China Airlines, Ltd. and Subsidiaries

Transcription

1 nd Susidiries Consolidted Finncil Sttements for the Yers Ended, 2014 nd 2013 nd Independent Auditors Report 1

2 DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES The compnies required to e included in the consolidted finncil sttements of ffilites in ccordnce with the Criteri Governing Preprtion of Affilition Reports, Consolidted Business Reports nd Consolidted Finncil Sttements of Affilited Enterprises for the yer ended, 2014 re ll the sme s the compnies required to e included in the consolidted finncil sttements of prent nd susidiry compnies s provided in Interntionl Accounting Stndrd 27 Consolidted nd Seprte Finncil Sttements. Relevnt informtion tht should e disclosed in the consolidted finncil sttements of ffilites hs ll een disclosed in the consolidted finncil sttements of prent nd susidiry compnies. Hence, we hve not prepred seprte set of consolidted finncil sttements of ffilites. Very truly yours, CHINA AIRLINES, LTD. 2

3 INDEPENDENT AUDITORS REPORT The Bord of Directors nd the Stockholders We hve udited the ccompnying lnce sheets of nd susidiries s of, 2014 nd 2013, nd the relted consolidted sttements of comprehensive income, chnges in equity nd csh flows for the yers ended. These consolidted finncil sttements re the responsiility of the Compny s mngement. Our responsiility is to express n opinion on these consolidted finncil sttements sed on our udits. We conducted our udits in ccordnce with the Rules Governing the Audit of Finncil Sttements y Certified Pulic Accountnts nd uditing stndrds generlly ccepted in the Repulic of Chin. Those rules nd stndrds require tht we pln nd perform the udit to otin resonle ssurnce out whether the consolidted finncil sttements re free of mteril missttement. An udit includes exmining, on test sis, evidence supporting the mounts nd disclosures in the consolidted finncil sttements. An udit lso includes ssessing the ccounting principles used nd significnt estimtes mde y mngement, s well s evluting the overll finncil sttement presenttion. We elieve tht our udits provide resonle sis for our opinion. In our opinion, sed on our udits, the consolidted finncil sttements referred to ove present firly, in ll mteril respects, the finncil position of nd susidiries s of, 2014 nd 2013 the results of its opertions nd its csh flows for the yers then ended, in conformity with the Guidelines Governing the Preprtion of Finncil Reports y Securities Issuers, the Interntionl Finncil Reporting Stndrds, Interntionl Accounting Stndrds, Interprettion s well s relted guidnce trnslted y Accounting Reserch nd Development Foundtion endorsed y the Finncil Supervisory Commission of the Repulic of Chin with effective dte. We hve lso udited finncil sttements of the prent compny,, s of nd for the yers ended, 2014 nd 2013 on which we hve issued n unqulified report. Mrch 27, 2015 Notice to Reders The ccompnying consolidted finncil sttements re intended only to present the consolidted finncil position, finncil performnce nd csh flows in ccordnce with ccounting principles nd prctices generlly ccepted in the Repulic of Chin nd not those of ny other jurisdictions. The stndrds, procedures nd prctices to udit such consolidted finncil sttements re those generlly pplied in the Repulic of Chin. For the convenience of reders, the independent uditors report nd the ccompnying consolidted finncil sttements hve een trnslted into English from the originl Chinese version prepred nd used in the Repulic of Chin. If there is ny conflict etween the English version nd the originl Chinese version or ny difference in the interprettion of the two versions, the Chineselnguge independent uditors report nd consolidted finncil sttements shll previl. 3

4 CHINA AIRLINES, LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2014 AND 2013 (In Thousnds of New Tiwn Dollrs) ASSETS Amount % Amount % CURRENT ASSETS Csh nd csh equivlents (Notes 4, 6 nd 17) $ 20,468,151 9 $ 19,007,649 9 Finncil ssets t fir vlue through profit or loss current (Notes 4, 5, 7 nd 31) 235, ,673 Avilleforsle finncil ssets current (Notes 4, 8 nd 31) 75,504 Derivtive finncil ssets for hedging current (Notes 4, 5, 9 nd 31) 42, ,003 Receivles: Notes nd ccounts, net (Notes 4, 5 nd 11) 9,460, ,774,730 4 Notes nd ccounts relted prties (Note 32) 6,615 14,517 Other receivles 817, ,665 Current tx ssets (Notes 4 nd 27) 8,714 16,959 Inventories, net (Notes 4 nd 12) 7,226, ,791,453 3 Other ssets current (Notes 6 nd 17) 2,643, ,465,919 1 Totl current ssets 40,910, ,085, NONCURRENT ASSETS Avilleforsle finncil ssets noncurrent, net of current portion (Notes 4, 8 nd 31) 28,881 28,768 Derivtive finncil ssets for hedging noncurrent (Notes 4, 5, 9 nd 31) 727 5,617 Finncil ssets crried t cost noncurrent, net of current portion (Notes 10 nd 31) 469, ,476 Investments ccounted for y the equity method (Notes 4 nd 13) 2,806, ,687,755 1 Property, plnt nd equipment (Notes 4, 5, 14 nd 33) 142,655, ,662, Investment properties (Notes 4 nd 15) 2,076, ,076,740 1 Other intngile ssets (Notes 4 nd 16) 670, ,412 Deferred income tx sset (Notes 4, 5 nd 27) 8,521, ,127,014 4 Other ssets noncurrent (Notes 17, 33 nd 34) 30,931, ,344,977 9 Totl noncurrent ssets 188,161, ,890, TOTAL $ 229,071, $ 220,975, LIABILITIES AND EQUITY CURRENT LIABILITIES Shortterm lons (Note 18) $ 4,361,628 2 $ 204,036 Shortterm ills pyle (Note 18) 2,088,113 1 Finncil liilities t fir vlue through profit or loss current (Notes 4, 5, 7 nd 31) 2,799 Derivtive finncil liilities for hedging current (Notes 4, 5, 9 nd 31) 2,460, ,853 Notes nd ccounts pyle 411, ,176 Notes nd ccounts pyle relted prties (Note 32) 435, ,535 Other pyle (Notes 21 nd 26) 11,096, ,339,082 7 Current tx liilities (Notes 4 nd 27) 75,940 88,927 Provisions current (Notes 4, 5 nd 23) 6,744 Deferred revenue current (Notes 4, 5 nd 22) 11,163, ,850,384 4 Bonds pyle current portion (Notes 19, 31 nd 32) 8,585, ,780,000 2 Lons nd dets current portion (Notes 18, 31 nd 33) 14,218, ,265, Cpitl lese oligtions current portion (Note 4, 20, 31 nd 33) 2,758, ,399,039 2 Other current liilities (Note 26) 3,696, ,741,236 1 Totl current liilities 61,357, ,906, NONCURRENT LIABILITIES Derivtive finncil liilities for hedging noncurrent (Notes 4, 5, 9 nd 31) 5,150 2,026 Bonds pyle noncurrent (Notes 19, 31 nd 32) 18,323, ,368, Lons nd dets noncurrent (Notes 18, 31 nd 33) 73,192, ,239, Provisions noncurrent (Notes 4, 5 nd 23) 4,297, ,302,484 2 Deferred tx liilities (Notes 4 nd 27) 423, ,820 Cpitl lese oligtions noncurrent (Notes 4, 20, 31 nd 33) 7,100, ,641,834 4 Deferred revenue noncurrent (Notes 4, 5 nd 22) 1,805, ,909,749 1 Accrued pension costs (Notes 4, 5 nd 24) 10,179, ,410,907 5 Other noncurrent liilities (Note 26) 1,388, ,086 Totl noncurrent liilities 116,716, ,179, Totl liilities 178,074, ,085, EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Notes 19 nd 25) Cpitl stock 52,491, ,000, Cpitl surplus 1,992, ,924,015 1 Retined ernings Legl reserve 321,891 Specil reserve 3,926,293 2 Accumulted deficit (3,864,876) (2) (7,409,299) (3) Totl retined ernings (3,864,876) (2) (3,161,115) (1) Other equity (1,905,698) (1) 86,936 Tresury shres (43,372) (43,372) Totl equity ttriutle to owners of the Compny 48,670, ,806, NONCONTROLLING INTERESTS (Note 25) 2,326, ,083,896 1 Totl equity 50,997, ,890, TOTAL $ 229,071, $ 220,975, The ccompnying notes re n integrl prt of the consolidted finncil sttements. 4

5 CHINA AIRLINES, LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (In Thousnds of New Tiwn Dollrs, Except Loss Per Shre) Amount % Amount % REVENUES (Notes 4, 26 nd 32) $ 150,581, $ 141,702, COSTS (Notes 9, 12, 24, 26 nd 32) 136,954, ,675, GROSS PROFIT 13,627, ,027,385 8 OPERATING EXPENSES (Notes 24 nd 26) 11,113, ,301,117 7 OPERATING PROFIT 2,514, ,268 1 NONOPERATING INCOME Other income (Notes 15 nd 26) 1,094, ,603,573 1 Other gins nd losses (Notes 9 nd 26) (1,740,965) (1) (1,019,056) (1) Finnce cost (Notes 9, 26 nd 32) (2,019,124) (2) (2,122,326) (1) Shre of the profit of ssocites nd joint ventures (Note 13) 509, ,361 Totl nonoperting income (2,156,321) (2) (1,087,448) (1) PRETAX PROFIT (LOSS) 357,709 (361,180) INCOME TAX EXPENSE (Notes 4, 5 nd 27) 959, ,700 1 NET LOSS (601,404) (1) (948,880) (1) OTHER COMPREHENSIVE INCOME (LOSS) Exchnge differences on trnslting foreign opertions (Notes 4 nd 25) 119,945 81,030 Unrelized gin (loss) on villeforsle finncil ssets (Notes 4 nd 25) 17,467 4,108 Csh flow hedges (Notes 4 nd 25) (2,537,524) (1) 96,500 Shre of other comprehensive loss of ssocites nd joint ventures (Notes 4 nd 25) (15,590) (6,082) Acturil gins (losses) on defined enefit plns (Note 24) 74,083 (23,940) Income tx relting to components of other comprehensive income (Note 27) 393,641 (29,893) Other comprehensive income (loss) for the yer, net of income tx (1,947,978) (1) 121,723 TOTAL COMPREHENSIVE LOSS FOR THE YEAR $ (2,549,382) (2) $ (827,157) (1) (Continued) 5

6 CHINA AIRLINES, LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (In Thousnds of New Tiwn Dollrs, Except Loss Per Shre) 2014 Amount % 2013 Amount % NET INCOME (LOSS) ATTRIBUTABLE TO: Owner of the Compny Noncontrolling interests $ (751,232) 149,828 $ (1,274,046) 325,166 (1) $ (601,404) $ (948,880) (1) TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO: Owner of the Compny Noncontrolling interests $ (2,696,395) 147,013 (2) $ (1,171,929) 344,772 (1) $ (2,549,382) (2) $ (827,157) (1) LOSS PER SHARE (NEW TAIWAN DOLLARS; Note 28) Bsic nd diluted $ (0.14) $ (0.25) The ccompnying notes re n integrl prt of the consolidted finncil sttements. (Concluded) 6

7 CHINA AIRLINES, LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (In Thousnds of New Tiwn Dollrs) Shre Cpitl Cpitl Surplus Legl Reserve Equity Attriutle to Owners of the Compny Other Equity Exchnge Differences on Unrelized Gin Retined Ernings Trnslting (Loss) on Unpproprited Foreign Avilleforsle Specil Reserve Ernings Opertions Finncil Assets Csh Flow Hedges Tresury Shres Held y Susidiries Totl Noncontrolling Interests Totl Equity BALANCE AT JANUARY 1, 2013 $ 52,000,000 $ 1,405,394 $ 316,010 $ 3,873,369 $ (6,031,067) $ (60,381) $ (16,666) $ 16,485 $ (43,372) $ 51,459,772 $ 1,831,137 $ 53,290,909 Approprition of 2012 the ernings Legl reserve Specil reserve 5,881 52,924 (5,881) (52,924) Other chnges in cpitl surplus Issue of convertile onds rising on equity component 518, , ,621 Net income (loss) for the yer ended, 2013 (1,274,046) (1,274,046) 325,166 (948,880) Other comprehensive income (loss) for the yer ended, 2013, net of income tx (45,381) 62,224 5,180 80, ,117 19, ,723 Totl comprehensive income (loss) for the yer ended, 2013 (1,319,427) 62,224 5,180 80,094 (1,171,929) 344,772 (827,157) Csh dividend from susidiries pid to noncontrolling interest (92,013) (92,013) BALANCE AT DECEMBER 31, ,000,000 1,924, ,891 3,926,293 (7,409,299) 1,843 (11,486) 96,579 (43,372) 50,806,464 2,083,896 52,890,360 Compenstion of 2013 deficit Legl reserve Specil reserve (321,891) (3,926,293) 321,891 3,926,293 Convertile onds converted to ordinry shres 491,666 68, , ,066 Net income (loss) for the yer ended, 2014 (751,232) (751,232) 149,828 (601,404) Other comprehensive income (loss) for the yer ended, 2014, net of income tx 47,471 98,009 15,501 (2,106,144) (1,945,163) (2,815) (1,947,978) Totl comprehensive income (loss) for the yer ended, 2014 (703,761) 98,009 15,501 (2,106,144) (2,696,395) 147,013 (2,549,382) Issue of common shres for csh 200, ,000 Csh dividend from susidiries pid to noncontrolling interest (103,936) (103,936) BALANCE AT DECEMBER 31, 2014 $ 52,491,666 $ 1,992,415 $ $ $ (3,864,876) $ 99,852 $ 4,015 $ (2,009,565) $ (43,372) $ 48,670,135 $ 2,326,973 $ 50,997,108 The ccompnying notes re n integrl prt of the consolidted finncil sttements. 7

8 CHINA AIRLINES, LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (In Thousnds of New Tiwn Dollrs) CASH FLOWS FROM OPERATING ACTIVITIES Pretx profit (loss) Adjustments to reconcile pretx profit (loss) to net csh generted from (used in) operting ctivities: Deprecition expenses Amortiztion expenses Bddet expense Net gin on fir vlue chnge of finncil ssets nd liilities held for trding Interest income Dividend income Shre of profit of ssocites nd joint ventures Gin on disposl of property, plnt nd equipment Net gin on disposl of villeforsle finncil ssets Gin on disposl of ssocite Loss on inventories nd property, plnt nd equipment Net loss on foreign currency exchnge Finnce costs Recognition of provisions Amortiztion of unrelized gin on sleleseck Amortiztion of deferred credits Reversl of impirment on investment properties Chnges in operting ssets nd liilities Decrese in finncil ssets held for trding Increse in notes nd ccounts receivle Increse in ccounts receivle relted prties Increse in other receivles Decrese (increse) in inventories Decrese (increse) in other current ssets Increse (decrese) in notes nd ccounts pyle Increse in ccounts pyle relted prties Increse (decrese) in other pyles Increse in deferred revenue Decrese in provisions Increse in other current liilities Decrese in ccrued pension liilities Increse in other liilities Csh generted from opertions Interest received Dividend received Interest pid Income tx pid $ 357,709 17,460,725 55,422 30,021 (78,742) (441,968) (29,522) (509,352) (52,340) (6,557) 521, ,912 2,019,124 1,530,536 (14,512) (2,862) 55,802 (1,513,216) (114,621) (200,822) (412,261) (342,329) (443,447) 119,499 (1,755,706) 2,208,926 (579,081) 9,333 (157,437) 59,112 18,209, , ,683 (2,061,008) (106,302) $ (361,180) 17,244,851 50, (132,701) (361,433) (65,631) (450,361) (6,008) (742,286) 318, ,433 2,122, ,008 (14,512) (48,986) (579,015) 1,411,176 (214,653) (171,326) (133,314) 4,080 1,262, , ,602 2,592, ,208 (426,740) 20,784 (164,684) 85,907 22,865, , ,805 (1,976,580) (145,454) Net csh generted from operting ctivities 16,908,595 21,485,902 8 (Continued)

9 CHINA AIRLINES, LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (In Thousnds of New Tiwn Dollrs) CASH FLOWS FROM INVESTING ACTIVITIES Proceeds on sle of villeforsle finncil ssets 96,862 Proceeds on shre redemption of finncil ssets mesured t cost 4,616 Disposl of ffilites 742,286 Pyment for property, plnt nd equipment (9,920,198) (5,966,226) Proceeds from disposl of property, plnt nd equipment 82,451 37,458 Increse in refundle deposits (498,599) (134,518) Decrese in refundle deposits 330, ,101 Increse in prepyment for equipment (12,337,340) (7,396,503) Increse in computer softwre cost (230,392) (115,135) Decrese in restricted ssets 129,169 56,306 Net csh used in investing ctivities (22,342,913) (12,382,231) CASH FLOWS FROM FINANCING ACTIVITIES Increse (decrese) in shortterm lons 4,213,633 (1,466,964) Increse in shortterm ills pyle 2,088,138 Issue of onds pyle 16,900,000 Repyments of onds pyle (4,780,000) (5,460,000) Proceeds of longterm dets 39,440,000 15,211,898 Repyments of longterm dets nd cpitl lese oligtions (34,284,523) (26,182,916) Proceeds of gurntee deposits received 146, ,648 Refund of gurntee deposits received (183,913) (179,459) Proceeds of issue of ordinry shres from noncontrolling interest 200,000 Csh dividend pid to noncontrolling interest (103,936) (92,013) Net csh generted from (used in) finncing ctivities 6,735,734 (1,064,806) EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES 159, ,653 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,460,502 8,176,518 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 19,007,649 10,831,131 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR $ 20,468,151 $ 19,007,649 The ccompnying notes re n integrl prt of the consolidted finncil sttements. (Concluded) 9

10 CHINA AIRLINES, LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013 (In Thousnds of New Tiwn Dollrs, Unless Stted Otherwise) 1. GENERAL INFORMATION (the Compny ) ws founded in 1959 nd its stocks hve een listed on the Tiwn Stock Exchnge since Ferury 26, The Compny primrily provides ir trnsport services for pssengers nd crgo. Its other opertions include () mil services; () ground services nd routine ircrft mintennce; (c) mjor mintennce of flight equipment; (d) communictions nd dt processing services to other irlines; (e) sle of ircrft prts, equipment nd entire ircrft; nd (f) lese of ircrft. The mjor stockholders of the Compny re the Chin Avition Development Foundtion (CADF) nd the Ntionl Development Fund (NDF), Executive Yun. As of, 2014 nd 2013, CADF nd NDF held 45.5% nd 45.9% of the Compny s shres. 2. APPROVAL OF FINANCIAL STATEMENTS The consolidted finncil sttement were pproved y the ord of directors nd uthorized for issue on Mrch 27, APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS. The mendments to the Regultions Governing the Preprtion of Finncil Reports y Securities Issuers nd the 2013 version of the Interntionl Finncil Reporting Stndrds (IFRS), Interntionl Accounting Stndrds (IAS), Interprettions of IFRS (IFRIC), nd Interprettions of IAS (SIC) endorsed y the FSC not yet effective Rule No nd Rule No issued y the FSC on April 3, 2014, stipulted tht the Group should pply the 2013 version of IFRS, IAS, IFRIC nd SIC (collectively, the IFRSs ) endorsed y the FSC nd the relted mendments to the Regultions Governing the Preprtion of Finncil Reports y Securities Issuers strting Jnury 1, The New IFRSs Included in the 2013 IFRSs Version Not Yet Endorsed y the FSC Improvements to IFRSs (2009) mendment to IAS 39 Amendment to IAS 39 Emedded Derivtives Improvements to IFRSs (2010) Annul Improvements to IFRSs Cycle Amendment to IFRS 1 Limited Exemption from Comprtive IFRS 7 Disclosures for Firsttime Adopters Amendment to IFRS 1 Severe Hyperinfltion nd Removl of Fixed Dtes for Firsttime Adopters Amendment to IFRS 1 Government Lons Effective Dte Announced y IASB (Note) Jnury 1, 2009 nd Jnury 1, 2010, s pproprite Effective for nnul periods ended on or fter June 30, 2009 July 1, 2010 nd Jnury 1, 2011, s pproprite Jnury 1, 2013 July 1, 2010 July 1, 2011 Jnury 1, 2013 (Continued) 10

11 The New IFRSs Included in the Effective Dte 2013 IFRSs Version Not Yet Endorsed y the FSC Announced y IASB (Note) Amendment to IFRS 7 Disclosure Offsetting Finncil Assets nd Jnury 1, 2013 Finncil Liilities Amendment to IFRS 7 Disclosure Trnsfer of Finncil Assets July 1, 2011 IFRS 10 Consolidted Finncil Sttements Jnury 1, 2013 IFRS 11 Joint Arrngements Jnury 1, 2013 IFRS 12 Disclosure of Interests in Other Entities Jnury 1, 2013 Amendments to IFRS 10, IFRS 11 nd IFRS 12 Consolidted Jnury 1, 2013 Finncil Sttements, Joint Arrngements nd Disclosure of Interests in Other Entities: Trnsition Guidnce Amendments to IFRS 10 nd IFRS 12 nd IAS 27 Investment Jnury 1, 2014 Entities IFRS 13 Fir Vlue Mesurement Jnury 1, 2013 Amendment to IAS 1 Presenttion of Other Comprehensive Income July 1, 2012 Amendment to IAS 12 Deferred Tx: Recovery of Underlying Jnury 1, 2012 Assets IAS 19 (Revised 2011) Employee Benefits Jnury 1, 2013 IAS 27 (Revised 2011) Seprte Finncil Sttements Jnury 1, 2013 IAS 28 (Revised 2011) Investments in Assocites nd Joint Ventures Jnury 1, 2013 Amendment to IAS 32 Offsetting Finncil Assets nd Finncil Jnury 1, 2014 Liilities IFRIC 20 Stripping Costs in Production Phse of Surfce Mine Jnury 1, 2013 (Concluded) Note: Unless stted otherwise, the ove New IFRSs re effective for nnul periods eginning on or fter the respective effective dtes. Except for the following, the initil ppliction of the ove 2013 version of IFRSs is not expected to hve ny mteril impct on the Group s ccounting policies: 1) IFRS 12 Disclosure of Interests in Other Entities IFRS 12 is new disclosure stndrd tht pplies to entities with interests in susidiries, joint rrngements, ssocites nd/or unconsolidted structured entities. The disclosure requirements in IFRS 12 re more extensive thn those required in the current stndrds. 2) IFRS 13 Fir Vlue Mesurement IFRS 13 estlishes single source of guidnce for fir vlue mesurements. It defines fir vlue, estlishes frmework for mesuring fir vlue, nd requires disclosures out fir vlue mesurements. The disclosure requirements in IFRS 13 re more extensive thn those required in the current stndrds. For exmple, quntittive nd qulittive disclosures sed on the threelevel fir vlue hierrchy currently required for finncil instruments only will e extended y IFRS 13 to cover ll ssets nd liilities within its scope. The fir vlue mesurements under IFRS 13 will e pplied prospectively from Jnury 1, ) Amendments to IAS 1 Presenttion of Items of Other Comprehensive Income The mendments to IAS 1 requires the grouping of items of other comprehensive income (OCI) into those tht (1) will not e reclssified susequently to profit or loss; nd (2) my e reclssified susequently to profit or loss. Income txes on OCI items re grouped on the sme sis. Under 11

12 the current IAS 1, there re no such requirements. The Compny will pply the ove mendments strting in Items not expected to e reclssified to profit or loss re remesurements of the defined enefit plns nd shre of the defined enefit plns of ssocites nd joint ventures ccounted for using the equity method. Items expected to e reclssified to profit or loss re the exchnge differences on trnslting foreign opertions, unrelized gins (losses) on villeforsle finncil ssets, csh flow hedges, nd shre of the other comprehensive income (except the shre of the remesurements of the defined enefit plns) of ssocites nd joint ventures ccounted for using the equity method. 4) Revision to IAS 19 Employee Benefits Revised IAS 19 requires the immedite recognition of ll chnges in defined enefit oligtions nd in the fir vlue of pln ssets in the period these chnges occur, thus eliminting the corridor pproch permitted under the current IAS 19. In ddition, ll pst service costs re recognized immeditely in the period of pln mendment. The revision requires ll remesurements of the defined enefit plns to e recognized immeditely in other comprehensive income so tht the net pension sset or liility will reflect the full vlue of the pln deficit or surplus. Furthermore, the interest cost nd expected return on pln ssets used in the current IAS 19 re replced with net interest on the net defined liility or sset, which is clculted y pplying the discount rte to the net defined enefit liility or sset. The nticipted impct of the initil ppliction of the revised IAS 19 is detiled s follows: Adjustments Arising from Adjusted Impct on Crrying Initil Crrying Assets, Liilities nd Equity Amount Appliction Amount Jnury 1, 2014 Deferred tx ssets Accrued pension liilities $ 9,127,104 $ 10,410,907 $ $ 3,259 19,172 $ 9,130,363 $ 10,430,079 Retined ernings Noncontrolling interests $ (3,161,115) 2,083,896 $ (8,444) (7,468) $ (3,169,559) 2,076,428 Totl effect on equity $ (1,077,219) $ (15,912) $ (1,093,131), 2014 Deferred tx ssets Accrued pension liilities $ 8,521,770 $ 10,179,539 $ $ 2,273 13,369 $ 8,524,043 $ 10,192,908 Retined ernings Noncontrolling interests $ (3,864,876) 2,326,973 $ (5,860) (5,236) $ (3,870,736) 2,321,737 Totl effect on equity $ (1,537,903) $ (11,096) $ (1,548,999) 12

13 Adjustments Arising from Adjusted Impct on Crrying Initil Crrying Totl Comprehensive Income Amount Appliction Amount Operting cost $136,954,265 $ (3,893) $ 136,950,372 Operting expense 11,113,447 (824) 11,112,623 Income tx expense 959, ,914 Totl effect on net profit for the yer $ (3,916) Items not eing reclssified to profit or loss: Remesurements of the defined enefit plns $ 74,083 $ 1,085 $ 75,168 Income txes relting to items tht will not e reclssified 393,641 (185) 393,456 Impct on other comprehensive income for the yer (net of income tx) $ 900. New IFRSs in issue ut not yet endorsed y the FSC The Group hs not pplied the following New IFRSs issued y the IASB ut not yet endorsed y the FSC. As of the dte the consolidted finncil sttements were uthorized for issue, the FSC hs not nnounced their effective dtes. Effective Dte The New IFRSs Not Included in the 2013 IFRSs Version Announced y IASB (Note 1) Annul Improvements to IFRSs Cycle July 1, 2014 (Note 2) Annul Improvements to IFRSs Cycle July 1, 2014 Annul Improvements to IFRSs Cycle Jnury 1, 2016 (Note 4) IFRS 9 Finncil Instruments Jnury 1, 2018 Amendments to IFRS 9 nd IFRS 7 Mndtory Effective Dte of Jnury 1, 2018 IFRS 9 nd Trnsition Disclosures Amendments to IFRS 10 nd IAS 28 Sle or Contriution of Assets Jnury 1, 2016 (Note 3) etween n Investor nd its Associte or Joint Venture Amendments to IFRS 10, IFRS 12 nd IAS 28 'Investment Entities: Applying the Consolidtion Exception Amendment to IFRS 11 Accounting for Acquisitions of Interests in Joint Opertions IFRS 14 Regultory Deferrl Accounts IFRS 15 Revenue from Contrcts with Customers Jnury 1, 2016 Jnury 1, 2016 Jnury 1, 2016 Jnury 1, 2017 Amendments to IAS 16 nd IAS 38 Clrifiction of Acceptle Jnury 1, 2016 Methods of Deprecition nd Amortiztion Amendments to IAS 16 nd IAS 41 Agriculture: Berer Plnts Jnury 1, 2016 Amendment to IAS 19 Defined Benefit Plns: Employee July 1, 2014 Contriutions Amendment to IAS 27 Equity Method in Seprte Finncil Jnury 1, 2016 Sttements Amendment to IAS 36 Impirment of Assets: Recoverle Amount Jnury 1,

14 Disclosures for Nonfinncil Assets Amendment to IAS 39 Novtion of Derivtives nd Continution of Jnury 1, 2014 Hedge Accounting IFRIC 21 Levies Jnury 1, 2014 Note 1: Unless stted otherwise, the ove New IFRSs re effective for nnul periods eginning on or fter the respective effective dtes. Note 2: The mendment to IFRS 2 pplies to shresed pyment trnsctions for which the grnt dte is on or fter July 1, 2014; the mendment to IFRS 3 pplies to usiness comintions for which the cquisition dte is on or fter July 1, 2014; the mendment to IFRS 13 is effective immeditely; the remining mendments re effective for nnul periods eginning on or fter July 1, Note 3: Prospectively pplicle to trnsctions occurring in nnul periods eginning on or fter Jnury 1, Note 4: The mendment to IFRS 5 is pplied prospectively to chnges in method of disposl the remining mendments re effective for nnul periods eginning on or fter Jnury 1, The initil ppliction of the ove New IFRSs, whenever pplied, would not hve ny mteril impct on the Group s ccounting policies, except for the following: 1) IFRS 9 Finncil Instruments Recognition nd mesurement of finncil ssets With regrds to finncil ssets, ll recognized finncil ssets tht re within the scope of IAS 39 Finncil Instruments: Recognition nd Mesurement re susequently mesured t mortized cost or fir vlue. Under IFRS 9, the requirement for the clssifiction of finncil ssets is stted elow. For the Group s det instruments tht hve contrctul csh flows tht re solely pyments of principl nd interest on the principl mount outstnding, their clssifiction nd mesurement re s follows: ) For det instruments, if they re held within usiness model whose ojective is to collect the contrctul csh flows, the finncil ssets re mesured t mortized cost nd re ssessed for impirment continuously with impirment loss recognized in profit or loss, if ny. Interest revenue is recognized in profit or loss y using the effective interest method; ) For det instruments, if they re held within usiness model whose ojective is chieved y oth the collecting of contrctul csh flows nd the selling of finncil ssets, the finncil ssets re mesured t fir vlue through other comprehensive income (FVTOCI) nd re ssessed for impirment. Interest revenue is recognized in profit or loss y using the effective interest method, nd other gin or loss shll e recognized in other comprehensive income, except for impirment gins or losses nd foreign exchnge gins nd losses. When the det instruments re derecognized or reclssified, the cumultive gin or loss previously recognized in other comprehensive income is reclssified from equity to profit or loss. Except for ove, ll other finncil ssets re mesured t fir vlue through profit or loss. However, the Group my mke n irrevocle election to present susequent chnges in the fir vlue of n equity investment (tht is not held for trding) in other comprehensive income, with only dividend income generlly recognized in profit or loss. No susequent impirment ssessment is required, nd the cumultive gin or loss previously recognized in other comprehensive income cnnot e reclssified from equity to profit or loss. 14

15 The impirment of finncil ssets IFRS 9 requires tht impirment loss on finncil ssets is recognized y using the Expected Credit Losses Model. The credit loss llownce is required for finncil ssets mesured t mortized cost, finncil ssets mndtorily mesured t FVTOCI, lese receivles, contrct ssets rising from IFRS 15 Revenue from Contrcts with Customers, certin written lon commitments nd finncil gurntee contrcts. A loss llownce for the 12month expected credit losses is required for finncil sset if its credit risk hs not incresed significntly since initil recognition. A loss llownce for full lifetime expected credit losses is required for finncil sset if its credit risk hs incresed significntly since initil recognition nd is not low. However, loss llownce for full lifetime expected credit losses is required for trde receivles tht do not constitute finncing trnsction. For purchsed or originted creditimpired finncil ssets, the Group tkes into ccount the expected credit losses on initil recognition in clculting the creditdjusted effective interest rte. Susequently, ny chnges in expected losses re recognized s loss llownce with corresponding gin or loss recognized in profit or loss. Hedge ccounting The min chnges in hedge ccounting mended the ppliction requirements for hedge ccounting to etter reflect the entity s risk mngement ctivities. Compred with IAS 39, the min chnges include: (1) enhncing types of trnsctions eligile for hedge ccounting, specificlly rodening the risk eligile for hedge ccounting of nonfinncil items; (2) chnging the wy hedging derivtive instruments re ccounted for to reduce profit or loss voltility; nd (3) replcing retrospective effectiveness ssessment with the principle of economic reltionship etween the hedging instrument nd the hedged item. 2) Amendment to IAS 36 Recoverle Amount Disclosures for Nonfinncil Assets In issuing IFRS 13 Fir Vlue Mesurement, the IASB mde consequentil mendment to the disclosure requirements in IAS 36 Impirment of Assets, introducing requirement to disclose in every reporting period the recoverle mount of n sset or ech cshgenerting unit. The mendment clrifies tht such disclosure of recoverle mounts is required only when n impirment loss hs een recognized or reversed during the period. Furthermore, the Group is required to disclose the discount rte used in mesurements of the recoverle mount sed on fir vlue less costs of disposl mesured using present vlue technique. Except for the ove impct, s of the dte the consolidted finncil sttements were uthorized for issue, the Group is continuously ssessing the possile impct tht the ppliction of other stndrds nd interprettions will hve on the Group s finncil position nd finncil performnce, nd will disclose the relevnt impct when the ssessment is completed. As of the dte the ccompnying consolidted finncil sttements were uthorized for issue, the Group ws continuing to ssess the possile impct tht the ppliction of other stndrds nd except for IAS 19 interprettions will hve on the Compny s finncil position nd operting result, nd will disclose the possile impct when the ssessment is completed. 4. SIGNIFICANT ACCOUNTING POLICIES Sttement of Complince The consolidted finncil sttements hve een prepred in ccordnce with the Regultions Governing the Preprtion of Finncil Reports y Securities Issuers, or other regultions. Bsis of Preprtion 15

16 The consolidted finncil sttements hve een prepred on the historicl cost sis except for finncil instruments tht re mesured t fir vlues. Historicl cost is generlly sed on the fir vlue of the considertion given in exchnge for ssets. Current nd Noncurrent Assets nd Liilities Current ssets include ssets held primrily for the purpose of trding, ssets expected to e relized within twelve months fter the reporting period, nd csh nd csh equivlents unless the sset is restricted from eing exchnged or used to settle liility for t lest twelve months fter the reporting period. All other ssets such s property, plnt nd equipment, investment properties, intngile ssets nd other ssets tht re not clssified s current re clssified s noncurrent. Current liilities include liilities held primrily for the purpose of trding, liilities due to e settled within twelve months fter the reporting period. Terms of liility tht could, t the option of the counterprty, result in its settlement y the issue of equity instruments do not ffect its clssifiction. Bsis of Consolidtion. Principles for prepring consolidted finncil sttements The consolidted finncil sttements incorporte the finncil sttements of the Compny nd the entities controlled y the Compny (i.e. its susidiries, including specil purpose entities). When necessry, djustments re mde to the finncil sttements of susidiries, susidiries ccounting policies re consistent with the Compny. All intrgroup trnsctions, lnces, income nd expenses re written of in consolidtion finncil sttement. Totl comprehensive income of susidiries is ttriuted to the owners of the Compny nd to the noncontrolling interests even if this results in the noncontrolling interests hving deficit lnce.. Susidiry included in consolidted finncil sttements Percent of Shreholding Investor,, Compny Investee Compny Min Businesses nd Products Chin Airlines, ClDynsty Interntionl A holding compny, rel estte nd hotel services Ltd. ClAsi Investment Generl investment Hw Hsi Clening of ircrft nd mintennce of mchine nd equipment Yestrip Trvel usiness Cl Prk Rel estte lese nd interntionl trde Cl Hotel Co., Ltd. Hotel usiness Acus Distriution System Sle nd mintennce of hrdwre nd softwre (Tiwn) Mndrin Airlines Air trnsporttion nd mintennce of ircrft Tiwn Air Crgo Terminl(Note) Air crgo nd storge Dynsty Holdings Trvel usiness Toyun Interntionl Airport Airport services Services Tiwn Airport Services Airport services Glol Sky Express Forwrding nd storge of ir crgo (Continued) 16

17 Percent of Shreholding Investor Compny Investee Compny Min Businesses nd Products, 2014, 2013 Freighter Princess Ltd. Aircrft lese Freighter Prince Ltd. Aircrft lese Freighter Queen Ltd. Aircrft lese 100 Tigerir Tiwn Co., Ltd.(Note) Air trnspottion 90 ClDynsty Interntionl Dynsty Properties Co., Ltd. Rel estte mngement Dynsty Hotel of Hwii, Inc. Hotel usiness Tiwn Airport Services Tiwn Airport Service (Smo) Airport supporting service nd investment Hw Hsi Hw Shin Building Sfegurd Building security nd mintennce services (Concluded) Note: Shreholding is held cominedly y The Group. Freighter Queen Ltd. ws liquidted on 17 April, In order to provide the customers with more diverse options, the ord of directors hs reched n greement to estlish Low Cost Crrier, nmed Tigerir Tiwn Co., Ltd., with Tiger Airwys Singpore Pte. Ltd. in the form of joint venture. The cpitl stock of Tigerir Tiwn Co., Ltd. is 2,000,000 thousnd, which contins 1,600,000 thousnd(80%) from the compny nd 200,000 thousnd (10%) from Mndrin Airlines Co., Ltd. respectively. Tigerir Tiwn Co., Ltd ws estlished on April 21, 2014 nd strted operting on Septemer 26, The finncil informtion of Tigerir Tiwn Co., Ltd. hs een consolidted into the Group s finncil sttement since the dy it ws estlished. The Compny s holdings of the issued shre cpitl of Toyun Interntionl Airport Service, Tiwn Airport Service nd Glol Sky Express did not ech exceed 50%, ut since the Compny hd control over these investees, they were listed s susidiries. The finncil informtion of the susidiries ove on 2014 nd 2013 hs een reported into the correspondent period s investees fter uditing. The Compny s holding of the issued shre cpitl of Chin Pcific Ctering Services nd Chin Pcific Lundry Services exceeded 50%, yet The Compny didn t not hve control over the investees. Plese refer to Note 13. Foreign Currencies In prepring the consolidted finncil sttement of the Group, trnsctions in currencies other thn the entity s functionl currency (foreign currencies) re recognized t the rtes of exchnge previling t the dtes of the trnsctions. At the end of ech reporting period, monetry items denominted in foreign currencies re retrnslted t the rtes previling t tht dte. Nonmonetry items tht re mesured t historicl cost in foreign currency re not retrnslted. Nonmonetry items mesured t fir vlue tht re denominted in foreign currencies re retrnslted t the rtes previling t the dte when the fir vlue ws determined. Exchnge differences on monetry items rising from settlement or trnsltion re recognized in profit or loss in the period in which they rise except for:. Exchnge differences on foreign currency orrowings relting to ssets under construction for future productive use, which re included in the cost of those ssets when they re regrded s n djustment to interest costs on those foreign currency orrowings;. Exchnge differences on trnsctions entered into in order to hedge certin foreign currency risks; nd Exchnge differences rising on the retrnsltion of nonmonetry items re included in profit or loss for the period except for exchnge differences rising from the retrnsltion of nonmonetry items in respect of which gins nd losses re recognized directly in other comprehensive income, in which cse, the exchnge differences re lso recognized directly in other comprehensive income. 17

18 For the purposes of presenting consolidted finncil sttement, the ssets nd liilities of the Group s foreign opertions re trnslted into New Tiwn dollrs using exchnge rtes previling t the end of ech reporting period. Income nd expense items re trnslted t the verge exchnge rtes for the period. Exchnge differences rising re recognized in other comprehensive income (ttriuted to the owners of the Compny nd noncontrolling interests s pproprite). On the disposl of foreign opertion, ll of the exchnge differences ccumulted in equity in respect of tht opertion ttriutle to the owners of the Compny re reclssified to profit or loss. Csh Equivlents Csh equivlents, consisting of commercil pper, re highly liquid finncil instruments with mturities of three months or less when cquired nd with crrying mounts tht pproximte their fir vlues. Inventories Inventories re primrily expendle nd nonexpendle prts nd mterils, supplies used in opertions nd items for inflight sle nd re stted t the lower of cost or net relizle vlue. The costs of inventories sold or consumed re determined using the weightedverge method. Investments in ssocites An ssocite is n entity over which the Group hs significnt influence nd tht is neither susidiry nor n interest in joint venture. (Joint venture rrngements tht involve the estlishment of seprte entity in which venturers hve joint control over the economic ctivity of the entity re referred to s jointly controlled entities.) The results nd ssets nd liilities of ssocites re incorported in these consolidted finncil sttements using the equity method of ccounting. Under the equity method, n investment in n ssocite is initilly recognized t cost nd djusted therefter to recognize the Group s shre of the profit or loss nd other comprehensive income of the ssocite. The Group lso recognizes the chnges in the Group s shre of (equity of ssocites /equity of ssocites ttriutle to the Group). When the Group s shre of losses of n ssocite equls or exceeds its interest in tht ssocite which includes ny crrying mount of the investment ccounted for y the equity method nd longterm interests tht, in sustnce, form prt of the Group s net investment in the ssocite, the Group discontinues recognizing its shre of further losses. Additionl losses nd liilities re recognized only to the extent tht the Group hs incurred legl oligtions, or constructive oligtions, or mde pyments on ehlf of tht ssocite. Any excess of the cost of cquisition over the Group s shre of the net fir vlue of the identifile ssets nd liilities of n ssocite recognized t the dte of cquisition is recognized s goodwill, which is included within the crrying mount of the investment nd is not mortized. Any excess of the Group s shre of the net fir vlue of the identifile ssets nd liilities over the cost of cquisition, fter ressessment, is recognized immeditely in profit or loss. The fir vlue of ny investment retined in the former susidiry t the dte when control is lost is regrded s the fir vlue on initil recognition for susequent ccounting under IAS 39 Finncil Instruments: Recognition nd Mesurement or, when pplicle, the cost on initil recognition of n investment in n ssocite. According to IAS 36 Impirment Loss, the impirment loss recognized y the impirment test compring the recoverle mount (using the higher of vlue in use or fir vlue minus costs of sle) nd the ook vlue is prt of the ook vlue of the investment. Any reversl in the impirment loss, if eing in the dditionl rnge of the recoverle mount, is recognized under IAS 36 Impirment Loss. The entire crrying mount of the investment (including goodwill) is tested for impirment s single sset 18

19 y compring its recoverle mount with its crrying mount. Any impirment loss recognized forms prt of the crrying mount of the investment. Any reversl of tht impirment loss is recognized to the extent tht the recoverle mount of the investment susequently increses. Investments in jointly controlled entities Joint venture rrngements tht involve the estlishment of seprte entity in which venturers hve joint control over the economic ctivity of the entity re referred to s jointly controlled entities. The results nd ssets nd liilities of jointly controlled entities re incorported in these finncil sttements using the equity method of ccounting. Under the equity method, n investment in jointly controlled entity is initilly recognized t cost nd djusted therefter to recognize the Group s shre of the profit or loss nd other comprehensive income of the jointly controlled entity. The Group lso recognizes the chnges in the compny s shre of equity of jointly controlled entity ttriutle to the Group.The ccounting tretment in ssessing impirment test nd recognized reversl of impirment loss re consistent with investments in ssocites. Property, Plnt nd Equipment Property, plnt nd equipment re tngile items tht re held for use in the production or supply of goods or services, for rentl to others, or for dministrtive purposes; nd re expected to e used more thn one period. The cost of n item of property, plnt nd equipment shll e recognized s ssets if, nd only if it is prole tht future economic enefits ssocited with the item will flow to the entity; nd the cost of the item cn e mesured relily. Property, plnt nd equipment re stted t cost, less susequent ccumulted deprecition nd susequent ccumulted impirment loss. Freehold lnd is not deprecited. Deprecition is recognized using the strightline method. Ech significnt prt is deprecited seprtely. The estimted useful lives, residul vlues nd deprecition method re reviewed t the end of ech reporting period, with the effect of ny chnges in estimte ccounted for on prospective sis. Assets held under finnce leses re deprecited over their expected useful lives on the sme sis s owned ssets. Assets re deprecited over the shorter of the lese term nd their useful lives using the strightline method. Any gin or loss rising on the disposl or retirement of n item of property, plnt nd equipment is determined s the difference etween the sles proceeds nd the crrying mount of the sset nd is recognized in profit or loss. Investment Properties Investment properties re properties held to ern rentls or for cpitl pprecition. Investment properties lso include lnd held for currently undetermined future use. Investment properties re mesured initilly t cost, including trnsction costs. Susequent to initil recognition, investment properties re mesured t cost less ccumulted deprecition nd ccumulted impirment loss. Deprecition is recognized using the strightline method. The estimted useful life residul vlue re reviewed t the end of ech reporting period. Any gin or loss rising on derecognition of the property is clculted s the difference etween the net disposl proceeds nd the crrying mount of the sset nd is included in profit or loss in the period in which the property is derecognized. 19

20 Intngile Assets Intngile ssets with finite useful lives tht re cquired seprtely re initilly mesured t cost nd susequently mesured t cost less ccumulted mortiztion nd ccumulted impirment loss. Amortiztion is recognized on strightline sis. The estimted useful life, residul vlue, nd mortiztion method re reviewed t the end of ech reporting period, with the effect of ny chnges in estimte eing ccounted for on prospective sis. The residul vlue of n intngile sset with finite useful life shll e ssumed to e zero unless the Group expects to dispose of the intngile sset efore the end of its economic life. Impirment of Tngile nd Intngile Assets Other Thn Goodwill At the end of ech reporting period, the Group reviews the crrying mounts of its tngile nd intngile ssets, excluding goodwill, to determine whether there is ny indiction tht those ssets hve suffered n impirment loss. If ny such indiction exists, the recoverle mount of the sset is estimted in order to determine the extent of the impirment loss. When it is not possile to estimte the recoverle mount of n individul sset, the Group estimtes the recoverle mount of the cshgenerting unit to which the sset elongs. Corporte ssets re llocted to the individul cshgenerting units on resonle nd consistent sis; otherwise Corporte ssets re llocted to the smllest group of cshgenerting units on resonle nd consistent lloction sis. Intngile ssets with indefinite useful lives nd intngile ssets not yet ville for use re tested for impirment t lest nnully, nd whenever there is n indiction tht the sset my e impired. Recoverle mount is the higher of fir vlue less costs to sell nd vlue in use. In ssessing vlue in use, the Compny use the estimted csh flows to e discounted y future pretx discount rte, the discount rte reflects current mrket time vlue of money nd the specific risks to the sset tht the estimted future csh flows hve not yet djusted to the mrket. If the recoverle mount of n sset or cshgenerting unit is estimted to e less thn its crrying mount, the crrying mount of the sset or cshgenerting unit is reduced to its recoverle mount. When n impirment loss susequently is reversed, the crrying mount of the sset or cshgenerting unit is incresed to the revised estimte of its recoverle mount, ut only to the extent of the crrying mount tht would hve een determined hd no impirment loss een recognized for the sset or cshgenerting unit in prior yers. A reversl of n impirment loss is recognized in profit or loss. Finncil Instruments Finncil ssets nd finncil liilities re recognized when the Group ecomes prty to the contrctul provisions of the instruments. Finncil ssets nd finncil liilities re initilly mesured t fir vlue. Trnsction costs tht re directly ttriutle to the cquisition or issue of finncil ssets nd finncil liilities (other thn finncil ssets nd finncil liilities t fir vlue through profit or loss) re dded to or deducted from the fir vlue of the finncil ssets or finncil liilities, s pproprite, on initil recognition. Trnsction costs directly ttriutle to the cquisition of finncil ssets or finncil liilities t fir vlue through profit or loss re recognized immeditely in profit or loss.. Finncil ssets All regulr wy purchses or sles of finncil ssets re recognized nd derecognized on trde dte sis. All regulr wy purchses or sles of finncil ssets mens uy or sell finncil ssets in the period mde y regultion or mrket convention. 1) Mesurement ctegory 20

21 Finncil ssets re clssified into the following specified ctegories: Finncil ssets t fir vlue through profit or loss, heldtomturity investments, villeforsle finncil ssets nd lons nd receivles. The clssifiction of finncil ssets is depending on their nture nd purpose of the originl recognition. Finncil ssets re clssified into the following ctegories: Finncil ssets t fir vlue through profit or loss nd villeforsle finncil ssets. ) Finncil ssets t fir vlue through profit or loss Finncil ssets re clssified s t fir vlue through profit or loss when the finncil sset is either held for trding or it is designted s t fir vlue through profit or loss. Finncil ssets t fir vlue through profit or loss re stted t fir vlue, with ny gins or losses rising on remesurement recognized in profit or loss. The net gin or loss recognized in profit or loss incorportes ny dividend or interest erned on the finncil sset. Fir vlue is determined in the mnner descried in Note 31. ) Avilleforsle finncil ssets Avilleforsle finncil ssets re nonderivtives tht re either designted s villeforsle or re not clssified s lons nd receivles, heldtomturity investments or finncil ssets t fir vlue through profit or loss. Chnges in the crrying mount of villeforsle finncil ssets re recognized in other comprehensive income nd will e reclssified to profit or loss when the investment is disposed of or is determined to e impired. Dividends on villeforsle equity instruments re recognized in profit or loss when the Compny s right to receive the dividends is estlished. Avilleforsle equity investments tht do not hve quoted mrket price in n ctive mrket nd whose fir vlue cnnot e relily mesured nd derivtives tht re linked to nd must e settled y delivery of such unquoted equity investments re mesured t cost less ny identified impirment loss t the end of ech reporting period nd re presented in seprte line item s finncil ssets crried t cost. If, in susequent period, the fir vlue of the finncil ssets cn e relily mesured, the finncil ssets re remesured t fir vlue. The difference etween crrying mount nd fir vlue is recognized in profit or loss or other comprehensive income on finncil ssets. c) Lons nd receivles Lons nd receivles (including trde receivles, csh nd csh equivlent, det investments with no ctive mrket, nd other receivles re mesured t mortized cost using the effective interest method, less ny impirment, except for shortterm receivles when the effect of discounting is immteril. 2) Impirment of finncil ssets Finncil ssets, other thn those t fir vlue through profit or loss nd villeforsle finncil ssets, re ssessed for indictors of impirment t the end of ech reporting period. Finncil ssets re considered to e impired when there is ojective evidence tht, s result of one or more events tht occurred fter the initil recognition of the finncil sset, the estimted future csh flows of the investment hve een ffected. For finncil ssets crried t mortized cost, such s trde receivles nd other receivles, ssets re ssessed for impirment on collective sis even if they were ssessed not to e impired 21