncen
trat
ion
is n
ot c
riti
cal
avia
tion
. F
inan
cial
cre
dit r
isk
Cre
dit
risk
on
bank
dep
osit
s, i
nves
tmen
ts i
ncom
e an
d ot
her
fina
ncia
l in
stru
men
ts a
re m
easu
red
and
mon
itor
by
the
Gro
up’s
fin
ance
dep
artm
ent.
The
Gro
up’s
tra
ding
par
tner
s an
d ot
her
part
ies
wer
e w
ell-
perf
orm
ing
bank
s an
d fi
nanc
ial i
nstit
utio
ns, c
orpo
rati
ons,
and
gov
ernm
ent a
genc
ies,
and
so
the
risk
of
coun
terp
arti
es f
aili
ng t
o di
scha
rge
an o
blig
atio
n is
low
; th
eref
ore,
the
re i
s no
sig
nifi
cant
cr
edit
ris
k.
3)
Liq
uidi
ty r
isk
T
he o
bjec
tive
of
the
Gro
up’s
man
agem
ent
of l
iqui
dity
is
to m
aint
ain
cash
and
cas
h eq
uiva
lent
s su
ffic
ient
for
ope
rati
ng p
urpo
ses,
mar
keta
ble
secu
riti
es w
ith
high
liq
uidi
ty a
nd l
oan
com
mit
men
ts
that
are
suf
fici
ent t
o en
sure
that
the
Gro
up h
as a
dequ
ate
fina
ncia
l fle
xibi
lity
.
180
- 77
-
Liq
uidi
ty a
nd in
tere
st r
isk
rate
tabl
e T
he f
ollo
win
g ta
ble
show
s th
e re
mai
ning
con
trac
tual
mat
urit
y an
alys
is o
f th
e G
roup
’s f
inan
cial
li
abil
itie
s w
ith
agre
ed-u
pon
repa
ymen
t pe
riod
s, w
hich
wer
e ba
sed
on t
he d
ate
the
Gro
up m
ay b
e re
quir
ed t
o pa
y th
e fi
rst
repa
ymen
t an
d fi
nanc
ial
liab
ilit
ies
is e
valu
ated
bas
ed o
n un
disc
ount
ed c
ash
flow
s, in
clud
ing
cash
flo
ws
of in
tere
st a
nd p
rinc
ipal
. B
ank
loan
s w
ith
a re
paym
ent
on d
eman
d cl
ause
wer
e in
clud
ed i
n th
e se
cond
col
umn
of t
he t
able
be
low
reg
ardl
ess
of w
heth
er o
r no
t th
e ba
nks
wou
ld c
hoos
e to
exe
rcis
e ea
rly
thei
r ri
ghts
to
repa
ymen
t. T
he m
atur
ity
date
s fo
r ot
her
non-
deri
vati
ve f
inan
cial
lia
bili
ties
wer
e ba
sed
on t
he
agre
ed-u
pon
repa
ymen
t dat
es. T
he G
roup
’s li
quid
ity a
naly
sis
for
its d
eriv
ativ
e fi
nanc
ial i
nstr
umen
ts
is a
lso
show
n in
the
fol
low
ing
tabl
e. T
he t
able
was
bas
ed o
n th
e un
disc
ount
ed c
ontr
actu
al n
et c
ash
infl
ows
and
outf
low
s on
der
ivat
ive
inst
rum
ents
that
set
tle
on a
net
bas
is, a
nd th
e un
disc
ount
ed g
ross
ca
sh i
nflo
ws
and
outf
low
s on
tho
se d
eriv
ativ
es t
hat
requ
ire
gros
s se
ttle
men
t. W
hen
the
amou
nt
paya
ble
or r
ecei
vabl
e is
not
fix
ed,
the
amou
nt d
iscl
osed
has
bee
n de
term
ined
by
refe
renc
e to
the
pr
ojec
ted
inte
rest
rat
es a
s il
lust
rate
d by
yie
ld c
urve
s at
the
end
of th
e re
port
ing
peri
od.
Dec
embe
r 31
, 201
9
Th
e W
eigh
ted
A
vera
ge
Eff
ecti
ve
Inte
rest
Rat
e (%
)
Les
s th
an 1
Y
ear
1
to 5
Yea
rs
O
ver
5 Y
ears
L
ease
liab
ilit
ies
1.
1613
$
3,35
7,99
6
$
10,6
22,2
04
$
8,
949,
194
Flo
atin
g in
tere
st r
ate
liab
ilit
ies
1.
9058
15
,254
,687
36
,274
,033
16
,785
,664
D
eriv
ativ
e in
stru
men
ts
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
Dec
embe
r 31
, 201
8
Th
e W
eigh
ted
A
vera
ge
Eff
ecti
ve
Inte
rest
Rat
e (%
)
Les
s th
an 1
Y
ear
1
to 5
Yea
rs
O
ver
5 Y
ears
L
ease
liab
ilit
ies
1.
3104
$
641,
524
$
3,
024
$
-
Flo
atin
g in
tere
st r
ate
liab
ilit
ies
1.
8105
14
,853
,360
42
,143
,959
20
,810
,464
F
ixed
inte
rest
rat
e li
abil
itie
s
0.10
34
2,00
0,51
7
-
- H
edgi
ng in
stru
men
ts
-
239,
138
-
-
Bon
ds p
ayab
le
1.
3905
5,
999,
321
30,8
35,4
49
1,05
1,41
8
$
23
,733
,860
$
72,9
82,4
32
$
21
,861
,882
- 78
-
Loa
n co
mm
itm
ents
D
ecem
ber
31
2019
2018
Unu
sed
bank
loan
lim
it (
unse
cure
d)
$
18
,422
,000
$
17,3
37,0
00
34
. R
EL
AT
ED
-PA
RT
Y T
RA
NS
AC
TIO
NS
T
he tr
ansa
ctio
ns, a
ccou
nts
bala
nces
, inc
ome
and
expe
nses
bet
wee
n re
late
d pa
rtie
s w
ere
elim
inat
ed f
rom
the
cons
olid
ated
rep
ort a
nd, t
here
fore
, wer
e no
t dis
clos
ed in
this
not
e. E
xcep
t for
the
disc
losu
res
stat
ed in
oth
er
note
s, tr
ansa
ctio
ns b
etw
een
the
Gro
up a
nd it
s re
late
d pa
rtie
s ar
e di
sclo
sed
belo
w:
a.
Rel
ated
par
ties
’ na
mes
and
rel
atio
nshi
ps
N
ame
R
elat
ion
ship
wit
h t
he
Com
pan
y
D
ynas
ty H
olid
ays
Ass
ocia
te (
beco
me
asso
ciat
e in
Jan
uary
201
9)
Kao
hsiu
ng C
ater
ing
Ser
vice
s S
ubsi
diar
y (b
ecom
e su
bsid
iary
in M
arch
201
8)
Chi
na A
ircr
aft S
ervi
ce
Ass
ocia
te
Air
port
Air
Car
go T
erm
inal
(X
iam
en)
Co.
, Ltd
. A
ssoc
iate
A
irpo
rt A
ir C
argo
Ser
vice
(X
iam
en)
Co.
, Ltd
. A
ssoc
iate
E
aste
rn U
nite
d In
tern
atio
nal L
ogis
tics
(H
ong
Kon
g)
Ass
ocia
te
Chi
na P
acif
ic C
ater
ing
Ser
vice
s J
oint
ven
ture
inve
stm
ent
Chi
na P
acif
ic L
aund
ry S
ervi
ces
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
Dir
ecto
r of
the
Com
pany
and
maj
or s
hare
hold
er
Oth
ers
Dir
ecto
r, k
ey m
anag
emen
t per
sonn
el, c
hair
man
, ge
nera
l man
ager
of
the
Gro
up, s
pous
e an
d se
cond
-deg
ree
rela
tive
b.
O
pera
ting
inco
me
F
or t
he
Yea
r E
nd
ed D
ecem
ber
31
Acc
oun
t It
ems
R
elat
ed P
arty
Typ
e
2019
2018
O
ther
inco
me
Maj
or s
hare
hold
er o
f th
e C
ompa
ny
$
25
,457
$
28,6
70
A
ssoc
iate
$
1,23
9
$
523
J
oint
ven
ture
inve
stm
ent
$
42
,457
$
41,4
10
c.
Pur
chas
es
For
th
e Y
ear
En
ded
Dec
emb
er 3
1 R
elat
ed P
arty
Typ
e
2019
2018
Maj
or s
hare
hold
er o
f th
e C
ompa
ny
$
56
,474
$
64,1
88
Ass
ocia
te
$
41
4,10
6
$
501,
609
Join
t ven
ture
inve
stm
ent
$
1,
911,
091
$
1,
912,
995
181
- 79
-
d.
Acc
ount
s re
ceiv
able
- r
elat
ed p
arti
es (
gene
rate
d by
ope
rati
ons)
Dec
emb
er 3
1 R
elat
ed P
arty
Typ
e
2019
2018
Join
t ven
ture
inve
stm
ent
$
7,
760
$
7,
589
Maj
or s
hare
hold
er o
f th
e C
ompa
ny
2,58
8
1,
454
$
10
,348
$
9,04
3 T
he r
ecei
vabl
es a
re n
ot g
uara
ntee
d, a
nd t
here
is
no a
llow
ance
for
dou
btfu
l ac
coun
ts r
elat
ed t
o ac
coun
ts
rece
ivab
le -
rel
ated
par
ties
. The
pay
men
t pe
riod
s of
suc
h ac
coun
ts w
ere
wit
hin
30 t
o 90
day
s, a
nd t
here
ar
e no
ove
rdue
pay
men
ts.
e.
A
ccou
nts
paya
ble
- re
late
d pa
rtie
s (g
ener
ated
by
oper
atio
ns)
D
ecem
ber
31
Rel
ated
Par
ty T
ype
20
19
20
18
A
ssoc
iate
$
51,3
33
$
54
,948
Jo
int v
entu
re in
vest
men
t
48
4,70
0
47
4,49
9 M
ajor
sha
reho
lder
of
the
Com
pany
5,
982
3,36
8
$
542,
015
$
53
2,81
5 T
he r
emai
ning
bal
ance
of
note
s an
d ac
coun
ts p
ayab
le -
rel
ated
par
ties
wil
l be
paid
in c
ash
if th
ey a
re n
ot
secu
red.
f.
Lea
ses
of p
rope
rtie
s (o
pera
ting
leas
es)
Und
er a
n op
erat
ing
leas
e ag
reem
ent,
the
Com
pany
ren
ted
flig
ht t
rain
ing
mac
hine
s an
d fl
ight
sim
ulat
ors
from
Chi
na A
viat
ion
Dev
elop
men
t F
ound
atio
n to
tra
in p
ilot
s, t
he C
ompa
ny p
aid
the
rent
al o
n us
age
hour
s. I
n 20
19 a
nd 2
018,
the
Com
pany
had
pai
d re
ntal
s of
abo
ut $
56,4
74 t
hous
and
and
$64,
188
thou
sand
, res
pect
ivel
y.
g.
End
orse
men
ts a
nd g
uara
ntee
s
Dec
emb
er 3
1
20
19
20
18
Au
thor
ized
A
mou
nt
A
ctu
al
Am
oun
t U
sed
Au
thor
ized
A
mou
nt
A
ctu
al
Am
oun
t U
sed
The
Com
pany
CA
L P
ark
$
3,
850,
000
$
2,
129,
400
$
3,
850,
000
$
2,
339,
700
Tai
wan
Air
Car
go T
erm
inal
1,
080,
000
-
1,
080,
000
- T
iger
air
Tai
wan
3,
012,
668
685,
444
1,08
1,79
2
41
8,49
1 T
aiw
an A
ir C
raft
Mai
nten
ance
2,
000,
000
1,27
9,82
7
2,
000,
000
605,
457
- 80
-
h.
Com
pens
atio
n of
key
man
agem
ent p
erso
nnel
For
th
e Y
ear
En
ded
Dec
emb
er 3
1
20
19
20
18
S
hort
-ter
m e
mpl
oyee
ben
efit
s
$
39,6
93
$
44
,551
P
ost-
empl
oym
ent b
enef
its
2,36
2
3,
295
$
42
,055
$
47,8
46
The
rem
uner
atio
n of
dir
ecto
rs a
nd k
ey e
xecu
tive
s w
as d
eter
min
ed b
y th
e re
mun
erat
ion
com
mit
tee
havi
ng r
egar
d to
the
perf
orm
ance
of
indi
vidu
als
and
mar
ket t
rend
s.
35
. P
LE
DG
ED
AS
SE
TS
T
he f
ollo
win
g as
sets
wer
e pl
edge
d or
mor
tgag
ed a
s co
llat
eral
for
lon
g-te
rm b
ank
loan
s, l
ease
obl
igat
ions
an
d bu
sine
ss tr
ansa
ctio
ns:
Dec
emb
er 3
1
20
19
20
18
P
rope
rty,
pla
nt a
nd e
quip
men
t
$
31,2
60,8
01
$
42
,066
,242
R
ight
-of-
use
asse
ts
71,0
33,6
17
- R
estr
icte
d as
sets
- n
on-c
urre
nt
Ple
dged
cer
tifi
cate
dep
osit
s
13
0,05
2
16
9,92
5
$ 1
02,4
24,4
70
$
42
,236
,167
36
. C
OM
MIT
ME
NT
S A
ND
CO
NT
ING
EN
T L
IAB
ILIT
IES
A
s of
Dec
embe
r 31
, 201
9, e
xcep
t fo
r th
e di
sclo
sure
s st
ated
in
othe
r no
tes,
the
Gro
up h
ad c
omm
itm
ents
and
co
ntin
gent
liab
ilit
ies
(exc
ept f
or th
ose
men
tion
ed in
oth
er n
otes
) as
fol
low
s:
a.
For
ope
rati
on n
eeds
, the
boa
rd o
f di
rect
ors
of M
anda
rin
Air
line
s re
solv
ed to
ent
er in
to a
con
trac
t to
buy
six
AT
R72
-600
air
craf
t, an
d th
e to
tal
list
pric
e of
the
six
air
craf
t w
as $
120,
000
thou
sand
. The
exp
ecte
d de
live
ry p
erio
d ra
nges
fro
m J
une
2018
to
June
202
0, a
s of
Dec
embe
r 31
, 201
9, f
our
of t
he a
ircr
aft
has
been
han
ded
over
to th
e co
mpa
ny, a
nd th
e to
tal l
ist p
rice
of
the
left
s tw
o ai
rcra
ft w
as $
40,0
00 th
ousa
nd,
whi
ch h
as b
een
paid
in th
e am
ount
of
US
$8,3
14 th
ousa
nd (
reco
gniz
ed a
s pr
epay
men
ts f
or a
ircr
aft)
.
b.
Tai
wan
Air
Car
go T
erm
inal
Co.
(T
AC
T)
sign
ed a
ter
min
al c
onst
ruct
ion
cont
ract
wit
h th
e C
ivil
Aer
onau
tics
Adm
inis
trat
ions
(C
AA
) on
Jan
uary
14,
200
0. T
he c
hart
ered
ope
rati
on p
erio
d (C
OP
) is
20
year
s fr
om t
he d
ate
of t
rans
fer
of t
he c
hart
ered
ope
rati
on r
ight
s fr
om C
AA
to
TA
CT
. T
he t
erm
inal
ex
pans
ion
and
impr
ovem
ents
and
the
equ
ipm
ent
inst
alla
tion
and
upg
rade
in
the
Tai
wan
Tao
yuan
In
tern
atio
nal
Air
port
car
go t
erm
inal
and
Kao
hsiu
ng c
argo
ter
min
al w
ere
expe
cted
to
be c
ompl
eted
in
the
firs
t 10
yea
rs o
f th
e C
OP
. Thi
s co
nstr
ucti
on p
roje
ct w
as a
ppro
ved
by T
AC
T’s
boa
rd o
f di
rect
ors
in
2003
. T
AC
T f
iled
an
appl
icat
ion
for
a 10
-yea
r ex
tens
ion
of t
he C
OP
for
the
car
go t
erm
inal
s in
the
T
aiw
an T
aoyu
an I
nter
natio
nal
Air
port
and
Kao
hsiu
ng I
nter
nati
onal
Air
port
and
rec
eive
d th
e ap
prov
al
from
the
Tao
yuan
Air
port
Cor
pora
tion
and
CA
A in
Jul
y 20
13 a
nd J
uly
2015
, res
pect
ivel
y.
The
ori
gina
l to
tal
expe
nditu
re o
f th
e pr
evio
us m
ain
cons
truc
tion
pro
ject
was
$8,
490,
000
thou
sand
. H
owev
er,
TA
CT
fil
ed a
n ar
bitr
atio
n fo
r th
e to
tal
amou
nt o
f ex
pend
itur
e in
201
2 to
rev
ise
the
tota
l am
ount
to $
6,84
0,00
0 th
ousa
nd.
182
- 81
-
As
of D
ecem
ber
31,
2019
, T
AC
T h
ad s
igne
d th
e fo
llow
ing
cons
truc
tion
con
trac
ts w
ith
unre
late
d pa
rtie
s:
Cli
ent
Nam
e
Con
trac
t T
itle
Con
trac
t A
mou
nt
(VA
T
Incl
ud
ed)
C
EC
I E
ngin
eeri
ng
Con
sult
ant,
Inc.
, Tai
wan
C
argo
Ter
min
al E
xpan
sion
Con
stru
ctio
n C
onsu
ltan
t C
ontr
act
$
55
2,28
5
As
of D
ecem
ber
31,
2019
, th
e cu
mul
ated
con
sult
ant
serv
ice
expe
nse
and
cons
truc
tion
equ
ipm
ent
had
amou
nted
to
$4
81,7
76
thou
sand
(V
AT
in
clud
ed)
and
$5,2
12,6
22
thou
sand
(V
AT
in
clud
ed),
re
spec
tive
ly.
Upo
n co
mpl
etio
n of
the
pro
ject
s, t
he a
mou
nt o
f $4
68,7
55 t
hous
and
(VA
T i
nclu
ded)
and
$5
,200
,780
th
ousa
nd
(VA
T
incl
uded
) w
ere
recl
assi
fied
to
pr
oper
ty,
plan
t, an
d eq
uipm
ent.
The
re
mai
ning
cum
ulat
ive
paym
ents
wer
e re
cogn
ized
und
er c
onst
ruct
ion
in p
rogr
ess.
A
sset
s ac
quir
ed f
rom
car
go t
erm
inal
im
prov
emen
ts,
equi
pmen
t ac
quis
itio
n an
d su
bseq
uent
equ
ipm
ent
acqu
isit
ion
and
repl
acem
ent
wil
l be
tra
nsfe
rred
to
the
gove
rnm
ent
wit
hout
any
com
pens
atio
n w
hen
the
char
tere
d op
erat
ing
lice
nse
expi
res.
T
AC
T
shou
ld
pay
roya
lties
to
T
aoyu
an
Air
port
Cor
pora
tion
and
th
e C
AA
du
ring
th
e ch
arte
red
oper
atio
n pe
riod
. T
he c
alcu
lati
on i
s ba
sed
on a
nnua
l sa
les
(inc
ludi
ng o
pera
ting
and
non
-ope
rati
ng
reve
nue
but
excl
udin
g th
e re
ntal
rev
enue
fro
m s
peci
fic
dist
rict
s), a
nd T
aoyu
an A
irpo
rt C
orpo
rati
on a
nd
the
CA
A h
ave
the
opti
on to
adj
ust t
he r
oyal
ty r
ates
eve
ry 3
yea
rs s
tart
ing
from
the
date
of
tran
sfer
of
the
char
tere
d op
erat
ion
righ
ts o
n th
e ba
sis
of a
ctua
l re
venu
e an
d ex
pend
itur
es.
The
cur
rent
roy
alty
rat
e is
6%
.
c.
CA
L P
ark
Co.
, L
td.
(“C
AL
Par
k”)
sign
ed “
Tai
wan
Tao
yuan
Int
erna
tion
al A
irpo
rt A
viat
ion
Ope
rati
on
Cen
ter
(inc
ludi
ng A
irpo
rt H
otel
) C
onst
ruct
ion
Ope
rati
ng C
ontr
act”
wit
h th
e C
AA
on
Sep
tem
ber
20,
2006
. How
ever
, on
Nov
embe
r 1,
201
0, th
e T
aoyu
an A
irpo
rt C
orpo
rati
on to
ok o
ver
the
CA
A’s
rig
hts
on
this
con
trac
t fr
om t
he C
AA
. The
con
trac
t is
eff
ecti
ve f
or 5
0 ye
ars
(con
sist
ing
of t
he d
evel
opm
ent
stag
e an
d op
erat
ing
peri
od)
from
the
cont
ract
dat
e. T
hree
yea
rs b
efor
e co
ntra
ct e
xpir
y da
te, C
AL
Par
k ha
s th
e fi
rst o
ptio
n to
ren
ew th
e co
ntra
ct o
nce
wit
h a
20-y
ear
exte
nsio
n.
CA
L P
ark’
s bu
sine
ss s
cope
inc
lude
s pr
ovid
ing
busi
ness
and
oth
er o
pera
ting
spa
ce r
elat
ed t
o ci
vil
air
tran
spor
t, ho
tels
, av
iati
on s
ervi
ce a
nd r
elat
ed i
ndus
trie
s ad
here
d to
the
bas
e an
d es
sent
ial
serv
ices
law
an
d ap
prov
ed b
y th
e T
aoyu
an A
irpo
rt C
orpo
rati
on.
CA
L P
ark
shou
ld p
ay l
and
rent
als
on t
he d
ate
of t
he r
egis
trat
ion
of s
urfa
ce r
ight
s. T
he r
enta
l ra
tes
for
the
deve
lopm
ent
stag
e di
ffer
fro
m t
hose
for
the
ope
rati
on p
erio
d. T
he r
enta
l ra
tes
shou
ld f
ollo
w A
rtic
le
No.
2 o
f th
e “R
egul
atio
ns f
or F
avor
able
Ren
tals
Reg
ardi
ng P
ubli
c L
and
Lea
se a
nd S
uper
fici
es i
n In
fras
truc
ture
Pro
ject
s,”
whi
ch s
tate
s th
at r
enta
l cal
cula
tion
in th
e de
velo
pmen
t sta
ge s
houl
d in
clud
e th
e la
nd v
alue
add
ed ta
x pl
us th
e ne
cess
ary
mai
nten
ance
fee
; in
the
oper
atio
n pe
riod
, ren
tals
are
60%
of
the
amou
nt b
ased
on
the
Nat
iona
l B
uild
ing
Lan
d R
enta
l S
tand
ard
plus
lan
d va
lue
tax,
val
ue-a
dded
tax
and
th
e ne
cess
ary
mai
nten
ance
fee
. D
urin
g th
e 50
yea
rs b
egin
ning
fro
m th
e in
itia
l ope
rati
on d
ate
of C
AL
Par
k to
the
end
of th
e co
nstr
ucti
on
peri
od, C
AL
Par
k sh
ould
pay
roy
alti
es b
ased
on
the
oper
atin
g re
venu
e es
tim
ated
in th
e fi
nanc
ial p
lan
of
its
inve
stm
ent
exec
utio
n pr
opos
al.
If t
he s
ales
and
bus
ines
s ta
x de
clar
ed a
nd f
iled
by
a bu
sine
ss e
ntit
y fo
r a
sing
le y
ear
exce
eds
10%
of
the
oper
atin
g re
venu
e as
est
imat
ed i
n th
e fi
nanc
ial
plan
in
its
inve
stm
ent e
xecu
tion
pro
posa
l, C
AL
Par
k sh
ould
pay
add
itio
nal r
oyal
ties
at 1
0% o
f th
is e
xces
s.
- 82
-
CA
L P
ark
shou
ld s
ubm
it th
e as
set t
rans
fer
plan
wit
hin
five
yea
rs b
efor
e th
e ex
piry
dat
e of
the
char
tere
d op
erat
ion
peri
od,
begi
n th
e ne
goti
atio
n of
the
ass
et t
rans
fer
cont
ract
, an
d co
mpl
ete
the
assi
gnat
ion
no
late
r th
an t
hree
yea
rs b
efor
e th
e ex
piry
dat
e of
the
cha
rter
ed p
erio
d. I
f C
AA
dec
ides
not
to
keep
the
bu
ildi
ng a
nd e
quip
men
t on
the
bas
e ar
ea,
CA
L P
ark
shou
ld r
emov
e al
l re
late
d bu
ildi
ng a
nd e
quip
men
t w
ithi
n th
ree
mon
ths
afte
r th
e ex
piry
dat
e.
d.
T
he C
ompa
ny f
aile
d to
med
iate
lab
or d
ispu
tes
wit
h th
e la
bor
unio
n. A
fter
obt
aini
ng t
he r
ight
to
stri
ke,
the
labo
r un
ion
wen
t on
str
ike
on F
ebru
ary
8, 2
019,
and
the
fli
ghts
res
umed
nor
mal
ope
rati
on o
n F
ebru
ary
14,
2019
. A
tot
al o
f 21
4 fl
ight
s w
as c
ance
lled
and
the
acc
umul
ated
rev
enue
los
s w
as a
bout
$5
00 m
illi
on. T
he in
itia
l est
imat
ed c
ompe
nsat
ion
for
cust
omer
loss
es a
nd o
ther
exp
endi
ture
s w
ere
abou
t $5
4 m
illi
on (
reco
gniz
ed a
s op
erat
ing
cost
).
e.
In O
ctob
er 2
019,
the
Com
pany
sig
ned
a co
ntra
ct w
ith
Air
bus
S.A
.S.
to p
urch
ase
elev
en A
321n
eo
airc
raft
and
an
optio
n to
pur
chas
e fi
ve A
321n
eo a
ircr
aft.
The
tot
al l
ist
pric
e of
the
ele
ven
airc
raft
is
US
$1,6
76,4
13 t
hous
and,
and
the
lis
t pr
ice
of t
he o
ptio
n to
pur
chas
e fi
ve a
ircr
aft
is U
S$7
69,9
22
thou
sand
. T
he e
xpec
ted
deli
very
per
iod
of t
he e
leve
n ai
rcra
ft r
ange
s fr
om 2
024
to 2
026.
As
of
Dec
embe
r 31
, 20
19,
the
list
pric
e ha
s be
en p
aid
in t
he a
mou
nt o
f U
S$1
7,01
4 th
ousa
nd (
reco
gniz
ed a
s pr
epay
men
ts f
or a
ircr
aft)
. In
Oct
ober
201
9, t
he C
ompa
ny s
igne
d a
cont
ract
wit
h In
tern
atio
nal
Aer
o E
ngin
es C
ompa
ny t
o pu
rcha
se f
our
back
up e
ngin
es o
f A
321n
eo. T
he t
otal
lis
t pr
ice
of t
he f
our
engi
nes
is U
S$6
0,28
9 th
ousa
nd.
f.
In J
uly
and
Aug
ust
2019
, th
e C
ompa
ny s
igne
d a
cont
ract
wit
h th
e B
oein
g C
ompa
ny t
o pu
rcha
se t
hree
B
777F
air
craf
t an
d ex
erci
sed
the
opti
on t
o pu
rcha
se t
hree
B77
7F a
ircr
aft.
The
tot
al l
ist
pric
e of
the
six
ai
rcra
ft i
s U
S$2
,320
,315
tho
usan
d, a
nd t
he e
xpec
ted
deli
very
per
iod
is f
rom
202
0 to
202
3. A
s of
D
ecem
ber
30, 2
019,
the
lis
t pr
ice
has
been
pai
d in
the
am
ount
of
US
$241
,650
tho
usan
d (r
ecog
nize
d as
pr
epay
men
ts f
or a
ircr
aft)
. g.
In
Sep
tem
ber
2019
, T
iger
air
Tai
wan
Co.
, L
td.
sign
ed a
con
trac
t w
ith
Air
bus
S.A
.S.
to p
urch
ase
seve
n A
320n
eo a
ircr
aft
and
an o
ptio
n to
pur
chas
e tw
o A
320n
eo a
ircr
aft.
The
tot
al l
ist
pric
e of
the
sev
en
airc
raft
is
US
$729
,746
thou
sand
, and
the
lis
t pr
ice
of t
he o
ptio
n to
pur
chas
e tw
o ai
rcra
ft i
s U
S$2
08,4
99
thou
sand
. The
exp
ecte
d de
live
ry p
erio
d of
the
seve
n ai
rcra
ft r
ange
s fr
om 2
025
to 2
028.
As
of D
ecem
ber
30, 2
019,
the
lis
t pr
ice
has
been
pai
d in
the
am
ount
of
US
$9,3
24 t
hous
and
(rec
ogni
zed
as p
repa
ymen
ts
for
airc
raft
).
In
addi
tion
, in
D
ecem
ber
2019
, T
iger
air
Tai
wan
C
o.,
Ltd
. si
gned
a
cont
ract
w
ith
Inte
rnat
iona
l Aer
o E
ngin
es C
ompa
ny to
pur
chas
e tw
o ba
ckup
eng
ines
of
A32
0neo
air
craf
t. T
he to
tal l
ist
pric
e of
the
two
engi
nes
is U
S$2
7,34
5 th
ousa
nd.
37
. S
IGN
IFIC
AN
T E
VE
NT
S A
FT
ER
TH
E B
AL
AN
CE
SH
EE
T D
AT
E
By
the
end
of J
anua
ry 2
020,
the
Cor
onav
irus
that
ori
gina
ted
from
Wuh
an, t
he c
apit
al c
ity
of H
ubei
pro
vinc
e in
Chi
na,
beca
me
a pa
ndem
ic.
The
Com
pany
has
com
plie
d an
d co
ntin
ues
to c
ompl
y w
ith
the
trav
el a
lert
s is
sued
by
the
Tai
wan
Cen
ters
for
Dis
ease
Con
trol
and
has
can
cell
ed f
ligh
ts b
etw
een
seve
ral
coun
trie
s li
ke
Chi
na,
Hon
g K
ong,
Jap
an a
nd K
orea
. O
ther
fli
ghts
hav
e fl
exib
le c
apac
ity
depe
ndin
g on
the
red
ucti
on o
f de
man
d. S
o fa
r, t
he a
ir t
rans
port
ser
vice
s fo
r pa
ssen
gers
hav
e be
en s
ever
ely
affe
cted
. In
add
itio
n to
ad
just
ing
the
oper
atio
n, t
he C
ompa
ny a
lso
take
s m
easu
res
abou
t fu
ndin
g as
sist
ance
, hu
man
res
ourc
es,
redu
cing
exp
endi
ture
, an
d as
ks t
he g
over
nmen
t fo
r he
lp i
n th
ree
mai
n ar
eas
incl
udin
g gu
aran
tee
for
its
oper
atio
n, r
elie
f fr
om th
e bu
rden
, and
a r
ecov
ery
plan
.
183
- 83
-
38.
SIG
NIF
ICA
NT
AS
SE
TS
AN
D L
IAB
ILIT
IES
DE
NO
MIN
AT
ED
IN
FO
RE
IGN
CU
RR
EN
CIE
S
The
fol
low
ing
info
rmat
ion
was
agg
rega
ted
by t
he f
orei
gn c
urre
ncie
s ot
her
than
fun
ctio
nal
curr
enci
es o
f th
e gr
oup
enti
ties
and
the
exc
hang
e ra
tes
betw
een
fore
ign
curr
enci
es a
nd r
espe
ctiv
e fu
ncti
onal
cur
renc
ies
wer
e di
sclo
sed.
The
sig
nifi
cant
ass
ets
and
liab
ilit
ies
deno
min
ated
in f
orei
gn c
urre
ncie
s w
ere
as f
ollo
ws:
D
ecem
ber
31, 2
019
For
eign
C
urr
enci
es (
In
Th
ousa
nd
s)
E
xch
ange
Rat
e
Car
ryin
g A
mou
nt
F
inan
cial
ass
ets
M
onet
ary
item
s
U
SD
$
658,
407
30
.030
0
$
19,7
71,9
57
EU
R
18,4
01
33
.670
0
61
9,57
1 H
KD
22
8,23
4
3.85
95
880,
868
JPY
6,
262,
272
0.
2766
1,
732,
130
CN
Y
425,
343
4.
3048
1,
831,
012
F
inan
cial
liab
ilit
ies
M
onet
ary
item
s
U
SD
2,
480,
896
30
.030
0
74
,501
,305
E
UR
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 D
ecem
ber
31, 2
018
For
eign
C
urr
enci
es (
In
Th
ousa
nd
s)
E
xch
ange
Rat
e
Car
ryin
g A
mou
nt
F
inan
cial
ass
ets
M
onet
ary
item
s
U
SD
$
532,
196
30
.769
2
$
16,3
75,2
37
EU
R
20,5
19
35
.211
3
72
2,51
4 H
KD
30
2,93
0
3.92
31
1,18
8,42
5 JP
Y
6,47
9,94
2
0.27
78
1,80
0,96
7 C
NY
39
4,50
3
4.48
03
1,76
7,49
1
Fin
anci
al li
abil
itie
s
Mon
etar
y it
ems
US
D
441,
798
30
.769
2
13
,593
,777
E
UR
7,
806
35
.211
3
27
4,87
3 H
KD
79
,716
3.92
31
310,
978
JPY
5,
586,
337
0.
2778
1,
552,
067
CN
Y
150,
536
4.
4803
67
4,44
6
- 84
-
For
the
yea
rs e
nded
Dec
embe
r 31
, 20
19 a
nd 2
018,
the
Gro
up’s
net
for
eign
exc
hang
e ga
in (
loss
es)
wer
e $(
141,
611)
tho
usan
d an
d $4
1,84
3 th
ousa
nd,
resp
ecti
vely
. It
is
impr
acti
cal
to d
iscl
ose
net
fore
ign
exch
ange
ga
ins
(los
ses)
by
each
sig
nifi
cant
for
eign
cur
renc
y du
e to
the
var
iety
of
the
fore
ign
curr
ency
tra
nsac
tion
s an
d fu
ncti
onal
cur
renc
ies
of th
e gr
oup
enti
ties
.
39.
AD
DIT
ION
AL
DIS
CL
OS
UR
ES
a.
F
ollo
win
g ar
e th
e ad
diti
onal
dis
clos
ures
req
uire
d by
the
Sec
urit
ies
and
Fut
ures
Bur
eau
for
the
Com
pany
an
d it
s in
vest
ees:
1
) Fin
anci
ng p
rovi
ded:
Non
e 2
) End
orse
men
ts/g
uara
ntee
s pr
ovid
ed: T
able
1 (
atta
ched
) 3
) Mar
keta
ble
secu
riti
es h
eld:
Tab
le 2
(at
tach
ed)
4) M
arke
tabl
e se
curi
ties
acq
uire
d an
d di
spos
ed o
f at
cos
ts o
r pr
ices
of
at l
east
NT
$300
mil
lion
or
20%
of
the
paid
-in
capi
tal:
Tab
le 3
(at
tach
ed)
5) A
cqui
siti
ons
of i
ndiv
idua
l re
al e
stat
es a
t co
sts
or p
rice
of
at l
east
NT
$300
mil
lion
or
20%
of
the
paid
-in
capi
tal:
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$3
00 m
illi
on o
r 20
% o
f th
e pa
id-i
n ca
pita
l: N
one
7) T
otal
pur
chas
es f
rom
or
sale
s to
rel
ated
par
ties
am
ount
ing
to a
t le
ast
NT
$100
mil
lion
or
20%
of
the
paid
-in
capi
tal:
Tab
le 4
(at
tach
ed)
8) R
ecei
vabl
es f
rom
rel
ated
par
ties
am
ount
ing
to a
t le
ast
NT
$100
mil
lion
or
20%
of
the
paid
-in
capi
tal:
Tab
le 5
(at
tach
ed)
9
) Nam
es,
loca
tion
s,
and
rela
ted
info
rmat
ion
of
inve
stee
s ov
er
whi
ch
the
Com
pany
ex
erci
ses
sign
ific
ant i
nflu
ence
: Tab
le 6
(at
tach
ed)
10) D
eriv
ativ
e fi
nanc
ial t
rans
acti
ons
(Not
es 7
and
8)
b.
In
vest
men
t in
mai
nlan
d C
hina
: Tab
le 7
(at
tach
ed)
c.
Bus
ines
s re
lati
onsh
ips
and
impo
rtan
t tr
ansa
ctio
ns b
etw
een
Chi
na A
irli
nes,
Ltd
. an
d it
s su
bsid
iari
es:
Tab
le 8
(at
tach
ed)
184
- 85
-
40.
SE
GM
EN
T I
NF
OR
MA
TIO
N
a.
Seg
men
t inf
orm
atio
n
The
Gro
up m
ainl
y en
gage
s in
air
tra
nspo
rtat
ion
serv
ices
for
pas
seng
ers
and
carg
o; t
he s
ervi
ces
incl
ude
airp
ort
serv
ice,
sto
rage
ser
vice
, an
d ot
her
air
tran
spor
tati
on s
ervi
ces
whi
ch a
re b
elow
the
fin
anci
al
thre
shol
d fo
r an
ope
rati
ng s
egm
ent
of t
he G
roup
. The
refo
re, t
he G
roup
’s m
ain
repo
rtab
le s
egm
ent
is a
ir
tran
spor
tati
on.
The
acc
ount
ing
poli
cies
of
the
repo
rtab
le s
egm
ent
are
cons
iste
nt w
ith
the
acco
unti
ng
poli
cies
des
crib
ed in
Not
e 4.
For
th
e Y
ear
En
ded
Dec
emb
er 3
1, 2
019
Air
T
ran
spor
tati
on
O
ther
s
Ad
just
men
ts
and
Wri
te-o
ffs
T
otal
Ope
ratin
g re
venu
e
$
164,
492,
453
$ 11
,067
,323
$
(7,1
15,6
16)
$ 16
8,44
4,16
0
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 r
even
ue
41
7,44
6 In
vest
men
ts in
com
e ac
coun
ted
for
usin
g th
e eq
uity
met
hod
33
2,30
5 R
even
ue
49
5,24
9 Fi
nanc
ial c
osts
(3,3
40,1
19)
Exp
ense
s
(667
,519
)
Pro
fit b
efor
e in
com
e ta
x
$
(96,
817)
Iden
tifia
ble
asse
ts
$ 20
9,39
7,85
0
$
15,9
15,0
60
(6
,317
,254
)
$
218,
995,
656
Inve
stm
ents
acc
ount
ed f
or u
sing
th
e eq
uity
met
hod
2,
223,
793
Ass
ets
71
,828
,530
Tot
al a
sset
s
$
293,
047,
979
F
or t
he
Yea
r E
nd
ed D
ecem
ber
31,
201
8
Air
T
ran
spor
tati
on
O
ther
s
Ad
just
men
ts
and
Wri
te-o
ffs
T
otal
Ope
ratin
g re
venu
e
$
167,
370,
925
$ 10
,430
,156
$
(7,0
89,4
74)
$ 17
0,71
1,60
7
Ope
ratio
n pr
ofit
and
loss
es
$ 2,
617,
116
$ 1,
429,
884
$ (2
4,61
7)
$
4,02
2,38
3 In
tere
st r
even
ue
33
0,71
0 In
vest
men
ts in
com
e ac
coun
ted
for
usin
g th
e eq
uity
met
hod
36
7,24
6 R
even
ue
15
7,30
1 Fi
nanc
ial c
osts
(1,3
79,9
85)
Exp
ense
s
(416
,406
)
Pro
fit b
efor
e in
com
e ta
x
$
3,08
1,24
9
Id
entif
iabl
e as
sets
$
154,
007,
329
$ 11
,036
,945
138,
787
$ 16
5,18
3,06
2 In
vest
men
ts a
ccou
nted
for
usi
ng
the
equi
ty m
etho
d
2,20
0,14
9 A
sset
s
62,7
53,3
70
T
otal
ass
ets
$ 23
0,13
6,58
2
- 86
-
b.
Geo
grap
hica
l seg
men
t T
he g
eogr
aphi
cal
segm
ent
info
rmat
ion
of t
he C
ompa
ny a
nd i
ts s
ubsi
diar
ies
in 2
019
and
2018
are
lis
ted
belo
w:
For
th
e Y
ear
En
ded
Dec
emb
er 3
1, 2
019
Am
eric
a
Nor
thea
st A
sia
S
outh
east
Asi
a
Eu
rop
e
Au
stra
lia
C
hin
a
Dom
esti
c
Ad
just
men
t an
d
Eli
min
atio
ns
C
onso
lid
atio
n
O
pera
ting
rev
enue
$
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 )
$
168,
444,
160
O
pera
tion
pro
fit
and
loss
es
$ (5
07,2
37 )
$
2,53
7,00
3
$
(3,4
97,5
92 )
($
86
8,09
1 )
$ (1
39,5
73 )
$
1,91
3,14
0
$
3,31
4,61
7
($
86
,446
)
$ 2,
665,
821
Inte
rest
rev
enue
417,
446
Inve
stm
ents
in
com
e ac
coun
ted
for
usin
g th
e eq
uity
m
etho
d
332,
305
Rev
enue
495,
249
Inte
rest
exp
ense
(3,3
40,1
19 )
E
xpen
ses
(6
67,5
19 )
Pro
fit b
efor
e in
com
e ta
x
$
(96,
817
)
Iden
tifi
able
ass
ets
$ 1,
399,
591
$ 22
2,58
4
$
154,
074
$ 26
,707
$
8,98
5
$
50,9
48
$ 22
3,45
0,02
1
$
(6,3
17,2
54 )
$
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
T
otal
ass
ets
$ 29
3,04
7,97
9
For
th
e Y
ear
En
ded
Dec
emb
er 3
1, 2
018
Am
eric
a
Nor
thea
st A
sia
S
outh
east
Asi
a
Eu
rop
e
Au
stra
lia
C
hin
a
Dom
esti
c
Ad
just
men
t an
d
Eli
min
atio
ns
C
onso
lid
atio
n
O
pera
ting
rev
enue
$
43,2
78,8
90
$ 38
,464
,450
$
34,1
32,3
01
$ 16
,092
,452
$
6,76
0,14
6
$
22,1
14,2
27
$ 16
,958
,615
$
(7,0
89,4
74 )
$
170,
711,
607
O
pera
tion
pro
fit
and
loss
es
$ 58
2,72
1
$
2,71
7,25
5
$
(2,4
12,8
23 )
($
75
6,26
3 )
$ (9
04,4
16 )
$
2,45
4,93
5
$
2,36
5,59
1
($
24
,617
)
$ 4,
022,
383
In
tere
st r
even
ue
33
0,71
0 In
vest
men
ts
inco
me
acco
unte
d fo
r us
ing
the
equi
ty
met
hod
36
7,24
6 R
even
ue
14
6,66
7 In
tere
st e
xpen
se
(1
,369
,351
)
Exp
ense
s
(416
,406
)
P
rofi
t bef
ore
inco
me
tax
$ 3,
081,
249
Id
enti
fiab
le a
sset
s
$
1,32
8,00
4
$
15,5
20
$ 94
,631
$
2,79
6
$
2,61
9
$
10,1
74
$ 16
3,59
0,53
0
$
138,
787
$
165,
183,
061
Inve
stm
ents
ac
coun
ted
for
usin
g th
e eq
uity
m
etho
d
2,20
0,14
9 A
sset
s
62,7
53,3
72
T
otal
ass
ets
$ 23
0,13
6,58
2
185
- 87
-
TA
BL
E 1
C
HIN
A A
IRL
INE
S, L
TD
. AN
D I
NV
ES
TE
ES
E
ND
OR
SE
ME
NT
/GU
AR
AN
TE
E P
RO
VID
ED
F
OR
TH
E Y
EA
R E
ND
ED
DE
CE
MB
ER
31,
201
9 (I
n T
hous
ands
of
New
Tai
wan
Dol
lars
, Un
less
Sta
ted
Oth
erw
ise)
C
oun
terp
arty
No.
E
nd
orse
men
t/
Gu
aran
tee
Pro
vid
er
Nam
e N
atu
re o
f R
elat
ion
ship
Lim
it o
n E
ach
C
oun
terp
arty
’s
En
dor
sem
ent/
G
uar
ante
e A
mou
nt
(Not
e 1)
Max
imu
m
Bal
ance
for
th
e P
erio
d
En
din
g B
alan
ce
Act
ual
Bor
row
ing
Am
ount
Val
ue
of
Col
late
rals
P
rop
erty
, Pla
nt
or E
qu
ipm
ent
Rat
io o
f A
ccu
mu
late
d
Am
ount
of
Col
late
ral t
o N
et E
quit
y of
th
e L
ates
t F
inan
cial
S
tate
men
t (%
)
Max
imu
m
Col
late
ral/
Gu
aran
tee
Am
ount
s A
llow
able
(N
ote
2)
En
dor
sem
ent/
G
uar
ante
e G
iven
by
Par
ent
on B
ehal
f of
S
ub
sid
iari
es
En
dor
sem
ent/
G
uar
ante
e G
iven
by
Su
bsi
dia
ries
on
B
ehal
f of
Par
ent
En
dor
sem
ent/
G
uar
ante
e G
iven
on
Beh
alf
of C
ompa
nie
s in
M
ain
lan
d C
hin
a
0 C
hina
Air
lines
C
AL
Par
k
100%
sub
sidi
ary
$
11,
310,
754
$
3,
850,
000
$
3,
850,
000
$
2,
129,
400
$
-
6.81
$ 2
8,27
6,88
6 Y
N
N
(t
he “
Com
pany
”)
Tai
wan
Air
Car
go T
erm
inal
54
% s
ubsi
diar
y
11
,310
,754
1,
080,
000
1,08
0,00
0
-
- 1.
91
28,2
76,8
86
Y
N
N
Tig
erai
r T
aiw
an C
o., L
td.
77.1
7% s
ubsi
diar
y by
di
rect
and
indi
rect
ho
ldin
gs
11,3
10,7
54
3,05
5,47
5
3,
012,
668
685,
444
- 5.
33
28,2
76,8
86
Y
N
N
Tai
wan
Air
craf
t Mai
nten
ance
an
d E
ngin
eeri
ng C
o., L
td.
100%
sub
sidi
ary
11,3
10,7
54
2,00
0,00
0
2,
000,
000
1,27
9,82
7
-
3.54
28
,276
,886
Y
N
N
Not
e 1:
B
ased
on
the
Com
pany
’s g
uide
lines
, the
max
imum
am
ount
of
guar
ante
e to
an
indi
vidu
al c
ount
erpa
rty
is u
p to
20%
of
the
Com
pany
’s s
hare
hold
ers’
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
colla
tera
l gua
rant
ee is
up
to 5
0% o
f th
e C
ompa
ny’s
sha
reho
lder
s’ e
quity
. 186
- 88
-
TA
BL
E 2
C
HIN
A A
IRL
INE
S, L
TD
. AN
D I
NV
ES
TE
ES
M
AR
KE
TA
BL
E S
EC
UR
ITIE
S H
EL
D
DE
CE
MB
ER
31,
201
9 (I
n T
hou
san
ds
of N
ew T
aiw
an D
olla
rs, U
nle
ss S
tate
d O
ther
wis
e)
D
ecem
ber
31,
201
9
Hol
din
g C
omp
any
Nam
e M
ark
etab
le S
ecu
rity
Typ
e an
d I
ssu
er/N
ame
Rel
atio
nsh
ip
wit
h t
he
Hol
din
g C
omp
any
Fin
anci
al S
tate
men
t A
ccou
nt
Nu
mb
er o
f S
har
es/U
nit
s C
arry
ing
Am
oun
t
Per
cen
tage
of
Ow
ner
ship
(%
)
Mar
ket
Val
ue
or N
et A
sset
V
alu
e
Not
e
C
hina
Air
line
s (“
Par
ent c
ompa
ny”)
S
hare
s
E
vere
st I
nves
tmen
t Hol
ding
s L
td. -
ord
inar
y sh
ares
-
Fin
anci
al a
sset
s at
FV
TO
CI
- no
n-cu
rren
t 1,
359,
368
$
73
,628
13
.59
$
80
,991
N
ote
1
Eve
rest
Inv
estm
ent H
oldi
ngs
Ltd
. - p
refe
renc
e sh
ares
-
Fin
anci
al a
sset
s at
FV
TO
CI
- no
n-cu
rren
t 13
5,93
7
7,
363
-
-
Chu
ng H
ua E
xpre
ss C
o.
- F
inan
cial
ass
ets
at F
VT
OC
I -
non-
curr
ent
1,10
0,00
0
26
,865
11
.00
26,8
65
Jard
ine
Air
Ter
min
al S
ervi
ces
- F
inan
cial
ass
ets
at F
VT
PL
- c
urre
nt
12,0
00,0
00
- 15
.00
-
T
he G
rand
Hi L
ai H
otel
-
Fin
anci
al a
sset
s at
FV
TP
L -
cur
rent
4,
021
- 0.
02
-
M
anda
rin
Air
line
s S
hare
s
C
hina
Air
line
s P
aren
t com
pany
F
inan
cial
ass
ets
at F
VT
OC
I -
non-
curr
ent
2,07
4,62
8
18
,796
-
18,7
96
-
Cal
-Asi
a In
vest
men
t S
hare
s
T
aiko
o (X
iam
en)
Lan
ding
Gea
r S
ervi
ces
- F
inan
cial
ass
ets
at F
VT
PL
- c
urre
nt
-
-
2.59
-
Not
e 2
H
AE
CO
Com
posi
te S
truc
ture
s (J
inji
ang)
-
Fin
anci
al a
sset
s at
FV
TO
CI
- no
n-cu
rren
t -
101,
365
5.45
10
1,36
5 N
ote
2
Sab
re T
rave
l Net
wor
k (T
aiw
an)
Ben
efic
iary
cer
tifi
cate
s
F
rank
lin
Tem
plet
on S
inoA
m M
oney
Mar
ket F
und
- F
inan
cial
ass
ets
at F
VT
PL
- c
urre
nt
7,81
6,04
8
81
,124
-
81,1
24
-
FS
ITC
Mon
ey M
arke
t Fun
d -
Fin
anci
al a
sset
s at
FV
TP
L -
cur
rent
49
7,74
0
89
,145
-
89,1
45
All
ianz
Glo
bal I
nves
tors
Tai
wan
Mon
ey M
arke
t Fun
d -
Fin
anci
al a
sset
s at
FV
TP
L -
cur
rent
6,
444,
010
81,0
65
-
81
,065
C
apit
al M
oney
Mar
ket F
und
- F
inan
cial
ass
ets
at F
VT
PL
- c
urre
nt
2,84
2,14
6
46
,035
-
46,0
35
Tai
wan
Air
port
Ser
vice
s S
hare
s
T
rans
Asi
a A
irw
ays
- F
inan
cial
ass
ets
at F
VT
PL
- c
urre
nt
2,27
7,78
6
-
0.4
- -
Ben
efic
ial c
erti
fica
tes
Fuh
Hw
a E
mer
ging
Mar
ket S
hort
-ter
m I
ncom
e F
und
- F
inan
cial
ass
ets
at F
VT
PL
- c
urre
nt
1,67
1,65
7
20
,253
-
20,2
53
-
Fuh
Hw
a G
loba
l Bon
d F
und
- F
inan
cial
ass
ets
at F
VT
PL
- c
urre
nt
1,23
3,21
1
18
,045
-
18,0
45
Dyn
asty
Aer
otec
h In
tern
atio
nal C
orp.
S
hare
s
C
hina
Air
line
s P
aren
t com
pany
F
inan
cial
ass
ets
at F
VT
OC
I -
non-
curr
ent
814,
152
7,37
6 -
7,37
6 -
Ben
efic
iary
cer
tifi
cate
s
T
aish
in 1
699
Mon
ey M
arke
t Fun
d -
Fin
anci
al a
sset
s at
FV
TP
L -
cur
rent
34
9,52
3
4,
748
-
4,
748
-
(Con
tinu
ed)
187
- 89
-
D
ecem
ber
31,
201
9
Hol
din
g C
omp
any
Nam
e M
ark
etab
le S
ecu
rity
Typ
e an
d I
ssu
er/N
ame
Rel
atio
nsh
ip
wit
h t
he
Hol
din
g C
omp
any
Fin
anci
al S
tate
men
t A
ccou
nt
Nu
mb
er o
f S
har
es/U
nit
s C
arry
ing
Am
oun
t
Per
cen
tage
of
Ow
ner
ship
(%
)
Mar
ket
Val
ue
or N
et A
sset
V
alu
e
Not
e
K
aohs
iung
Cat
erin
g S
ervi
ces
Ben
efic
iary
cer
tifi
cate
s
P
rude
ntia
l Fin
anci
al M
oney
Mar
ket F
und
- F
inan
cial
ass
ets
at F
VT
PL
- c
urre
nt
5,40
7,83
2
$
85,8
86
-
$
85,8
85
-
Pru
dent
ial F
inan
cial
Ret
urn
Fun
d -
Fin
anci
al a
sset
s at
FV
TP
L -
cur
rent
4,
493,
628
70,4
23
-
70
,423
T
aish
in 1
699
Mon
ey M
arke
t Fun
d -
Fin
anci
al a
sset
s at
FV
TP
L -
cur
rent
1,
106,
807
15,0
35
-
15
,035
T
iger
air
Tai
wan
Co.
, Ltd
. G
over
nmen
t bon
d
P
hili
ppin
es g
over
nmen
t bon
d -
Am
orti
zed
cost
fin
anci
al a
sset
s -
299
Not
app
lica
ble
299
Not
e 1:
T
he s
ubsi
diar
y’s
net a
sset
val
ue w
as $
80,9
91 th
ousa
nd, w
hich
incl
uded
ord
inar
y sh
ares
and
pre
fere
nce
shar
es a
s of
and
for
the
year
end
ed D
ecem
ber
31, 2
019.
N
ote
2:
The
Com
pany
doe
s no
t iss
ue s
hare
s be
caus
e it
is a
lim
ited
com
pany
. N
ote
3:
The
tabl
e on
ly li
sts
fina
ncia
l ass
ets
that
are
IF
RS
9 r
egul
ated
.
(Con
clud
ed)
188
- 90
-
TA
BL
E 3
C
HIN
A A
IRL
INE
S, L
TD
. AN
D S
UB
SID
IAR
IES
M
AR
KE
TA
BL
E S
EC
UR
ITIE
S A
CQ
UIR
ED
AN
D D
ISP
OS
ED
OF
AT
CO
ST
S O
R P
RIC
ES
OF
AT
LE
AST
NT
$300
MIL
LIO
N O
R 2
0% O
F T
HE
PA
ID-I
N C
AP
ITA
L
FO
R T
HE
YE
AR
EN
DE
D D
EC
EM
BE
R 3
1, 2
019
(In
Th
ousa
nd
s of
New
Tai
wan
Dol
lars
, Un
less
Sta
ted
Oth
erw
ise)
B
egin
nin
g B
alan
ce
Acq
uis
itio
n (
Not
e 3)
D
isp
osal
(N
ote
3)
En
din
g B
alan
ce
Com
pan
y N
ame
Typ
e an
d N
ame
of
Mar
keta
ble
Secu
riti
es
(Not
e 1)
Fin
anci
al S
tate
men
t A
ccou
nt
Cou
nte
rpar
ty
(Not
e 2)
R
elat
ion
ship
(N
ote
2)
Num
ber
of
Sh
ares
A
mou
nt
Num
ber
of
Sh
ares
A
mou
nt
Num
ber
of
Sh
ares
A
mou
nt
Car
ryin
g A
mou
nt
Gai
n (
Los
s) o
n
Dis
pos
al
Num
ber
of
Sh
ares
A
mou
nt
C
hina
Air
line
s, L
td.
Sh
ares
T
iger
air
Tai
wan
Co.
, Ltd
. In
vest
men
ts a
ccou
nted
for
us
ing
the
equi
ty m
etho
d (N
ote
5)
Non
-rel
ated
par
ty
-
$
-
-
$
-
-
$
-
$
-
$
-
-
$
-
N
ote
1:
The
mar
keta
ble
secu
riti
es in
this
tabl
e re
fer
to s
hare
s, b
onds
, ben
efic
ial c
erti
fica
tes
and
the
secu
riti
es d
eriv
ed f
rom
the
abov
e it
ems.
N
ote
2:
Mar
keta
ble
secu
riti
es w
hich
are
rec
ogni
zed
as in
vest
men
ts a
ccou
nts
for
usin
g th
e eq
uity
met
hod
are
requ
ired
to b
e fi
lled
in th
e se
cond
col
umn.
N
ote
3 T
he c
umul
ativ
e am
ount
of
acqu
ired
and
dis
pose
d of
mar
keta
ble
secu
riti
es a
re r
equi
red
to b
e ca
lcul
ated
sep
arat
ely
to d
eter
min
e w
heth
er th
ey a
re a
t lea
st N
T$3
00 m
illi
on o
r 20
% o
f th
e pa
id-i
n ca
pita
l. N
ote
4 Pa
id-i
n ca
pita
l re
fers
to
paid
-in
capi
tal
of t
he i
ndic
ated
par
ent
com
pany
. If
the
shar
es i
ssue
d by
an
issu
er h
ave
no p
ar v
alue
or
a pa
r va
lue
othe
r th
an N
T$1
0 pe
r sh
are,
the
thr
esho
ld o
f 20
% o
f pa
id-i
n ca
pita
l, as
set
out
in
the
prec
edin
g it
em, s
hall
be
repl
aced
by
10%
of
equi
ty a
ttri
buta
ble
to
owne
rs o
f th
e in
dica
ted
pare
nt c
ompa
ny, a
s st
ated
in th
e re
spec
tive
bala
nce
shee
t. N
ote
5:
Sub
sidi
arie
s pl
anni
ng in
itia
l pub
lic
offe
ring
rel
ease
sto
cks.
189
- 91
-
TA
BL
E 4
C
HIN
A A
IRL
INE
S, L
TD
. AN
D I
NV
ES
TE
ES
T
OT
AL
PU
RC
HA
SE
S F
RO
M O
R S
AL
ES
TO
RE
LA
TE
D P
AR
TIE
S A
MO
UN
TIN
G T
O A
T L
EA
ST
NT
$100
MIL
LIO
N O
R 2
0% O
F T
HE
PA
ID-I
N C
AP
ITA
L
FO
R T
HE
YE
AR
EN
DE
D D
EC
EM
BE
R 3
1, 2
019
(In
Th
ousa
nd
s of
New
Tai
wan
Dol
lars
, Un
less
Sta
ted
Oth
erw
ise)
Tra
nsa
ctio
n D
etai
ls
Ab
nor
mal
Tra
nsa
ctio
n
Not
e/A
ccou
nt
Pay
able
or
Rec
eiva
ble
C
omp
any
Nam
e R
elat
ed P
arty
N
atu
re o
f R
elat
ion
ship
P
urc
has
e/
Sal
e A
mou
nt
% o
f T
otal
P
aym
ent
Ter
ms
Un
it P
rice
P
aym
ent
Ter
ms
En
din
g B
alan
ce
% o
f T
otal
Not
e
Chi
na A
irli
nes,
Ltd
. T
aiw
an A
ir C
argo
Ter
min
al
Sub
sidi
ary
Pur
chas
e
$
524,
457
0.39
30
day
s
$
-
-
$
(41,
017)
(1
.52)
-
(“C
hina
Air
line
s”)
Tai
wan
Air
port
Ser
vice
s S
ubsi
diar
y P
urch
ase
445,
472
0.33
40
day
s
-
-
(7
7,97
0)
(2.9
0)
-
Man
dari
n A
irli
nes
Sub
sidi
ary
Sal
e
(1
,971
,462
) 1.
35
2 m
onth
s
-
-
15
8,12
3 1.
83
-
Man
dari
n A
irli
nes
Sub
sidi
ary
Pur
chas
e
24
2,11
4 0.
18
2 m
onth
s
-
-
(2
47,9
97)
(9.2
1)
-
Tig
erai
r T
aiw
an
Sub
sidi
ary
Sal
e
(3
73,8
11)
0.26
1
mon
ths
42,6
42
0.49
T
iger
air
Tai
wan
S
ubsi
diar
y P
urch
ase
152,
914
0.11
1
mon
ths
- -
(31,
210)
(1
.16)
-
T
aoyu
an I
nter
nati
onal
Air
port
Ser
vice
S
ubsi
diar
y P
urch
ase
1,22
0,42
2 0.
90
40 d
ays
- -
(347
,127
) (1
2.90
) -
K
aohs
iung
Cat
erin
g S
ervi
ces
Sub
sidi
ary
Pur
chas
e
56
1,44
3 0.
42
60 d
ays
- -
(99,
649)
(3
.70)
-
H
ua H
sia
Sub
sidi
ary
Pur
chas
e
34
9,60
2 0.
26
2 m
onth
s
-
-
(3
7,86
0)
(1.4
1)
-
CA
L P
ark
Sub
sidi
ary
Pur
chas
e
23
1,28
8 0.
17
2 m
onth
s
-
-
(1
27)
- -
C
al H
otel
S
ubsi
diar
y P
urch
ase
135,
687
0.10
1
mon
ths
- -
(40,
293)
(1
.50)
-
G
loba
l Sky
Exp
ress
S
ubsi
diar
y S
ale
(101
,421
) 0.
07
15 d
ays
- -
3,88
8
0.05
-
E
aste
rn U
nite
d In
tern
atio
nal L
ogis
tics
E
quity
-met
hod
inve
stee
P
urch
ase
216,
368
0.16
2
mon
ths
- -
(23,
430)
(0
.87)
-
C
hina
Pac
ific
Lau
ndry
Ser
vice
s E
quity
-met
hod
inve
stee
P
urch
ase
120,
088
0.09
2
mon
ths
- -
(20,
118)
(0
.75)
-
C
hina
Pac
ific
Cat
erin
g S
ervi
ces
Equ
ity-m
etho
d in
vest
ee
Pur
chas
e
1,
791,
003
1.33
90
day
s
-
-
(4
64,5
82)
(17.
26)
-
Chi
na A
ircr
aft S
ervi
ces
E
quity
-met
hod
inve
stee
P
urch
ase
169,
400
0.13
30
day
s
-
-
(2
7,67
9)
(1.0
3)
-
M
anda
rin
Air
line
s T
aiw
an A
irpo
rt S
ervi
ces
Sam
e pa
rent
com
pany
P
urch
ase
189,
853
2.56
1
mon
ths
- -
(27,
760)
(3
.74)
-
Cal
Hot
el
CA
L P
ark
Sam
e pa
rent
com
pany
P
urch
ase
114,
281
26.0
7 1
mon
ths
- -
(382
) (0
.53)
-
Tig
erai
r T
aiw
an
Tao
yuan
Int
erna
tion
al A
irpo
rt S
ervi
ce
Sam
e pa
rent
com
pany
P
urch
ase
197,
179
2.53
1
mon
ths
- -
(24.
389)
(3
.66)
-
190
- 92
-
TA
BL
E 5
C
HIN
A A
IRL
INE
S, L
TD
. AN
D I
NV
ES
TE
ES
R
EC
EIV
AB
LE
S F
RO
M R
EL
AT
ED
PA
RT
IES
AM
OU
NT
ING
TO
AT
LE
AS
T N
T$1
00 M
ILL
ION
OR
20%
OF
TH
E P
AID
-IN
CA
PIT
AL
D
EC
EM
BE
R 3
1, 2
019
(In
Th
ousa
nd
s of
New
Tai
wan
Dol
lars
, Un
less
Sta
ted
Oth
erw
ise)
Ove
rdu
e C
omp
any
Nam
e R
elat
ed P
arty
N
atu
re o
f R
elat
ion
ship
E
nd
ing
Bal
ance
T
urn
over
Rat
e A
mou
nt
Act
ion
Tak
en
Am
oun
ts R
ecei
ved
in
Su
bse
qu
ent
Per
iod
All
owan
ce f
or
Bad
Deb
ts
C
hina
Air
line
s, L
td. (
“Chi
na A
irli
nes”
) M
anda
rin
Air
line
s S
ubsi
diar
y
$
158,
123
Not
e
$
- -
$
15
8,12
3
$
-
Man
dari
n A
irli
nes
Chi
na A
irli
nes
Par
ent c
ompa
ny
247,
997
Not
e
-
-
24
5,36
4
-
C
hina
Pac
ific
Cat
erin
g S
ervi
ces
Chi
na A
irli
nes
Par
ent c
ompa
ny
464,
582
3.90
-
-
31
1,35
6
-
T
aoyu
an I
nter
nati
onal
Air
port
Ser
vice
C
hina
Air
line
s P
aren
t com
pany
34
7,12
7 3.
43
- -
340,
924
-
Not
e:
Acc
ount
s re
ceiv
able
and
rev
enue
wer
e no
t dir
ectly
cor
rela
ted
beca
use
of th
e pa
rtic
ular
indu
stry
cha
ract
eris
tics
, and
ther
efor
e th
e tu
rnov
er r
ate
was
not
app
lica
ble.
191
- 93
-
TA
BL
E 6
C
HIN
A A
IRL
INE
S, L
TD
. AN
D I
NV
ES
TE
ES
N
AM
ES
, LO
CA
TIO
NS
, AN
D O
TH
ER
IN
FO
RM
AT
ION
OF
IN
VE
ST
EE
S O
VE
R W
HIC
H T
HE
CO
MP
AN
Y E
XE
RC
ISE
S S
IGN
IFIC
AN
T I
NF
LU
EN
CE
F
OR
TH
E Y
EA
R E
ND
ED
DE
CE
MB
ER
31,
201
9 (I
n th
ousa
nds
of N
ew T
aiw
an D
olla
rs a
nd F
orei
gn C
urre
ncie
s in
Tho
usan
ds,
Unl
ess
Stat
ed O
ther
wis
e)
In
vest
men
t A
mou
nt
Bal
ance
as
of D
ecem
ber
31, 2
019
Inve
stor
Com
pan
y In
vest
ee C
omp
any
Loc
atio
n
Mai
n B
usi
nes
s an
d P
rod
uct
D
ecem
ber
31,
2019
D
ecem
ber
31,
2018
N
umbe
r of
S
har
es/U
nit
s
Per
cen
tage
of
O
wne
rshi
p (%
)
Car
ryin
g A
mou
nt
Net
In
com
e (L
oss)
of
the
Inve
stee
Inve
stm
ent
Inco
me
(Los
s)
Not
e
Chi
na A
irli
nes,
Ltd
. C
AL
Par
k
Tao
yuan
, 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,
552,
310
$
1,16
3 $
47
,694
N
ote
4
Man
dari
n A
irli
nes
Tai
pei,
Tai
wan
A
ir tr
ansp
orta
tion
and
mai
nten
ance
of
airc
raft
2,04
2,36
8
2,04
2,36
8
188,
154,
025
93.9
9
1,49
4,60
3
204,
018
19
1,32
2 N
otes
1 a
nd 4
Tai
wan
Air
Car
go T
erm
inal
T
aoyu
an, T
aiw
an
Air
car
go a
nd s
tora
ge
1,
350,
000
1,
350,
000
13
5,00
0,00
0 54
.00
1,
517,
946
27
1,55
2
146,
642
Not
e 4
C
al-D
ynas
ty I
nter
nati
onal
L
os A
ngel
es, U
SA
A
hol
ding
com
pany
, rea
l est
ate
and
hote
l ser
vice
s
US
$ 26
,145
U
S$
26,1
45
2,
614,
500
100.
00
1,
276,
546
41
,262
41,2
62
Not
es 2
and
4
C
hina
Pac
ific
Cat
erin
g S
ervi
ces
Tao
yuan
, Tai
wan
In
-fli
ght c
ater
ing
43
9,11
0
439,
110
43
,911
,000
51
.00
80
1,07
1
511,
121
25
6,89
9 -
T
aoyu
an I
nter
nati
onal
Air
port
Ser
vice
s T
aoyu
an, T
aiw
an
Air
port
ser
vice
s
147,
000
14
7,00
0
34,3
00,0
00
49.0
0
737,
245
29
1,52
2
142,
846
-
CA
L-A
sia
Inve
stm
ent
Ter
rito
ry o
f th
e B
riti
sh V
irgi
n Is
land
s G
ener
al in
vest
men
t U
S$
7,17
2 U
S$
7,17
2
7,17
2,34
6 10
0.00
559,
562
30
,820
30,8
19
-
Sab
re T
rave
l Net
wor
k (T
aiw
an)
Tai
pei,
Tai
wan
S
ale
and
mai
nten
ance
of
hard
war
e an
d so
ftw
are
52
,200
52,2
00
13
,021
,042
93
.93
46
0,21
3
195,
347
18
3,49
0 -
C
hina
Air
craf
t Ser
vice
H
ong
Kon
g In
tern
atio
nal A
irpo
rt
Air
port
ser
vice
s H
K$
58,0
00
HK
$ 58
,000
28,4
00,0
00
20.0
0
461,
263
51
,828
10,3
65
-
Tai
wan
Air
port
Ser
vice
s T
aipe
i, T
aiw
an
Air
port
ser
vice
s
12,2
89
12
,289
20,6
26,6
44
47.3
5
276,
134
15
6,86
1
74,2
74
-
Kao
hsiu
ng C
ater
ing
Ser
vice
s K
aohs
iung
, Tai
wan
In
-fli
ght c
ater
ing
38
3,84
6
383,
846
21
,494
,637
53
.67
66
1,17
0
292,
632
14
2,88
6 N
ote
5
C
al H
otel
Co.
, Ltd
. T
aoyu
an, T
aiw
an
Hot
el b
usin
ess
46
5,00
0
465,
000
46
,500
,000
10
0.00
479,
259
16
,787
18,0
20
Not
e 4
Chi
na P
acif
ic L
aund
ry S
ervi
ces
Tao
yuan
, Tai
wan
C
lean
ing
and
leas
ing
of th
e to
wel
of
airl
ines
, hot
els,
re
stau
rant
s an
d he
alth
clu
bs
13
7,50
0
137,
500
13
,750
,000
55
.00
16
8,54
7
27,3
27
15
,030
-
D
ynas
ty A
erot
ech
Inte
rnat
iona
l Cor
p.
Tao
yuan
, Tai
wan
C
lean
ing
of a
ircr
aft a
nd m
aint
enan
ce o
f m
achi
ne a
nd
equi
pmen
t
77
,270
77,2
70
77
,270
10
0.00
88,3
13
17
,008
16,8
57
Not
es 1
and
4
Y
estr
ip
Tai
pei,
Tai
wan
T
rave
l bus
ines
s
26,2
65
26
,265
1,60
0,00
0 10
0.00
25,2
68
(4
80)
(3
84)
Not
e 4
D
ynas
ty H
olid
ays
Tok
yo, J
apan
T
rave
l bus
ines
s J
PY
8,
000
JP
Y
20,4
00
16
0 20
.00
10
,004
(894
)
(480
) -
G
loba
l Sky
Exp
ress
T
aipe
i, T
aiw
an
For
war
ding
and
sto
rage
of
air
carg
o
2,
500
2,
500
25
0,00
0 25
.00
7,
294
6,
392
1,
598
-
Tig
erai
r T
aiw
an C
o., L
td.
Tai
pei,
Tai
wan
A
ir tr
ansp
orta
tion
and
mai
nten
ance
of
airc
raft
1,27
2,06
3
1,64
8,38
7
138,
906,
275
69.4
5
1,94
6,32
8
808,
718
69
9,03
9 N
ote
4
Tai
wan
Air
craf
t Mai
nten
ance
and
E
ngin
eeri
ng C
o., L
td.
Tao
yuan
, Tai
wan
A
ircr
aft m
aint
enan
ce
1,
350,
000
1,
350,
000
13
5,00
0,00
0 10
0.00
921,
989
(2
06,1
51)
(2
06,1
49)
-
N
OR
DA
M A
sia
Ltd
. T
aoyu
an, T
aiw
an
Air
craf
t mai
nten
ance
37,9
75
2,
450
3,
797,
500
49.0
0
37,8
13
(1
44)
(7
0)
-
M
anda
rin
Air
line
s T
iger
air
Tai
wan
Co.
, Ltd
. T
aipe
i, T
aiw
an
Air
tran
spor
tati
on a
nd m
aint
enan
ce o
f ai
rcra
ft
15
4,33
0
200,
000
15
,433
,000
7.
72
21
6,24
3
808,
718
77
,587
-
T
aiw
an A
irpo
rt S
ervi
ces
Tai
pei,
Tai
wan
A
irpo
rt s
ervi
ces
11
,658
11,6
58
46
9,75
5 1.
08
6,
281
15
6,86
1
1,68
9 -
CA
L-A
sia
Inve
stm
ent
Eas
tern
Uni
ted
Inte
rnat
iona
l Log
isti
cs
Hon
g K
ong
F
orw
ardi
ng a
nd s
tora
ge o
f ai
r ca
rgo
HK
$ 3,
329
HK
$ 3,
329
1,
050,
000
35.0
0
42,7
17
9,
678
3,
387
-
T
aiw
an A
irpo
rt S
ervi
ces
Tai
wan
Air
port
Ser
vice
(S
amoa
)
Sam
oa
Air
port
ser
vice
s an
d in
vest
men
t
US
$ 5,
877
US
$ 5,
877
-
100.
00
34
7,55
1
23,1
07
23
,107
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,
867
(4
)
(2)
-
Not
e 1:
A
dopt
ed th
e tr
easu
ry s
hare
s m
etho
d in
rec
ogni
zing
inve
stm
ent i
ncom
e or
loss
. N
ote
2:
Rep
rese
nts
the
cons
olid
ated
fin
anci
al in
form
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 no
t iss
ue s
hare
s be
caus
e it
is a
lim
ited
com
pany
. N
ote
4:
Dif
fere
nce
caus
ed b
y le
ase
arra
ngem
ent b
etw
een
cons
olid
ated
ent
ities
. N
ote
5:
Dif
fere
nce
caus
e by
acq
uisi
tion
. 192
- 94
-
TA
BL
E 7
C
HIN
A A
IRL
INE
S, L
TD
. AN
D I
NV
ES
TE
ES
IN
VE
ST
ME
NT
S I
N M
AIN
LA
ND
CH
INA
F
OR
TH
E Y
EA
R E
ND
ED
DE
CE
MB
ER
31,
201
9 (I
n t
hou
san
ds
of N
ew T
aiw
an D
olla
rs/R
enm
inb
i/U
S D
olla
rs)
Chi
na A
irli
nes
In
vest
men
t F
low
Inve
stee
Com
pan
y N
ame
Mai
n B
usi
nes
s an
d
Pro
du
ct
Tot
al A
mou
nt
of P
aid
-in
C
apit
al
Inve
stm
ent
Typ
e
Acc
um
ula
ted
O
utf
low
of
Inve
stm
ent
from
Tai
wan
as
of J
anua
ry 1
, 20
19
Ou
tflo
w
Infl
ow
Acc
um
ula
ted
O
utf
low
of
Inve
stm
ent
from
Tai
wan
as
of D
ecem
ber
31,
20
19
Net
In
com
e (L
oss)
of
the
Inve
stee
% O
wn
ersh
ip
of D
irec
t or
In
dir
ect
Inve
stm
ent
Inve
stm
ent
Gai
n (
Los
s)
Car
ryin
g A
mou
nt
as
of
D
ecem
ber
31,
20
19
Acc
um
ula
ted
In
war
d
Rem
itta
nce
of
Ear
nin
gs a
s of
D
ecem
ber
31,
20
19
A
irpo
rt A
ir C
argo
Ter
min
al
(Xia
men
) C
o., L
td.
For
war
ding
and
sto
rage
of
air
car
go
$
10,9
5,48
0 (
RM
B 2
54,4
80)
Indi
rect
(N
ote
1)
$
125,
705
(U
S$
4,18
6) $
-
$
- $
12
5,70
5 (
US
$ 4,
186)
$
76,7
11
(R
MB
17
,107
) 14
.00
$
10,7
95
(R
MB
2,
395)
$
223,
683
(R
MB
51
,962
) $
86
,208
(
US
$ 2,
802)
(Not
e 2)
Air
port
Air
Car
go S
ervi
ce
(Xia
men
) C
o., L
td.
For
war
ding
and
sto
rage
of
air
car
go
60
,267
(
RM
B
14,0
00)
Indi
rect
(N
ote
1)
58
,482
(
US
$ 1,
947)
-
-
58
,482
(
US
$ 1,
947)
89
,573
(
RM
B
19,9
75)
14.0
0
12,6
06
(R
MB
2,
796)
12
4,07
1 (
RM
B
28,8
22)
26
,933
(
US
$ 87
5)
(N
ote
2)
T
aiko
o (X
iam
en)
Lan
ding
G
ear
Ser
vice
s
Lan
ding
gea
r m
aint
enan
ce s
ervi
ces
2,
495,
195
(U
S$
83,0
90)
Indi
rect
(N
ote
1)
64
,601
(
US
$ 2,
151)
-
-
64
,601
(
US
$ 2,
151)
-
2.58
9
-
-
-
H
AE
CO
Com
posi
te
Str
uctu
res
(Jin
jian
g)
Com
posi
te m
ater
ial
35
0,24
0 (
US
$ 11
,663
) In
dire
ct
(Not
e 1)
19,0
99
(U
S$
636)
-
-
19
,099
(
US
$ 63
6)
- 5.
45
-
42
,718
(
RM
B
9,92
3)
-
Acc
um
ula
ted
In
vest
men
t in
M
ain
lan
d C
hin
a as
of
Dec
emb
er 3
1, 2
019
Inve
stm
ent
Am
oun
t
Au
thor
ized
by
Inve
stm
ent
Com
mis
sion
, MO
EA
L
imit
on
In
vest
men
t
$2
67,8
86 (
US
$8,9
20)
$650
,192
(N
ote
3)
$36,
079,
270
(Not
e 4)
(Con
tinu
ed)
193
- 95
-
Tai
wan
Air
port
Ser
vice
s
Rem
itta
nce
of
Fu
nd
s
Inve
stee
Com
pan
y M
ain
Bu
sin
ess
and
P
rod
uct
P
aid
-in
Cap
ital
M
eth
od o
f In
vest
men
t
Acc
um
ula
ted
O
utw
ard
R
emit
tan
ce f
or
Inve
stm
ent
from
Tai
wan
as
of J
anua
ry 1
, 20
19
Ou
twar
d
Inw
ard
Acc
um
ula
ted
O
utw
ard
R
emit
tan
ce f
or
Inve
stm
ent
from
Tai
wan
as
of D
ecem
ber
31,
20
19
Net
In
com
e (L
oss)
of
the
Inve
stee
% O
wn
ersh
ip
of D
irec
t or
In
dir
ect
Inve
stm
ent
Inve
stm
ent
Inco
me
(Los
s)
Car
ryin
g A
mou
nt
as o
f D
ecem
ber
31,
20
19
Acc
um
ula
ted
R
epat
riat
ion
of
Inve
stm
ent
Inco
me
as o
f D
ecem
ber
31,
20
19
A
irpo
rt A
ir C
argo
Ter
min
al
(Xia
men
) C
o., L
td.
For
war
ding
and
sto
rage
of
air
car
go
$
1,09
5,48
0 (
RM
B 2
54,4
80)
Indi
rect
(N
ote
5)
$
120,
671
(U
S$
4,01
8) $
-
$
- $
12
0,67
1 (
US
$ 4,
018)
$
76,7
11
(R
MB
17
,107
) 14
.00
$
10,7
40
(R
MB
2,
395)
$
222,
478
(R
MB
51
,682
) $
11
4,30
4 (
US
$ 3,
806)
Air
port
Air
Car
go S
ervi
ce
(Xia
men
) C
o., L
td.
For
war
ding
and
sto
rage
of
air
car
go
60
,267
(
RM
B
14,0
00)
Indi
rect
(N
ote
5)
57
,860
(
US
$ 1,
927)
-
-
57
,860
(
US
$ 1,
927)
89
,573
(
RM
B
19,9
75)
14.0
0
12,5
40
(R
MB
2,
796)
12
4,27
9 (
RM
B
28,8
70)
42
,240
(
US
$ 1,
407)
A
ccu
mu
late
d O
utw
ard
R
emit
tan
ce f
or I
nve
stm
ent
in
Mai
nla
nd
Ch
ina
as o
f D
ecem
ber
31,
201
9
Inve
stm
ent
Am
oun
ts A
uth
oriz
ed b
y In
vest
men
t C
omm
issi
on, M
OE
A
Up
per
Lim
it o
n t
he
Am
oun
t of
In
vest
men
t S
tip
ula
ted
by
In
vest
men
t C
omm
issi
on, M
OE
A
$1
78,5
32 (
US
$5,9
45)
$178
,532
(U
S$5
,945
) $3
49,9
06 (
Not
e 4)
Not
e 1:
C
hina
Air
line
s, L
td. t
he “
Com
pany
” in
vest
ed in
CA
L-A
sia
Inve
stm
ent,
whi
ch, i
n tu
rn, i
nves
ted
in a
com
pany
loca
ted
in m
ainl
and
Chi
na.
Not
e 2:
T
he in
war
d re
mit
tanc
e of
ear
ning
s in
201
9 am
ount
ed to
US
$2,8
01,7
49 a
nd U
S$87
5,33
0.
Not
e 3:
T
he a
mou
nt c
ompr
ised
US
$19,
828,
324,
RM
B4,
200,
000
and
NT
$36,
666,
667.
N
ote
4:
The
lim
it s
tate
d in
the
Inve
stm
ent C
omm
issi
on’s
reg
ulat
ion,
“In
vest
men
t or
Tec
hnic
al C
oope
rati
on in
Mai
nlan
d C
hina
Adj
ustm
ent R
ule,
” is
the
larg
er o
f th
e C
ompa
ny’s
net
ass
et v
alue
or
60%
of
the
cons
olid
ated
net
ass
et v
alue
. N
ote
5:
Tai
wan
Air
port
Ser
vice
s in
vest
ed in
Tai
wan
Air
port
Ser
vice
s (S
amoa
), w
hich
in r
etur
n, in
vest
ed 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
ass
ets
are
tran
slat
ed a
t yea
r-en
d ra
tes
and
thos
e of
gai
ns (
loss
es),
at t
he a
vera
ge o
f th
e ye
ar-e
nd r
ates
of
refe
r fo
r th
e re
port
ing
peri
od.
(C
oncl
uded
)
194
- 96
-
TA
BL
E 8
C
HIN
A A
IRL
INE
S, L
TD
. AN
D S
UB
SID
IAR
IES
B
US
INE
SS
RE
LA
TIO
NS
HIP
S A
ND
IM
PO
RT
AN
T T
RA
NS
AC
TIO
NS
BE
TW
EE
N C
HIN
A A
IRL
INE
S, L
TD
. AN
D I
TS
SU
BS
IDIA
RIE
S
FO
R T
HE
YE
AR
EN
DE
D D
EC
EM
BE
R 3
1, 2
019
(In
Th
ousa
nd
s of
New
Tai
wan
Dol
lars
)
Inte
rcom
pan
y T
ran
sact
ion
s
No.
C
omp
any
Nam
e R
elat
ed P
arty
N
atu
ral o
f R
elat
ion
ship
(N
ote
1)
Fin
anci
al S
tate
men
t A
ccou
nt
Am
oun
t T
ran
sact
ion
Cri
teri
a
% o
f T
otal
C
onso
lid
ated
T
otal
Rev
enu
e or
Ass
ets
0 C
hina
Air
line
s, L
td.
Man
dari
n A
irli
nes
a P
asse
nger
rev
enue
$
1,72
8,15
8 T
he s
ame
as o
rdin
ary
tran
sact
ions
1.
03
Man
dari
n A
irli
nes
a O
ther
ope
rati
ng r
even
ue
243,
304
The
sam
e as
ord
inar
y tr
ansa
ctio
ns
0.14
T
iger
air
Tai
wan
Co.
, Ltd
. a
Oth
er o
pera
ting
rev
enue
37
3,81
1 T
he s
ame
as o
rdin
ary
tran
sact
ions
0.
22
Man
dari
n A
irli
nes
a P
asse
nger
cos
ts
242,
114
The
sam
e as
ord
inar
y tr
ansa
ctio
ns
0.14
T
aoyu
an I
nter
nati
onal
Air
port
Ser
vice
s a
Air
port
ser
vice
cos
ts
1,22
0,42
2 T
he s
ame
as o
rdin
ary
tran
sact
ions
0.
72
Tai
wan
Air
port
Ser
vice
a
Air
port
ser
vice
cos
ts
445,
472
The
sam
e as
ord
inar
y tr
ansa
ctio
ns
0.26
D
ynas
ty A
erot
ech
Inte
rnat
iona
l Cor
p.
a A
irpo
rt s
ervi
ce c
osts
34
9,60
2 T
he s
ame
as o
rdin
ary
tran
sact
ions
0.
21
Tai
wan
Air
Car
go T
erm
inal
a
Oth
er o
pera
ting
cos
ts
524,
457
The
sam
e as
ord
inar
y tr
ansa
ctio
ns
0.31
C
AL
Par
k a
Oth
er o
pera
ting
cos
ts
231,
288
The
sam
e as
ord
inar
y tr
ansa
ctio
ns
0.14
C
al H
otel
Co.
, Ltd
. a
Oth
er o
pera
ting
cos
ts
135,
687
The
sam
e as
ord
inar
y tr
ansa
ctio
ns
0.08
K
aohs
iung
Cat
erin
g S
ervi
ces
a O
ther
ope
rati
ng c
osts
56
1,44
3 T
he s
ame
as o
rdin
ary
tran
sact
ions
0.
33
Man
dari
n A
irli
nes
a A
ccou
nts
rece
ivab
le -
rel
ated
par
ties
15
8,12
3 T
he s
ame
as o
rdin
ary
tran
sact
ions
0.
05
Man
dari
n A
irli
nes
a A
ccou
nts
paya
ble
- re
late
d pa
rtie
s
24
7,99
7 T
he s
ame
as o
rdin
ary
tran
sact
ions
0.
08
Tao
yuan
Int
erna
tion
al A
irpo
rt S
ervi
ces
a A
ccou
nts
paya
ble
- re
late
d pa
rtie
s
34
7,12
7 T
he s
ame
as o
rdin
ary
tran
sact
ions
0.
11
Man
dari
n A
irli
nes
a B
onds
pay
able
- n
on-c
urre
nt
250,
000
The
sam
e as
ord
inar
y tr
ansa
ctio
ns
0.08
1
Tai
wan
Air
Car
go T
erm
inal
C
hina
Air
line
s, L
td.
b S
ales
rev
enue
52
4,45
7 T
he s
ame
as o
rdin
ary
tran
sact
ions
0.
31
2 M
anda
rin
Air
line
s C
hina
Air
line
s, L
td.
b P
asse
nger
cos
ts
1,72
8,15
8 T
he s
ame
as o
rdin
ary
tran
sact
ions
1.
03
Tai
wan
Air
port
Ser
vice
c
Air
port
ser
vice
cos
ts
189,
853
The
sam
e as
ord
inar
y tr
ansa
ctio
ns
0.11
C
hina
Air
line
s, L
td.
b P
asse
nger
rev
enue
24
2,11
4 T
he s
ame
as o
rdin
ary
tran
sact
ions
0.
14
Chi
na A
irli
nes,
Ltd
. b
Ope
rati
ng e
xpen
ses
243,
304
The
sam
e as
ord
inar
y tr
ansa
ctio
ns
0.14
C
hina
Air
line
s, L
td.
b A
ccou
nts
rece
ivab
le -
rel
ated
par
ties
24
7,99
7 T
he s
ame
as o
rdin
ary
tran
sact
ions
0.
08
Chi
na A
irli
nes,
Ltd
. b
Fin
anci
al a
sset
s at
am
orti
zed
cost
s
25
0,00
0 T
he s
ame
as o
rdin
ary
tran
sact
ions
0.
08
Chi
na A
irli
nes,
Ltd
. b
Not
es p
ayab
le a
nd a
ccou
nts
paya
ble
- re
late
d pa
rtie
s
15
8,12
3 T
he s
ame
as o
rdin
ary
tran
sact
ions
0.
05
3 T
aoyu
an I
nter
nati
onal
Air
port
Ser
vice
s T
iger
air
Tai
wan
Co.
, Ltd
. c
Air
port
ser
vice
rev
enue
19
7,17
9 T
he s
ame
as o
rdin
ary
tran
sact
ions
0.
12
Chi
na A
irli
nes,
Ltd
. b
Air
port
ser
vice
rev
enue
1,
220,
422
The
sam
e as
ord
inar
y tr
ansa
ctio
ns
0.72
C
hina
Air
line
s, L
td.
b A
ccou
nts
rece
ivab
le -
rel
ated
par
ties
34
7,12
7 T
he s
ame
as o
rdin
ary
tran
sact
ions
0.
11
4 T
aiw
an A
irpo
rt S
ervi
ce
Chi
na A
irli
nes,
Ltd
. b
Ope
rati
ng r
even
ue
445,
472
The
sam
e as
ord
inar
y tr
ansa
ctio
ns
0.26
M
anda
rin
Air
line
s c
Ope
rati
ng r
even
ue
189,
853
The
sam
e as
ord
inar
y tr
ansa
ctio
ns
0.11
5
Dyn
asty
Aer
otec
h In
tern
atio
nal C
orp.
C
hina
Air
line
s, L
td.
b O
pera
ting
rev
enue
34
9,60
2 T
he s
ame
as o
rdin
ary
tran
sact
ions
0.
21
(Con
tinu
ed)
195
- 97
-
In
terc
omp
any
Tra
nsa
ctio
ns
No.
C
omp
any
Nam
e R
elat
ed P
arty
N
atu
ral o
f R
elat
ion
ship
(N
ote
1)
Fin
anci
al S
tate
men
t A
ccou
nt
Am
oun
t T
ran
sact
ion
Cri
teri
a
% o
f T
otal
C
onso
lid
ated
T
otal
Rev
enu
e or
Ass
ets
6 C
AL
Par
k C
hina
Air
line
s, L
td.
b O
pera
ting
rev
enue
$
231,
288
The
sam
e as
ord
inar
y tr
ansa
ctio
ns
0.14
C
al H
otel
Co.
, Ltd
. c
Ope
rati
ng r
even
ue
114,
281
The
sam
e as
ord
inar
y tr
ansa
ctio
ns
0.07
7
Cal
Hot
el C
o., L
td.
Chi
na A
irli
nes,
Ltd
. b
Ope
rati
ng r
even
ue
135,
687
The
sam
e as
ord
inar
y tr
ansa
ctio
ns
0.08
C
AL
Par
k c
Ope
rati
ng c
osts
11
4,28
1 T
he s
ame
as o
rdin
ary
tran
sact
ions
0.
07
8 T
iger
air
Tai
wan
Co.
, Ltd
. C
hina
Air
line
s, L
td.
b O
pera
ting
expe
nses
37
3,81
1 T
he s
ame
as o
rdin
ary
tran
sact
ions
0.
22
Tao
yuan
Int
erna
tion
al A
irpo
rt S
ervi
ces
c A
irpo
rt s
ervi
ce c
osts
19
7,17
9 T
he s
ame
as o
rdin
ary
tran
sact
ions
0.
12
9 K
aohs
iung
Cat
erin
g S
ervi
ces
Chi
na A
irli
nes,
Ltd
. b
Ope
rati
ng r
even
ue
561,
443
The
sam
e as
ord
inar
y tr
ansa
ctio
ns
0.18
N
ote
1:
The
thre
e di
rect
iona
l typ
es f
or tr
ansa
ctio
ns b
y bu
sine
ss r
elat
ions
hip
betw
een
Chi
na A
irli
nes,
Ltd
. and
its
subs
idia
ries
are
as
foll
ows:
a.
P
aren
t to
subs
idia
ries
. b.
S
ubsi
diar
ies
to p
aren
t. c.
S
ubsi
diar
ies
to s
ubsi
diar
ies.
N
ote
2:
Inte
rcom
pany
tran
sact
ions
wer
e w
ritt
en o
ff in
the
cons
olid
ated
fin
anci
al s
tate
men
ts.
Not
e 3:
T
he C
ompa
ny o
nly
disc
lose
s tr
ansa
ctio
n am
ount
s or
bal
ance
s of
mor
e th
an $
100,
000
thou
sand
.
(Con
clud
ed)
196
- 1
-
IND
EP
EN
DE
NT
AU
DIT
OR
S’
RE
PO
RT
The
Boa
rd o
f D
irec
tors
and
the
Sha
reho
lder
s C
hina
Air
line
s, L
td.
Op
inio
n
We
have
aud
ited
the
acc
ompa
nyin
g fi
nanc
ial
stat
emen
ts o
f C
hina
Air
line
s, L
td.
(the
“C
ompa
ny”)
, w
hich
co
mpr
ise
the
bala
nce
shee
ts a
s of
Dec
embe
r 31
, 20
19 a
nd 2
018,
and
the
sta
tem
ents
of
com
preh
ensi
ve i
ncom
e,
chan
ges
in e
quit
y an
d ca
sh f
low
s fo
r th
e ye
ars
then
end
ed, a
nd t
he n
otes
to
the
fina
ncia
l st
atem
ents
, inc
ludi
ng a
su
mm
ary
of s
igni
fica
nt a
ccou
ntin
g po
lici
es (
coll
ecti
vely
ref
erre
d to
as
the
“fin
anci
al s
tate
men
ts”)
.
In o
ur o
pini
on,
the
acco
mpa
nyin
g fi
nanc
ial
stat
emen
ts p
rese
nt f
airl
y, i
n al
l m
ater
ial
resp
ects
, th
e fi
nanc
ial
posi
tion
of
the
Com
pany
as
of D
ecem
ber
31,
2019
and
201
8, a
nd i
ts f
inan
cial
per
form
ance
and
its
cas
h fl
ows
for
the
year
s th
en e
nded
in
acco
rdan
ce w
ith
the
Reg
ulat
ions
Gov
erni
ng t
he P
repa
rati
on o
f F
inan
cial
Rep
orts
by
Sec
urit
ies
Issu
ers
and
othe
r re
gula
tion
s.
Bas
is f
or O
pin
ion
We
cond
ucte
d ou
r au
dits
in
acco
rdan
ce w
ith
the
Reg
ulat
ions
Gov
erni
ng A
uditi
ng a
nd A
ttes
tati
on o
f F
inan
cial
S
tate
men
ts b
y C
erti
fied
Pub
lic
Acc
ount
ants
and
aud
itin
g st
anda
rds
gene
rall
y ac
cept
ed in
the
Rep
ubli
c of
Chi
na.
Our
res
pons
ibil
itie
s un
der
thos
e st
anda
rds
are
furt
her
desc
ribe
d in
the
Aud
itor
s’ R
espo
nsib
ilit
ies
for
the
Aud
it o
f th
e F
inan
cial
Sta
tem
ents
sec
tion
of
our
repo
rt.
We
are
inde
pend
ent
of t
he C
ompa
ny i
n ac
cord
ance
wit
h T
he
Nor
m o
f P
rofe
ssio
nal E
thic
s fo
r C
erti
fied
Pub
lic A
ccou
ntan
t of
the
Rep
ubli
c of
Chi
na, a
nd w
e ha
ve f
ulfi
lled
our
ot
her
ethi
cal
resp
onsi
bili
ties
in a
ccor
danc
e w
ith
thes
e re
quir
emen
ts. W
e be
liev
e th
at t
he a
udit
evid
ence
we
have
ob
tain
ed is
suf
fici
ent a
nd a
ppro
pria
te to
pro
vide
a b
asis
for
our
opi
nion
.
Key
Au
dit
Mat
ters
Key
aud
it m
atte
rs a
re t
hose
mat
ters
tha
t, in
our
pro
fess
iona
l ju
dgm
ent,
wer
e of
mos
t si
gnif
ican
ce i
n ou
r au
dit o
f th
e fi
nanc
ial
stat
emen
ts f
or t
he y
ear
ende
d D
ecem
ber
31, 2
019.
The
se m
atte
rs w
ere
addr
esse
d in
the
con
text
of
our
audi
t of
the
fin
anci
al s
tate
men
ts a
s a
who
le,
and
in f
orm
ing
our
opin
ion
ther
eon,
and
we
do n
ot p
rovi
de a
se
para
te o
pini
on o
n th
ese
mat
ters
.
The
key
aud
it m
atte
rs in
the
audi
t of
the
fina
ncia
l sta
tem
ents
of
the
Com
pany
are
sta
ted
belo
w:
Pas
seng
er R
even
ue R
ecog
niti
on
In a
ccor
danc
e w
ith
IFR
S 1
5 “R
even
ue f
rom
Con
trac
ts w
ith
Cus
tom
ers”
, pa
ssen
ger
sale
s ar
e ac
coun
ted
for
as
cont
ract
lia
bili
ties
bef
ore
rele
vant
tra
nspo
rtat
ion
serv
ices
are
pro
vide
d. A
fter
pro
vidi
ng t
he r
elat
ed s
ervi
ces,
co
ntra
ct l
iabi
liti
es a
re r
ecla
ssif
ied
to p
asse
nger
rev
enue
. F
or t
he y
ear
ende
d D
ecem
ber
31,
2019
, pa
ssen
ger
reve
nue
was
NT
$96,
176,
865
thou
sand
. R
efer
to
Not
es 4
and
26
to t
he a
ccom
pany
ing
fina
ncia
l st
atem
ents
for
re
late
d de
tail
ed in
form
atio
n.
(App
endi
x 2)
- 2
-
Sin
ce
rele
vant
sa
les
can
only
be
re
cogn
ized
as
pa
ssen
ger
reve
nue
whe
n pa
ssen
gers
ac
tual
ly
boar
ded,
co
nfir
mat
ion
from
eac
h pa
ssen
ger
hold
ing
the
tick
et w
ho a
ctua
lly
boar
ded
invo
lves
a c
ompl
icat
ed p
roce
ss;
ther
efor
e, w
e id
enti
fied
pas
seng
er r
even
ue r
ecog
niti
on a
s a
key
audi
t mat
ter.
T
he m
ain
audi
t pro
cedu
res
that
we
perf
orm
ed in
clud
ed th
e fo
llow
ing:
1.
W
e un
ders
tood
and
tes
ted
the
inte
rnal
con
trol
rel
ated
to
the
proc
ess
of r
even
ue f
rom
pas
seng
er,
incl
udin
g m
anua
l and
aut
omat
ic c
ontr
ol.
2.
We
unde
rsto
od a
nd t
este
d th
e ef
fect
iven
ess
of t
he i
nfor
mat
ion
syst
em r
elat
ed t
o th
e pr
oces
s of
pas
seng
er
reve
nue.
3.
W
e sa
mpl
ed s
ever
al f
ligh
t ti
cket
s, w
hich
wer
e fl
own
and
reco
gniz
ed a
s re
venu
e, t
o ve
rify
whe
ther
the
bo
ardi
ng d
ate
mat
ched
the
date
rec
orde
d on
the
tick
ets,
fro
m a
dvan
ced
sale
s ti
cket
s.
Init
ial A
ppli
cati
on o
f IF
RS
16
(Lea
ses)
- A
ircr
aft
In a
ccor
danc
e w
ith
IFR
S 1
6 “L
ease
s”,
airc
raft
s le
ases
ini
tial
ly c
lass
ifie
d as
fin
ance
lea
ses
unde
r IA
S 1
7 sh
ould
be
rec
ogni
zed
as R
ight
-of-
use
asse
ts a
nd l
ease
lia
bili
ties
in
the
bala
nce
shee
t. A
s of
Dec
embe
r 31
, 20
19,
the
carr
ying
am
ount
of
righ
t-of
-use
ass
ets
and
leas
e li
abil
itie
s (i
nclu
ding
fin
anci
al li
abil
itie
s fo
r he
dgin
g) r
elat
ing
to
airc
raft
s le
ases
are
NT
$53,
870,
134
thou
sand
and
NT
$52,
153,
682
thou
sand
, re
spec
tive
ly.
Ref
er t
o N
otes
4 a
nd
20 to
the
acco
mpa
nyin
g fi
nanc
ial s
tate
men
ts f
or r
elat
ed d
etai
led
info
rmat
ion.
C
hina
Air
line
s le
ased
ten
777-
300E
R p
lane
s, f
ifte
en A
330-
300
plan
es a
nd f
ifte
en 7
37-8
00 p
lane
s, f
or o
pera
tion
. B
ecau
se t
he l
ease
ter
m o
f ai
rcra
fts
is h
ighe
r an
d th
e am
ount
of
rent
al i
s hi
gher
, th
e pe
rcen
tage
of
righ
t-of
-use
as
sets
and
lea
se l
iabi
liti
es o
f th
e ai
rcra
fts
in t
he b
alan
ce s
heet
is
high
. T
he p
aram
eter
s an
d le
ase
term
s ar
e de
term
ined
by
the
man
agem
ent,
and
the
calc
ulat
ion
of t
he l
ease
lia
bili
ties
wil
l af
fect
the
car
ryin
g am
ount
and
de
prec
iati
on e
xpen
se o
f th
e ri
ght-
of-u
se a
sset
s an
d le
ase
liab
ilit
ies
(inc
ludi
ng f
inan
cial
lia
bili
ties
for
hed
ging
) re
lati
ng to
air
craf
ts. T
here
fore
, we
iden
tifi
ed in
itia
l app
lica
tion
of
IFR
S 1
6-A
ircr
afts
as
a ke
y au
dit m
atte
r.
The
mai
n au
dit p
roce
dure
s th
at w
e pe
rfor
med
incl
uded
the
foll
owin
g:
1.
We
unde
rsto
od a
nd t
este
d th
e ef
fect
iven
ess
of t
he i
nfor
mat
ion
syst
em r
elat
ed t
o th
e ca
lcul
atio
n of
lea
se
liab
ilit
ies.
2.
W
e se
lect
ed o
ne o
f th
e re
ntal
pay
men
ts s
ched
ule
of t
he a
ircr
afts
fro
m t
he l
ease
cal
cula
tion
sys
tem
, to
re
calc
ulat
e am
ount
of
the
leas
e li
abil
itie
s ba
lanc
e an
d fi
nanc
ial
cost
and
am
orti
zati
on o
f ri
ght-
of-u
se,
and
rela
ted
carr
ying
am
ount
. A
lso,
we
sele
cted
sev
eral
air
craf
t le
ase
cont
ract
s fr
om t
he c
arry
ing
amou
nts
of
airc
raft
lea
se l
iabi
lity
, and
che
cked
if
ther
e w
as a
ny d
iffe
renc
e be
twee
n co
ntra
cted
ren
tal
and
rent
als
in t
he
airc
raft
ren
tal
paym
ent
sche
dule
. A
nd w
e ch
ecke
d if
the
lea
se t
erm
use
d th
e re
ntal
pay
men
t sc
hedu
le w
as
cons
iste
nt w
ith
the
cont
ract
. O
ther
Mat
ter
- A
ud
it b
y O
ther
In
dep
end
ent
Au
dit
ors
Som
e in
vest
men
ts a
ccou
nted
for
usi
ng th
e eq
uity
met
hod
and
disc
losu
re in
form
atio
n in
Not
e 13
wer
e au
dite
d by
ot
her
inde
pend
ent
audi
tors
, an
d ou
r au
dit
opin
ion
is b
ased
sol
ely
on t
he a
udit
rep
ort
of o
ther
ind
epen
dent
au
dito
rs.
As
of D
ecem
ber
31, 2
019,
the
afo
rem
enti
oned
inv
estm
ent
acco
unte
d fo
r us
ing
the
equi
ty m
etho
d w
as
NT
$1,9
46,3
28
thou
sand
, re
pres
enti
ng
0.72
%
of
tota
l as
sets
. F
or
the
year
en
ded
Dec
embe
r 31
, 20
19,
com
preh
ensi
ve i
ncom
e (i
nclu
ding
sha
re o
f pr
ofit
or
loss
of
subs
idia
ries
, ass
ocia
tes
and
join
t ve
ntur
es a
nd s
hare
of
oth
er c
ompr
ehen
sive
inc
ome
(los
s) o
f su
bsid
iari
es,
asso
ciat
es a
nd j
oint
ven
ture
s ac
coun
ted
for
usin
g th
e eq
uity
met
hod)
was
NT
$691
,115
thou
sand
.
197
- 3
-
Res
pon
sib
ilit
ies
of M
anag
emen
t an
d T
hos
e C
har
ged
wit
h G
over
nan
ce f
or t
he
Fin
anci
al S
tate
men
ts
Man
agem
ent
is r
espo
nsib
le f
or t
he p
repa
rati
on a
nd f
air
pres
enta
tion
of
the
fina
ncia
l st
atem
ents
in
acco
rdan
ce
wit
h th
e R
egul
atio
ns G
over
ning
the
Pre
para
tion
of
Fin
anci
al R
epor
ts b
y S
ecur
itie
s Is
suer
s, a
nd f
or s
uch
inte
rnal
co
ntro
l as
man
agem
ent
dete
rmin
es i
s ne
cess
ary
to e
nabl
e th
e pr
epar
atio
n of
fin
anci
al s
tate
men
ts t
hat
are
free
fr
om m
ater
ial m
isst
atem
ent,
whe
ther
due
to f
raud
or
erro
r.
In p
repa
ring
the
fin
anci
al s
tate
men
ts,
man
agem
ent
is r
espo
nsib
le f
or a
sses
sing
the
Com
pany
’s a
bilit
y to
co
ntin
ue a
s a
goin
g co
ncer
n, d
iscl
osin
g, a
s ap
plic
able
, m
atte
rs r
elat
ed t
o go
ing
conc
ern
and
usin
g th
e go
ing
conc
ern
basi
s of
acc
ount
ing
unle
ss m
anag
emen
t ei
ther
int
ends
to
liqu
idat
e th
e C
ompa
ny o
r to
cea
se o
pera
tion
s,
or h
as n
o re
alis
tic
alte
rnat
ive
but t
o do
so.
T
hose
cha
rged
wit
h go
vern
ance
, in
clud
ing
the
audi
t co
mm
itte
e an
d su
perv
isor
s, a
re r
espo
nsib
le f
or o
vers
eein
g th
e C
ompa
ny’s
fin
anci
al r
epor
ting
pro
cess
. A
ud
itor
s’ R
esp
onsi
bil
itie
s fo
r th
e A
ud
it o
f th
e F
inan
cial
Sta
tem
ents
O
ur o
bjec
tive
s ar
e to
obt
ain
reas
onab
le a
ssur
ance
abo
ut w
heth
er t
he f
inan
cial
sta
tem
ents
as
a w
hole
are
fre
e fr
om m
ater
ial
mis
stat
emen
t, w
heth
er d
ue t
o fr
aud
or e
rror
, an
d to
iss
ue a
n au
dito
rs’
repo
rt t
hat
incl
udes
our
op
inio
n. R
easo
nabl
e as
sura
nce
is a
hig
h le
vel
of a
ssur
ance
, bu
t is
not
a g
uara
ntee
tha
t an
aud
it c
ondu
cted
in
acco
rdan
ce w
ith
the
audi
ting
sta
ndar
ds g
ener
ally
acc
epte
d in
the
Rep
ubli
c of
Chi
na w
ill a
lway
s de
tect
a m
ater
ial
mis
stat
emen
t w
hen
it e
xist
s. M
isst
atem
ents
can
ari
se f
rom
fra
ud o
r er
ror
and
are
cons
ider
ed m
ater
ial
if,
indi
vidu
ally
or
in th
e ag
greg
ate,
they
cou
ld r
easo
nabl
y be
exp
ecte
d to
infl
uenc
e th
e ec
onom
ic d
ecis
ions
of
user
s ta
ken
on th
e ba
sis
of th
ese
fina
ncia
l sta
tem
ents
. A
s pa
rt o
f an
aud
it i
n ac
cord
ance
wit
h th
e au
diti
ng s
tand
ards
gen
eral
ly a
ccep
ted
in t
he R
epub
lic
of C
hina
, w
e ex
erci
se p
rofe
ssio
nal j
udgm
ent a
nd m
aint
ain
prof
essi
onal
ske
ptic
ism
thro
ugho
ut th
e au
dit.
We
also
: 1.
Id
enti
fy a
nd a
sses
s th
e ri
sks
of m
ater
ial
mis
stat
emen
t of
the
fin
anci
al s
tate
men
ts,
whe
ther
due
to
frau
d or
er
ror,
des
ign
and
perf
orm
aud
it p
roce
dure
s re
spon
sive
to
thos
e ri
sks,
and
obt
ain
audi
t ev
iden
ce t
hat
is
suff
icie
nt
and
appr
opri
ate
to
prov
ide
a ba
sis
for
our
opin
ion.
T
he
risk
of
no
t de
tect
ing
a m
ater
ial
mis
stat
emen
t re
sult
ing
from
fra
ud i
s hi
gher
tha
n fo
r on
e re
sult
ing
from
err
or,
as f
raud
may
inv
olve
co
llus
ion,
for
gery
, int
enti
onal
om
issi
ons,
mis
repr
esen
tati
ons,
or
the
over
ride
of
inte
rnal
con
trol
. 2.
O
btai
n an
und
erst
andi
ng o
f in
tern
al c
ontr
ol r
elev
ant t
o th
e au
dit i
n or
der
to d
esig
n au
dit p
roce
dure
s th
at a
re
appr
opri
ate
in t
he c
ircu
mst
ance
s, b
ut n
ot f
or t
he p
urpo
se o
f ex
pres
sing
an
opin
ion
on t
he e
ffec
tive
ness
of
the
Com
pany
’s in
tern
al c
ontr
ol.
3.
Eva
luat
e th
e ap
prop
riat
enes
s of
acc
ount
ing
poli
cies
use
d an
d th
e re
ason
able
ness
of
acco
unti
ng e
stim
ates
an
d re
late
d di
sclo
sure
s 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
use
of t
he g
oing
con
cern
bas
is o
f ac
coun
ting
and
, bas
ed
on t
he a
udit
evi
denc
e ob
tain
ed,
whe
ther
a m
ater
ial
unce
rtai
nty
exis
ts r
elat
ed t
o ev
ents
or
cond
itio
ns t
hat
may
cas
t si
gnif
ican
t do
ubt
on t
he C
ompa
ny’s
abi
lity
to c
ontin
ue a
s a
goin
g co
ncer
n. I
f w
e co
nclu
de t
hat
a m
ater
ial
unce
rtai
nty
exis
ts,
we
are
requ
ired
to
draw
att
enti
on i
n ou
r au
dito
rs’
repo
rt t
o th
e re
late
d di
sclo
sure
s in
the
fin
anci
al s
tate
men
ts o
r, i
f su
ch d
iscl
osur
es a
re i
nade
quat
e, t
o m
odif
y ou
r op
inio
n. O
ur
conc
lusi
ons
are
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 co
ndit
ions
may
cau
se th
e C
ompa
ny to
cea
se to
con
tinu
e as
a g
oing
con
cern
. 5.
E
valu
ate
the
over
all p
rese
ntat
ion,
str
uctu
re a
nd c
onte
nt o
f th
e fi
nanc
ial s
tate
men
ts, i
nclu
ding
the
disc
losu
res,
an
d w
heth
er t
he f
inan
cial
sta
tem
ents
rep
rese
nt t
he u
nder
lyin
g tr
ansa
ctio
ns a
nd e
vent
s in
a m
anne
r th
at
achi
eves
fai
r pr
esen
tati
on.
- 4
-
6.
Obt
ain
suff
icie
nt a
ppro
pria
te a
udit
evi
denc
e re
gard
ing
the
fina
ncia
l in
form
atio
n of
the
ent
itie
s or
bus
ines
s ac
tivi
ties
wit
hin
the
Com
pany
to
expr
ess
an o
pini
on o
n th
e fi
nanc
ial
stat
emen
ts. W
e ar
e re
spon
sibl
e fo
r th
e di
rect
ion,
sup
ervi
sion
and
per
form
ance
of
the
audi
t. W
e re
mai
n so
lely
res
pons
ible
for
our
aud
it o
pini
on.
We
com
mun
icat
e w
ith
thos
e ch
arge
d w
ith
gove
rnan
ce r
egar
ding
, am
ong
othe
r m
atte
rs,
the
plan
ned
scop
e an
d ti
min
g of
the
aud
it an
d si
gnif
ican
t au
dit
find
ings
, in
clud
ing
any
sign
ific
ant
defi
cien
cies
in
inte
rnal
con
trol
tha
t w
e id
enti
fy d
urin
g ou
r au
dit.
We
also
pro
vide
tho
se c
harg
ed w
ith
gove
rnan
ce w
ith
a st
atem
ent
that
we
have
com
plie
d w
ith
rele
vant
eth
ical
re
quir
emen
ts r
egar
ding
ind
epen
denc
e, a
nd t
o co
mm
unic
ate
wit
h th
em a
ll r
elat
ions
hips
and
oth
er m
atte
rs t
hat
may
rea
sona
bly
be th
ough
t to
bear
on
our
inde
pend
ence
, and
whe
re a
ppli
cabl
e, r
elat
ed s
afeg
uard
s.
Fro
m t
he m
atte
rs c
omm
unic
ated
wit
h th
ose
char
ged
wit
h go
vern
ance
, w
e de
term
ine
thos
e m
atte
rs t
hat
wer
e of
m
ost
sign
ific
ance
in
the
audi
t of
the
fin
anci
al s
tate
men
ts f
or t
he y
ear
ende
d D
ecem
ber
31,
2019
and
are
th
eref
ore
the
key
audi
t m
atte
rs.
We
desc
ribe
the
se m
atte
rs i
n ou
r au
dito
rs’
repo
rt u
nles
s la
w o
r re
gula
tion
pr
eclu
des
publ
ic d
iscl
osur
e ab
out
the
mat
ter
or w
hen,
in
extr
emel
y ra
re c
ircu
mst
ance
s, w
e de
term
ine
that
a
mat
ter
shou
ld n
ot b
e co
mm
unic
ated
in
our
repo
rt b
ecau
se t
he a
dver
se c
onse
quen
ces
of d
oing
so
wou
ld
reas
onab
ly b
e ex
pect
ed to
out
wei
gh th
e pu
blic
inte
rest
ben
efit
s of
suc
h co
mm
unic
atio
n.
The
eng
agem
ent
part
ners
on
the
audi
t re
sult
ing
in t
his
inde
pend
ent
audi
tors
’ re
port
are
Jui
-Cha
n H
uang
and
S
hiuh
-Ran
, Che
ng.
Del
oitt
e &
Tou
che
Tai
pei,
Tai
wan
R
epub
lic
of C
hina
M
arch
18,
202
0
Not
ice
to R
eade
rs
The
ac
com
pany
ing
finan
cial
st
atem
ents
ar
e in
tend
ed
only
to
pr
esen
t th
e fin
anci
al
posi
tion
, fi
nanc
ial
perf
orm
ance
and
cas
h fl
ows
in a
ccor
danc
e w
ith
acco
unti
ng p
rinc
iple
s an
d pr
acti
ces
gene
rall
y ac
cept
ed i
n th
e R
epub
lic
of C
hina
and
not
tho
se o
f an
y ot
her
juri
sdic
tion
s. T
he s
tand
ards
, pr
oced
ures
and
pra
ctic
es t
o au
dit
such
fina
ncia
l sta
tem
ents
are
thos
e ge
nera
lly
appl
ied
in th
e R
epub
lic o
f Chi
na.
F
or t
he c
onve
nien
ce o
f re
ader
s, t
he i
ndep
ende
nt a
udit
ors’
rep
ort
and
the
acco
mpa
nyin
g fin
anci
al s
tate
men
ts
have
bee
n tr
ansl
ated
into
Eng
lish
from
the
orig
inal
Chi
nese
ver
sion
pre
pare
d an
d us
ed in
the
Rep
ubli
c of
Chi
na.
If t
here
is
any
conf
lict
bet
wee
n th
e E
ngli
sh v
ersi
on a
nd t
he o
rigi
nal
Chi
nese
ver
sion
or
any
diff
eren
ce i
n th
e in
terp
reta
tion
of
the
two
vers
ions
, th
e C
hine
se-l
angu
age
inde
pend
ent
audi
tors
’ re
port
and
fin
anci
al s
tate
men
ts
shal
l pre
vail
.
198
- 5
-
CH
INA
AIR
LIN
ES
, LT
D.
BA
LA
NC
E S
HE
ET
S
DE
CE
MB
ER
31,
201
9 A
ND
201
8 (I
n T
hou
san
ds
of N
ew T
aiw
an D
olla
rs)
2019
2018
A
SS
ET
S
A
mou
nt
%
Am
ount
%
C
UR
RE
NT
AS
SE
TS
C
ash
and
cash
equ
ival
ents
(N
otes
4, 6
and
30)
$
20
,626
,014
8
$
18
,688
,022
9 F
inan
cial
ass
ets
at f
air
valu
e th
roug
h pr
ofit
or lo
ss -
cur
rent
(N
otes
4, 7
and
30)
434
-
-
-
Fin
anci
al a
sset
s at
am
ortiz
ed c
ost (
Not
es 9
and
30)
1,46
0,45
0
-
2,31
0,00
0
1 F
inan
cial
ass
ets
for
hedg
ing
- cu
rren
t (N
otes
4 a
nd 3
0)
9,
588
-
27
,354
- N
otes
and
acc
ount
s re
ceiv
able
s, n
et (
Not
es 4
, 10
and
30)
7,
694,
431
3
9,
280,
662
4
Acc
ount
s re
ceiv
able
s -
rela
ted
part
ies
(Not
e 31
)
232,
386
-
29
8,31
1
- O
ther
rec
eiva
bles
560,
819
-
65
6,79
0
- C
urre
nt ta
x as
sets
(N
otes
4 a
nd 2
7)
52
,776
-
15,8
10
-
Inve
ntor
ies,
net
(N
otes
4 a
nd 1
1)
8,
246,
515
3
8,
451,
892
4
Non
-cur
rent
ass
ets
held
for
sal
e (N
otes
4 a
nd 1
2)
-
-
46
,154
- O
ther
cur
rent
ass
ets
(Not
e 17
)
2,10
6,19
9
1
3,15
7,86
4
2
Tot
al c
urre
nt a
sset
s
40,9
89,6
12
15
42,9
32,8
59
20
NO
N-C
UR
RE
NT
AS
SET
S
Fin
anci
al a
sset
s at
fai
r va
lue
thro
ugh
othe
r co
mpr
ehen
sive
inco
me
- no
n-cu
rren
t (N
otes
4, 8
and
30)
107,
856
-
83
,366
- In
vest
men
ts a
ccou
nted
for
usi
ng th
e eq
uity
met
hod
(Not
es 4
and
13)
13,4
82,8
77
5
13
,158
,355
6 P
rope
rty,
pla
nt a
nd e
quip
men
t (N
otes
4, 1
4 an
d 32
)
131,
029,
886
49
149,
029,
054
69
R
ight
-of-
use
asse
ts (
Not
es 4
, 20
and
32)
64
,262
,830
24
-
-
Inve
stm
ent p
rope
rtie
s (N
otes
4 a
nd 1
5)
2,
047,
448
1
2,
047,
448
1
Oth
er in
tang
ible
ass
ets
(Not
es 4
and
16)
971,
298
-
97
9,70
8
1 D
efer
red
tax
asse
ts (
Not
es 4
and
27)
4,75
7,14
2
2
4,56
1,34
6
2 O
ther
non
-cur
rent
ass
ets
(Not
es 1
7, 2
0 an
d 30
)
11,2
27,5
56
4
2,
122,
085
1
T
otal
non
-cur
rent
ass
ets
22
7,88
6,89
3
85
17
1,98
1,36
2
80
T
OT
AL
$
268
,876
,505
1
00
$ 2
14,9
14,2
21
100
L
IAB
ILIT
IES
AN
D E
QU
ITY
C
UR
RE
NT
LIA
BIL
ITIE
S
Fin
anci
al li
abili
ties
at f
air
valu
e th
roug
h pr
ofit
or lo
ss -
cur
rent
(N
otes
4, 7
and
30)
$
11
,749
-
$
221
- F
inan
cial
liab
ilitie
s fo
r he
dgin
g -
curr
ent (
Not
es 4
, 20
and
30)
8,
610,
015
3
239
- N
otes
and
acc
ount
s pa
yabl
e (N
ote
30)
1,
222,
410
-
1,19
8,64
7
1
Con
trac
t lia
bilit
ies
curr
ent (
Not
es 4
and
22)
18,5
84,2
87
7
17,0
65,4
81
8 A
ccou
nts
paya
ble
- re
late
d pa
rtie
s (N
ote
31)
1,
469,
434
1
1,58
3,68
4
1
Oth
er p
ayab
les
(Not
es 2
1 an
d 26
)
10,8
92,2
03
4
11,7
39,3
01
5 P
rovi
sion
s -
curr
ent (
Not
es 4
and
23)
-
-
26
8,90
1
-
Lea
se li
abil
itie
s -
curr
ent (
Not
es 4
and
20)
695,
215
-
-
-
Bon
ds p
ayab
le a
nd p
ut o
ptio
n of
con
vert
ible
bon
ds -
cur
rent
por
tion
(Not
es 4
, 19,
30
and
31)
10
,000
,000
4
4,
445,
900
2 L
oans
and
deb
ts -
cur
rent
por
tion
(Not
es 1
8, 3
0 an
d 32
)
13,7
08,3
20
5
15,3
35,0
05
7 C
apita
l lea
se o
blig
atio
ns -
cur
rent
por
tion
(Not
es 4
, 20,
30,
31
and
33)
-
-
596,
000
- O
ther
cur
rent
liab
ilitie
s
2,80
6,54
0
1
2,
946,
455
1
Tot
al c
urre
nt li
abili
ties
68
,000
,173
25
55,1
79,8
34
25
N
ON
-CU
RR
EN
T L
IAB
ILIT
IES
F
inan
cial
liab
ilitie
s fo
r he
dgin
g -
non-
curr
ent (
Not
es 4
, 20
and
30)
42
,420
,205
16
-
-
Bon
ds p
ayab
le (
Not
es 4
, 19,
30
and
31)
22
,352
,625
8
28
,773
,710
13
L
oans
and
deb
ts (
Not
es 1
8, 3
0 an
d 32
)
48,6
18,1
68
18
56
,827
,738
27
L
ease
liab
ilitie
s -
non-
curr
ent (
Not
es 4
and
20)
10,9
09,2
62
4
-
-
Con
trac
t lia
bilit
ies
(Not
es 4
and
22)
2,23
6,31
1
1
1,
903,
665
1 P
rovi
sion
s (N
otes
4 a
nd 2
3)
9,
431,
736
4
7,73
0,11
4
4
Def
erre
d ta
x lia
bilit
ies
(Not
es 4
and
27)
399,
253
-
21,1
95
- A
ccru
ed p
ensi
on c
osts
(N
otes
5 a
nd 2
4)
7,
588,
745
3
6,93
2,78
3
3
Oth
er n
on-c
urre
nt li
abili
ties
36
6,25
5
-
46
3,61
0
-
T
otal
non
-cur
rent
liab
ilitie
s
144,
322,
560
54
10
2,65
2,81
5
48
Tot
al li
abili
ties
21
2,32
2,73
3
79
157,
832,
649
73
E
QU
ITY
(N
otes
19
and
25)
Sha
re c
apita
l
54,2
09,8
46
20
54
,209
,846
25
C
apita
l sur
plus
2,48
8,90
7
1
1,
241,
214
1 R
etai
ned
earn
ings
L
egal
res
erve
466,
416
-
351,
923
- S
peci
al r
eser
ve
12
,967
-
11
8,81
0
-
Una
ppro
pria
ted
reta
ined
ear
ning
s (a
ccum
ulat
ed d
efic
its)
(1
,777
,225
)
-
1,
144,
928
1 T
otal
ret
aine
d ea
rnin
gs
(1
,297
,842
)
-
1,
615,
661
1 O
ther
equ
ity
1,
196,
233
-
58,2
23
- T
reas
ury
shar
es
(4
3,37
2)
-
(43,
372)
-
T
otal
equ
ity
56
,553
,772
21
57,0
81,5
72
27
T
OT
AL
$
268
,876
,505
10
0
$
214
,914
,221
10
0 T
he a
ccom
pany
ing
note
s ar
e an
inte
gral
par
t of
the
fina
ncia
l sta
tem
ents
.
- 6
-
CH
INA
AIR
LIN
ES
, LT
D.
ST
AT
EM
EN
TS
OF
CO
MP
RE
HE
NS
IVE
IN
CO
ME
F
OR
TH
E Y
EA
RS
EN
DE
D D
EC
EM
BE
R 3
1, 2
019
AN
D 2
018
(In
Th
ousa
nd
s of
New
Tai
wan
Dol
lars
, Exc
ept
Ear
nin
gs P
er S
har
e)
2019
2018
A
mou
nt
%
Am
oun
t
%
R
EV
EN
UE
(N
otes
4, 2
6 an
d 32
)
$ 1
46,3
72,4
01
1
00
$
150
,264
,792
100
CO
ST
S (
Not
es 4
, 11,
26
and
32)
135,
008,
166
92
137,
614,
956
92
G
RO
SS
PR
OF
IT
11,3
64,2
35
8
12
,649
,836
8
O
PE
RA
TIN
G E
XP
EN
SE
S (
Not
es 4
, 26
and
32)
11,2
84,0
00
8
10
,802
,269
7
O
PE
RA
TIN
G P
RO
FIT
80
,235
-
1,84
7,56
7
1
N
ON
-OP
ER
AT
ING
IN
CO
ME
AN
D E
XP
EN
SE
S
Oth
er in
com
e (N
ote
26)
524,
233
-
42
0,41
6
-
Oth
er g
ains
and
loss
es (
Not
es 1
2, 1
3, 1
4 an
d 26
)
(5
69,5
82)
-
(5
59,2
30)
- F
inan
ce c
osts
(N
otes
26
and
32)
(3,0
34,1
72)
(2)
(1,3
12,0
44)
(1)
Sha
re o
f th
e pr
ofit
of
asso
ciat
es a
nd jo
int v
entu
res
(Not
e 13
)
1,
811,
960
1
1,
918,
922
1
Tot
al n
on-o
pera
ting
inco
me
and
expe
nses
(1
,267
,561
)
(1
)
46
8,06
4
-
P
RO
FIT
(L
OS
S)
BE
FO
RE
IN
CO
ME
TA
X
(1,1
87,3
26)
(1)
2,31
5,63
1
1
IN
CO
ME
TA
X E
XP
EN
SE
(N
otes
4 a
nd 2
7)
12,4
72
-
52
5,27
0
-
N
ET
IN
CO
ME
(L
OS
S)
(1,1
99,7
98)
(1)
1,79
0,36
1
1
O
TH
ER
CO
MP
RE
HE
NS
IVE
IN
CO
ME
(L
OS
S)
Item
s th
at w
ill n
ot b
e re
clas
sifi
ed s
ubse
quen
tly
to
prof
it o
r lo
ss:
Los
s on
hed
ging
inst
rum
ents
sub
ject
to b
asis
ad
just
men
ts (
Not
es 4
, 25
and
31)
(17,
705)
-
23
,884
-
Unr
eali
zed
(los
s) g
ain
on in
vest
men
ts in
equ
ity
inst
rum
ents
des
igna
ted
as a
t fai
r va
lue
thro
ugh
othe
r co
mpr
ehen
sive
inco
me
(Not
es 4
and
25)
24
,490
-
(23,
830)
- R
emea
sure
men
t of
defi
ned
bene
fit p
lans
(N
otes
4
and
24)
(562
,259
)
-
(674
,905
)
-
Sha
re o
f th
e ot
her
com
preh
ensi
ve lo
ss o
f as
soci
ates
and
join
t ven
ture
s ac
coun
ted
for
usin
g th
e eq
uity
met
hod
(Not
es 4
and
24)
(7
2,71
8)
-
(105
,569
)
-
Inco
me
tax
rela
ting
to it
ems
that
wil
l not
be
recl
assi
fied
sub
sequ
ently
to p
rofi
t or
loss
(N
ote
27)
101,
259
-
12
7,12
0
-
(Con
tinu
ed)
199
- 7
-
CH
INA
AIR
LIN
ES
, LT
D.
ST
AT
EM
EN
TS
OF
CO
MP
RE
HE
NS
IVE
IN
CO
ME
F
OR
TH
E Y
EA
RS
EN
DE
D D
EC
EM
BE
R 3
1, 2
019
AN
D 2
018
(In
Th
ousa
nd
s of
New
Tai
wan
Dol
lars
, Exc
ept
Ear
nin
gs P
er S
har
e)
2019
2018
A
mou
nt
%
Am
oun
t
%
It
ems
that
may
be
recl
assi
fied
sub
sequ
entl
y to
pro
fit
or lo
ss:
Exc
hang
e di
ffer
ence
s on
tran
slat
ing
fore
ign
oper
atio
ns (
Not
es 4
and
25)
$
(59,
174)
-
$
34,1
40
- S
hare
of
the
othe
r co
mpr
ehen
sive
loss
of
asso
ciat
es a
nd jo
int v
entu
res
acco
unte
d fo
r us
ing
the
equi
ty m
etho
d (N
otes
4 a
nd 2
5)
(13,
259)
-
29
,573
-
Gai
n on
hed
ging
inst
rum
ents
not
sub
ject
to b
asis
ad
just
men
t (N
otes
4, 2
5 an
d 31
)
1,
425,
306
1
75
,454
-
Inco
me
tax
rela
ting
to it
ems
that
may
be
recl
assi
fied
sub
sequ
ently
to p
rofi
t or
loss
(N
ote
27)
(273
,227
)
-
(18,
193)
-
Oth
er c
ompr
ehen
sive
inco
me
(los
s) f
or th
e ye
ar,
net o
f in
com
e ta
x
55
2,71
3
1
(532
,326
)
-
T
OT
AL
CO
MP
RE
HE
NS
IVE
IN
CO
ME
(L
OS
S)
FO
R
TH
E Y
EA
R
$
(6
47,0
85)
-
$
1,25
8,03
5
1
E
AR
NIN
GS
PE
R S
HA
RE
(N
EW
TA
IWA
N
DO
LL
AR
S; N
ote
27)
Bas
ic
$
(0
.22)
$
0.
33
D
ilut
ed
$
(0
.22)
$
0.
32
T
he a
ccom
pany
ing
note
s ar
e an
inte
gral
par
t of
the
fina
ncia
l sta
tem
ents
. (C
oncl
uded
)
200
- 8
-
CH
INA
AIR
LIN
ES
, LT
D.
ST
AT
EM
EN
TS
OF
CH
AN
GE
S I
N E
QU
ITY
F
OR
TH
E Y
EA
RS
EN
DE
D D
EC
EM
BE
R 3
1, 2
019
AN
D 2
018
(In
Th
ousa
nd
s of
New
Tai
wan
Dol
lars
)
Oth
er E
qu
ity
Un
real
ized
Ret
ain
ed E
arn
ings
Exc
han
ge
U
nre
aliz
ed G
ain
Gai
n o
n F
inan
cial
A
sset
s at
Fai
r
Sh
are
Cap
ital
Cap
ital
Su
rplu
s
Leg
al R
eser
ve
S
pec
ial R
eser
ve
Un
app
rop
riat
ed
Ear
nin
gs
(Acc
um
ula
ted
D
efic
its)
Dif
fere
nce
s on
T
ran
slat
ing
For
eign
O
per
atio
ns
(Los
s) o
n
Ava
ilab
le-f
or-
sale
Fin
anci
al
Ass
ets
Val
ue
Th
rou
gh
Oth
er
Com
pre
hen
sive
In
com
e
Cas
h F
low
H
edge
s
Gai
n (
Los
s) o
n
Hed
gin
g In
stru
men
ts
Tre
asu
ry S
har
es
Hel
d b
y S
ub
sid
iari
es
T
otal
Eq
uit
y
BA
LA
NC
E A
T J
AN
UA
RY
1, 2
018
$
54,7
09,8
46
$
799,
999
$
206,
092
$
-
$
1,
458,
313
$
(34,
986 )
$
1,
774
$
-
$
(7
4,42
9 )
$
-
$
(4
3,37
2 )
$
57,0
23,2
37
E
ffec
t of
retr
ospe
ctiv
e ap
plic
atio
n an
d re
tros
pect
ive
rest
atem
ent
-
-
-
-
60
-
(1,7
74 )
42
,351
74,4
29
(7
4,42
9 )
-
40
,637
BA
LA
NC
E A
T J
AN
UA
RY
1, 2
018
AS
RE
ST
AT
ED
54,7
09,8
46
79
9,99
9
206,
092
-
1,
458,
373
(3
4,98
6 )
-
42
,351
-
(74,
429 )
(43,
372 )
57,0
63,8
74
Is
suan
ce o
f co
nver
tibl
e bo
nds
-
40
9,97
8
-
-
-
-
-
-
-
-
-
409,
978
B
asis
adj
ustm
ents
to g
ain
on h
edgi
ng in
stru
men
ts
-
-
-
-
-
-
-
-
-
12
,118
-
12,1
18
A
ppro
pria
tion
of
2017
ear
ning
s
L
egal
res
erve
-
-
145,
831
-
(1
45,8
31 )
-
-
-
-
-
-
-
Spe
cial
res
erve
-
-
-
118,
810
(1
18,8
10 )
-
-
-
-
-
-
-
Cas
h di
vide
nds
- $0
.218
1820
086
per
shar
e
-
-
-
-
(1,1
93,6
70 )
-
-
-
-
-
-
(1
,193
,670
)
Cha
nges
in c
apit
al s
urpl
us f
rom
div
iden
ds d
istr
ibut
ed to
sub
sidi
arie
s
-
630
-
-
-
-
-
-
-
-
-
63
0
Net
inco
me
for
the
year
end
ed D
ecem
ber
31, 2
018
-
-
-
-
1,
790,
361
-
-
-
-
-
-
1,
790,
361
O
ther
com
preh
ensi
ve in
com
e (l
oss)
for
the
year
end
ed D
ecem
ber
31, 2
018,
ne
t of
inco
me
tax
-
-
-
-
(6
45,4
95 )
25
,322
-
268
-
87
,579
-
(532
,326
)
Tot
al c
ompr
ehen
sive
inco
me
(los
s) f
or th
e ye
ar e
nded
Dec
embe
r 31
, 201
8
-
-
-
-
1,14
4,86
6
25,3
22
-
26
8
-
87,5
79
-
1,
258,
035
T
reas
ury
shar
es a
cqui
red
-
-
-
-
-
-
-
-
-
-
(4
69,3
93 )
(4
69,3
93 )
T
reas
ury
shar
es r
etir
ed
(5
00,0
00 )
30
,607
-
-
-
-
-
-
-
-
469,
393
-
B
AL
AN
CE
AT
DE
CE
MB
ER
31,
201
8
54,2
09,8
46
1,
241,
214
35
1,92
3
118,
810
1,
144,
928
(9
,664
)
-
42,6
19
-
25
,268
(43,
372 )
57,0
81,5
72
B
asis
adj
ustm
ents
to g
ain
on h
edgi
ng in
stru
men
ts
-
-
-
-
-
-
-
-
-
(6
03 )
-
(6
03 )
A
ppro
pria
tion
of
2018
ear
ning
s
L
egal
res
erve
-
-
114,
493
-
(1
14,4
93 )
-
-
-
-
-
-
-
Spe
cial
res
erve
-
-
-
(105
,843
)
105,
843
-
-
-
-
-
-
-
Cas
h di
vide
nds
- $0
.209
6073
7 pe
r sh
are
-
-
-
-
(1
,136
,278
)
-
-
-
-
-
-
(1,1
36,2
78 )
C
hang
es in
cap
ital
sur
plus
fro
m in
vest
men
ts in
ass
ocia
tes
and
join
t ve
ntur
es a
ccou
nted
for
usi
ng th
e eq
uity
met
hod
-
60
6
-
-
-
-
-
-
-
-
-
606
A
ctua
l dis
posa
l or
acqu
isit
ion
of in
tere
sts
in s
ubsi
diar
ies
-
1,
247,
087
-
-
-
-
-
-
-
-
-
1,
247,
087
N
et lo
ss f
or th
e ye
ar e
nded
Dec
embe
r 31
, 201
9
-
-
-
-
(1,1
99,7
98 )
-
-
-
-
-
-
(1
,199
,798
)
Oth
er c
ompr
ehen
sive
inco
me
(los
s) f
or th
e ye
ar e
nded
Dec
embe
r 31
, 201
9,
net o
f in
com
e ta
x
-
-
-
-
(577
,427
)
(53,
411 )
-
64,5
38
-
1,
119,
013
-
55
2,71
3
Tot
al c
ompr
ehen
sive
inco
me
(los
s) f
or th
e ye
ar e
nded
Dec
embe
r 31
, 201
9
-
-
-
-
(1,7
77,2
25 )
(5
3,41
1 )
-
64
,538
-
1,11
9,01
3
-
(647
,085
)
Cha
nges
in c
apit
al s
urpl
us f
rom
inve
stm
ents
in a
ssoc
iate
s an
d jo
int
vent
ures
acc
ount
ed f
or u
sing
the
equi
ty m
etho
d
-
-
-
-
-
8,36
8
-
105
-
-
-
8,
473
B
AL
AN
CE
AT
DE
CE
MB
ER
31,
201
9
$
54
,209
,846
$
2,
488,
907
$
466,
416
$
12,9
67
$
(1,7
77,2
25 )
$
(54,
707 )
$
-
$
107,
262
$
-
$
1,
143,
678
$
(43,
372 )
$
56
,553
,772
T
he a
ccom
pany
ing
note
s ar
e an
inte
gral
par
t of
the
fina
ncia
l sta
tem
ents
.
201
- 9
-
CH
INA
AIR
LIN
ES
, LT
D.
ST
AT
EM
EN
TS
OF
CA
SH
FL
OW
S
FO
R T
HE
YE
AR
S E
ND
ED
DE
CE
MB
ER
31,
201
9 A
ND
201
8 (I
n T
hou
san
ds
of N
ew T
aiw
an D
olla
rs)
2019
2018
CA
SH
FL
OW
S F
RO
M O
PE
RA
TIN
G A
CT
IVIT
IES
In
com
e be
fore
inco
me
tax
$
(1
,187
,326
)
$
2,31
5,63
1 A
djus
tmen
ts f
or:
Exp
ecte
d cr
edit
loss
rec
ogni
zed
on tr
ade
rece
ivab
les
24,0
00
50,0
00
Dep
reci
atio
n ex
pens
es
29,3
98,6
35
18,1
92,2
91
Am
orti
zati
on e
xpen
ses
165,
981
165,
050
Net
gai
n on
fai
r va
lue
chan
ges
of f
inan
cial
ass
ets
and
liab
ilit
ies
at
fair
val
ue th
roug
h pr
ofit
or
loss
(2
5,70
0)
(11,
076)
In
tere
st in
com
e
(3
14,9
44)
(274
,189
) D
ivid
end
inco
me
(10,
112)
(9
,603
) S
hare
of
prof
it o
f as
soci
ates
and
join
t ven
ture
s
(1
,811
,960
)
(1
,918
,922
) L
oss
(gai
n) o
n di
spos
al o
f pr
oper
ty, p
lant
and
equ
ipm
ent
(26,
377)
27
3,30
8 G
ain
on d
ispo
sal o
f in
vest
men
ts a
ccou
nted
for
usi
ng th
e eq
uity
m
etho
d
(7
,656
)
(4
50,1
95)
Los
s on
dis
posa
l of
non-
curr
ent a
sset
s he
ld f
or s
ale
10,4
62
368,
992
Los
s on
inve
ntor
ies
and
prop
erty
, pla
nt a
nd e
quip
men
t
57
1,96
0
62
3,01
2 Im
pair
men
t los
s re
cogn
ized
on
prop
erty
, pla
nt a
nd e
quip
men
t
-
50,0
00
Net
gai
n on
for
eign
cur
renc
y ex
chan
ge
41,2
92
288,
598
Fin
ance
cos
ts
3,03
4,17
2
1,
312,
044
Rec
ogni
tion
of
prov
isio
ns
3,61
6,51
9
2,
566,
045
Am
orti
zati
on o
f un
real
ized
gai
n on
sal
e-le
aseb
acks
-
(13,
888)
L
oss
on s
ale-
leas
ebac
ks
103,
775
- O
ther
s
5
- Im
pair
men
t los
s re
cogn
ized
on
non-
curr
ent a
sset
s he
ld f
or s
ale
-
75
,437
C
hang
es in
ope
rati
ng a
sset
s an
d li
abil
itie
s
F
inan
cial
ass
ets
man
dato
rily
cla
ssif
ied
as a
t fai
r va
lue
thro
ugh
prof
it
25,2
66
11,0
76
Fin
anci
al li
abil
itie
s m
anda
tori
ly c
lass
ifie
d as
at f
air
valu
e th
roug
h pr
ofit
or
loss
11
,528
(9
,359
) N
otes
and
acc
ount
s re
ceiv
able
1,
507,
192
(1,2
60,3
44)
Acc
ount
s re
ceiv
able
- r
elat
ed p
arti
es
65,9
25
212,
277
Oth
er r
ecei
vabl
es
101,
047
(94,
232)
In
vent
orie
s
(1
28,0
37)
(225
,553
) O
ther
cur
rent
ass
ets
351,
186
62,1
51
Not
es a
nd a
ccou
nts
paya
ble
53,0
77
878,
219
Acc
ount
s pa
yabl
e -
rela
ted
part
ies
(114
,250
)
89
,678
O
ther
pay
able
s
(7
31,5
99)
513,
674
Con
trac
t lia
bili
ties
1,
851,
452
3,10
2,85
5 P
rovi
sion
s
(1
,970
,226
)
(2
,539
,210
) O
ther
cur
rent
liab
ilit
ies
(120
,655
)
10
,515
A
ccru
ed p
ensi
on li
abil
itie
s
93
,703
99
,135
C
ash
gene
rate
d fr
om o
pera
tion
s
34
,578
,335
24
,453
,417
In
tere
st r
ecei
ved
307,
503
244,
604
Div
iden
ds r
ecei
ved
940,
039
624,
834
Inte
rest
pai
d
(3
,038
,729
)
(1
,242
,278
) In
com
e ta
x pa
id
(41,
260 )
(1
9,08
5)
N
et c
ash
gene
rate
d fr
om o
pera
ting
act
ivit
ies
32,7
45,8
88
24,0
61,4
92
(Con
tinu
ed)
- 10
-
CH
INA
AIR
LIN
ES
, LT
D.
ST
AT
EM
EN
TS
OF
CA
SH
FL
OW
S
FO
R T
HE
YE
AR
S E
ND
ED
DE
CE
MB
ER
31,
201
9 A
ND
201
8 (I
n T
hou
san
ds
of N
ew T
aiw
an D
olla
rs)
2019
2018
CA
SH
FL
OW
S F
RO
M I
NV
ES
TIN
G A
CT
IVIT
IES
P
urch
ase
of f
inan
cial
ass
ets
at a
mor
tize
d co
st
$
(1
,467
,317
)
$
(2,3
10,0
00)
Dis
posa
l of
fina
ncia
l ass
ets
at a
mor
tize
d co
st
2,31
0,00
0
-
Acq
uisi
tion
of
inve
stm
ents
acc
ount
ed f
or b
y th
e eq
uity
met
hod
(35,
525)
(2
43,7
43)
Pay
men
ts f
or p
rope
rty,
pla
nt a
nd e
quip
men
t
(2
,397
,742
)
(2
,561
,987
) P
roce
eds
from
dis
posa
l of
prop
erty
, pla
nt a
nd e
quip
men
t
38
,596
33
0,13
6 P
roce
eds
from
dis
posa
l of
non-
curr
ent a
sset
s he
ld f
or s
ale
35,6
92
688,
427
Pro
ceed
s fr
om d
ispo
sal o
f in
vest
men
ts a
ccou
nted
for
usi
ng th
e eq
uity
m
etho
d
1,
713,
825
- In
crea
se in
ref
unda
ble
depo
sits
(3
87,2
44)
(51,
378)
D
ecre
ase
in r
efun
dabl
e de
posi
ts
104,
825
103,
593
Incr
ease
in p
repa
ymen
ts f
or e
quip
men
t
(1
3,69
9,04
3)
(13,
798,
867)
In
crea
se in
com
pute
r so
ftw
are
cost
s
(1
57,5
71)
(155
,431
)
Net
cas
h us
ed in
inve
stin
g ac
tivi
ties
(1
3,94
1,50
4 )
(17,
999,
250)
CA
SH
FL
OW
S F
RO
M F
INA
NC
ING
AC
TIV
ITIE
S
Rep
aym
ents
of
the
prin
cipa
l por
tion
of
leas
e li
abil
itie
s
(9
,666
,313
)
-
Pay
men
ts f
or b
uy-b
ack
of tr
easu
ry s
hare
s
-
(469
,393
) P
roce
eds
from
issu
ance
of
bond
s pa
yabl
e
3,
500,
000
10,5
12,0
00
Rep
aym
ents
of
bond
s pa
yabl
e
(4
,445
,900
)
(2
,700
,000
) P
roce
eds
from
sal
e-le
aseb
acks
4,
905,
660
- P
roce
eds
from
long
-ter
m b
orro
win
gs
5,50
0,00
0
17
,200
,000
R
epay
men
ts o
f lo
ng-t
erm
bor
row
ings
and
cap
ital
leas
e ob
liga
tion
s
(1
5,33
6,25
5)
(27,
339,
868)
P
roce
eds
from
gua
rant
ee d
epos
its
rece
ived
16
7,03
4
11
8,36
7 R
efun
ds o
f gu
aran
tee
depo
sits
rec
eive
d
(1
33,9
38)
(67,
905)
D
ivid
ends
pai
d to
ow
ners
of
the
Com
pany
(1
,136
,278
)
(1
,193
,670
)
Net
cas
h us
ed in
fin
anci
ng a
ctiv
itie
s
(1
6,64
5,99
0 )
(3,9
40,4
69)
E
FF
EC
TS
OF
EX
CH
AN
GE
RA
TE
CH
AN
GE
S O
N T
HE
BA
LA
NC
E
OF
CA
SH
HE
LD
IN
FO
RE
IGN
CU
RR
EN
CIE
S
(220
,402
)
2,
690
N
ET
IN
CR
EA
SE
IN
CA
SH
AN
D C
AS
H E
QU
IVA
LE
NT
S
1,93
7,99
2
2,
124,
463
C
AS
H A
ND
CA
SH
EQ
UIV
AL
EN
TS
AT
TH
E B
EG
INN
ING
OF
TH
E
YE
AR
18
,688
,022
16
,563
,559
CA
SH
AN
D C
AS
H E
QU
IVA
LE
NT
S A
T T
HE
EN
D O
F T
HE
YE
AR
$
20,6
26,0
14
$
18
,688
,022
T
he a
ccom
pany
ing
note
s ar
e an
inte
gral
par
t of
the
fina
ncia
l sta
tem
ents
. (C
oncl
uded
)
202
- 11
-
CH
INA
AIR
LIN
ES
, LT
D.
NO
TE
S T
O F
INA
NC
IAL
ST
AT
EM
EN
TS
F
OR
TH
E Y
EA
RS
EN
DE
D D
EC
EM
BE
R 3
1, 2
019
AN
D 2
018
(In
Th
ousa
nd
s of
New
Tai
wan
Dol
lars
, Un
less
Sta
ted
Oth
erw
ise)
1
. G
EN
ER
AL
IN
FO
RM
AT
ION
C
hina
Air
line
s, L
td.
(the
“C
ompa
ny”)
was
fou
nded
in
1959
and
its
sha
res
have
bee
n li
sted
on
the
Tai
wan
S
tock
Exc
hang
e si
nce
Feb
ruar
y 26
, 19
93.
The
Com
pany
pri
mar
ily
prov
ides
air
tra
nspo
rt s
ervi
ces
for
pass
enge
rs a
nd c
argo
. Its
oth
er o
pera
tion
s in
clud
e (a
) m
ail s
ervi
ces;
(b)
gro
und
serv
ices
and
rou
tine
air
craf
t m
aint
enan
ce;
(c)
maj
or m
aint
enan
ce o
f fl
ight
equ
ipm
ent;
(d)
com
mun
icat
ions
and
dat
a pr
oces
sing
ser
vice
s to
oth
er a
irli
nes;
(e)
the
sale
of
airc
raft
par
ts, e
quip
men
t and
the
enti
re a
ircr
aft;
and
(f)
leas
ing
of a
ircr
aft.
The
maj
or s
hare
hold
ers
of t
he C
ompa
ny a
re t
he C
hina
Avi
atio
n D
evel
opm
ent
Fou
ndat
ion
(CA
DF
) an
d th
e N
atio
nal D
evel
opm
ent F
und
(ND
F),
Exe
cuti
ve Y
uan.
As
of D
ecem
ber
31, 2
019
and
2018
, CA
DF
and
ND
F
held
44.
03%
of
the
Com
pany
’s s
hare
s. A
s of
Dec
embe
r 31
, 20
19 a
nd 2
018,
the
Com
pany
had
12,
175
and
12,4
98 e
mpl
oyee
s, r
espe
ctiv
ely.
2
. A
PP
RO
VA
L O
F F
INA
NC
IAL
ST
AT
EM
EN
TS
T
he f
inan
cial
sta
tem
ents
wer
e ap
prov
ed b
y th
e C
ompa
ny’s
boa
rd o
f di
rect
ors
on M
arch
18,
202
0.
3.
AP
PL
ICA
TIO
N O
F N
EW
, AM
EN
DE
D A
ND
RE
VIS
ED
ST
AN
DA
RD
S A
ND
IN
TE
RP
RE
TA
TIO
NS
a.
Init
ial a
ppli
cati
on o
f th
e am
endm
ents
to th
e R
egul
atio
ns G
over
ning
the
Pre
para
tion
of
Fin
anci
al R
epor
ts
by S
ecur
itie
s Is
suer
s (F
SC
) an
d th
e In
tern
atio
nal
Fin
anci
al R
epor
ting
Sta
ndar
ds (
IFR
S),
Int
erna
tion
al
Acc
ount
ing
Sta
ndar
ds
(IA
S),
In
terp
reta
tion
s of
IF
RS
(I
FR
IC),
an
d In
terp
reta
tion
s of
IA
S
(SIC
) en
dors
ed a
nd is
sued
into
eff
ect b
y th
e F
SC
E
xcep
t fo
r th
e fo
llow
ing,
the
ini
tial
app
lica
tion
of
the
amen
dmen
ts t
o th
e R
egul
atio
ns G
over
ning
the
P
repa
rati
on o
f F
inan
cial
Rep
orts
by
Sec
urit
ies
Issu
ers
and
the
IFR
Ss
endo
rsed
and
iss
ued
into
eff
ect
by
the
FS
C d
id n
ot h
ave
mat
eria
l im
pact
on
the
Com
pany
’s a
ccou
ntin
g po
lici
es:
IFR
S 1
6 “L
ease
s”
IFR
S 1
6 pr
ovid
es a
com
preh
ensi
ve m
odel
for
the
ide
ntif
icat
ion
of l
ease
arr
ange
men
ts a
nd t
heir
tr
eatm
ent
in t
he f
inan
cial
sta
tem
ents
of
both
les
see
and
less
or. I
t su
pers
edes
IA
S 1
7 “L
ease
s”, I
FR
IC 4
“D
eter
min
ing
whe
ther
an
Arr
ange
men
t con
tain
s a
Lea
se”,
and
a n
umbe
r of
rel
ated
inte
rpre
tati
ons.
Ref
er
to N
ote
4 fo
r in
form
atio
n re
lati
ng to
the
rele
vant
acc
ount
ing
poli
cies
. D
efin
itio
n of
a le
ase
The
Com
pany
ele
cted
to a
pply
the
guid
ance
of
IFR
S 1
6 in
det
erm
inin
g w
heth
er c
ontr
acts
are
, or
cont
ain,
a
leas
e on
ly t
o co
ntra
cts
ente
red
into
(or
cha
nged
) on
or
afte
r Ja
nuar
y 1,
201
9. C
ontr
acts
ide
ntif
ied
as
cont
aini
ng a
lea
se u
nder
IA
S 1
7 an
d IF
RIC
4 a
re n
ot b
e re
asse
ssed
and
acc
ount
ed f
or i
n ac
cord
ance
w
ith
the
tran
siti
onal
pro
visi
ons
unde
r IF
RS
16.
- 12
-
The
Com
pany
as
less
ee
The
Com
pany
rec
ogni
zes
righ
t-of
-use
ass
ets,
or
inve
stm
ent p
rope
rtie
s if
the
righ
t-of
-use
ass
ets
mee
t the
de
fini
tion
of
inve
stm
ent
prop
erti
es,
and
leas
e li
abil
itie
s fo
r al
l le
ases
on
the
bala
nce
shee
ts e
xcep
t fo
r th
ose
who
se
paym
ents
un
der
low
-val
ue
and
shor
t-te
rm
leas
es
are
reco
gniz
ed
as
expe
nses
on
a
stra
ight
-lin
e ba
sis.
On
the
stat
emen
ts o
f co
mpr
ehen
sive
inc
ome,
the
Com
pany
pre
sent
s th
e de
prec
iati
on
expe
nse
char
ged
on r
ight
-of-
use
asse
ts s
epar
atel
y fr
om t
he i
nter
est
expe
nse
accr
ued
on l
ease
lia
bili
ties
; in
tere
st is
com
pute
d us
ing
the
effe
ctiv
e in
tere
st m
etho
d. O
n th
e st
atem
ents
of
cash
flo
ws,
cas
h pa
ymen
ts
for
the
prin
cipa
l po
rtio
n of
lea
se l
iabi
liti
es a
re c
lass
ifie
d w
ithi
n fi
nanc
ing
acti
viti
es;
cash
pay
men
ts f
or
the
inte
rest
por
tion
are
cla
ssif
ied
wit
hin
oper
atin
g ac
tivi
ties
. P
rior
to
the
appl
icat
ion
of I
FR
S 1
6,
paym
ents
und
er o
pera
ting
leas
e co
ntra
cts,
incl
udin
g pr
oper
ty in
tere
st q
uali
fied
as
inve
stm
ent p
rope
rtie
s,
wer
e re
cogn
ized
as
expe
nses
on
a st
raig
ht-l
ine
basi
s. C
ash
flow
s fo
r op
erat
ing
leas
es w
ere
clas
sifi
ed
wit
hin
oper
atin
g ac
tivi
ties
on
the
stat
emen
ts o
f ca
sh f
low
s. L
ease
d as
sets
and
fin
ance
lea
se p
ayab
les
wer
e re
cogn
ized
on
the
bala
nce
shee
ts f
or c
ontr
acts
cla
ssif
ied
as f
inan
ce le
ases
. L
ease
lia
bili
ties
wer
e re
cogn
ized
on
Janu
ary
1, 2
019
for
leas
es c
lass
ifie
d as
ope
rati
ng l
ease
s un
der
IAS
17
. L
ease
lia
bili
ties
are
mea
sure
d at
the
pre
sent
val
ue o
f th
e re
mai
ning
lea
se p
aym
ents
, di
scou
nted
us
ing
the
less
ee’s
inc
rem
enta
l bo
rrow
ing
rate
on
Janu
ary
1, 2
019.
Rig
ht-o
f-us
e as
sets
are
mea
sure
d at
an
am
ount
equ
al t
o th
e le
ase
liab
ilit
ies,
adj
uste
d by
the
am
ount
of
any
prep
aid
or a
ccru
ed l
ease
pa
ymen
ts. T
he C
ompa
ny a
ppli
es I
AS
36
to a
ll r
ight
-of-
use
asse
ts.
For
leas
es c
lass
ifie
d as
fin
ance
leas
es u
nder
IA
S 1
7, th
e ca
rryi
ng a
mou
nt o
f ri
ght-
of-u
se a
sset
s an
d le
ase
liab
ilit
ies
on J
anua
ry 1
, 20
19 w
as d
eter
min
ed a
s th
e ca
rryi
ng a
mou
nt o
f th
e le
ased
ass
ets
and
fina
nce
leas
e pa
yabl
es a
s of
Dec
embe
r 31
, 201
8.
If t
he C
ompa
ny d
eter
min
es t
hat
a sa
le a
nd l
ease
back
tra
nsac
tion
doe
s no
t sa
tisf
y th
e re
quir
emen
ts o
f IF
RS
15
to b
e ac
coun
ted
for
as a
sal
e of
an
asse
t, it
is
acco
unte
d fo
r as
a f
inan
cing
tra
nsac
tion
. If
it
sati
sfie
s th
e re
quir
emen
ts t
o be
acc
ount
ed f
or a
s a
sale
of
an a
sset
, th
e C
ompa
ny r
ecog
nize
s on
ly t
he
amou
nt o
f an
y ga
in o
r lo
ss w
hich
rel
ates
to
the
righ
ts t
rans
ferr
ed t
o th
e bu
yer-
less
or.
Pri
or t
o th
e ap
plic
atio
n of
IF
RS
16,
the
leas
ebac
k po
rtio
n is
cla
ssif
ied
as e
ithe
r a
fina
nce
leas
e or
an
oper
atin
g le
ase
and
acco
unte
d fo
r di
ffer
entl
y.
The
Com
pany
doe
s no
t re
asse
ss s
ale
and
leas
ebac
k tr
ansa
ctio
ns e
nter
ed i
nto
befo
re J
anua
ry 1
, 20
19 t
o de
term
ine
whe
ther
the
tra
nsfe
r of
an
unde
rlyi
ng a
sset
sat
isfi
es t
he r
equi
rem
ents
in
IFR
S 1
5 to
be
acco
unte
d fo
r as
a s
ale.
Upo
n in
itia
l ap
plic
atio
n of
IF
RS
16,
the
afo
rem
enti
oned
tra
nsit
iona
l pr
ovis
ion
for
a le
ssee
is
appl
ied
to t
he l
ease
back
por
tion
. In
add
itio
n, f
or a
sset
s ac
coun
ted
for
as a
sal
e an
d a
fina
nce
leas
e un
der
IAS
17,
the
Com
pany
con
tinu
es to
am
orti
ze a
ny g
ains
on
sale
s ov
er th
e le
ase
term
.
203
- 13
-
The
les
see’
s w
eigh
ted
aver
age
incr
emen
tal
borr
owin
g ra
te a
ppli
ed t
o le
ase
liab
ilit
ies
reco
gniz
ed o
n Ja
nuar
y 1,
201
9 w
as 2
.47%
. The
dif
fere
nce
betw
een
the
(i)
leas
e li
abil
itie
s re
cogn
ized
and
(ii)
ope
rati
ng
leas
e co
mm
itm
ents
on
Dec
embe
r 31
, 201
8 is
exp
lain
ed a
s fo
llow
s:
The
fut
ure
min
imum
leas
e pa
ymen
ts o
f no
n-ca
ncel
labl
e op
erat
ing
leas
e co
mm
itm
ents
on
Dec
embe
r 31
, 201
8
$
68,1
74,2
92
Und
isco
unte
d am
ount
on
Janu
ary
1, 2
019
$
68
,174
,292
D
isco
unte
d am
ount
usi
ng th
e in
crem
enta
l bor
row
ing
rate
on
Janu
ary
1, 2
019
$
58
,286
,964
A
dd: F
inan
ce le
ase
paya
ble
on D
ecem
ber
31, 2
018
596,
000
Add
: Adj
ustm
ents
as
a re
sult
of
a di
ffer
ent t
reat
men
t of
exte
nsio
n an
d te
rmin
atio
n op
tion
s
6,
419,
285
Add
: Oth
er
4,55
7,77
0 L
ess:
Der
ivat
ive
fina
ncia
l ins
trum
ents
for
hed
ging
(4
1,91
9,50
8 )
Lea
se li
abil
itie
s re
cogn
ized
on
Janu
ary
1, 2
019
$
27
,940
,511
T
he C
ompa
ny a
s le
ssor
T
he C
ompa
ny d
oes
not
mak
e an
y ad
just
men
ts t
o le
ases
in
whi
ch i
t is
a l
esso
r an
d ac
coun
ts f
or t
hose
le
ases
und
er I
FR
S 1
6 st
arti
ng f
rom
Jan
uary
1, 2
019.
T
he im
pact
on
asse
ts, l
iabi
liti
es a
nd e
quit
y as
of
Janu
ary
1, 2
019
from
the
init
ial a
ppli
cati
on o
f IF
RS
16
is s
et o
ut a
s fo
llow
s:
Car
ryin
g A
mou
nt
as o
f D
ecem
ber
31,
20
19
Ad
just
men
ts
Ari
sin
g fr
om
Init
ial
Ap
pli
cati
on
Ad
just
ed
Car
ryin
g A
mou
nt
as o
f Ja
nu
ary
1, 2
019
Pre
paid
ren
t
$
699,
098
$
(6
99,0
98)
$
-
Ref
unda
ble
depo
sits
37
7,57
7
(2
15,4
26)
162,
151
Rig
ht-o
f-us
e as
sets
-
69,9
88,7
35
69,9
88,7
35
Oth
er f
inan
cial
ass
ets
-
18
9,80
8
18
9,80
8
T
otal
eff
ect o
n as
sets
$ 1,
076,
675
$
69
,264
,019
$ 70
,340
,694
L
ease
liab
ilit
ies
- cu
rren
t
$
-
$
3,
394,
630
$
3,
394,
630
Lea
se li
abil
itie
s -
non-
curr
ent
-
24
,545
,881
24
,545
,881
C
apit
al le
ase
obli
gati
ons
596,
000
(596
,000
)
-
Fin
anci
al li
abil
itie
s fo
r he
dgin
g -
curr
ent
-
5,
947,
449
5,94
7,44
9 F
inan
cial
liab
ilit
ies
for
hedg
ing
- no
n-cu
rren
t
-
35,9
72,0
59
35,9
72,0
59
Tot
al e
ffec
t on
liab
ilit
ies
$
59
6,00
0
$
69,2
64,0
19
$
69
,860
,019
- 14
-
b.
New
IF
RS
s in
issu
e bu
t not
yet
end
orse
d an
d is
sued
into
eff
ect b
y th
e F
SC
New
IF
RS
s
Eff
ecti
ve D
ate
An
nou
nce
d b
y IA
SB
A
men
dmen
ts to
IF
RS
3 “
Def
init
ion
of B
usin
ess”
J
anua
ry 1
, 202
0 (N
ote
1)
Am
endm
ents
to I
FR
S 9
, IA
S 3
9 an
d IF
RS
7 “
Inte
rest
Rat
e B
ench
mar
k R
efor
m”
J
anua
ry 1
, 202
0 (N
ote
2)
Am
endm
ents
to I
AS
1 a
nd I
AS
8 “
Def
init
ion
of M
ater
iali
ty”
Jan
uary
1, 2
020
(Not
e 3)
N
ote
1:
Unl
ess
stat
ed o
ther
wis
e, t
he a
bove
New
IF
RS
s ar
e ef
fect
ive
for
annu
al p
erio
ds b
egin
ning
on
or a
fter
thei
r re
spec
tive
eff
ecti
ve d
ates
. N
ote
2:
Bus
ines
s co
mbi
nati
ons
that
beg
an a
fter
Jan
uary
1,
2020
and
acq
uisi
tion
of
asse
ts a
fter
the
af
ores
aid
date
are
sub
ject
ed to
the
amen
dmen
t. N
ote
3:
The
am
endm
ent i
s ap
plie
d fo
r th
e an
nual
per
iod
begi
nnin
g af
ter
Janu
ary
1, 2
020.
A
s of
the
dat
e th
e fi
nanc
ial
stat
emen
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
sta
ndar
ds a
nd in
terp
reta
tion
s w
ill h
ave
on th
e C
ompa
ny’s
fin
anci
al p
osit
ion
and
fina
ncia
l pe
rfor
man
ce a
nd w
ill
disc
lose
the
rel
evan
t im
pact
whe
n th
e as
sess
men
t is
com
plet
ed.
c.
N
ew I
FR
Ss
in is
sue
but n
ot y
et e
ndor
sed
and
issu
ed in
to e
ffec
t by
the
FS
C
New
IF
RS
s
Eff
ecti
ve D
ate
An
nou
nce
d b
y IA
SB
(N
ote)
A
men
dmen
ts to
IF
RS
10
and
IAS
28
“Sal
e or
Con
trib
utio
n of
Ass
ets
betw
een
an I
nves
tor
and
its
Ass
ocia
te o
r Jo
int V
entu
re”
To
be d
eter
min
ed b
y IA
SB
IFR
S 1
7 “I
nsur
ance
Con
trac
ts”
Jan
uary
1, 2
021
Am
endm
ents
to I
AS
1 “c
lari
fy th
e cl
assi
fica
tion
of
liab
ilit
ies
as c
urre
nt
or n
on-c
urre
nt”
Jan
uary
1, 2
022
Not
e:
Unl
ess
stat
ed o
ther
wis
e, t
he a
bove
New
IF
RS
s ar
e ef
fect
ive
for
annu
al r
epor
ting
per
iods
be
ginn
ing
on o
r af
ter
thei
r re
spec
tive
eff
ecti
ve d
ates
. T
he a
ppli
cati
on o
f ne
w I
FRS
s in
issu
e bu
t not
yet
end
orse
d an
d is
sued
into
eff
ect b
y th
e F
SC
wou
ld n
ot
have
any
mat
eria
l im
pact
on
the
Com
pany
’s a
ccou
ntin
g po
lici
es. A
s of
the
date
the
fina
ncia
l sta
tem
ents
w
ere
auth
oriz
ed
for
issu
e,
the
Com
pany
is
co
ntin
uous
ly
asse
ssin
g th
e po
ssib
le
impa
ct
that
th
e ap
plic
atio
n of
oth
er s
tand
ards
and
int
erpr
etat
ions
wil
l ha
ve o
n th
e C
ompa
ny’s
fin
anci
al p
osit
ion
and
fina
ncia
l per
form
ance
and
wil
l dis
clos
e th
e re
leva
nt im
pact
whe
n th
e as
sess
men
t is
com
plet
ed.
4
. S
IGN
IFIC
AN
T A
CC
OU
NT
ING
PO
LIC
IES
S
tate
men
t of
Com
pli
ance
T
he f
inan
cial
sta
tem
ents
hav
e be
en p
repa
red
in a
ccor
danc
e w
ith
the
Reg
ulat
ions
Gov
erni
ng t
he P
repa
rati
on
of F
inan
cial
Rep
orts
by
Secu
riti
es I
ssue
rs a
nd o
ther
reg
ulat
ions
.
Bas
is o
f P
rep
arat
ion
T
he f
inan
cial
sta
tem
ents
hav
e be
en p
repa
red
on t
he h
isto
rica
l co
st b
asis
exc
ept
for
fina
ncia
l in
stru
men
ts
whi
ch a
re m
easu
red
at f
air
valu
e.
204
- 15
-
The
fai
r va
lue
mea
sure
men
ts,
whi
ch a
re g
roup
ed i
nto
Lev
els
1 to
3 b
ased
on
the
degr
ee t
o w
hich
the
fai
r va
lue
mea
sure
men
t in
puts
are
obs
erva
ble
and
base
d on
the
sig
nifi
canc
e of
the
inp
uts
to t
he f
air
valu
e m
easu
rem
ent i
n it
s en
tire
ty, a
re d
escr
ibed
as
foll
ows:
a.
L
evel
1 in
puts
are
quo
ted
pric
es (
unad
just
ed)
in a
ctiv
e m
arke
ts f
or id
enti
cal a
sset
s or
liab
ilit
ies;
b.
L
evel
2 i
nput
s ar
e in
puts
oth
er t
han
quot
ed p
rice
s in
clud
ed w
ithi
n L
evel
1 t
hat
are
obse
rvab
le f
or a
n as
set o
r li
abil
ity,
eit
her
dire
ctly
(i.e
. as
pric
es)
or in
dire
ctly
(i.e
. der
ived
fro
m p
rice
s); a
nd
c.
Lev
el 3
inpu
ts a
re u
nobs
erva
ble
inpu
ts f
or a
n as
set o
r li
abil
ity.
Whe
n pr
epar
ing
thes
e pa
rent
com
pany
onl
y fi
nanc
ial
stat
emen
ts,
the
Com
pany
use
d th
e eq
uity
met
hod
to
acco
unt f
or it
s in
vest
men
ts in
sub
sidi
arie
s, a
ssoc
iate
s an
d jo
int v
entu
res.
In
orde
r fo
r th
e am
ount
s of
the
net
prof
it f
or t
he y
ear,
oth
er c
ompr
ehen
sive
inc
ome
for
the
year
and
tot
al e
quit
y in
the
par
ent
com
pany
onl
y fi
nanc
ial
stat
emen
ts t
o be
the
sam
e w
ith
the
amou
nts
attr
ibut
able
to
the
owne
rs o
f th
e C
ompa
ny i
n its
st
anda
lone
fin
anci
al s
tate
men
ts, a
djus
tmen
ts a
risi
ng f
rom
the
dif
fere
nces
in
acco
unti
ng t
reat
men
ts b
etw
een
the
pare
nt c
ompa
ny o
nly
basi
s an
d th
e st
anda
lone
bas
is w
ere
mad
e to
inv
estm
ents
acc
ount
ed f
or u
sing
the
eq
uity
met
hod,
the
sha
re o
f pr
ofit
or
loss
of
subs
idia
ries
, as
soci
ates
and
joi
nt v
entu
res,
the
sha
re o
f ot
her
com
preh
ensi
ve i
ncom
e of
sub
sidi
arie
s, a
ssoc
iate
s an
d jo
int
vent
ures
and
the
rel
ated
equ
ity
item
s, a
s ap
prop
riat
e, in
thes
e pa
rent
com
pany
onl
y fi
nanc
ial s
tate
men
ts.
Cu
rren
t an
d N
on-c
urr
ent
Ass
ets
and
Lia
bil
itie
s C
urre
nt a
sset
s in
clud
e:
a.
Ass
ets
held
pri
mar
ily
for
the
purp
ose
of tr
adin
g;
b.
Ass
ets
expe
cted
to b
e re
aliz
ed w
ithi
n 12
mon
ths
afte
r th
e re
port
ing
peri
od; a
nd
c.
Cas
h an
d ca
sh e
quiv
alen
ts u
nles
s th
e as
set i
s re
stri
cted
fro
m b
eing
exc
hang
ed o
r us
ed to
set
tle
a li
abil
ity
for
at le
ast 1
2 m
onth
s af
ter
the
repo
rtin
g pe
riod
. C
urre
nt li
abil
itie
s in
clud
e:
a.
Lia
bili
ties
hel
d pr
imar
ily
for
the
purp
ose
of tr
adin
g;
b.
Lia
bili
ties
due
to b
e se
ttle
d w
ithi
n 12
mon
ths
afte
r th
e re
port
ing
peri
od; a
nd
c.
Lia
bili
ties
for
whi
ch t
he C
ompa
ny d
oes
not
have
an
unco
nditi
onal
rig
ht t
o de
fer
sett
lem
ent
for
at l
east
12
mon
ths
afte
r th
e re
port
ing
peri
od.
Ass
ets
and
liab
ilit
ies
that
are
not
cla
ssif
ied
as c
urre
nt a
re c
lass
ifie
d as
non
-cur
rent
. F
orei
gn C
urr
enci
es
In p
repa
ring
the
fin
anci
al s
tate
men
ts o
f th
e C
ompa
ny, t
rans
acti
ons
in c
urre
ncie
s ot
her
than
the
Com
pany
’s
func
tion
al c
urre
ncy
(i.e
. fo
reig
n cu
rren
cies
) ar
e re
cogn
ized
at
the
rate
s of
exc
hang
e pr
evai
ling
at
the
date
s of
the
tra
nsac
tion
s. A
t th
e en
d of
eac
h re
port
ing
peri
od,
mon
etar
y it
ems
deno
min
ated
in
fore
ign
curr
enci
es
are
retr
ansl
ated
at
the
rate
s pr
evai
ling
at
that
dat
e. N
on-m
onet
ary
item
s th
at a
re m
easu
red
at h
isto
rica
l co
st
in a
for
eign
cur
renc
y ar
e no
t re
tran
slat
ed. N
on-m
onet
ary
item
s m
easu
red
at f
air
valu
e th
at a
re d
enom
inat
ed
in f
orei
gn c
urre
ncie
s ar
e re
tran
slat
ed a
t the
rat
es p
reva
ilin
g at
the
date
whe
n th
e fa
ir v
alue
was
det
erm
ined
.
- 16
-
Exc
hang
e di
ffer
ence
s on
mon
etar
y it
ems
aris
ing
from
set
tlem
ent
or t
rans
lati
on a
re r
ecog
nize
d in
pro
fit
or
loss
in th
e pe
riod
in w
hich
they
ari
se e
xcep
t for
: a.
E
xcha
nge
diff
eren
ces
on f
orei
gn c
urre
ncy
borr
owin
gs r
elat
ing
to a
sset
s un
der
cons
truc
tion
for
fut
ure
prod
ucti
ve u
se, w
hich
are
inc
lude
d in
the
cos
t of
tho
se a
sset
s w
hen
they
are
reg
arde
d as
an
adju
stm
ent
to in
tere
st c
osts
on
thos
e fo
reig
n cu
rren
cy b
orro
win
gs;
b.
Exc
hang
e di
ffer
ence
s on
tran
sact
ions
ent
ered
into
in o
rder
to h
edge
cer
tain
for
eign
cur
renc
y ri
sks.
E
xcha
nge
diff
eren
ces
aris
ing
on t
he r
etra
nsla
tion
of
non-
mon
etar
y it
ems
are
incl
uded
in
prof
it o
r lo
ss f
or
the
peri
od e
xcep
t fo
r ex
chan
ge d
iffe
renc
es a
risi
ng f
rom
the
ret
rans
lati
on o
f no
n-m
onet
ary
item
s in
res
pect
of
whi
ch g
ains
and
los
ses
are
reco
gniz
ed d
irec
tly
in o
ther
com
preh
ensi
ve i
ncom
e, i
n w
hich
cas
e, t
he
exch
ange
dif
fere
nces
are
als
o re
cogn
ized
dir
ectl
y in
oth
er c
ompr
ehen
sive
inco
me.
F
or t
he p
urpo
ses
of p
rese
ntin
g fi
nanc
ial
stat
emen
ts,
the
asse
ts a
nd l
iabi
liti
es o
f th
e C
ompa
ny’s
for
eign
op
erat
ions
are
tra
nsla
ted
into
New
Tai
wan
dol
lars
usi
ng e
xcha
nge
rate
s pr
evai
ling
at
the
end
of e
ach
repo
rtin
g pe
riod
. In
com
e an
d ex
pens
e it
ems
are
tran
slat
ed a
t th
e av
erag
e ex
chan
ge r
ates
for
the
per
iod.
E
xcha
nge
diff
eren
ces
aris
ing
are
reco
gniz
ed in
oth
er c
ompr
ehen
sive
inco
me
(att
ribu
ted
to th
e ow
ners
of
the
Com
pany
and
non
-con
trol
ling
inte
rest
s as
app
ropr
iate
).
On
the
disp
osal
of
a fo
reig
n op
erat
ion,
all
of
the
exch
ange
dif
fere
nces
acc
umul
ated
in
equi
ty i
n re
spec
t of
th
at o
pera
tion
att
ribu
tabl
e to
the
owne
rs o
f th
e C
ompa
ny a
re r
ecla
ssif
ied
to p
rofi
t or
loss
. In
ven
tori
es
Inve
ntor
ies
are
prim
aril
y ex
pend
able
and
non
expe
ndab
le p
arts
and
mat
eria
ls,
supp
lies
use
d in
ope
rati
ons
and
item
s fo
r in
-fli
ght
sale
and
are
sta
ted
at t
he l
ower
of
cost
or
net
real
izab
le v
alue
. T
he c
osts
of
inve
ntor
ies
sold
or
cons
umed
are
det
erm
ined
usi
ng th
e w
eigh
ted-
aver
age
met
hod.
N
on-c
urr
ent
Ass
ets
Hel
d f
or S
ale
Non
-cur
rent
ass
ets
are
clas
sifi
ed a
s he
ld-f
or-s
ale
if t
heir
car
ryin
g am
ount
wil
l be
rec
over
ed p
rinc
ipal
ly
thro
ugh
a sa
le t
rans
acti
on r
athe
r th
an t
hrou
gh c
onti
nuin
g us
e. T
his
cond
itio
n is
reg
arde
d 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
vail
able
for
imm
edia
te s
ale
in it
s pr
esen
t con
diti
on.
To
mee
t th
e cr
iter
ia 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
itte
d to
the
sal
e, w
hich
sho
uld
be e
xpec
ted
to q
uali
fy f
or r
ecog
nitio
n as
a c
ompl
eted
sal
e w
ithi
n on
e ye
ar f
rom
the
date
of
clas
sifi
cati
on.
Non
-cur
rent
ass
ets
clas
sifi
ed a
s he
ld-f
or-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 v
alue
less
cos
ts to
sel
l. R
ecog
niti
on o
f de
prec
iati
on o
f th
ose
asse
ts w
ould
cea
se.
Inve
stm
ents
Acc
oun
ted
for
by
the
Eq
uit
y M
eth
od
Inve
stm
ents
in
subs
idia
ries
, as
soci
ates
and
joi
ntly
con
trol
led
enti
ties
are
acc
ount
ed f
or b
y th
e eq
uity
m
etho
d.
a.
Inve
stm
ent i
n su
bsid
iari
es
S
ubsi
diar
ies
(inc
ludi
ng s
peci
al p
urpo
se e
ntit
ies)
are
the
enti
ties
con
trol
led
by th
e C
ompa
ny.
Und
er t
he e
quity
met
hod,
the
inv
estm
ent
is i
niti
ally
rec
ogni
zed
at c
ost
and
the
carr
ying
am
ount
is
incr
ease
d or
dec
reas
ed t
o re
cogn
ize
the
Com
pany
’s s
hare
of
the
prof
it o
r lo
ss a
nd o
ther
com
preh
ensi
ve
inco
me
of t
he s
ubsi
diar
y af
ter
the
date
of
acqu
isit
ion.
Bes
ides
, th
e C
ompa
ny a
lso
reco
gniz
es t
he
Com
pany
’s s
hare
of
the
chan
ges
in o
ther
equ
ity
of th
e su
bsid
iary
.
205
- 17
-
Cha
nges
in
the
Com
pany
’s o
wne
rshi
p in
tere
sts
in s
ubsi
diar
ies
that
do
not
resu
lt i
n th
e C
ompa
ny’s
los
s of
con
trol
ove
r th
e su
bsid
iari
es a
re a
ccou
nted
for
as
equi
ty t
rans
acti
ons.
Any
dif
fere
nce
betw
een
the
carr
ying
am
ount
s of
th
e in
vest
men
t an
d th
e fa
ir
valu
e of
th
e co
nsid
erat
ion
paid
or
re
ceiv
ed
is
reco
gniz
ed d
irec
tly
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
int
eres
t in
tha
t su
bsid
iary
(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
-ter
m i
nter
ests
tha
t, in
sub
stan
ce,
form
par
t of
the
Com
pany
’s n
et i
nves
tmen
t in
the
su
bsid
iary
), th
e C
ompa
ny c
onti
nues
rec
ogni
zing
its
shar
e of
fur
ther
loss
es.
The
acq
uisi
tion
cos
t in
exc
ess
of t
he a
cqui
siti
on-d
ate
fair
val
ue o
f th
e id
enti
fiab
le n
et a
sset
s ac
quir
ed i
s re
cogn
ized
as
go
odw
ill.
Goo
dwil
l is
no
t am
orti
zed.
T
he
acqu
isit
ion-
date
fa
ir
valu
e of
th
e ne
t id
enti
fiab
le a
sset
s ac
quir
ed in
exc
ess
of th
e ac
quis
itio
n co
st is
rec
ogni
zed
imm
edia
tely
in p
rofi
t or
loss
. W
hen
the
Com
pany
cea
ses
to h
ave
cont
rol
over
a s
ubsi
diar
y, a
ny r
etai
ned
inve
stm
ent
is m
easu
red
at
fair
val
ue a
t th
at d
ate
and
the
diff
eren
ce b
etw
een
the
prev
ious
car
ryin
g am
ount
of
the
subs
idia
ry
attr
ibut
able
to
the
reta
ined
int
eres
t an
d it
s fa
ir v
alue
is
incl
uded
in
the
dete
rmin
atio
n of
the
gai
n or
los
s.
Fur
ther
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
the
Com
pany
had
di
rect
ly d
ispo
sed
of th
e re
late
d as
sets
or
liab
ilit
ies.
P
rofi
ts a
nd l
osse
s fr
om d
owns
trea
m t
rans
acti
ons
wit
h a
subs
idia
ry a
re e
lim
inat
ed i
n fu
ll.
Pro
fits
and
lo
sses
fro
m u
pstr
eam
wit
h a
subs
idia
ry a
nd s
ide
stre
am tr
ansa
ctio
ns b
etw
een
subs
idia
ries
are
rec
ogni
zed
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
.
b.
Inve
stm
ents
in a
ssoc
iate
s an
d jo
int v
entu
res
A
n as
soci
ate
is a
n en
tity
ove
r w
hich
the
Com
pany
has
sig
nifi
cant
inf
luen
ce a
nd t
hat
is n
eith
er a
su
bsid
iary
nor
an
inte
rest
in
a jo
int
vent
ure.
A j
oint
ven
ture
is
a jo
int
arra
ngem
ent
whe
reby
the
C
ompa
ny a
nd o
ther
par
ties
tha
t ha
ve j
oint
con
trol
of
the
arra
ngem
ent
and
the
righ
ts t
o th
e ne
t as
sets
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.
Und
er t
he e
quit
y m
etho
d, a
n in
vest
men
t in
an
asso
ciat
e an
d jo
intl
y co
ntro
lled
ent
ity
is i
niti
ally
re
cogn
ized
at
cost
and
adj
uste
d th
erea
fter
to
reco
gniz
e th
e C
ompa
ny’s
sha
re o
f th
e pr
ofit
or
loss
and
ot
her
com
preh
ensi
ve i
ncom
e of
the
ass
ocia
te a
nd j
oint
ly v
entu
res.
The
Com
pany
als
o re
cogn
izes
the
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
trib
utab
le t
o th
e C
ompa
ny.
Whe
n th
e C
ompa
ny s
ubsc
ribe
s fo
r ad
diti
onal
new
sha
res
of a
n as
soci
ate
and
join
t ve
ntur
es a
t a
perc
enta
ge d
iffe
rent
fro
m i
ts e
xist
ing
owne
rshi
p pe
rcen
tage
, th
e re
sult
ing
carr
ying
am
ount
of
the
inve
stm
ent
diff
ers
from
the
am
ount
of
the
Com
pany
’s p
ropo
rtio
nate
int
eres
t in
the
ass
ocia
te a
nd j
oint
ve
ntur
es.
The
C
ompa
ny
reco
rds
such
a
diff
eren
ce
as
an
adju
stm
ent
to
inve
stm
ents
w
ith
the
corr
espo
ndin
g am
ount
cha
rged
or
cred
ited
to
capi
tal
surp
lus.
If
the
Com
pany
’s o
wne
rshi
p in
tere
st i
s re
duce
d du
e to
the
sub
scri
ptio
n of
add
itio
nal
new
sha
res
of t
he a
ssoc
iate
and
joi
ntly
con
trol
led
enti
ty,
the
prop
orti
onat
e am
ount
of
the
gain
s or
loss
es p
revi
ousl
y re
cogn
ized
in o
ther
com
preh
ensi
ve in
com
e in
re
lati
on to
that
ass
ocia
te a
nd jo
int v
entu
res
is r
ecla
ssif
ied
to p
rofi
t or
loss
on
the
sam
e ba
sis
as w
ould
be
requ
ired
had
the
inv
este
e di
rect
ly d
ispo
sed
of t
he r
elat
ed a
sset
s or
lia
bili
ties
. W
hen
the
adju
stm
ent
shou
ld b
e de
bite
d to
cap
ital
surp
lus,
but
the
cap
ital
sur
plus
rec
ogni
zed
from
inv
estm
ents
acc
ount
ed f
or
usin
g th
e eq
uity
met
hod
is in
suff
icie
nt, t
he s
hort
age
is d
ebit
ed to
ret
aine
d ea
rnin
gs.
- 18
-
Whe
n th
e C
ompa
ny’s
sha
re o
f lo
sses
of
an a
ssoc
iate
and
joi
nt v
entu
res
equa
ls o
r ex
ceed
s it
s in
tere
st i
n th
at a
ssoc
iate
and
joi
nt v
entu
res
whi
ch i
nclu
des
any
carr
ying
am
ount
of
the
inve
stm
ent
acco
unte
d fo
r us
ing
the
equi
ty m
etho
d an
d lo
ng-t
erm
int
eres
ts t
hat,
in s
ubst
ance
, fo
rm 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
enti
ty, t
he C
ompa
ny d
isco
ntin
ues
reco
gniz
ing
its
shar
e of
fu
rthe
r lo
sses
. A
ddit
iona
l lo
sses
and
lia
bili
ties
are
rec
ogni
zed
only
to
the
exte
nt t
hat
the
Com
pany
has
in
curr
ed le
gal o
blig
atio
ns, o
r co
nstr
ucti
ve o
blig
atio
ns, o
r m
ade
paym
ents
on
beha
lf o
f th
at a
ssoc
iate
and
jo
int v
entu
res.
A
ny e
xces
s of
the
cos
t of
acq
uisi
tion
ove
r th
e C
ompa
ny’s
sha
re o
f th
e ne
t fa
ir v
alue
of
the
iden
tifi
able
as
sets
an
d li
abil
itie
s of
an
as
soci
ate
and
join
t ve
ntur
es
reco
gniz
ed
at
the
date
of
ac
quis
itio
n is
re
cogn
ized
as
good
wil
l, w
hich
is
incl
uded
wit
hin
the
carr
ying
am
ount
of
the
inve
stm
ent
and
is n
ot
amor
tize
d. A
ny e
xces
s of
the
Com
pany
’s s
hare
of
the
net
fair
val
ue o
f th
e id
enti
fiab
le a
sset
s an
d li
abil
itie
s ov
er th
e co
st o
f ac
quis
itio
n, a
fter
rea
sses
smen
t, is
rec
ogni
zed
imm
edia
tely
in p
rofi
t or
loss
. T
he e
ntir
e ca
rryi
ng a
mou
nt o
f th
e in
vest
men
t (i
nclu
ding
goo
dwil
l) i
s te
sted
for
im
pair
men
t as
a s
ingl
e as
set b
y co
mpa
ring
its
reco
vera
ble
amou
nt w
ith
its
carr
ying
am
ount
. Any
impa
irm
ent l
oss
reco
gniz
ed is
no
t al
loca
ted
to a
ny a
sset
, inc
ludi
ng g
oodw
ill,
that
for
ms
part
of
the
carr
ying
am
ount
of
the
inve
stm
ent.
Any
rev
ersa
l of
tha
t im
pair
men
t lo
ss i
s re
cogn
ized
to
the
exte
nt t
hat
the
reco
vera
ble
amou
nt o
f th
e in
vest
men
t sub
sequ
entl
y in
crea
ses.
T
he C
ompa
ny d
isco
ntin
ues
the
use
of t
he e
quity
met
hod
from
the
dat
e on
whi
ch i
t ce
ases
to
have
si
gnif
ican
t inf
luen
ce a
nd jo
int c
ontr
ol. A
ny r
etai
ned
inve
stm
ent i
s m
easu
red
at f
air
valu
e at
that
dat
e an
d th
e fa
ir v
alue
is
rega
rded
as
its
fair
val
ue o
n in
itia
l re
cogn
itio
n as
a f
inan
cial
ass
et.
The
dif
fere
nce
betw
een
the
prev
ious
car
ryin
g am
ount
of
the
asso
ciat
e an
d th
e jo
intly
con
trol
led
enti
ty a
ttri
buta
ble
to
the
reta
ined
int
eres
t an
d it
s fa
ir v
alue
is
incl
uded
in
the
dete
rmin
atio
n of
the
gai
n or
los
s on
dis
posa
l of
th
e as
soci
ate
and
the
join
tly c
ontr
olle
d en
tity
. T
he C
ompa
ny a
ccou
nts
for
all
amou
nts
prev
ious
ly
reco
gniz
ed i
n ot
her
com
preh
ensi
ve i
ncom
e in
rel
atio
n to
tha
t as
soci
ate
and
the
join
tly c
ontr
olle
d en
tity
on
the
sam
e ba
sis
as w
ould
be
requ
ired
if
that
ass
ocia
te h
ad d
irec
tly
disp
osed
of
the
rela
ted
asse
ts o
r li
abil
itie
s.
Whe
n th
e C
ompa
ny t
rans
acts
wit
h it
s as
soci
ate
and
join
t ve
ntur
es, p
rofi
ts a
nd l
osse
s re
sult
ing
from
the
tr
ansa
ctio
ns w
ith
the
asso
ciat
e ar
e re
cogn
ized
in th
e C
ompa
ny’
fina
ncia
l sta
tem
ents
onl
y to
the
exte
nt o
f in
tere
sts
in th
e as
soci
ate
and
the
join
tly
cont
roll
ed e
ntit
y th
at a
re n
ot r
elat
ed to
the
Com
pany
. P
rop
erty
, Pla
nt
and
Eq
uip
men
t P
rope
rty,
pla
nt a
nd e
quip
men
t ar
e ta
ngib
le i
tem
s th
at a
re h
eld
for
use
in t
he p
rodu
ctio
n or
sup
ply
of g
oods
or
ser
vice
s, f
or r
enta
l to
oth
ers,
or
for
adm
inis
trat
ive
purp
oses
and
are
exp
ecte
d to
be
used
for
mor
e th
an
one
peri
od. T
he c
ost o
f an
item
of
prop
erty
, pla
nt a
nd e
quip
men
t sha
ll b
e re
cogn
ized
as
an a
sset
if, a
nd o
nly
if,
it i
s pr
obab
le t
hat
futu
re e
cono
mic
ben
efit
s as
soci
ated
wit
h th
e it
em w
ill
flow
to
the
Com
pany
; an
d th
e co
st o
f th
e ite
m c
an b
e m
easu
red
reli
ably
. P
rope
rty,
pla
nt a
nd e
quip
men
t ar
e st
ated
at
cost
les
s re
cogn
ized
ac
cum
ulat
ed d
epre
ciat
ion
and
reco
gniz
ed a
ccum
ulat
ed im
pair
men
t los
s.
Fre
ehol
d la
nd is
not
dep
reci
ated
. D
epre
ciat
ion
is r
ecog
nize
d us
ing
the
stra
ight
-lin
e m
etho
d. E
ach
sign
ific
ant
part
is
depr
ecia
ted
sepa
rate
ly.
The
est
imat
ed u
sefu
l li
ves,
res
idua
l va
lues
and
dep
reci
atio
n m
etho
ds a
re r
evie
wed
at
the
end
of e
ach
repo
rtin
g pe
riod
, wit
h th
e ef
fect
s of
any
cha
nges
in th
e es
tim
ates
acc
ount
ed f
or o
n a
pros
pect
ive
basi
s.
Ass
ets
held
und
er f
inan
ce le
ases
are
dep
reci
ated
ove
r th
eir
expe
cted
use
ful l
ives
on
the
sam
e ba
sis
as o
wne
d as
sets
. Ass
ets
are
depr
ecia
ted
over
the
sho
rter
of
the
leas
e te
rm a
nd t
heir
use
ful
live
s us
ing
the
stra
ight
-lin
e m
etho
d.
Any
gai
n or
los
s ar
isin
g on
the
dis
posa
l or
ret
irem
ent
of a
n it
em o
f pr
oper
ty,
plan
t an
d eq
uipm
ent
is
dete
rmin
ed a
s th
e di
ffer
ence
bet
wee
n th
e sa
les
proc
eeds
and
the
car
ryin
g am
ount
of
the
asse
t an
d is
re
cogn
ized
in p
rofi
t or
loss
.
206
- 19
-
Inve
stm
ent
Pro
per
ties
In
vest
men
t pr
oper
ties
are
pro
pert
ies
held
to
earn
ren
tals
or
for
capi
tal
appr
ecia
tion
. In
vest
men
t pr
oper
ties
al
so in
clud
e la
nd h
eld
for
a cu
rren
tly
unde
term
ined
fut
ure
use.
In
vest
men
t pr
oper
ties
are
mea
sure
d in
itia
lly
at c
ost,
incl
udin
g tr
ansa
ctio
n co
sts.
Sub
sequ
ent
to i
niti
al
reco
gnit
ion,
inv
estm
ent
prop
erti
es a
re m
easu
red
at c
ost
less
acc
umul
ated
dep
reci
atio
n an
d ac
cum
ulat
ed
impa
irm
ent l
oss.
A
ny g
ain
or l
oss
aris
ing
on t
he d
erec
ogni
tion
of
inve
stm
ent
prop
erti
es i
s ca
lcul
ated
as
the
diff
eren
ce
betw
een
the
net
disp
osal
pro
ceed
s an
d th
e ca
rryi
ng a
mou
nt o
f th
e as
set
and
is i
nclu
ded
in p
rofi
t or
los
s in
th
e pe
riod
in w
hich
the
prop
erty
is d
erec
ogni
zed.
In
tan
gib
le A
sset
s In
tang
ible
ass
ets
wit
h fi
nite
use
ful
live
s th
at a
re a
cqui
red
sepa
rate
ly a
re i
niti
ally
mea
sure
d at
cos
t an
d su
bseq
uent
ly
mea
sure
d at
co
st
less
ac
cum
ulat
ed
amor
tiza
tion
an
d ac
cum
ulat
ed
impa
irm
ent
loss
. A
mor
tiza
tion
is
reco
gniz
ed o
n a
stra
ight
-lin
e ba
sis.
The
est
imat
ed u
sefu
l li
ves,
res
idua
l va
lues
, an
d am
orti
zati
on m
etho
ds a
re r
evie
wed
at
the
end
of e
ach
repo
rtin
g pe
riod
, w
ith
the
effe
cts
of a
ny c
hang
es i
n th
e es
tim
ates
bei
ng a
ccou
nted
for
on
a pr
ospe
ctiv
e ba
sis.
The
res
idua
l va
lue
of a
n in
tang
ible
ass
et w
ith
a fi
nite
use
ful
life
sha
ll b
e as
sum
ed t
o be
zer
o un
less
the
Com
pany
exp
ects
to
disp
ose
of t
he i
ntan
gibl
e as
set
befo
re th
e en
d of
its
econ
omic
life
. Im
pai
rmen
t of
Tan
gib
le a
nd
In
tan
gibl
e A
sset
s O
ther
Th
an G
ood
wil
l A
t th
e en
d of
eac
h re
port
ing
peri
od,
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, e
xclu
ding
goo
dwil
l, to
det
erm
ine
whe
ther
the
re i
s an
y in
dica
tion
tha
t th
ose
asse
ts h
ave
suff
ered
an
impa
irm
ent
loss
. If
any
such
ind
icat
ion
exis
ts, t
he r
ecov
erab
le a
mou
nt o
f th
e as
set
is e
stim
ated
in
ord
er t
o de
term
ine
the
exte
nt o
f th
e im
pair
men
t lo
ss. W
hen
it i
s no
t po
ssib
le t
o es
tim
ate
the
reco
vera
ble
amou
nt o
f an
indi
vidu
al a
sset
, the
Com
pany
est
imat
es th
e re
cove
rabl
e am
ount
of
the
cash
-gen
erat
ing
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
unit
s on
a
reas
onab
le
and
cons
iste
nt
basi
s;
othe
rwis
e,
corp
orat
e as
sets
ar
e al
loca
ted
to
the
smal
lest
gr
oup
of
cash
-gen
erat
ing
unit
s on
a r
easo
nabl
e an
d co
nsis
tent
all
ocat
ion
basi
s.
Inta
ngib
le a
sset
s w
ith
inde
fini
te u
sefu
l li
ves
and
inta
ngib
le a
sset
s no
t ye
t av
aila
ble
for
use
are
test
ed f
or
impa
irm
ent a
t lea
st a
nnua
lly,
and
whe
neve
r th
ere
is a
n in
dica
tion
that
the
asse
t may
be
impa
ired
. T
he r
ecov
erab
le a
mou
nt i
s th
e hi
gher
of
fair
val
ue l
ess
cost
s to
sel
l an
d va
lue
in u
se.
In a
sses
sing
val
ue i
n us
e, t
he C
ompa
ny u
ses
the
esti
mat
ed c
ash
flow
s di
scou
nted
by
the
futu
re p
re-t
ax d
isco
unt
rate
, an
d th
e di
scou
nt r
ate
refl
ects
the
curr
ent m
arke
t tim
e va
lue
of m
oney
and
the
spec
ific
ris
ks to
the
asse
t for
est
imat
ed
futu
re c
ash
flow
s no
t yet
adj
usti
ng to
the
mar
ket.
If t
he r
ecov
erab
le a
mou
nt o
f an
ass
et o
r ca
sh-g
ener
atin
g un
it is
est
imat
ed t
o be
les
s th
an i
ts c
arry
ing
amou
nt, t
he c
arry
ing
amou
nt o
f th
e as
set o
r ca
sh-g
ener
atin
g un
it is
red
uced
to it
s re
cove
rabl
e am
ount
. W
hen
an i
mpa
irm
ent
loss
is
subs
eque
ntly
is
reve
rsed
, th
e ca
rryi
ng a
mou
nt o
f th
e as
set
or c
ash-
gene
rati
ng
unit
is
incr
ease
d to
the
rev
ised
est
imat
e of
its
rec
over
able
am
ount
, bu
t on
ly t
o 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
pair
men
t lo
ss b
een
reco
gniz
ed f
or t
he a
sset
or
cash
-gen
erat
ing
unit
in p
rior
yea
rs. A
rev
ersa
l of
an im
pair
men
t los
s is
rec
ogni
zed
in p
rofi
t or
loss
. F
inan
cial
In
stru
men
ts
Fin
anci
al a
sset
s an
d fi
nanc
ial
liab
ilit
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
the
inst
rum
ents
.
- 20
-
Fin
anci
al a
sset
s an
d fi
nanc
ial
liab
ilit
ies
are
init
iall
y m
easu
red
at f
air
valu
e. T
rans
acti
on c
osts
tha
t ar
e di
rect
ly a
ttri
buta
ble
to t
he a
cqui
siti
on o
r is
suan
ce o
f fi
nanc
ial
asse
ts a
nd f
inan
cial
lia
bili
ties
(ot
her
than
fi
nanc
ial
asse
ts a
nd f
inan
cial
lia
bili
ties
at
FV
TP
L)
are
adde
d to
or
dedu
cted
fro
m t
he f
air
valu
e of
the
fi
nanc
ial
asse
ts o
r fi
nanc
ial
liab
ilit
ies,
as
appr
opri
ate,
on
init
ial
reco
gnit
ion.
Tra
nsac
tion
cos
ts d
irec
tly
attr
ibut
able
to
th
e ac
quis
itio
n of
fi
nanc
ial
asse
ts
or
fina
ncia
l li
abil
itie
s at
F
VT
PL
ar
e re
cogn
ized
im
med
iate
ly in
pro
fit o
r lo
ss.
a.
Fin
anci
al a
sset
s A
ll r
egul
ar p
urch
ases
or
sale
s of
fin
anci
al a
sset
s ar
e re
cogn
ized
and
der
ecog
nize
d on
a t
rade
dat
e ba
sis.
A
ll r
egul
ar p
urch
ases
or
sale
s of
fin
anci
al a
sset
s ar
e bu
y or
sel
l of
fin
anci
al a
sset
s in
the
per
iod
set
by
regu
lati
on o
r m
arke
t con
vent
ion.
1)
M
easu
rem
ent c
ateg
ory
Fin
anci
al a
sset
s ar
e cl
assi
fied
int
o th
e fo
llow
ing
cate
gori
es:
fina
ncia
l as
sets
at
FV
TP
L,
fina
ncia
l as
sets
at a
mor
tize
d co
st, a
nd in
vest
men
ts in
equ
ity
inst
rum
ents
at F
VT
OC
I.
a)
Fin
anci
al a
sset
s at
FV
TP
L
F
inan
cial
ass
ets
are
clas
sifi
ed a
s at
FV
TP
L w
hen
such
a f
inan
cial
ass
et is
man
dato
rily
cla
ssif
ied
or d
esig
nate
d as
at
FV
TP
L.
Fin
anci
al a
sset
s m
anda
tori
ly c
lass
ifie
d as
at
FV
TP
L i
nclu
de
inve
stm
ents
in
equi
ty i
nstr
umen
ts w
hich
are
not
des
igna
ted
as a
t F
VT
OC
I an
d de
bt i
nstr
umen
ts
that
do
not m
eet t
he a
mor
tize
d co
st c
rite
ria
or th
e F
VT
OC
I cr
iter
ia.
Fin
anci
al a
sset
s at
FV
TP
L a
re s
ubse
quen
tly m
easu
red
at f
air
valu
e, w
ith
any
gain
s or
los
ses
aris
ing
on r
emea
sure
men
t re
cogn
ized
in
prof
it or
los
s. F
air
valu
e is
det
erm
ined
in
the
man
ner
desc
ribe
d in
Not
e 31
. b)
F
inan
cial
ass
ets
at a
mor
tize
d co
st
Fin
anci
al a
sset
s th
at m
eet
the
foll
owin
g co
ndit
ions
are
sub
sequ
entl
y m
easu
red
at a
mor
tize
d co
st:
i. T
he f
inan
cial
ass
et i
s he
ld w
ithi
n a
busi
ness
mod
el w
hose
obj
ecti
ve i
s to
hol
d fi
nanc
ial
asse
ts in
ord
er to
col
lect
con
trac
tual
cas
h fl
ows;
and
ii
. T
he c
ontr
actu
al te
rms
of th
e fi
nanc
ial a
sset
giv
e ri
se o
n sp
ecif
ied
date
s to
cas
h fl
ows
that
are
so
lely
pay
men
ts o
f pr
inci
pal a
nd in
tere
st o
n th
e pr
inci
pal a
mou
nt o
utst
andi
ng.
S
ubse
quen
t to
ini
tial
rec
ogni
tion
, fi
nanc
ial
asse
ts a
t am
orti
zed
cost
, in
clud
ing
cash
and
cas
h eq
uiva
lent
s, t
rade
rec
eiva
bles
, ot
her
rece
ivab
les
and
othe
r fi
nanc
ial
asse
ts,
are
mea
sure
d at
am
orti
zed
cost
, w
hich
equ
als
the
gros
s ca
rryi
ng a
mou
nt d
eter
min
ed u
sing
the
eff
ecti
ve i
nter
est
met
hod
less
any
impa
irm
ent l
oss.
Exc
hang
e di
ffer
ence
s ar
e re
cogn
ized
in p
rofi
t or
loss
. In
tere
st i
ncom
e is
cal
cula
ted
by a
pply
ing
the
effe
ctiv
e in
tere
st r
ate
to t
he g
ross
car
ryin
g am
ount
of
a f
inan
cial
ass
et.
Cas
h eq
uiva
lent
s in
clud
e ti
me
depo
sits
wit
h or
igin
al m
atur
itie
s w
ithi
n 3
mon
ths
from
the
date
of
acqu
isit
ion,
whi
ch a
re h
ighl
y liq
uid,
rea
dily
con
vert
ible
to
a kn
own
amou
nt o
f ca
sh a
nd a
re
subj
ect
to a
n in
sign
ific
ant
risk
of
chan
ges
in v
alue
. T
hese
cas
h eq
uiva
lent
s ar
e he
ld f
or t
he
purp
ose
of m
eeti
ng s
hort
-ter
m c
ash
com
mit
men
ts.
207
- 21
-
c)
Inve
stm
ents
in e
quit
y in
stru
men
ts a
t FV
TO
CI
O
n in
itia
l re
cogn
itio
n, t
he C
ompa
ny m
ay m
ake
an i
rrev
ocab
le e
lect
ion
to d
esig
nate
inv
estm
ents
in
equ
ity
inst
rum
ents
as
at F
VT
OC
I. D
esig
nati
on a
t F
VT
OC
I is
not
per
mit
ted
if a
n eq
uity
in
vest
men
t is
hel
d fo
r tr
adin
g or
if
it i
s co
ntin
gent
con
side
rati
on r
ecog
nize
d by
an
acqu
irer
in
a bu
sine
ss c
ombi
nati
on.
Inve
stm
ents
in
equi
ty i
nstr
umen
ts a
t F
VT
OC
I ar
e su
bseq
uent
ly m
easu
red
at f
air
valu
e w
ith
gain
s an
d lo
sses
ari
sing
fro
m c
hang
es i
n fa
ir v
alue
rec
ogni
zed
in o
ther
com
preh
ensi
ve i
ncom
e an
d ac
cum
ulat
ed in
oth
er e
quit
y. T
he c
umul
ativ
e ga
in o
r lo
ss w
ill n
ot b
e re
clas
sifi
ed to
pro
fit o
r lo
ss o
n di
spos
al o
f th
e eq
uity
inve
stm
ents
; ins
tead
, the
y w
ill b
e tr
ansf
erre
d to
ret
aine
d ea
rnin
gs.
Div
iden
ds o
n th
ese
inve
stm
ents
in
equi
ty i
nstr
umen
ts a
re r
ecog
nize
d in
pro
fit
or l
oss
whe
n th
e C
ompa
ny’s
rig
ht t
o re
ceiv
e th
e di
vide
nds
is e
stab
lish
ed, u
nles
s th
e di
vide
nds
clea
rly
repr
esen
t a
reco
very
of
part
of
the
cost
of
an in
vest
men
t.
2)
Impa
irm
ent o
f fi
nanc
ial a
sset
s
The
C
ompa
ny
reco
gniz
es
a lo
ss
allo
wan
ce
for
expe
cted
cr
edit
lo
sses
on
fi
nanc
ial
asse
ts
at
amor
tize
d co
st (
incl
udin
g tr
ade
rece
ivab
les)
, as
wel
l as
cont
ract
ass
ets.
T
he C
ompa
ny a
lway
s re
cogn
izes
lif
etim
e ex
pect
ed c
redi
t lo
sses
(E
CL
s) f
or t
rade
rec
eiva
bles
and
ot
her
rece
ivab
les.
For
all
oth
er f
inan
cial
ins
trum
ents
, the
Com
pany
rec
ogni
zes
life
tim
e E
CL
s w
hen
ther
e ha
s be
en a
sig
nifi
cant
inc
reas
e in
cre
dit
risk
sin
ce i
niti
al r
ecog
niti
on. I
f, o
n th
e ot
her
hand
, the
cr
edit
ris
k on
a f
inan
cial
ins
trum
ent
has
not
incr
ease
d si
gnif
ican
tly
sinc
e in
itia
l re
cogn
itio
n, t
he
Com
pany
mea
sure
s th
e lo
ss a
llow
ance
for
that
fin
anci
al in
stru
men
t at a
n am
ount
equ
al to
12-
mon
th
EC
Ls.
E
xpec
ted
cred
it l
osse
s re
flec
t th
e w
eigh
ted
aver
age
of c
redi
t lo
sses
wit
h th
e re
spec
tive
ris
ks o
f a
defa
ult
occu
rrin
g as
the
wei
ghts
. Lif
etim
e E
CL
rep
rese
nts
the
expe
cted
cre
dit
loss
es t
hat
wil
l re
sult
fr
om a
ll p
ossi
ble
defa
ult
even
ts o
ver
the
expe
cted
lif
e of
a f
inan
cial
ins
trum
ent.
In c
ontr
ast,
12-m
onth
EC
L r
epre
sent
s th
e po
rtio
n of
lif
etim
e E
CL
tha
t is
exp
ecte
d to
res
ult
from
def
ault
eve
nts
on a
fin
anci
al in
stru
men
t tha
t are
pos
sibl
e w
ithi
n 12
mon
ths
afte
r th
e re
port
ing
date
. T
he i
mpa
irm
ent
loss
of
all
fina
ncia
l as
sets
is
reco
gniz
ed i
n pr
ofit
or
loss
by
a re
duct
ion
in t
heir
ca
rryi
ng a
mou
nts
thro
ugh
a lo
ss a
llow
ance
acc
ount
, exc
ept
for
inve
stm
ents
in
debt
ins
trum
ents
tha
t ar
e m
easu
red
at F
VT
OC
I, f
or w
hich
the
los
s al
low
ance
is
reco
gniz
ed i
n ot
her
com
preh
ensi
ve
inco
me
and
the
carr
ying
am
ount
s of
suc
h fi
nanc
ial a
sset
s ar
e no
t red
uced
.
3)
Der
ecog
niti
on o
f fi
nanc
ial a
sset
s T
he C
ompa
ny d
erec
ogni
zes
a fi
nanc
ial a
sset
onl
y w
hen
the
cont
ract
ual r
ight
s to
the
cash
flo
ws
from
th
e as
set
expi
re o
r w
hen
it t
rans
fers
the
fin
anci
al a
sset
and
sub
stan
tial
ly a
ll t
he r
isks
and
rew
ards
of
owne
rshi
p of
the
asse
t to
anot
her
part
y.
On
dere
cogn
itio
n of
a f
inan
cial
ass
et a
t am
orti
zed
cost
in
its
enti
rety
, th
e di
ffer
ence
bet
wee
n th
e as
set’
s ca
rryi
ng a
mou
nt a
nd t
he s
um o
f th
e co
nsid
erat
ion
rece
ived
and
rec
eiva
ble
is r
ecog
nize
d in
pr
ofit
or
loss
. O
n de
reco
gnit
ion
of a
n in
vest
men
t in
a d
ebt
inst
rum
ent
at F
VT
OC
I, t
he d
iffe
renc
e be
twee
n th
e as
set’
s ca
rryi
ng a
mou
nt a
nd t
he s
um o
f th
e co
nsid
erat
ion
rece
ived
and
rec
eiva
ble
and
the
cum
ulat
ive
gain
or
lo
ss
whi
ch
had
been
re
cogn
ized
in
ot
her
com
preh
ensi
ve
inco
me
is
reco
gniz
ed i
n pr
ofit
or l
oss.
How
ever
, on
dere
cogn
itio
n of
an
inve
stm
ent
in a
n eq
uity
ins
trum
ent
at
FV
TO
CI,
the
dif
fere
nce
betw
een
the
asse
t’s
carr
ying
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
rofi
t or
los
s, a
nd t
he c
umul
ativ
e ga
in o
r lo
ss w
hich
had
be
en r
ecog
nize
d in
oth
er c
ompr
ehen
sive
inc
ome
is t
rans
ferr
ed d
irec
tly
to r
etai
ned
earn
ings
, wit
hout
re
cycl
ing
thro
ugh
prof
it o
r lo
ss.
- 22
-
b.
Equ
ity in
stru
men
ts
D
ebt
and
equi
ty i
nstr
umen
ts i
ssue
d by
the
Com
pany
ent
ity
are
clas
sifi
ed a
s ei
ther
fin
anci
al l
iabi
liti
es o
r as
equ
ity
in a
ccor
danc
e w
ith
the
subs
tanc
e of
the
con
trac
tual
arr
ange
men
ts a
nd t
he d
efin
itio
ns o
f a
fina
ncia
l lia
bili
ty a
nd a
n eq
uity
inst
rum
ent.
Equ
ity i
nstr
umen
ts i
ssue
d by
the
Com
pany
ent
ity a
re r
ecog
nize
d at
the
pro
ceed
s re
ceiv
ed, n
et o
f di
rect
is
sue
cost
s.
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
irec
tly
from
eq
uity
. No
gain
or
loss
is
reco
gniz
ed i
n pr
ofit
or
loss
on
the
purc
hase
, sal
e, i
ssue
or
canc
ella
tion
of
the
Com
pany
’s o
wn
equi
ty in
stru
men
ts.
c.
F
inan
cial
liab
ilit
ies
1)
Sub
sequ
ent m
easu
rem
ent
E
xcep
t fo
r fi
nanc
ial
liab
ilit
ies
at F
VT
PL
, al
l fi
nanc
ial
liab
ilit
ies
are
mea
sure
d at
am
orti
zed
cost
us
ing
the
effe
ctiv
e in
tere
st m
etho
d.
2)
D
erec
ogni
tion
of
fina
ncia
l lia
bili
ties
T
he
diff
eren
ce
betw
een
the
carr
ying
am
ount
of
a
fina
ncia
l li
abil
ity
dere
cogn
ized
an
d th
e co
nsid
erat
ion
paid
, inc
ludi
ng a
ny n
on-c
ash
asse
ts tr
ansf
erre
d or
liab
ilit
ies
assu
med
, is
reco
gniz
ed in
pr
ofit
or
loss
.
d.
Con
vert
ible
bon
ds
The
com
pone
nt p
arts
of
com
poun
d in
stru
men
ts (
i.e.
conv
erti
ble
bond
s) i
ssue
d by
the
Com
pany
are
cl
assi
fied
se
para
tely
as
fi
nanc
ial
liab
ilit
ies
and
equi
ty
in
acco
rdan
ce
wit
h th
e su
bsta
nce
of
the
cont
ract
ual a
rran
gem
ents
and
the
defi
nitio
ns o
f a
fina
ncia
l lia
bili
ty a
nd a
n eq
uity
inst
rum
ent.
On
init
ial
reco
gnit
ion,
the
fai
r va
lue
of t
he l
iabi
lity
com
pone
nt i
s es
tim
ated
usi
ng t
he p
reva
ilin
g m
arke
t in
tere
st r
ate
for
sim
ilar
non
-con
vert
ible
ins
trum
ents
. T
his
amou
nt i
s re
cord
ed a
s a
liab
ility
on
an
amor
tize
d co
st b
asis
usi
ng t
he e
ffec
tive
int
eres
t m
etho
d un
til
exti
ngui
shed
upo
n co
nver
sion
or
the
inst
rum
ent’
s m
atur
ity
date
. Any
em
bedd
ed d
eriv
ativ
e li
abil
ity is
mea
sure
d at
fai
r va
lue.
T
he c
onve
rsio
n op
tion
clas
sifi
ed a
s eq
uity
is
dete
rmin
ed b
y de
duct
ing
the
amou
nt o
f th
e li
abil
ity
com
pone
nt f
rom
the
fair
val
ue o
f th
e co
mpo
und
inst
rum
ent a
s a
who
le. T
his
is r
ecog
nize
d an
d in
clud
ed
in e
quity
, ne
t of
inc
ome
tax
effe
cts,
and
is
not
subs
eque
ntly
rem
easu
red.
In
addi
tion
, th
e co
nver
sion
op
tion
cla
ssif
ied
as e
quity
wil
l re
mai
n in
equ
ity u
ntil
the
con
vers
ion
opti
on i
s ex
erci
sed,
in
whi
ch c
ase,
th
e ba
lanc
e re
cogn
ized
in
equi
ty w
ill
be t
rans
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
mat
urit
y, t
he b
alan
ce r
ecog
nize
d in
equ
ity w
ill
be t
rans
ferr
ed
to c
apit
al s
urpl
us -
sha
re p
rem
ium
s.
Tra
nsac
tion
cos
ts t
hat
rela
te t
o th
e is
suan
ce o
f th
e co
nver
tibl
e no
tes
are
allo
cate
d to
the
lia
bili
ty a
nd
equi
ty c
ompo
nent
s in
pro
port
ion
to t
he a
lloc
atio
n of
the
gro
ss p
roce
eds.
Tra
nsac
tion
cos
ts r
elat
ing
to
the
equi
ty c
ompo
nent
are
rec
ogni
zed
dire
ctly
in
equi
ty.
Tra
nsac
tion
cos
ts r
elat
ing
to t
he l
iabi
lity
co
mpo
nent
are
incl
uded
in th
e ca
rryi
ng a
mou
nt o
f th
e li
abil
ity c
ompo
nent
.
e.
Der
ivat
ive
fina
ncia
l ins
trum
ents
T
he C
ompa
ny e
nter
s in
to a
var
iety
of
deri
vati
ve f
inan
cial
inst
rum
ents
to m
anag
e it
s ex
posu
re to
inte
rest
ra
te,
fore
ign
exch
ange
rat
e an
d fu
el p
rice
ris
ks,
incl
udin
g fo
reig
n ex
chan
ge f
orw
ard
cont
ract
s, i
nter
est
rate
sw
aps,
cur
renc
y op
tion
s sw
aps
and
fuel
sw
aps.
208
- 23
-
Der
ivat
ives
are
ini
tial
ly r
ecog
nize
d at
fai
r va
lue
at t
he d
ate
the
deri
vati
ve c
ontr
acts
are
ent
ered
int
o an
d ar
e su
bseq
uent
ly r
emea
sure
d to
thei
r fa
ir v
alue
at t
he e
nd o
f ea
ch r
epor
ting
per
iod.
The
res
ulti
ng g
ain
or
loss
is
reco
gniz
ed i
n pr
ofit
or
loss
im
med
iate
ly u
nles
s th
e de
riva
tive
is
desi
gnat
ed a
nd e
ffec
tive
as
a he
dgin
g in
stru
men
t, in
whi
ch e
vent
, the
tim
ing
of th
e re
cogn
itio
n in
pro
fit o
r lo
ss d
epen
ds o
n th
e na
ture
of
the
hed
ging
rel
atio
nshi
p. W
hen
the
fair
val
ue o
f a
deri
vati
ve f
inan
cial
ins
trum
ent
is p
osit
ive,
the
de
riva
tive
is
reco
gniz
ed a
s a
fina
ncia
l as
set;
whe
n th
e fa
ir v
alue
of
a de
riva
tive
fin
anci
al i
nstr
umen
t is
ne
gati
ve, t
he d
eriv
ativ
e is
rec
ogni
zed
as a
fin
anci
al li
abil
ity.
H
edge
Acc
oun
tin
g T
he C
ompa
ny e
nter
s in
to s
ome
deri
vati
ve t
rans
acti
ons
that
aim
to
man
age
inte
rest
rat
es,
fore
ign
exch
ange
ra
tes,
fu
el
pric
es,
and
othe
r fa
ctor
s af
fect
ing
gain
s or
lo
sses
on
as
sets
an
d li
abil
itie
s.
The
he
dgin
g tr
ansa
ctio
ns a
re d
efin
ed a
s ca
sh f
low
hed
ges.
Whe
n en
teri
ng i
nto
hedg
ing
tran
sact
ions
, th
e C
ompa
ny h
as
prep
ared
off
icia
l do
cum
ents
tha
t de
scri
be t
he h
edgi
ng r
elat
ions
hip
betw
een
hedg
ing
inst
rum
ents
and
ite
ms
whi
ch h
ave
been
hed
ged,
the
obj
ecti
ve o
f ri
sk m
anag
emen
t, th
e he
dgin
g st
rate
gy,
and
the
way
to
eval
uate
th
e ef
fect
iven
ess
of th
e he
dgin
g in
stru
men
t.
The
eff
ecti
ve p
orti
on o
f ch
ange
s in
the
fair
val
ue o
f de
riva
tive
s th
at a
re d
esig
nate
d an
d qu
alif
y as
cas
h fl
ow
hedg
es i
s re
cogn
ized
in
othe
r co
mpr
ehen
sive
inc
ome.
The
gai
n or
los
s re
lati
ng t
o th
e in
effe
ctiv
e po
rtio
n is
re
cogn
ized
imm
edia
tely
in p
rofi
t or
loss
. T
he a
ssoc
iate
d ga
ins
or l
osse
s th
at w
ere
reco
gniz
ed i
n ot
her
com
preh
ensi
ve i
ncom
e ar
e re
clas
sifi
ed f
rom
eq
uity
to
prof
it o
r lo
ss a
s a
recl
assi
fica
tion
adj
ustm
ent
in t
he l
ine
item
rel
atin
g to
the
hed
ged
item
in
the
sam
e pe
riod
as
whe
n th
e he
dged
ite
m a
ffec
ts p
rofi
t or
los
s. I
f a
hedg
e of
a f
orec
aste
d tr
ansa
ctio
n su
bseq
uent
ly r
esul
ts i
n th
e re
cogn
itio
n of
a n
on-f
inan
cial
ass
et o
r a
non-
fina
ncia
l li
abil
ity,
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
itia
l cos
t of
the
non-
fina
ncia
l ass
et o
r no
n-fi
nanc
ial l
iabi
lity
. S
tart
ing
from
201
8, th
e C
ompa
ny d
isco
ntin
ues
hedg
e ac
coun
ting
onl
y w
hen
the
hedg
ing
rela
tion
ship
cea
ses
to m
eet
the
qual
ifyi
ng c
rite
ria;
for
ins
tanc
e, w
hen
the
hedg
ing
inst
rum
ent
expi
res
or i
s so
ld,
term
inat
ed o
r ex
erci
sed.
The
cum
ulat
ive
gain
or
loss
on
the
hedg
ing
inst
rum
ent
that
has
bee
n pr
evio
usly
rec
ogni
zed
in
othe
r co
mpr
ehen
sive
inc
ome
from
the
per
iod
in w
hich
the
hed
ge w
as e
ffec
tive
rem
ains
sep
arat
ely
in e
quit
y un
til
the
fore
cast
ed t
rans
acti
on o
ccur
s. W
hen
a fo
reca
sted
tra
nsac
tion
is
no l
onge
r ex
pect
ed t
o oc
cur,
the
ga
in o
r lo
ss a
ccum
ulat
ed in
equ
ity is
rec
ogni
zed
imm
edia
tely
in p
rofi
t or
loss
. P
rovi
sion
s T
he 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
(leg
al o
r co
nstr
ucti
ve)
aris
ing
from
pas
t ev
ents
(le
gal
or c
onst
ruct
ive
obli
gati
on),
pay
men
t fo
r th
e ob
ligat
ion
is p
roba
ble,
and
the
ex
pend
itur
e fo
r se
ttli
ng th
e ob
liga
tion
can
be
esti
mat
ed r
elia
bly.
T
he a
mou
nt r
ecog
nize
d as
a p
rovi
sion
is
the
best
est
imat
e of
the
exp
endi
ture
req
uire
d to
set
tle t
he p
rese
nt
obli
gati
on, t
akin
g in
to a
ccou
nt th
e ri
sks
and
unce
rtai
ntie
s su
rrou
ndin
g th
e ob
ligat
ion
as o
f th
e ba
lanc
e sh
eet
date
. W
hen
a pr
ovis
ion
is m
easu
red
usin
g th
e ca
sh f
low
s es
tim
ated
to
sett
le t
he p
rese
nt o
blig
atio
n, i
ts
carr
ying
am
ount
is
the
pres
ent
valu
e of
tho
se c
ash
flow
s. W
hen
the
airc
raft
lea
se c
ontr
acts
exp
ire
and
wil
l be
ret
urne
d to
less
or, t
he C
ompa
ny w
ill a
sses
s if
ther
e ar
e ex
isti
ng o
blig
atio
ns a
nd if
a p
rovi
sion
is r
equi
red
whe
n si
gnin
g th
e le
ase
cont
ract
. R
even
ue
Rec
ogn
itio
n
Whe
n ap
plyi
ng I
FR
S 1
5 du
ring
201
8, th
e C
ompa
ny r
ecog
nize
s re
venu
e by
app
lyin
g th
e fo
llow
ing
step
s:
Iden
tify
ing
the
cont
ract
wit
h th
e cu
stom
er;
Iden
tify
ing
the
perf
orm
ance
obl
igat
ions
in th
e co
ntra
ct;
Det
erm
ine
the
tran
sact
ion
pric
e;
All
ocat
e th
e tr
ansa
ctio
n pr
ice
to th
e pe
rfor
man
ce o
blig
atio
ns in
the
cont
ract
; and
- 24
-
Rec
ogni
ze r
even
ue w
hen
the
Com
pany
sat
isfi
es a
per
form
ance
obl
igat
ion.
S
hipp
ing
serv
ice
reve
nue
Pas
seng
er a
nd c
argo
rev
enue
are
rec
ogni
zed
as r
even
ue w
hen
the
pass
enge
rs a
nd g
oods
are
act
uall
y ca
rrie
d.
Whe
n th
e ti
cket
s ar
e so
ld, d
ue to
the
fact
that
the
fulf
illm
ent o
blig
atio
ns o
f th
e sh
ipm
ent h
ave
not b
een
met
, th
e re
leva
nt a
mou
nt o
f re
venu
e is
fir
st r
ecor
ded
as c
ontr
act
liab
ilit
ies
unti
l pa
ssen
gers
act
uall
y bo
ard.
B
efor
e 20
17, t
he r
elev
ant a
mou
nts
wer
e re
cord
ed a
s de
ferr
ed r
even
ue.
Lea
sin
g 20
19
At t
he in
cept
ion
of a
con
trac
t, th
e C
ompa
ny a
sses
ses
whe
ther
the
cont
ract
is, o
r co
ntai
ns, a
leas
e.
The
Com
pany
as
less
ee
The
Com
pany
rec
ogni
zes
righ
t-of
-use
ass
ets
and
leas
e li
abil
itie
s fo
r al
l lea
ses
at th
e co
mm
ence
men
t dat
e of
a
leas
e, e
xcep
t fo
r sh
ort-
term
lea
ses
and
low
-val
ue a
sset
lea
ses
acco
unte
d fo
r ap
plyi
ng a
rec
ogni
tion
ex
empt
ion
whe
re le
ase
paym
ents
are
rec
ogni
zed
as e
xpen
ses
on a
str
aigh
t-li
ne b
asis
ove
r th
e le
ase
term
s.
Rig
ht-o
f-us
e as
sets
are
ini
tial
ly m
easu
red
at c
ost,
whi
ch c
ompr
ises
the
ini
tial
mea
sure
men
t of
lea
se
liab
ilit
ies
adju
sted
for
lea
se p
aym
ents
mad
e at
or
befo
re t
he c
omm
ence
men
t da
te,
plus
any
ini
tial
dir
ect
cost
s in
curr
ed a
nd a
n es
tim
ate
of c
osts
nee
ded
to r
esto
re th
e un
derl
ying
ass
ets,
and
less
any
leas
e in
cent
ives
re
ceiv
ed.
Rig
ht-o
f-us
e as
sets
ar
e su
bseq
uent
ly
mea
sure
d at
co
st
less
ac
cum
ulat
ed
depr
ecia
tion
an
d im
pair
men
t lo
sses
and
adj
uste
d fo
r an
y re
mea
sure
men
t of
the
lea
se l
iabi
liti
es.
Rig
ht-o
f-us
e as
sets
are
pr
esen
ted
on a
sep
arat
e li
ne in
the
bala
nce
shee
ts.
Rig
ht-o
f-us
e as
sets
are
dep
reci
ated
usi
ng t
he s
trai
ght-
line
met
hod
from
the
com
men
cem
ent
date
s to
the
ea
rlie
r of
the
end
of
the
usef
ul l
ives
of
the
righ
t-of
-use
ass
ets
or t
he e
nd o
f th
e le
ase
term
s. H
owev
er,
if
leas
es t
rans
fer
owne
rshi
p of
the
und
erly
ing
asse
ts t
o th
e C
ompa
ny b
y th
e en
d of
the
lea
se t
erm
s 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
exer
cise
a p
urch
ase
opti
on,
the
Com
pany
de
prec
iate
s th
e ri
ght-
of-u
se a
sset
s fr
om t
he c
omm
ence
men
t da
tes
to t
he e
nd o
f th
e us
eful
liv
es o
f th
e un
derl
ying
ass
ets.
L
ease
lia
bili
ties
are
ini
tial
ly m
easu
red
at t
he p
rese
nt v
alue
of
the
leas
e pa
ymen
ts,
whi
ch c
ompr
ise
fixe
d pa
ymen
ts,
in-s
ubst
ance
fix
ed p
aym
ents
, va
riab
le l
ease
pay
men
ts w
hich
dep
end
on a
n in
dex
or a
rat
e,
resi
dual
val
ue g
uara
ntee
s, t
he e
xerc
ise
pric
e of
a p
urch
ase
opti
on i
f th
e le
ssee
is
reas
onab
ly c
erta
in t
o ex
erci
se t
hat
opti
on,
and
paym
ents
of
pena
ltie
s fo
r te
rmin
atin
g a
leas
e if
the
lea
se t
erm
ref
lect
s su
ch
term
inat
ion,
les
s an
y le
ase
ince
ntiv
es p
ayab
le.
The
lea
se p
aym
ents
are
dis
coun
ted
usin
g th
e in
tere
st r
ate
impl
icit
in
a le
ase,
if
that
rat
e ca
n be
rea
dily
det
erm
ined
. If
tha
t ra
te c
anno
t be
rea
dily
det
erm
ined
, th
e C
ompa
ny u
ses
the
less
ee’s
incr
emen
tal b
orro
win
g ra
te.
S
ubse
quen
tly,
leas
e li
abil
itie
s ar
e m
easu
red
at a
mor
tize
d co
st u
sing
the
eff
ecti
ve i
nter
est
met
hod,
wit
h in
tere
st e
xpen
se r
ecog
nize
d ov
er t
he l
ease
ter
ms.
Whe
n th
ere
is a
cha
nge
in a
lea
se t
erm
, a
chan
ge i
n th
e am
ount
s ex
pect
ed to
be
paya
ble
unde
r a
resi
dual
val
ue g
uara
ntee
, a c
hang
e in
the
asse
ssm
ent o
f an
opt
ion
to
purc
hase
an
unde
rlyi
ng a
sset
, or
a ch
ange
in
futu
re l
ease
pay
men
ts r
esul
ting
fro
m 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 C
ompa
ny r
emea
sure
s th
e le
ase
liab
ilit
ies
wit
h a
corr
espo
ndin
g ad
just
men
t to
the
righ
t-of
-use
-ass
ets.
Lea
se li
abil
itie
s ar
e pr
esen
ted
on a
sep
arat
e li
ne in
the
bala
nce
shee
ts.
Var
iabl
e le
ase
paym
ents
tha
t do
not
dep
end
on a
n in
dex
or a
rat
e ar
e re
cogn
ized
as
expe
nses
in
the
peri
ods
in w
hich
they
are
incu
rred
.
209
- 25
-
For
sal
e an
d le
aseb
ack
tran
sact
ions
, if
the
tra
nsfe
r of
an
asse
t sa
tisf
ies
the
requ
irem
ents
of
IFR
S 1
5 to
be
acco
unte
d fo
r as
a s
ale,
the
Com
pany
rec
ogni
zes
only
the
am
ount
of
any
gain
or
loss
whi
ch r
elat
es t
o th
e ri
ghts
tra
nsfe
rred
to
the
buye
r-le
ssor
, an
d ad
just
s th
e of
f-m
arke
t te
rms
to m
easu
re t
he s
ale
proc
eeds
at
fair
va
lue.
If
the
tran
sfer
doe
s no
t sa
tisf
y th
e re
quir
emen
ts o
f IF
RS
15
to b
e ac
coun
ted
for
as a
sal
e, i
t is
ac
coun
ted
for
as a
fin
anci
ng tr
ansa
ctio
n.
2018
L
ease
s ar
e cl
assi
fied
as
fina
nce
leas
es w
hene
ver
the
term
s of
the
leas
e tr
ansf
er s
ubst
anti
ally
all
the
risk
s an
d re
war
ds o
f ow
ners
hip
to th
e le
ssee
. All
oth
er le
ases
are
cla
ssif
ied
as o
pera
ting
leas
es.
The
Com
pany
as
less
ee
Ass
ets
held
und
er f
inan
ce l
ease
s ar
e in
itia
lly
reco
gniz
ed a
s as
sets
of
the
Com
pany
at
the
low
er o
f th
eir
fair
va
lue
at t
he i
ncep
tion
of
the
leas
e or
the
pre
sent
val
ue o
f th
e m
inim
um l
ease
pay
men
ts. T
he c
orre
spon
ding
li
abil
ity
to th
e le
ssee
is in
clud
ed in
the
bala
nce
shee
ts a
s a
fina
nce
leas
e ob
liga
tion
. F
inan
ce e
xpen
ses
are
reco
gniz
ed i
mm
edia
tely
in
prof
it o
r lo
ss,
unle
ss t
hey
are
dire
ctly
att
ribu
tabl
e to
qu
alif
ying
ass
ets,
in
whi
ch c
ase,
the
y ar
e ca
pita
lize
d in
acc
orda
nce
wit
h th
e C
ompa
ny’s
gen
eral
pol
icy
on
borr
owin
g co
sts.
O
pera
ting
leas
e pa
ymen
ts a
re r
ecog
nize
d as
exp
ense
s on
a s
trai
ght-
line
bas
is o
ver
the
leas
e te
rm
Em
plo
yee
Ben
efit
s a.
S
hort
-ter
m e
mpl
oyee
ben
efit
s L
iabi
liti
es r
ecog
nize
d in
res
pect
of
shor
t-te
rm e
mpl
oyee
ben
efit
s ar
e m
easu
red
at t
he u
ndis
coun
ted
amou
nt o
f th
e be
nefi
ts e
xpec
ted
to b
e pa
id in
exc
hang
e fo
r th
e re
late
d se
rvic
es.
b.
Ret
irem
ent b
enef
its
Pay
men
ts
to
the
defi
ned
cont
ribu
tion
re
tire
men
t be
nefi
t pl
an
are
reco
gniz
ed
as
expe
nses
w
hen
empl
oyee
s ha
ve r
ende
red
serv
ices
ent
itli
ng th
em to
the
cont
ribu
tion
s.
Def
ined
ben
efit
cos
ts (
incl
udin
g se
rvic
e co
st,
net
inte
rest
and
rem
easu
rem
ent)
und
er t
he d
efin
ed
cont
ribu
tion
reti
rem
ent
bene
fit
plan
are
det
erm
ined
usi
ng t
he p
roje
cted
uni
t cr
edit
met
hod.
Ser
vice
cos
t (i
nclu
ding
cur
rent
ser
vice
cos
t an
d pa
st s
ervi
ce c
ost)
and
net
int
eres
t on
the
net
def
ined
ben
efit
liab
ilit
ies
(ass
ets)
are
rec
ogni
zed
as e
mpl
oyee
ben
efit
s ex
pens
e in
the
per
iod
in w
hich
the
y oc
cur.
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
(exc
ludi
ng in
tere
st),
is
re
cogn
ized
in
ot
her
com
preh
ensi
ve
inco
me
in
the
peri
od i
n w
hich
it
oc
curs
. R
emea
sure
men
t re
cogn
ized
in o
ther
com
preh
ensi
ve in
com
e is
ref
lect
ed im
med
iate
ly in
ret
aine
d ea
rnin
gs a
nd w
ill n
ot b
e re
clas
sifi
ed to
pro
fit o
r lo
ss.
N
et d
efin
ed b
enef
it l
iabi
liti
es (
asse
ts)
repr
esen
t th
e ac
tual
def
icit
in
the
Com
pany
’s d
efin
ed b
enef
it
plan
s.
Bor
row
ing
Cos
ts
Bor
row
ing
cost
s di
rect
ly a
ttri
buta
ble
to t
he a
cqui
siti
on,
cons
truc
tion
or
prod
ucti
on o
f qu
alif
ying
ass
ets
(ass
ets
whi
ch a
re s
ubst
anti
ally
rea
dy f
or th
eir
inte
nded
use
or
sale
thro
ugh
a fa
irly
long
per
iod)
are
add
ed to
th
e co
st o
f th
ose
asse
ts, u
ntil
suc
h ti
me
as th
e as
sets
are
sub
stan
tial
ly r
eady
for
thei
r in
tend
ed u
se o
r sa
le.
Inve
stm
ent i
ncom
e ea
rned
on
the
tem
pora
ry in
vest
men
t of
spec
ific
bor
row
ings
pen
ding
thei
r ex
pend
itur
e on
qu
alif
ying
ass
ets
is d
educ
ted
from
the
borr
owin
g co
sts
elig
ible
for
cap
ital
izat
ion.
- 26
-
Oth
er th
an th
at w
hich
is s
tate
d ab
ove,
all
oth
er b
orro
win
g co
sts
are
reco
gniz
ed in
pro
fit o
r lo
ss in
the
peri
od
in w
hich
they
are
incu
rred
. F
req
uen
t F
lyer
Pro
gram
s T
he C
ompa
ny h
as a
“D
ynas
ty F
lyer
Pro
gram
” th
roug
h w
hich
pro
gram
mem
bers
can
con
vert
acc
umul
ated
m
ilea
ge to
a c
abin
upg
rade
, fre
e ti
cket
s an
d ot
her
mem
ber
rew
ards
. A
por
tion
of
pass
enge
r re
venu
e at
trib
utab
le t
o th
e re
war
ds f
or t
he f
requ
ent
flye
r pr
ogra
m i
s de
ferr
ed.
The
C
ompa
ny r
ecog
nize
s th
is d
efer
red
reve
nue
as r
even
ue o
nly
whe
n th
e C
ompa
ny h
as f
ulfi
lled
its
obl
igat
ions
on
the
gran
ting
of r
ewar
ds o
r w
hen
the
peri
od f
or c
onve
rtin
g th
e m
ilea
ge to
rew
ards
has
exp
ired
. S
har
e-b
ased
Pay
men
t A
rran
gem
ents
E
quit
y-se
ttle
d sh
are-
base
d pa
ymen
ts t
o em
ploy
ees
are
mea
sure
d at
the
fai
r va
lue
of t
he e
quit
y in
stru
men
ts
at th
e gr
ant d
ate.
T
he f
air
valu
e de
term
ined
at
the
gran
t da
te o
f th
e eq
uity
-set
tled
sha
re-b
ased
pay
men
ts i
s ex
pens
ed o
n a
stra
ight
-lin
e ba
sis
over
the
ves
ting
per
iod,
bas
ed o
n th
e C
ompa
ny’s
est
imat
e of
equ
ity
inst
rum
ent
that
wil
l ev
entu
ally
ves
t, w
ith
a co
rres
pond
ing
incr
ease
in
capi
tal
surp
lus
- em
ploy
ee s
hare
opt
ions
. T
he f
air
valu
e de
term
ined
at
the
gran
t da
te o
f th
e eq
uity
-set
tled
sha
re-b
ased
pay
men
ts i
s re
cogn
ized
as
an e
xpen
se i
n fu
ll at
the
gran
t dat
e w
hen
the
gran
ted
shar
e op
tion
s ar
e ve
sted
imm
edia
tely
. T
axat
ion
In
com
e ta
x ex
pens
e re
pres
ents
the
sum
of
the
curr
ent t
ax a
nd d
efer
red
tax.
a.
C
urre
nt ta
x
The
cur
rent
tax
lia
bili
ties
are
bas
ed o
n cu
rren
t ta
xabl
e pr
ofit
. Sin
ce p
art
of t
he i
ncom
e an
d ex
pens
es a
re
taxa
ble
or d
educ
tibl
e in
oth
er p
erio
ds,
or i
n ac
cord
ance
wit
h th
e re
leva
nt t
ax l
aws
are
taxa
ble
or
dedu
ctib
le,
curr
ent
taxa
ble
prof
it d
iffe
rs f
rom
net
pro
fit
repo
rted
in
the
stat
emen
ts o
f co
mpr
ehen
sive
in
com
e.
The
Com
pany
’s c
urre
nt t
ax l
iabi
liti
es a
re c
alcu
late
d by
the
tax
rat
e w
as l
egis
late
d or
sub
stan
tial
ly
legi
slat
ed a
t the
bal
ance
she
et d
ate.
A
ccor
ding
to
the
Inco
me
Tax
Law
, an
addi
tion
al t
ax a
t 10
% o
f un
appr
opri
ated
ear
ning
s is
pro
vide
d fo
r as
inco
me
tax
in th
e ye
ar th
e sh
areh
olde
rs a
ppro
ve th
e re
tent
ion
of th
ese
earn
ings
. A
djus
tmen
ts o
f pr
ior
year
s’ ta
x li
abili
ties
are
add
ed to
or
dedu
cted
fro
m th
e cu
rren
t yea
r’s
tax
prov
isio
n.
b.
D
efer
red
tax
Def
erre
d ta
x is
rec
ogni
zed
on t
empo
rary
dif
fere
nces
bet
wee
n th
e ca
rryi
ng a
mou
nts
of a
sset
s an
d li
abil
itie
s in
the
fina
ncia
l sta
tem
ents
and
the
corr
espo
ndin
g ta
x ba
ses
used
in th
e co
mpu
tati
on o
f ta
xabl
e pr
ofit
. D
efer
red
tax
liab
ilit
ies
are
gene
rall
y re
cogn
ized
for
all
tax
able
tem
pora
ry d
iffe
renc
es.
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
iffe
renc
es,
unus
ed l
oss
carr
yfor
war
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
itur
es,
and
pers
onne
l tr
aini
ng e
xpen
ditu
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
iffe
renc
es c
an b
e ut
iliz
ed.
210
- 27
-
Def
erre
d ta
x li
abil
itie
s ar
e re
cogn
ized
for
tax
able
tem
pora
ry d
iffe
renc
es a
ssoc
iate
d w
ith
inve
stm
ents
in
subs
idia
ries
and
ass
ocia
tes
and
inte
rest
s in
joi
nt v
entu
res,
exc
ept
whe
re t
he C
ompa
ny i
s ab
le t
o co
ntro
l th
e re
vers
al o
f th
e te
mpo
rary
dif
fere
nce
and
it is
pro
babl
e th
at th
e te
mpo
rary
dif
fere
nce
wil
l not
rev
erse
in
the
for
esee
able
fut
ure.
Def
erre
d ta
x as
sets
ari
sing
fro
m d
educ
tibl
e te
mpo
rary
dif
fere
nces
ass
ocia
ted
wit
h su
ch in
vest
men
ts a
nd in
tere
sts
are
only
rec
ogni
zed
to th
e ex
tent
that
it is
pro
babl
e th
at th
ere
wil
l be
suff
icie
nt t
axab
le p
rofi
t ag
ains
t w
hich
to
util
ize
the
bene
fits
of
the
tem
pora
ry d
iffe
renc
es a
nd t
hey
are
expe
cted
to r
ever
se in
the
fore
seea
ble
futu
re.
The
car
ryin
g am
ount
of
defe
rred
tax
ass
ets
is r
evie
wed
at
the
end
of e
ach
repo
rtin
g pe
riod
and
red
uced
to
the
ext
ent
that
it
is n
o lo
nger
pro
babl
e th
at s
uffi
cien
t ta
xabl
e pr
ofit
wil
l be
ava
ilab
le t
o al
low
all
or
part
of
the
asse
ts t
o be
rec
over
ed.
A p
revi
ousl
y un
reco
gniz
ed d
efer
red
tax
asse
t is
als
o re
view
ed a
t th
e en
d of
eac
h re
port
ing
peri
od a
nd r
ecog
nize
d to
the
exte
nt th
at it
has
bec
ome
prob
able
that
fut
ure
taxa
ble
prof
it w
ill a
llow
the
defe
rred
tax
asse
t to
be r
ecov
ered
. D
efer
red
tax
liab
ilit
ies
and
asse
ts a
re m
easu
red
at th
e ta
x ra
tes
that
are
exp
ecte
d to
app
ly in
the
peri
od in
w
hich
the
lia
bili
ties
are
set
tled
or
the
asse
ts a
re r
eali
zed,
bas
ed o
n ta
x ra
tes
(and
tax
law
s) t
hat
have
be
en e
nact
ed o
r su
bsta
ntiv
ely
enac
ted
by t
he e
nd o
f th
e re
port
ing
peri
od. T
he m
easu
rem
ent
of d
efer
red
tax
liab
ilit
ies
and
asse
ts r
efle
cts
the
tax
cons
eque
nces
tha
t w
ould
fol
low
fro
m t
he m
anne
r in
whi
ch t
he
Com
pany
exp
ects
, at
the
end
of
the
repo
rtin
g pe
riod
, to
rec
over
or
sett
le t
he c
arry
ing
amou
nt o
f it
s as
sets
and
liab
ilit
ies.
c.
Cur
rent
and
def
erre
d ta
xes
for
the
year
C
urre
nt a
nd d
efer
red
taxe
s ar
e re
cogn
ized
in
prof
it o
r lo
ss,
exce
pt w
hen
they
rel
ate
to i
tem
s th
at a
re
reco
gniz
ed in
oth
er c
ompr
ehen
sive
inco
me
or d
irec
tly
in e
quity
, in
whi
ch c
ase,
the
curr
ent a
nd d
efer
red
taxe
s ar
e al
so r
ecog
nize
d in
oth
er c
ompr
ehen
sive
inco
me
or d
irec
tly
in e
quity
, res
pect
ivel
y.
Mai
nte
nan
ce a
nd
Ove
rhau
l Cos
ts
Rou
tine
mai
nten
ance
cos
ts a
re r
ecog
nize
d in
pro
fit o
r lo
ss in
the
peri
od in
whi
ch th
ey a
re in
curr
ed.
The
ove
rhau
l co
sts
of a
n ow
ned
or l
ease
d ai
rcra
ft t
hat
mee
t th
e cr
iter
ia f
or f
ixed
ass
et c
apit
aliz
atio
n ar
e ca
pita
lize
d as
rep
lace
men
ts f
or a
ircr
aft
and
engi
nes
and
are
depr
ecia
ted
on a
str
aigh
t 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
ES
TIM
AT
ION
U
NC
ER
TA
INT
Y
In t
he a
ppli
cati
on o
f th
e C
ompa
ny’s
acc
ount
ing
poli
cies
as
disc
lose
d in
Not
e 4,
man
agem
ent
is r
equi
red
to
mak
e ju
dgm
ents
, es
tim
atio
ns a
nd a
ssum
ptio
ns a
bout
the
car
ryin
g am
ount
s of
ass
ets
and
liab
ilit
ies
that
are
no
t re
adil
y ap
pare
nt f
rom
oth
er s
ourc
es.
The
est
imat
es a
nd a
ssoc
iate
d as
sum
ptio
ns a
re b
ased
on
hist
oric
al
expe
rien
ce a
nd o
ther
fac
tors
that
are
con
side
red
rele
vant
. Act
ual r
esul
ts m
ay d
iffe
r fr
om th
ese
esti
mat
es.
The
est
imat
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
unti
ng
esti
mat
es a
re r
ecog
nize
d in
the
per
iod
in w
hich
the
est
imat
es a
re r
evis
ed i
f th
e re
visi
ons
affe
ct o
nly
that
pe
riod
or
in t
he p
erio
d of
the
rev
isio
ns a
nd f
utur
e pe
riod
s if
the
rev
isio
ns a
ffec
t bo
th c
urre
nt a
nd f
utur
e pe
riod
s.
Key
Sou
rces
of
Est
imat
ion
Un
cert
ain
ty
The
key
ass
umpt
ions
con
cern
ing
the
futu
re a
nd o
ther
key
sou
rces
of
esti
mat
ion
unce
rtai
nty
at th
e en
d of
the
repo
rtin
g pe
riod
tha
t ha
ve a
sig
nifi
cant
ris
k of
cau
sing
a m
ater
ial
adju
stm
ent
to t
he c
arry
ing
amou
nts
of
asse
ts a
nd li
abil
itie
s w
ithi
n th
e ne
xt f
inan
cial
yea
r ar
e di
scus
sed
belo
w.
- 28
-
Dep
reci
atio
n o
f P
rop
erty
, Pla
nt
and
Eq
uip
men
t -
Fli
ght
Eq
uip
men
t F
ligh
t eq
uipm
ent
is d
epre
ciat
ed o
n a
stra
ight
-lin
e ba
sis
at r
ates
tha
t ca
n be
use
d to
wri
te d
own
thei
r co
st t
o th
eir
esti
mat
ed r
esid
ual
valu
es a
t th
e en
d of
the
ir u
sefu
l li
ves.
The
est
imat
es o
f th
e us
eful
liv
es a
nd r
esid
ual
valu
es o
f th
e fl
ight
equ
ipm
ent a
re m
ade
by th
e C
ompa
ny o
n th
e ba
sis
of p
ast e
xper
ienc
e an
d fl
eet o
pera
tion
pe
rfor
man
ce i
n th
e in
dust
ry.
Due
to
chan
ges
in t
he f
leet
pla
n, t
he b
oard
of
dire
ctor
s of
the
Com
pany
has
de
cide
d to
cha
nge
the
expe
cted
use
ful
live
s of
fou
r 74
7-40
0 (G
E)
from
20
to 1
6-17
yea
rs s
ince
Jan
uary
1,
2018
in
orde
r to
mee
t th
e ec
onom
ic b
enef
its
and
num
ber
of y
ears
of
cons
umpt
ion.
It
is e
stim
ated
tha
t th
e de
prec
iati
on e
xpen
se w
ill i
ncre
ase
by a
ppro
xim
atel
y N
T$7
70 m
illi
on a
nnua
lly.
Def
ined
Ben
efit
Ob
liga
tion
s T
he p
rese
nt v
alue
of
defi
ned
bene
fit
obli
gati
ons
at t
he e
nd o
f th
e re
port
ing
peri
od a
re c
alcu
late
d us
ing
actu
aria
l as
sum
ptio
ns.
Tho
se a
ssum
ptio
ns,
whi
ch a
re b
ased
on
man
agem
ent’
s ju
dgm
ent
and
esti
mat
es,
com
pris
e th
e di
scou
nt r
ate
and
expe
cted
ret
urn
on p
lan
asse
ts. C
hang
es in
act
uari
al a
ssum
ptio
ns m
ay h
ave
a m
ater
ial i
mpa
ct o
n th
e am
ount
of
defi
ned
bene
fit o
blig
atio
ns.
6
. C
AS
H A
ND
CA
SH
EQ
UIV
AL
EN
TS
Dec
emb
er 3
1
20
19
20
18
C
ash
on h
and
and
revo
lvin
g fu
nds
$
58
,661
$
51,2
64
Che
ckin
g ac
coun
ts a
nd d
eman
d de
posi
ts
4,86
7,01
5
6,
367,
527
Cas
h eq
uiva
lent
s
T
ime
depo
sits
wit
h or
igin
al m
atur
itie
s of
less
than
thre
e m
onth
s
12
,662
,162
12
,269
,231
R
epur
chas
e ag
reem
ents
col
late
rali
zed
by b
onds
3,
038,
176
-
$
20,6
26,0
14
$
18
,688
,022
T
he m
arke
t ra
te i
nter
vals
of
cash
in
bank
s an
d ca
sh e
quiv
alen
ts a
t th
e en
d of
the
rep
orti
ng p
erio
d w
ere
as
foll
ows:
D
ecem
ber
31
2019
2018
Ban
k ba
lanc
e
0.01
%-1
.90%
0%-1
.90%
T
ime
depo
sits
wit
h or
igin
al m
atur
itie
s of
less
than
thre
e m
onth
s
0.60
%-2
.55%
0.60
%-3
.55%
R
epur
chas
e ag
reem
ents
col
late
rali
zed
by b
onds
0.55
%-0
.70%
-
7.
FIN
AN
CIA
L I
NS
TR
UM
EN
TS
AT
FA
IR V
AL
UE
TH
RO
UG
H P
RO
FIT
OR
LO
SS
(F
VT
PL
)
D
ecem
ber
31
2019
2018
F
inan
cial
ass
ets
- cu
rren
t
Fin
anci
al a
sset
s m
anda
tori
ly c
lass
ifie
d at
FV
TP
L
Der
ivat
ive
fina
ncia
l ins
trum
ents
(no
t und
er h
edge
acc
ount
ing)
F
orei
gn e
xcha
nge
forw
ard
cont
ract
s
$
434
$
-
F
inan
cial
liab
ilit
ies
held
for
trad
ing
D
eriv
ativ
e fi
nanc
ial i
nstr
umen
ts (
not u
nder
hed
ge a
ccou
ntin
g)
fore
ign
exch
ange
for
war
d co
ntra
cts
$
11
,749
$
221
211
- 29
-
At
the
end
of t
he r
epor
ting
peri
od,
outs
tand
ing
fore
ign
exch
ange
for
war
d co
ntra
cts
not
unde
r he
dge
acco
unti
ng w
ere
as f
ollo
ws:
Cu
rren
cy
M
atu
rity
Dat
e
Not
ion
al A
mou
nt
(In
Th
ousa
nd
s)
D
ecem
ber
31, 2
019
B
uy f
orw
ard
cont
ract
s N
TD
/US
D
20
20.0
1.15
-202
0.07
.31
NT
D57
0,57
1/U
SD
19,0
00
D
ecem
ber
31, 2
018
B
uy f
orw
ard
cont
ract
s N
TD
/US
D
20
19.0
1.02
-201
9.01
.31
NT
D30
,923
/US
D1,
000
8.
FIN
AN
CIA
L A
SS
ET
S A
T F
AIR
VA
LU
E T
HR
OU
GH
OT
HE
R C
OM
PR
EH
EN
SIV
E I
NC
OM
E
Inve
stm
ents
in E
qu
ity
Inst
rum
ents
D
ecem
ber
31
2019
2018
Non
-cur
rent
For
eign
inve
stm
ents
U
nlis
ted
shar
es
$
80
,991
$
61,6
20
Dom
esti
c in
vest
men
ts
Unl
iste
d sh
ares
26
,865
21
,746
$
107,
856
$
83
,366
T
hese
inv
estm
ents
in
equi
ty i
nstr
umen
ts a
re n
ot h
eld
for
trad
ing.
Ins
tead
, th
ey a
re h
eld
for
med
ium
- to
lo
ng-t
erm
str
ateg
ic p
urpo
ses.
Acc
ordi
ngly
, the
man
agem
ent e
lect
ed to
des
igna
te th
ese
inve
stm
ents
in e
quit
y in
stru
men
ts a
s at
FV
TO
CI
as i
t be
liev
es t
hat
reco
gniz
ing
shor
t-te
rm f
luct
uati
ons
in t
hese
inv
estm
ents
’ fa
ir
valu
es i
n pr
ofit
or
loss
wou
ld n
ot b
e co
nsis
tent
wit
h th
e C
ompa
ny’s
str
ateg
y of
hol
ding
the
se i
nves
tmen
ts
for
long
-ter
m p
urpo
ses.
9.
FIN
AN
CIA
L A
SS
ET
S A
T A
MO
RT
IZE
D C
OS
T
Dec
emb
er 3
1
20
19
20
18
C
urre
nt
T
ime
depo
sits
wit
h or
igin
al m
atur
itie
s of
mor
e th
an 3
mon
ths
(e)
$
1,
460,
450
$
2,
310,
000
T
he r
ange
of
inte
rest
rat
es f
or t
ime
depo
sits
wit
h or
igin
al m
atur
itie
s of
mor
e th
an 3
mon
ths
wer
e ap
prox
imat
ely
0.60
%-2
.44%
and
0.4
0%-0
.68%
per
ann
um a
s of
Dec
embe
r 31
, 201
9 an
d 20
18, r
espe
ctiv
ely.
- 30
-
10.
NO
TE
S R
EC
EIV
AB
LE
AN
D A
CC
OU
NT
S R
EC
EIV
AB
LE
Dec
emb
er 3
1
20
19
20
18
N
otes
rec
eiva
ble
$
29
7,07
5
$
596,
739
A
ccou
nts
rece
ivab
le
A
t am
orti
zed
cost
G
ross
car
ryin
g am
ount
7,
577,
460
8,87
5,00
2 L
ess:
All
owan
ce f
or im
pair
men
t los
s
(1
80,1
04)
(191
,079
)
7,39
7,35
6
8,
683,
923
$
7,
694,
431
$
9,
280,
662
The
ave
rage
cre
dit
peri
od w
as 7
to
55 d
ays.
In
dete
rmin
ing
the
reco
vera
bili
ty o
f a
trad
e re
ceiv
able
, th
e C
ompa
ny c
onsi
dere
d an
y ch
ange
in
the
cred
it q
uali
ty o
f th
e re
ceiv
able
sin
ce t
he d
ate
cred
it w
as i
niti
ally
gr
ante
d to
the
end
of
the
repo
rtin
g pe
riod
, an
d an
y al
low
ance
for
im
pair
men
t lo
ss w
as b
ased
on
the
esti
mat
ed ir
reco
vera
ble
amou
nts
dete
rmin
ed b
y re
fere
nce
to th
e C
ompa
ny’s
pas
t def
ault
exp
erie
nce
wit
h th
e co
unte
rpar
ty a
nd a
n an
alys
is o
f th
e co
unte
rpar
ty’s
cur
rent
fin
anci
al p
osit
ion.
The
Com
pany
ado
pted
a
poli
cy o
f on
ly d
eali
ng w
ith e
ntit
ies
that
are
rat
ed th
e eq
uiva
lent
of
inve
stm
ent g
rade
or
high
er a
nd o
btai
ning
su
ffic
ient
col
late
ral,
whe
re a
ppro
pria
te,
as a
mea
ns o
f m
itig
atin
g th
e ri
sk o
f fi
nanc
ial
loss
fro
m d
efau
lts.
C
redi
t ra
ting
inf
orm
atio
n is
obt
aine
d fr
om i
ndep
ende
nt r
atin
g ag
enci
es w
here
ava
ilab
le o
r, i
f no
t av
aila
ble,
th
e C
ompa
ny u
ses
othe
r pu
blic
ly a
vail
able
fin
anci
al i
nfor
mat
ion
or i
ts o
wn
trad
ing
reco
rds
to r
ate
its
maj
or
cust
omer
s. T
he C
ompa
ny’s
exp
osur
e an
d th
e cr
edit
rat
ings
of
its
coun
terp
arti
es a
re c
onti
nuou
sly
mon
itor
ed
and
the
aggr
egat
e va
lue
of t
rans
acti
ons
conc
lude
d is
spr
ead
amon
gst
appr
oved
cou
nter
part
ies.
Cre
dit
expo
sure
is
cont
roll
ed b
y co
unte
rpar
ty l
imit
s th
at a
re r
evie
wed
and
app
rove
d by
the
ris
k m
anag
emen
t co
mm
itte
e an
nual
ly.
The
Com
pany
app
lies
the
sim
plif
ied
appr
oach
to
allo
win
g fo
r ex
pect
ed c
redi
t lo
sses
pre
scri
bed
by I
FR
S 9
, w
hich
per
mit
s th
e us
e of
lif
etim
e ex
pect
ed l
oss
allo
wan
ce f
or a
ll t
rade
rec
eiva
bles
. T
he e
xpec
ted
cred
it
loss
es o
n tr
ade
rece
ivab
les
are
esti
mat
ed u
sing
a p
rovi
sion
mat
rix
by r
efer
ence
to
past
def
ault
exp
erie
nce
wit
h th
e de
btor
s an
d an
ana
lysi
s of
the
deb
tors
’ cu
rren
t fi
nanc
ial
posi
tion
, ad
just
ed f
or g
ener
al e
cono
mic
co
ndit
ions
of
the
indu
stry
in
whi
ch t
he d
ebto
rs o
pera
te a
nd a
n as
sess
men
t of
bot
h th
e cu
rren
t as
wel
l as
the
fo
reca
sted
dir
ecti
on o
f ec
onom
ic c
ondi
tion
s at
the
rep
orti
ng d
ate.
As
the
Com
pany
’s h
isto
rica
l cr
edit
los
s ex
peri
ence
doe
s no
t sh
ow s
igni
fica
ntly
dif
fere
nt l
oss
patt
erns
for
dif
fere
nt c
usto
mer
seg
men
ts,
the
loss
al
low
ance
bas
ed o
n th
e pa
st d
ue s
tatu
s is
not
fur
ther
dis
ting
uish
ed a
ccor
ding
to th
e di
ffer
ent s
egm
ents
of
the
Com
pany
’s c
usto
mer
bas
e.
The
Com
pany
wri
tes
off
a tr
ade
rece
ivab
le w
hen
ther
e is
inf
orm
atio
n in
dica
ting
tha
t th
e de
btor
is
expe
rien
cing
se
vere
fi
nanc
ial
diff
icul
ty
and
ther
e is
no
re
alis
tic
pros
pect
of
re
cove
ry.
For
ac
coun
ts
rece
ivab
le t
hat
have
bee
n w
ritt
en o
ff,
the
Com
pany
con
tinu
es t
o en
gage
in
enfo
rcem
ent
acti
vity
to
atte
mpt
to
rec
over
the
rece
ivab
les
whi
ch a
re d
ue. W
here
rec
over
ies
are
mad
e, th
ese
are
reco
gniz
ed in
pro
fit o
r lo
ss.
212
- 31
-
The
fol
low
ing
tabl
e de
tail
s th
e lo
ss a
llow
ance
of
trad
e re
ceiv
able
s ba
sed
on t
he C
ompa
ny’s
pro
visi
on
mat
rix.
D
ecem
ber
31, 2
019
N
ot P
ast
Du
e U
p t
o 30
Day
s
31 t
o 60
Day
s
61 t
o 90
Day
s
Ove
r 90
Day
s
Tot
al
E
xpec
ted
cred
it lo
ss r
ate
0.
03%
0.15
%
15
.89%
22.1
4%
10
0%
-
Gro
ss c
arry
ing
amou
nt
$
6,0
70,7
53
$
1,2
41,7
66
$
37
,891
$
73,0
58
$
15
3,99
2
$ 7
,577
,460
L
oss
allo
wan
ce (
life
time
EC
Ls)
(2
,052
)
(1
,862
)
(6
,020
)
(1
6,17
8)
(153
,992
)
(1
80,1
04)
Am
orti
zed
cost
$ 6
,068
,701
$ 1
,239
,904
$
31,8
71
$
56
,880
$
-
$ 7
,397
,356
D
ecem
ber
31, 2
018
N
ot P
ast
Du
e U
p t
o 30
Day
s
31 t
o 60
Day
s
61 t
o 90
Day
s
Ove
r 90
Day
s
Tot
al
E
xpec
ted
cred
it lo
ss r
ate
0.
06%
0.06
%
3.
67%
21.7
8%
97
.5%
Gro
ss c
arry
ing
amou
nt
$
7,2
91,9
10
$
1,3
31,5
29
$
36
,819
$
41,9
20
$
17
2,82
4
$ 8
,875
,002
L
oss
allo
wan
ce (
life
time
EC
Ls)
(1
,149
)
(6
99)
(3,7
96)
(12,
611)
(1
72,8
24)
(191
,079
)
A
mor
tize
d co
st
$
7,2
90,7
61
$
1,3
30,8
30
$
33
,023
$
29,3
09
$
-
$
8,6
83,9
23
The
mov
emen
ts o
f th
e lo
ss a
llow
ance
of
acco
unts
rec
eiva
bles
wer
e as
fol
low
s:
F
or t
he
Yea
r E
nd
ed D
ecem
ber
31
2019
2018
Bal
ance
at J
anua
ry 1
$
191,
079
$
14
2,63
7 A
dd: N
et r
emea
sure
men
t of
loss
all
owan
ce
24,0
00
50,0
00
Les
s: A
mou
nts
wri
tten
off
(3
4,97
5)
(2,5
55)
For
eign
exc
hang
e ga
ins
and
loss
es
-
99
7
Bal
ance
at D
ecem
ber
31
$
18
0,10
4
$
191,
079
11
. IN
VE
NT
OR
IES
Dec
emb
er 3
1
20
19
20
18
A
ircr
aft s
pare
par
ts
$
7,
390,
981
$
7,
669,
834
Item
s fo
r in
-fli
ght s
ale
571,
601
554,
084
Wor
k in
pro
cess
- m
aint
enan
ce s
ervi
ces
283,
933
227,
974
$
8,
246,
515
$
8,
451,
892
The
ope
rati
ng c
osts
for
the
yea
rs e
nded
Dec
embe
r 31
, 20
19 a
nd 2
018
incl
uded
los
ses
from
inv
ento
ry
wri
te-d
owns
of
$317
,629
thou
sand
and
$37
1,27
5 th
ousa
nd, r
espe
ctiv
ely.
- 32
-
12.
NO
N-C
UR
RE
NT
AS
SE
TS
HE
LD
FO
R S
AL
E
D
ecem
ber
31
2019
2018
Air
craf
t hel
d fo
r sa
le
$
-
$
46
,154
T
o en
hanc
e it
s co
mpe
titi
vene
ss,
the
Com
pany
pla
ns t
o in
trod
uce
new
air
craf
t an
d re
tire
old
air
craf
t ac
cord
ing
to a
pla
nned
sch
edul
e. S
uch
airc
raft
, cla
ssif
ied
as n
on-c
urre
nt a
sset
s he
ld f
or s
ale,
had
an
orig
inal
bo
ok v
alue
whi
ch w
as h
ighe
r th
an th
e ex
pect
ed s
ale
pric
e an
d w
hich
was
rec
ogni
zed
as a
n im
pair
men
t los
s.
How
ever
, the
act
ual l
oss
shal
l be
iden
tifi
ed b
y th
e ac
tual
sal
e pr
ice.
In
201
9 an
d 20
18,
the
Com
pany
rec
ogni
zed
impa
irm
ent
loss
es o
f $0
tho
usan
d an
d $7
5,43
7 th
ousa
nd,
resp
ecti
vely
. In
2019
and
201
8, th
e C
ompa
ny r
ecog
nize
d di
spos
al lo
sses
of
$10,
462
thou
sand
and
$36
8,99
2 th
ousa
nd, r
espe
ctiv
ely.
T
he f
air
valu
e w
as d
eter
min
ed b
y tr
ansa
ctio
ns o
f th
e 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
the
airc
raft
. The
fai
r va
lue
is c
lass
ifie
d as
Lev
el 3
.
13.
INV
ES
TM
EN
TS
AC
CO
UN
TE
D F
OR
US
ING
TH
E E
QU
ITY
ME
TH
OD
Dec
emb
er 3
1
20
19
20
18
In
vest
men
ts in
sub
sidi
arie
s
$
12,0
04,1
80
$
11
,686
,577
In
vest
men
ts in
ass
ocia
tes
471,
267
497,
362
Inve
stm
ents
in jo
intly
con
trol
led
enti
ties
1,
007,
430
974,
416
$
13
,482
,877
$
13,1
58,3
55
a.
In
vest
men
t in
subs
idia
ries
Dec
emb
er 3
1
20
19
20
18
U
nlis
ted
com
pani
es
T
iger
air
Tai
wan
Co.
, Ltd
.
$
1,94
6,32
8
$
1,80
5,92
1 C
AL
Par
k
1,
552,
310
1,50
7,44
5 M
anda
rin
Air
line
s
1,
494,
603
1,20
1,10
9 C
AL
-Dyn
asty
Int
erna
tion
al
1,27
6,54
6
1,
266,
921
Tai
wan
Air
Car
go T
erm
inal
1,
517,
946
1,53
3,24
4 T
aoyu
an I
nter
nati
onal
Air
port
Ser
vice
s
73
7,24
5
75
5,61
9 C
AL
-Asi
a In
vest
men
t
55
9,56
2
49
4,09
8 S
abre
Tra
vel N
etw
ork
(Tai
wan
)
46
0,21
3
45
4,14
9 C
AL
Hot
el
479,
259
461,
239
Tai
wan
Air
port
Ser
vice
s
27
6,13
4
26
6,77
5 H
wa
Hsi
a
88
,313
89
,101
T
aiw
an A
ircr
aft M
aint
enan
ce A
nd E
ngin
eeri
ng C
o., L
td.
921,
989
1,12
8,13
8 Y
estr
ip
25,2
68
26,9
46
Dyn
asty
Hol
iday
s
-
26,0
59
Glo
bal S
ky E
xpre
ss
7,29
4
6,
996
Kao
hsiu
ng C
ater
ing
Ser
vice
s
66
1,17
0
66
2,81
7
$
12,0
04,1
80
$
11
,686
,577
213
- 33
-
At t
he e
nd o
f th
e re
port
ing
peri
od, t
he p
ropo
rtio
n of
ow
ners
hip
and
votin
g ri
ghts
in s
ubsi
diar
ies
held
by
the
Com
pany
wer
e as
fol
low
s:
D
ecem
ber
31
2019
2018
T
iger
air
Tai
wan
Co.
, Ltd
.
69%
90
%
Tai
wan
Air
Car
go T
erm
inal
54%
54
%
CA
L P
ark
10
0%
100%
M
anda
rin
Air
line
s
94%
94
%
CA
L-D
ynas
ty I
nter
nati
onal
100%
10
0%
Tao
yuan
Int
erna
tion
al A
irpo
rt S
ervi
ces
49
%
49%
C
AL
-Asi
a In
vest
men
t
100%
10
0%
Sab
re T
rave
l Net
wor
k (T
aiw
an)
94
%
94%
T
aiw
an A
irpo
rt S
ervi
ces
47
%
47%
C
AL
Hot
el
10
0%
100%
H
wa
Hsi
a
100%
10
0%
Tai
wan
Air
craf
t Mai
nten
ance
And
Eng
inee
ring
Co.
, Ltd
.
100%
10
0%
Dyn
asty
Hol
iday
s
20%
51
%
Yes
trip
100%
10
0%
Glo
bal S
ky E
xpre
ss
25
%
25%
K
aohs
iung
Cat
erin
g S
ervi
ces
54
%
54%
E
ach
of t
he C
ompa
ny’s
hol
ding
s of
the
iss
ued
shar
e ca
pita
l of
Tao
yuan
Int
erna
tion
al A
irpo
rt S
ervi
ce,
Tai
wan
Air
port
Ser
vice
and
Glo
bal
Sky
Exp
ress
did
not
exc
eed
50%
, bu
t si
nce
the
Com
pany
had
co
ntro
l ove
r th
ese
inve
stee
s, th
ey w
ere
list
ed a
s su
bsid
iari
es.
The
Com
pany
pai
d $2
43,7
43 t
hous
and
on M
arch
7,
2018
to
acqu
ire
an a
ddit
iona
l 18
% o
f K
aohs
iung
C
ater
ing,
Ltd
. (K
aohs
iung
Cat
erin
g) o
f w
hich
the
Com
pany
’s h
oldi
ng o
f th
e is
sued
sha
re c
apit
al
exce
eded
50%
. Kao
hsiu
ng C
ater
ing
is l
iste
d as
a s
ubsi
diar
y be
caus
e th
e C
ompa
ny h
as c
ontr
ol o
ver
the
inve
stee
. For
the
disc
losu
re o
f th
e C
ompa
ny’s
acq
uisi
tion
of K
aohs
iung
Cat
erin
g, r
efer
to N
ote
30.
The
boa
rd o
f di
rect
ors
of t
he C
ompa
ny d
ecid
ed t
o se
ll p
art
of t
he e
quity
of
Dyn
asty
Hol
iday
s to
H.I
.S.
Tai
wan
Co.
, L
td.
on J
anua
ry 2
1, 2
019,
and
com
plet
ed t
he t
rans
acti
on o
n Ja
nuar
y 31
, 21
09.
Aft
er t
he
sale
of
the
equi
ty,
the
Com
pany
’s h
oldi
ng o
f th
e is
sued
sha
re c
apit
al d
ecre
ased
fro
m 5
1% t
o 20
%.
Dyn
asty
Hol
iday
s w
as c
lass
ifie
d as
an
asso
ciat
e si
nce
the
Gro
up l
ost
cont
rol
of t
he s
ubsi
diar
y. F
or t
he
info
rmat
ion
abou
t the
dis
posa
l of
the
Dyn
asty
Hol
iday
s, p
leas
e re
fer
to N
ote
31.
In o
rder
to
prep
are
the
list
ing
of T
iger
air
Tai
wan
Co.
, L
td.
and
com
ply
wit
h th
e ru
les
rela
ting
to
the
exam
inat
ion
for
publ
ic l
isti
ng,
the
rele
ase
of t
he s
hare
s of
Tig
erai
r T
aiw
an C
o.,
Ltd
. he
ld b
y th
e C
ompa
ny w
as r
esol
ved
in th
e sh
areh
olde
rs’
mee
ting
of
the
Com
pany
on
June
25,
201
9. T
he s
hare
s sh
all
be s
ubsc
ribe
d by
all
sha
reho
lder
s of
the
Com
pany
on
the
basi
s of
the
per
cent
age
of s
hare
hold
ings
. F
or
the
subs
crib
ed s
hare
s th
at t
he o
rigi
nal
shar
ehol
ders
wai
ved
or f
or t
he u
nder
subs
crib
ed p
orti
on,
the
chai
rman
was
aut
hori
zed
to c
onta
ct s
peci
fic
pers
ons
to s
ubsc
ribe
. The
sub
scri
ptio
n pr
ice
was
set
at
$41
per
shar
e. I
n O
ctob
er a
nd D
ecem
ber
2019
, th
e st
ock
pric
e w
as f
ully
pai
d an
d th
e sh
ares
wer
e co
mpl
etel
y de
live
red
and
tran
sfer
red.
The
pro
ceed
s fr
om d
ispo
sal
wer
e $1
,679
,789
tho
usan
d, a
nd t
he
rela
ted
gain
on
disp
osal
was
$1,
129,
080
thou
sand
and
rec
ogni
zed
in th
e ca
pita
l sur
plus
acc
ount
. T
he s
hare
of
prof
it o
r lo
ss o
f su
bsid
iari
es r
ecog
nize
d un
der
the
equi
ty m
etho
d w
as a
s fo
llow
s:
20
19
20
18
T
he s
hare
of
prof
it o
r lo
ss
$
1,
529,
721
$
1,
628,
453
- 34
-
b.
Inve
stm
ents
in a
ssoc
iate
s
Dec
emb
er 3
1
20
19
20
18
U
nlis
ted
com
pani
es
C
hina
Air
craf
t Ser
vice
s
$
461,
263
$
49
7,36
2 D
ynas
ty H
olid
ays
10,0
04
-
$
471,
267
$
49
7,36
2 A
t th
e en
d of
the
rep
ortin
g pe
riod
, th
e pr
opor
tion
of
owne
rshi
p an
d vo
ting
righ
ts i
n as
soci
ates
hel
d by
th
e C
ompa
ny w
ere
as f
ollo
ws:
D
ecem
ber
31
2019
2018
Chi
na A
ircr
aft S
ervi
ces
20
%
20%
D
ynas
ty H
olid
ays
(Not
e)
20
%
51%
N
ote:
Dyn
asty
Hol
iday
s w
as li
st a
s a
asso
ciat
e on
Jan
uary
31,
201
9.
The
rec
ogni
zed
inve
stm
ent
inco
me
of a
ssoc
iate
s ac
coun
ted
for
usin
g th
e eq
uity
met
hod
wer
e as
fo
llow
s:
20
19
20
18
C
hina
Air
craf
t Ser
vice
s
$
10,3
65
$
6,
402
Dyn
asty
Hol
iday
s
15
-
$
10
,380
$
6,40
2
c.
Inve
stm
ents
in jo
intly
con
trol
led
enti
ties
T
he in
vest
men
ts in
join
tly c
ontr
olle
d en
titie
s w
ere
as f
ollo
ws:
Dec
emb
er 3
1
20
19
20
18
C
hina
Pac
ific
Cat
erin
g S
ervi
ces
$
80
1,07
0
$
805,
157
Chi
na P
acif
ic L
aund
ry S
ervi
ces
168,
547
166,
901
NO
RD
AM
Asi
a
37
,813
2,
358
$
1,
007,
430
$
97
4,41
6
214
- 35
-
At
the
end
of t
he r
epor
ting
per
iod,
the
per
cent
ages
of
owne
rshi
p an
d vo
ting
righ
ts i
n jo
intly
con
trol
led
enti
ties
hel
d by
the
Com
pany
wer
e as
fol
low
s:
D
ecem
ber
31
2019
2018
Chi
na P
acif
ic C
ater
ing
Ser
vice
s
51%
51
%
Chi
na P
acif
ic L
aund
ry S
ervi
ces
55
%
55%
N
OR
DA
M A
sia
49
%
49%
T
he C
ompa
ny s
igne
d a
join
t ve
ntur
e ag
reem
ent
wit
h th
e T
aiko
o C
ompa
ny t
o in
vest
in
Chi
na P
acif
ic
Cat
erin
g S
ervi
ces
and
Chi
na P
acif
ic L
aund
ry S
ervi
ces.
Acc
ordi
ng t
o th
e ag
reem
ent,
both
par
ties
hav
e th
e m
ajor
ity
pow
er i
n th
e bo
ard
of d
irec
tors
to
pose
a m
otio
n fo
r ve
to, a
nd t
here
fore
the
Com
pany
doe
s no
t hav
e co
ntro
l. T
o en
hanc
e th
e C
ompa
ny’s
mai
nten
ance
cap
abil
itie
s, t
he C
ompa
ny e
stab
lish
ed a
joi
nt v
entu
re w
ith
the
US
NO
RD
AM
Aer
ospa
ce G
roup
in D
ecem
ber
2017
, pla
nnin
g to
pro
vide
thru
st r
ever
sers
and
com
posi
te
repa
ir s
ervi
ces
in 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
zati
on i
n th
e U
SA
on
July
22,
201
8 to
sol
ve t
he b
usin
ess
disp
utat
ion
wit
h th
eir
coop
erat
ive
part
ner,
whi
le t
heir
com
pany
ope
rati
on w
as n
ot i
mpa
ct.
NO
RD
AM
Asi
a su
spen
ded
its
oper
atio
n fr
om
Oct
ober
5, 2
018
to O
ctob
er 4
, 201
9 an
d re
sum
ed b
usin
ess
on O
ctob
er 4
, 201
9. T
he c
ompa
ny i
ncre
ased
ca
pita
l of
$35,
525
thou
sand
to N
OR
DA
M A
sia
on N
ovem
ber
2019
. D
etai
ls o
f th
e in
vest
men
t in
com
e at
trib
utab
le t
o in
vest
men
ts i
n jo
intly
con
trol
led
enti
ties
wer
e as
fo
llow
s:
D
ecem
ber
31
2019
2018
Chi
na P
acif
ic C
ater
ing
Ser
vice
s
$
256,
899
$
26
7,41
3 C
hina
Pac
ific
Lau
ndry
Ser
vice
s
15
,030
16
,695
N
OR
DA
M A
sia
(70)
(4
1)
$
27
1,85
9
$
284,
067
The
Com
pany
’s s
hare
s of
oth
er c
ompr
ehen
sive
inco
me
of s
ubsi
diar
ies,
ass
ocia
tes
and
join
tly
cont
roll
ed
enti
ties
wer
e lo
sses
of
$(85
,977
) th
ousa
nd a
nd $
(75,
996)
thou
sand
in 2
019
and
2018
, res
pect
ivel
y.
The
fin
anci
al s
tate
men
ts u
sed
as a
bas
is o
f th
e am
ount
s of
and
rel
ated
inf
orm
atio
n on
the
inv
estm
ents
ac
coun
ted
for
usin
g th
e eq
uity
met
hod
and
the
shar
e of
pro
fit
or l
oss
and
othe
r co
mpr
ehen
sive
inc
ome
of t
hose
inv
estm
ents
for
the
yea
rs e
nded
Dec
embe
r 31
, 201
9 an
d 20
18 w
ere
all
inde
pend
ently
aud
ited
, ex
cept
of
Chi
na A
ircr
aft S
ervi
ces.
How
ever
, the
man
agem
ent d
eter
min
ed th
at th
ere
wou
ld h
ave
been
no
sign
ific
ant a
djus
tmen
ts h
ad th
is in
vest
ee’s
fin
anci
al s
tate
men
ts b
een
inde
pend
ently
aud
ited
. F
or d
etai
ls o
n se
rvic
es,
maj
or b
usin
ess
offi
ces
and
the
coun
try
whe
re t
he a
bove
ass
ocia
tes
and
join
tly
cont
roll
ed e
ntit
ies
are
regi
ster
ed,
refe
r to
Tab
le 6
, “N
ames
, L
ocat
ions
, A
nd O
ther
Inf
orm
atio
n of
In
vest
ees
Ove
r W
hich
the
Com
pany
Exe
rcis
es S
igni
fica
nt I
nflu
ence
” an
d, T
able
7,
“Inv
estm
ents
In
Mai
nlan
d C
hina
”, f
ollo
win
g th
e no
tes
to f
inan
cial
sta
tem
ents
.
- 36
-
14.
PR
OP
ER
TY
, PL
AN
T A
ND
EQ
UIP
ME
NT
Fre
ehol
d L
and
Bu
ild
ings
Fli
ght
Eq
uip
men
t
Eq
uip
men
t u
nd
er F
inan
ce
Lea
ses
O
ther
s
Tot
al
C
ost
B
alan
ce a
t Jan
uary
1,
2018
$
193,
013
$
7,
304,
328
$
261
,114
,631
$
25,5
94,4
36
$
6,
163,
436
$
300
,369
,844
A
ddit
ions
-
41,0
16
2,30
8,68
3
-
212,
288
2,56
1,98
7 D
ispo
sals
-
(10,
349 )
(20,
305,
928 )
(1,8
11,2
22 )
(108
,752
)
(2
2,23
6,25
1 )
Rec
lass
ific
atio
n
-
542
12,4
62,2
41
1,42
8,46
3
73
,574
13
,964
,820
Bal
ance
at D
ecem
ber
31,
2018
$
193,
013
$
7,
335,
537
$
255
,579
,627
$
25,2
11,6
77
$
6,
340,
546
$
294
,660
,400
Acc
umul
ated
dep
reci
atio
n
and
impa
irm
ent
B
alan
ce a
t Jan
uary
1,
2018
$
-
$
(3,7
17,0
55 )
$
(135
,671
,634
)
$
(13,
613,
023 )
$
(5
,102
,584
)
$ (1
58,1
04,2
96 )
Dep
reci
atio
n ex
pens
e
-
(172
,873
)
(1
5,73
2,01
8 )
(1
,993
,631
)
(2
93,7
69 )
(18,
192,
291 )
D
ispo
sals
-
9,32
6
19
,813
,183
1,
532,
046
89,8
41
21,4
44,3
96
Impa
irm
ent l
osse
s
-
-
(50,
000 )
-
-
(50,
000 )
R
ecla
ssif
icat
ion
-
-
9,28
3,04
1
-
(12,
196 )
9,27
0,84
5
Bal
ance
at D
ecem
ber
31,
2018
$
-
$
(3,8
80,6
02 )
$
(122
,357
,428
)
$
(14,
074,
608 )
$
(5
,318
,708
)
$ (1
45,6
31,3
46 )
C
arry
ing
amou
nts
at
Dec
embe
r 31
, 201
8
$
193,
013
$
3,
454,
935
$
133
,222
,199
$
11,1
37,0
69
$
1,
021,
838
$
149
,029
,054
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
itio
ns
-
37
,725
2,
211,
321
-
14
8,69
6
2,
397,
742
Dis
posa
ls
-
(1
62 )
(20,
698,
042 )
(79,
866 )
(85,
852 )
(20,
863,
922 )
R
ecla
ssif
icat
ion
-
10
,658
29
,815
,008
(2
5,13
1,81
1 )
10
6,25
7
4,
800,
112
B
alan
ce a
t Dec
embe
r 31
, 20
19
$
19
3,01
3
$
7,38
3,75
8
$ 2
66,9
07,9
14
$
-
$
6,
509,
647
$
280
,994
,332
Acc
umul
ated
dep
reci
atio
n
and
impa
irm
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
-
16
2
14
,899
,562
79
,866
76
,586
15
,056
,176
R
ecla
ssif
icat
ion
-
-
(14,
692,
000 )
14,7
36,5
22
(45,
104 )
(582
)
Bal
ance
at D
ecem
ber
31,
2019
$
-
$
(4,0
56,3
83 )
$
(140
,336
,300
)
$
-
$
(5,5
71,7
63 )
$
(149
,964
,446
)
Car
ryin
g am
ount
s at
D
ecem
ber
31, 2
019
$
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
Rec
lass
ific
atio
n is
mai
nly
from
pre
paid
equ
ipm
ent.
215
- 37
-
The
abo
ve it
ems
of p
rope
rty,
pla
nt a
nd e
quip
men
t are
dep
reci
ated
on
a st
raig
ht-l
ine
basi
s ov
er th
e es
tim
ated
us
eful
life
of
the
asse
t:
Bui
ldin
g
M
ain
buil
ding
s
45-5
5 ye
ars
Oth
ers
10
-25
year
s M
achi
nery
and
equ
ipm
ent
Ele
ctro
-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
Lea
seho
ld im
prov
emen
ts
Bui
ldin
g im
prov
emen
ts
5
year
s O
ther
s
3-5
year
s F
ligh
t equ
ipm
ent a
nd e
quip
men
t und
er f
inan
ce le
ases
A
irfr
ames
18-2
5 ye
ars
Air
craf
t cab
ins
10
-20
year
s E
ngin
es
12
-20
year
s H
eavy
mai
nten
ance
on
airc
raft
6-8
year
s E
ngin
e ov
erha
uls
3-
10 y
ears
L
andi
ng g
ear
over
haul
s
8-12
yea
rs
Rep
aira
ble
spar
e pa
rts
3-
15 y
ears
L
ease
d ai
rcra
ft im
prov
emen
ts
5-
12 y
ears
R
egar
ding
cha
nges
in
flee
t co
mpo
siti
on,
curr
ent
and
fore
cast
ed m
arke
t va
lues
, an
d ot
her
tech
nica
l fa
ctor
s,
the
Com
pany
rec
ogni
zed
impa
irm
ent l
osse
s on
a p
art o
f ai
rcra
ft e
quip
men
t of
$50,
000
thou
sand
in 2
018.
R
efer
to
Not
e 32
for
the
car
ryin
g am
ount
s of
air
craf
t eq
uipm
ent
and
righ
t-of
-use
ass
ets
pled
ged
by t
he
Com
pany
. B
ased
on
the
part
icul
arit
y of
ris
k in
the
avi
atio
n in
dust
ry, a
ll o
f th
e C
ompa
ny’s
ass
ets
such
as
airc
raft
, rea
l es
tate
, and
mov
able
pro
pert
y ar
e ad
equa
tely
insu
red
to d
iver
sify
the
pote
ntia
l ris
k re
late
d to
ope
rati
ons.
15
. IN
VE
ST
ME
NT
PR
OP
ER
TIE
S
D
ecem
ber
31
2019
2018
Car
ryin
g am
ount
In
vest
men
t pro
pert
ies
$
2,
047,
448
$
2,
047,
448
T
he in
vest
men
t pro
pert
ies
(lan
d) h
eld
Com
pany
, loc
ated
in N
anka
n, w
ere
leas
ed to
oth
ers.
T
he f
air
valu
e of
the
inv
estm
ent
prop
erti
es h
eld
by t
he C
ompa
ny w
ere
both
$2,
473,
771
thou
sand
as
of
Dec
embe
r 31
, 20
19
and
2018
. T
he
fair
va
lue
valu
atio
n w
as
perf
orm
ed
by
inde
pend
ent
qual
ifie
d pr
ofes
sion
al v
alue
rs,
and
the
futu
re i
ncom
e ev
alua
ted
by m
anag
emen
t w
as b
ased
on
mar
ket
tran
sact
ions
. A
ll o
f th
e C
ompa
ny’s
inve
stm
ent p
rope
rtie
s w
ere
held
und
er f
reeh
old
inte
rest
.
- 38
-
16.
OT
HE
R I
NT
AN
GIB
LE
AS
SE
TS
C
omp
ute
r S
oftw
are
Cos
ts
A
ccu
mu
late
d
Am
orti
zati
on
N
et V
alu
e
B
alan
ce a
t Jan
uary
1, 2
018
$
1,
905,
354
$
(9
16,0
27)
$
98
9,32
7 A
ddit
ions
15
5,43
1
-
155,
431
Am
orti
zati
on e
xpen
se
-
(1
65,0
50)
(165
,050
)
B
alan
ce a
t Dec
embe
r 31
, 201
8
$
2,06
0,78
5
$ (
1,08
1,07
7)
$
97
9,70
8
B
alan
ce a
t Jan
uary
1, 2
019
$
2,
060,
785
$
(1,
081,
077)
$
979,
708
Add
itio
ns
157,
571
-
15
7,57
1 A
mor
tiza
tion
exp
ense
-
(165
,981
)
(1
65,9
81)
Bal
ance
at D
ecem
ber
31, 2
019
$
2,
218,
356
$
(1,
247,
058)
$
971,
298
The
abo
ve it
ems
of o
ther
inta
ngib
le a
sset
s ar
e am
orti
zed
on a
str
aigh
t-li
ne b
asis
ove
r 2-
10 y
ears
.
17.
OT
HE
R A
SS
ET
S
D
ecem
ber
31
2019
2018
Cur
rent
Tem
pora
ry p
aym
ents
$
94,6
82
$
29
0,66
2 P
repa
ymen
ts
1,55
1,11
3
2,
549,
376
Oth
ers
460,
404
317,
826
$
2,
106,
199
$
3,
157,
864
N
on-c
urre
nt
P
repa
ymen
ts f
or a
ircr
aft
$
8,
322,
518
$
22
3,74
5 P
repa
ymen
ts -
long
-ter
m
2,26
4,22
0
1,
501,
429
Ref
unda
ble
depo
sits
62
1,71
5
37
7,57
7 O
ther
fin
anci
al a
sset
s
19
,103
19
,334
$
11,2
27,5
56
$
2,
122,
085
The
pre
paym
ents
for
air
craf
t co
mpr
ised
the
pre
paid
dep
osit
s an
d ca
pita
lize
d in
tere
st f
rom
the
pur
chas
e of
A
321n
eo a
nd B
777F
air
craf
t. F
or d
etai
ls o
n th
e A
321n
eo a
nd B
777F
air
craf
t pu
rcha
se c
ontr
acts
, re
fer
to
Not
e 33
.
216
- 39
-
18.
BO
RR
OW
ING
S
Lon
g-te
rm B
orro
win
gs
D
ecem
ber
31
2019
2018
Uns
ecur
ed b
ank
loan
s
$
650,
000
$
7,
749,
000
Sec
ured
ban
k lo
ans
30,4
35,8
70
34,1
71,8
75
Com
mer
cial
pap
er
Pro
ceed
s fr
om is
sue
31,3
00,0
00
30,3
00,0
00
Les
s: U
nam
orti
zed
disc
ount
59
,382
58
,132
62,3
26,4
88
72,1
62,7
43
Les
s: C
urre
nt p
orti
on
13,7
08,3
20
15,3
35,0
05
$
48
,618
,168
$
56,8
27,7
38
Inte
rest
rat
es
1.
08%
-1.4
6%
0.
92%
-1.4
6%
For
info
rmat
ion
on s
ecur
ed b
ank
loan
s w
hich
wer
e se
cure
d by
fli
ght e
quip
men
t, re
fer
to N
ote
32.
Ban
k lo
ans
(New
Tai
wan
dol
lars
and
U.S
. do
llar
s) a
re r
epay
able
qua
rter
ly,
sem
iann
uall
y or
in
lum
p su
m
upon
mat
urit
y. R
elat
ed in
form
atio
n is
sum
mar
ized
as
foll
ows:
Dec
emb
er 3
1
20
19
20
18
P
erio
ds
20
08/2
/26-
20
30/4
/25
20
07/5
/24-
20
30/4
/25
The
Com
pany
has
not
e is
suan
ce f
acil
itie
s (N
IFs)
obt
aine
d fr
om c
erta
in f
inan
cial
ins
titu
tion
s. T
he N
IFs,
w
ith
vari
ous
mat
urit
ies
unti
l A
ugus
t 20
24,
wer
e us
ed b
y th
e C
ompa
ny t
o gu
aran
tee
com
mer
cial
pap
er
whi
ch i
t is
sued
. T
he c
omm
erci
al p
aper
was
iss
ued
at d
isco
unt
rate
s of
1.1
300%
-1.1
680%
in
2019
and
1.
0693
%-1
.296
0% in
201
8.
19
. B
ON
DS
PA
YA
BL
E
D
ecem
ber
31
2019
2018
Uns
ecur
ed c
orpo
rate
bon
ds f
irst
-tim
e is
sued
in 2
013
$
2,75
0,00
0
$
5,50
0,00
0 U
nsec
ured
cor
pora
te b
onds
fir
st-t
ime
issu
ed in
201
6
5,
000,
000
5,00
0,00
0 U
nsec
ured
cor
pora
te b
onds
sec
ond-
tim
e is
sued
in 2
016
5,00
0,00
0
5,
000,
000
Uns
ecur
ed c
orpo
rate
bon
ds f
irst
-tim
e is
sued
in 2
017
2,35
0,00
0
2,
350,
000
Uns
ecur
ed c
orpo
rate
bon
ds s
econ
d-ti
me
issu
ed in
201
7
3,
500,
000
3,50
0,00
0 U
nsec
ured
cor
pora
te b
onds
fir
st-t
ime
issu
ed in
201
8
4,
500,
000
4,50
0,00
0 U
nsec
ured
cor
pora
te b
onds
fir
st-t
ime
issu
ed in
201
9
3,
500,
000
- C
onve
rtib
le b
onds
- f
ifth
-tim
e is
sue
-
1,
695,
900
Con
vert
ible
bon
ds -
six
th-t
ime
issu
e
5,
752,
625
5,67
3,71
0
32,3
52,6
25
33,2
19,6
10
Les
s: C
urre
nt p
orti
on a
nd p
ut o
ptio
n of
con
vert
ible
bon
ds
10,0
00,0
00
4,44
5,90
0
$
22,3
52,6
25
$
28
,773
,710
- 40
-
Rel
ated
issu
ance
con
diti
ons
wer
e as
fol
low
s:
Cat
egor
y
Per
iod
Con
dit
ion
s
Rat
e (%
)
F
ive-
year
pri
vate
uns
ecur
ed b
onds
- is
sued
at
par
in J
anua
ry 2
013;
rep
ayab
le in
Jan
uary
20
17 a
nd 2
018;
1.6
% in
tere
st p
.a.,
paya
ble
annu
ally
20
13.0
1.17
- 20
18.0
1.17
P
rinc
ipal
rep
ayab
le in
Ja
nuar
y of
201
7 an
d 20
18;
indi
cato
r ra
te; p
ayab
le
annu
ally
1.
6
Sev
en-y
ear
priv
ate
unse
cure
d bo
nds
- is
sued
at
par
in J
anua
ry 2
013;
rep
ayab
le in
Jan
uary
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
rinc
ipal
rep
ayab
le in
Ja
nuar
y of
201
9 an
d 20
20;
indi
cato
r ra
te; p
ayab
le
annu
ally
1.
85
Fiv
e-ye
ar u
nsec
ured
bon
ds -
issu
ed a
t par
in
May
201
6; r
epay
able
in M
ay 2
020
and
2021
; 1.1
9% in
tere
st p
.a.,
paya
ble
annu
ally
20
16.0
5.26
- 20
21.0
5.26
P
rinc
ipal
rep
ayab
le in
May
of
2020
and
202
1; in
tere
st p
.a.
paya
ble
annu
ally
1.
19
Fiv
e-ye
ar u
nsec
ured
bon
ds -
issu
ed a
t par
in
Sep
tem
ber
2016
; rep
ayab
le in
S
epte
mbe
r 20
20 a
nd 2
021;
1.0
8% in
tere
st
p.a.
, pay
able
ann
ually
20
16.0
9.27
- 20
21.0
9.27
P
rinc
ipal
rep
ayab
le in
S
epte
mbe
r of
202
0 an
d 20
21; i
nter
est p
.a. p
ayab
le
annu
ally
1.
08
Thr
ee-y
ear
priv
ate
unse
cure
d bo
nds
- is
sued
at
par
in M
ay 2
017;
rep
ayab
le o
n du
e da
te;
inte
rest
of
1.2%
p.a
., pa
yabl
e an
nual
ly
20
17.0
5.19
- 20
20.0
5.19
P
rinc
ipal
rep
ayab
le o
n du
e da
te; i
ndic
ator
rat
e;
paya
ble
annu
ally
1.
20
Sev
en-y
ear
priv
ate
unse
cure
d bo
nds
- is
sued
at
par
in M
ay 2
017;
rep
ayab
le o
n du
e da
te;
inte
rest
of
1.75
% p
.a.,
paya
ble
annu
ally
20
17.0
5.19
- 20
24.0
5.19
P
rinc
ipal
rep
ayab
le o
n du
e da
te; i
ndic
ator
rat
e;
paya
ble
annu
ally
1.
75
Thr
ee-y
ear
priv
ate
unse
cure
d bo
nds
- is
sued
at
par
in O
ctob
er 2
017;
rep
ayab
le o
n du
e da
te;
inte
rest
of
1.14
% p
.a.,
paya
ble
annu
ally
20
17.1
0.12
- 20
20.1
0.12
P
rinc
ipal
rep
ayab
le o
n du
e da
te; i
ndic
ator
rat
e;
paya
ble
annu
ally
1.
14
Fiv
e-ye
ar p
riva
te u
nsec
ured
bon
ds -
issu
ed a
t pa
r in
Oct
ober
201
7; r
epay
able
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
rinc
ipal
rep
ayab
le in
O
ctob
er o
f 20
21 a
nd 2
022;
in
dica
tor
rate
; pay
able
an
nual
ly
1.
45
Fiv
e-ye
ar p
riva
te u
nsec
ured
bon
ds -
issu
ed a
t pa
r in
Nov
embe
r 20
18; r
epay
able
in
Nov
embe
r 20
22 a
nd 2
023;
1.3
2% in
tere
st
p.a.
, pay
able
ann
ually
20
18.1
1.30
- 20
23.1
1.30
P
rinc
ipal
rep
ayab
le in
N
ovem
ber
of 2
022
and
2023
; ind
icat
or r
ate;
pa
yabl
e an
nual
ly
1.
32
Sev
en-y
ear
priv
ate
unse
cure
d bo
nds
- is
sued
at
par
in N
ovem
ber
2018
; rep
ayab
le in
N
ovem
ber
2022
and
202
3; 1
.45%
inte
rest
p.
a., p
ayab
le a
nnua
lly
20
18.1
1.30
- 20
25.1
1.30
P
rinc
ipal
rep
ayab
le in
N
ovem
ber
of 2
022
and
2023
; ind
icat
or r
ate;
pa
yabl
e an
nual
ly
1.
45
Fiv
e-ye
ar p
riva
te u
nsec
ured
bon
ds -
issu
ed a
t pa
r in
Jun
e 20
19; r
epay
able
in J
une
2023
an
d 20
24; 1
.10%
inte
rest
p.a
., pa
yabl
e an
nual
ly
20
19.0
6.21
- 20
24.0
6.21
P
rinc
ipal
rep
ayab
le in
Jun
e of
20
23 a
nd 2
024;
indi
cato
r ra
te; p
ayab
le a
nnua
lly
1.
10
Sev
en-y
ear
priv
ate
unse
cure
d bo
nds
- is
sued
at
par
in J
une
2019
; rep
ayab
le in
Jun
e 20
25
and
2026
; 1.3
2% in
tere
st p
.a.,
paya
ble
annu
ally
20
19.0
6.21
- 20
26.0
6.21
P
rinc
ipal
rep
ayab
le in
Jun
e of
20
25 a
nd 2
026;
indi
cato
r ra
te; p
ayab
le a
nnua
lly
1.
32
(Con
tinu
ed)
217
- 41
-
Cat
egor
y
Per
iod
Con
dit
ion
s
Rat
e (%
)
F
ive-
year
con
vert
ible
bon
ds -
issu
ed a
t di
scou
nt in
Dec
embe
r 20
13; r
epay
able
in
lum
p su
m u
pon
mat
urit
y; 1
.824
5% d
isco
unt
rate
p.a
.
20
13.1
2.26
- 20
18.1
2.26
E
xcep
t for
con
vert
ing
to s
hare
ca
pita
l or
buyi
ng b
ack,
pr
inci
pal r
epay
able
in
Dec
embe
r of
201
8
-
Fiv
e-ye
ar c
onve
rtib
le b
onds
- is
sued
at
disc
ount
in J
anua
ry 2
018;
rep
ayab
le in
lum
p su
m u
pon
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
vert
ing
to s
hare
ca
pita
l or
buyi
ng b
ack,
pr
inci
pal r
epay
able
in
Dec
embe
r of
202
3
-
(Con
clud
ed)
The
Com
pany
iss
ued
its
2016
fir
st u
nsec
ured
cor
pora
te b
onds
wit
h a
face
val
ue o
f $5
,000
,000
tho
usan
d,
and
the
purc
hase
rs o
f th
e bo
nds
incl
uded
Man
dari
n A
irli
nes
Co.
, L
td.
and
Sab
re T
rave
l N
etw
ork
(Tai
wan
) C
o., L
td.,
whi
ch h
eld
a fa
ce v
alue
of
$300
,000
tho
usan
d, a
nd t
he a
mou
nt w
as e
lim
inat
ed i
n th
e C
ompa
ny’s
co
nsol
idat
ed f
inan
cial
sta
tem
ents
. T
he C
ompa
ny i
ssue
d th
e fi
fth
issu
e of
uns
ecur
ed c
onve
rtib
le b
onds
, an
d th
e is
suan
ce c
ondi
tion
s w
ere
as
foll
ows:
a.
T
he h
olde
rs m
ay d
eman
d a
lum
p-su
m p
aym
ent f
or th
e bo
nds
upon
mat
urit
y.
b.
The
hol
ders
can
req
uest
tha
t th
e C
ompa
ny r
epur
chas
e th
eir
bond
s at
100
.75%
fac
e va
lue
on t
he t
hird
an
nive
rsar
y of
the
off
erin
g da
te. B
ecau
se t
he h
olde
rs c
an e
xerc
ise
sell
ing
righ
ts o
n D
ecem
ber
26, 2
016,
th
e C
ompa
ny r
ecla
ssif
ied
the
bond
s pa
yabl
e to
“cu
rren
t po
rtio
n of
bon
ds p
ayab
le”
in D
ecem
ber
2015
. T
he C
ompa
ny p
aid
$994
,705
tho
usan
d to
the
hol
ders
of
the
bond
s pa
yabl
e w
ho e
xerc
ised
the
put
op
tion
s, a
nd th
e di
ffer
ence
bet
wee
n th
e pa
ymen
t am
ount
and
car
ryin
g am
ount
rec
ogni
zed
was
a l
oss
on
the
bond
s pa
yabl
e bu
y ba
ck o
f $4
1,94
3 th
ousa
nd,
for
whi
ch t
he C
ompa
ny r
ecla
ssif
ied
the
rem
aini
ng
face
val
ue to
Non
-cur
rent
ass
ets.
c.
T
he C
ompa
ny m
ay r
edee
m t
he b
onds
at
face
val
ue b
etw
een
Mar
ch 2
6, 2
014
and
Nov
embe
r 16
, 20
18
unde
r ce
rtai
n co
ndit
ions
. d.
B
etw
een
Janu
ary
26, 2
014
and
Dec
embe
r 16
, 201
8 (e
xcep
t fo
r th
e pe
riod
bet
wee
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
bon
ds t
o th
e C
ompa
ny’s
ord
inar
y sh
ares
. T
he i
niti
al c
onve
rsio
n pr
ice
was
set
at
NT
$12.
24,
whi
ch i
s su
bjec
t to
ad
just
men
t if
the
re i
s a
capi
tal
inje
ctio
n by
cas
h, s
hare
div
iden
d di
stri
buti
on, a
nd t
he p
ropo
rtio
n of
cas
h di
vide
nds
per
shar
e in
mar
ket
pric
e ex
ceed
ing
1.5%
. B
ecau
se t
he C
ompa
ny d
istr
ibut
ed c
ash
divi
dend
s as
of
Aug
ust
14, 2
018,
the
re w
as a
djus
tmen
t th
e co
nver
sion
pri
ce t
o N
T$1
1.38
, cor
pora
te b
onds
wit
h a
face
val
ue o
f $3
,316
,800
thou
sand
had
bee
n co
nver
ted
to 2
70,9
85 th
ousa
nd u
nits
of
ordi
nary
sha
res.
e.
T
he c
onve
rtib
le b
onds
has
exp
ired
on
Dec
embe
r 26
, 201
8, t
he C
ompa
ny h
as f
ully
rep
ayab
le i
n Ja
nuar
y 8,
201
9, th
e re
late
d ca
pita
l sur
plus
- s
hare
opt
ion
has
recl
assi
fied
as
capi
tal s
urpl
us -
oth
er.
The
con
vert
ible
bon
ds c
onta
in b
oth
liab
ility
and
equ
ity c
ompo
nent
s. T
he e
quity
com
pone
nt w
as p
rese
nted
in
equ
ity u
nder
the
head
ing
of c
apit
al s
urpl
us -
opt
ions
. The
eff
ecti
ve in
tere
st r
ate
of th
e li
abili
ty c
ompo
nent
w
as 1
.824
5% p
er a
nnum
on
init
ial r
ecog
niti
on.
Pro
ceed
s fr
om is
suan
ce
$
6,
000,
000
Equ
ity c
ompo
nent
(5
18,6
21)
Lia
bili
ty c
ompo
nent
at t
he d
ate
of is
suan
ce
$
5,
481,
379
- 42
-
The
Com
pany
issu
ed th
e si
xth
issu
e of
its
unse
cure
d co
nver
tibl
e bo
nds,
and
the
issu
ance
con
diti
ons
wer
e as
fo
llow
s:
a.
The
hol
ders
may
dem
and
a lu
mp-
sum
pay
men
t for
the
bond
s up
on m
atur
ity.
b.
T
he h
olde
rs c
an r
eque
st t
hat
the
Com
pany
rep
urch
ase
thei
r bo
nds
at f
ace
valu
e on
the
thi
rd a
nniv
ersa
ry
of th
e of
feri
ng d
ate.
The
hol
ders
can
exe
rcis
e th
e ri
ght t
o se
ll o
n Ja
nuar
y 30
, 202
1.
c.
The
Com
pany
may
red
eem
the
bon
ds a
t fa
ce v
alue
bet
wee
n A
pril
30,
201
8 an
d D
ecem
ber
20,
2022
un
der
cert
ain
cond
itio
ns.
d.
Bet
wee
n Ja
nuar
y 26
, 201
4 an
d D
ecem
ber
16, 2
018
(exc
ept
for
the
peri
od b
etw
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 t
he b
onds
to
the
Com
pany
’s o
rdin
ary
shar
es.
The
ini
tial
con
vers
ion
pric
e w
as s
et a
t N
T$1
3.2,
whi
ch i
s su
bjec
t to
ad
just
men
t if
the
re i
s a
capi
tal
inje
ctio
n by
cas
h, s
hare
div
iden
d di
stri
buti
on, a
nd t
he p
ropo
rtio
n of
cas
h di
vide
nds
per
shar
e in
mar
ket
pric
e ex
ceed
ing
1.5%
. B
ecau
se t
he C
ompa
ny d
istr
ibut
ed c
ash
divi
dend
s as
of
July
29,
201
9, th
e co
nver
sion
pri
ce w
as a
djus
ted
to N
T$1
2.6.
T
he c
onve
rtib
le b
onds
con
tain
bot
h li
abil
ity a
nd e
quity
com
pone
nts.
The
equ
ity c
ompo
nent
was
pre
sent
ed
in e
quity
und
er th
e he
adin
g of
cap
ital
sur
plus
- o
ptio
ns. T
he e
ffec
tive
inte
rest
rat
e of
the
liab
ility
com
pone
nt
was
1.3
821%
per
ann
um o
n in
itia
l rec
ogni
tion
.
Pro
ceed
s fr
om is
suan
ce
$
6,
012,
000
Equ
ity c
ompo
nent
(4
09,9
78)
Lia
bili
ty c
ompo
nent
at t
he d
ate
of is
suan
ce
$
5,
602,
022
The
sev
enth
iss
ue o
f th
e C
ompa
ny’s
uns
ecur
ed c
onve
rtib
le b
onds
was
res
olve
d by
the
boa
rd o
f di
rect
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 is
sued
at 1
00%
-100
.5%
of
the
face
val
ue, a
nd th
e is
suan
ce p
erio
d is
5 y
ears
.
20.
LE
AS
E A
GR
EE
ME
NT
S
Yea
r 20
19
a.
Rig
ht-o
f-us
e as
sets
- 2
019
Dec
emb
er 3
1,
2019
C
arry
ing
amou
nts
Lan
d
$
3,
442,
366
Bui
ldin
gs
6,
950,
330
Fli
ght e
quip
men
t
53,8
70,1
34
$
64,2
62,8
30
218
- 43
-
For
th
e Y
ear
En
ded
D
ecem
ber
31,
20
19
A
ddit
ions
to r
ight
-of-
use
asse
ts
$
5,04
3,40
9
Dep
reci
atio
n fo
r ri
ght-
of-u
se a
sset
s
L
and
$
171,
147
Bui
ldin
gs
76
7,93
9 F
ligh
t equ
ipm
ent
9,
070,
855
$
10,0
09,9
41
b.
Lea
se li
abil
itie
s -
2019
Dec
emb
er 3
1,
2019
C
arry
ing
amou
nts
C
urre
nt
$
695,
215
Non
-cur
rent
$
10
,909
,262
R
ange
of
disc
ount
rat
e fo
r le
ase
liab
ilit
ies
(inc
lude
US
leas
e he
dgin
g in
stru
men
ts):
D
ecem
ber
31,
20
19
L
and
1.
09%
-1.6
5%
Bui
ldin
gs
0%
-3.5
6%
Fli
ght e
quip
men
t
2.49
%-3
.16%
c.
Fin
anci
al li
abil
itie
s un
der
hedg
e ac
coun
ting
T
he C
ompa
ny s
peci
fics
a p
art
of U
S l
ease
con
trac
t as
a h
edgi
ng i
nstr
umen
ts t
o av
oid
exch
ange
fl
uctu
atio
ns is
US
dol
lar
pass
enge
r re
venu
e, a
nd a
pplie
s th
e ac
coun
ting
trea
tmen
t of
cash
flo
w h
edgi
ng.
The
leas
e in
form
atio
n is
as
foll
ows:
M
atu
rity
Dat
e
Su
bje
ct
Car
ryin
g V
alu
e
Dec
embe
r 31
, 201
9
2021
.4.1
5-20
28.5
.15
Fin
anci
al li
abil
itie
s fo
r he
dgin
g -
curr
ent
$
8,
577,
482
F
inan
cial
liab
ilit
ies
for
hedg
ing
- no
n-cu
rren
t
42
,420
,205
Infl
uenc
e of
com
preh
ensi
ve in
com
e
Rec
ogn
ized
in
Oth
er
Com
pre
hen
sive
In
com
e
Rec
lass
ifie
d t
o In
com
e
For
the
year
end
ed D
ecem
ber
31, 2
019
$
1,
457,
058
$
(2
4,02
9)
- 44
-
d.
Mat
eria
l lea
sing
act
ivit
ies
and
term
s
As
less
ee,
Chi
na A
irli
nes
leas
ed t
en 7
77-3
00E
R p
lane
s, f
ifte
en A
330-
300
plan
es a
nd f
ifte
en 7
37-8
00
plan
es f
or o
pera
tion
, lea
se p
erio
d ar
e 8
to 1
2 ye
ars
from
Feb
ruar
y 20
06 to
May
202
8. T
he r
enta
l pri
cing
m
etho
d is
par
tly
a fi
xed
amou
nt o
f fu
nds,
and
som
e of
the
m a
re f
loat
ing
rent
s, f
loat
ing
rent
s ar
e ac
cord
ing
to b
ench
mar
k ra
tio,
the
ren
t is
rev
ised
eve
ry h
alf
year
. W
hen
the
leas
e ex
pire
s, t
he l
ease
ag
reem
ents
hav
e no
pur
chas
e ri
ghts
. T
he in
form
atio
n of
ref
unda
ble
depo
sits
and
ope
ning
of
cred
it le
tter
due
to r
enta
l of
plan
es:
Dec
emb
er 3
1,
2019
Ref
unda
ble
depo
sits
$
46
3,11
5 C
redi
t gua
rant
ees
1,40
6,70
2
e.
Lea
se a
gree
men
t T
he C
ompa
ny s
igne
d a
rent
al c
ontr
act f
or s
ix A
321n
eo w
ith
Air
Lea
se C
orpo
rati
on o
n S
epte
mbe
r 20
19,
whi
ch is
exp
ecte
d to
be
intr
oduc
ed b
etw
een
2021
and
202
2.
The
Com
pany
sig
ned
a re
ntal
let
ter
of i
nten
t fo
r ei
ght
A32
1neo
with
CA
LC
Lea
se C
orpo
rati
on o
n M
ay
2019
, whi
ch is
exp
ecte
d to
be
intr
oduc
ed in
202
2.
f.
S
ale-
and-
leas
ebac
k
In o
rder
to
revi
tali
ze a
sset
s an
d st
reng
then
the
fin
anci
al s
truc
ture
, th
e C
ompa
ny s
old
five
of
its
own
A33
0-30
0 ai
rcra
ft t
o A
ltav
air
L.P
. in
Sep
tem
ber
2019
by
sale
-and
-lea
seba
ck f
or $
4,90
5,66
0 th
ousa
nd.
The
leas
e te
rm w
as 5
to 6
yea
rs a
nd a
loss
of
$103
,775
thou
sand
was
incu
rred
. The
leas
e ag
reem
ent h
ad
no t
erm
s fo
r le
ase
rene
wal
or
offt
ake
righ
ts. T
he a
nnua
l le
ase
paym
ents
for
eac
h ai
rcra
ft a
re U
S$5
,389
th
ousa
nd to
US
$5,4
37 th
ousa
nd.
As
less
ee, t
he C
ompa
ny le
ased
off
ice
buil
ding
s an
d eq
uipm
ent f
rom
CA
L P
ark.
Lea
se p
erio
d is
2 y
ears
, an
d th
e fi
xed
paym
ent (
tax
incl
uded
) is
$20
,238
thou
sand
per
mon
th.
g.
O
ther
leas
e in
form
atio
n T
he C
ompa
ny u
ses
oper
atin
g le
ase
agre
emen
t for
inve
stm
ent p
rope
rtie
s, r
efer
to N
ote
15.
For
th
e Y
ear
En
ded
D
ecem
ber
31,
20
19
S
hort
-ter
m a
nd lo
w p
rice
leas
e pa
ymen
t
$
18
,144
T
otal
of
leas
e ca
sh o
utfl
ow
$ (
11,5
83,3
49)
The
Com
pany
cho
oses
to
wai
ve t
he r
ecog
nitio
n of
the
con
trac
t pr
ovis
ions
for
the
sho
rt-t
erm
lea
ses
and
low
pri
ce le
ase,
and
doe
s no
t rec
ogni
ze th
e re
late
d ri
ght-
of-u
se a
sset
s an
d le
ase
liab
ilit
ies
for
such
leas
e.
219
- 45
-
2018
a.
S
ale-
and-
leas
ebac
k fi
nanc
e le
ases
Dec
emb
er 3
1,
2018
Min
imum
leas
e pa
ymen
ts -
fli
ght e
quip
men
t
Wit
hin
one
year
$
59
6,00
0 B
eyon
d on
e ye
ar a
nd w
ithi
n fi
ve y
ears
-
Pre
sent
val
ue o
f m
inim
um le
ase
paym
ents
$
59
6,00
0
Inte
rest
rat
es
1.
0680
%
The
Com
pany
had
leas
ed o
ne A
330-
300
airc
raft
und
er s
ale-
leas
ebac
k fi
nanc
e le
ases
as
of D
ecem
ber
31,
2018
. T
he l
ease
ter
ms
star
ted
from
Jun
e 20
06 t
o A
pril
201
9. D
urin
g th
e le
ase
term
s, t
he C
ompa
ny
reta
ined
all
ris
ks a
nd r
ewar
ds a
ttac
hed
to t
he a
ircr
aft
and
engi
nes
and
enjo
yed
the
sam
e su
bsta
ntiv
e ri
ghts
as
thos
e pr
ior
to t
he tr
ansa
ctio
ns. T
he i
nter
est
rate
s un
derl
ying
all
oblig
atio
ns u
nder
thes
e fi
nanc
e le
ases
wer
e fl
oati
ng. T
here
fore
, the
min
imum
leas
e pa
ymen
ts u
nder
the
sale
-lea
seba
ck a
ircr
aft c
ontr
acts
do
not
incl
ude
inte
rest
exp
ense
s.
b.
O
pera
ting
leas
e ar
rang
emen
ts (
incl
ude
sale
-lea
seba
ck o
pera
ting
leas
es)
F
or t
he o
pera
ting
lea
se a
rran
gem
ents
, pl
ease
ref
er t
o th
e fi
nanc
ial
stat
emen
ts f
or t
he y
ear
ende
d D
ecem
ber
31, 2
018.
A
s of
Dec
embe
r 31
, 201
8, th
e re
fund
able
dep
osit
s pa
id b
y th
e C
ompa
ny u
nder
ope
rati
ng le
ase
cont
ract
s w
ere
$215
,425
tho
usan
d. S
ome
of t
he g
uara
ntee
s w
ere
secu
red
by c
redi
t gu
aran
tees
, an
d ou
tsta
ndin
g cr
edit
gua
rant
ees
as o
f D
ecem
ber
31, 2
018
wer
e $1
,437
,707
thou
sand
. T
he f
utur
e m
inim
um l
ease
pay
men
ts f
or t
he n
on-c
ance
labl
e op
erat
ing
leas
e co
mm
itm
ents
wer
e as
fo
llow
s:
Dec
emb
er 3
1,
2018
U
p to
1 y
ear
$
9,
943,
373
Ove
r 1
year
to 5
yea
rs
38,7
89,0
47
Ove
r 5
year
s
19
,441
,872
$
68
,174
,292
T
he le
ase
paym
ents
rec
ogni
zed
in e
xpen
se f
or th
e cu
rren
t per
iod
wer
e as
fol
low
s:
For
th
e Y
ear
En
ded
D
ecem
ber
31,
20
18
M
inim
um le
ase
paym
ents
$
10
,024
,963
- 46
-
21.
OT
HE
R P
AY
AB
LE
S
D
ecem
ber
31
2019
2018
Fue
l cos
ts
$
3,
419,
803
$
3,
571,
314
Gro
und
serv
ice
expe
nses
1,
178,
184
1,08
9,12
5 R
epai
r ex
pens
es
1,13
6,58
8
96
0,13
8 In
tere
st e
xpen
ses
214,
089
260,
179
Sho
rt-t
erm
em
ploy
ee b
enef
its
1,57
7,32
2
2,
053,
442
Ter
min
al s
urch
arge
s
91
4,42
8
91
4,17
1 C
omm
issi
on e
xpen
ses
509,
520
484,
341
Oth
ers
1,94
2,26
9
2,
406,
591
$
10
,892
,203
$
11,7
39,3
01
22.
CO
NT
RA
CT
LIA
BIL
ITIE
S/D
EF
ER
RE
D R
EV
EN
UE
Dec
emb
er 3
1
20
19
20
18
Con
trac
t L
iab
ilit
ies
C
ontr
act
Lia
bil
itie
s
Fre
quen
t fly
er p
rogr
ams
$
2,
884,
122
$
2,
489,
950
Adv
ance
tick
et s
ales
17
,936
,476
16
,479
,196
$
20,8
20,5
98
$
18
,969
,146
Cur
rent
$
18,5
84,2
87
$
17
,065
,481
N
on-c
urre
nt
2,23
6,31
1
1,
903,
665
$
20
,820
,598
$
18,9
69,1
46
23.
PR
OV
ISIO
NS
Dec
emb
er 3
1
20
19
20
18
O
pera
ting
leas
es -
air
craf
t
$
9,43
1,73
6
$
7,99
9,01
5
Cur
rent
$
-
$
268,
901
Non
-cur
rent
9,
431,
736
7,73
0,11
4
$
9,43
1,73
6
$
7,99
9,01
5
220
- 47
-
The
Com
pany
ren
ted
flig
ht e
quip
men
t un
der
oper
atin
g le
ase
agre
emen
ts.
Und
er t
he c
ontr
acts
(so
me
of t
he
leas
ed f
ligh
t equ
ipm
ent’
s le
ase
paym
ents
are
cal
cula
ted
mon
thly
), w
hen
the
leas
e ex
pire
s an
d th
e eq
uipm
ent
is r
etur
ned
to t
he l
esso
r, t
he f
ligh
t eq
uipm
ent
has
to b
e re
pair
ed a
ccor
ding
to
the
expe
cted
yea
rs o
f us
e,
num
ber
of f
ligh
t ho
urs,
fli
ght
cycl
e an
d th
e nu
mbe
r of
eng
ine
revo
luti
ons.
The
Com
pany
had
exi
stin
g ob
liga
tion
s to
rec
ogni
ze p
rovi
sion
s w
hen
sign
ing
a le
ase
or d
urin
g th
e le
ase
term
.
Air
craf
t L
ease
C
ontr
act
B
alan
ce a
t Jan
uary
1, 2
018
$
7,75
8,65
1 A
ddit
iona
l pro
visi
ons
reco
gniz
ed
2,
566,
045
Usa
ge
(2
,539
,210
) E
ffec
t of
exch
ange
rat
e ch
ange
s
213,
529
B
alan
ce a
t Dec
embe
r 31
, 201
8
$
7,
999,
015
B
alan
ce a
t Jan
uary
1, 2
019
$
7,99
9,01
5 A
ddit
iona
l pro
visi
ons
reco
gniz
ed
3,
616,
519
Usa
ge
(1
,970
,226
) E
ffec
t of
exch
ange
rat
e ch
ange
s
(213
,572
)
Bal
ance
at D
ecem
ber
31, 2
019
$
9,43
1,73
6 24
. R
ET
IRE
ME
NT
BE
NE
FIT
PL
AN
S
a.
Def
ined
con
trib
utio
n pl
ans
The
C
ompa
ny
adop
ted
a pe
nsio
n pl
an
unde
r th
e L
abor
P
ensi
on
Act
(t
he
“LP
A”)
, w
hich
is
a
stat
e-m
anag
ed d
efin
ed c
ontr
ibut
ion
plan
. U
nder
the
LP
A,
an e
ntity
mak
es m
onth
ly c
ontr
ibut
ions
to
empl
oyee
s’ in
divi
dual
pen
sion
acc
ount
s at
6%
of
mon
thly
sal
arie
s an
d w
ages
.
b.
Def
ined
ben
efit
pla
ns
The
Com
pany
ado
pted
the
def
ined
ben
efit
pla
n un
der
the
Lab
or S
tand
ards
Law
, un
der
whi
ch p
ensi
on
bene
fits
are
cal
cula
ted
on t
he b
asis
of
the
leng
th o
f se
rvic
e an
d av
erag
e m
onth
ly s
alar
ies
of t
he s
ix
mon
ths
befo
re r
etir
emen
t. T
he C
ompa
ny c
ontr
ibut
e am
ount
s eq
ual
to 1
5% o
f to
tal
mon
thly
sal
arie
s an
d w
ages
to a
pen
sion
fun
d ad
min
iste
red
by th
e pe
nsio
n fu
nd m
onit
orin
g co
mm
itte
e. P
ensi
on c
ontr
ibut
ions
ar
e de
posi
ted
in th
e B
ank
of T
aiw
an in
the
com
mit
tee’
s na
me.
B
efor
e th
e en
d of
eac
h ye
ar, t
he C
ompa
ny 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 t
he p
ensi
on f
und
is i
nade
quat
e to
pay
ret
irem
ent
bene
fits
for
em
ploy
ees
who
con
form
to
reti
rem
ent
requ
irem
ents
in
the
next
yea
r, t
he C
ompa
ny i
s re
quir
ed t
o fu
nd t
he d
iffe
renc
e in
one
ap
prop
riat
ion
that
sho
uld
be m
ade
befo
re t
he e
nd o
f M
arch
of
the
next
yea
r. T
he p
ensi
on f
und
is
man
aged
by
the
Bur
eau
of L
abor
Fun
ds, M
inis
try
of L
abor
(th
e “B
urea
u”);
the
Com
pany
has
no
righ
t to
infl
uenc
e th
e in
vest
men
t pol
icy
and
stra
tegy
.
- 48
-
The
am
ount
s in
clud
ed i
n th
e ba
lanc
e sh
eets
in
resp
ect
of t
he C
ompa
ny’s
def
ined
ben
efit
pla
ns w
ere
as
foll
ows:
D
ecem
ber
31
2019
2018
Pre
sent
val
ue o
f de
fine
d be
nefi
t obl
igat
ion
$
13
,932
,511
$
13,1
17,2
55
Fai
r va
lue
of p
lan
asse
ts
(6,3
43,7
66)
(6,1
84,4
72)
N
et d
efin
ed b
enef
it li
abil
itie
s
$
7,
588,
745
$
6,
932,
783
Mov
emen
ts in
net
def
ined
ben
efit
liab
ilit
ies
(ass
ets)
wer
e as
fol
low
s:
Pre
sen
t V
alu
e of
th
e D
efin
ed
Ben
efit
O
bli
gati
on
F
air
Val
ue
of
the
Pla
n A
sset
s
Net
Def
ined
B
enef
it
Lia
bil
itie
s (A
sset
s)
Bal
ance
at J
anua
ry 1
, 201
8
$
11,9
56,2
23
$
(5
,797
,479
)
$
6,15
8,74
4 S
ervi
ce c
ost
Cur
rent
ser
vice
cos
t
1,
263,
193
-
1,
263,
193
Net
inte
rest
exp
ense
(in
com
e)
116,
231
(56,
995)
59
,236
R
ecog
nize
d in
pro
fit o
r lo
ss
1,37
9,42
4
(5
6,99
5)
1,32
2,42
9 R
emea
sure
men
t
Ret
urn
on p
lan
asse
ts (
excl
udin
g am
ount
s in
clud
ed in
net
inte
rest
)
-
(168
,987
)
(1
68,9
87)
Act
uari
al lo
ss -
cha
nges
in f
inan
cial
as
sum
ptio
ns
283,
774
-
28
3,77
4 A
ctua
rial
loss
- e
xper
ienc
e ad
just
men
ts
560,
118
-
56
0,11
8 R
ecog
nize
d in
oth
er c
ompr
ehen
sive
inco
me
843,
892
(168
,987
)
67
4,90
5 C
ontr
ibut
ions
fro
m th
e em
ploy
er
-
(1
,058
,494
)
(1
,058
,494
) B
enef
its
paid
(8
97,4
83)
897,
483
- P
aym
ent t
o em
ploy
ees
dire
ct f
rom
the
empl
oyer
(1
74,3
90)
-
(1
74,3
90)
Eff
ect o
f ex
chan
ge r
ate
chan
ges
9,58
9
-
9,58
9 B
alan
ce a
t Dec
embe
r 31
, 201
8
13
,117
,255
(6
,184
,472
)
6,
932,
783
Ser
vice
cos
t
C
urre
nt s
ervi
ce c
ost
1,18
7,28
1
-
1,18
7,28
1 N
et in
tere
st e
xpen
se (
inco
me)
11
8,51
7
(5
6,04
9)
62,4
68
Rec
ogni
zed
in p
rofi
t or
loss
1,
305,
798
(56,
049)
1,
249,
749
Rem
easu
rem
ent
R
etur
n on
pla
n as
sets
(ex
clud
ing
amou
nts
incl
uded
in n
et in
tere
st)
-
(2
19,3
45)
(219
,345
) A
ctua
rial
loss
- c
hang
es in
fin
anci
al
assu
mpt
ions
29
0,04
4
-
290,
044
Act
uari
al lo
ss -
exp
erie
nce
adju
stm
ents
49
1,56
0
-
491,
560
Rec
ogni
zed
in o
ther
com
preh
ensi
ve in
com
e
78
1,60
4
(2
19,3
45)
562,
259
Con
trib
utio
ns f
rom
the
empl
oyer
-
(1,0
38,6
24)
(1,0
38,6
24)
Ben
efit
s pa
id
(1,1
54,7
24)
1,15
4,72
4
-
Pay
men
t to
empl
oyee
s di
rect
fro
m th
e em
ploy
er
(117
,492
)
-
(117
,492
) E
ffec
t of
exch
ange
rat
e ch
ange
s
70
-
70
Bal
ance
at D
ecem
ber
31, 2
019
$
13
,932
,511
$
(6,3
43,7
66)
$
7,
588,
745
221
- 49
-
Thr
ough
the
def
ined
ben
efit
pla
ns u
nder
the
Lab
or S
tand
ards
Law
, th
e C
ompa
ny i
s ex
pose
d to
the
fo
llow
ing
risk
s:
1)
Inve
stm
ent
risk
: T
he p
lan
asse
ts a
re i
nves
ted
in d
omes
tic
and
fore
ign
equi
ty a
nd d
ebt
secu
riti
es,
bank
dep
osits
, et
c. T
he i
nves
tmen
t is
con
duct
ed a
t th
e di
scre
tion
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,
the
retu
rn g
ener
ated
by
plan
ass
ets
shou
ld
not b
e be
low
the
inte
rest
rat
e fo
r a
two-
year
tim
e de
posi
t wit
h lo
cal b
anks
. 2)
In
tere
st r
isk:
A d
ecre
ase
in t
he g
over
nmen
t bo
nd i
nter
est
rate
wil
l in
crea
se t
he p
rese
nt v
alue
of
the
defi
ned
bene
fit
obli
gati
on;
how
ever
, th
is w
ill
be p
arti
ally
off
set
by a
n in
crea
se i
n th
e re
turn
on
the
plan
’s d
ebt i
nves
tmen
ts.
3)
Sal
ary
risk
: T
he p
rese
nt v
alue
of
the
defi
ned
bene
fit
obli
gati
on i
s ca
lcul
ated
by
refe
renc
e to
the
fu
ture
sal
arie
s of
pla
n pa
rtic
ipan
ts.
Thu
s, a
n in
crea
se i
n th
e sa
lari
es o
f th
e pl
an p
arti
cipa
nts
wil
l in
crea
se th
e pr
esen
t val
ue o
f th
e de
fine
d be
nefi
t obl
igat
ions
. T
he a
ctua
rial
val
uati
ons
of t
he p
rese
nt v
alue
of
the
defi
ned
bene
fit
obli
gati
on w
ere
carr
ied
out
by
qual
ifie
d ac
tuar
ies.
The
sig
nifi
cant
ass
umpt
ions
use
d fo
r th
e pu
rpos
es o
f th
e ac
tuar
ial v
alua
tion
s w
ere
as
foll
ows:
D
ecem
ber
31
2019
2018
Dis
coun
t rat
e
0.71
%
0.93
%
Exp
ecte
d ra
te o
f sa
lary
incr
ease
1.00
%
1.00
%
If p
ossi
ble
reas
onab
le c
hang
e in
eac
h of
the
sig
nifi
cant
act
uari
al a
ssum
ptio
ns w
ill
occu
r an
d al
l ot
her
assu
mpt
ions
wil
l re
mai
n co
nsta
nt,
the
pres
ent
valu
e of
the
def
ined
ben
efit
obl
igat
ion
wou
ld i
ncre
ase
(dec
reas
e) a
s fo
llow
s:
Dec
emb
er 3
1
20
19
20
18
D
isco
unt r
ate
0.5%
incr
ease
$ (
613,
408 )
$ (
576,
271)
0.
5% d
ecre
ase
$
65
3,41
3
$
626,
381
Exp
ecte
d ra
te o
f sa
lary
incr
ease
0.
5% in
crea
se
$
62
6,74
3
$
601,
326
0.5%
dec
reas
e
$ (
600,
073 )
$ (
563,
743)
T
he s
ensi
tivi
ty a
naly
sis
pres
ente
d ab
ove
may
not
be
repr
esen
tati
ve o
f th
e ac
tual
cha
nge
in t
he p
rese
nt
valu
e of
the
def
ined
ben
efit
obl
igat
ion
as i
t is
unl
ikel
y th
at t
he c
hang
e in
ass
umpt
ions
wou
ld o
ccur
in
isol
atio
n of
one
ano
ther
as
som
e of
the
assu
mpt
ions
may
be
corr
elat
ed.
Dec
emb
er 3
1
20
19
20
18
T
he e
xpec
ted
cont
ribu
tions
to th
e pl
an f
or th
e ne
xt y
ear
$
73
6,05
6
$
722,
820
T
he a
vera
ge d
urat
ion
of th
e de
fine
d be
nefi
t obl
igat
ion
9.
6 ye
ars
9.
8 ye
ars
- 50
-
25.
EQ
UIT
Y
a.
Sha
re c
apit
al
Ord
inar
y sh
ares
D
ecem
ber
31
2019
2018
Num
ber
of a
utho
rize
d sh
ares
(in
thou
sand
s)
7,00
0,00
0
6,
000,
000
Am
ount
of
auth
oriz
ed s
hare
s
$
70,0
00,0
00
$
60
,000
,000
A
mou
nt o
f is
sued
sha
res
$
54
,209
,846
$
54,2
09,8
46
b.
C
apit
al s
urpl
us
D
ecem
ber
31
2019
2018
Inco
me
of c
onve
rtib
le b
onds
in e
xces
s of
par
val
ue a
nd
conv
ersi
on p
rem
ium
$
315,
114
$
31
5,11
4 D
ivid
ends
dis
trib
uted
to s
ubsi
diar
ies
3,90
9
3,
303
Ret
irem
ent o
f tr
easu
ry s
hare
s
33
,513
33
,513
D
iffe
renc
e in
sal
e pr
ice
of s
hare
of
subs
idia
ries
and
boo
k va
lue
1,12
9,08
0
-
Exp
ired
em
ploy
ee s
hare
opt
ions
11
,747
11
,747
L
ong-
term
inve
stm
ents
11
8,96
2
95
5 B
onds
pay
able
equ
ity c
ompo
nent
40
9,97
8
40
9,97
8 O
ther
s
46
6,60
4
46
6,60
4
$
2,48
8,90
7
$
1,24
1,21
4
The
cap
ital
sur
plus
fro
m s
hare
s is
sued
in
exce
ss o
f pa
r (a
ddit
iona
l pa
id-i
n ca
pita
l fr
om i
ssua
nce
of
ordi
nary
sha
res)
may
be
used
to
offs
et a
def
icit
; in
add
itio
n, w
hen
the
Com
pany
has
no
defi
cit,
such
ca
pita
l su
rplu
s m
ay b
e di
stri
bute
d as
cas
h di
vide
nds
or t
rans
ferr
ed t
o ca
pita
l (l
imit
ed t
o a
cert
ain
perc
enta
ge o
f th
e C
ompa
ny’s
pai
d-in
cap
ital
).
The
cap
ital
sur
plus
fro
m lo
ng-t
erm
inve
stm
ents
, em
ploy
ee s
hare
s op
tion
s ex
pire
d, d
ivid
ends
dis
trib
uted
to
sub
sidi
arie
s an
d re
tire
men
t of
trea
sury
sha
res
may
not
be
used
for
any
pur
pose
, exp
ect f
or o
ffse
ttin
g a
defi
cit.
As
for
capi
tal
surp
lus
from
con
vers
ion
of c
onve
rtib
le b
onds
pay
able
may
not
be
used
for
any
pu
rpos
e.
222
- 51
-
c.
App
ropr
iati
on o
f ea
rnin
gs a
nd d
ivid
end
poli
cy
Acc
ordi
ng t
o am
ende
d C
ompa
ny A
ct,
whe
re t
he C
ompa
ny m
ade
prof
it i
n a
fisc
al y
ear,
the
pro
fit
shal
l be
fir
st u
tili
zed
for
payi
ng t
axes
, of
fset
ting
los
ses
of p
revi
ous
year
s, s
etti
ng a
side
as
lega
l re
serv
e 10
%
of t
he r
emai
ning
pro
fit,
sett
ing
asid
e or
rev
ersi
ng a
spe
cial
res
erve
in
acco
rdan
ce w
ith
the
law
s an
d re
gula
tion
s, a
nd t
hen
any
rem
aini
ng p
rofi
t to
geth
er w
ith
any
undi
stri
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
trib
utio
n pl
an w
ith
due
cons
ider
atio
n of
any
fut
ure
airc
raft
acq
uisi
tion
pla
ns a
nd f
und
dem
and,
whi
ch s
houl
d be
res
olve
d in
the
sh
areh
olde
rs’
mee
ting
for
the
dis
trib
utio
n of
div
iden
ds a
nd b
onus
es t
o sh
areh
olde
rs b
y ca
sh o
r sh
ares
(c
ash
divi
dend
s ca
nnot
be
less
tha
n 30
% o
f to
tal
divi
dend
s di
stri
bute
d).
How
ever
, if
the
Com
pany
’s
prof
it b
efor
e ta
x in
a f
isca
l ye
ar a
fter
ded
ucti
ons
for
the
abov
emen
tion
ed i
tem
s is
not
suf
fici
ent
for
earn
ings
dis
trib
utio
n, r
etai
ned
earn
ings
can
be
used
as
a su
pple
men
t for
the
defi
cien
cy.
The
Com
pany
sha
ll s
et a
side
pro
fits
as
a le
gal
rese
rve
unti
ll th
e le
gal
rese
rve
amou
nts
to t
he a
utho
rize
d ca
pita
l. T
he l
egal
res
erve
cou
ld b
e us
ed f
or m
akin
g go
od t
he d
efic
it o
f th
e C
ompa
ny.
If t
he C
ompa
ny
has
no d
efic
it i
n a
fisc
al y
ear,
the
Com
pany
can
dis
trib
ute
all
or p
art
of t
he c
apit
al s
urpl
us b
y ca
sh o
r sh
ares
wit
h du
e co
nsid
erat
ion
of f
inan
ce,
mar
ketin
g an
d m
anag
emen
t re
quir
emen
ts i
n ac
cord
ance
wit
h th
e la
ws
and
regu
lati
ons.
T
he d
istr
ibut
ion
of p
rofi
t su
rplu
s sh
all
be a
ppro
ved
in t
he a
nnua
l sh
areh
olde
rs’
mee
ting
hel
d in
the
fo
llow
ing
year
and
sha
ll b
e ac
coun
ted
for
in th
at y
ear.
1)
A
ppro
pria
tion
of
earn
ings
and
div
iden
ds p
er s
hare
in 2
017
T
he a
ppro
pria
tion
of
earn
ings
for
201
7 w
as r
esol
ved
in th
e sh
areh
olde
rs’
mee
ting
on
June
27,
201
8.
The
app
ropr
iati
ons
and
divi
dend
s pe
r sh
are
wer
e as
fol
low
s:
Ap
pro
pri
atio
n
of E
arn
ings
Div
iden
ds
Per
S
har
e (N
T$)
L
egal
res
erve
$
145,
831
Spe
cial
res
erve
11
8,81
0
C
ash
divi
dend
s
1,
193,
670
$0
.218
1820
086
2)
App
ropr
iati
on o
f ea
rnin
gs in
201
8 T
he a
ppro
pria
tion
of
earn
ings
for
201
8 w
as r
esol
ved
in th
e sh
areh
olde
rs’
mee
ting
on
June
25,
201
9.
The
app
ropr
iati
on a
nd d
ivid
ends
per
sha
re w
ere
as f
ollo
ws:
A
pp
rop
riat
ion
of
Ear
nin
gs
D
ivid
end
s P
er
Sh
are
(NT
$)
L
egal
res
erve
$
114,
493
C
ash
divi
dend
s
1,
136,
278
$0
.209
6073
7 C
ompa
ny r
ever
sed
spec
ial r
eser
ve o
f $1
05,8
43 th
ousa
nd.
- 52
-
3)
Off
sett
ing
of d
efic
its
in 2
019
O
n M
arch
18,
202
0, t
he b
oard
pro
pose
d to
off
set
the
accu
mul
ated
def
icit
in
2019
. T
he d
efic
it
incl
uded
a n
et l
oss
of $
1,19
9,79
8 th
ousa
nd,
nega
tive
adju
stm
ent
of o
ther
ret
aine
d ea
rnin
gs o
f $5
77,4
27 th
ousa
nd, t
he r
emai
ning
am
ount
of
accu
mul
ated
def
icit
was
$1,
777,
225
thou
sand
.
The
of
fset
ting
of
de
fici
ts
for
2019
is
su
bjec
t to
th
e re
solu
tion
of
th
e sh
areh
olde
rs
in
the
shar
ehol
ders
’ m
eeti
ng to
be
held
on
June
23,
202
0.
d.
Oth
er e
quity
item
s T
he m
ovem
ent o
f ot
her
equi
ty it
ems
is a
s fo
llow
s:
Exc
han
ge
Dif
fere
nce
s on
T
ran
slat
ing
For
eign
O
per
atio
ns
Un
real
ized
G
ain
(L
oss)
on
A
vail
able
-for
- sa
le F
inan
cial
A
sset
s
Un
real
ized
G
ain
(L
oss)
on
F
inan
cial
A
sset
s at
F
VT
OC
I
Cas
h F
low
H
edge
s
Gai
n (
Los
s) o
n
Hed
gin
g In
stru
men
ts
T
otal
Bal
ance
at J
anua
ry 1
, 20
18
$ (3
4,98
6 )
$ 1,
774
$ -
$ (7
4,42
9 )
$ -
$ (1
07,6
41 )
Adj
ustm
ents
on
init
ial
appl
icat
ion
of I
FR
S 9
-
(1,7
74 )
42
,351
74,4
29
(7
4,42
9 )
40
,577
B
alan
ce a
t Jan
uary
1,
2018
aft
er I
FR
S 9
ad
just
men
ts
(3
4,98
6 )
-
42
,351
-
(74,
429 )
(67,
064 )
E
xcha
nge
diff
eren
ces
on
tran
slat
ing
fore
ign
oper
atio
ns
34
,140
-
-
-
-
34,1
40
Cum
ulat
ive
loss
on
chan
ges
in f
air
valu
e of
he
dgin
g in
stru
men
ts
-
-
-
-
84
,984
84,9
84
Cum
ulat
ive
gain
on
chan
ges
in f
air
valu
e of
he
dgin
g in
stru
men
ts
recl
assi
fied
to p
rofi
t or
loss
$
-
$
-
$
-
$
-
$
14,3
54
$ 14
,354
U
nrea
lize
d ga
in o
n fi
nanc
ial a
sset
s at
F
VT
OC
I
-
-
(23,
830 )
-
-
(23,
830 )
S
hare
of
prof
it o
r as
soci
ates
acc
ount
ed
for
usin
g eq
uity
m
etho
d
(3,1
88 )
-
24
,760
-
8,00
1
29,5
73
Eff
ect o
f ch
ange
in ta
x ra
te
1,
198
-
(1
,209
)
-
2,53
0
2,51
9 E
ffec
ts o
f in
com
e ta
x
(6,8
28 )
-
54
7
-
(22,
290 )
(28,
571 )
O
ther
com
preh
ensi
ve
inco
me
(los
s)
reco
gniz
ed in
the
peri
od
25
,322
-
268
-
87
,579
113,
169
T
rans
fers
of
init
ial
carr
ying
am
ount
of
hedg
ed it
ems
-
-
-
-
12
,118
12,1
18
B
alan
ce a
t Dec
embe
r 31
, 20
18
$ (9
,664
)
$
-
$
42,6
19
$ -
$ 25
,268
$
58,2
23
(Con
tinu
ed)
223
- 53
-
Exc
han
ge
Dif
fere
nce
s on
T
ran
slat
ing
For
eign
O
per
atio
ns
Un
real
ized
G
ain
(L
oss)
on
A
vail
able
-for
- sa
le F
inan
cial
A
sset
s
Un
real
ized
G
ain
(L
oss)
on
F
inan
cial
A
sset
s at
F
VT
OC
I
Cas
h F
low
H
edge
s
Gai
n (
Los
s) o
n
Hed
gin
g In
stru
men
ts
T
otal
Bal
ance
at J
anua
ry 1
, 20
19
$ (9
,664
)
$
-
$
42,6
19
$ -
$ 25
,268
$
58,2
23
Exc
hang
e di
ffer
ence
s on
tr
ansl
atin
g fo
reig
n op
erat
ions
(59,
174 )
-
-
-
-
(59,
174 )
C
umul
ativ
e lo
ss o
n ch
ange
s in
fai
r va
lue
of
hedg
ing
inst
rum
ents
-
-
-
-
1,39
8,29
6
1,39
8,29
6 C
umul
ativ
e ga
in o
n ch
ange
s in
fai
r va
lue
of
hedg
ing
inst
rum
ents
re
clas
sifi
ed to
pro
fit o
r lo
ss
-
-
-
-
9,
305
9,
305
Unr
eali
zed
gain
on
fina
ncia
l ass
ets
at
FV
TO
CI
-
-
24
,490
-
-
24,4
90
Sha
re o
f pr
ofit
or
asso
ciat
es a
ccou
nted
fo
r us
ing
equi
ty
met
hod
(6
,072
)
-
54,9
02
-
(7
,187
)
41,6
43
Eff
ects
of
inco
me
tax
11
,835
-
(14,
854 )
-
(281
,401
)
(284
,420
) O
ther
com
preh
ensi
ve
inco
me
(los
s)
reco
gniz
ed in
the
peri
od
(5
3,41
1 )
-
64
,538
-
1,11
9,01
3
1,
130,
140
D
ispo
sal o
f su
bsid
iari
es
8,
368
-
105
-
-
8,47
3
Tra
nsfe
rs o
f in
itia
l ca
rryi
ng a
mou
nt o
f he
dged
item
s
-
-
-
-
(603
)
(603
)
Bal
ance
at D
ecem
ber
31,
2019
$
(54,
707 )
$
-
$
107,
262
$ -
$ 1,
143,
678
$
1,19
6,23
3
(Con
clud
ed)
- 54
-
e.
Tre
asur
y sh
ares
T
reas
ury
shar
es a
re t
he C
ompa
ny’s
sha
res
held
by
its
subs
idia
ries
, as
of
Dec
embe
r 31
, 20
19 a
nd 2
018
wer
e as
fol
low
s:
(S
har
es in
Th
ousa
nd
s)
Pu
rpos
e of
Tre
asu
ry S
har
es
B
uy
Bac
k t
o W
rite
off
Com
pan
y’s
Sh
ares
Hel
d b
y It
s S
ub
sid
iari
es
T
otal
N
umbe
r of
sha
res,
Jan
uary
1, 2
019
-
2,
889
2,88
9 A
ddit
ion
duri
ng th
e ye
ar
-
-
-
N
umbe
r of
sha
res,
Dec
embe
r 31
, 201
9
-
2,88
9
2,
889
Num
ber
of s
hare
s, J
anua
ry 1
, 201
8
-
2,88
9
2,
889
Add
itio
n du
ring
the
year
50
,000
-
50,0
00
Red
ucti
on d
urin
g th
e ye
ar
(50,
000 )
-
(50,
000)
N
umbe
r of
sha
res,
Dec
embe
r 31
, 201
8
-
2,88
9
2,
889
S
ub
sid
iary
Sh
ares
(I
n T
hou
san
ds)
Car
ryin
g A
mou
nt
M
ark
et V
alu
e
D
ecem
ber
31, 2
019
M
anda
rin
Air
line
s
2,07
5
$
18,7
96
$
18
,796
H
wa
Hsi
a
814
7,37
6
7,
376
$
26
,172
$
26,1
72
Dec
embe
r 31
, 201
8
Man
dari
n A
irli
nes
2,
075
$
22
,821
$
22,8
21
Hw
a H
sia
81
4
8,
956
8,95
6
$
31,7
77
$
31
,777
T
he
abov
e ac
quis
itio
ns
by
subs
idia
ries
of
th
e C
ompa
ny’s
sh
ares
in
pr
evio
us
year
s w
as
due
to
inve
stm
ent p
lann
ing.
T
he s
hare
s of
the
Com
pany
hel
d by
its
subs
idia
ries
wer
e tr
eate
d as
trea
sury
sha
res.
The
sub
sidi
arie
s ca
n ex
erci
se
shar
ehol
ders
’ ri
ght
on
thes
e tr
easu
ry
shar
es,
exce
pt
for
the
righ
t to
su
bscr
ibe
for
the
Com
pany
’s n
ew s
hare
s an
d vo
ting
righ
ts.
To
mai
ntai
n th
e C
ompa
ny’s
cre
dit s
tand
ing
and
shar
ehol
ders
’ ri
ghts
and
inte
rest
s, th
e bo
ard
of d
irec
tors
de
cide
d to
buy
bac
k sh
ares
of
the
Com
pany
fro
m T
aiw
an S
tock
Exc
hang
e at
a p
rice
fro
m $
9 to
$14
per
sh
are.
The
exp
ecte
d pe
riod
of
purc
hase
is
from
Aug
ust
10,
2018
to
Oct
ober
9,
2018
. A
s of
50,
000
thou
sand
sha
res
had
been
rep
urch
ased
. T
he t
reas
ury
shar
es h
eld
by t
he C
ompa
ny h
as r
etir
ed o
n D
ecem
ber
18,
2018
, sh
are
capi
tal
decr
ease
s $5
00,0
00 t
hous
and,
add
itio
nal
paid
-in
capi
tal
in e
xces
s of
pa
r-or
dina
ry s
hare
dec
reas
es $
2,90
6 th
ousa
nd a
nd a
ddit
iona
l pa
id-i
n ca
pita
l -
trea
sury
sha
re i
ncre
ases
$3
3,51
3 th
ousa
nd. U
nder
the
Sec
urit
ies
Exc
hang
e A
ct, t
he t
reas
ury
shar
es h
eld
by th
e C
ompa
ny c
anno
t be
ple
dged
and
are
not
ent
itled
to d
ivid
ends
dis
trib
utio
n an
d vo
ting
rig
hts,
etc
.
224
- 55
-
26.
NE
T I
NC
OM
E
a.
R
even
ue
For
th
e Y
ear
En
ded
Dec
emb
er 3
1
20
19
20
18
P
asse
nger
$
96,1
76,8
65
$
94
,248
,291
C
argo
43
,406
,487
49
,422
,018
O
ther
s
6,
789,
049
6,59
4,48
3
$ 1
46,3
72,4
01
$
150
,264
,792
b.
Oth
er in
com
e
F
or t
he
Yea
r E
nd
ed D
ecem
ber
31
2019
2018
Inte
rest
inco
me
$
31
4,94
4
$
274,
189
Sub
sidy
inco
me
38,6
21
11,2
00
Div
iden
d in
com
e
10
,112
9,
603
Oth
ers
160,
556
125,
424
$
52
4,23
3
$
420,
416
c.
Oth
er g
ains
and
loss
es
For
th
e Y
ear
En
ded
Dec
emb
er 3
1
20
19
20
18
G
ain
(los
s) o
n di
spos
al p
rope
rty,
pla
nt a
nd e
quip
men
t
$
26,3
77
$
(27
3,30
8)
Los
s on
Non
-cur
rent
ass
ets
held
for
sal
e
(1
0,46
2)
(368
,992
) N
et lo
ss o
n fi
nanc
ial a
sset
s as
hel
d fo
r tr
adin
g
25,7
00
11,0
76
Gai
n on
dis
posa
l of
inve
stm
ent
7,65
6
45
0,19
5 G
ain
(los
s) o
n fo
reig
n ex
chan
ge, n
et
(262
,610
)
10
,812
L
oss
on s
ale-
and-
leas
e ba
ck
(103
,775
)
-
Impa
irm
ent l
oss
reco
gniz
ed o
n N
on-c
urre
nt a
sset
s he
ld f
or s
ale
-
(7
5,43
7)
Impa
irm
ent l
oss
reco
gniz
ed o
n fl
ight
equ
ipm
ent
-
(50,
000)
O
ther
s
(2
52,4
68)
(263
,576
)
$ (
569,
582 )
$ (
559,
230)
d.
Fin
ance
cos
ts
F
or t
he
Yea
r E
nd
ed D
ecem
ber
31
2019
2018
Inte
rest
exp
ense
B
onds
pay
able
$
431,
599
$
41
4,56
4 B
ank
loan
s
70
3,68
1
88
2,19
0 In
tere
st o
n ob
liga
tion
s un
der
fina
nce
leas
es
-
15
,290
In
tere
st o
n le
ase
liab
ilit
ies
1,89
8,89
2
-
$
3,
034,
172
$
1,
312,
044
- 56
-
Info
rmat
ion
abou
t cap
ital
ized
inte
rest
was
as
foll
ows:
For
th
e Y
ear
En
ded
Dec
emb
er 3
1
20
19
20
18
C
apit
aliz
atio
n in
tere
st
$
36
,404
$
37,1
74
Cap
ital
izat
ion
rate
1.01
%-1
.28%
1.16
%-1
.31%
e.
D
epre
ciat
ion
and
amor
tiza
tion
exp
ense
s
For
th
e Y
ear
En
ded
Dec
emb
er 3
1
20
19
20
18
P
rope
rty,
pla
nt a
nd e
quip
men
t
$
19,3
88,6
94
$
18
,192
,291
R
ight
of
use
asse
ts
10,0
09,9
41
In
tang
ible
ass
ets
165,
981
165,
050
$
29
,564
,616
$
18,3
57,3
41
A
n an
alys
is o
f de
prec
iati
on b
y fu
ncti
on
Ope
rati
ng c
osts
$
28,3
73,5
97
$
17
,907
,878
O
pera
ting
exp
ense
s
1,
025,
038
284,
413
$
29
,398
,635
$
18,1
92,2
91
A
n an
alys
is o
f am
orti
zati
on b
y fu
ncti
on
Ope
rati
ng e
xpen
ses
$
16
5,98
1
$
165,
050
f.
E
mpl
oyee
ben
efit
s ex
pens
e
For
th
e Y
ear
En
ded
Dec
emb
er 3
1
20
19
20
18
Pos
t-em
ploy
men
t ben
efit
s
D
efin
ed c
ontr
ibut
ion
plan
s
$
373,
187
$
36
5,70
7 D
efin
ed b
enef
it p
lans
1,
249,
749
1,32
2,42
9
$
1,62
2,93
6
$
1,68
8,13
6
Oth
er e
mpl
oyee
ben
efit
s
S
alar
y ex
pens
es
$
14
,475
,115
$
15,0
10,5
13
Lab
or a
nd h
ealt
h in
sura
nce
1,28
2,46
1
1,
242,
585
Per
sonn
el s
ervi
ce e
xpen
ses
4,58
9,29
9
3,
610,
480
$
20
,346
,875
$
19,8
63,5
78
A
n an
alys
is o
f em
ploy
ee b
enef
its
expe
nse
by f
unct
ion
Ope
rati
ng c
osts
$
17,8
62,9
54
$
17
,751
,051
O
pera
ting
exp
ense
s
4,
106,
857
3,80
0,66
3
$
21,9
69,8
11
$
21
,551
,714
A
ccor
ding
to
the
Com
pany
’s a
rtic
les,
the
Com
pany
acc
rued
em
ploy
ees’
com
pens
atio
n at
rat
es o
f no
le
ss t
han
3% o
f th
e ne
t pr
ofit
bef
ore
inco
me
tax
and
empl
oyee
s’ c
ompe
nsat
ion,
and
acc
rued
pro
fit
bonu
s at
a c
erta
in r
ate
of p
rofi
t bef
ore
tax
on th
e ba
sis
of th
e co
llec
tive
agr
eem
ent s
igne
d w
ith
the
Chi
na
Air
line
s E
mpl
oyee
s U
nion
. T
he
empl
oyee
s’
com
pens
atio
n an
d pr
ofit
bo
nus
for
the
year
en
ded
Dec
embe
r 31
, 20
18 w
as $
51,6
56 t
hous
and
and
$594
,810
tho
usan
d. F
or t
he y
ear
ende
d D
ecem
ber
31,
225
- 57
-
2019
, the
em
ploy
ees’
com
pens
atio
n ha
ve n
ot e
stim
ated
sin
ce it
was
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
dat
e th
e an
nual
fin
anci
al s
tate
men
ts a
re a
utho
rize
d fo
r is
sue
are
adju
sted
in
the
year
tha
t th
e bo
nus
and
rem
uner
atio
n w
ere
reco
gniz
ed. I
f th
ere
is a
cha
nge
in t
he p
ropo
sed
amou
nts
afte
r th
e an
nual
fin
anci
al s
tate
men
ts w
ere
auth
oriz
ed f
or i
ssue
, the
dif
fere
nces
are
rec
orde
d as
a c
hang
e in
the
acco
unti
ng e
stim
ate.
In
form
atio
n on
the
empl
oyee
s’ c
ompe
nsat
ion
and
rem
uner
atio
n of
dir
ecto
rs a
nd s
uper
viso
rs r
esol
ved
by
the
Com
pany
’s b
oard
of
dire
ctor
s in
201
9 an
d 20
18 is
ava
ilab
le o
n th
e M
arke
t Obs
erva
tion
Pos
t Sys
tem
w
ebsi
te o
f th
e T
aiw
an S
tock
Exc
hang
e.
27
. IN
CO
ME
TA
X
a.
In
com
e ta
x re
cogn
ized
in p
rofi
t or
loss
T
he m
ajor
com
pone
nts
of ta
x ex
pens
e w
ere
as f
ollo
ws:
F
or t
he
Yea
r E
nd
ed D
ecem
ber
31
2019
2018
Cur
rent
tax
Cur
rent
yea
r
$
8,83
6
$
22,5
06
Pri
or y
ear
adju
stm
ent
(6,6
58)
4,86
6 D
efer
red
tax
Cur
rent
yea
r
(1
6,21
8)
1,36
6,74
0 A
djus
tmen
ts to
def
erre
d ta
x at
trib
utab
le to
cha
nges
in ta
x ra
tes
and
law
s
26
,512
-
Eff
ect o
f in
com
e ta
x
-
(8
68,8
42)
In
com
e ta
x ex
pens
e re
cogn
ized
in p
rofi
t or
loss
$
12,4
72
$
52
5,27
0 A
rec
onci
liat
ion
of a
ccou
ntin
g pr
ofit
and
inco
me
tax
expe
nse
is a
s fo
llow
s:
For
th
e Y
ear
En
ded
Dec
emb
er 3
1
20
19
20
18
P
rofi
t bef
ore
tax
$
(1,
187,
326 )
$
2,31
5,63
1
Inco
me
tax
expe
nse
calc
ulat
ed a
t the
sta
tuto
ry r
ate
$
(2
37,4
65)
$
46
3,12
6 A
dd (
dedu
ct)
tax
effe
cts
of:
Non
dedu
ctib
le e
xpen
ses
in d
eter
min
ing
taxa
ble
inco
me
17,9
00
20,0
98
Tax
-exe
mpt
inco
me
(347
,338
)
(3
43,1
07)
Ove
rsea
s in
com
e ta
x ex
pens
e
8,
836
22,5
06
Add
itio
nal i
ncom
e ta
x un
der
the
Alt
erna
tive
Min
imum
Tax
Act
-
- U
nrec
ogni
zed
loss
car
ryfo
rwar
ds a
nd in
vest
men
t tax
cre
dits
55
0,68
5
1,22
7,00
0 E
ffec
t of
inco
me
tax
-
(868
,842
) A
djus
tmen
ts f
or p
rior
yea
rs’
tax
(6,6
58)
4,86
6 A
djus
tmen
ts to
def
erre
d ta
x at
trib
utab
le to
cha
nges
in ta
x ra
tes
and
law
s
26
,512
-
Oth
er
-
(377
)
Inco
me
tax
expe
nse
reco
gniz
ed in
pro
fit o
r lo
ss
$
12
,472
$
525,
270
- 58
-
It w
as a
nnou
nced
tha
t th
e In
com
e T
ax L
aw i
n th
e R
OC
. w
as a
men
ded
and,
sta
rtin
g fr
om 2
018,
the
co
rpor
ate
inco
me
tax
rate
wil
l be
adj
uste
d fr
om 1
7% t
o 20
%.
In a
ddit
ion,
the
rat
e of
the
cor
pora
te
surt
ax a
ppli
cabl
e to
una
ppro
pria
ted
earn
ings
wil
l be
redu
ced
from
10%
to 5
%.
b.
In
com
e ta
x re
cogn
ized
in o
ther
com
preh
ensi
ve in
com
e
F
or t
he
Yea
r E
nd
ed D
ecem
ber
31
2019
2018
Def
erre
d ta
x
Rec
ogni
zed
in o
ther
com
preh
ensi
ve in
com
e
T
rans
lati
on o
f fo
reig
n op
erat
ions
$
11,8
35
$
(6
,828
) F
air
valu
e re
valu
atio
n of
hed
ging
inst
rum
ents
for
cas
h fl
ow
hedg
es
(281
,401
)
(2
2,29
0)
Act
uari
al g
ain
or lo
ss o
n de
fine
d be
nefi
t pla
n
112,
452
134,
979
Fai
r va
lue
chan
ges
of f
inan
cial
ass
ets
at F
VT
OC
I
(1
4,85
4)
547
Eff
ect o
f in
com
e ta
x
-
2,51
9
Tot
al in
com
e ta
x re
cogn
ized
in o
ther
com
preh
ensi
ve in
com
e
$ (
171,
968 )
$
108,
927
c.
D
efer
red
tax
asse
ts a
nd li
abil
itie
s F
or th
e ye
ar e
nded
Dec
embe
r 31
, 201
9
B
egin
nin
g B
alan
ce
R
ecog
niz
ed in
P
rofi
t or
Los
s
Rec
ogn
ized
in
Oth
er
Com
pre
- h
ensi
ve
Inco
me
E
nd
ing
Bal
ance
Def
erre
d ta
x as
sets
Tem
pora
ry d
iffe
renc
es
Def
ined
ben
efit
pla
ns
$
1,
396,
033
$
18
,726
$
112,
452
$
1,
527,
211
Fre
quen
t fly
er p
rogr
ams
510,
060
80,6
34
-
59
0,69
4 M
aint
enan
ce r
eser
ve
1,67
4,97
3
38
8,51
2
-
2,06
3,48
5 A
llow
ance
for
red
ucti
on o
f in
vent
ory
333,
653
(38,
854)
-
294,
799
Oth
ers
646,
627
(377
,534
)
11
,860
28
0,95
3
$
4,56
1,34
6
$
71,4
84
$
12
4,31
2
$
4,75
7,14
2
Def
erre
d ta
x li
abil
itie
s
Tem
pora
ry d
iffe
renc
es
Unr
eali
zed
fore
ign
exch
ange
ga
ins
$
-
$
81,7
78
$
-
$
81
,778
O
ther
s (N
ote)
21
,195
-
29
6,28
0
317,
475
$
21
,195
$
81,7
78
$
29
6,28
0
$
39
9,25
3
226
- 59
-
For
the
year
end
ed D
ecem
ber
31, 2
018
Beg
inn
ing
Bal
ance
Rec
ogn
ized
in
Pro
fit
or L
oss
Rec
ogn
ized
in
Oth
er
Com
pre
- h
ensi
ve
Inco
me
E
nd
ing
Bal
ance
Def
erre
d ta
x as
sets
Tem
pora
ry d
iffe
renc
es
Def
ined
ben
efit
pla
ns
$
1,
055,
972
$
20
5,08
1
$
13
4,98
0
$
1,39
6,03
3 F
requ
ent f
lyer
pro
gram
s
42
6,10
6
83
,954
-
510,
060
Mai
nten
ance
res
erve
1,
395,
805
279,
168
-
1,
674,
973
All
owan
ce f
or r
educ
tion
of
inve
ntor
y
23
7,36
6
96
,287
-
333,
653
Oth
ers
1,07
9,92
3
(4
20,1
79)
(13,
117)
64
6,62
7 L
oss
carr
yfor
war
ds
779,
769
(779
,769
)
-
-
$
4,97
4,94
1
$
(535
,458
)
$
121,
863
$
4,
561,
346
D
efer
red
tax
liab
ilit
ies
T
empo
rary
dif
fere
nces
D
epre
ciat
ion
diff
eren
ce f
rom
fi
xed
asse
ts
$
31
,010
$
(31,
010)
$
-
$
- U
nrea
lize
d fo
reig
n ex
chan
ge
gain
s
91
5
(9
15)
-
-
Oth
ers
(Not
e)
13,8
94
(5,6
35)
12,9
36
21,1
95
$
45
,819
$
(37,
560)
$
12,9
36
$
21
,195
N
ote:
In
clud
ed a
djus
tmen
ts o
n in
itia
l ap
plic
atio
n du
e to
tax
rat
e ch
ange
s $6
,873
tho
usan
d fr
om
IFR
S 9
. D
educ
tibl
e te
mpo
rary
dif
fere
nces
, un
used
los
s ca
rryf
orw
ards
and
unu
sed
inve
stm
ent
cred
its
for
whi
ch
no d
efer
red
tax
asse
ts h
ave
been
rec
ogni
zed
in th
e ba
lanc
e sh
eets
are
as
foll
ows:
D
ecem
ber
31
2019
2018
Los
s ca
rryf
orw
ards
20
19
$
11,7
90,7
70
2021
$
2,89
9,49
6
2,
899,
496
2022
61
9,79
9
61
9,79
9 20
26
202,
699
202,
699
2028
1,
519,
941
1,32
6,52
8 20
29
760,
157
-
$
6,00
2,09
2
$
16,8
39,2
92
O
ther
$
1,09
7,90
8
$
39,1
42
- 60
-
d.
Unu
sed
tax
loss
car
ryfo
rwar
ds a
s of
Dec
embe
r 31
, 201
8 w
ere
as f
ollo
ws:
Exp
iry
Yea
r
Un
use
d
Am
oun
t
2021
$
2,
899,
496
2022
619,
799
2026
202,
699
2028
1,51
9,94
1 20
29
76
0,15
7
$
6,
002,
092
e.
In
com
e ta
x re
turn
s
The
inco
me
tax
retu
rns
of th
e C
ompa
ny th
roug
h 20
17 h
ave
been
exa
min
ed b
y th
e ta
x au
thor
itie
s.
28.
EA
RN
ING
S P
ER
SH
AR
E
F
or t
he
Yea
r E
nd
ed D
ecem
ber
31
2019
2018
Bas
ic e
arni
ngs
per
shar
e
$
(0.2
2 )
$
0.
33
Dil
uted
ear
ning
s pe
r sh
are
$
(0
.22)
$
0.32
F
or t
he
Yea
r E
nd
ed D
ecem
ber
31
2019
2018
Ear
ning
s us
ed in
the
com
puta
tion
of
basi
c ea
rnin
gs p
er s
hare
$ (
1,19
9,79
8)
$
1,
790,
361
Eff
ect o
f po
tent
iall
y di
luti
ve o
rdin
ary
shar
es:
Inte
rest
on
conv
erti
ble
bond
s (a
fter
tax)
-
81,4
63
E
arni
ngs
used
in th
e co
mpu
tati
on o
f di
lute
d ea
rnin
gs p
er s
hare
$ (
1,19
9,79
8 )
$
1,
871,
824
W
eigh
ted
aver
age
num
ber
of o
rdin
ary
shar
es in
com
puta
tion
of
basi
c ea
rnin
gs p
er s
hare
(in
thou
sand
s)
5,41
8,09
6
5,
453,
579
Eff
ect o
f po
tent
iall
y di
luti
ve o
rdin
ary
shar
es:
Con
vert
ible
bon
ds (
in th
ousa
nds)
-
457,
481
Em
ploy
ees’
com
pens
atio
n or
bon
uses
issu
ed to
em
ploy
ees
(in
thou
sand
s)
-
8,
821
W
eigh
ted
aver
age
num
ber
of o
rdin
ary
shar
es u
sed
in th
e co
mpu
tati
on o
f di
lute
d ea
rnin
gs p
er s
hare
(in
thou
sand
s)
5,41
8,09
6
5,
919,
881
If th
e C
ompa
ny o
ffer
s to
set
tle
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
amou
nt o
f th
e co
mpe
nsat
ion
or b
onus
es w
ould
be
sett
led
in s
hare
s, a
nd t
he r
esul
ting
po
tent
ial
shar
es
wer
e in
clud
ed
in
the
wei
ghte
d av
erag
e nu
mbe
r of
sh
ares
ou
tsta
ndin
g us
ed
in
the
com
puta
tion
of
dilu
ted
earn
ings
per
sha
re,
if t
he e
ffec
t is
dil
utiv
e. S
uch
dilu
tive
eff
ect
of t
he p
oten
tial
shar
es w
as i
nclu
ded
in t
he c
ompu
tati
on o
f di
lute
d ea
rnin
gs p
er s
hare
unt
il t
he n
umbe
r of
sha
res
to b
e di
stri
bute
d to
em
ploy
ees
is r
esol
ved
in th
e fo
llow
ing
year
.
227
- 61
-
29.
CA
PIT
AL
MA
NA
GE
ME
NT
T
he C
ompa
ny m
anag
es i
ts c
apit
al t
o en
sure
tha
t en
titi
es i
n th
e C
ompa
ny w
ill
be a
ble
to c
onti
nue
as g
oing
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
str
uctu
re o
f th
e C
ompa
ny c
onsi
sts
of n
et d
ebt
(bor
row
ings
off
set
by c
ash
and
cash
eq
uiva
lent
s) a
nd e
quit
y of
the
Com
pany
com
pris
ing
issu
ed c
apit
al, r
eser
ves,
ret
aine
d ea
rnin
gs, o
ther
equ
ity
and
non-
cont
roll
ing
inte
rest
s.
To
supp
ort
its
oper
atin
g ac
tivi
ties
and
pur
chas
e of
air
craf
t, th
e C
ompa
ny n
eeds
to
mai
ntai
n su
ffic
ient
ca
pita
l. T
here
fore
, the
goa
l of
capi
tal m
anag
emen
t is
to e
nsur
e fi
nanc
ial r
esou
rces
and
ope
rati
ng p
lan
is a
ble
to s
uppo
rt th
e fu
ture
wor
king
cap
ital
, cap
ital
exp
endi
ture
s, d
ebt r
epay
men
t and
div
iden
d ex
pens
es a
nd o
ther
ne
eds.
30.
FIN
AN
CIA
L I
NS
TR
UM
EN
TS
a.
Fai
r va
lues
of
fina
ncia
l ins
trum
ents
Dec
emb
er 3
1
20
19
20
18
Car
ryin
g A
mou
nt
F
air
Val
ue
C
arry
ing
Am
oun
t
Fai
r V
alu
e
Fin
anci
al li
abil
itie
s
Bon
ds p
ayab
le
$
32
,352
,625
$
32,3
63,3
01
$
33
,219
,610
$
31,6
51,8
65
Ban
k lo
ans
62
,326
,488
62
,326
,488
72
,162
,743
70
,171
,333
Som
e lo
ng-t
erm
bor
row
ings
are
flo
atin
g-ra
te f
inan
cial
liab
ilit
ies,
so
thei
r ca
rryi
ng a
mou
nts
are
thei
r fa
ir
valu
es. T
he f
air
valu
es o
f lo
ng-t
erm
bor
row
ings
and
pri
vate
bon
ds w
ith
fixe
d in
tere
st r
ates
are
est
imat
ed
at t
he p
rese
nt v
alue
of
expe
cted
cas
h fl
ows
disc
ount
ed a
t ra
tes
of 0
.67%
in
2019
and
0.6
8% i
n 20
18
prev
aili
ng in
the
mar
ket f
or lo
ng-t
erm
bor
row
ings
(L
evel
2).
The
fai
r va
lues
of
bond
s pa
yabl
e ar
e ba
sed
on th
ose
whi
ch a
re tr
aded
in th
e st
ock
exch
ange
and
bas
ed o
n qu
oted
mar
ket p
rice
s (L
evel
1).
b.
F
air
valu
e m
easu
rem
ents
rec
ogni
zed
in th
e ba
lanc
e sh
eets
T
he f
ollo
win
g ta
ble
prov
ides
an
anal
ysis
of
fina
ncia
l ins
trum
ents
that
are
mea
sure
d su
bseq
uent
to in
itia
l re
cogn
itio
n at
fai
r va
lue,
gro
uped
int
o L
evel
s 1
to 3
bas
ed o
n th
e de
gree
to
whi
ch t
he f
air
valu
e is
ob
serv
able
: 1)
L
evel
1 f
air
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 f
or id
enti
cal a
sset
s or
liab
ilit
ies;
2)
L
evel
2 f
air
valu
e m
easu
rem
ents
are
tho
se d
eriv
ed f
rom
inp
uts
othe
r th
an q
uote
d pr
ices
inc
lude
d w
ithi
n L
evel
1 t
hat
are
obse
rvab
le f
or t
he a
sset
or
liab
ilit
y, e
ithe
r di
rect
ly (
i.e.
as p
rice
s) o
r in
dire
ctly
(i.e
. der
ived
fro
m p
rice
s); a
nd
- 62
-
3)
Lev
el 3
fai
r va
lue
mea
sure
men
ts a
re th
ose
deri
ved
from
val
uati
on te
chni
ques
that
incl
ude
inpu
ts f
or
the
asse
t or
liab
ility
that
are
not
bas
ed o
n ob
serv
able
mar
ket d
ata
(uno
bser
vabl
e in
puts
).
Dec
embe
r 31
, 201
9
L
evel
1
L
evel
2
L
evel
3
T
otal
Fin
anci
al a
sset
s at
FV
TP
L
Der
ivat
ive
inst
rum
ents
$
-
$
434
$ -
$ 43
4
Fin
anci
al a
sset
s at
FV
TO
CI
Inve
stm
ents
in e
quity
inst
rum
ents
Unl
iste
d sh
ares
- d
omes
tic
$ -
$ -
$ 26
,865
$
26,8
65
Unl
iste
d sh
ares
- f
orei
gn
-
-
80
,991
80,9
91
$ -
$ -
$ 10
7,85
6
$
107,
856
F
inan
cial
liab
ilitie
s at
FV
TP
L
Der
ivat
ive
inst
rum
ents
$
-
$
11,7
49
$ -
$ 11
,749
Fin
anci
al a
sset
s fo
r he
dgin
g
$
-
$
109
$ 9,
479
$ 9,
588
F
inan
cial
liab
ilitie
s fo
r he
dgin
g
$
50,9
97,6
87
$ 28
,578
$
3,95
5
$
51,0
30,2
20
Dec
embe
r 31
, 201
8
L
evel
1
L
evel
2
L
evel
3
T
otal
Fin
anci
al a
sset
s at
FV
TO
CI
Inve
stm
ents
in e
quity
inst
rum
ents
Uni
ted
shar
es -
dom
estic
$
-
$
-
$
21,7
46
$ 21
,746
U
nlis
ted
shar
es -
for
eign
-
-
61,6
20
61
,620
$
-
$
-
$
83,3
66
$ 83
,366
Fin
anci
al li
abili
ties
at F
VT
PL
D
eriv
ativ
e in
stru
men
ts
$ -
$ 22
1
$
-
$
221
F
inan
cial
ass
ets
for
hedg
ing
$ -
$ 22
,453
$
4,90
1
$
27,3
54
F
inan
cial
liab
ilitie
s fo
r he
dgin
g
$
-
$
239
$ -
$ 23
9 T
here
wer
e no
tran
sfer
s be
twee
n L
evel
2 a
nd 3
in th
e cu
rren
t and
pri
or p
erio
ds.
4)
V
alua
tion
tech
niqu
es a
nd in
puts
app
lied
for
Lev
el 2
fai
r va
lue
mea
sure
men
t F
inan
cial
In
stru
men
ts
V
alu
atio
n T
ech
niq
ues
an
d I
np
uts
Der
ivat
ives
- f
orei
gn e
xcha
nge
forw
ard
cont
ract
s an
d in
tere
st r
ate
swap
s
T
he f
air
valu
es o
f de
riva
tive
s (e
xcep
t opt
ions
) ha
ve b
een
dete
rmin
ed b
ased
on
disc
ount
ed c
ash
flow
ana
lyse
s us
ing
inte
rest
yie
ld c
urve
s ap
plic
able
for
the
dura
tion
of
the
deri
vati
ves.
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 v
alue
s ar
e id
enti
cal t
o th
ose
used
in
the
pric
ing
of f
inan
cial
inst
rum
ents
for
mar
ket p
arti
cipa
nts.
228
- 63
-
5)
Val
uati
on te
chni
ques
and
inpu
ts a
ppli
ed f
or L
evel
3 f
air
valu
e m
easu
rem
ent
T
he f
air
valu
es o
f cu
rren
cy o
ptio
ns a
nd f
uel
opti
ons
are
dete
rmin
ed u
sing
opt
ion
pric
ing
mod
els
whe
re t
he s
igni
fica
nt u
nobs
erva
ble
inpu
ts a
re i
mpl
ied
fluc
tuat
ion.
An
incr
ease
in
the
impl
ied
fluc
tuat
ion
used
in is
olat
ion
wou
ld r
esul
t in
a de
crea
se in
the
fair
val
ue o
f cu
rren
cy o
ptio
ns a
nd f
uel
opti
ons.
T
he d
omes
tic
unli
sted
equ
ity
inve
stm
ent i
s ba
sed
on th
e co
mpa
rati
ve c
ompa
ny v
alua
tion
to e
stim
ate
the
fair
val
ue.
The
mai
n as
sum
ptio
ns a
re b
ased
on
the
mul
tipl
ier
of t
he m
arke
t pr
ice
of t
he
com
para
ble
list
ed c
ompa
ny a
nd t
he n
et v
alue
per
sha
re,
whi
ch h
ave
cons
ider
ed t
he l
iqui
dity
di
scou
nt.
The
hig
her
the
mul
tipl
ier
or t
he l
ower
the
liq
uidi
ty d
isco
unt,
the
high
er t
he f
air
valu
e of
th
e re
leva
nt f
inan
cial
inst
rum
ents
. T
he m
ovem
ents
of
Lev
el 3
fin
anci
al in
stru
men
ts a
re a
s fo
llow
s:
Mu
ltip
lica
tor
L
iqu
idit
y D
isco
un
t
Dec
embe
r 31
, 201
9
0.75
-13.
23
80
%
Dec
embe
r 31
, 201
8
0.74
-15.
29
80
%
Der
ivat
ive
Inst
rum
ents
Eq
uit
y In
stru
men
ts
B
alan
ce a
t Jan
uary
1, 2
019
$
4,
901
$
83
,366
R
ecog
nize
d in
oth
er c
ompr
ehen
sive
inco
me
623
24,4
90
B
alan
ce a
t Dec
embe
r 31
, 201
9
$
5,52
4
$
107,
856
Der
ivat
ive
Inst
rum
ents
Eq
uit
y In
stru
men
ts
B
alan
ce a
t Jan
uary
1, 2
018
$
-
$
64
,177
A
djus
tmen
ts o
n in
itia
l app
licat
ion
of I
FRS
9
-
43
,019
O
ther
com
preh
ensi
ve in
com
e re
cogn
ized
dur
ing
the
peri
od
4,90
1
(2
3,83
0)
B
alan
ce a
t Dec
embe
r 31
, 201
8
$
4,90
1
$
83,3
66
Bec
ause
som
e fi
nanc
ial
inst
rum
ents
and
non
fina
ncia
l in
stru
men
ts m
ay n
ot h
ave
thei
r fa
ir v
alue
s di
sclo
sed,
the
tot
al f
air
valu
e di
sclo
sed
here
in i
s no
t th
e to
tal
valu
e of
the
Gro
up’s
col
lect
ive
inst
rum
ents
.
- 64
-
c.
Cat
egor
ies
of f
inan
cial
inst
rum
ents
Dec
emb
er 3
1
20
19
20
18
F
inan
cial
ass
ets
F
inan
cial
ass
ets
at F
VT
PL
$
434
$
-
Fin
anci
al a
sset
s fo
r he
dgin
g
9,
588
27,3
54
Fin
anci
al a
sset
s at
am
orti
zed
cost
(N
ote
1)
31,3
56,5
62
31,6
30,6
97
Fin
anci
al a
sset
s at
FV
TO
CI
- eq
uity
inst
rum
ent i
nves
tmen
t
10
7,85
6
83
,366
Fin
anci
al li
abil
itie
s
Fin
anci
al li
abil
itie
s at
FV
TP
L
11,7
49
221
Fin
anci
al li
abil
itie
s fo
r he
dgin
g
51
,030
,220
23
9 F
inan
cial
liab
ilit
ies
at a
mor
tize
d co
st (
Not
e 2)
11
9,88
8,72
0
12
0,51
9,57
5 N
ote
1:
The
bal
ance
s in
clud
e fi
nanc
ial
asse
ts m
easu
red
at a
mor
tize
d co
st,
whi
ch c
ompr
ise
cash
and
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
, ot
her
rece
ivab
les,
ref
unda
ble
depo
sits
and
oth
er r
estr
icte
d fi
nanc
ial a
sset
s.
Not
e 2:
T
he b
alan
ce o
f fi
nanc
ial
liab
ilit
ies
mea
sure
d at
am
orti
zed
cost
com
pris
ed s
hort
-ter
m n
otes
pa
yabl
e, n
otes
and
acc
ount
s pa
yabl
e, a
ccou
nts
paya
ble
- re
late
d pa
rtie
s, o
ther
pay
able
s, b
onds
pa
yabl
e an
d lo
ng-t
erm
loan
s, le
ase
liab
ilit
ies,
pro
visi
ons,
par
ts o
f ot
her
curr
ent l
iabi
liti
es, p
arts
of
oth
er n
oncu
rren
t lia
bili
ties
and
guar
ante
e de
posi
ts.
d.
F
inan
cial
ris
k m
anag
emen
t obj
ecti
ves
and
poli
cies
T
he 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
, fi
nanc
ial e
nvir
onm
ent a
nd in
the
fuel
mar
ket.
To
redu
ce th
e fi
nanc
ial r
isks
fro
m c
hang
es in
inte
rest
rat
es,
in e
xcha
nge
rate
s an
d fu
el p
rice
s, t
he C
ompa
ny h
as i
ts o
pera
ting
cos
ts s
tay
wit
hin
a sp
ecif
ied
rang
e by
us
ing
appr
opri
ate
fina
ncia
l he
dgin
g in
stru
men
ts a
nd h
edgi
ng p
erce
ntag
es i
n ac
cord
ance
wit
h th
e “P
roce
ssin
g P
rogr
am
of
Der
ivat
ive
Fin
anci
al
Inst
rum
ent
Tra
nsac
tion
s”
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.
The
se r
isks
inc
lude
mar
ket
risk
(i
nclu
ding
for
eign
cur
renc
y ri
sk, i
nter
est r
ate
risk
and
oth
er p
rice
ris
k), c
redi
t ris
k an
d li
quid
ity
risk
. In
add
itio
n, t
he C
ompa
ny h
as a
ris
k m
anag
emen
t co
mm
itte
e, w
hich
mee
ts p
erio
dica
lly
to e
valu
ate
the
perf
orm
ance
of
deri
vati
ve i
nstr
umen
ts a
nd d
eter
min
e th
e ap
prop
riat
e he
dgin
g po
rtio
n. T
his
com
mit
tee
info
rms
the
Com
pany
of
glob
al e
cono
mic
and
fin
anci
al c
ondi
tion
s, c
ontr
ols
the
Com
pany
’s e
ntir
e fi
nanc
ial
risk
res
ulti
ng f
rom
cha
nges
in
the
fina
ncia
l en
viro
nmen
t an
d fu
el p
rice
s, a
nd d
evel
ops
the
stra
tegy
and
res
pons
e to
avo
id f
inan
cial
ris
k w
ith
the
assi
stan
ce o
f fi
nanc
ial
risk
exp
erts
to
effe
ct r
isk
man
agem
ent.
1)
Mar
ket r
isk
The
Com
pany
is
prim
aril
y ex
pose
d to
the
fin
anci
al r
isks
of
chan
ges
in f
orei
gn c
urre
ncy
exch
ange
ra
tes
and
inte
rest
rat
es.
The
Com
pany
ent
ered
int
o de
riva
tive
fin
anci
al i
nstr
umen
ts t
o m
anag
e its
ex
posu
re to
for
eign
cur
renc
y ri
sk a
nd in
tere
st r
ate
risk
. T
he C
ompa
ny e
nter
s in
to f
orw
ard
cont
ract
s, f
orei
gn c
urre
ncy
optio
n co
ntra
cts,
and
int
eres
t sw
ap
cont
ract
s w
ith
fair
val
ues
that
are
hig
hly
nega
tive
ly c
orre
late
d to
the
fair
val
ues
of h
edge
d it
ems
and
eval
uate
s th
e he
dgin
g ef
fect
iven
ess
of th
ese
inst
rum
ents
per
iodi
call
y.
229
- 65
-
a)
For
eign
cur
renc
y ri
sk
The
Com
pany
ent
ers
into
cur
renc
y op
tion
to
hedg
e ag
ains
t th
e ri
sks
of c
hang
es i
n re
late
d ex
chan
ge r
ates
, and
ent
ers
into
for
eign
exc
hang
e fo
rwar
d co
ntra
cts
to h
edge
aga
inst
the
ris
ks o
f ch
ange
s in
the
rela
ted
exch
ange
rat
es o
f fo
reig
n-cu
rren
cy a
sset
s, li
abil
itie
s an
d co
mm
itm
ents
. S
ensi
tivi
ty a
naly
sis
The
Com
pany
is m
ainl
y ex
pose
d to
the
U.S
. dol
lar.
T
he f
ollo
win
g de
tail
s th
e G
roup
’s s
ensi
tivi
ty t
o a
one
doll
ar i
ncre
ase
and
decr
ease
in
the
New
T
aiw
an d
olla
r (i
.e. t
he f
unct
iona
l cu
rren
cy)
agai
nst
the
U.S
. dol
lar.
The
sen
siti
vity
am
ount
use
d w
hen
repo
rtin
g fo
reig
n cu
rren
cy r
isk
inte
rnal
ly t
o ke
y m
anag
emen
t pe
rson
nel
and
whi
ch
repr
esen
ts m
anag
emen
t’s
asse
ssm
ent
of t
he r
easo
nabl
y po
ssib
le c
hang
e in
for
eign
exc
hang
e ra
tes
is
one
doll
ar.
The
se
nsit
ivit
y an
alys
is
incl
uded
on
ly
outs
tand
ing
fore
ign
curr
ency
de
nom
inat
ed m
onet
ary
item
s an
d fo
reig
n ex
chan
ge f
orw
ard
cont
ract
s de
sign
ated
as
cash
flo
w
hedg
es a
nd a
djus
ts th
eir
tran
slat
ion
at th
e en
d of
the
repo
rtin
g pe
riod
for
the
New
Tai
wan
dol
lar
stre
ngth
enin
g or
wea
keni
ng o
ne d
olla
r ag
ains
t the
U.S
. dol
lar.
W
hen
New
Tai
wan
dol
lars
inc
reas
e on
e do
llar
aga
inst
U.S
. dol
lars
and
all
oth
er v
aria
bles
wer
e he
ld c
onst
ant,
ther
e w
ould
be
a de
crea
se i
n pr
e-ta
x pr
ofit
of
$40,
775
thou
sand
and
inc
reas
e in
pr
e-ta
x ot
her
com
preh
ensi
ve i
ncom
e ga
in a
nd l
osse
s of
$1,
629,
223
thou
sand
in
year
end
ed
Dec
embe
r 31
, 20
19.
A d
ecre
ase
in p
re-t
ax p
rofi
t of
$35
,184
tho
usan
d an
d de
crea
se i
n pr
e-ta
x ot
her
com
preh
ensi
ve i
ncom
e ga
in a
nd l
osse
s of
$54
,250
tho
usan
d in
yea
r en
ded
Dec
embe
r 31
, 20
18.
For
the
year
end
ed D
ecem
ber
31, 2
019
The
Com
pany
’s h
edgi
ng s
trat
egy
is t
o en
ter
into
for
eign
exc
hang
e fo
rwar
d co
ntra
cts
to a
void
ex
chan
ge r
ate
expo
sure
of
its
fore
ign
curr
ency
den
omin
ated
rec
eipt
s an
d pa
ymen
ts a
nd t
o m
anag
e ex
chan
ge r
ate
expo
sure
of
its
airc
raft
pre
paym
ents
in
the
next
yea
r. T
hose
tra
nsac
tion
s ar
e de
sign
ated
as
cash
flo
w h
edge
s. W
hen
fore
cast
ed p
urch
ases
act
uall
y ta
ke p
lace
, ba
sis
adju
stm
ents
are
mad
e to
the
init
ial c
arry
ing
amou
nts
of h
edge
d it
ems.
F
or t
he h
edge
s of
hig
hly
prob
able
air
craf
t pr
epay
men
ts,
as t
he c
riti
cal
term
s (i
.e.
the
noti
onal
am
ount
, us
eful
lif
e an
d un
derl
ying
ass
et)
of t
he f
orei
gn e
xcha
nge
forw
ard
cont
ract
s an
d th
eir
corr
espo
ndin
g he
dged
ite
ms
are
the
sam
e, t
he C
ompa
ny p
erfo
rms
a qu
alit
ativ
e as
sess
men
t of
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 f
orw
ard
cont
ract
s an
d th
e va
lue
of th
e co
rres
pond
ing
hedg
ed it
ems
wil
l sys
tem
atic
ally
cha
nge
in th
e op
posi
te d
irec
tion
in
res
pons
e to
mov
emen
ts in
the
unde
rlyi
ng e
xcha
nge
rate
s.
The
fol
low
ing
tabl
e su
mm
ariz
es t
he i
nfor
mat
ion
rela
ting
to
the
hedg
es o
f fo
reig
n cu
rren
cy r
isk.
F
or th
e in
form
atio
n re
late
d to
leas
e co
ntra
ct a
s a
hedg
ing
inst
rum
ents
, ple
ase
refe
r to
not
e 20
.
Dec
embe
r 31
, 201
9
Not
ion
al
L
ine
Item
in
C
arry
ing
Am
oun
t H
edgi
ng
Inst
rum
ents
Cu
rren
cy
A
mou
nt
M
atu
rity
For
war
d R
ate
B
alan
ce S
hee
t
Ass
et
L
iab
ility
Cas
h fl
ow h
edge
A
viat
ion
fuel
- f
orw
ard
exch
ange
con
trac
ts
N
TD
/US
D
N
TD
660,
661/
U
SD
22,0
00
20
20.2
.27-
20
20.1
1.30
29.7
-30.
7
Fina
ncia
l ass
ets
for
hedg
ing
- cu
rren
t/
liab
ilit
ies
for
hedg
ing
- cu
rren
t
$
32
$ 1
0,19
3
Air
craf
t ren
tals
-
forw
ard
exch
ange
co
ntra
cts
N
TD
/US
D
N
TD
1,41
1,41
1/
US
D47
,000
2020
.11.
4
29.6
-30.
5
Fina
ncia
l ass
ets
for
hedg
ing
- cu
rren
t/
liab
ilit
ies
for
hedg
ing
- cu
rren
t
77
18,3
85
The
abo
ve m
enti
oned
hed
ging
ins
trum
ents
con
tinu
e to
be
appl
ied
to h
edgi
ng a
ccou
ntin
g. T
he
book
val
ue o
f ot
her
equi
ty w
hich
bel
ongs
to
each
hed
ging
ite
m (
airc
raft
ren
tals
in
U.S
. do
llar
s
- 66
-
and
avia
tion
fue
l) a
re $
(18,
308)
thou
sand
and
$(1
0,16
1) th
ousa
nd, r
espe
ctiv
ely.
For
the
year
end
ed D
ecem
ber
31, 2
019
Com
pre
hen
sive
In
com
e
Hed
gin
g G
ain
R
ecog
niz
ed in
O
ther
C
omp
reh
ensi
ve
Inco
me
Am
oun
t R
ecla
ssif
ied
to
Pro
fit
and
Los
s an
d t
he
Ad
just
ed L
ine
Item
Cas
h fl
ow h
edge
Air
craf
t ren
tals
$ (
22,2
14)
$
28
,374
(N
ote)
A
viat
ion
fuel
(1
0,16
1)
(53)
Air
craf
t pre
paym
ents
(1
7,70
5 )
-
$ (
50,0
80)
$
28
,321
Not
e:
Dec
reas
e in
ope
rati
ng c
osts
or
fore
ign
exch
ange
loss
. F
or t
he y
ear
ende
d D
ecem
ber
31,
2019
, th
e he
dgin
g in
stru
men
ts s
ettl
emen
t re
clas
sifi
ed t
o pr
epai
d eq
uipm
ent w
as $
(603
) th
ousa
nd.
Dec
embe
r 31
, 201
8
Not
ion
al
F
orw
ard
Lin
e It
em in
Car
ryin
g A
mou
nt
Hed
gin
g In
stru
men
ts
C
urr
ency
Am
oun
t
Mat
uri
ty
R
ate
B
alan
ce S
hee
t
Ass
et
L
iab
ility
C
ash
flow
hed
ge
Air
craf
t ren
tals
-
forw
ard
exch
ange
co
ntra
cts
N
TD
/US
D
N
TD
1,66
9,23
1/
US
D54
,250
2019
.1.1
7-
2019
.12.
23
28
.3-3
0.7
Fi
nanc
ial a
sset
s fo
r he
dgin
g -
curr
ent/
li
abil
itie
s fo
r he
dgin
g -
curr
ent
$ 2
2,45
3
$
23
9
The
abo
ve h
edgi
ng in
stru
men
ts a
re c
onti
nuou
sly
appl
ied
to h
edgi
ng a
ccou
ntin
g. T
he b
ook
valu
e of
oth
er e
quity
whi
ch b
elon
gs t
o ea
ch h
edgi
ng it
ems
(air
craf
t re
ntal
s in
U.S
. dol
lar)
are
$22
,214
th
ousa
nd.
For
the
year
end
ed D
ecem
ber
31, 2
018
Com
pre
hen
sive
In
com
e
Hed
gin
g G
ain
(L
oss)
R
ecog
niz
ed in
O
ther
C
omp
reh
ensi
ve
Inco
me
Am
oun
t R
ecla
ssif
ied
to
Pro
fit
and
Los
s an
d t
he
Ad
just
ed L
ine
Item
Cas
h fl
ow h
edge
Air
craf
t ren
tals
$
70,5
53
$
(4
,933
) (N
ote)
A
ircr
aft p
repa
ymen
ts
23,8
84
-
$
94,4
37
$
(4
,933
)
Not
e:
Incr
ease
in o
pera
ting
cos
ts o
r fo
reig
n ex
chan
ge lo
ss.
For
the
yea
r en
ded
Dec
embe
r 31
, 20
18,
the
hedg
ing
inst
rum
ents
set
tlem
ent
recl
assi
fied
to
prep
aid
equi
pmen
t was
$12
,118
thou
sand
.
230
- 67
-
b)
Inte
rest
rat
e ri
sk
The
Com
pany
ent
ers
into
int
eres
t sw
ap c
ontr
acts
to
hedg
e ag
ains
t th
e ri
sks
on c
hang
e in
net
li
abil
itie
s in
tere
st r
ates
.
The
ris
k is
man
aged
by
the
Com
pany
thr
ough
mai
ntai
ning
an
appr
opri
ate
mix
of
fixe
d an
d fl
oati
ng r
ate
borr
owin
gs,
and
usin
g in
tere
st r
ate
swap
con
trac
ts a
nd f
orw
ard
inte
rest
rat
e co
ntra
cts.
T
he c
arry
ing
amou
nt o
f th
e C
ompa
ny’s
fin
anci
al l
iabi
liti
es w
ith
expo
sure
to
inte
rest
rat
es a
t th
e en
d of
the
repo
rtin
g pe
riod
wer
e as
fol
low
s.
Dec
emb
er 3
1
20
19
20
18
F
air
valu
e in
tere
st r
ate
risk
$
83,3
50,3
12
$
33
,523
,710
C
ash
flow
inte
rest
rat
e ri
sk
73,9
30,9
65
70,7
58,7
43
Sen
siti
vity
ana
lysi
s T
he s
ensi
tivi
ty a
naly
ses
belo
w w
ere
dete
rmin
ed b
ased
on
the
Com
pany
’s e
xpos
ure
to i
nter
est
rate
s fo
r bo
th d
eriv
ativ
es a
nd n
on-d
eriv
ativ
e in
stru
men
ts a
t th
e en
d of
the
rep
orti
ng p
erio
d. F
or
floa
ting
ra
te
liab
ilit
ies,
th
e an
alys
is
was
pr
epar
ed
assu
min
g th
e am
ount
of
th
e li
abil
ity
outs
tand
ing
at t
he e
nd o
f th
e re
port
ing
peri
od w
as o
utst
andi
ng f
or t
he w
hole
yea
r. O
ne y
ard
(25
basi
s)
incr
ease
or
de
crea
se
was
us
ed
whe
n re
port
ing
inte
rest
ra
te
risk
in
tern
ally
to
ke
y m
anag
emen
t pe
rson
nel
and
repr
esen
ts m
anag
emen
t’s
asse
ssm
ent
of t
he r
easo
nabl
y po
ssib
le
chan
ge in
inte
rest
rat
es.
H
ad i
nter
est
rate
s in
crea
sed
one
yard
(25
bas
is)
and
had
all
othe
r va
riab
les
been
hel
d co
nsta
nt,
the
Com
pany
’s p
re-t
ax p
rofi
t fo
r th
e ye
ar e
nded
Dec
embe
r 31
, 20
19 w
ould
hav
e de
crea
sed
by
$184
,827
thou
sand
. H
ad i
nter
est
rate
s in
crea
sed
one
yard
(25
bas
is)
and
had
all
othe
r va
riab
les
been
hel
d co
nsta
nt,
the
Com
pany
’s p
re-t
ax p
rofi
t fo
r th
e ye
ar e
nded
Dec
embe
r 31
, 20
18 w
ould
hav
e de
crea
sed
by
$176
,897
thou
sand
.
c)
Oth
er p
rice
ris
k
The
Com
pany
was
exp
osed
to
fuel
pri
ce r
isk
on i
ts p
urch
ase
of a
viat
ion
fuel
. T
he C
ompa
ny
ente
rs in
to f
uel s
wap
con
trac
ts to
hed
ge a
gain
st a
dver
se r
isks
on
fuel
pri
ce c
hang
es.
D
ecem
ber
31, 2
019
N
otio
nal
Lin
e It
em in
Car
ryin
g A
mou
nt
Hed
gin
g In
stru
men
t
Cu
rren
cy
A
mou
nt
M
atu
rity
For
war
d R
ate
B
alan
ce S
hee
t
Ass
et
L
iab
ility
Cas
h fl
ow h
edge
s -
fuel
op
tion
s
US
D
N
TD
5,52
4
2020
.3.3
1-
2020
.12.
31
U
SD
49.6
5-
US
D80
.75
Fi
nanc
ial a
sset
s fo
r he
dgin
g -
curr
ent/
li
abil
itie
s fo
r he
dgin
g -
curr
ent
$
9,47
9
$
3,
955
- 68
-
The
abo
ve m
enti
oned
hed
ging
ins
trum
ents
con
tinu
e to
be
appl
ied
to h
edgi
ng a
ccou
ntin
g. T
he
book
val
ue o
f ot
her
equi
ty w
hich
bel
ongs
to
each
hed
ging
ite
m (
fuel
pay
men
ts)
is $
5,52
4 th
ousa
nd.
For
the
year
end
ed D
ecem
ber
31, 2
019
Com
pre
hen
sive
In
com
e
Hed
gin
g G
ain
(L
oss)
R
ecog
niz
ed in
O
ther
C
omp
reh
ensi
ve
Inco
me
Am
oun
t R
ecla
ssif
ied
to
Pro
fit
and
Los
s an
d t
he
Ad
just
ed L
ine
Item
Cas
h fl
ow h
edge
s -
fuel
opt
ions
$
623
$
(13
,597
) (N
ote)
N
ote:
In
crea
se in
ope
rati
ng c
osts
. D
ecem
ber
31, 2
018
N
otio
nal
Lin
e It
em in
Car
ryin
g A
mou
nt
Hed
gin
g In
stru
men
t
Cu
rren
cy
A
mou
nt
M
atu
rity
For
war
d R
ate
B
alan
ce S
hee
t
Ass
et
L
iab
ility
Cas
h fl
ow h
edge
s -
fu
el o
ptio
ns
U
SD
NT
$4,9
01
20
19.1
.31-
20
19.1
2.31
US
D72
-US
D88
Fina
ncia
l ass
ets
for
hedg
ing
$
4,90
1
$
-
The
abo
ve m
enti
oned
hed
ging
ins
trum
ents
con
tinu
e to
be
appl
ied
to h
edgi
ng a
ccou
ntin
g. T
he
book
val
ue o
f ot
her
equi
ty w
hich
bel
ongs
to
each
hed
ging
ite
m (
fuel
pay
men
ts)
is $
4,90
1 th
ousa
nd.
For
the
year
end
ed D
ecem
ber
31, 2
018
Com
pre
hen
sive
In
com
e
Hed
gin
g G
ain
(L
oss)
R
ecog
niz
ed in
O
ther
C
omp
reh
ensi
ve
Inco
me
Am
oun
t R
ecla
ssif
ied
to
Pro
fit
and
Los
s an
d t
he
Ad
just
ed L
ine
Item
Cas
h fl
ow h
edge
s -
fuel
opt
ions
$
4,90
1
$
(9,4
21)
(Not
e)
Not
e:
Incr
ease
in o
pera
ting
cos
ts.
231
- 69
-
Sen
siti
vity
ana
lysi
s T
he s
ensi
tivi
ty a
naly
sis
belo
w w
as d
eter
min
ed b
ased
on
the
expo
sure
to
fuel
pri
ce r
isks
at
the
end
of th
e re
port
ing
peri
od.
For
th
e Y
ear
En
ded
Dec
emb
er 3
1
20
19
20
18
Pre
-tax
Pro
fit
Incr
ease
(D
ecre
ase)
Oth
er
Com
pre
- h
ensi
ve
Inco
me
Incr
ease
(D
ecre
ase)
Pre
-tax
Pro
fit
Incr
ease
(D
ecre
ase)
Oth
er
Com
pre
- h
ensi
ve
Inco
me
Incr
ease
(D
ecre
ase)
Fue
l pri
ce in
crea
se o
f 5%
$
-
$
7,97
3
$
-
$
- F
uel p
rice
dec
reas
e of
5%
-
-
-
-
2)
Cre
dit r
isk
C
redi
t ri
sk r
efer
s to
the
ris
k th
at a
cou
nter
part
y w
ill
defa
ult
on i
ts c
ontr
actu
al o
blig
atio
ns r
esul
ting
in
fin
anci
al l
oss
to t
he C
ompa
ny.
The
Com
pany
’s c
redi
t ri
sk,
prim
aril
y co
mes
fro
m a
ccou
nts
rece
ivab
le g
ener
ated
fro
m o
pera
ting
act
ivit
ies,
ban
k de
posi
ts g
ener
ated
fro
m i
nves
ting
act
ivit
ies,
fi
xed
inve
stm
ent
inco
me
and
othe
r fi
nanc
ial
inst
rum
ents
. Ope
rati
on r
elat
ed c
redi
t ri
sk a
nd f
inan
cial
cr
edit
ris
k ar
e m
anag
ed s
epar
atel
y.
Ope
rati
on -
rel
ated
cre
dit r
isk
The
Com
pany
has
est
abli
shed
pro
cedu
res
to m
anag
emen
t op
erat
ions
rel
ated
cre
dit
risk
to
mai
ntai
n th
e qu
ality
of
acco
unts
rec
eiva
ble.
T
o as
sess
indi
vidu
al c
usto
mer
s, th
e C
ompa
ny c
onsi
der
into
the
fina
ncia
l con
diti
on o
f th
e cu
stom
ers,
th
e cr
edit
rat
ing
agen
cy r
atin
g, t
he C
ompa
ny’s
int
erna
l cr
edit
rat
ing,
tra
nsac
tion
his
tory
and
cur
rent
ec
onom
ic c
ondi
tion
s an
d m
any
othe
r fa
ctor
s th
at
may
aff
ect
the
repa
ymen
t. S
omet
imes
, th
e C
ompa
ny u
ses
cert
ain
cred
it e
nhan
cem
ent t
ools
to r
educ
e th
e cr
edit
ris
k of
spe
cifi
c cu
stom
ers.
S
ince
the
cus
tom
ers
of t
he i
ndus
try
is d
ispe
rsed
and
non
-rel
ated
, the
cre
dit
risk
con
cent
rati
on i
s no
t cr
itic
al a
viat
ion.
F
inan
cial
cre
dit r
isk
Cre
dit
risk
on
bank
dep
osit
s, i
nves
tmen
ts i
ncom
e an
d ot
her
fina
ncia
l in
stru
men
ts a
re m
easu
red
and
mon
itor
by
the
Com
pany
’s f
inan
ce d
epar
tmen
t. T
he C
ompa
ny’s
tra
ding
par
tner
s an
d ot
her
part
ies
wer
e w
ell-
perf
orm
ing
bank
s an
d fi
nanc
ial
inst
itut
ions
, co
rpor
atio
ns,
and
gove
rnm
ent
agen
cies
, an
d so
the
ris
k of
cou
nter
part
ies
fail
ing
to d
isch
arge
an
oblig
atio
n is
low
; th
eref
ore,
the
re i
s no
si
gnif
ican
t cre
dit r
isk.
E
ndor
sem
ents
giv
en b
y th
e C
ompa
ny o
n be
half
of
its
subs
idia
ries
can
be
foun
d in
Not
es 3
1(g)
.
3)
Liq
uidi
ty r
isk
The
obj
ecti
ve o
f th
e C
ompa
ny’s
man
agem
ent
of l
iqui
dity
is
to m
aint
ain
cash
and
cas
h eq
uiva
lent
s su
ffic
ient
for
ope
rati
ng p
urpo
ses,
mar
keta
ble
secu
riti
es w
ith
high
liq
uidi
ty a
nd l
oan
com
mit
men
ts
that
are
suf
fici
ent t
o en
sure
that
the
Com
pany
has
ade
quat
e fi
nanc
ial f
lexi
bili
ty.
- 70
-
Liq
uidi
ty a
nd in
tere
st r
isk
rate
tabl
e T
he f
ollo
win
g ta
ble
show
s th
e re
mai
ning
con
trac
tual
mat
urit
y an
alys
is o
f th
e C
ompa
ny’s
fin
anci
al
liab
ilit
ies
wit
h ag
reed
-upo
n re
paym
ent
peri
ods,
whi
ch w
ere
base
d on
the
dat
e th
e C
ompa
ny m
ay b
e re
quir
ed t
o pa
y th
e fi
rst
repa
ymen
t an
d fi
nanc
ial
liab
ilit
ies
is e
valu
ated
bas
ed o
n un
disc
ount
ed c
ash
flow
s, in
clud
ing
cash
flo
ws
of in
tere
st a
nd p
rinc
ipal
.
Ban
k lo
ans
wit
h a
repa
ymen
t on
dem
and
clau
se w
ere
incl
uded
in
the
seco
nd c
olum
n of
the
tab
le
belo
w r
egar
dles
s of
whe
ther
or
not
the
bank
s w
ould
cho
ose
to e
xerc
ise
earl
y th
eir
righ
ts t
o re
paym
ent.
The
mat
urit
y da
tes
for
othe
r no
n-de
riva
tive
fin
anci
al l
iabi
liti
es w
ere
base
d on
the
ag
reed
-upo
n re
paym
ent
date
s.
The
C
ompa
ny’s
li
quid
ity
anal
ysis
fo
r it
s de
riva
tive
fi
nanc
ial
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 ne
t ca
sh i
nflo
ws
and
outf
low
s on
der
ivat
ive
inst
rum
ents
tha
t se
ttle
on
a ne
t ba
sis,
and
th
e un
disc
ount
ed g
ross
cas
h in
flow
s an
d ou
tflo
ws
on t
hose
der
ivat
ives
that
req
uire
gro
ss s
ettl
emen
t. W
hen
the
amou
nt p
ayab
le o
r re
ceiv
able
is
not
fixe
d, t
he a
mou
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
ill
ustr
ated
by
yiel
d cu
rves
at
the
end
of t
he r
epor
ting
pe
riod
. D
ecem
ber
31, 2
019
Th
e W
eigh
ted
A
vera
ge
Eff
ecti
ve
Inte
rest
Rat
e (%
)
Les
s th
an 1
Y
ear
1
to 5
Yea
rs
O
ver
5 Y
ears
F
inan
ce le
ase
liab
ilit
ies
0.
1448
$
914,
419
$
3,
362,
181
$
10
,451
,021
F
loat
ing
inte
rest
rat
e li
abil
itie
s
0.95
76
14,2
84,0
90
34,4
57,4
00
14,7
87,8
69
Hed
ging
inst
rum
ents
3.11
31
10,0
60,8
22
39,7
29,0
62
6,37
3,33
3 B
onds
pay
able
2.52
73
10,8
23,9
05
19,8
71,1
74
3,38
3,40
1
$
36
,083
,236
$
97,4
19,8
17
$
34
,995
,624
D
ecem
ber
31, 2
018
Th
e W
eigh
ted
A
vera
ge
Eff
ecti
ve
Inte
rest
Rat
e (%
)
Les
s th
an 1
Y
ear
1
to 5
Yea
rs
O
ver
5 Y
ears
F
inan
ce le
ase
liab
ilit
ies
1.
0627
$
601,
743
$
-
$
-
Flo
atin
g in
tere
st r
ate
liab
ilit
ies
1.
1084
14
,050
,574
39
,852
,965
18
,293
,128
F
ixed
inte
rest
rat
e li
abil
itie
s
1.18
00
2,00
5,90
0
-
- H
edgi
ng in
stru
men
ts
-
239
-
-
Bon
ds p
ayab
le
1.
3905
5,
999,
321
30,8
35,4
49
1,05
1,41
8
$
22
,657
,777
$
70,6
88,4
14
$
19
,344
,546
232
- 71
-
Loa
n co
mm
itm
ents
D
ecem
ber
31
2019
2018
Unu
sed
bank
loan
lim
it (
unse
cure
d)
$
18
,422
,000
$
17,3
37,0
00
31.
RE
LA
TE
D-P
AR
TY
TR
AN
SA
CT
ION
S
Exc
ept
for
the
disc
losu
res
stat
ed i
n ot
her
note
s, t
rans
acti
ons
betw
een
the
Com
pany
and
its
rel
ated
par
ties
ar
e di
sclo
sed
belo
w:
a.
Rel
ated
par
ties
’ na
mes
and
rel
atio
nshi
ps
N
ame
R
elat
ion
ship
wit
h t
he
Com
pan
y
T
aiw
an A
irca
rgo
Ter
min
al C
ompa
ny
Sub
sidi
ary
Tao
yuan
Int
erna
tion
al A
irpo
rt S
ervi
ce C
o., L
td.
Sub
sidi
ary
Sab
re T
rave
l Net
wor
k (T
aiw
an),
Ltd
. S
ubsi
diar
y T
aiw
an A
irpo
rt S
ervi
ce C
o., L
td.
Sub
sidi
ary
Tai
wan
Air
port
Ser
vice
(S
amoa
) S
ubsi
diar
y H
wa
Hsi
a S
ubsi
diar
y Y
estr
ip
Sub
sidi
ary
Glo
bal S
ky E
xpre
ss
Sub
sidi
ary
Man
dari
n A
irli
nes
Sub
sidi
ary
CA
L P
ark
Sub
sidi
ary
CA
L H
otel
Co.
, Ltd
. S
ubsi
diar
y C
AL
-Asi
a In
vest
men
t S
ubsi
diar
y D
ynas
ty H
olid
ays,
Inc
. A
ssoc
iate
(be
com
e as
soci
ate
in J
anua
ry
2019
) C
AL
-Dyn
asty
Int
erna
tion
al I
nc.
Sub
sidi
ary
Tig
erai
r T
aiw
an C
o., L
td.
Sub
sidi
ary
Tai
wan
Air
craf
t Mai
nten
ance
and
Eng
inee
ring
Co.
, Ltd
. S
ubsi
diar
y K
aohs
iung
Cat
erin
g S
ervi
ces
Sub
sidi
ary
(bec
ome
subs
idia
ry in
Mar
ch
2018
) A
sian
Com
pres
sor
Tec
hnol
ogy
Ser
vice
s A
ssoc
iate
(di
spos
al in
Jan
uary
201
8)
Chi
na A
ircr
aft S
ervi
ce
Ass
ocia
te
Air
port
Air
Car
go T
erm
inal
(X
iam
en)
Co.
, Ltd
. A
ssoc
iate
A
irpo
rt A
ir C
argo
Ser
vice
(X
iam
en)
Co.
, Ltd
. A
ssoc
iate
E
aste
rn U
nite
d In
tern
atio
nal L
ogis
tics
(H
ong
Kon
g)
Ass
ocia
te
Chi
na P
acif
ic C
ater
ing
Ser
vice
s J
oint
ven
ture
inve
stm
ent
Chi
na P
acif
ic L
aund
ry S
ervi
ces
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
Dir
ecto
r of
the
Com
pany
and
maj
or
shar
ehol
der
Oth
ers
Dir
ecto
r, k
ey m
anag
emen
t per
sonn
el,
chai
rman
, gen
eral
man
ager
of
the
Com
pany
, spo
use
and
seco
nd-d
egre
e re
lati
ve
- 72
-
b.
Ope
rati
ng in
com
e
For
th
e Y
ear
En
ded
Dec
emb
er 3
1 A
ccou
nt
Item
s
Rel
ated
Par
ty T
ype
20
19
20
18
O
ther
inco
me
Sub
sidi
ary
$
2,
577,
039
$
2,
651,
423
M
ajor
sha
reho
lder
of
the
Com
pany
$
25,4
57
$
28
,670
A
ssoc
iate
$
1,23
9
$
523
J
oint
ven
ture
inve
stm
ent
$
42
,457
$
41,4
10
c.
Pur
chas
es
For
th
e Y
ear
En
ded
Dec
emb
er 3
1 R
elat
ed P
arty
Typ
e
2019
2018
Sub
sidi
ary
$
3,
915,
258
$
3,
843,
308
Maj
or s
hare
hold
er o
f th
e C
ompa
ny
$
56
,474
$
64,1
88
Ass
ocia
te
$
41
4,10
6
$
501,
609
Join
t ven
ture
inve
stm
ent
$
1,
911,
091
$
1,
912,
995
d.
A
ccou
nts
rece
ivab
le -
rel
ated
par
ties
(ge
nera
ted
by o
pera
tion
s)
D
ecem
ber
31
Rel
ated
Par
ty T
ype
20
19
20
18
S
ubsi
diar
y
$
222,
038
$
28
9,26
8 Jo
int v
entu
re in
vest
men
t
7,
760
7,58
9 M
ajor
sha
reho
lder
of
the
Com
pany
2,
588
1,45
4
$
232,
386
$
29
8,31
1 T
he r
ecei
vabl
es a
re n
ot g
uara
ntee
d, a
nd t
here
is
no a
llow
ance
for
dou
btfu
l ac
coun
ts r
elat
ed t
o ac
coun
ts
rece
ivab
le -
rel
ated
par
ties
. The
pay
men
t pe
riod
s of
suc
h ac
coun
ts w
ere
wit
hin
30 t
o 90
day
s, a
nd t
here
ar
e no
ove
rdue
pay
men
ts.
e.
A
ccou
nts
paya
ble
- re
late
d pa
rtie
s (g
ener
ated
by
oper
atio
ns)
D
ecem
ber
31
Rel
ated
Par
ty T
ype
20
19
20
18
S
ubsi
diar
y
$
927,
419
$
1,
050,
869
Ass
ocia
te
51,3
33
54,9
48
Join
t ven
ture
inve
stm
ent
484,
700
474,
499
Maj
or s
hare
hold
er o
f th
e C
ompa
ny
5,98
2
3,
368
$
1,
469,
434
$
1,
583,
684
The
rem
aini
ng b
alan
ce o
f no
tes
and
acco
unts
pay
able
- r
elat
ed p
arti
es w
ill b
e pa
id in
cas
h if
they
are
not
se
cure
d.
f.
L
ease
s of
pro
pert
ies
(ope
rati
ng le
ases
) T
he C
ompa
ny r
ente
d ou
t pl
anes
to
Man
dari
n A
irli
nes
unde
r an
ope
rati
ng l
ease
con
trac
t. T
he m
onth
ly
rent
rec
eive
d is
bas
ed o
n fl
ight
hou
rs.
In 2
019
and
2018
, th
e re
ntal
s re
ceiv
ed a
mou
nted
to
$1,6
24,5
68
thou
sand
and
$1,
685,
494
thou
sand
, res
pect
ivel
y.
233
- 73
-
Und
er a
n op
erat
ing
leas
e ag
reem
ent,
the
Com
pany
ren
ted
flig
ht t
rain
ing
mac
hine
s an
d fl
ight
sim
ulat
ors
from
Chi
na A
viat
ion
Dev
elop
men
t F
ound
atio
n to
tra
in p
ilot
s. T
he C
ompa
ny p
aid
the
rent
al b
ased
on
usag
e ho
urs.
In
2019
and
201
8, t
he C
ompa
ny p
aid
rent
als
of a
bout
$56
,474
tho
usan
d an
d $6
4,18
8 th
ousa
nd, r
espe
ctiv
ely.
In
Mar
ch 2
010,
the
Com
pany
sig
ned
wit
h C
AL
Par
k a
year
ly r
enew
able
ope
rati
ng l
ease
agr
eem
ent
to
use
the
Ope
rati
ng a
nd A
viat
ion
Hea
dqua
rter
s bu
ildi
ng o
f th
e T
aiw
an T
aoyu
an I
nter
nati
onal
Air
port
. In
2019
and
201
8, th
e C
ompa
ny p
aid
rent
als
of b
oth
wer
e $2
31,2
88 th
ousa
nd p
er y
ear.
g.
E
ndor
sem
ents
and
gua
rant
ees
D
ecem
ber
31
2019
2018
Au
thor
ized
A
mou
nt
A
ctu
al
Am
oun
t U
sed
Au
thor
ized
A
mou
nt
A
ctu
al
Am
oun
t U
sed
T
he C
ompa
ny
C
AL
Par
k
$
3,85
0,00
0
$
2,12
9,40
0
$
3,85
0,00
0
$
2,33
9,70
0 T
aiw
an A
ir C
argo
Ter
min
al
1,08
0,00
0
-
1,08
0,00
0
-
Tig
erai
r T
aiw
an
3,01
2,66
8
68
5,44
4
1,
081,
792
418,
491
Tai
wan
Air
Cra
ft M
aint
enan
ce
2,00
0,00
0
1,
279,
827
2,00
0,00
0
60
5,45
7 h.
B
onds
pay
able
- r
elat
ed p
arti
es
R
elat
ed p
arti
es t
hat
inve
sted
in
the
firs
t is
sue
of u
nsec
ured
bon
ds i
n 20
16 (
Not
e 19
) ar
e su
mm
ariz
ed a
s fo
llow
s:
Dec
emb
er 3
1, 2
019
Rel
ated
Par
ty
U
nit
s
Agg
rega
te
Par
/Dol
lars
T
he f
irst
issu
e of
uns
ecur
ed b
onds
in 2
016
M
anda
rin
Air
line
s
250
$
25
0,00
0 S
abre
Tra
vel N
etw
ork
(Tai
wan
)
50
50,0
00
In 2
019,
inte
rest
exp
ense
s w
as $
3,57
0 th
ousa
nd. T
his
bond
s pa
yabl
e w
ill b
e pa
id o
ff in
May
202
1. A
s of
D
ecem
ber
31, 2
019
the
inte
rest
pay
able
was
$2,
142
thou
sand
.
i. C
ompe
nsat
ion
of k
ey m
anag
emen
t per
sonn
el
F
or t
he
Yea
r E
nd
ed D
ecem
ber
31
2019
2018
Sho
rt-t
erm
em
ploy
ee b
enef
its
$
39
,693
$
44,5
51
Pos
t-em
ploy
men
t ben
efit
s
2,
362
3,29
5
$
42,0
55
$
47
,846
T
he r
emun
erat
ion
of d
irec
tors
and
key
exe
cuti
ves
was
det
erm
ined
by
the
rem
uner
atio
n co
mm
itte
e ha
ving
reg
ard
to th
e pe
rfor
man
ce o
f in
divi
dual
s an
d m
arke
t tre
nds.
- 74
-
32.
PL
ED
GE
D A
SS
ET
S
The
fol
low
ing
asse
ts w
ere
pled
ged
or m
ortg
aged
as
coll
ater
al f
or l
ong-
term
ban
k lo
ans,
lea
se o
blig
atio
ns
and
busi
ness
tran
sact
ions
:
D
ecem
ber
31
2019
2018
Pro
pert
y, p
lant
and
equ
ipm
ent
$
26,9
56,6
31
$
37
,468
,142
R
ight
-of-
use
asse
t
64
,262
,830
-
$
91
,219
,461
$
37,4
68,1
42
33
. C
OM
MIT
ME
NT
S A
ND
CO
NT
ING
EN
T L
IAB
ILIT
IES
A
s of
Dec
embe
r 31
, 201
9, e
xcep
t fo
r th
e di
sclo
sure
s st
ated
in
othe
r no
tes,
the
Com
pany
had
com
mit
men
ts
and
cont
inge
nt li
abil
itie
s w
hich
wer
e as
fol
low
s:
a.
The
Com
pany
fai
led
to m
edia
te l
abor
dis
pute
s w
ith
the
labo
r un
ion.
Aft
er o
btai
ning
the
rig
ht t
o st
rike
, th
e la
bor
unio
n w
ent
on s
trik
e on
Feb
ruar
y 8,
201
9, a
nd t
he f
ligh
ts r
esum
ed n
orm
al o
pera
tion
on
Feb
ruar
y 14
, 20
19.
A t
otal
of
214
flig
hts
was
can
cell
ed a
nd t
he a
ccum
ulat
ed r
even
ue l
oss
was
abo
ut
$500
mil
lion
. The
init
ial e
stim
ated
com
pens
atio
n fo
r cu
stom
er lo
sses
and
oth
er e
xpen
ditu
res
wer
e ab
out
$54
mil
lion
(re
cogn
ized
as
oper
atin
g co
st).
b.
In
Oct
ober
201
9, t
he C
ompa
ny s
igne
d a
cont
ract
wit
h A
irbu
s S
.A.S
. to
pur
chas
e el
even
A32
1neo
ai
rcra
ft a
nd a
n op
tion
to p
urch
ase
five
A32
1neo
air
craf
t. T
he t
otal
lis
t pr
ice
of t
he e
leve
n ai
rcra
ft i
s U
S$1
,676
,413
tho
usan
d, a
nd t
he l
ist
pric
e of
the
opt
ion
to p
urch
ase
five
air
craf
t is
US
$769
,922
th
ousa
nd. T
he e
xpec
ted
deli
very
per
iod
of t
he e
leve
n ai
rcra
ft r
ange
s fr
om 2
024
to 2
026.
As
of O
ctob
er
31,
2019
, th
e li
st p
rice
of
the
four
teen
air
craf
t ha
s be
en p
aid
in t
he a
mou
nt o
f U
S$1
7,01
4 th
ousa
nd
(rec
ogni
zed
as p
repa
ymen
ts f
or a
ircr
aft)
. In
Oct
ober
201
9, t
he C
ompa
ny s
igne
d a
cont
ract
wit
h In
tern
atio
nal
Aer
o E
ngin
es C
ompa
ny t
o pu
rcha
se f
our
back
up e
ngin
es o
f A
321n
eo.
The
tot
al l
ist
pric
e of
the
four
eng
ines
is U
S$6
0,28
9 th
ousa
nd.
c.
In J
uly
and
Aug
ust
2019
, th
e C
ompa
ny s
igne
d a
cont
ract
wit
h th
e B
oein
g C
ompa
ny t
o pu
rcha
se t
hree
B
777F
air
craf
t an
d ex
erci
sed
the
opti
on t
o pu
rcha
se t
hree
B77
7F a
ircr
aft.
The
tot
al l
ist
pric
e of
the
six
ai
rcra
ft i
s U
S$2
,320
,315
tho
usan
d, a
nd t
he e
xpec
ted
deli
very
per
iod
is f
rom
202
0 to
202
3. A
s of
S
epte
mbe
r 30
, 201
9, t
he l
ist
pric
e ha
s be
en p
aid
in t
he a
mou
nt o
f U
S$2
41,6
50 t
hous
and
(rec
ogni
zed
as
prep
aym
ents
for
air
craf
t).
34
. S
IGN
IFIC
AN
T E
VE
NT
S A
FT
ER
TH
E B
AL
AN
CE
SH
EE
T D
AT
E
By
the
end
of J
anua
ry,
2020
, th
e C
oron
avir
us t
hat
orig
inat
ed f
rom
Wuh
an,
the
capi
tal
city
of
Hub
ei
prov
ince
in
Chi
na,
beca
me
a pa
ndem
ic.
The
Com
pany
has
com
plie
d an
d co
ntin
ues
to c
ompl
y w
ith
the
trav
el a
lert
s is
sued
by
the
Tai
wan
Cen
ters
for
Dis
ease
Con
trol
and
has
can
cell
ed f
ligh
ts b
etw
een
seve
ral
coun
trie
s li
ke C
hina
, H
ong
Kon
g, J
apan
and
Kor
ea.
Oth
er f
ligh
ts h
ave
flex
ible
cap
acit
y de
pend
ing
on t
he
dem
and.
So
far,
the
air
tra
nspo
rt s
ervi
ces
for
pass
enge
rs h
ave
been
sev
erel
y af
fect
ed.
In a
ddit
ion
to
adju
stin
g th
e op
erat
ion,
the
Com
pany
als
o ta
kes
mea
sure
s ab
out
fund
ing
assi
stan
ce,
hum
an r
esou
rces
, re
duci
ng e
xpen
ditu
re,
and
asks
the
gov
ernm
ent
for
help
in
thre
e m
ain
area
s in
clud
ing
guar
ante
e fo
r it
s op
erat
ion,
rel
ief
from
the
burd
en, a
nd a
rec
over
y pl
an.
234
- 75
-
35.
SIG
NIF
ICA
NT
AS
SE
TS
AN
D L
IAB
ILIT
IES
DE
NO
MIN
AT
ED
IN
FO
RE
IGN
CU
RR
EN
CIE
S
The
fol
low
ing
info
rmat
ion
was
agg
rega
ted
by t
he f
orei
gn c
urre
ncie
s ot
her
than
fun
ctio
nal
curr
enci
es o
f th
e C
ompa
ny e
ntit
ies
and
the
exch
ange
rat
es b
etw
een
fore
ign
curr
enci
es a
nd r
espe
ctiv
e fu
ncti
onal
cur
renc
ies
wer
e di
sclo
sed.
The
sig
nifi
cant
ass
ets
and
liab
ilit
ies
deno
min
ated
in f
orei
gn c
urre
ncie
s w
ere
as f
ollo
ws:
D
ecem
ber
31, 2
019
For
eign
C
urr
enci
es
(In
Th
ousa
nd
s)
E
xch
ange
Rat
e
Car
ryin
g A
mou
nt
Fin
anci
al a
sset
s
Mon
etar
y it
ems
US
D
$
50
2,60
8
30.0
300
$
15
,093
,328
E
UR
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
Fin
anci
al li
abil
itie
s
Mon
etar
y it
ems
US
D
2,17
9,05
6
30.0
300
65,4
37,0
49
EU
R
7,63
9
33.6
700
257,
211
HK
D
67,5
29
3.
8595
26
0,63
0 JP
Y
5,70
6,14
1
0.27
66
1,57
8,31
9 R
MB
13
2,62
2
4.30
48
570,
913
Dec
embe
r 31
, 201
8
For
eign
C
urr
enci
es
(In
Th
ousa
nd
s)
E
xch
ange
Rat
e
Car
ryin
g A
mou
nt
Fin
anci
al a
sset
s
Mon
etar
y it
ems
US
D
$
43
9,65
2
30.7
692
$
13
,527
,732
E
UR
20
,511
35.2
113
722,
232
HK
D
297,
496
3.
9231
1,
167,
107
JPY
5,
521,
288
0.
2778
1,
533,
814
RM
B
345,
777
4.
4803
1,
549,
187
F
inan
cial
liab
ilit
ies
M
onet
ary
item
s
U
SD
40
5,46
8
30.7
692
12,4
75,9
19
EU
R
7,80
1
35.2
113
274,
697
HK
D
70,9
00
3.
9231
27
8,14
9 JP
Y
4,86
6,89
4
0.27
78
1,35
2,02
3 R
MB
12
6,54
6
4.48
03
566,
964
For
the
year
s en
ded
Dec
embe
r 31
, 201
9 an
d 20
18, t
he C
ompa
ny’s
net
for
eign
exc
hang
e (l
osse
s) g
ains
wer
e $(
262,
610)
tho
usan
d an
d $1
0,81
2 th
ousa
nd,
resp
ecti
vely
. It
is
impr
acti
cal
to d
iscl
ose
net
fore
ign
exch
ange
ga
ins
(los
ses)
by
each
sig
nifi
cant
for
eign
cur
renc
y du
e to
the
vari
ety
of th
e fo
reig
n cu
rren
cy tr
ansa
ctio
ns.
- 76
-
36.
AD
DIT
ION
AL
DIS
CL
OS
UR
ES
a.
Fol
low
ing
are
the
addi
tion
al d
iscl
osur
es r
equi
red
by th
e S
ecur
itie
s an
d F
utur
es B
urea
u fo
r th
e C
ompa
ny
and
its
inve
stee
s:
1) F
inan
cing
pro
vide
d: N
one.
2
) End
orse
men
ts/g
uara
ntee
s pr
ovid
ed: T
able
1 (
atta
ched
).
3) M
arke
tabl
e se
curi
ties
hel
d: T
able
2 (
atta
ched
).
4) M
arke
tabl
e se
curi
ties
acq
uire
d an
d di
spos
ed o
f at
cos
ts o
r pr
ices
of
at l
east
NT
$300
mil
lion
or
20%
of
the
paid
-in
capi
tal:
Tab
le 3
(at
tach
ed).
5
) Acq
uisi
tion
s of
ind
ivid
ual
real
est
ates
at
cost
s or
pri
ce o
f at
lea
st N
T$1
00 m
illi
on o
r 20
% o
f th
e pa
id-i
n ca
pita
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
$100
mil
lion
or
20%
of
the
paid
-in
capi
tal:
Non
e.
7) T
otal
pur
chas
es f
rom
or
sale
s to
rel
ated
par
ties
am
ount
ing
to a
t le
ast
NT
$100
mil
lion
or
20%
of
the
paid
-in
capi
tal:
Tab
le 4
(at
tach
ed).
8
) Rec
eiva
bles
fro
m r
elat
ed p
arti
es a
mou
ntin
g to
at
leas
t N
T$1
00 m
illi
on o
r 20
% o
f th
e pa
id-i
n ca
pita
l: T
able
5 (
atta
ched
).
9) N
ames
, lo
cati
ons,
an
d re
late
d in
form
atio
n of
in
vest
ees
over
w
hich
th
e C
ompa
ny
exer
cise
s si
gnif
ican
t inf
luen
ce: T
able
6 (
atta
ched
).
10) D
eriv
ativ
e fi
nanc
ial t
rans
acti
ons:
Not
es 7
and
30.
b.
Inve
stm
ent i
n m
ainl
and
Chi
na: T
able
7 (
atta
ched
).
37.
SE
GM
EN
T I
NF
OR
MA
TIO
N
The
Com
pany
mai
nly
enga
ges
in a
ir t
rans
port
atio
n se
rvic
es f
or p
asse
nger
s, c
argo
and
oth
ers.
The
maj
or
reve
nue-
gene
rati
ng a
sset
is
the
flee
t, w
hich
is
join
tly
used
for
pas
seng
er a
nd c
argo
ser
vice
s. T
hus,
the
C
ompa
ny’s
sol
e re
port
able
seg
men
t is
the
fli
ght
segm
ent.
For
ope
rati
ng s
egm
ent
repo
rtin
g in
the
fin
anci
al
stat
emen
ts,
the
Com
pany
’s
repo
rtab
le
segm
ent
com
pris
es
the
flig
ht
and
the
non-
flig
ht
busi
ness
de
part
men
ts.
235
- 77
-
TA
BL
E 1
C
HIN
A A
IRL
INE
S, L
TD
. AN
D I
NV
ES
TE
ES
E
ND
OR
SE
ME
NT
/GU
AR
AN
TE
E P
RO
VID
ED
F
OR
TH
E Y
EA
R E
ND
ED
DE
CE
MB
ER
31,
201
9 (I
n T
hous
ands
of
New
Tai
wan
Dol
lars
, Un
less
Sta
ted
Oth
erw
ise)
C
oun
terp
arty
No.
E
nd
orse
men
t/
Gu
aran
tee
Pro
vid
er
Nam
e N
atu
re o
f R
elat
ion
ship
Lim
it o
n E
ach
C
oun
terp
arty
’s
En
dor
sem
ent/
G
uar
ante
e A
mou
nt
(Not
e 1)
Max
imu
m
Bal
ance
for
th
e P
erio
d
En
din
g B
alan
ce
Act
ual
Bor
row
ing
Am
ount
Val
ue
of
Col
late
rals
P
rop
erty
, Pla
nt
or E
qu
ipm
ent
Rat
io o
f A
ccu
mu
late
d
Am
ount
of
Col
late
ral t
o N
et E
quit
y of
th
e L
ates
t F
inan
cial
S
tate
men
t (%
)
Max
imu
m
Col
late
ral/
Gu
aran
tee
Am
ount
s A
llow
able
(N
ote
2)
En
dor
sem
ent/
G
uar
ante
e G
iven
by
Par
ent
on B
ehal
f of
S
ub
sid
iari
es
En
dor
sem
ent/
G
uar
ante
e G
iven
by
Su
bsi
dia
ries
on
B
ehal
f of
Par
ent
En
dor
sem
ent/
G
uar
ante
e G
iven
on
Beh
alf
of C
ompa
nie
s in
M
ain
lan
d C
hin
a
0 C
hina
Air
lines
C
AL
Par
k
100%
sub
sidi
ary
$
11,
310,
754
$
3,
850,
000
$
3,
850,
000
$
2,
129,
400
$
-
6.81
$ 2
8,27
6,88
6 Y
N
N
(t
he “
Com
pany
”)
Tai
wan
Air
Car
go T
erm
inal
54
% s
ubsi
diar
y
11
,310
,754
1,
080,
000
1,08
0,00
0
-
- 1.
91
28,2
76,8
86
Y
N
N
Tig
erai
r T
aiw
an C
o., L
td.
77.1
7% s
ubsi
diar
y by
di
rect
and
indi
rect
ho
ldin
gs
11,3
10,7
54
3,05
5,47
5
3,
012,
668
685,
444
- 5.
33
28,2
76,8
86
Y
N
N
Tai
wan
Air
craf
t Mai
nten
ance
an
d E
ngin
eeri
ng C
o., L
td.
100%
sub
sidi
ary
11,3
10,7
54
2,00
0,00
0
2,
000,
000
1,27
9,82
7
-
3.54
28
,276
,886
Y
N
N
Not
e 1:
B
ased
on
the
Com
pany
’s g
uide
lines
, the
max
imum
am
ount
of
guar
ante
e to
an
indi
vidu
al c
ount
erpa
rty
is u
p to
20%
of
the
Com
pany
’s s
hare
hold
ers’
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
colla
tera
l gua
rant
ee is
up
to 5
0% o
f th
e C
ompa
ny’s
sha
reho
lder
s’ e
quity
. 236
- 78
-
TA
BL
E 2
C
HIN
A A
IRL
INE
S, L
TD
. AN
D I
NV
ES
TE
ES
M
AR
KE
TA
BL
E S
EC
UR
ITIE
S H
EL
D
DE
CE
MB
ER
31,
201
9 (I
n T
hou
san
ds
of N
ew T
aiw
an D
olla
rs, U
nle
ss S
tate
d O
ther
wis
e)
D
ecem
ber
31,
201
9
Hol
din
g C
omp
any
Nam
e M
ark
etab
le S
ecu
rity
Typ
e an
d I
ssu
er/N
ame
Rel
atio
nsh
ip
wit
h t
he
Hol
din
g C
omp
any
Fin
anci
al S
tate
men
t A
ccou
nt
Nu
mb
er o
f S
har
es/U
nit
s C
arry
ing
Am
oun
t
Per
cen
tage
of
Ow
ner
ship
(%
)
Mar
ket
Val
ue
or N
et A
sset
V
alu
e
Not
e
C
hina
Air
line
s (“
Par
ent c
ompa
ny”)
S
hare
s
E
vere
st I
nves
tmen
t Hol
ding
s L
td. -
ord
inar
y sh
ares
-
Fin
anci
al a
sset
s at
FV
TO
CI
- no
n-cu
rren
t 1,
359,
368
$
73
,628
13
.59
$
80
,991
N
ote
1
Eve
rest
Inv
estm
ent H
oldi
ngs
Ltd
. - p
refe
renc
e sh
ares
-
Fin
anci
al a
sset
s at
FV
TO
CI
- no
n-cu
rren
t 13
5,93
7
7,
363
-
-
Chu
ng H
ua E
xpre
ss C
o.
- F
inan
cial
ass
ets
at F
VT
OC
I -
non-
curr
ent
1,10
0,00
0
26
,865
11
.00
26,8
65
Jard
ine
Air
Ter
min
al S
ervi
ces
- F
inan
cial
ass
ets
at F
VT
PL
- c
urre
nt
12,0
00,0
00
- 15
.00
-
T
he G
rand
Hi L
ai H
otel
-
Fin
anci
al a
sset
s at
FV
TP
L -
cur
rent
4,
021
- 0.
02
-
M
anda
rin
Air
line
s S
hare
s
C
hina
Air
line
s P
aren
t com
pany
F
inan
cial
ass
ets
at F
VT
OC
I -
non-
curr
ent
2,07
4,62
8
18
,796
-
18,7
96
-
Cal
-Asi
a In
vest
men
t S
hare
s
T
aiko
o (X
iam
en)
Lan
ding
Gea
r S
ervi
ces
- F
inan
cial
ass
ets
at F
VT
PL
- c
urre
nt
-
-
2.59
-
Not
e 2
H
AE
CO
Com
posi
te S
truc
ture
s (J
inji
ang)
-
Fin
anci
al a
sset
s at
FV
TO
CI
- no
n-cu
rren
t -
101,
365
5.45
10
1,36
5 N
ote
2
Sab
re T
rave
l Net
wor
k (T
aiw
an)
Ben
efic
iary
cer
tifi
cate
s
F
rank
lin
Tem
plet
on S
inoA
m M
oney
Mar
ket F
und
- F
inan
cial
ass
ets
at F
VT
PL
- c
urre
nt
7,81
6,04
8
81
,124
-
81,1
24
-
FS
ITC
Mon
ey M
arke
t Fun
d -
Fin
anci
al a
sset
s at
FV
TP
L -
cur
rent
49
7,74
0
89
,145
-
89,1
45
All
ianz
Glo
bal I
nves
tors
Tai
wan
Mon
ey M
arke
t Fun
d -
Fin
anci
al a
sset
s at
FV
TP
L -
cur
rent
6,
444,
010
81,0
65
-
81
,065
C
apit
al M
oney
Mar
ket F
und
- F
inan
cial
ass
ets
at F
VT
PL
- c
urre
nt
2,84
2,14
6
46
,035
-
46,0
35
Tai
wan
Air
port
Ser
vice
s S
hare
s
T
rans
Asi
a A
irw
ays
- F
inan
cial
ass
ets
at F
VT
PL
- c
urre
nt
2,27
7,78
6
-
0.4
- -
Ben
efic
ial c
erti
fica
tes
Fuh
Hw
a E
mer
ging
Mar
ket S
hort
-ter
m I
ncom
e F
und
- F
inan
cial
ass
ets
at F
VT
PL
- c
urre
nt
1,67
1,65
7
20
,253
-
20,2
53
-
Fuh
Hw
a G
loba
l Bon
d F
und
- F
inan
cial
ass
ets
at F
VT
PL
- c
urre
nt
1,23
3,21
1
18
,045
-
18,0
45
Hw
a H
sia
Sha
res
Chi
na A
irli
nes
Par
ent c
ompa
ny
Fin
anci
al a
sset
s at
FV
TO
CI
- no
n-cu
rren
t 81
4,15
2
7,
376
-
7,
376
-
B
enef
icia
ry c
erti
fica
tes
Tai
shin
169
9 M
oney
Mar
ket F
und
- F
inan
cial
ass
ets
at F
VT
PL
- c
urre
nt
349,
523
4,74
8 -
4,74
8 -
(C
onti
nued
) 237
- 79
-
D
ecem
ber
31,
201
9
Hol
din
g C
omp
any
Nam
e M
ark
etab
le S
ecu
rity
Typ
e an
d I
ssu
er/N
ame
Rel
atio
nsh
ip
wit
h t
he
Hol
din
g C
omp
any
Fin
anci
al S
tate
men
t A
ccou
nt
Nu
mb
er o
f S
har
es/U
nit
s C
arry
ing
Am
oun
t
Per
cen
tage
of
Ow
ner
ship
(%
)
Mar
ket
Val
ue
or N
et A
sset
V
alu
e
Not
e
K
aohs
iung
Cat
erin
g S
ervi
ces
Ben
efic
iary
cer
tifi
cate
s
P
rude
ntia
l Fin
anci
al M
oney
Mar
ket F
und
- F
inan
cial
ass
ets
at F
VT
PL
- c
urre
nt
5,40
7,83
2
$
85,8
85
-
$
85,8
85
-
Pru
dent
ial F
inan
cial
Ret
urn
Fun
d -
Fin
anci
al a
sset
s at
FV
TP
L -
cur
rent
4,
493,
628
70,4
23
-
70
,423
T
aish
in 1
699
Mon
ey M
arke
t Fun
d -
Fin
anci
al a
sset
s at
FV
TP
L -
cur
rent
1,
106,
807
15,0
35
-
15
,035
T
iger
air
Tai
wan
Co.
, Ltd
. G
over
nmen
t bon
d
P
hili
ppin
es g
over
nmen
t bon
d -
Am
orti
zed
cost
fin
anci
al a
sset
s -
299
Not
app
lica
ble
299
Not
e 1:
T
he s
ubsi
diar
y’s
net a
sset
val
ue w
as $
80,9
91 th
ousa
nd, w
hich
incl
uded
ord
inar
y sh
ares
and
pre
fere
nce
shar
es a
s of
and
for
the
year
end
ed D
ecem
ber
31, 2
019.
N
ote
2:
The
Com
pany
doe
s no
t iss
ue s
hare
s be
caus
e it
is a
lim
ited
com
pany
. N
ote
3:
The
tabl
e on
ly li
sts
fina
ncia
l ass
ets
that
are
IF
RS
9 r
egul
ated
.
(Con
clud
ed)
238
- 80
-
TA
BL
E 3
C
HIN
A A
IRL
INE
S, L
TD
. AN
D S
UB
SID
IAR
IES
M
AR
KE
TA
BL
E S
EC
UR
ITIE
S A
CQ
UIR
ED
AN
D D
ISP
OS
ED
OF
AT
CO
ST
S O
R P
RIC
ES
OF
AT
LE
AST
NT
$300
MIL
LIO
N O
R 2
0% O
F T
HE
PA
ID-I
N C
AP
ITA
L
FO
R T
HE
YE
AR
EN
DE
D D
EC
EM
BE
R 3
1, 2
019
(In
Th
ousa
nd
s of
New
Tai
wan
Dol
lars
, Un
less
Sta
ted
Oth
erw
ise)
B
egin
nin
g B
alan
ce
Acq
uis
itio
n (
Not
e 3)
D
isp
osal
(N
ote
3)
En
din
g B
alan
ce
Com
pan
y N
ame
Typ
e an
d N
ame
of
Mar
keta
ble
Secu
riti
es
(Not
e 1)
Fin
anci
al S
tate
men
t A
ccou
nt
Cou
nte
rpar
ty
(Not
e 2)
R
elat
ion
ship
(N
ote
2)
Num
ber
of
Sh
ares
A
mou
nt
Num
ber
of
Sh
ares
A
mou
nt
Num
ber
of
Sh
ares
A
mou
nt
Car
ryin
g A
mou
nt
Gai
n (
Los
s) o
n
Dis
pos
al
Num
ber
of
Sh
ares
A
mou
nt
C
hina
Air
line
s, L
td.
Sh
ares
T
iger
air
Tai
wan
Co.
, Ltd
. In
vest
men
ts a
ccou
nted
for
us
ing
the
equi
ty m
etho
d (N
ote
5)
Non
-rel
ated
par
ty
-
$
-
-
$
-
-
$
-
$
-
$
-
-
$
-
N
ote
1:
The
mar
keta
ble
secu
riti
es in
this
tabl
e re
fer
to s
hare
s, b
onds
, ben
efic
ial c
erti
fica
tes
and
the
secu
riti
es d
eriv
ed f
rom
the
abov
e it
ems.
N
ote
2:
Mar
keta
ble
secu
riti
es w
hich
are
rec
ogni
zed
as in
vest
men
ts a
ccou
nts
for
usin
g th
e eq
uity
met
hod
are
requ
ired
to b
e fi
lled
in th
e se
cond
col
umn.
N
ote
3 T
he c
umul
ativ
e am
ount
of
acqu
ired
and
dis
pose
d of
mar
keta
ble
secu
riti
es a
re r
equi
red
to b
e ca
lcul
ated
sep
arat
ely
to d
eter
min
e w
heth
er th
ey a
re a
t lea
st N
T$3
00 m
illi
on o
r 20
% o
f th
e pa
id-i
n ca
pita
l. N
ote
4 Pa
id-i
n ca
pita
l re
fers
to
paid
-in
capi
tal
of t
he i
ndic
ated
par
ent
com
pany
. If
the
shar
es i
ssue
d by
an
issu
er h
ave
no p
ar v
alue
or
a pa
r va
lue
othe
r th
an N
T$1
0 pe
r sh
are,
the
thr
esho
ld o
f 20
% o
f pa
id-i
n ca
pita
l, as
set
out
in
the
prec
edin
g it
em, s
hall
be
repl
aced
by
10%
of
equi
ty a
ttri
buta
ble
to
owne
rs o
f th
e in
dica
ted
pare
nt c
ompa
ny, a
s st
ated
in th
e re
spec
tive
bala
nce
shee
t. N
ote
5:
Sub
sidi
arie
s pl
anni
ng in
itia
l pub
lic
offe
ring
rel
ease
sto
cks.
239
- 81
-
TA
BL
E 4
C
HIN
A A
IRL
INE
S, L
TD
. AN
D I
NV
ES
TE
ES
T
OT
AL
PU
RC
HA
SE
S F
RO
M O
R S
AL
ES
TO
RE
LA
TE
D P
AR
TIE
S A
MO
UN
TIN
G T
O A
T L
EA
ST
NT
$100
MIL
LIO
N O
R 2
0% O
F T
HE
PA
ID-I
N C
AP
ITA
L
FO
R T
HE
YE
AR
EN
DE
D D
EC
EM
BE
R 3
1, 2
019
(In
Th
ousa
nd
s of
New
Tai
wan
Dol
lars
, Un
less
Sta
ted
Oth
erw
ise)
Tra
nsa
ctio
n D
etai
ls
Ab
nor
mal
Tra
nsa
ctio
n
Not
e/A
ccou
nt
Pay
able
or
Rec
eiva
ble
C
omp
any
Nam
e R
elat
ed P
arty
N
atu
re o
f R
elat
ion
ship
P
urc
has
e/
Sal
e A
mou
nt
% o
f T
otal
P
aym
ent
Ter
ms
Un
it P
rice
P
aym
ent
Ter
ms
En
din
g B
alan
ce
% o
f T
otal
Not
e
Chi
na A
irli
nes,
Ltd
. T
aiw
an A
ir C
argo
Ter
min
al
Sub
sidi
ary
Pur
chas
e
$
524,
457
0.39
30
day
s
$
-
-
$
(41,
017)
(1
.52)
-
(“C
hina
Air
line
s”)
Tai
wan
Air
port
Ser
vice
s S
ubsi
diar
y P
urch
ase
445,
472
0.33
40
day
s
-
-
(7
7,97
0)
(2.9
0)
-
Man
dari
n A
irli
nes
Sub
sidi
ary
Sal
e
(1
,971
,462
) 1.
35
2 m
onth
s
-
-
15
8,12
3 1.
83
-
Man
dari
n A
irli
nes
Sub
sidi
ary
Pur
chas
e
24
2,11
4 0.
18
2 m
onth
s
-
-
(2
47,9
97)
(9.2
1)
-
Tig
erai
r T
aiw
an
Sub
sidi
ary
Sal
e
(3
73,8
11)
0.26
1
mon
ths
42,6
42
0.49
T
iger
air
Tai
wan
S
ubsi
diar
y P
urch
ase
152,
914
0.11
1
mon
ths
- -
(31,
210)
(1
.16)
-
T
aoyu
an I
nter
nati
onal
Air
port
Ser
vice
S
ubsi
diar
y P
urch
ase
1,22
0,42
2 0.
90
40 d
ays
- -
(347
,127
) (1
2.90
) -
K
aohs
iung
Cat
erin
g S
ervi
ces
Sub
sidi
ary
Pur
chas
e
56
1,44
3 0.
42
60 d
ays
- -
(99,
649)
(3
.70)
-
H
ua H
sia
Sub
sidi
ary
Pur
chas
e
34
9,60
2 0.
26
2 m
onth
s
-
-
(3
7,86
0)
(1.4
1)
-
CA
L P
ark
Sub
sidi
ary
Pur
chas
e
23
1,28
8 0.
17
2 m
onth
s
-
-
(1
27)
- -
C
al H
otel
S
ubsi
diar
y P
urch
ase
135,
687
0.10
1
mon
ths
- -
(40,
293)
(1
.50)
-
G
loba
l Sky
Exp
ress
S
ubsi
diar
y S
ale
(101
,421
) 0.
07
15 d
ays
- -
3,88
8
0.05
-
E
aste
rn U
nite
d In
tern
atio
nal L
ogis
tics
E
quity
-met
hod
inve
stee
P
urch
ase
216,
368
0.16
2
mon
ths
- -
(23,
430)
(0
.87)
-
C
hina
Pac
ific
Lau
ndry
Ser
vice
s E
quity
-met
hod
inve
stee
P
urch
ase
120,
088
0.09
2
mon
ths
- -
(20,
118)
(0
.75)
-
C
hina
Pac
ific
Cat
erin
g S
ervi
ces
Equ
ity-m
etho
d in
vest
ee
Pur
chas
e
1,
791,
003
1.33
90
day
s
-
-
(4
64,5
82)
(17.
26)
-
Chi
na A
ircr
aft S
ervi
ces
E
quity
-met
hod
inve
stee
P
urch
ase
169,
400
0.13
30
day
s
-
-
(2
7,67
9)
(1.0
3)
-
M
anda
rin
Air
line
s T
aiw
an A
irpo
rt S
ervi
ces
Sam
e pa
rent
com
pany
P
urch
ase
189,
853
2.56
1
mon
ths
- -
(27,
760)
(3
.74)
-
Cal
Hot
el
CA
L P
ark
Sam
e pa
rent
com
pany
P
urch
ase
114,
281
26.0
7 1
mon
ths
- -
(382
) (0
.53)
-
Tig
erai
r T
aiw
an
Tao
yuan
Int
erna
tion
al A
irpo
rt S
ervi
ce
Sam
e pa
rent
com
pany
P
urch
ase
197,
179
2.53
1
mon
ths
- -
(24.
389)
(3
.66)
-
240
- 82
-
TA
BL
E 5
C
HIN
A A
IRL
INE
S, L
TD
. AN
D I
NV
ES
TE
ES
R
EC
EIV
AB
LE
S F
RO
M R
EL
AT
ED
PA
RT
IES
AM
OU
NT
ING
TO
AT
LE
AS
T N
T$1
00 M
ILL
ION
OR
20%
OF
TH
E P
AID
-IN
CA
PIT
AL
D
EC
EM
BE
R 3
1, 2
019
(In
Th
ousa
nd
s of
New
Tai
wan
Dol
lars
, Un
less
Sta
ted
Oth
erw
ise)
Ove
rdu
e C
omp
any
Nam
e R
elat
ed P
arty
N
atu
re o
f R
elat
ion
ship
E
nd
ing
Bal
ance
T
urn
over
Rat
e A
mou
nt
Act
ion
Tak
en
Am
oun
ts R
ecei
ved
in
Su
bse
qu
ent
Per
iod
All
owan
ce f
or
Bad
Deb
ts
C
hina
Air
line
s, L
td. (
“Chi
na A
irli
nes”
) M
anda
rin
Air
line
s S
ubsi
diar
y
$
158,
123
Not
e
$
- -
$
15
8,12
3
$
-
Man
dari
n A
irli
nes
Chi
na A
irli
nes
Par
ent c
ompa
ny
247,
997
Not
e
-
-
24
5,36
4
-
C
hina
Pac
ific
Cat
erin
g S
ervi
ces
Chi
na A
irli
nes
Par
ent c
ompa
ny
464,
582
3.90
-
-
31
1,35
6
-
T
aoyu
an I
nter
nati
onal
Air
port
Ser
vice
C
hina
Air
line
s P
aren
t com
pany
34
7,12
7 3.
43
- -
340,
924
-
Not
e:
Acc
ount
s re
ceiv
able
and
rev
enue
wer
e no
t dir
ectly
cor
rela
ted
beca
use
of th
e pa
rtic
ular
indu
stry
cha
ract
eris
tics
, and
ther
efor
e th
e tu
rnov
er r
ate
was
not
app
lica
ble.
241
- 83
-
TA
BL
E 6
C
HIN
A A
IRL
INE
S, L
TD
. AN
D I
NV
ES
TE
ES
N
AM
ES
, LO
CA
TIO
NS
, AN
D O
TH
ER
IN
FO
RM
AT
ION
OF
IN
VE
ST
EE
S O
VE
R W
HIC
H T
HE
CO
MP
AN
Y E
XE
RC
ISE
S S
IGN
IFIC
AN
T I
NF
LU
EN
CE
F
OR
TH
E Y
EA
R E
ND
ED
DE
CE
MB
ER
31,
201
9 (I
n T
hous
and
s of
New
Tai
wan
Dol
lars
and
For
eign
Cur
renc
ies
in T
hous
and
s, U
nles
s St
ated
Oth
erw
ise)
In
vest
men
t A
mou
nt
Bal
ance
as
of D
ecem
ber
31, 2
019
Inve
stor
Com
pan
y In
vest
ee C
omp
any
Loc
atio
n
Mai
n B
usi
nes
s an
d P
rod
uct
D
ecem
ber
31,
2019
D
ecem
ber
31,
2018
N
umbe
r of
S
har
es/U
nit
s
Per
cen
tage
of
O
wne
rshi
p (%
)
Car
ryin
g A
mou
nt
Net
In
com
e (L
oss)
of
the
Inve
stee
Inve
stm
ent
Inco
me
(Los
s)
Not
e
Chi
na A
irli
nes,
Ltd
. C
AL
Par
k
Tao
yuan
, 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,
552,
310
$
1,16
3 $
47
,694
N
ote
4
Man
dari
n A
irli
nes
Tai
pei,
Tai
wan
A
ir tr
ansp
orta
tion
and
mai
nten
ance
of
airc
raft
2,04
2,36
8
2,04
2,36
8
188,
154,
025
93.9
9
1,49
4,60
3
204,
018
19
1,32
2 N
otes
1 a
nd 4
Tai
wan
Air
Car
go T
erm
inal
T
aoyu
an, T
aiw
an
Air
car
go a
nd s
tora
ge
1,
350,
000
1,
350,
000
13
5,00
0,00
0 54
.00
1,
517,
946
27
1,55
2
146,
642
Not
e 4
C
al-D
ynas
ty I
nter
nati
onal
L
os A
ngel
es, U
SA
A
hol
ding
com
pany
, rea
l est
ate
and
hote
l ser
vice
s
US
$ 26
,145
U
S$
26,1
45
2,
614,
500
100.
00
1,
276,
546
41
,262
41,2
62
Not
e 2
Chi
na P
acif
ic C
ater
ing
Ser
vice
s T
aoyu
an, T
aiw
an
In-f
ligh
t cat
erin
g
439,
110
43
9,11
0
43,9
11,0
00
51.0
0
801,
071
51
1,12
1
256,
899
-
Tao
yuan
Int
erna
tion
al A
irpo
rt S
ervi
ces
Tao
yuan
, Tai
wan
A
irpo
rt s
ervi
ces
14
7,00
0
147,
000
34
,300
,000
49
.00
73
7,24
5
291,
522
14
2,84
6 -
C
AL
-Asi
a In
vest
men
t T
erri
tory
of
the
Bri
tish
Vir
gin
Isla
nds
Gen
eral
inve
stm
ent
US
$ 7,
172
US
$ 7,
172
7,
172,
346
100.
00
55
9,56
2
30,8
20
30
,819
-
S
abre
Tra
vel N
etw
ork
(Tai
wan
) T
aipe
i, T
aiw
an
Sal
e an
d m
aint
enan
ce o
f ha
rdw
are
and
soft
war
e
52,2
00
52
,200
13,0
21,0
42
93.9
3
460,
213
19
5,34
7
183,
490
-
Chi
na A
ircr
aft S
ervi
ce
Hon
g K
ong
Inte
rnat
iona
l Air
port
A
irpo
rt s
ervi
ces
HK
$ 58
,000
H
K$
58,0
00
28
,400
,000
20
.00
46
1,26
3
51,8
28
10
,365
-
T
aiw
an A
irpo
rt S
ervi
ces
Tai
pei,
Tai
wan
A
irpo
rt s
ervi
ces
12
,289
12,2
89
20
,626
,644
47
.35
27
6,13
4
156,
861
74
,274
-
K
aohs
iung
Cat
erin
g S
ervi
ces
Kao
hsiu
ng, T
aiw
an
In-f
ligh
t cat
erin
g
383,
846
38
3,84
6
21,4
94,6
37
53.6
7
661,
170
29
2,63
2
142,
886
Not
e 5
C
al H
otel
Co.
, Ltd
. T
aoyu
an, T
aiw
an
Hot
el b
usin
ess
46
5,00
0
465,
000
46
,500
,000
10
0.00
479,
259
16
,787
18,0
20
Not
e 4
C
hina
Pac
ific
Lau
ndry
Ser
vice
s T
aoyu
an, T
aiw
an
Cle
anin
g an
d le
asin
g of
the
tow
el o
f ai
rlin
es, h
otel
s,
rest
aura
nts
and
heal
th c
lubs
137,
500
13
7,50
0
13,7
50,0
00
55.0
0
168,
547
27
,327
15,0
30
-
H
wa
Hsi
a T
aoyu
an, T
aiw
an
Cle
anin
g of
air
craf
t and
mai
nten
ance
of
mac
hine
and
eq
uipm
ent
77,2
70
77
,270
77,2
70
100.
00
88
,313
17,0
08
16
,857
N
otes
1 a
nd 4
Y
estr
ip
Tai
pei,
Tai
wan
T
rave
l bus
ines
s
26,2
65
26
,265
1,60
0,00
0 10
0.00
25,2
68
(4
80)
(3
84)
Not
e 4
D
ynas
ty H
olid
ays
Tok
yo, J
apan
T
rave
l bus
ines
s J
PY
8,
000
JP
Y
20,4
00
16
0 20
.00
10
,004
(894
)
(480
) -
G
loba
l Sky
Exp
ress
T
aipe
i, T
aiw
an
For
war
ding
and
sto
rage
of
air
carg
o
2,
500
2,
500
25
0,00
0 25
.00
7,
294
6,
392
1,
598
-
Tig
erai
r T
aiw
an C
o., L
td.
Tai
pei,
Tai
wan
A
ir tr
ansp
orta
tion
and
mai
nten
ance
of
airc
raft
1,27
2,06
3
1,64
8,38
7
138,
906,
275
69.4
5
1,94
6,32
8
808,
718
69
9,03
9 N
ote
4
Tai
wan
Air
craf
t Mai
nten
ance
and
E
ngin
eeri
ng C
o., L
td.
Tao
yuan
, Tai
wan
A
ircr
aft m
aint
enan
ce
1,
350,
000
1,
350,
000
13
5,00
0,00
0 10
0.00
921,
989
(2
06,1
51)
(2
06,1
49)
Not
e 4
N
OR
DA
M A
sia
Ltd
. T
aoyu
an, T
aiw
an
Air
craf
t mai
nten
ance
37,9
75
2,
450
3,
797,
500
49.0
0
37,8
13
(1
44)
(7
0)
-
M
anda
rin
Air
line
s T
iger
air
Tai
wan
Co.
, Ltd
. T
aipe
i, T
aiw
an
Air
tran
spor
tati
on a
nd m
aint
enan
ce o
f ai
rcra
ft
15
4,33
0
200,
000
15
,433
,000
7.
72
21
6,24
3
808,
718
77
,587
-
T
aiw
an A
irpo
rt S
ervi
ces
Tai
pei,
Tai
wan
A
irpo
rt s
ervi
ces
11
,658
11,6
58
46
9,75
5 1.
08
6,
281
15
6,86
1
1,68
9 -
CA
L-A
sia
Inve
stm
ent
Eas
tern
Uni
ted
Inte
rnat
iona
l Log
isti
cs
Hon
g K
ong
F
orw
ardi
ng a
nd s
tora
ge o
f ai
r ca
rgo
HK
$ 3,
329
HK
$ 3,
329
1,
050,
000
35.0
0
42,7
17
9,
678
3,
387
-
T
aiw
an A
irpo
rt S
ervi
ces
Tai
wan
Air
port
Ser
vice
(S
amoa
)
Sam
oa
Air
port
ser
vice
s an
d in
vest
men
t
US
$ 5,
877
US
$ 5,
877
-
100.
00
34
7,55
1
23,1
07
23
,107
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,
867
(4
)
(2)
-
Not
e 1:
A
dopt
ed th
e tr
easu
ry s
hare
s m
etho
d in
rec
ogni
zing
inve
stm
ent i
ncom
e or
loss
. N
ote
2:
Rep
rese
nts
the
cons
olid
ated
fin
anci
al in
form
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 no
t iss
ue s
hare
s be
caus
e it
is a
lim
ited
com
pany
. N
ote
4:
Dif
fere
nce
caus
ed b
y le
ase
arra
ngem
ent b
etw
een
cons
olid
ated
ent
ities
. N
ote
5:
Dif
fere
nce
caus
e by
acq
uisi
tion
. 242
- 84
-
TA
BL
E 7
C
HIN
A A
IRL
INE
S, L
TD
. AN
D I
NV
ES
TE
ES
IN
VE
ST
ME
NT
S I
N M
AIN
LA
ND
CH
INA
F
OR
TH
E Y
EA
R E
ND
ED
DE
CE
MB
ER
31,
201
9 (I
n T
hou
san
ds
of N
ew T
aiw
an D
olla
rs/R
enm
inib
i/U
.S. D
olla
rs in
Th
ousa
nd
s, U
nle
ss S
tate
d O
ther
wis
e)
Chi
na A
irli
nes
In
vest
men
t F
low
Inve
stee
Com
pan
y N
ame
Mai
n B
usi
nes
s an
d
Pro
du
ct
Tot
al A
mou
nt
of P
aid
-in
C
apit
al
Inve
stm
ent
Typ
e
Acc
um
ula
ted
O
utf
low
of
Inve
stm
ent
from
Tai
wan
as
of J
anua
ry 1
, 20
19
Ou
tflo
w
Infl
ow
Acc
um
ula
ted
O
utf
low
of
Inve
stm
ent
from
Tai
wan
as
of D
ecem
ber
31,
20
19
Net
In
com
e (L
oss)
of
the
Inve
stee
% O
wn
ersh
ip
of D
irec
t or
In
dir
ect
Inve
stm
ent
Inve
stm
ent
Gai
n (
Los
s)
Car
ryin
g A
mou
nt
as
of
D
ecem
ber
31,
20
19
Acc
um
ula
ted
In
war
d
Rem
itta
nce
of
Ear
nin
gs a
s of
D
ecem
ber
31,
20
19
A
irpo
rt A
ir C
argo
Ter
min
al
(Xia
men
) C
o., L
td.
For
war
ding
and
sto
rage
of
air
car
go
$
10,9
5,48
0 (
RM
B 2
54,4
80)
Indi
rect
(N
ote
1)
$
125,
705
(U
S$
4,18
6) $
-
$
- $
12
5,70
5 (
US
$ 4,
186)
$
76,7
11
(R
MB
17
,107
) 14
.00
$
10,7
95
(R
MB
2,
395)
$
223,
683
(R
MB
51
,962
) $
84
,137
(
US
$ 2,
802)
(Not
e 2)
Air
port
Air
Car
go S
ervi
ce
(Xia
men
) C
o., L
td.
For
war
ding
and
sto
rage
of
air
car
go
60
,267
(
RM
B
14,0
00)
Indi
rect
(N
ote
1)
58
,482
(
US
$ 1,
947)
-
-
58
,482
(
US
$ 1,
947)
89
,573
(
RM
B
19,9
75)
14.0
0
12,6
06
(R
MB
2,
796)
12
4,07
1 (
RM
B
28,8
22)
26
,286
(
US
$ 87
5)
(N
ote
2)
T
aiko
o (X
iam
en)
Lan
ding
G
ear
Ser
vice
s
Lan
ding
gea
r m
aint
enan
ce s
ervi
ces
2,
495,
195
(U
S$
83,0
90)
Indi
rect
(N
ote
1)
64
,601
(
US
$ 2,
151)
-
-
64
,601
(
US
$ 2,
151)
-
2.58
9
-
-
-
H
AE
CO
Com
posi
te
Str
uctu
res
(Jin
jian
g)
Com
posi
te m
ater
ial
35
0,24
0 (
US
$ 11
,663
) In
dire
ct
(Not
e 1)
19,0
99
(U
S$
636)
-
-
19
,099
(
US
$ 63
6)
- 5.
45
-
42
,718
(
RM
B
9,92
3)
-
Acc
um
ula
ted
In
vest
men
t in
M
ain
lan
d C
hin
a as
of
Dec
emb
er 3
1, 2
019
Inve
stm
ent
Am
oun
t
Au
thor
ized
by
Inve
stm
ent
Com
mis
sion
, MO
EA
L
imit
on
In
vest
men
t
$2
67,8
86 (
US
$8,9
20)
$650
,192
(N
ote
3)
$36,
079,
270
(Not
e 4)
(Con
tinu
ed)
243
- 85
-
Tai
wan
Air
port
Ser
vice
s
Rem
itta
nce
of
Fu
nd
s
Inve
stee
Com
pan
y M
ain
Bu
sin
ess
and
P
rod
uct
P
aid
-in
Cap
ital
M
eth
od o
f In
vest
men
t
Acc
um
ula
ted
O
utw
ard
R
emit
tan
ce f
or
Inve
stm
ent
from
Tai
wan
as
of J
anua
ry 1
, 20
19
Ou
twar
d
Inw
ard
Acc
um
ula
ted
O
utw
ard
R
emit
tan
ce f
or
Inve
stm
ent
from
Tai
wan
as
of D
ecem
ber
31,
20
19
Net
In
com
e (L
oss)
of
the
Inve
stee
% O
wn
ersh
ip
of D
irec
t or
In
dir
ect
Inve
stm
ent
Inve
stm
ent
Inco
me
(Los
s)
Car
ryin
g A
mou
nt
as o
f D
ecem
ber
31,
20
19
Acc
um
ula
ted
R
epat
riat
ion
of
Inve
stm
ent
Inco
me
as o
f D
ecem
ber
31,
20
19
A
irpo
rt A
ir C
argo
Ter
min
al
(Xia
men
) C
o., L
td.
For
war
ding
and
sto
rage
of
air
car
go
$
1,09
5,48
0 (
RM
B 2
54,4
80)
Indi
rect
(N
ote
5)
$
120,
671
(U
S$
4,01
8) $
-
$
- $
12
0,67
1 (
US
$ 4,
018)
$
76,7
11
(R
MB
17
,107
) 14
.00
$
10,7
40
(R
MB
2,
395)
$
222,
478
(R
MB
51
,682
) $
11
4,30
4 (
US
$ 3,
806)
Air
port
Air
Car
go S
ervi
ce
(Xia
men
) C
o., L
td.
For
war
ding
and
sto
rage
of
air
car
go
60
,267
(
RM
B
14,0
00)
Indi
rect
(N
ote
5)
57
,860
(
US
$ 1,
927)
-
-
57
,860
(
US
$ 1,
927)
89
,573
(
RM
B
19,9
75)
14.0
0
12,5
40
(R
MB
2,
796)
12
4,27
9 (
RM
B
28,8
70)
42
,240
(
US
$ 1,
407)
A
ccu
mu
late
d O
utw
ard
R
emit
tan
ce f
or I
nve
stm
ent
in
Mai
nla
nd
Ch
ina
as o
f D
ecem
ber
31,
201
9
Inve
stm
ent
Am
oun
ts A
uth
oriz
ed b
y In
vest
men
t C
omm
issi
on, M
OE
A
Up
per
Lim
it o
n t
he
Am
oun
t of
In
vest
men
t S
tip
ula
ted
by
In
vest
men
t C
omm
issi
on, M
OE
A
$1
78,5
32 (
US
$5,9
45)
$178
,532
(U
S$5
,945
) $3
49,9
06 (
Not
e 4)
Not
e 1:
C
hina
Air
line
s, L
td. t
he “
Com
pany
” in
vest
ed in
CA
L-A
sia
Inve
stm
ent,
whi
ch, i
n tu
rn, i
nves
ted
in a
com
pany
loca
ted
in m
ainl
and
Chi
na.
Not
e 2:
T
he in
war
d re
mit
tanc
e of
ear
ning
s in
201
9 am
ount
ed to
US
$2,8
01,7
49 a
nd U
S$87
5,33
0.
Not
e 3:
T
he a
mou
nt c
ompr
ised
US
$19,
828,
324,
RM
B4,
200,
000
and
NT
$36,
666,
667.
N
ote
4:
The
lim
it s
tate
d in
the
Inve
stm
ent C
omm
issi
on’s
reg
ulat
ion,
“In
vest
men
t or
Tec
hnic
al C
oope
rati
on in
Mai
nlan
d C
hina
Adj
ustm
ent R
ule,
” is
the
larg
er o
f th
e C
ompa
ny’s
net
ass
et v
alue
or
60%
of
the
cons
olid
ated
net
ass
et v
alue
. N
ote
5:
Tai
wan
Air
port
Ser
vice
s in
vest
ed in
Tai
wan
Air
port
Ser
vice
s (S
amoa
), w
hich
in r
etur
n, in
vest
ed 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
ass
ets
are
tran
slat
ed a
t yea
r-en
d ra
tes
and
thos
e of
gai
ns (
loss
es),
at t
he a
vera
ge o
f th
e ye
ar-e
nd r
ates
of
refe
r fo
r th
e re
port
ing
peri
od.
(C
oncl
uded
) 244
China Airlines Co., Ltd.
Chairman Hsieh, Su-Chien
Spokesperson & Deputy Spokesman
Name Spokesman Deputy Spokesman Liu, Tsao-Yang Chen, I-Chieh
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] je [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 O ce 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, Tower 2, 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 86-29-895-81909 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 3404, Building 2, Block C, Kaifu Wanda Plaza, No.589 Of Zhongshan Road, Changsha , Hunan, China 86-731-8224-0871 Shenyang O ce Room 2009, 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 1702, China Ci c Building, No.36 Of Zhenming Road, Haishu District, Ningbo, Zhejiang, 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 on 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 701, Unit A, Building 16, No.205 Guangchang S. Rd., Nanchang, Jiangxi Province, China 86-0791-8378-0580 Sanya Sta on Room No.110, 5F, Block B, Sanya Avia on City, Sanya Phoenix Int'l Airport, Hainan 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 A207, No.18 Airport Second Road, New District, Wuxi City, Jiangsu Province, China 86-0510-8522-8710 Qingdao O ce Unit 2801, O ce Tower, Shangri-La Centre, No.9 Xiang Gang Zhong Lu, Qingdao, China 86-532-6887-7106 Weihai Sta on 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 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 Bldg. 3F, Kita 1, Jo Nishi 5, Chuo-ku, Sapporo-Shi, Hokkaido, 060-0001, Japan 81-11-218-6766 Shizuoka Sta on Shizuoka Airport 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 81-995-57-6151 Miyazaki Sta on Miyazaki Airport, Akae Miyazaki 880-0912, Japan 81-985-64-9288 Nagoya Branch NMF Nagoya-Fushimi Bldg. 3F, Nishiki 2-9-27, Naka-ku, Nagoya-Shi, 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 Bldg. 1312-7, Oka, Konan-cho, Takamatsu-shi, 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 12F, Donghwa Bldg. Seosomun-Ro 106, Jung-Gu, Seoul, Korea 04513 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 Chiang Mai 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 62-361-9357-298 Malaysia Branch Unit 15.01-15.02, Level 15, AMODA Building, 22, Jalan Imbi, 55100 Kuala Lumpur, Malaysia 60-3-2148-9417 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 855-23-222-058 Myanmar Branch No.353/355, Bo Aung Kyaw Street, Kyauktada Township, Yangon, Myanmar 95-1-8392-663 Philippines Branch G/F Unit-1 Golden Empire Tower 1322 Roxas Boulevard Cor. Padre Faura St., Ermita Manila, Philippines 63-2-354-6700 to 09 Cebu Branch G/F Unit-1 Golden Empire Tower 1322 Roxas Boulevard Cor. Padre Faura St., Ermita Manila, Philippines 63-2-354-6700 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 1G 35, Brisbane Interna onal 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 Unit 023/025, 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 300 Rodgers Blvd., #14, Honolulu, HI 96819, U.S.A. 1-808-955-0088 Anchorage Branch 4600 Postmark Drive, Ste. NA 142, Anchorage, AK99502, U.S.A. 1-907-249-2300 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 Gutleutstrasse 80, 60329 Frankfurt, Germany 49-69-297-0580 Italy Branch Viale Marco Polo, 71, 3F, 00154 Roma, Italy 39-06-474-5045 Cargo Sales & Services, Europe Room G2045-G2050, 2nd Floor, Cargo Center Luxair, L-1360 Luxembourg, 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: CTBC Bank Co., Ltd. Address: 5F., No.83, Sec. 1, Chongqing S. Rd., Zhongzheng Dist., Taipei City 100, Taiwan Website: h p://www.ctbcbank.com Tel: 886-2-6636-5566
Auditors: Name: Deloi e & Touche Auditors: Huang, Jui-Chan ; Cheng, Shiuh-Ran Address: 20F., No. 100, Songren Rd., Xinyi Dist., Taipei City 110, Taiwan Website: h p://www.deloi e.com.tw Tel: 886-2-2725-9988
Overseas Securities Exchange: N/A Corporate Website: http://www.china-airlines.com