# EDGAR Filing Document

**Accession Number:** 0001132924
**File Stem:** 0001193125-23-047400
**Filing Date:** 2023-2
**Character Count:** 677376
**Document Hash:** 78f5b60cbaf594a58f1bf7fd2cb25b3b
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-23-047400.hdr.sgml**: 20230224

**ACCESSION NUMBER**: 0001193125-23-047400

**CONFORMED SUBMISSION TYPE**: 6-K

**PUBLIC DOCUMENT COUNT**: 4

**CONFORMED PERIOD OF REPORT**: 20230224

**FILED AS OF DATE**: 20230224

**DATE AS OF CHANGE**: 20230224

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** CHUNGHWA TELECOM CO LTD
- **CENTRAL INDEX KEY:** 0001132924
- **STANDARD INDUSTRIAL CLASSIFICATION:** RADIO TELEPHONE COMMUNICATIONS [4812]
- **IRS NUMBER:** 000000000

**FILING VALUES:**
- **FORM TYPE:** 6-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-31731
- **FILM NUMBER:** 23662238

**BUSINESS ADDRESS:**
- **STREET 1:** 21 3 HSINYI RD SECTION 1
- **STREET 2:** TAIPEI TAIWAN REPUBLIC OF CHINAA
- **CITY:** TAIPEI TAIWAN
- **STATE:** F5
- **ZIP:** 10048
- **BUSINESS PHONE:** 886223445488

**MAIL ADDRESS:**
- **STREET 1:** 21 3 HSINYI RD SECTION 1
- **STREET 2:** TAIPEI TAIWAN REPUBLIC OF CHINA
- **CITY:** TAIPEI TAIWAN
- **STATE:** F5
- **ZIP:** 10048

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**1934 Act Registration No. 1-31731** 

**UNITED STATES** 

**SECURITIES AND EXCHANGE COMMISSION** 

**Washington, DC 20549** 

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**FORM 6-K** 

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**REPORT OF FOREIGN PRIVATE ISSUER** 

**PURSUANT TO RULE 13a-16 OR 15d-16 OF** 

**THE SECURITIES EXCHANGE ACT OF 1934** 

**Dated February 24, 2023** 

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## Chunghwa Telecom Co., Ltd.
**(Translation of Registrant's Name into English)** 

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**21-3 Hsinyi Road Sec. 1,** 

**Taipei, Taiwan, 100 R.O.C.** 

**(Address of Principal Executive Office)** 

(Indicate by check mark whether the registrant files or will file annual reports under cover of form 20-F or Form 40-F.)

Form 20-F ☒ Form 40-F ☐

(Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)

Yes ☐ No ☒

(If "Yes" is marked, indicated below the file number assigned to the registrant in connection with Rule 12g3-2(b): Not applicable)

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| | |
|:---|:---|
| **Exhibit** | **Description** |
| 99.1 | Financial Statements for the Years Ended December 31, 2022 and 2021 and Independent Auditors' Review Report pursuant to International Financial Reporting Standards adopted by ROC ("Taiwan-IFRSs")(Parent Company Only) |
| 99.2 | Consolidated Financial Statements for the Years Ended December 31, 2022 and 2021 and Independent Auditors' Report pursuant to International Financial Reporting Standards adopted by ROC ("Taiwan-IFRSs") |

---

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant Chunghwa Telecom Co., Ltd. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: February 24, 2023

---

| | |
|:---|:---|
| Chunghwa Telecom Co., Ltd. | Chunghwa Telecom Co., Ltd. |
| By: | /s/ Yu-Shen Chen |
| Name: | Yu-Shen Chen |
| Title: | Chief Financial Officer |

---

## Exhibit 99.1

**Exhibit 99.1** 

**Chunghwa Telecom Co., Ltd.** 

**Financial Statements for the** 

**Years Ended December 31, 2022 and 2021 and** 

**Independent Auditors' Report** 

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**INDEPENDENT AUDITORS' REPORT** 

The Board of Directors and Stockholders

Chunghwa Telecom Co., Ltd.

**Opinion** 

We have audited the accompanying financial statements of Chunghwa Telecom Co., Ltd. (the "Company"), which comprise the balance sheets as of December 31, 2022 and 2021, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

**Basis for Opinion** 

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

**Key Audit Matters** 

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the year ended December 31, 2022. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The key audit matter of the financial statements for the year ended December 31, 2022 is as follows:

<u>Revenue Recognition on Mobile Service</u> 

Refer to Notes 3 and 38 to the financial statements.

The Company's mobile service revenue consists of subscriber-based charges made up of a significant volume of low-dollar transactions. Because of the complexity and a variety of subscriber-based charges as well as a large number of transactions, the Company uses highly automated systems to process and record its revenue transactions.

Given the Company's systems to process and record revenue are highly automated, auditing revenue was complex and challenging due to the extent of audit effort required and involvement of professionals with expertise in information technology (IT) necessary for us to identify, test, and evaluate the Company's IT systems.

------

Our audit procedures related to the Company's systems to process revenue transactions included the following, among others:

• With the assistance of our IT specialists, we:

– Identified the significant systems used to process revenue transactions and tested the general IT controls over each of these systems, including testing of user access controls and change management controls.

– Performed testing of system interface controls and automated controls within the relevant revenue streams, as well as the controls designed to ensure the accuracy and completeness of revenue.

• We tested manual controls within the relevant revenue business processes, including those in place to reconcile
the various systems to the Company's accounting system.

• We selected samples from mobile service revenue and agreed to customer contracts and records of cash receipts.

**Responsibilities of Management and Those Charged with Governance for the Financial Statements** 

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the audit committee, are responsible for overseeing the Company's financial reporting process.

**Auditors' Responsibilities for the Audit of the Financial Statements** 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Standards on Auditing of the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.

------

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.

4. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we
are required to draw attention in our auditors' report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date
of our auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.

5. Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

6. Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business
activities within the Company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements for the year ended December 31, 2022, and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audits resulting in this independent auditors' report are Yih-Shin Kao and Mei Yen Chiang.

---

| | |
|:---|:---|
| /s/ Yih-Shin Kao  | /s/ Mei Yen Chiang  |

---

Deloitte & Touche

Taipei, Taiwan

Republic of China

February 24, 2023

*<u>Notice to Readers</u>*

*The accompanying financial statements are intended only to present the financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such financial statements are those generally applied in the Republic of China.* 

*For the convenience of readers, the independent auditors' report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors' report and financial statements shall prevail.* 

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**CHUNGHWA TELECOM CO., LTD.** 

**BALANCE SHEETS** 

**DECEMBER 31, 2022 AND 2021** 

**(In Thousands of New Taiwan Dollars)** 

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **2022** | **2022** | **2021** | **2021** |
|  | **Amount** | **%** | **Amount** | **%** |
|  **ASSETS** |  |  |  |  |
|  CURRENT ASSETS |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash and cash equivalents (Notes 3 and 6) | $37976062 | 8 | $28289556 | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial assets at fair value through profit or loss (Notes 3, 4 and 7) | 3514 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Hedging financial assets (Notes 3 and 19) | 12891 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Contract assets (Notes 3 and 26) | 2114559 | 1 | 1982596 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Trade notes and accounts receivable, net (Notes 3, 4, 9 and 26) | 21449052 | 4 | 20691664 | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Receivables from related parties (Note 33) | 1209306 |  | 1789959 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventories (Notes 3, 4 and 10) | 4903003 | 1 | 5278144 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepayments (Note 11) | 1428124 |  | 1643733 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other current monetary assets (Notes 12, 24 and 30) | 1376203 |  | 1359713 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other current assets (Notes 17 and 18) | 3382727 | 1 | 2844972 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current assets | 73855441 | 15 | 63880337 | 13 |
|  NONCURRENT ASSETS |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial assets at fair value through profit or loss (Notes 3, 4 and 7) | 978196 |  | 884670 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial assets at fair value through other comprehensive income (Notes 3, 4, 8 and 30) | 3143866 | 1 | 3058606 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Investments accounted for using equity method (Notes 3 and 13) | 20396082 | 4 | 20120401 | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Contract assets (Notes 3 and 26) | 1212847 |  | 1105747 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Property, plant and equipment (Notes 3, 4, 14, 30 and 33) | 281135193 | 56 | 279910890 | 57 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Right-of-use assets (Notes 3, 4, 15 and 33) | 10533019 | 2 | 10737544 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Investment properties (Notes 3, 4 and 16) | 9974127 | 2 | 9832904 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Intangible assets (Notes 3, 4 and 17) | 78697640 | 16 | 83435418 | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred income tax assets (Notes 3 and 28) | 1935053 |  | 2271292 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Incremental costs of obtaining contracts (Notes 3 and 26) | 7704427 | 2 | 6899240 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net defined benefit assets (Notes 3, 4 and 24) | 5240239 | 1 | 3369703 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepayments (Note 11) | 878600 |  | 937318 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other noncurrent assets (Notes 18 and 34) | 3940642 | 1 | 4100621 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total noncurrent assets | 425769931 | 85 | 426664354 | 87 |
|  TOTAL | $499625372 | 100 | $490544691 | 100 |
|  **LIABILITIES AND EQUITY** |  |  |  |  |
|  CURRENT LIABILITIES |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial liabilities at fair value through profit or loss (Notes 3, 4 and 7) | $— |  | $6180 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Hedging financial liabilities (Notes 3 and 19) |  |  | 8286 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Contract liabilities (Notes 3 and 26) | 12790467 | 3 | 11537157 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Trade notes and accounts payable (Note 21) | 12438047 | 3 | 14119843 | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Payables to related parties (Note 33) | 3715122 | 1 | 3448259 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Current tax liabilities (Notes 3 and 28) | 4580440 | 1 | 4079823 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Lease liabilities (Notes 3, 4, 15, 30 and 33) | 3038698 | 1 | 2918782 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other payables (Notes 22 and 30) | 21102682 | 4 | 20362594 | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provisions (Notes 3 and 23) | 130161 |  | 175454 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other current liabilities | 952411 |  | 939652 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current liabilities | 58748028 | 13 | 57596030 | 12 |
|  NONCURRENT LIABILITIES |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Contract liabilities (Notes 3 and 26) | 5680583 | 1 | 5063165 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bonds payable (Note 20) | 30477357 | 6 | 26976675 | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred income tax liabilities (Notes 3 and 28) | 2276910 |  | 2160049 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provisions (Notes 3 and 23) | 169168 |  | 141865 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Lease liabilities (Notes 3, 4, 15, 30 and 33) | 7066749 | 1 | 7037599 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Customers' deposits (Note 33) | 4991461 | 1 | 4881790 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net defined benefit liabilities (Notes 3, 4 and 24) | 2224847 |  | 2188572 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other noncurrent liabilities | 6811382 | 1 | 5164100 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total noncurrent liabilities | 59698457 | 10 | 53613815 | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities | 118446485 | 23 | 111209845 | 22 |
|  EQUITY (Note 25) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Common stocks | 77574465 | 16 | 77574465 | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Additional paid-in capital | 171300898 | 34 | 171279625 | 35 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Retained earnings |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Legal reserve | 77574465 | 16 | 77574465 | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Special reserve | 3083569 | 1 | 2675419 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Unappropriated earnings | 51868574 | 10 | 50639022 | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total retained earnings | 132526608 | 27 | 130888906 | 27 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | (223084) |  | (408150) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total equity | 381178887 | 77 | 379334846 | 78 |
|  TOTAL | $499625372 | 100 | $490544691 | 100 |

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The accompanying notes are an integral part of the financial statements.

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**CHUNGHWA TELECOM CO., LTD.** 

**STATEMENTS OF COMPREHENSIVE INCOME** 

**YEARS ENDED DECEMBER 31, 2022 AND 2021** 

**(In Thousands of New Taiwan Dollars, Except Earnings Per Share)** 

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **2022** | **2022** | **2021** | **2021** |
|  | **Amount** | **%** | **Amount** | **%** |
|  REVENUES (Notes 3, 26, 33 and 38) | $182254339 | 100 | $178843350 | 100 |
|  OPERATING COSTS (Notes 3, 10, 24, 26, 27 and 33) | 113210698 | 62 | 113928789 | 64 |
|  GROSS PROFIT | 69043641 | 38 | 64914561 | 36 |
|  OPERATING EXPENSES (Notes 3, 9, 24, 27 and 33) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Marketing | 17583419 | 10 | 16024280 | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; General and administrative | 5242664 | 3 | 3885112 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Research and development | 2812225 | 2 | 2837425 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Expected credit loss | 115870 |  | 141794 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total operating expenses | 25754178 | 15 | 22888611 | 13 |
|  OTHER INCOME AND EXPENSES (Notes 14, 15, 16, 27 and 38) | 102882 |  | (342764) |  |
|  INCOME FROM OPERATIONS | 43392345 | 23 | 41683186 | 23 |
|  NON-OPERATING INCOME AND EXPENSES |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest income (Note 38) | 191932 |  | 56471 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other income (Notes 8, 27 and 33) | 255214 |  | 255445 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other gains and losses (Notes 13, 27, 32 and 33) | (494392) |  | 471086 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest expense (Notes 15, 27, 33 and 38) | (220498) |  | (190093) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Share of profits of subsidiaries, associates and joint ventures accounted for using equity method (Notes 13 and 38) | 1784364 | 1 | 1611361 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total non-operating income and expenses | 1516620 | 1 | 2204270 | 1 |
|  INCOME BEFORE INCOME TAX | 44908965 | 24 | 43887456 | 24 |
|  INCOME TAX EXPENSE (Notes 3 and 28) | 8431808 | 5 | 8133877 | 5 |
|  NET INCOME | 36477157 | 19 | 35753579 | 19 |

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(Continued)

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**CHUNGHWA TELECOM CO., LTD.** 

**STATEMENTS OF COMPREHENSIVE INCOME** 

**YEARS ENDED DECEMBER 31, 2022 AND 2021** 

**(In Thousands of New Taiwan Dollars, Except Earnings Per Share)** 

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **2022** | **2022** | **2021** | **2021** |
|  | **Amount** | **%** | **Amount** | **%** |
|  TOTAL OTHER COMPREHENSIVE INCOME (LOSS) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Items that will not be reclassified to profit or loss: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Remeasurements of defined benefit pension plans (Note 24) | $1116673 | 1 | $398352 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Unrealized gain or loss on investments in equity instruments at fair value through other comprehensive income (Notes 3, 25 and 32) | 92444 |  | (1208027) | (1) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Gain or loss on hedging instruments subject to basis adjustment (Notes 3 and 19) | 21177 |  | (10038) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Share of other comprehensive income (loss) of subsidiaries, associates and joint ventures accounted for using the equity method (Notes 3, 13 and 25) | (191987) |  | 12698 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income tax relating to items that will not be reclassified to profit or loss (Note 28) | (223335) |  | (79670) |  |
|  | 814972 | 1 | (886685) | (1) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Items that may be reclassified subsequently to profit or loss: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exchange differences arising from the translation of the foreign operations | 262176 |  | (76359) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Share of other comprehensive income (loss) of subsidiaries, associates and joint ventures accounted for using the equity method (Note 13) | 14777 |  | (1386) |  |
|  | 276953 |  | (77745) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total other comprehensive income (loss), net of income tax | 1091925 | 1 | (964430) | (1) |
|  TOTAL COMPREHENSIVE INCOME | $37569082 | 20 | $34789149 | 18 |
|  EARNINGS PER SHARE (Note 29) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basic | $4.70 |  | $4.61 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Diluted | $4.70 |  | $4.60 |  |

---

The accompanying notes are an integral part of the financial statements. (Concluded)

------

**CHUNGHWA TELECOM CO., LTD.** 

**STATEMENTS OF CHANGES IN EQUITY** 

**YEARS ENDED DECEMBER 31, 2022 AND 2021** 

**(In Thousands of New Taiwan Dollars)** 

------

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | | | | | | **Others (Notes 19 and 25)** | **Others (Notes 19 and 25)** | **Others (Notes 19 and 25)** | |
|  | | | | | | | **Unrealized Gain** | | |
|  | | | | | | **Exchange** | **or Loss on** | | |
|  | | | | | | **Differences** | **Financial Assets** | | |
|  | | | | | | **Arising from the** | **at Fair Value** | | |
|  | | | **Retained Earnings (Note 25)** | **Retained Earnings (Note 25)** | **Retained Earnings (Note 25)** | **Translation of** | **through Other** | **Gain or Loss** | |
|  | **Common Stocks<br>(Note 25)** | **Additional**<br> **Paid-in Capital<br>(Note 25)** | **Legal Reserve** | **Special Reserve** | **Unappropriated<br>Earnings** | **the Foreign<br>Operations** | **Comprehensive**<br> **Income** | **on Hedging**<br> **Instruments** | **Total Equity** |
|  BALANCE, JANUARY 1, 2021 | $77574465 | $171261379 | $77574465 | $2675419 | $47918166 | $(314531) | $1239901 | $1752 | $377931016 |
|  Appropriation of 2020 earnings |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash dividends |  |  |  |  | (33403565) |  |  |  | (33403565) |
|  Unclaimed dividend |  | 1968 |  |  |  |  |  |  | 1968 |
|  Change in additional paid-in capital from investments in subsidiaries, associates and joint ventures accounted for using equity method |  | 16278 |  |  |  |  |  |  | 16278 |
|  Net income for the year ended December 31, 2021 |  |  |  |  | 35753579 |  |  |  | 35753579 |
|  Other comprehensive income (loss) for the year ended December 31, 2021 |  |  |  |  | 311189 | (77745) | (1187836) | (10038) | (964430) |
|  Total comprehensive income (loss) for the year ended December 31, 2021 |  |  |  |  | 36064768 | (77745) | (1187836) | (10038) | 34789149 |
|  Disposal of investments in equity instruments at fair value through other comprehensive income |  |  |  |  | 94588 |  | (94588) |  |  |
|  Disposal of investments in equity instruments at fair value through other comprehensive income by subsidiaries |  |  |  |  | (34935) |  | 34935 |  |  |
|  BALANCE, DECEMBER 31, 2021 | 77574465 | 171279625 | 77574465 | 2675419 | 50639022 | (392276) | (7588) | (8286) | 379334846 |
|  Appropriation of 2021 earnings |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Special reserve |  |  |  | 408150 | (408150) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash dividends |  |  |  |  | (35746314) |  |  |  | (35746314) |
|  Unclaimed dividend |  | 1632 |  |  |  |  |  |  | 1632 |
|  Change in additional paid-in capital from investments in subsidiaries, associates and joint ventures accounted for using equity method |  | 14488 |  |  |  |  |  |  | 14488 |
|  Change in additional paid-in capital for not proportionately participating in the capital increase of subsidiaries |  | 5153 |  |  |  |  |  |  | 5153 |
|  Net income for the year ended December 31, 2022 |  |  |  |  | 36477157 |  |  |  | 36477157 |
|  Other comprehensive income (loss) for the year ended December 31, 2022 |  |  |  |  | 906975 | 281063 | (117290) | 21177 | 1091925 |
|  Total comprehensive income (loss) for the year ended December 31, 2022 |  |  |  |  | 37384132 | 281063 | (117290) | 21177 | 37569082 |
|  Disposal of investments in equity instruments at fair value through other comprehensive income by subsidiaries |  |  |  |  | (116) |  | 116 |  |  |
|  BALANCE, DECEMBER 31, 2022 | $77574465 | $171300898 | $77574465 | $3083569 | $51868574 | $(111213) | $(124762) | $12891 | $381178887 |

---

The accompanying notes are an integral part of the financial statements.

------

**CHUNGHWA TELECOM CO., LTD.** 

**STATEMENTS OF CASH FLOWS** 

**YEARS ENDED DECEMBER 31, 2022 AND 2021** 

**(In Thousands of New Taiwan Dollars)** 

------

---

| | | |
|:---|:---|:---|
|  | **2022** | **2021** |
|  CASH FLOWS FROM OPERATING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income before income tax | $44908965 | $43887456 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Adjustments for: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation | 31637715 | 30748863 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amortization | 6545816 | 6475933 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amortization of incremental costs of obtaining contracts | 5787729 | 5684693 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Expected credit loss | 115870 | 141794 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest expense | 220498 | 190093 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest income | (191932) | (56471) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Dividend income | (150569) | (149918) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Share of profits of subsidiaries, associates and joint ventures accounted for using equity method | (1784364) | (1611361) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loss on disposal of property, plant and equipment | 4585 | 5603 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Gain on disposal of investments accounted for using equity method |  | (3239) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provision for impairment loss and obsolescence of inventory | 9252 | 163193 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Impairment loss on right-of-use assets |  | 420590 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reversal of impairment loss on investment properties | (107467) | (83429) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Valuation loss (gain) on financial assets and liabilities at fair value through profit or loss, net | 198534 | (243417) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 251791 | (139079) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Decrease (increase) in: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Contract assets | (239255) | (347693) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Trade notes and accounts receivable | (817154) | (1149116) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Receivables from related parties | 580653 | (449409) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventories | 365889 | 1605349 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepayments | 274327 | 263649 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other current monetary assets | 84274 | (304927) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other current assets | (537755) | (661501) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Incremental cost of obtaining contracts | (6592916) | (5568854) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase (decrease) in: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Contract liabilities | 1870728 | (1402756) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Trade notes and accounts payable | (1678057) | 1888527 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Payables to related parties | 266863 | 67771 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other payables | 791532 | (77677) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provisions | (17990) | 2437 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other current liabilities | 35291 | (12186) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net defined benefit plans | (717588) | (748165) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash generated from operations | 81115265 | 78536753 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interests paid | (59037) | (57637) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income taxes paid | (7701426) | (7470701) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash provided by operating activities | 73354802 | 71008415 |

---

(Continued)

------

**CHUNGHWA TELECOM CO., LTD.** 

**STATEMENTS OF CASH FLOWS** 

**YEARS ENDED DECEMBER 31, 2022 AND 2021** 

**(In Thousands of New Taiwan Dollars)** 

------

---

| | | |
|:---|:---|:---|
|  | **2022** | **2021** |
|  CASH FLOWS FROM INVESTING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from disposal of financial assets at fair value through other comprehensive income | $— | $2907367 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from capital reduction of financial assets at fair value through other comprehensive income | 7184 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Acquisition of financial assets at fair value through profit or loss | (323321) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from capital reduction of financial assets at fair value through profit or loss | 65967 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Acquisition of time deposits and negotiable certificates of deposit with maturities of more than three months | (4013040) | (13133853) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from disposal of time deposits and negotiable certificates of deposit with maturities of more than three months | 4033853 | 13111803 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Acquisition of investments accounted for using equity method |  | (273800) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from disposal of investments accounted for using equity method |  | 8519 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from capital reduction of investments accounted for using equity method |  | 813793 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Acquisition of property, plant and equipment | (29630706) | (34302157) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from disposal of property, plant and equipment | 15413 | 15454 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Acquisition of intangible assets | (1808038) | (187945) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Acquisition of investment properties | (18333) | (146) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Decrease in other noncurrent assets | 104902 | 213694 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interests received | 164371 | 57190 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash dividends received from others | 150569 | 149918 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash dividends received from subsidiaries, associates and joint ventures accounted for using equity method | 1465692 | 1235130 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash used in investing activities | (29785487) | (29385033) |
|  CASH FLOWS FROM FINANCING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from short-term bills payable |  | 5000000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Repayments of short-term bills payable |  | (12000000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from issuance of bonds | 3500000 | 7000000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Payments for transaction costs attributable to the issuance of bonds | (4463) | (7675) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase in customers' deposits | 87139 | 134718 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Payments for the principal of lease liabilities | (3368085) | (3342213) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase in other noncurrent liabilities | 1647282 | 3192888 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash dividends paid | (35746314) | (33403565) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Unclaimed dividend | 1632 | 1968 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash used in financing activities | (33882809) | (33423879) |

---

(Continued)

------

**CHUNGHWA TELECOM CO., LTD.** 

**STATEMENTS OF CASH FLOWS** 

**YEARS ENDED DECEMBER 31, 2022 AND 2021** 

**(In Thousands of New Taiwan Dollars)** 

------

---

| | | |
|:---|:---|:---|
|  | **2022** | **2021** |
|  NET INCREASE IN CASH AND CASH EQUIVALENTS | $9686506 | $8199503 |
|  CASH AND CASH EQUIVALENTS, BEGINNING OF THE YEAR | 28289556 | 20090053 |
|  CASH AND CASH EQUIVALENTS, END OF THE YEAR | $37976062 | $28289556 |

---

The accompanying notes are an integral part of the financial statements. (Concluded)

------

**CHUNGHWA TELECOM CO., LTD.** 

**NOTES TO FINANCIAL STATEMENTS** 

**YEARS ENDED DECEMBER 31, 2022 AND 2021** 

**(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)** 

------

**1.** **GENERAL** 

Chunghwa Telecom Co., Ltd. ("the Company") was incorporated on July 1, 1996 in the Republic of China ("ROC"). The Company is a company limited by shares and, prior to August 2000, was wholly owned by the Ministry of Transportation and Communications ("MOTC"). Prior to July 1, 1996, the current operations of the Company were carried out under the Directorate General of Telecommunications ("DGT"). The DGT was established by the MOTC in June 1943 to take primary responsibility in the development of telecommunications infrastructure and to formulate policies related to telecommunications. On July 1, 1996, the telecom operations of the DGT were spun-off as the Company which continues to carry out the business and the DGT continues to be the industry regulator.

Effective August 12, 2005, the MOTC completed the process of privatizing the Company by reducing the government ownership to below 50% in various stages. In July 2000, the Company received approval from the Securities and Futures Commission (the "SFC") for a domestic initial public offering and its common stocks were listed and traded on the Taiwan Stock Exchange (the "TWSE") on October 27, 2000. Certain of the Company's common stocks were sold, in connection with the foregoing privatization plan, in domestic public offerings at various dates from August 2000 to July 2003. Certain of the Company's common stocks were also sold in an international offering of securities in the form of American Depository Shares ("ADS") on July 17, 2003 and were listed and traded on the New York Stock Exchange (the "NYSE"). The MOTC sold common stocks of the Company by auction in the ROC on August 9, 2005 and completed the second international offering on August 10, 2005. Upon completion of the share transfers associated with these offerings on August 12, 2005, the MOTC owned less than 50% of the outstanding shares of the Company and completed the privatization plan.

Chunghwa launched its organizational transformation based on customer-centric structure effective from January 2022. Please refer to Note 38 Segment Information for details.

The financial statements are presented in the Company's functional currency, New Taiwan dollars.

**2.** **APPROVAL OF FINANCIAL STATEMENTS** 

The financial statements were approved and authorized for issue by the Board of Directors on February 24, 2023.

**3.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** 

**Statement of Compliance** 

The accompanying financial statements have been prepared in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

**Basis of Preparation** 

The financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at fair values and net defined benefit liabilities (assets) which are measured at the present value of the defined benefit obligation less the fair value of plan assets.

------

When preparing the accompanying financial statements, the Company used equity method to account for its investment in subsidiaries, associates and joint ventures. In order for the amounts of the net profit, other comprehensive income and total equity in the parent company only financial statements to be the same with those amounts attributable to the owner of the Company in its consolidated financial statements, adjustments arising from the differences in accounting treatment between parent company only basis and consolidated basis were made to the captions of "investments accounted for using equity method", "share of profit (loss) of subsidiaries, associates and joint ventures accounted for using equity method", "share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method" and related equity items, as appropriate, in the parent company only financial statements.

**Current and Noncurrent Assets and Liabilities** 

Current assets include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Assets held primarily for the purpose of trading;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Assets expected to be realized within twelve months after the reporting period; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for
at least twelve months after the reporting period.

Current liabilities include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Liabilities held primarily for the purpose of trading;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Liabilities due to be settled within twelve months after the reporting period; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Liabilities for which the Company does not have an unconditional right to defer settlement for at least twelve
months after the reporting period.

Assets and liabilities that are not classified as current are classified as noncurrent.

**Foreign Currencies** 

In preparing the Company's financial statements, transactions in currencies other than the Company's functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period in which they arise.

Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined and related exchange differences are recognized in profit or loss. Conversely, when the fair value changes were recognized in other comprehensive income, related exchange difference shall be recognized in other comprehensive income.

Non-monetary items that are measured at historical cost in a foreign currency are not retranslated.

For the purpose of presenting financial statements, the assets and liabilities of the Company's foreign operations (including those subsidiaries, associates and joint ventures in other countries or currencies used different with the Company) are translated into New Taiwan dollars using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising, if any, are recognized in other comprehensive income.

------

**Cash Equivalents** 

Cash equivalents include those maturities within three months from the date of acquisition, highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value such as commercial papers, negotiable certificates of deposit and stimulus vouchers. These cash equivalents are held for the purpose of meeting short-term cash commitments.

**Inventories** 

Inventories are stated at the lower of cost or net realizable value item by item, except for those that may be appropriate to group items of similar or related inventories. Net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. The calculation of the cost of inventory is derived using the weighted-average method.

**Investments Accounted for Using Equity Method** 

Investments in subsidiaries, associates and joint ventures are accounted for using equity method.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Investment in subsidiaries

Subsidiaries are the entities controlled by the Company.

Under the equity method, the investment in subsidiaries is initially recognized at cost and the increase or decrease of carrying amount reflects the recognition of the Company's share of profit or loss and other comprehensive income of the subsidiaries after the date of acquisition. Besides, the Company also recognizes the Company's share of the change in other equity of the subsidiaries.

Changes in the Company's ownership interests in subsidiaries that do not result in the Company's loss of control over the subsidiaries are accounted for as equity transactions. Any difference between the carrying amounts of the investment of the subsidiaries and the fair value of the consideration paid or received is recognized directly in equity.

The acquisition cost in excess of the acquisition-date fair value of the identifiable net assets acquired is recognized as goodwill, which is included within the carrying amount of the investment and shall not be amortized. The acquisition-date fair value of the net identifiable assets acquired in excess of the acquisition cost is recognized immediately in profit or loss.

Unrealized profits and losses from downstream transactions with a subsidiary are eliminated in full. Profits and losses from upstream transactions with a subsidiary and sidestream transactions between subsidiaries are recognized in the Company's financial statements only to the extent of interests in the subsidiary that are not related to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Investments in associates and joint ventures

An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor an interest in a joint venture. A joint venture is a joint arrangement whereby the Company and other parties that have joint control of the arrangement have rights to the net assets of the arrangement.

Under the equity method, an investment in an associate and a joint venture is initially recognized at cost and adjusted thereafter to recognize the Company's share of profit or loss and other comprehensive income of the associate and joint venture as well as the distribution received. The Company also recognizes its share in changes in the associates and joint ventures.

------

When the Company subscribes for new shares of an associate and a joint venture at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Company's proportionate interest in the associate and joint venture. The Company records such a difference as an adjustment to investments with the corresponding amount charged or credited to additional paid-in capital. When the adjustment should be debited to additional paid-in capital but the additional paid-in capital recognized from investments accounted for using equity method is insufficient, the shortage is debited to retained earnings.

Any excess of the cost of acquisition over the Company's share of the fair value of the identifiable net assets and liabilities of an associate and a joint venture at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and shall not be amortized. Any excess of the Company's share of the net fair value of the identifiable assets and liabilities over the cost of acquisition is recognized immediately in profit or loss.

The entire carrying amount of an investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized is not allocated to any asset, including goodwill, that forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

The Company discontinues the use of the equity method from the date on which its investment ceases to be an associate and a joint venture. Any retained investment is measured at fair value at that date, and the fair value is regarded as the investment's fair value on initial recognition as a financial asset. The difference between the previous carrying amount of the associate and joint venture attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate and joint venture. The Company accounts for all amounts previously recognized in other comprehensive income in relation to that associate and joint venture on the same basis as would be required had that associate and joint venture directly disposed of the related assets or liabilities.

When the Company transacts with its associate and joint venture, profits and losses resulting from the transactions with the associate and joint venture are recognized in the Company's financial statements only to the extent of interests in the associate and joint venture that are not related to the Company.

**Property, Plant and Equipment** 

Property, plant and equipment are initially measured at cost and subsequently measured at cost less accumulated depreciation and accumulated impairment loss.

Property, plant and equipment in the course of construction are depreciated and classified to the appropriate categories of property, plant and equipment when completed and ready for their intended use.

Depreciation on property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. Freehold land is not depreciated. The estimated useful lives, residual values and depreciation method are reviewed at the end of each year, with the effect of any changes in estimate accounted for on a prospective basis.

On derecognition of an item of property, plant and equipment, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss in the period in which the property is derecognized.

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**Investment Properties** 

Investment properties are properties held to earn rentals and/or for capital appreciation. Investment properties also include land held for a currently undetermined future use.

Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation and accumulated impairment loss. Depreciation is recognized using the straight-line method.

For a transfer from the investment properties to property, plant and equipment, the deemed cost of the property, plant and equipment for subsequent accounting is its carrying amount at the commencement of owner-occupation.

For a transfer from the property, plant and equipment to investment properties, the deemed cost of the investment properties for subsequent accounting is its carrying amount at the end of owner-occupation.

On derecognition of the investment properties, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss in the period in which the property is derecognized.

**Intangible Assets** 

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful life, residual value, and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. The residual value of an intangible asset with a finite useful life shall be assumed to be zero unless the Company expects to dispose of the intangible asset before the end of its economic life.

Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in profit or loss in the period in which the asset is derecognized.

**Impairment of Property, Plant and Equipment, Right-of-use Assets, Investment Properties, Intangible Assets and Incremental Costs of Obtaining Contracts** 

At the end of each reporting period, the Company reviews the carrying amounts of its property, plant and equipment, right-of-use assets, investment properties and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

Impairment loss from the assets related to incremental cost of obtaining contracts is recognized to the extent that the carrying amount of the assets exceeds the remaining amount of consideration that the Company expects to receive in exchange for related goods or services less the costs which relate directly to providing those goods or services.

------

When an impairment loss is subsequently reversed, the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss.

**Financial Instruments** 

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

1) Measurement category

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Financial assets at fair value through profit or loss (FVTPL)

Financial asset is classified as at FVTPL when the financial asset is mandatorily classified as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at fair value through other comprehensive income (FVOCI).

Financial assets at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss does not incorporate any dividend earned on the financial asset. Fair value is determined in the manner described in Note 32.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Financial assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. The financial asset is held within a business model whose objective is to hold financial assets in order to
collect contractual cash flows; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. The contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.

Subsequent to initial recognition, financial assets at amortized cost are measured at amortized cost, which equals to gross carrying amount determined by the effective interest method less any impairment loss, except for short-term receivables as the effect of discounting is immaterial. Exchange differences are recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of such financial assets.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Investments in equity instruments at FVOCI

On initial recognition, the Company may make an irrevocable election to designate investments in equity instruments as at FVOCI. Designation at FVOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

Investments in equity instruments at FVOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments. Instead, it will be transferred to retained earnings.

Dividends on these investments in equity instruments are recognized in profit or loss when the Company's right to receive the dividends is established, unless the dividends clearly represent a recovery of part of the cost of the investment.

2) Impairment of financial assets and contract assets

The Company recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including accounts receivable) and contract assets.

The Company recognizes lifetime Expected Credit Loss (ECL) for accounts receivable and contract assets. For all other financial instruments, the Company recognizes lifetime ECL when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on the financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month ECL.

Expected credit losses reflect the weighted average of credit losses with the respective risks of a default occurring as the weights. Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECL represents the portion of ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

The Company recognizes an impairment loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account.

3) Derecognition of financial assets

The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.

On derecognition of a financial asset measured at amortized cost in its entirety, the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognized in profit or loss.

On derecognition of investments in equity instruments at FVOCI in its entirety, the cumulative gain or loss is directly transferred to retained earnings, and it is not reclassified to profit or loss.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Financial liabilities

1) Subsequent measurement

Except for financial liabilities at FVTPL, all the financial liabilities are subsequently measured at amortized cost using the effective interest method.

2) Derecognition of financial liabilities

The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Derivative financial instruments

The Company enters into derivative financial instruments to manage its exposure to foreign exchange rate risks, including forward exchange contracts.

Derivatives are initially measured at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship. When the fair value of derivative financial instruments is positive, the derivative is recognized as a financial asset; when the fair value of derivative financial instruments is negative, the derivative is recognized as a financial liability.

**Hedge Accounting** 

The Company designates some derivatives instruments as cash flow hedges. Hedges of foreign exchange risk on firm commitments are accounted for as cash flow hedges.

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss.

The associated gains or losses that were recognized in other comprehensive income are reclassified from equity to profit or loss as a reclassification adjustment in the line item relating to the hedged item in the same period when the hedged item affects profit or loss. If a hedge of a forecast transaction subsequently results in the recognition of a non-financial asset or a non-financial liability, the associated gains and losses that were recognized in other comprehensive income are removed from equity and are included in the initial cost of the non-financial asset or non-financial liability.

The Company discontinues hedge accounting only when the hedging relationship ceases to meet the qualifying criteria; for instance, when the hedging instrument expires or is sold, terminated or exercised. The cumulative gain or loss on the hedging instrument that has been previously recognized in other comprehensive income from the period when the hedge was effective remains separately in equity until the forecast transaction occurs. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognized immediately in profit or loss.

**Provisions** 

Provisions are measured at the best estimate of the expenditure required to settle the Company's obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. The provisions for warranties claims are made by management according to the sales agreements which represent the management's best estimate of the future outflow of economic benefits. The provisions of warranties claims are recognized as operating cost in the period in which the goods are sold. The provision for onerous contracts represents the present obligation resulting from the measurement for the unavoidable costs of meeting the Company's contractual obligations exceed the economic benefits expected to be received from the contracts. In assessing whether a contract is onerous, the cost of fulfilling a contract includes both the incremental costs of fulfilling that contract and an allocation of other costs that are related directly to fulfilling contracts.

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**Revenue Recognition** 

The Company identifies the performance obligations in the contract with the customers, allocates transaction price to each performance obligation and recognizes revenue when performance obligations are satisfied.

Sales of products are recognized as revenue when the Company delivers products and the customer accepts and controls the product. Except for the consumer electronic products such as mobile devices sold in channel stores which are usually in cash sale, the Company recognizes revenues for sale of other electronic devices and corresponding trade notes and accounts receivable.

Usage revenues from fixed-line services (including local, domestic long distance and international long distance telephone services), mobile services, internet and data services, and interconnection and call transfer fees from other telecommunications companies and carriers are billed in arrears and are recognized based upon seconds or minutes of traffic processed when the services are provided in accordance with contract terms. The usage revenues and corresponding trade notes and accounts receivable are recognized monthly.

Other revenues are recognized as follows: (a) one-time subscriber connection fees (on fixed-line services) are first recognized as contract liabilities and revenues are recognized subsequently over the average expected customer service periods, (b) monthly fees (on fixed-line services, mobile, internet and data services) and related receivables are accrued monthly, and (c) prepaid services (fixed-line, mobile, internet and data services) are recognized as contract liabilities upon collection considerations from customers and are recognized as revenues subsequently based upon actual usage by customers.

Where the Company enters into transactions which involve both the provision of telecommunications service bundled with products such as handsets, total consideration received from products and telecommunications service in these arrangements are allocated based on their relative stand-alone selling price. The amount of sales revenue recognized for products is not limited to the amount paid by the customer for the products. When the amount of sales revenue recognized for products exceeded the amount paid by the customer for the products, the difference is recognized as contract assets. Contract assets are reclassified to accounts receivable when the amounts become collectible from customers subsequently. When the amount of sales revenue recognized for products was less than the amount paid by the customer for the products, the difference is recognized as contract liabilities and revenues are recognized subsequently when the telecommunications service are provided.

For project business contracts, if a substantial part of the Company's promise to customers is to manage and coordinate the various tasks and assume the risks of those tasks to ensure the individual goods or services are incorporated into the combined output, they are treated as a single performance obligation since the Company provides a significant integration service. The Company recognizes revenues and corresponding accounts receivable when the project business contract is completed and accepted by customers.

For service contracts such as maintenance and warranties, customers simultaneously receive and consume the benefits provided by the Company; thus revenues and corresponding accounts receivable of service contracts are recognized over the related service period.

When another party is involved in providing goods or services to a customer, the Company is acting as a principal if it controls the specified good or service before that good or service is transferred to a customer; otherwise, the Company is acting as an agent. When the Company is acting as a principal, gross inflow of economic benefits arising from transactions is recognized as revenue. When the Company is acting as an agent, revenue is recognized as its share of transaction.

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**Incremental Costs of Obtaining Contracts** 

Commissions and equipment subsidy related to telecommunications service as a result of obtaining contracts are recognized as an asset under the incremental costs of obtaining contracts to the extent the costs are expected to be recovered, and are amortized over the contract period. However, the Company elects not to capitalize the incremental costs of obtaining contracts if the amortization period of the assets that the Company otherwise would have recognized is expected to be one year or less.

**Leasing** 

At inception of a contract, the Company assesses whether the contract is, or contains, a lease.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. The Company as lessor

Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. The Company as lessee

The Company recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for lease payments for low-value assets are recognized as expenses on a straight-line basis over the lease terms accounted for applying recognition exemption.

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities and for lease payments made at or before the commencement date. Right-of-use assets are subsequently measured at cost less accumulated depreciation and accumulated impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented separately on the balance sheets.

Right-of-use assets are depreciated using the straight-line basis from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

Lease liabilities were initially measured at the present value of the lease payments, which comprise fixed payments, in-substance fixed payments, variable lease payments which depend on an index or a rate. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If such rate cannot be readily determined, the lessee's incremental borrowing rate is used.

Lease liabilities are subsequently measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term, a change in future lease payments resulting from a change in an index or a rate used to determine those payments, the Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. The Company accounts for the remeasurement of the lease liability as a result of the decrease of lease scope by decreasing the carrying amount of the right-of-use assets and recognizes in profit or loss any gain or loss on the partial or full termination of the lease. Lease liabilities are presented separately on the balance sheets.

Variable lease payments not depending on an index or a rate are recognized as expenses in the periods in which they are incurred.

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**Borrowing Costs** 

All borrowing costs are recognized in profit or loss in the period in which they are incurred.

**Government Grants** 

Government grants are not recognized until there is reasonable assurance that the Company will comply with the conditions attached to government grants and that the grants will be received.

Government grants related to income are recognized in profit or loss on a systematic basis over the periods in which the Company recognizes expenses of the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Company should construct noncurrent assets are recognized as deferred revenue and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.

Government grants that become receivable as compensation for expenses or losses already incurred are recognized in profit or loss in the period in which they become receivable.

**Employee Benefits** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.

Defined benefit costs (including service cost, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost and gains or losses on settlements) and net interest on the net defined benefit liability (asset) are recognized as employee benefits expense in the period they occur. Remeasurement, comprising (a) actuarial gains and losses; and (b) the return on plan assets, excluding amounts included in net interest on the net defined benefit liability (asset), is recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit liability (asset) represents the actual deficit (surplus) in the Company's defined benefit plan. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Other long-term employee benefits

Other long-term employee benefits are accounted for in the same way as the accounting required for defined benefit plan except that remeasurement is recognized in profit or loss.

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**Income Tax** 

Income tax expense represents the sum of the tax currently payable and deferred tax.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Current tax

According to the Income Tax Act in the ROC, an additional tax of unappropriated earnings is provided for in the year the stockholders approve to retain the earnings.

Adjustments of prior years' tax liabilities are added to or deducted from the current year's tax provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the Company's financial statements and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences and unused tax credits from purchases of machinery, equipment and technology and research, development expenditures, etc. to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, associates and joint ventures, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and such temporary differences are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax assets and liabilities reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Current and deferred tax

Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income, in which case, the current and deferred tax are also recognized in other comprehensive income.

Where current tax or deferred tax arises from the initial accounting for the acquisition of a subsidiary, the tax effect is included in the accounting for the investments in a subsidiary.

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**4.** **CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY AND ASSUMPTION** 

In the application of the Company's accounting policies, the management is required to make judgments, estimates and assumptions which are based on historical experience and other factors that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed by the management on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Critical accounting judgments

1) Principal versus agent

The Company's project agreements are mainly to provide one or more customized equipment or services to customers. In order to fulfill the agreements, another party may be involved in some agreements. The Company considers the following factors to determine whether the Company is a principal of the transaction: whether the Company is the primary obligation provider of the agreements, its exposures to inventory risks and the discretion in establishing prices, etc. The determination of whether the Company is a principal or an agent will affect the amount of revenue recognized by the Company. Only when the Company is acting as a principal, gross inflows of economic benefits arising from transactions is recognized as revenue.

2) Control over subsidiaries

As discussed in Note 13, some entities are subsidiaries of the Company although the Company only owns less than 50% ownership interests in these entities. After considering the Company's absolute size of holding in the entity and the relative size of and the dispersion of shares owned by the other stockholders, and the contractual arrangements between the Company and other investors, potential voting interests and the written agreement between stockholders, the management concluded that the Company has a sufficiently dominant voting interest to direct the relevant activities of the entity and therefore the Company has control over these entities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Key sources of estimation uncertainty and assumption

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period. Actual results may differ from these estimates.

1) Impairment of trade notes and accounts receivable

The provision for impairment of trade notes and accounts receivable is based on assumptions on probability of default and expected credit loss rates. The Company uses judgment in making these assumptions and in selecting the inputs to the impairment calculation, based on the Company's past experience, current market conditions as well as forward looking information at the end of each reporting period. For details of the key assumptions and inputs used, see Note 9. Where the actual future cash flows are less than expected, a material impairment loss may arise.

2) Fair value measurements and valuation processes

For the assets and liabilities measured at fair value without quoted prices in active markets, the Company's management determines the appropriate valuation techniques for the fair value measurements and whether to engage third party qualified appraisers based on the related regulations and professional judgments.

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Information about the valuation techniques and inputs used in determining the fair value of various assets and liabilities was disclosed in Note 32. If the actual changes of inputs in the future differ from expectation, the fair value may vary accordingly. The Company updates inputs periodically to monitor the appropriateness of the fair value measurement.

3) Provision for inventory valuation and obsolescence

Inventories are stated at the lower of cost or net realizable value. Net realizable value is calculated as the estimated selling price less the estimated costs necessary to make a sale. Comparison of net realizable value and cost is determined on an item by item basis, except for those similar items which could be categorized into the same groups. The Company uses the inventory holding period and turnover as the evaluation basis for inventory obsolescence losses.

4) Impairment of property, plant and equipment, right-of-use assets, investment properties and intangible assets

When an indication of impairment is assessed with objective evidence, the Company considers whether the recoverable amount of an asset is less than its carrying amount and recognizes the impairment loss based on difference between the recoverable amount and its carrying amount. The estimate of recoverable amount would impact on the timing and the amount of impairment loss recognition.

5) Useful lives of property, plant and equipment

As discussed in Note 3, "Summary of Significant Accounting Policies-Property, Plant and Equipment", the Company reviews estimated useful lives of property, plant and equipment at the end of each year.

6) Recognition and measurement of defined benefit plans

Net defined benefit liabilities (assets) and the resulting pension expense under defined benefit pension plans are calculated using the Projected Unit Credit Method. Actuarial assumptions comprise the discount rate, employee turnover rate, average future salary increase and etc. Changes in economic circumstances and market conditions will affect these assumptions and may have a material impact on the amount of the expense and the liability.

7) Lessees' incremental borrowing rates

In determining a lessee's incremental borrowing rate used in discounting lease payments, a risk-free rate for relevant duration and the same currency is selected as a reference rate. The lessee's credit spread adjustments and lease specific adjustments are also taken into account.

**5.** **APPLICATION OF NEW AND REVISED STANDARDS AND INTERPRETATIONS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Initial application of the amendments to the International Financial Reporting Standards (IFRS), International
Accounting Standards (IAS), International Financial Reporting Interpretations Committee Interpretations (IFRIC) and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission (FSC).

The initial application of the amendments to the IFRS, IAS, IFRIC and SIC issued by the International Accounting Standards Board and endorsed and issued into effect by the FSC (collectively, the "Taiwan-IFRSs") does not have material impacts on the Company's financial statements.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Amendments to IFRSs endorsed by the FSC for application starting from January 1, 2023

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| | | |
|:---|:---|:---|
| **New, Revised or Amended Standards and Interpretations** | **New, Revised or Amended Standards and Interpretations** | **Effective Date**<br> **Announced by IASB** |
| Amendments to IAS 1 | Disclosure of Accounting Policies | January 1, 2023 (Note 1) |
| Amendments to IAS 8 | Definition of Accounting Estimates | January 1, 2023 (Note 2) |
| Amendments to IAS 12 | Deferred Tax related to Assets and Liabilities arising from a Single Transaction | January 1, 2023 (Note 3) |

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Note 1: The amendments will be applied for annual reporting periods beginning on or after January 1, 2023.

Note 2: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.

Note 3: Except for deferred taxes that were recognized on January 1, 2022 for temporary differences associated with leases and decommissioning obligations, the amendments were applied prospectively to transactions that occur on or after January 1, 2022.

The application of the above new, revised or amended standards and interpretations will not have a material impact on the Company's financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. IFRSs issued by the IASB but not yet endorsed and issued into effect by the FSC

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| | | |
|:---|:---|:---|
| **New, Revised or Amended Standards and Interpretations** | **New, Revised or Amended Standards and Interpretations** | **Effective Date<br>Announced by IASB<br>(Note 1)** |
|  Amendments to IFRS 10 and IAS 28 | Sale or Contribution of Assets between An Investor and Its Associate or Joint Venture | To be determined<br> by IASB |
|  Amendments to IFRS 16 | Leases Liability in a Sale and Leaseback | January 1, 2024<br> (Note 2) |
|  Amendments to IAS 1 | Classification of Liabilities as Current or Non-current | January 1, 2024 |
|  Amendments to IAS 1 | Non-current Liabilities with Covenants | January 1, 2024 |

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Note 1: Unless stated otherwise, the above new IFRSs are effective for annual periods beginning on or after their respective effective dates.

Note 2: A seller-lessee shall apply the Amendments to IFRS 16 retrospectively to sale and leaseback transactions entered into after the date of initial application of IFRS 16.

As of the date the financial statements were authorized for issue, the Company is continuously assessing the possible impact that the application of above standards and interpretations will have on the Company's financial position and operating result and will disclose the relevant impact when the assessment is completed.

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**6.** **CASH AND CASH EQUIVALENTS** 

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| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Cash |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash on hand | $126582 | $138312 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bank deposits | 3305759 | 8310540 |
|  | 3432341 | 8448852 |
|  Cash equivalents (with maturities of less than three months) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Commercial papers | 19043721 | 12338368 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Negotiable certificates of deposit | 15500000 | 7500000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stimulus vouchers |  | 2336 |
|  | 34543721 | 19840704 |
|  | $37976062 | $28289556 |

---

The annual yield rates of bank deposits, commercial papers and negotiable certificates of deposit as of balance sheet dates were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Bank deposits | 0.00%~2.62% | 0.00%~0.10% |
|  Commercial papers | 0.90%~1.30% | 0.20%~0.30% |
|  Negotiable certificates of deposit | 1.20%~1.45% | 0.27%~0.30% |

---

**7.** **FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  <u>Financial assets-current</u> |  |  |
|  Mandatorily measured at FVTPL |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Derivatives (not designated for hedge) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Forward exchange contracts | $3514 | $— |
|  <u>Financial assets-noncurrent</u> |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mandatorily measured at FVTPL |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-derivatives |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-listed stocks - domestic | $758312 | $647998 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-listed stocks - foreign | 102648 | 236672 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Limited partnership - domestic | 93114 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Film and drama investing agreements | 24122 |  |
|  | $978196 | $884670 |
|  <u>Financial liabilities-current</u> |  |  |
|  Held for trading |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Derivatives (not designated for hedge) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Forward exchange contracts | $— | $6180 |

---

------

Chunghwa's Board of Directors approved an investment in Taiwania Capital Buffalo Fund VI, L.P. at the amount of $600,000 thousand in January 2022. As of December 31, 2022, Chunghwa invested $100,000 thousand.

Outstanding forward exchange contracts not designated for hedge as of balance sheet dates were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Currency** | **Maturity<br>Period** | **Contract Amount**<br> **(In Thousands)** |
| December 31, 2022 |  |  |  |
|  Forward exchange contracts - buy | NT$/EUR | 2023.03 | NT$61,746/EUR2,000 |
| December 31, 2021 |  |  |  |
|  Forward exchange contracts - buy | NT$/EUR | 2022.03 | NT$257,081/EUR8,000 |

---

The Company entered into the above forward exchange contracts to manage its exposure to foreign currency risk due to fluctuations in exchange rates. However, the aforementioned derivatives did not meet the criteria for hedge accounting.

**8.** **FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - NONCURRENT** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Domestic investments |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-listed stocks | $3026049 | $2931257 |
|  Foreign investments |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-listed stocks | 117817 | 127349 |
|  | $3143866 | $3058606 |

---

The Company holds the above foreign and domestic stocks for medium to long-term strategic purposes and expects to profit from long-term investment. Accordingly, the management elected to designate these investments in equity instruments at FVOCI as they believe that recognizing short-term fair value fluctuations of these investments in profit or loss is not consistent with the Company's strategy of holding these investments for long-term purposes.

The Company disposed of its investment in China Airlines, Ltd. starting from December 2020 and sold all its shares by February 2021. The total fair value of the disposed investment was $2,635,568 thousand in 2021. The Company disposed of its investment in UUPON Inc. (UUPON) in October 2021 and the fair value of the disposed investment was $1,478 thousand.

The related unrealized gains on financial assets at FVOCI of $94,588 thousand were transferred from other equity to retained earnings upon the aforementioned disposals in 2021.

The Company recognized dividend income of $150,569 thousand and $149,918 thousand for the years ended December 31, 2022 and 2021, respectively, from the investments still held on December 31, 2022 and 2021.

------

**9.** **TRADE NOTES AND ACCOUNTS RECEIVABLE, NET** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Trade notes and accounts receivable | $22784830 | $22264613 |
|  Less: Loss allowance | (1335778) | (1572949) |
|  | $21449052 | $20691664 |

---

The main credit terms range from 30 to 90 days.

The Company serves a large consumer base for telecommunications business; therefore, the concentration of credit risk is limited. When having transactions with customers, the Company considers the record of arrears in the past. In addition, the Company may also collect some telecommunication charges in advance to reduce the payment arrears in subsequent periods.

The Company adopted a policy of dealing with counterparties with certain credit ratings for project business and to obtain collateral where necessary to mitigate the risk of loss arising from defaults. Credit rating information is provided by independent rating agencies where available and, if such credit rating information is not available, the Company uses other publicly available financial information and its own historical transaction experience to rate its major customers. The Company continues to monitor the credit exposure and credit ratings of its counterparties and spread the credit risk amongst qualified counterparties.

In order to mitigate credit risk, the management of the Company has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure the recoverability of receivables. In addition, the Company reviews the recoverable amount of receivables at balance sheet dates to ensure that adequate allowance is provided for possible irrecoverable amounts. In this regard, the management believes the Company's credit risk could be reasonably reduced.

The Company applies the simplified approach to recognize expected credit losses prescribed by IFRS 9, which permits the use of lifetime expected loss provision for receivables. The expected credit losses on receivables are estimated using a provision matrix by reference to past default experience of the customers and an analysis of the customers' current financial positions, as well as the forward-looking indicators such as macroeconomic business indicator.

When there is evidence indicating that the counterparty is in evasion, bankruptcy, deregistration or the accounts receivable are over two years past due and the recoverable amount cannot be reasonable estimated, the Company writes off the trade notes and accounts receivable. For accounts receivable that have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

The Company's provision matrix arising from telecommunications business and project business is disclosed below.

<u>December 31, 2022</u> 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Not Past Due** | **Past Due Less<br>than 30 Days** | **Pass Due**<br> **31 to 60 Days** | **Pass Due**<br> **61 to 90 Days** | **Pass Due**<br> **91 to 120 Days** | **Pass Due**<br> **121 to 180 Days** | **Pass Due**<br> **over 180 Days** | **Total** |
|  Telecommunications business |  |  |  |  |  |  |  |  |
|  Expected credit loss rate (Note a) | 0%~1% | 1%~20% | 3%~64% | 11%~80% | 25%~90% | 45%~96% | 100% |  |
|  Gross carrying amount | $17162634 | $310392 | $86500 | $32826 | $27774 | $34127 | $599316 | $18253569 |
|  Loss allowance (lifetime ECL) | (49644) | (22309) | (19806) | (20927) | (20085) | (29244) | (599316) | (761331) |
|  Amortized cost | $17112990 | $288083 | $66694 | $11899 | $7689 | $4883 | $— | $17492238 |

---

(Continued)

------

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Not Past Due** | **Past Due Less<br>than 30 Days** | **Pass Due**<br> **31 to 60 Days** | **Pass Due**<br> **61 to 90 Days** | **Pass Due**<br> **91 to 120 Days** | **Pass Due**<br> **121 to 180 Days** | **Pass Due**<br> **over 180 Days** | **Total** |
|  <u>Project business</u> |  |  |  |  |  |  |  |  |
|  Expected credit loss rate (Note b) | 0%~5% | 5% | 10% | 30% | 50% | 80% | 100% |  |
|  Gross carrying amount | $3797905 | $119329 | $11424 | $53189 | $1360 | $785 | $547269 | $4531261 |
|  Loss allowance (lifetime ECL) | (2604) | (6138) | (1142) | (15986) | (680) | (628) | (547269) | (574447) |
|  Amortized cost | $3795301 | $113191 | $10282 | $37203 | $680 | $157 | $— | $3956814 |

---

(Concluded)

<u>December 31, 2021</u> 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Not Past Due** | **Past Due Less<br>than 30 Days** | **Pass Due**<br> **31 to 60 Days** | **Pass Due**<br> **61 to 90 Days** | **Pass Due**<br> **91 to 120 Days** | **Pass Due**<br> **121 to 180 Days** | **Pass Due**<br> **over 180 Days** | **Total** |
|  Telecommunications business |  |  |  |  |  |  |  |  |
|  Expected credit loss rate (Note a) | 0%~1% | 1%~22% | 3%~62% | 11%~80% | 25%~90% | 49%~97% | 100% |  |
|  Gross carrying amount | $16410725 | $282040 | $82062 | $44539 | $31065 | $31000 | $602833 | $17484264 |
|  Loss allowance (lifetime ECL) | (50733) | (23465) | (28596) | (29800) | (25402) | (28423) | (602833) | (789252) |
|  Amortized cost | $16359992 | $258575 | $53466 | $14739 | $5663 | $2577 | $— | $16695012 |
|  <u>Project business</u> |  |  |  |  |  |  |  |  |
|  Expected credit loss rate (Note b) | 0%~5% | 5% | 10% | 30% | 50% | 80% | 100% |  |
|  Gross carrying amount | $3988010 | $136 | $6960 | $14271 | $411 | $799 | $769762 | $4780349 |
|  Loss allowance (lifetime ECL) | (7835) | (68) | (890) | (4293) | (210) | (639) | (769762) | (783697) |
|  Amortized cost | $3980175 | $68 | $6070 | $9978 | $201 | $160 | $— | $3996652 |

---

Note a: Please refer to Note 38 for the information of disaggregation of telecommunications service revenue. The expected credit loss rate applicable to different business revenue varies so as to reflect the risk level indicating by factors like historical experience.

---

| | |
|:---|:---|
| Note b: | The project business has different loss types according to the customer types. The expected credit loss rate listed above is for general customers. When the customer is a government-affiliated entity, it is anticipated that there will not be an instance of credit loss. Customers with past history of bounced checks or accounts receivable exceeding six months overdue are classified as high-risk customers, with an expected credit loss rate of 50%, increasing by period as the days overdue increase.  |

---

Movements of loss allowance for trade notes and accounts receivable were as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Beginning balance | $1572949 | $2116716 |
|  Add: Provision for credit loss | 108402 | 120961 |
|  Less: Amounts written off | (345573) | (664728) |
|  Ending balance | $1335778 | $1572949 |

---

------

**10.** **INVENTORIES** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Merchandise | $1026261 | $1190607 |
|  Project in process | 3876742 | 4087537 |
|  | $4903003 | $5278144 |

---

The operating costs related to inventories were $24,018,696 thousand (including the valuation loss on inventories of $9,252 thousand) and $27,634,049 thousand (including the valuation loss on inventories of $163,193 thousand) for the years ended December 31, 2022 and 2021, respectively.

**11.** **PREPAYMENTS** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Prepaid rents | $1299100 | $1388566 |
|  Others | 1007624 | 1192485 |
|  | $2306724 | $2581051 |
|  Current |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid rents | $420500 | $451248 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 1007624 | 1192485 |
|  | $1428124 | $1643733 |
|  Noncurrent |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid rents | $878600 | $937318 |

---

Prepaid rents comprised the prepayments from the lease agreements applying the recognition exemption and the prepayments for leases that do not meet the definition of leases under IFRS 16.

**12.** **OTHER CURRENT MONETARY ASSETS** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Receivable of receipts under custody | $732689 | $765169 |
|  Time deposits and negotiable certificates of deposit with maturities of more than three months | 14767 | 33853 |
|  Others | 628747 | 560691 |
|  | $1376203 | $1359713 |

---

------

The annual yield rates of time deposits and negotiable certificates of deposit with maturities of more than three months at the balance sheet dates were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Time deposits and negotiable certificates of deposit with maturities of more than three months | 1.20%~1.45% | 0.14%~0.82% |

---

**13.** **INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Investments in subsidiaries | $15075655 | $14537488 |
|  Investments in associates | 5310750 | 5572981 |
|  Investments in joint venture | 9677 | 9932 |
|  | $20396082 | $20120401 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Investments in subsidiaries

Investments in subsidiaries were as follows:

---

| | | |
|:---|:---|:---|
|  | **Carrying Amount** | **Carrying Amount** |
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  <u>Listed</u> |  |  |
|  Senao International Co., Ltd. ("SENAO") | $56695 | $211023 |
|  CHIEF Telecom Inc. ("CHIEF") | 1983440 | 1845072 |
|  <u>Non-listed</u> |  |  |
|  Light Era Development Co., Ltd. ("LED") | 3839742 | 3856921 |
|  Chunghwa Investment Co., Ltd. ("CHI") | 3176735 | 3202188 |
|  Chunghwa Telecom Singapore Pte., Ltd. ("CHTS") | 1120634 | 1057720 |
|  Honghwa International Co., Ltd. ("HHI") | 730084 | 616610 |
|  Chunghwa System Integration Co., Ltd. ("CHSI") | 718130 | 716992 |
|  Donghwa Telecom Co., Ltd. ("DHT") | 707721 | 613536 |
|  International Integrated Systems, Inc. ("IISI") | 642709 | 586133 |
|  Chunghwa Telecom Global, Inc. ("CHTG") | 597080 | 464281 |
|  CHT Security Co., Ltd. ("CHTSC") | 405032 | 375827 |
|  CHYP Multimedia Marketing & Communications Co., Ltd. ("CHYP") | 204188 | 201424 |
|  Prime Asia Investments Group Ltd. ("Prime Asia") | 162922 | 153582 |
|  Spring House Entertainment Tech. Inc. ("SHE") | 158406 | 143613 |
|  Chunghwa Leading Photonics Tech. Co., Ltd. ("CLPT") | 150071 | 121879 |
|  Chunghwa Telecom Japan Co., Ltd. ("CHTJ") | 124400 | 98852 |
|  Chunghwa Telecom (Thailand) Co., Ltd. ("CHTT") | 114611 | 99853 |
|  Chunghwa Telecom Vietnam Co., Ltd. ("CHTV") | 103508 | 97014 |
|  Smartfun Digital Co., Ltd. ("SFD") | 81764 | 79876 |
|  Chunghwa Sochamp Technology Inc. ("CHST") | (2217) | (4908) |
|  | $15075655 | $14537488 |

---

------

The percentages of ownership and voting rights in subsidiaries held by the Company as of balance sheet dates were as follows:

---

| | | |
|:---|:---|:---|
|  | **% of Ownership and Voting Right** | **% of Ownership and Voting Right** |
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Senao International Co., Ltd. ("SENAO") | 28 | 28 |
|  CHIEF Telecom Inc. ("CHIEF") | 56 | 56 |
|  Light Era Development Co., Ltd. ("LED") | 100 | 100 |
|  Chunghwa Investment Co., Ltd. ("CHI") | 89 | 89 |
|  Chunghwa Telecom Singapore Pte., Ltd. ("CHTS") | 100 | 100 |
|  Honghwa International Co., Ltd. ("HHI") | 100 | 100 |
|  Chunghwa System Integration Co., Ltd. ("CHSI") | 100 | 100 |
|  Donghwa Telecom Co., Ltd. ("DHT") | 100 | 100 |
|  International Integrated Systems, Inc. ("IISI") | 51 | 51 |
|  Chunghwa Telecom Global, Inc. ("CHTG") | 100 | 100 |
|  CHT Security Co., Ltd. ("CHTSC") | 73 | 77 |
|  CHYP Multimedia Marketing & Communications Co., Ltd. ("CHYP") | 100 | 100 |
|  Prime Asia Investments Group Ltd. ("Prime Asia") | 100 | 100 |
|  Spring House Entertainment Tech. Inc. ("SHE") | 56 | 56 |
|  Chunghwa Leading Photonics Tech. Co., Ltd. ("CLPT") | 75 | 75 |
|  Chunghwa Telecom Japan Co., Ltd. ("CHTJ") | 100 | 100 |
|  Chunghwa Telecom (Thailand) Co., Ltd. ("CHTT") | 100 | 100 |
|  Chunghwa Telecom Vietnam Co., Ltd. ("CHTV") | 100 | 100 |
|  Smartfun Digital Co., Ltd. ("SFD") | 65 | 65 |
|  Chunghwa Sochamp Technology Inc. ("CHST") | 37 | 51 |

---

The Company continues to control seven out of thirteen seats of the Board of Directors of SENAO through the support of large beneficial stockholders. As a result, the Company treated SENAO as a subsidiary.

CHIEF issued new shares in March 2021, December 2021, March 2022 and December 2022 as its employees exercised options. Therefore, the Company's ownership interest in CHIEF decreased to 55.95% % and 55.73% as of December 31, 2021 and 2022, respectively.

DHT reduced and returned its capital to its stakeholders in March 2021. The Company's ownership interest in DHT remained the same.

IISI issued new shares in January 2021 as its employees exercised options. Therefore, the Company's ownership interest in IISI decreased to 51.02%.

CHTSC issued new shares in February 2021, February 2022 and May 2022 as its employees exercised options. Therefore, the Company's ownership interest in CHTSC decreased to 77.46% and 73.09% as of December 31, 2021 and 2022, respectively.

The Company did not participate in the capital increase of CHST in November 2022. Therefore, the Company's ownership interest in CHST decreased to 37.09% as of December 31, 2022. However, the Company continues to control three out of five seats of the Board of Directors of CHST. As a result, the Company treated CHST as a subsidiary.

For the details of the subsidiaries indirectly held by the Company, please refer to Note 37.

------

The Company's share of profit (loss) and other comprehensive income (loss) of the subsidiaries was recognized based on the audited financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Investments in associates

Investments in associates were as follows:

---

| | | |
|:---|:---|:---|
|  | **Carrying Amount** | **Carrying Amount** |
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  <u>Material associate</u> |  |  |
|  <u>Non-listed</u> |  |  |
|  Next Commercial Bank Co., Ltd. ("NCB") | $3173309 | $3592054 |
|  <u>Associates that are not individually material</u> |  |  |
|  <u>Listed</u> |  |  |
|  KingwayTek Technology Co., Ltd. ("KWT") | 267125 | 258943 |
|  <u>Non-listed</u> |  |  |
|  Viettel-CHT Co., Ltd. ("Viettel-CHT") | 558532 | 447097 |
|  Taiwan International Standard Electronics Co., Ltd. ("TISE") | 296501 | 347269 |
|  Chunghwa PChome Fund I Co., Ltd. ("CPFI") | 277776 | 222491 |
|  So-net Entertainment Taiwan Limited ("So-net") | 228184 | 217021 |
|  WiAdvance Technology Corporation ("WATC") | 227868 | 253873 |
|  KKBOX Taiwan Co., Ltd. ("KKBOXTW") | 173634 | 157524 |
|  Taiwan International Ports Logistics Corporation ("TIPL") | 101078 | 70121 |
|  Cornerstone Ventures Co., Ltd. ("CVC") | 6743 | 6588 |
|  Alliance Digital Tech Co., Ltd. ("ADT") |  |  |
|  | 2137441 | 1980927 |
|  | $5310750 | $5572981 |

---

The percentages of ownership interests and voting rights in associates held by the Company as of balance sheet dates were as follows:

---

| | | |
|:---|:---|:---|
|  | **% of Ownership Interests and Voting Rights** | **% of Ownership Interests and Voting Rights** |
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  <u>Material associate</u> |  |  |
|  <u>Non-listed</u> |  |  |
|  Next Commercial Bank Co., Ltd. ("NCB") | 42 | 42 |

---

(Continued)

------

---

| | | |
|:---|:---|:---|
|  | **% of Ownership Interests and Voting Rights** | **% of Ownership Interests and Voting Rights** |
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  <u>Associates that are not individually material</u> |  |  |
|  <u>Listed</u> |  |  |
|  KingwayTek Technology Co., Ltd. ("KWT") | 23 | 23 |
|  <u>Non-listed</u> |  |  |
|  Viettel-CHT Co., Ltd. ("Viettel-CHT") | 30 | 30 |
|  Taiwan International Standard Electronics Co., Ltd. ("TISE") | 40 | 40 |
|  Chunghwa PChome Fund I Co., Ltd. ("CPFI") | 50 | 50 |
|  So-net Entertainment Taiwan Limited ("So-net") | 30 | 30 |
|  WiAdvance Technology Corporation ("WATC") | 20 | 20 |
|  KKBOX Taiwan Co., Ltd. ("KKBOXTW") | 30 | 30 |
|  Taiwan International Ports Logistics Corporation ("TIPL") | 27 | 27 |
|  Cornerstone Ventures Co., Ltd. ("CVC") | 49 | 49 |
|  Alliance Digital Tech Co., Ltd. ("ADT") |  |  |

---

(Concluded)

Summarized financial information of NCB was set out below:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Assets | $33540595 | $9197280 |
|  Liabilities | (25882268) | (524813) |
|  Equity | $7658327 | $8672467 |
|  The percentage of ownership interest held by the Company | 41.90% | 41.90% |
|  Equity attributable to the Company | $3208839 | $3633764 |
|  Unrealized gain or loss from downstream transactions | (35530) | (41710) |
|  The carrying amount of investment | $3173309 | $3592054 |

---

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Net revenues (losses) | $(47349) | $14907 |
|  Net loss for the year | $(1004331) | $(445665) |
|  Other comprehensive loss | (9809) |  |
|  Total comprehensive loss for the year | $(1014140) | $(445665) |

---

------

Except for NCB, no associate is considered individually material to the Company. Summarized financial information of associates that are not individually material to the Company was as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  The Company's share of profits | $314351 | $258266 |
|  The Company's share of other comprehensive income (loss) | 4625 | (6167) |
|  The Company's share of total comprehensive income | $318976 | $252099 |

---

The Level 1 fair values of associate based on the closing market prices as of the balance sheet date was as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  KWT | $804187 | $909787 |

---

The Company invested $273,800 thousand and obtained 20.33% ownership interest by participating in the capital increase of WATC in March 2021. WATC mainly engages in software solution integration. WATC issued new shares in March 2022 and October 2022 as its employees exercised option. Therefore, the Company's ownership interest in WATC decreased to 20.05% as of December 31, 2022.

The Company's ownership interest in NCB is 41.90%. Although the Company is the single largest stockholder of NCB, it only obtained six out of fifteen seats of the Board of Directors of NCB. In addition, the management considered the size of ownership interest and the dispersion of shares owned by the other stockholders, other holdings are not extremely dispersed. The Company is not able to direct its relevant activities. Therefore, the Company does not have control over NCB and merely has significant influence over NCB and treated it as an associate.

The Company invested and obtained 50% ownership interest in CPFI. However, as the Company has only two out of five seats of the Board of Directors of CPFI and has no control but significant influence over CPFI. Therefore, the Company recognized CPFI as an investment in associate.

The Company invested and obtained 49% ownership interest in CVC. However, as the Company has only two out of five seats of the Board of Directors of CVC and has no control but significant influence over CVC. Therefore, the Company recognized CVC as an investment in associate.

The Company owns 14% ownership interest in ADT. Considering the seats that the Company controls in the Board of Directors of ADT and the relative size of ownership interest and the dispersion of shares owned by the other stockholders, the Company has significant influence over ADT. ADT completed its liquidation in August 2021. The Company received the liquidation distribution of $8,519 thousand and recognized gain on disposal of $3,239 thousand under "other gains and losses" on the statements of comprehensive income.

The Company's share of profits and other comprehensive income (loss) of associates was recognized based on the audited financial statements.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Investment in joint venture

Investment in joint venture was as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Carrying Amount** | **Carrying Amount** | **% of Ownership Interests and Voting Rights** | **% of Ownership Interests and Voting Rights** |
|  | **December 31** | **December 31** | **December 31** | **December 31** |
| **Name of Joint Venture** | **2022** | **2021** | **2022** | **2021** |
|  <u>Non-listed</u> |  |  |  |  |
|  Chunghwa SEA Holdings("CHT SEA") | $9677 | $9932 | 51 | 51 |

---

The Company invested and established a joint venture, CHT SEA, with Delta Electronics, Inc. and Kwang Hsing Industrial Co., Ltd. and obtained 51% ownership interest of CHT SEA. However, according to the mutual agreements among stockholders, the Company does not individually direct CHT SEA's relevant activities and has joint control with the other party; therefore, the Company treated CHT SEA as a joint venture.

The joint venture is not considered individually material to the Company. Summarized financial information of CHT SEA was set out below:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  The Company's share of loss | $(255) | $(268) |
|  The Company's share of other comprehensive income |  |  |
|  The Company's share of total comprehensive loss | $(255) | $(268) |

---

The Company's share of loss and other comprehensive income of the joint venture was recognized based on the audited financial statements.

**14.** **PROPERTY, PLANT AND EQUIPMENT** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Assets used by the Company | $275320953 | $272636255 |
|  Assets subject to operating leases | 5814240 | 7274635 |
|  | $281135193 | $279910890 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Assets used by the Company

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Land** | **Land<br>Improvements** | **Buildings** | **Computer<br>Equipment** | **Telecommuni-<br>cations<br>Equipment** | **Transportation<br>Equipment** | **Miscellaneous<br>Equipment** | **Construction in<br>Progress and<br>Equipment to<br>be Accepted** | **Total** |
|  <u>Cost</u> |  |  |  |  |  |  |  |  |  |
|  Balance on January 1, 2021 | $99167842 | $1630362 | $66806830 | $11890117 | $707013740 | $3887139 | $7886132 | $8171372 | $906453534 |
|  Additions |  |  | 22 | 279 | 19414 |  |  | 34650055 | 34669770 |
|  Disposal |  | (1025) | (29418) | (1668127) | (27892367) | (83592) | (356778) |  | (30031307) |
|  Others | 409028 | 32291 | (82810) | 494150 | 30660664 | 117754 | 628098 | (32746371) | (487196) |
|  Balance on December 31, 2021 | $99576870 | $1661628 | $66694624 | $10716419 | $709801451 | $3921301 | $8157452 | $10075056 | $910604801 |

---

(Continued)

------

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Land** | **Land<br>Improvements** | **Buildings** | **Computer<br>Equipment** | **Telecommuni-<br>cations<br>Equipment** | **Transportation<br>Equipment** | **Miscellaneous<br>Equipment** | **Construction in<br>Progress and<br>Equipment to<br>be Accepted** | **Total** |
|  <u>Accumulated depreciation and impairment</u> |  |  |  |  |  |  |  |  |  |
|  Balance on January 1, 2021 | $— | $(1399204) | $(28338602) | $(10258795) | $(591164004) | $(3713962) | $(6308207) | $— | $(641182774) |
|  Depreciation expenses |  | (43433) | (1233587) | (654621) | (24610713) | (64388) | (428219) |  | (27034961) |
|  Disposal |  | 1025 | 29418 | 1667245 | 27876249 | 83592 | 352721 |  | 30010250 |
|  Others |  |  | 285632 | (264) | (1563) | 628 | (45494) |  | 238939 |
|  Balance on December 31, 2021 | $— | $(1441612) | $(29257139) | $(9246435) | $(587900031) | $(3694130) | $(6429199) | $— | $(637968546) |
|  Balance on January 1, 2021, net | $99167842 | $231158 | $38468228 | $1631322 | $115849736 | $173177 | $1577925 | $8171372 | $265270760 |
|  Balance on December 31, 2021, net | $99576870 | $220016 | $37437485 | $1469984 | $121901420 | $227171 | $1728253 | $10075056 | $272636255 |
|  <u>Cost</u> |  |  |  |  |  |  |  |  |  |
|  Balance on January 1, 2022 | $99576870 | $1661628 | $66694624 | $10716419 | $709801451 | $3921301 | $8157452 | $10075056 | $910604801 |
|  Additions |  |  |  |  | 7205 |  |  | 29360001 | 29367206 |
|  Disposal | (3558) | (6042) | (6988) | (775297) | (18385746) | (104132) | (337439) |  | (19619202) |
|  Others | 482268 | 19669 | 1839084 | 561307 | 24603405 | 145495 | 651346 | (26261920) | 2040654 |
|  Balance on December 31, 2022 | $100055580 | $1675255 | $68526720 | $10502429 | $716026315 | $3962664 | $8471359 | $13173137 | $922393459 |
|  <u>Accumulated depreciation and impairment</u> |  |  |  |  |  |  |  |  |  |
|  Balance on January 1, 2022 | $— | $(1441612) | $(29257139) | $(9246435) | $(587900031) | $(3694130) | $(6429199) | $— | $(637968546) |
|  Depreciation expenses |  | (38515) | (1290651) | (651812) | (25470119) | (76662) | (446757) |  | (27974516) |
|  Disposal |  | 6042 | 6988 | 775207 | 18372471 | 104132 | 334364 |  | 19599204 |
|  Others |  |  | (615545) | (262) | (42903) | (417) | (69521) |  | (728648) |
|  Balance on December 31, 2022 | $— | $(1474085) | $(31156347) | $(9123302) | $(595040582) | $(3667077) | $(6611113) | $— | $(647072506) |
|  Balance on January 1, 2022, net | $99576870 | $220016 | $37437485 | $1469984 | $121901420 | $227171 | $1728253 | $10075056 | $272636255 |
|  Balance on December 31, 2022, net | $100055580 | $201170 | $37370373 | $1379127 | $120985733 | $295587 | $1860246 | $13173137 | $275320953 |

---

(Concluded)

There was no indication that property, plant and equipment was impaired; therefore, the Company did not recognize any impairment loss for the years ended December 31, 2022 and 2021.

Depreciation expense for assets used by the Company is computed using the straight-line method over the following estimated service lives:

---

| | |
|:---|:---|
| Land improvements | 10~30 years |
| Buildings |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Main buildings | 35~60 years |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other building facilities | 4~10 years |
| Computer equipment | 4~6 years |
| Telecommunications equipment |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Telecommunication circuits | 10~15 years |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Telecommunication machinery and antennas equipment | 3~10 years |
| Transportation equipment | 3~7 years |
| Miscellaneous equipment |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Leasehold improvements | 2~6 years |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mechanical and air conditioner equipment | 5~16 years |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 3~15 years |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Assets subject to operating leases

---

| | | | |
|:---|:---|:---|:---|
|  | **Land** | **Buildings** | **Total** |
|  <u>Cost</u> |  |  |  |
|  Balance on January 1, 2021 | $4800876 | $4083626 | $8884502 |
|  Others | (163994) | 410274 | 246280 |
|  Balance on December 31, 2021 | $4636882 | $4493900 | $9130782 |

---

(Continued)

------

---

| | | | |
|:---|:---|:---|:---|
|  | **Land** | **Buildings** | **Total** |
|  <u>Accumulated depreciation and impairment</u> |  |  |  |
|  Balance on January 1, 2021 | $— | $(1532098) | $(1532098) |
|  Depreciation expenses |  | (80985) | (80985) |
|  Others |  | (243064) | (243064) |
|  Balance on December 31, 2021 | $— | $(1856147) | $(1856147) |
|  Balance on January 1, 2021, net | $4800876 | $2551528 | $7352404 |
|  Balance on December 31, 2021, net | $4636882 | $2637753 | $7274635 |
|  <u>Cost</u> |  |  |  |
|  Balance on January 1, 2022 | $4636882 | $4493900 | $9130782 |
|  Others | (432730) | (1739950) | (2172680) |
|  Balance on December 31, 2022 | $4204152 | $2753950 | $6958102 |
|  <u>Accumulated depreciation and impairment</u> |  |  |  |
|  Balance on January 1, 2022 | $— | $(1856147) | $(1856147) |
|  Depreciation expenses |  | (51609) | (51609) |
|  Others |  | 763894 | 763894 |
|  Balance on December 31, 2022 | $— | $(1143862) | $(1143862) |
|  Balance on January 1, 2022, net | $4636882 | $2637753 | $7274635 |
|  Balance on December 31, 2022, net | $4204152 | $1610088 | $5814240 |

---

(Concluded)

The Company leases out land and buildings with lease terms between 1 to 20 years. The lessees do not have bargain purchase options to acquire the assets at the expiry of the lease periods.

The future aggregate lease collection under operating lease for the freehold plant, property and equipment was as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Year 1 | $515213 | $566368 |
|  Year 2 | 330305 | 379279 |
|  Year 3 | 224778 | 233045 |
|  Year 4 | 180328 | 163610 |
|  Year 5 | 149433 | 136755 |
|  Onwards | 1122237 | 1177459 |
|  | $2522294 | $2656516 |

---

------

The above items of property, plant and equipment subject to operating leases are depreciated on a straight-line basis over their estimated useful lives as follows:

---

| | |
|:---|:---|
|  Buildings |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Main buildings | 35~60 years |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other building facilities | 4~10 years |

---

**15.** **LEASE ARRANGEMENTS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Right-of-use assets

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Land and buildings |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Handsets base stations | $7176845 | $6989498 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 1168313 | 1236987 |
|  Equipment | 2187861 | 2511059 |
|  | $10533019 | $10737544 |

---

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Additions to right-of-use assets | $3671805 | $4918877 |
|  Depreciation charge for right-of-use assets |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Land and buildings |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Handsets base stations | $2863650 | $2789938 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 376338 | 402224 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Equipment | 327848 | 398496 |
|  | $3567836 | $3590658 |

---

The Company entered into a contract with ST-2 Satellite Ventures Pte., Ltd. to lease capacity on the ST-2 satellite. However, certain frequency that ST-2 satellite originally used was transferred for the use of 5G spectrum to the government, the Company evaluated and determined that the recoverable amount of the related right-of-use assets was nil. Therefore, the Company recognized an impairment loss of $420,590 thousand for the year ended December 31, 2021. The impairment loss was included under "other income and expenses" in the statement of comprehensive income.

The Company did not have significant sublease or impairment of right-of-use assets for the year ended December 31, 2022. The Company did not have significant sublease of right-of-use assets for the year ended December 31, 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Lease liabilities

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Lease liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Current | $3038698 | $2918782 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Noncurrent | 7066749 | 7037599 |
|  | $10105447 | $9956381 |

---

------

Ranges of discount rates for lease liabilities were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Land and buildings |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Handsets base stations | 0.37%~1.71% | 0.37%~1.18% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 0.37%~1.68% | 0.37%~1.12% |
|  Equipment | 0.37%~1.35% | 0.37%~0.82% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Important lease-in activities and terms

The Company mainly enters into lease-in agreements of land and buildings for handsets base stations located throughout Taiwan with lease terms ranging from 1 to 20 years. The lease agreements do not contain bargain purchase options to acquire the assets at the expiration of the respective leases. For majority of the lease-in agreements on handsets base station, the Company has the right to terminate the agreement prior to the expiration date if the Company is unable to build the required telecommunication equipment, either due to legal restrictions, controversial events, or other events.

The Company also leases land and buildings for the use of offices, server rooms, and stores with lease terms from 1 to 30 years. Most of the lease agreements for national land adjust the lease payment according to the changes of the announced land values by the authority. At the expiry of the lease term, the Company does not have bargain purchase options to acquire the assets.

The lease agreements for equipment include a contract between the Company and ST-2 Satellite Ventures Pte., Ltd. to lease capacity on the ST-2 satellite. For the information of lease agreements with related parties, please refer to Note 33 to the financial statements for details.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Other lease information

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Expenses relating to low-value asset leases | $947 | $1039 |
|  Expenses relating to variable lease payments not included in the measurement of lease liabilities | $1561 | $951 |
|  Total cash outflow for leases | $3429630 | $3399194 |

---

The Company leases certain equipment which qualifies as low-value asset leases. The Company has elected to apply the recognition exemption and, thus, not to recognize right-of-use assets and lease liabilities for these leases.

Lease-out arrangements under operating leases for freehold property, plant, and equipment and investment properties were set out in Notes 14 and 16 to the financial statements.

------

**16.** **INVESTMENT PROPERTIES** 

---

| | |
|:---|:---|
|  | **Investment<br>Properties** |
|  <u>Cost</u> |  |
|  Balance on January 1, 2021 | $10587675 |
|  Additions | 146 |
|  Reclassification | 245041 |
|  Balance on December 31, 2021 | $10832862 |
|  <u>Accumulated depreciation and impairment</u> |  |
|  Balance on January 1, 2021 | $(1041128) |
|  Depreciation expense | (42259) |
|  Reversal of impairment loss | 83429 |
|  Balance on December 31, 2021 | $(999958) |
|  Balance on January 1, 2021, net | $9546547 |
|  Balance on December 31, 2021, net | $9832904 |
|  <u>Cost</u> |  |
|  Balance on January 1, 2022 | $10832862 |
|  Additions | 18333 |
|  Reclassification | 99100 |
|  Balance on December 31, 2022 | $10950295 |
|  <u>Accumulated depreciation and impairment</u> |  |
|  Balance on January 1, 2022 | $(999958) |
|  Depreciation expense | (43754) |
|  Reclassification | (39923) |
|  Reversal of impairment loss | 107467 |
|  Balance on December 31, 2022 | $(976168) |
|  Balance on January 1, 2022, net | $9832904 |
|  Balance on December 31, 2022, net | $9974127 |

---

After the evaluation of land and buildings, the Company concluded the recoverable amount which represented the fair value less costs to sell of some land and buildings was higher than the carrying amount. Therefore, the Company recognized reversal of impairment losses of $107,467 thousand and $83,429 thousand for the years ended December 31, 2022 and 2021, respectively, and the amounts were recognized only to the extent of impairment losses that had been recognized in prior years. The reversal of impairment loss was included in other income and expenses in the statements of comprehensive income.

------

Depreciation expense is computed using the straight-line method over the following estimated service lives:

---

| | |
|:---|:---|
|  Land improvements | 10~30 years |
|  Buildings |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Main buildings | 35~60 years |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other building facilities | 4~10 years |

---

The fair values of the Company's investment properties as of December 31, 2022 and 2021 were determined by Level 3 fair value measurements inputs based on the appraisal reports conducted by independent appraisers. Those appraisal reports are based on the comparison approach, income approach or cost approach. Key assumptions and the fair values were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Fair value | $26618481 | $25309026 |
|  Overall capital interest rate | 1.31%~4.91% | 0.91%~3.05% |
|  Profit margin ratio | 8%~20% | 8%~20% |
|  Discount rate |  |  |
|  Capitalization rate | 0.23%~2.16% | 0.53%~2.11% |

---

All of the Company's investment properties are held under freehold interest.

The future aggregate lease collection under operating lease for investment properties is as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Year 1 | $138834 | $120483 |
|  Year 2 | 122654 | 95805 |
|  Year 3 | 114722 | 78031 |
|  Year 4 | 96012 | 73225 |
|  Year 5 | 69686 | 56320 |
|  Onwards | 604532 | 508673 |
|  | $1146440 | $932537 |

---

**17.** **INTANGIBLE ASSETS** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Mobile<br>Broadband<br>Concession** | **Computer<br>Software** | **Others** | **Total** |
|  <u>Cost</u> |  |  |  |  |
|  Balance on January 1, 2021 | $108338000 | $2886946 | $21577 | $111246523 |
|  Additions-acquired separately |  | 162712 | 25233 | 187945 |
|  Disposal |  | (306356) | (9) | (306365) |
|  Balance on December 31, 2021 | $108338000 | $2743302 | $46801 | $111128103 |

---

(Continued)

------

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Mobile<br>Broadband<br>Concession** | **Computer<br>Software** | **Others** | **Total** |
|  <u>Accumulated amortization and impairment</u> |  |  |  |  |
|  Balance on January 1, 2021 | $(19318842) | $(2192532) | $(11743) | $(21523117) |
|  Amortization expenses | (6198911) | (273953) | (3069) | (6475933) |
|  Disposal |  | 306356 | 9 | 306365 |
|  Balance on December 31, 2021 | $(25517753) | $(2160129) | $(14803) | $(27692685) |
|  Balance on January 1, 2021, net | $89019158 | $694414 | $9834 | $89723406 |
|  Balance on December 31, 2021, net | $82820247 | $583173 | $31998 | $83435418 |
|  <u>Cost</u> |  |  |  |  |
|  Balance on January 1, 2022 | $108338000 | $2743302 | $46801 | $111128103 |
|  Additions-acquired separately | 1625431 | 176604 | 6003 | 1808038 |
|  Disposal |  | (653344) | (1008) | (654352) |
|  Balance on December 31, 2022 | $109963431 | $2266562 | $51796 | $112281789 |
|  <u>Accumulated amortization and impairment</u> |  |  |  |  |
|  Balance on January 1, 2022 | $(25517753) | $(2160129) | $(14803) | $(27692685) |
|  Amortization expenses | (6294525) | (239912) | (11379) | (6545816) |
|  Disposal |  | 653344 | 1008 | 654352 |
|  Balance on December 31, 2022 | $(31812278) | $(1746697) | $(25174) | $(33584149) |
|  Balance on January 1, 2022, net | $82820247 | $583173 | $31998 | $83435418 |
|  Balance on December 31, 2022, net | $78151153 | $519865 | $26622 | $78697640 |

---

(Concluded)

The Company's Board of Directors approved the acquisition of the 900MHz frequency band and equipment from Asia Pacific Telecom Co., Ltd. in November 2021. The aforementioned tax-excluded transaction amount was $1,800,113 thousand included in intangible assets- mobile broadband concession and other assets- spare parts. The transaction was approved by the related authority in May 2022 and completed in July 2022.

The concessions are granted and issued by the National Communications Commission ("NCC"). The concession fees are amortized using the straight-line method over the period from the date operations commence through the date the license expires or the useful life, whichever is shorter. The 4G concession fees will be fully amortized by December 2030 and December 2033 and 5G concession fees will be fully amortized by December 2040.

The computer software is amortized using the straight-line method over the estimated useful lives of 1 to 10 years. Other intangible assets are amortized using the straight-line method over the estimated useful lives of 3 to 11 years.

------

**18.** **OTHER ASSETS** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Spare parts | $3371966 | $2831990 |
|  Refundable deposits | 1350960 | 1398930 |
|  Other financial assets | 1000000 | 1000000 |
|  Others | 1600443 | 1714673 |
|  | $7323369 | $6945593 |
|  Current |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Spare parts | $3371966 | $2831990 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 10761 | 12982 |
|  | $3382727 | $2844972 |
|  Noncurrent |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Refundable deposits | $1350960 | $1398930 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other financial assets | 1000000 | 1000000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 1589682 | 1701691 |
|  | $3940642 | $4100621 |

---

Other financial assets-noncurrent was Piping Fund. As part of the government's effort to upgrade the existing telecommunications infrastructure, the Company and other public utility companies were required by the ROC government to contribute to a Piping Fund administered by the Taipei City Government. This fund was used to finance various telecommunications infrastructure projects. Net assets of this fund will be returned proportionately after the project is completed.

As of December 31, 2022 and 2021, the segregated deposits which included in other noncurrent assets- others were $28,347 thousand and $91,388 thousand, respectively, in accordance with The Management, Utilization, and Taxation of Repatriated Offshore Funds Act.

**19.** **HEDGING FINANCIAL INSTRUMENTS** 

The Company's hedge strategy is to enter into forward exchange contracts—buy to avoid its foreign currency exposure to certain foreign currency denominated equipment payments in the following six months. In addition, the Company's management considers the market condition to determine the hedge ratio and enters into forward exchange contracts with the banks to avoid the foreign currency risk.

The Company signed equipment purchase contracts with suppliers and entered into forward exchange contracts to avoid foreign currency risk exposure to Euro-denominated purchase commitments. Those forward exchange contracts were designated as cash flow hedges. When forecast purchases actually take place, basis adjustments are made to the initial carrying amounts of hedged items.

For the hedges of highly probable forecast sales and purchases, as the critical terms (i.e. the notional amount, life and underlying) of the forward foreign exchange contracts and their corresponding hedged items are the same, the Company performs a qualitative assessment of effectiveness and it is expected that the value of the forward contracts and the value of the corresponding hedged items will systematically change in opposite direction in response to movements in the underlying exchange rates.

------

The main source of hedge ineffectiveness in these hedging relationships is the effect of credit risks of the Company and the counterparty on the fair value of the forward exchange contracts. Such credit risks do not impact the fair value of the hedged item attributable to changes in foreign exchange rates. No other sources of ineffectiveness emerged from these hedging relationships.

The following tables summarized the information relating to the hedges for foreign currency risk.

<u>December 31, 2022</u> 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Hedging Instruments** | **Currency** | **Notional<br>Amount**<br> **(In Thousands)** | **Maturity** | **Forward**<br> **Rate** | **Line Item in**<br> **Balance Sheet** | **Carrying Amount** | **Carrying Amount** | **Change in Fair<br>Values of<br>Hedging<br>Instruments Used<br>for Calculating<br>Hedge**<br> **Ineffectiveness** |
| **Hedging Instruments** | **Currency** | **Notional<br>Amount**<br> **(In Thousands)** | **Maturity** | **Forward**<br> **Rate** | **Line Item in**<br> **Balance Sheet** | **Asset** | **Liability** | **Change in Fair<br>Values of<br>Hedging<br>Instruments Used<br>for Calculating<br>Hedge**<br> **Ineffectiveness** |
|  Cash flow hedge |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Forecast purchases - forward exchange contracts | NT$/EUR | NT$423,024/<br> EUR13,350 | 2023.03 | $31.69 | Hedging financial<br>assets (liabilities) | $12891 | $— | $21177 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Change in<br>Value of<br>Hedged Item<br>Used for** | **Accumulated Gain or Loss<br>on Hedging Instruments <br>in Other Equity** | **Accumulated Gain or Loss<br>on Hedging Instruments <br>in Other Equity** |
| **Hedged Items** | **Calculating<br>Hedge<br>Ineffectiveness** | **Continuing<br>Hedges** | **Hedge<br>Accounting No<br>Longer Applied** |
|  Cash flow hedge |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Forecast equipment purchases | $(21177) | $12891 | $— |

---

<u>December 31, 2021</u> 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | | **Notional<br>Amount** | | **Forward** | **Line Item in** | **Carrying Amount** | **Carrying Amount** | **Change in Fair<br>Values of<br>Hedging<br>Instruments Used<br>for Calculating<br>Hedge** |
| **Hedging Instruments** | **Currency** | **(In Thousands)** | **Maturity** | **Rate** | **Balance Sheet** | **Asset** | **Liability** | **Ineffectiveness** |
|  Cash flow hedge |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Forecast purchases - forward exchange contracts | NT$/EUR | NT$227,780/<br> EUR7,000 | 2022.03 | $32.54 | Hedging financial<br>assets (liabilities) | $— | $8286 | $(10038) |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Change in<br>Value of<br>Hedged Item<br>Used for** | **Accumulated Gain or Loss<br>on Hedging Instruments <br>in Other Equity** | **Accumulated Gain or Loss<br>on Hedging Instruments <br>in Other Equity** |
| **Hedged Items** | **Calculating<br>Hedge<br>Ineffectiveness** | **Continuing<br>Hedges** | **Hedge<br>Accounting No<br>Longer Applied** |
|  Cash flow hedge |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Forecast equipment purchases | $10038 | $(8286) | $— |

---

------

<u>Year ended December 31, 2022</u> 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Comprehensive Income** | **Comprehensive Income** | **Comprehensive Income** | **Comprehensive Income** | **Comprehensive Income** |
|  | | | | **Reclassification from Equity<br>to Assets and the Adjusted Line Item** | **Reclassification from Equity<br>to Assets and the Adjusted Line Item** |
| **Hedge Transaction** | **Hedging<br>Gain or Loss<br>Recognized<br>in OCI** | **Amount of<br>Hedge<br>Ineffectiveness<br>Recognized in<br>Profit or Loss** | **Line Item in<br>Which Hedge<br>Ineffectiveness is**<br> **Included** | **Amount<br>Reclassified to<br>Assets and the<br>Adjusted Line<br>Item** | **Due to Hedged<br>Future Cash<br>Flows No**<br> **Longer**<br> **Expected to<br>Occur** |
|  Cash flow hedge |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Forecast equipment purchases | $21177 | $— |  | $6273 | $— |
|  |  |  |  | Construction in<br> progress and<br> equipment<br> to be<br> accepted | Other gains and<br>losses |

---

<u>Year ended December 31, 2021</u> 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Comprehensive Income** | **Comprehensive Income** | **Comprehensive Income** | **Comprehensive Income** | **Comprehensive Income** |
|  | | | | **Reclassification from Equity<br>to Assets and the Adjusted Line Item** | **Reclassification from Equity<br>to Assets and the Adjusted Line Item** |
| **Hedge Transaction** | **Hedging**<br> **Gain or Loss<br>Recognized<br>in OCI** | **Amount of<br>Hedge<br>Ineffectiveness<br>Recognized in<br>Profit or Loss** | **Line Item in<br>Which Hedge<br>Ineffectiveness is**<br> **Included** | **Amount<br>Reclassified to<br>Assets and the<br>Adjusted Line<br>Item** | **Due to Hedged<br>Future Cash<br>Flows No**<br> **Longer**<br> **Expected to<br>Occur** |
|  Cash flow hedge |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Forecast equipment purchases | $(10038) | $— |  | $(42574) | $— |
|  |  |  |  | Construction in<br>progress and<br>equipment<br>to be<br>accepted | Other gains and<br>losses |

---

**20.** **BONDS PAYABLE** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Unsecured domestic bonds | $30500000 | $27000000 |
|  Less: Discounts on bonds payable | (22643) | (23325) |
|  | $30477357 | $26976675 |

---

The major terms of unsecured domestic bonds issued by the Company were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Issuance** | **Issuance Period** | **Total<br>Amount** | **Coupon<br>Rate** | **Repayment and Interest<br>Payment** |
| 2020-1<br> A | July 2020 to July 2025 | $8800000 | 0.50% | One-time repayment upon maturity; interest payable annually |
| B | July 2020 to July 2027 | 7500000 | 0.54% | The same as above |
| C | July 2020 to July 2030 | 3700000 | 0.59% | The same as above |

---

(Continued)

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Issuance** | **Tranche** | **Issuance Period** | **Total<br>Amount** | **Coupon<br>Rate** | **Repayment and Interest<br>Payment** |
| 2021-1 | A | April 2021 to April 2026 | 1900000 | 0.42% | The same as above |
|  | B | April 2021 to April 2028 | 4100000 | 0.46% | The same as above |
|  | C | April 2021 to April 2031 | 1000000 | 0.50% | The same as above |
|  2022-1<br> (Sustainable Bond) |  | March 2022 to March 2027 | 3500000 | 0.69% | The same as above |

---

(Concluded)

**21.** **TRADE NOTES AND ACCOUNTS PAYABLE** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Trade notes and accounts payable | $12438047 | $14119843 |

---

Trade notes and accounts payable were attributable to operating activities and the trading conditions were agreed separately.

**22.** **OTHER PAYABLES** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Accrued salary and compensation | $8511526 | $8371908 |
|  Payables to contractors | 2556383 | 2951841 |
|  Accrued compensation to employees and remuneration to directors | 1537854 | 1467552 |
|  Amounts collected for others | 1509099 | 1332933 |
|  Payables to equipment suppliers | 1194761 | 1120500 |
|  Accrued maintenance costs | 1043966 | 996665 |
|  Others | 4749093 | 4121195 |
|  | $21102682 | $20362594 |

---

**23.** **PROVISIONS** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Warranties | $150135 | $118126 |
|  Onerous contracts | 80651 | 132593 |
|  Employee benefits | 64776 | 62833 |
|  Others | 3767 | 3767 |
|  | $299329 | $317319 |
|  Current | $130161 | $175454 |
|  Noncurrent | 169168 | 141865 |
|  | $299329 | $317319 |

---

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Warranties** | **Onerous<br>Contracts** | **Employee<br>Benefits** | **Others** | **Total** |
|  Balance on January 1, 2021 | $83589 | $169986 | $57210 | $4097 | $314882 |
|  Additional / (reversal of) provisions recognized | 53500 | (37393) | 6963 | (330) | 22740 |
|  Used / forfeited during the year | (18963) |  | (1340) |  | (20303) |
|  Balance on December 31, 2021 | $118126 | $132593 | $62833 | $3767 | $317319 |
|  Balance on January 1, 2022 | $118126 | $132593 | $62833 | $3767 | $317319 |
|  Additional / (reversal of) provisions recognized | 47212 | (51942) | 2217 |  | (2513) |
|  Used / forfeited during the year | (15203) |  | (274) |  | (15477) |
|  Balance on December 31, 2022 | $150135 | $80651 | $64776 | $3767 | $299329 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. The provision for warranty claims represents the present value of the management's best estimate of the
future outflow of economic benefits that will be required under the Company's obligation for warranties in sales agreements. The estimate has been made based on historical warranty experience.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. The provision for employee benefits represents vested long-term service compensation accrued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. The provision for onerous contracts represents the present obligation resulting from the measurement for the
unavoidable costs of meeting the Company's contractual obligations exceed the economic benefits expected to be received from the contracts.

**24.** **RETIREMENT BENEFIT PLANS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Defined contribution plans

The pension plan under the Labor Pension Act of ROC (the "LPA") is considered as a defined contribution plan. Based on the LPA, the Company makes monthly contributions to employees' individual pension accounts at 6% of monthly salaries and wages.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Defined benefit plans

The Company completed its privatization plans on August 12, 2005. The Company is required to pay all accrued pension obligations including service clearance payment, lump sum payment under civil service plan, additional separation payments, etc. upon the completion of the privatization in accordance with the Statute Governing Privatization of Stated-owned Enterprises. After paying all pension obligations for privatization, the plan assets of the Company should be transferred to the Fund for Privatization of Government-owned Enterprises (the "Privatization Fund") under the Executive Yuan. On August 7, 2006, the Company transferred the remaining balance of fund to the Privatization Fund. However, according to the instructions of MOTC, the Company was requested to administer the distributions to employees for pension obligations including service clearance payment, lump sum payment under civil service plan, additional separation payments, etc. upon the completion of the privatization and recognized in other current monetary assets.

The Company with the pension mechanism under the Labor Standards Law in the ROC is considered as defined benefit plans. These pension plans provide benefits based on an employee's length of service and average six-month salary prior to retirement. The Company contributes an amount no more than 15% of salaries paid each month to their respective pension funds (the Funds), which are administered by the Labor Pension Fund Supervisory Committee (the Committee) and deposited in the names of the Committees in the Bank of Taiwan. The plan assets are held in a commingled fund which is operated and managed by the government's designated authorities; as such, the Company does not have any right to intervene in the investments of the funds. According to the Article 56 of the Labor Standards Law, entities are required to contribute the difference in one appropriation to their pension funds before the end of next March when the balance of the Funds is insufficient to pay the eligible employees who meet the retirement criteria in the following year.

------

The amounts included in the balance sheets arising from the Company's obligation in respect of its defined benefit plans were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Present value of funded defined benefit obligation | $33295706 | $35176705 |
|  Fair value of plan assets | (36311098) | (36357836) |
|  Funded status - surplus | $(3015392) | $(1181131) |
|  Net defined benefit liabilities | $2224847 | $2188572 |
|  Net defined benefit assets | (5240239) | (3369703) |
|  | $(3015392) | $(1181131) |

---

Movements in the defined benefit obligation and the fair value of plan assets were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Present Value<br>of Funded<br>Defined Benefit<br>Obligation** | **Fair Value of<br>Plan Assets** | **Net Defined<br>Benefit<br>Liabilities<br>(Assets)** |
|  Balance on January 1, 2021 | $39220357 | $39254971 | $(34614) |
|  Current service cost | 1252188 |  | 1252188 |
|  Interest expense / interest income | 187909 | 194020 | (6111) |
|  Amounts recognized in profit or loss | 1440097 | 194020 | 1246077 |
|  Remeasurement on the net defined benefit liability |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Return on plan assets (excluding amounts included in net interest) |  | 497845 | (497845) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Actuarial gains recognized from changes in demographic assumptions | (439959) |  | (439959) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Actuarial losses recognized from experience adjustments | 539452 |  | 539452 |
|  Amounts recognized in other comprehensive income | 99493 | 497845 | (398352) |
|  Contributions from employer |  | 1718818 | (1718818) |
|  Benefits paid | (5307818) | (5307818) |  |
|  Benefits paid directly by the Company | (275424) |  | (275424) |
|  Balance on December 31, 2021 | 35176705 | 36357836 | (1181131) |
|  Current service cost | 1084494 |  | 1084494 |
|  Interest expense / interest income | 169180 | 180009 | (10829) |
|  Amounts recognized in profit or loss | 1253674 | 180009 | 1073665 |

---

(Continued)

------

---

| | | | |
|:---|:---|:---|:---|
|  | **Present Value<br>of Funded<br>Defined Benefit<br>Obligation** | **Fair Value of<br>Plan Assets** | **Net Defined<br>Benefit<br>Liabilities<br>(Assets)** |
|  Remeasurement on the net defined benefit liability |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Return on plan assets (excluding amounts included in net interest) | $— | $2948559 | $(2948559) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Actuarial gains recognized from changes in financial assumptions | 227238 |  | 227238 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Actuarial losses recognized from experience adjustments | 1604648 |  | 1604648 |
|  Amounts recognized in other comprehensive income | 1831886 | 2948559 | (1116673) |
|  Contributions from employer |  | 1547564 | (1547564) |
|  Benefits paid | (4722870) | (4722870) |  |
|  Benefits paid directly by the Company | (243689) |  | (243689) |
|  Balance on December 31, 2022 | $33295706 | $36311098 | $(3015392) |

---

(Concluded)

Relevant pension costs recognized in profit and loss for defined benefit plans were as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Operating costs | $564281 | $724629 |
|  Marketing expenses | 359627 | 366131 |
|  General and administrative expenses | 85987 | 79929 |
|  Research and development expenses | 36594 | 44362 |
|  | $1046489 | $1215051 |

---

The Company is exposed to following risks for the defined benefits plans under the Labor Standards Law:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Investment risk

Under the Labor Standards Law, the rate of return on assets shall not be lower than the average interest rate on a two-year time deposit published by the local banks and the government is responsible for any shortfall in the event that the rate of return is less than the required rate of return. The plan assets are held in a commingled fund mainly invested in foreign and domestic equity and debt securities and bank deposits which is operated and managed by the government's designated authorities; as such, the Company does not have any right to intervene in the investments of the funds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Interest rate risk

The decline in government bond interest rate will increase the present value of the obligation on the defined benefit plan, while the return on plan assets will increase. The net effect on the present value of the obligation on defined benefit plan is partially offset by the return on plan assets.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Salary risk

The calculation of the present value of defined benefit obligation is referred to the plan participants' future salary. Hence, the increase in plan participants' salary will increase the present value of the defined benefit obligation.

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation were carried out by the independent actuary. The principal assumptions used for the purpose of the actuarial valuations were as follows:

---

| | | |
|:---|:---|:---|
|  | **Measurement Date** | **Measurement Date** |
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Discount rates | 1.25% | 0.50% |
|  Expected rates of salary increase | 2.00% | 1.20% |

---

If reasonably possible changes of the respective significant actuarial assumptions occur at the end of reporting periods, while holding all other assumptions constant, the present values of the defined benefit obligations would increase (decrease) as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Discount rates |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.5% increase | $(982713) | $(1057539) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.5% decrease | $1041853 | $1122272 |
|  Expected rates of salary increase |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.5% increase | $1116453 | $1200983 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.5% decrease | $(1062627) | $(1141971) |

---

The sensitivity analysis presented above may not be representative of the actual change in the present value of the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated. There is no change in the methods and assumptions used in preparing the sensitivity analysis from the previous period.

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  The expected contributions to the plan for the next year | $1535312 | $1674299 |
|  The average duration of the defined benefit obligation | 6.2 years | 6.3 years |

---

As of December 31, 2022, the Company's maturity analysis of the undiscounted benefit payments was as follows:

---

| | |
|:---|:---|
| **Year** | **Amount** |
| 2023 | $2662382 |
| 2024 | 6152791 |
| 2025 | 9270867 |
| 2026 | 10543682 |
|  2027 and thereafter | 36534455 |
|  | $65164177 |

---

------

**25.** **EQUITY** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Share capital

1) Common stocks

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Number of authorized shares (thousand) | 12000000 | 12000000 |
|  Authorized shares | $120000000 | $120000000 |
|  Number of issued and paid shares (thousand) | 7757447 | 7757447 |
|  Issued shares | $77574465 | $77574465 |

---

Each issued common stock with par value of $10 is entitled the right to vote and receive dividends.

2) Global depositary receipts

The MOTC and some stockholders sold some common stocks of the Company in an international offering of securities in the form of American Depositary Shares ("ADS") (one ADS represents 10 common stocks) in July 2003, August 2005, and September 2006. The ADSs were traded on the New York Stock Exchange since July 17, 2003. As of December 31, 2022, the outstanding ADSs were 195,211 thousand common stocks, which equaled 19,521 thousand units and represented 2.52% of the Company's total outstanding common stocks.

The ADS holders generally have the same rights and obligations as other common stockholders, subject to the provision of relevant laws. The exercise of such rights and obligations shall comply with the related regulations and deposit agreement, which stipulate, among other things, that ADS holders are entitled to, through deposit agents:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Exercise their voting rights,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Sell their ADSs, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Receive dividends declared and subscribe to the issuance of new shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Additional paid-in capital

The adjustments of additional paid-in capital for the years ended December 31, 2022 and 2021 were as follows:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share<br>Premium** | **Movements of<br>Additional<br>Paid-in Capital<br>for Associates<br>and Joint<br>Ventures<br>Accounted for<br>Using Equity<br>Method** | **Movements of<br>Additional<br>Paid-in Capital<br>Arising from<br>Changes in<br>Equities of<br>Subsidiaries** | **Difference<br>between<br>Consideration<br>Received and<br>Carrying<br>Amount of the<br>Subsidiaries'<br>Net Assets<br>upon Disposal** | **Donated<br>Capital** | **Stockholders'<br>Contribution due<br>to Privatization** | **Total** |
|  Balance on January 1, 2021 | $147329386 | $186828 | $2087957 | $987611 | $21519 | $20648078 | $171261379 |
|  Unclaimed dividend |  |  |  |  | 1968 |  | 1968 |
|  Change in additional paid-in capital from investments in subsidiaries, associates and joint ventures accounted for using equity method |  | (437) |  |  |  |  | (437) |
|  Share-based payment transactions of subsidiaries |  |  | 16715 |  |  |  | 16715 |
|  Balance on December 31, 2021 | 147329386 | 186391 | 2104672 | 987611 | 23487 | 20648078 | 171279625 |
|  Unclaimed dividend |  |  |  |  | 1632 |  | 1632 |

---

(Continued)

------

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share<br>Premium** | **Movements of<br>Additional<br>Paid-in Capital<br>for Associates<br>and Joint<br>Ventures<br>Accounted for<br>Using Equity<br>Method** | **Movements of<br>Additional<br>Paid-in Capital<br>Arising from<br>Changes in<br>Equities of<br>Subsidiaries** | **Difference<br>between<br>Consideration<br>Received and<br>Carrying<br>Amount of the<br>Subsidiaries'<br>Net Assets<br>upon Disposal** | **Donated<br>Capital** | **Stockholders'<br>Contribution due<br>to Privatization** | **Total** |
|  Change in additional paid-in capital from investments in subsidiaries, associates and joint ventures accounted for using equity method | $— | $(12719) | $— | $— | $— | $— | $(12719) |
|  Change in additional paid-in capital for not proportionately participating in the capital increase of subsidiaries |  |  | 5153 |  |  |  | 5153 |
|  Share-based payment transactions of subsidiaries |  |  | 27207 |  |  |  | 27207 |
|  Balance on December 31, 2022 | $147329386 | $173672 | $2137032 | $987611 | $25119 | $20648078 | $171300898 |

---

(Concluded)

Additional paid-in capital from share premium, donated capital and the difference between consideration received and the carrying amount of the subsidiaries' net assets upon disposal may be utilized to offset deficits. Furthermore, when the Company has no deficit, it may be distributed in cash or capitalized, which however is limited to a certain percentage of the Company's paid-in capital except the additional paid-in capital arising from unclaimed dividend can only be utilized to offset deficits.

The additional paid-in capital from movements of paid-in capital arising from changes in equities of subsidiaries may only be utilized to offset deficits.

Among additional paid-in capital from movements of investments in associates and joint ventures accounted for using equity method, the portion arising from the difference between consideration received and the carrying amount of the subsidiaries' net assets upon disposal may be utilized to offset deficits; furthermore, when the Company has no deficit, it may be distributed in cash or capitalized. However, other additional paid-in capital recognized in proportion of share ownership may only be utilized to offset deficits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Retained earnings and dividends policy

In accordance with the the Company's Articles of Incorporation, the Company must pay all outstanding taxes, offset deficits in prior years and set aside a legal reserve equal to 10% of its net income before distributing a dividend or making any other distribution to stockholders, except when the accumulated amount of such legal reserve equals to the Company's total issued capital, and depending on its business needs or requirements, may also set aside or reverse special reserves. No less than 50% of the remaining earnings comprising remaining balance of net income, if any, plus cumulative undistributed earnings shall be distributed as stockholders' dividends, of which cash dividends to be distributed shall not be less than 50% of the total amount of dividends to be distributed. If cash dividend to be distributed is less than $0.10 per share, such cash dividend shall be distributed in the form of common stocks.

The Company should appropriate a special reserve when the net amount of other equity items is negative at the end of reporting period upon the earnings distribution. Distributions can be made out of any subsequent reversal of the debit to other equity items.

The appropriation for legal reserve shall be made until the accumulated reserve equals the aggregate par value of the outstanding capital stock of the Company. This reserve can only be used to offset a deficit, or, when the legal reserve has exceeded 25% of the Company's paid-in capital, the excess may be transferred to capital or distributed in cash.

------

The appropriations of the 2021 and 2020 earnings of the Company approved by the stockholders in their meetings on May 27, 2022 and August 20, 2021, respectively, were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Appropriation of Earnings** | **Appropriation of Earnings** | **Dividends Per Share**<br>**(NT$)** | **Dividends Per Share**<br>**(NT$)** |
|  | **For Fiscal<br>Year 2021** | **For Fiscal<br>Year 2020** | **For Fiscal<br>Year 2021** | **For Fiscal<br>Year 2020** |
|  Special reserve | $408150 | $— |  |  |
|  Cash dividends | 35746314 | 33403565 | $4.608 | $4.306 |

---

The appropriations of earnings for 2022 had been proposed by Chunghwa's Board of Directors on February 24, 2023. The appropriations and dividends per share were as follows:

---

| | | |
|:---|:---|:---|
|  | **Appropriation<br>of Earnings** | **Dividends<br>Per Share (NT$)** |
|  Reversal of special reserve | $185066 |  |
|  Cash dividends | 36475514 | $4.702 |

---

The appropriations of earnings for 2022 are subject to the resolution of the stockholders' meeting planned to be held on May 26, 2023. Information of the appropriation of the Company's earnings proposed by the Board of Directors and approved by the stockholders is available on the Market Observation Post System website.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Others

1) Exchange differences arising from the translation of the foreign operations

The exchange differences arising from the translation of the foreign operations from their functional currency to New Taiwan dollars were recognized as exchange differences arising from the translation of the foreign operations in other comprehensive income.

2) Unrealized gain or loss on financial assets at FVOCI

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Beginning balance | $(7588) | $1239901 |
|  Recognized for the year |  |  |
|  Unrealized gain or loss |  |  |
|  Equity instruments | 92444 | (1208027) |
|  Share from subsidiaries, associates and joint ventures accounted for using the equity method | (209734) | 20191 |
|  Transferred accumulated gain or loss to unappropriated earnings resulting from the disposal of equity instruments (Note 8) |  | (94588) |
|  Transferred accumulated gain or loss to unappropriated earnings resulting from the disposal of equity instruments by subsidiaries | 116 | 34935 |
|  Ending balance | $(124762) | $(7588) |

---

------

**26.** **REVENUES** 

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Revenue from contracts with customers | $180117977 | $176776902 |
|  Other revenues |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Government grants income | 990806 | 1037057 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Rental income | 956505 | 864375 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 189051 | 165016 |
|  | 2136362 | 2066448 |
|  | $182254339 | $178843350 |

---

For the information of performance obligations related to customer contracts, please refer to Note 3 Summary of Significant Accounting Policies for details.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Disaggregation of revenue

Please refer to Note 38 Segment Information for details.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Contract balances

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31,<br>2022** | **December 31,<br>2021** | **January 1,**<br> **2021** |
|  Trade notes and accounts receivable (Note 9) | $21449052 | $20691664 | $19554643 |
|  Contract assets |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Products and service bundling | $3036507 | $2869419 | $2649230 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 299146 | 226979 | 99475 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Less: Loss allowance | (8247) | (8055) | (7016) |
|  | $3327406 | $3088343 | $2741689 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Current | $2114559 | $1982596 | $1734081 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Noncurrent | 1212847 | 1105747 | 1007608 |
|  | $3327406 | $3088343 | $2741689 |
|  Contract liabilities |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Telecommunications business | $12137375 | $11477270 | $11677075 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Project business | 5940736 | 4779100 | 6012181 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Products and service bundling | 7018 | 2936 | 12455 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 385921 | 341016 | 301367 |
|  | $18471050 | $16600322 | $18003078 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Current | $12790467 | $11537157 | $12661964 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Noncurrent | 5680583 | 5063165 | 5341114 |
|  | $18471050 | $16600322 | $18003078 |

---

------

The changes in the contract asset and the contract liability balances primarily result from the timing difference between the satisfaction of performance obligations and the payments collected from customers. Significant changes of contract assets and liabilities recognized resulting from product and service bundling were as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Contract assets |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net increase of customer contracts | $2493824 | $2398179 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reclassified to trade receivables | (2321884) | (2154799) |
|  | $171940 | $243380 |
|  Contract liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net increase of customer contracts | $8126 | $220 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Recognized as revenues | (4044) | (9739) |
|  | $4082 | $(9519) |

---

The Company applies the simplified approach to recognize expected credit losses prescribed by IFRS 9, which permits the use of lifetime expected loss provision for receivables. Contract assets will be reclassified to trade receivables when the corresponding invoice is billed to the client. Contract assets have substantially the same risk characteristics as the trade receivables of the same types of contracts. Therefore, the Company concluded that the expected loss rates for trade receivables can be applied to the contract assets.

Revenue recognized for the year that was included in the contract liability at the beginning of the year was as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Telecommunications business | $6596735 | $5935769 |
|  Project business | 3611613 | 4021159 |
|  Others | 216894 | 151470 |
|  | $10425242 | $10108398 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Incremental costs of obtaining contracts

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Noncurrent |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Incremental costs of obtaining contracts | $7704427 | $6899240 |

---

The Company considered the past experience and the default clauses in the telecommunications service contracts and believes the commissions and equipment subsidies paid for obtaining such contracts are expected to be recoverable; therefore, such costs were capitalized. Amortization expenses for the years ended December 31, 2022 and 2021 were $5,787,729 thousand and $5,684,693 thousand, respectively.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Remaining Performance Obligations

As of December 31, 2022, the aggregate amount of transaction price allocated to performance obligations for non-cancellable telecommunications service contracts that are unsatisfied is $36,315,028 thousand. The Company recognizes revenue when service is provided over contract terms. The Company expects to recognize such revenue of $22,038,330 thousand, $11,101,059 thousand and $3,175,639 thousand in 2023, 2024 and 2025, respectively. The variable consideration collected from customers on nonrecurring basis resulting from exceeded usage from monthly fee and revenue recognized for contracts that the Company has a right to consideration from customers in the amount corresponding directly with the value to the customers of the Company's performance completed to date have been excluded from the disclosure of remaining performance obligations.

As of December 31, 2022, the aggregate amount of transaction price allocated to performance obligations for non-cancellable project business contracts that are unsatisfied is $22,499,296 thousand. The Company recognizes revenues when the project business contract is completed and accepted by customers. The Company expects to recognize such revenue of $7,917,242 thousand, $5,813,434 thousand and $8,768,620 thousand in 2023, 2024 and 2025, respectively. Project business contracts whose expected duration are less than a year have been excluded from the aforementioned disclosure.

**27.** **NET INCOME** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Other income and expenses

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Loss on disposal of property, plant and equipment | $(4585) | $(5603) |
|  Reversal of impairment loss on investment properties | 107467 | 83429 |
|  Impairment loss on right-of-use assets |  | (420590) |
|  | $102882 | $(342764) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Other income

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Dividend income | $150569 | $149918 |
|  Others | 104645 | 105527 |
|  | $255214 | $255445 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Other gains and losses

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Foreign currency exchange gain or loss, net | $(285255) | $181417 |
|  Valuation gain (loss) on financial assets and liabilities at fair value through profit or loss, net | (198534) | 243417 |

---

(Continued)

------

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Gain on disposal of investments accounted for using equity method, net | $— | $3239 |
|  Others | (10603) | 43013 |
|  | $(494392) | $471086 |

---

(Concluded)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Interest expenses

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Interest on bonds payable | $161427 | $131635 |
|  Interest on lease liabilities | 59037 | 54991 |
|  Interest paid to financial institutions |  | 2509 |
|  Others | 34 | 958 |
|  | $220498 | $190093 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. Impairment loss (reversal of impairment loss)

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Contract assets | $192 | $1039 |
|  Trade notes and accounts receivable | $108402 | $120961 |
|  Other receivables | $7276 | $19794 |
|  Inventories | $9252 | $163193 |
|  Right-of-use assets | $— | $420590 |
|  Investment properties | $(107467) | $(83429) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. Depreciation and amortization expenses

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Property, plant and equipment | $28026125 | $27115946 |
|  Right-of-use assets | 3567836 | 3590658 |
|  Investment properties | 43754 | 42259 |
|  Intangible assets | 6545816 | 6475933 |
|  Incremental costs of obtaining contracts | 5787729 | 5684693 |
|  Total depreciation and amortization expenses | $43971260 | $42909489 |
|  Depreciation expenses summarized by functions |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating costs | $30281487 | $29654574 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating expenses | 1356228 | 1094289 |
|  | $31637715 | $30748863 |

---

(Continued)

------

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Amortization expenses summarized by functions |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating costs | $12220683 | $12026219 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Marketing expenses | 55187 | 72850 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; General and administrative expenses | 40342 | 40179 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Research and development expenses | 17333 | 21378 |
|  | $12333545 | $12160626 |

---

(Concluded)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. Employee benefit expenses

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Post-employment benefit |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Defined contribution plans | $423972 | $378090 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Defined benefit plans | 1046489 | 1215051 |
|  | 1470461 | 1593141 |
|  Other employee benefit |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Salaries | 18138094 | 18321506 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Insurance | 1980171 | 2057596 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 12716365 | 12469312 |
|  | 32834630 | 32848414 |
|  Total employee benefit expenses | $34305091 | $34441555 |
|  Summary by functions |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating costs | $18152527 | $19534148 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating expenses | 16152564 | 14907407 |
|  | $34305091 | $34441555 |

---

The Company distributes employees' compensation at the rates from 1.7% to 4.3% and remuneration to directors not higher than 0.17%, respectively, of pre-tax income. As of December 31, 2022, the payables of the employees' compensation and the remuneration to directors were $1,498,374 thousand and $39,480 thousand, respectively. Such amounts have been approved by the Company's Board of Directors on February 24, 2023 and will be reported to the stockholders in their meeting planned to be held on May 26, 2023.

If there is a change in the proposed amounts after the annual financial statements are authorized for issue, the difference is recorded as a change in accounting estimate.

The compensation to the employees and remuneration to the directors of 2021 and 2020 approved by the Board of Directors on February 23, 2022 and 2021, respectively, were as follows:

---

| | | |
|:---|:---|:---|
|  | **2021** | **2020** |
|  | **Cash** | **Cash** |
|  Compensation distributed to the employees | $1429000 | $1202448 |
|  Remuneration paid to the directors | 38552 | 35803 |

---

------

There was no difference between the initial accrued amounts recognized in 2021 and 2020 and the amounts approved by the Board of Directors in 2022 and 2021 of the aforementioned compensation to employees and the remuneration to directors.

Information of the appropriation of the Company's employees compensation and remuneration to directors and those approved by the Board of Directors is available on the Market Observation Post System website.

**28.** **INCOME TAX** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Income tax recognized in profit or loss

The major components of income tax expense were as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Current tax |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Current tax expenses recognized for the year | $8195651 | $7743777 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income tax adjustments on prior years |  | (114270) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 6392 | 6883 |
|  | 8202043 | 7636390 |
|  Deferred tax |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred tax benefits recognized for the year | 229765 | 497487 |
|  Income tax recognized in profit or loss | $8431808 | $8133877 |

---

Reconciliation of accounting profit and income tax expense was as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Income before income tax | $44908965 | $43887456 |
|  Income tax expense calculated at the statutory rate | $8981793 | $8777491 |
|  Nondeductible income and expenses in determining taxable income | (14340) | (8067) |
|  Tax-exempt income | (352462) | (349900) |
|  Investment credits | (180065) | (187018) |
|  Income tax adjustments on prior years |  | (114270) |
|  Others | (3118) | 15641 |
|  Income tax expense recognized in profit or loss | $8431808 | $8133877 |

---

The applicable tax rate used by the Company is 20%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Income tax recognized in other comprehensive income

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Deferred tax |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Remeasurement on defined benefit pension plan | $223335 | $79670 |

---

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Current tax liabilities

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Current tax liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income tax payable | $4580440 | $4079823 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Deferred income tax assets and liabilities

The movements of deferred income tax assets and liabilities were as follows:

<u>For the year ended December 31, 2022</u>

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Beginning<br>Balance** | **Recognized<br>in Profit or Loss** | **Recognized in<br>Other<br>Comprehensive<br>Income** | **Ending**<br> **Balance** |
|  <u>Deferred income tax assets</u> |  |  |  |  |
|  Temporary differences |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Defined benefit pension plan | $1730449 | $1629 | $(223335) | $1508743 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Allowance for doubtful receivables over quota | 263434 | (79935) |  | 183499 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Valuation loss on inventory | 164673 | (94871) |  | 69802 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Unrealized foreign exchange loss, net |  | 56175 |  | 56175 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Estimated warranty liabilities | 23625 | 6402 |  | 30027 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred revenue | 48678 | (19323) |  | 29355 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Valuation loss on financial assets |  | 23633 |  | 23633 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Valuation loss on onerous contracts | 26519 | (9713) |  | 16806 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued award credits liabilities | 8935 | 2577 |  | 11512 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 4979 | 522 |  | 5501 |
|  | $2271292 | $(112904) | $(223335) | $1935053 |
|  <u>Deferred income tax liabilities</u> |  |  |  |  |
|  Temporary differences |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Defined benefit pension plan | $1966675 | $145147 | $— | $2111822 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Land value incremental tax | 94986 |  |  | 94986 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred revenue for award credits | 55708 | 14394 |  | 70102 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Unrealized foreign exchange gain, net | 26606 | (26606) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Valuation gain on financial assets | 16074 | (16074) |  |  |
|  | $2160049 | $116861 | $— | $2276910 |

---

------

<u>For the year ended December 31, 2021</u> 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Beginning<br>Balance** | **Recognized<br>in Profit or<br>Loss** | **Recognized in<br>Other<br>Comprehensive<br>Income** | **Ending**<br> **Balance** |
|  <u>Deferred income tax assets</u> |  |  |  |  |
|  Temporary differences |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Defined benefit pension plan | $1803117 | $7002 | $(79670) | $1730449 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Allowance for doubtful receivables over quota | 362609 | (99175) |  | 263434 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Valuation loss on inventory | 275587 | (110914) |  | 164673 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Valuation loss on onerous contracts | 33997 | (7478) |  | 26519 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred revenue | 73067 | (24389) |  | 48678 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Estimated warranty liabilities | 16718 | 6907 |  | 23625 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued award credits liabilities | 18409 | (9474) |  | 8935 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 40129 | (35150) |  | 4979 |
|  | $2623633 | $(272671) | $(79670) | $2271292 |
|  <u>Deferred income tax liabilities</u> |  |  |  |  |
|  Temporary differences |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Defined benefit pension plan | $1810040 | $156635 | $— | $1966675 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Land value incremental tax | 94986 |  |  | 94986 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred revenue for award credits | 30207 | 25501 |  | 55708 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Unrealized foreign exchange gain, net |  | 26606 |  | 26606 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Valuation gain on financial assets |  | 16074 |  | 16074 |
|  | $1935233 | $224816 | $— | $2160049 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. All deductible temporary differences were recognized as deferred tax assets in the balance sheets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. Income tax examinations

Income tax returns of the Company have been examined by the tax authorities through 2019.

**29.** **EARNINGS PER SHARE ("EPS")** 

Net income and weighted average number of common stocks used in the calculation of earnings per share were as follows:

**Net Income** 

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Net income used to compute the basic earnings per share | $36477157 | $35753579 |

---

(Continued)

------

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Assumed conversion of all dilutive potential common stocks |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Employee stock options and employee compensation of subsidiaries | $(7370) | $(6258) |
|  Net income used to compute the diluted earnings per share | $36469787 | $35747321 |

---

(Concluded)

**Weighted Average Number of Common Stocks** 

**(Thousand Shares)** 

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Weighted average number of common stocks used to compute the basic earnings per share | 7757447 | 7757447 |
|  Assumed conversion of all dilutive potential common stocks |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Employee compensation | 8342 | 7773 |
|  Weighted average number of common stocks used to compute the diluted earnings per share | 7765789 | 7765220 |

---

As the Company may settle the employee compensation in shares or cash, the Company shall presume that it will be settled in shares and take those shares into consideration when calculating the weighted average number of outstanding shares used in the calculation of diluted EPS if the shares have a dilutive effect. The dilutive effect of the shares needs to be considered until the approval of the number of shares to be distributed to employees as compensation in the following year.

**30.** **CASH FLOW INFORMATION** 

Except for those disclosed in other notes, the Company entered into the following non-cash investing and financing activities:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
| **Investing activities** | **2022** | **2021** |
|  Additions of property, plant and equipment | $29367206 | $34669770 |
|  Changes in other payables | 263500 | (367613) |
|  Payments for acquisition of property, plant and equipment | $29630706 | $34302157 |
|  The carrying amounts of disposal of financial assets at fair value through other comprehensive income | $— | $2637046 |
|  Changes in other current monetary assets |  | 270321 |
|  Proceeds from disposal of financial assets at fair value through other comprehensive income | $— | $2907367 |

---

------

**Financing Activities** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Balance on**<br> **January 1,** | **Cash Flows**<br> **from<br>Financing** | **Changes in Non-Cash<br>Transactions** | **Changes in Non-Cash<br>Transactions** | **Cash Flows**<br> **from**<br> **Operation<br>Activities -** | **Balance on**<br> **December 31,** |
|  | **2022** | **Activities** | **New Leases** | **Others** | **Interest Paid** | **2022** |
|  Lease liabilities | $9956381 | $(3368085) | $3671805 | $(95617) | $(59037) | $10105447 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Balance on**<br> **January 1,** | **Cash Flows**<br> **from<br>Financing** | **Changes in Non-Cash<br>Transactions** | **Changes in Non-Cash<br>Transactions** | **Cash Flows**<br> **from**<br> **Operation<br>Activities -** | **Balance on**<br> **December 31,** |
|  | **2021** | **Activities** | **New Leases** | **Others** | **Interest Paid** | **2021** |
|  Lease liabilities | $8620647 | $(3342213) | $4918877 | $(185939) | $(54991) | $9956381 |

---

**31.** **CAPITAL MANAGEMENT** 

The Company manages its capital to ensure that the Company will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance.

The capital structure of the Company consists of debt and the equity of the Company.

The Company is required to maintain minimum paid-in capital amount as prescribed by the applicable laws.

The management reviews the capital structure of the Company as needed. As part of this review, the management considers the cost of capital and the risks associated with each class of capital.

According to the management's suggestion, the Company maintains a balanced capital structure through paying cash dividends, increasing its share capital, purchasing outstanding shares, and issuing new debt or repaying debt.

**32.** **FINANCIAL INSTRUMENTS** 

**Fair Value Information** 

The fair value measurement guidance establishes a framework for measuring fair value and expands disclosure about fair value measurements. The standard describes a fair value hierarchy based on three levels of inputs that may be used to measure fair value. These levels are:

Level 1 fair value measurements: These measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 fair value measurements: These measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 fair value measurements: These measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Financial instruments that are not measured at fair value but for which fair value is disclosed

Except those listed in the table below, the Company considers that the carrying amounts of financial assets and liabilities not measured at fair value approximate their fair values or the fair values cannot be reliable estimated.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31** | **December 31** | **December 31** | **December 31** |
|  | **2022** | **2022** | **2021** | **2021** |
|  | **Carrying<br>Value** | **Fair Value** | **Carrying<br>Value** | **Fair<br>Value** |
|  <u>Financial liabilities</u> |  |  |  |  |
|  Financial liabilities measured at amortized cost Bonds payable | $30477357 | $30452475 | $26976675 | $7082090 |

---

The fair value of bonds payable is measured using Level 2 inputs. The valuation of fair value is based on the quoted market prices provided by third party pricing services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Financial instruments that are measured at fair value on a recurring basis

<u>December 31, 2022</u>

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
|  Financial assets at FVTPL |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Derivatives | $— | $3514 | $— | $3514 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-listed stocks |  |  | 860960 | 860960 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Limited partnership |  |  | 93114 | 93114 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Film and drama investing agreements |  |  | 24122 | 24122 |
|  | $— | $3514 | $978196 | $981710 |
|  Hedging financial liabilities | $— | $12891 | $— | $12891 |
|  Financial assets at FVOCI |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-listed stocks | $— | $— | $3143866 | $3143866 |

---

<u>December 31, 2021</u>

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
|  Financial assets at FVTPL |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-listed stocks | $— | $— | $884670 | $884670 |
|  Financial assets at FVOCI |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-listed stocks | $— | $— | $3058606 | $3058606 |
|  Financial liabilities at FVTPL |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Derivatives | $— | $6180 | $— | $6180 |
|  Hedging financial liabilities | $— | $8286 | $— | $8286 |

---

------

There were no transfers between Levels 1 and 2 for the years ended December 31, 2022 and 2021.

The reconciliations for financial assets measured at Level 3 were listed below:

<u>2022</u>

---

| | | | |
|:---|:---|:---|:---|
| **Financial Assets** | **Measured at<br>Fair Value<br>through Profit<br>or Loss** | **Measured at<br>Fair Value<br>through Other<br>Comprehensive<br>Income** | **Total** |
|  Balance on January 1, 2022 | $884670 | $3058606 | $3943276 |
|  Acquisition | 323321 |  | 323321 |
|  Recognized in profit or loss under "Other gains and losses" | (208228) |  | (208228) |
|  Recognized in other comprehensive income under "Unrealized gain or loss on financial assets at fair value through other comprehensive income" |  | 92444 | 92444 |
|  Proceeds from capital reduction of the investee | (21567) | (7184) | (28751) |
|  Balance on December 31, 2022 | $978196 | $3143866 | $4122062 |
|  Unrealized gain in 2022 | $(198197) |  |  |

---

<u>2021</u>

---

| | | | |
|:---|:---|:---|:---|
| **Financial Assets** | **Measured at<br>Fair Value<br>through Profit<br>or Loss** | **Measured at<br>Fair Value<br>through Other<br>Comprehensive<br>Income** | **Total** |
|  Balance on January 1, 2021 | $677202 | $4293178 | $4970380 |
|  Disposal |  | (1478) | (1478) |
|  Recognized in profit or loss under "Other gains and losses" | 251868 |  | 251868 |
|  Recognized in other comprehensive income under "Unrealized gain or loss on financial assets at fair value through other comprehensive income" |  | (1233094) | (1233094) |
|  Proceeds from capital reduction of the investee | (44400) |  | (44400) |
|  Balance on December 31, 2021 | $884670 | $3058606 | $3943276 |
|  Unrealized gain in 2021 | $233272 |  |  |

---

The fair values of financial assets and financial liabilities of Level 2 are determined as follows:

1) The fair values of financial assets and financial liabilities with standard terms and conditions and traded in active markets are determined with reference to quoted market prices.

------

2) For derivatives, fair values are estimated using discounted cash flow model. Future cash flows are estimated based on observable inputs including forward exchange rates at the end of the reporting periods and the forward and spot exchange rates stated in the contracts, discounted at a rate that reflects the credit risk of various counterparties. 

The fair values of non-listed domestic and foreign equity investments and film and drama investing agreements were Level 3 financial assets and determined using the market approach by reference the Price-to-Book ratios (P/B ratios) of peer companies that traded in active markets, using the income approach, in which the discounted cash flow is used to capture the present value of the expected future economic benefits to be derived from the investments, or using assets approach. The Company originally used the market approach to measure the fair value of its investment in Taipei Financial Center Corp.; however, as the stock market was impacted by COVID-19 pandemic, the multiples of the referenced companies were changed significantly. With continuing impact of COVID-19 pandemic, the Company evaluated that the income approach, instead of the former market approach, would better reflect the future cash flows of Taipei Financial Center Corp. Therefore, the Company changed its valuation technique to the income approach starting from the second quarter of 2021. The significant unobservable inputs used were listed in the below table. An increase in growth rate of long-term revenue, a decrease in discount for the lack of marketability or noncontrolling interests discount, or a decrease in the discount rate would result in increases in the fair values.

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Discount for lack of marketability | 20% | 20% |
|  Noncontrolling interests discount | 25% | 25% |
|  Growth rate of long-term revenue | 0.19% | 0.19% |
|  Discount rate | 7.22%~8.80% | 8.50% |

---

If the inputs to the valuation model were changed to reflect reasonably possible alternative assumptions while all the other variables were held constant, the fair values of Level 3 financial assets would increase (decrease) as below table.

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Discount for lack of marketability |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5% increase | $(26827) | $(23981) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5% decrease | $26827 | $23981 |
|  Noncontrolling interests discount |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5% increase | $(20921) | $(17351) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5% decrease | $20921 | $17351 |
|  Long-term revenue growth rates |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.1% increase | $29506 | $25190 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.1% decrease | $(28938) | $(24733) |
|  Discount rate |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1% increase | $(329863) | $(287845) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1% decrease | $406648 | $350328 |

---

------

**Categories of Financial Instruments** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  <u>Financial assets</u> |  |  |
|  Measured at FVTPL |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mandatorily measured at FVTPL | $981710 | $884670 |
|  Hedging financial assets | 12891 |  |
|  Financial assets at amortized cost (Note a) | 64361583 | 54529822 |
|  Financial assets at FVOCI | 3143866 | 3058606 |
|  Financial liabilities |  |  |
|  <u>Measured at FVTPL</u> |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Held for trading |  | 6180 |
|  Hedging financial liabilities |  | 8286 |
|  Measured at amortized cost (Note b) | 62675289 | 59949701 |

---

Note a: The balances included cash and cash equivalents, trade notes and accounts receivable, receivables from related parties, other current monetary assets and refundable deposits (classified as other noncurrent assets), which were financial assets measured at amortized cost.

Note b: The balances included trade notes and accounts payable, payables to related parties, partial other payables, customers' deposits and bonds payable which were financial liabilities carried at amortized cost.

---

| | |
|:---|:---|
| **Financial** | **Risk Management Objectives**  |

---

The main financial instruments of the Company include equity investments, trade notes and accounts receivable, trade notes and accounts payable, lease liabilities, short-term bills payable and bonds payable. The Company's Finance Department provides services to its business units, co-ordinates access to domestic and international capital markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including foreign currency risk, interest rate risk and other price risk), credit risk, and liquidity risk.

The Company seeks to minimize the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives is governed by the Company's policies approved by the Board of Directors. Those derivatives are used to hedge the risks of exchange rate fluctuation arising from operating or investment activities. Compliance with policies and risk exposure limits is reviewed by the Company's Finance Department on a continuous basis. The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

The Company reports the significant risk exposures and related action plans timely and actively to the audit committee and if needed to the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Market risk

The Company is exposed to market risks of changes in foreign currency exchange rates and interest rates. The Company uses forward exchange contracts to hedge the exchange rate risk arising from assets and liabilities denominated in foreign currencies.

------

There were no changes to the Company's exposure to market risks or the manner in which these risks are managed and measured.

1) Foreign currency risk

The carrying amounts of the Company's foreign currency denominated monetary assets and monetary liabilities at the balance sheet dates were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Assets |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; USD | $776107 | $749945 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EUR | 73685 | 40282 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SGD |  | 57 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; JPY |  | 624 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; HKD | 6772 | 67992 |
|  Liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; USD | 660582 | 649400 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EUR | 853992 | 858843 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SGD | 2006225 | 1959171 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; JPY | 14371 | 6040 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; HKD | 16922 | 15520 |

---

The carrying amounts of the Company's derivatives with exchange rate risk exposures at the balance sheet dates were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Assets |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EUR | $16405 | $— |
|  Liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EUR |  | 14466 |

---

<u>Foreign currency sensitivity analysis</u>

The Company is mainly exposed to the fluctuations of the currencies USD, EUR, SGD, JPY and HKD as listed above.

The following table details the Company's sensitivity to a 5% increase and decrease in the functional currency against the relevant foreign currencies. 5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management's assessment of the reasonably possible changes in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and forward exchange contracts. A positive number below indicates an increase in pre-tax profit or equity where the functional currency weakens 5% against the relevant currency.

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Profit or loss |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Monetary assets and liabilities (a) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; USD | $5776 | $5027 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EUR | (39015) | (40928) |

---

(Continued)

------

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SGD | $(100311) | $(97956) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; JPY | (719) | (271) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; HKD | (508) | 2624 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Derivatives (b) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EUR | 3272 | 12528 |
|  Equity |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Derivatives (c) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EUR | 21841 | 10962 |

---

(Concluded)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) This is mainly attributable to the exposure to foreign currency denominated receivables and payables of the
Company outstanding at the balance sheet dates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) This is mainly attributable to forward exchange contracts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) This is mainly attributable to the changes in the fair value of derivatives that are designated as cash flow
hedges.

For a 5% strengthening of the functional currency against the relevant currencies, there would be an equal and opposite effect on the pre-tax profit or equity for the amounts shown above.

2) Interest rate risk

The carrying amounts of the Company's exposures to interest rates on financial assets and financial liabilities at the balance sheet dates were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Fair value interest rate risk |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial assets | $34758350 | $20221868 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial liabilities | 40582804 | 36933056 |
|  Cash flow interest rate risk |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial assets | 2558200 | 6883640 |

---

<u>Interest rate sensitivity analysis</u>

The sensitivity analyses below have been determined based on the exposure to interest rates for non-derivative instruments at the end of the reporting period. A 25 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management's assessment of the reasonably possible change in interest rates.

If interest rates had been 25 basis points higher/lower and all other variables were held constant, the Company's pre-tax income would increase/decrease by $6,396 thousand and $17,209 thousand for the years ended December 31, 2022 and 2021, respectively. This is mainly attributable to the Company's exposure to floating interest rates on its financial assets.

3) Other price risk

The Company is exposed to equity price risks arising from holding other company's equity. Equity investments are held for strategic rather than trading purposes. The management managed the risk through holding various risk portfolios. Further, the Company assigned finance and investment departments to monitor the price risk.

------

<u>Equity price sensitivity analysis</u>

The sensitivity analyses below have been determined based on the exposure to equity price risks at the end of the reporting period.

If equity prices had been 5% higher/lower, pre-tax profit and pre-tax other comprehensive income for the year ended December 31, 2022 would have increased/decreased by $47,704 thousand and $157,193 thousand, respectively, as a result of the changes in fair value of financial assets at FVTPL and financial assets at FVOCI, respectively. If equity prices had been 5% higher/lower, pre-tax profit and pre-tax other comprehensive income for the year ended December 31, 2021 would have increased/decreased by $44,234 thousand and $152,930 thousand, respectively, as a result of the changes in fair value of financial assets at FVTPL and financial assets at FVOCI, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Credit risk

Credit risk refers to the risk that a counterparty would default on its contractual obligations resulting in financial loss to the Company. The maximum credit exposure of the aforementioned financial instruments is equal to their carrying amounts recognized in the balance sheet as of the balance sheet date.

The Company has large trade receivables outstanding with its customers. A substantial majority of the Company's outstanding trade receivables are not covered by collateral or credit insurance. The Company has implemented ongoing measures including enhancing credit assessments and strengthening overall risk management to reduce its credit risk. While the Company has procedures to monitor and limit exposure to credit risk on trade receivables, there can be no assurance such procedures will effectively limit its credit risk and avoid losses. This risk is heightened during periods when economic conditions worsen.

As the Company serves a large number of unrelated consumers, the concentration of credit risk was limited.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Liquidity risk

The Company manages and maintains sufficient cash and cash equivalent position to support the operations and reduce the impact on fluctuation of cash flow.

1) Liquidity and interest risk tables

The following tables detailed the Company's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables had been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company is required to pay.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Weighted**<br> **Average**<br> **Effective**<br> **Interest Rate<br>(%)** | **Less than**<br>**1 Month** | **1-3 Months** | **3 Months to**<br>**1 Year** | **1-5 Years** | **More than**<br>**5 Years** | **Total** |
|  <u>December 31, 2022</u> |  |  |  |  |  |  |  |
|  Non-derivative financial liabilities |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-interest bearing |  | $35717997 | $— | $1537854 | $4991461 | $— | $42247312 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fixed interest rate instruments | 0.53 |  |  |  | 21700000 | 8800000 | 30500000 |
|  |  | $35717997 | $— | $1537854 | $26691461 | $8800000 | $72747312 |

---

------

Information about the maturity analysis for lease liabilities was as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Less than <br>1 Year** | **1-3 Years** | **3-5 Years** | **More<br>than 5<br>Years** | **Total** |
|  Lease liabilities | $3052399 | $4120872 | $2147303 | $939857 | $10260431 |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Weighted**<br> **Average**<br> **Effective**<br> **Interest Rate<br>(%)** | **Less than**<br>**1 Month** | **1-3 Months** | **3 Months to**<br>**1 Year** | **1-5 Years** | **More than**<br>**5 Years** | **Total** |
|  <u>December 31, 2021</u> |  |  |  |  |  |  |  |
|  Non-derivative financial liabilities |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-interest bearing |  | $36463144 | $— | $1467552 | $4881790 | $— | $42812486 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fixed interest rate instruments | 0.51 |  |  |  | 10700000 | 16300000 | 27000000 |
|  |  | $36463144 | $— | $1467552 | $15581790 | $16300000 | $69812486 |

---

Information about the maturity analysis for lease liabilities was as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Less than <br>1 Year** | **1-3 Years** | **3-5 Years** | **More than<br>5 Years** | **Total** |
|  Lease liabilities | $2926909 | $3899914 | $1848965 | $1409093 | $10084881 |

---

The following table detailed the Company's liquidity analysis for its derivative financial instruments. The table had been drawn up based on the undiscounted gross inflows and outflows on those derivatives that require gross settlement.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Less than<br>1 Month** | **1-3 Months** | **3 Months to**<br>**1 Year** | **1-5 Years** | **Total** |
|  <u>December 31, 2022</u> |  |  |  |  |  |
|  <u>Gross settled</u> |  |  |  |  |  |
|  Forward exchange contracts |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inflow | $— | $501175 | $— | $— | $501175 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Outflow |  | 484770 |  |  | 484770 |
|  | $— | $16405 | $— | $— | $16405 |
|  <u>December 31, 2021</u> |  |  |  |  |  |
|  <u>Gross settled</u> |  |  |  |  |  |
|  Forward exchange contracts |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inflow | $— | $470395 | $— | $— | $470395 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Outflow |  | 484861 |  |  | 484861 |
|  | $— | $(14466) | $— | $— | $(14466) |

---

2) Financing facilities

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Unsecured bank loan facilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amount used | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amount unused | 51386000 | 54994370 |
|  | $51386000 | $54994370 |

---

------

**33.** **RELATED PARTIES TRANSACTIONS** 

The ROC Government, one of the Company's customers, has significant equity interest in the Company. The Company provides fixed-line services, wireless services, internet and data and other services to the various departments and institutions of the ROC Government in the normal course of business and at arm's-length prices. Except for those disclosed in other notes or this note, the transactions with the ROC government bodies have not been disclosed because the transactions are not individually or collectively significant. However, the related revenues and operating costs have been appropriately recorded.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. The Company engages in business transactions with the following related parties:

---

| | |
|:---|:---|
| **Company** | **Relationship** |
|  Senao International Co., Ltd. ("SENAO") | Subsidiary |
|  Light Era Development Co., Ltd. ("LED") | Subsidiary |
|  Donghwa Telecom Co., Ltd. | Subsidiary |
|  Chunghwa Telecom Singapore Pte., Ltd. ("CHTS") | Subsidiary |
|  Chunghwa System Integration Co., Ltd. ("CHSI") | Subsidiary |
|  Chunghwa Investment Co., Ltd. ("CHI") | Subsidiary |
|  CHIEF Telecom, Inc. ("CHIEF") | Subsidiary |
| CHYP Multimedia Marketing & Communications Co., Ltd. ("CHYP") | Subsidiary |
|  Prime Asia Investments Group Ltd. ("Prime Asia") | Subsidiary |
|  Spring House Entertainment Tech. Inc. ("SHE") | Subsidiary |
|  Chunghwa Telecom Global, Inc. | Subsidiary |
|  Chunghwa Telecom Vietnam Co., Ltd. | Subsidiary |
|  Smartfun Digital Co., Ltd. | Subsidiary |
|  Chunghwa Telecom Japan Co., Ltd. | Subsidiary |
|  Chunghwa Sochamp Technology Inc. | Subsidiary |
|  Honghwa International Co., Ltd. | Subsidiary |
|  Chunghwa Leading Photonics Tech. Co., Ltd. ("CLPT") | Subsidiary |
|  Chunghwa Telecom (Thailand) Co., Ltd. ("CHTT") | Subsidiary |
|  CHT Security Co., Ltd.("CHTSC") | Subsidiary |
|  International Integrated Systems, Inc. ("IISI") | Subsidiary |
|  Senao International (Samoa) Holding Ltd. ("SIS") | Subsidiary of SENAO |
|  Youth Co., Ltd. | Subsidiary of SENAO |
|  Aval Technologies Co., Ltd. | Subsidiary of SENAO |
|  ISPOT Co., Ltd. | Subsidiary of SENAO |
|  Youyi Co., Ltd. | Subsidiary of SENAO |
|  Senyoung Insurance Agent Co., Ltd. | Subsidiary of SENAO |
|  Senaolife Insurance Agent Co., Ltd. | Subsidiary of SENAO |
|  Wiin Technologies Co., Ltd.("Wiin") | Subsidiary of SENAO |
|  Unigate Telecom Inc. | Subsidiary of CHIEF |
|  Chief International Corp. | Subsidiary of CHIEF |
|  Shanghai Chief Telecom Co., Ltd. | Subsidiary of CHIEF |
|  Chunghwa Precision Test Tech. Co., Ltd. ("CHPT") | Subsidiary of CHI |
|  Chunghwa Precision Test Tech. USA Corporation | Subsidiary of CHPT |
|  CHPT Japan Co., Ltd. | Subsidiary of CHPT |
| Chunghwa Precision Test Tech. International, Ltd. ("CHPT (International)") | Subsidiary of CHPT |
|  TestPro Investment Co., Ltd. ("TestPro") | Subsidiary of CHPT (Note 1) |

---

(Continued)

------

---

| | |
|:---|:---|
| **Company** | **Relationship** |
|  NavCore Tech Co., Ltd. ("NavCore") | Subsidiary of TestPro (Note 2) |
|  Senao International HK Limited ("SIHK") | Subsidiary of SIS |
|  Senao International Trading (Shanghai) Co., Ltd. ("SITS") | Subsidiary of SIHK (Note 3) |
|  Chunghwa Hsingta Co., Ltd. ("CHC") | Subsidiary of Prime Asia |
|  Chunghwa Telecom (China) Co., Ltd. | Subsidiary of CHC |
|  Shanghai Taihua Electronic Technology Limited ("STET") | Subsidiary of CHPT (International) |
|  Su Zhou Precision Test Tech. Ltd. | Subsidiary of CHPT (International) |
|  Infoexplorer International Co., Ltd. ("IESA") | Subsidiary of IISI |
|  IISI Investment Co., Ltd. ("IICL") | Subsidiary of IISI (Note 4) |
|  Unitronics Technology Corp. | Subsidiary of IISI |
|  International Integrated Systems (Hong Kong) Limited | Subsidiary of IESA |
|  Leading Tech Co., Ltd. ("LTCL") | Subsidiary of IICL (Note 4) |
|  Leading Systems Co., Ltd. ("LSCL") | Subsidiary of LTCL (Note 4) |
|  International Integrated Systems Inc. (Shanghai) ("IISS") | Subsidiary of LSCL (Note 5) |
|  Taiwan International Standard Electronics Co., Ltd. | Associate |
|  So-net Entertainment Taiwan Limited | Associate |
|  KKBOX Taiwan Co., Ltd. | Associate |
|  KingwayTek Technology Co., Ltd. | Associate |
|  Taiwan International Ports Logistics Corporation | Associate |
|  Senao Networks, Inc. | Associate of SENAO |
|  EnRack Tech. Co., Ltd. | Subsidiary of Senao Networks, Inc. |
|  ST-2 Satellite Ventures Pte., Ltd. | Associate of CHTS |
|  CHT Infinity Singapore Pte. Ltd. | Associate of CHTS |
|  Viettel-CHT Co., Ltd. | Associate |
|  Click Force Co., Ltd. | Associate of CHYP |
|  Alliance Digital Tech Co., Ltd. ("ADT") | Associate (Note 6) |
|  Chunghwa PChome Fund I Co., Ltd. | Associate |
|  Cornerstone Ventures Co., Ltd. | Associate |
|  Next Commercial Bank Co., Ltd. ("NCB") | Associate |
|  WiAdvance Technology Corporation | Associate |
|  AgriTalk Technology Inc. ("ATT ") | Associate of CHI (Note 7) |
|  Imedtac Co., Ltd. ("IME ") | Associate of CHI (Note 8) |
|  Baohwa Trust Co., Ltd. ("BHT") | Associate of CHTSC (Note 9) |
|  Chunghwa SEA Holdings | Joint venture |
|  Other related parties |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Chunghwa Telecom Foundation | A nonprofit organization of which the funds donated by the Company exceeds one third of its total funds |
| &nbsp;&nbsp;&nbsp;&nbsp; Senao Technical and Cultural Foundation | A nonprofit organization of which the funds donated by SENAO exceeds one third of its total funds |
| &nbsp;&nbsp;&nbsp;&nbsp; Sochamp Technology Co., Ltd. | Investor of significant influence over CHST |
| &nbsp;&nbsp;&nbsp;&nbsp; E-Life Mall Co., Ltd. | Substantial related party of SENAO |
| &nbsp;&nbsp;&nbsp;&nbsp; Cheng Keng Investment Co., Ltd. | Substantial related party of SENAO |
| &nbsp;&nbsp;&nbsp;&nbsp; Cheng Feng Investment Co., Ltd. | Substantial related party of SENAO |
| &nbsp;&nbsp;&nbsp;&nbsp; All Oriented Investment Co., Ltd. | Substantial related party of SENAO |
| &nbsp;&nbsp;&nbsp;&nbsp; Hwa Shun Investment Co., Ltd. | Substantial related party of SENAO |

---

(Continued)

------

---

| | |
|:---|:---|
| **Company** | **Relationship** |
| &nbsp;&nbsp;&nbsp;&nbsp; Yu Yu Investment Co., Ltd. | Substantial related party of SENAO |
| &nbsp;&nbsp;&nbsp;&nbsp; Divine Fine Foods & Wine Inc. | Substantial related party of SENAO (Note 10) |
| &nbsp;&nbsp;&nbsp;&nbsp; Kangsin Co., Ltd. | Substantial related party of SENAO |
| &nbsp;&nbsp;&nbsp;&nbsp; United Daily News Co., Ltd. | Investor of significant influence over SFD |
| &nbsp;&nbsp;&nbsp;&nbsp; Shenzhen Century Communication Co., Ltd. | Investor of significant influence over SCT |
| &nbsp;&nbsp;&nbsp;&nbsp; Advantech Co., Ltd. | Investor of significant influence over IISI |

---

(Concluded)

---

| | |
|:---|:---|
| Note 1: | CHPT invested and established TestPro in March 2022. CHPT obtained 100% ownership interest of TestPro.  |

---

---

| | |
|:---|:---|
| Note 2: | TestPro invested and established NavCore in May 2022. TestPro obtained 54.25% ownership interest of NavCore.  |

---

Note 3: SITS completed its liquidation in April 2021.

Note 4: IICL, LTCL and LSCL completed the cancellation of registration in September 2022.

Note 5: IISS completed its liquidation in August 2021.

Note 6: ADT completed its liquidation in August 2021. Please refer to Note 13.

Note 7: CHI originally treated ATT as a financial asset at FVOCI. However, as CHI obtained one out of three seats of the Board of Directors of ATT in July 2021 and has significant influence over ATT, CHI reclassified it as an associate.

Note 8: CHI originally treated IME as a financial asset at FVOCI. However, as CHI obtained one out of five seats of the Board of Directors of IME in August 2021 and has significant influence over IME, CHI reclassified it as an associate.

---

| | |
|:---|:---|
| Note 9: | CHTSC invested and established BHT in March 2022. CHTSC obtained 40.00% ownership interest of BHT.  |

---

Note 10: Divine Fine Foods & Wine Inc. replaced its responsible persons in October 2021. Since then, Divine Fine Foods & Wine Inc. is no longer a related party of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Terms of the foregoing transactions with related parties were not significantly different from transactions
with non-related parties. When no similar transactions with non-related parties can be referenced, terms were determined in accordance with mutual agreements. Details of transactions between the Company and other related parties are disclosed below:

1) Operating transactions

---

| | | |
|:---|:---|:---|
|  | **Revenues** | **Revenues** |
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Subsidiaries | $5468345 | $7072797 |
|  Associates | 228112 | 357694 |
|  Others | 3086 | 3308 |
|  | $5699543 | $7433799 |

---

------

---

| | | |
|:---|:---|:---|
|  | **Operating Costs and Expenses** | **Operating Costs and Expenses** |
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Subsidiaries | $11389004 | $10311564 |
|  Associates | 1016124 | 712641 |
|  Others | 56287 | 51733 |
|  | $12461415 | $11075938 |

---

2) Non-operating transactions

---

| | | |
|:---|:---|:---|
|  | **Non-operating Income and<br>(Expenses)** | **Non-operating Income and<br>(Expenses)** |
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Subsidiaries | $791 | $(25) |
|  Associates | (8597) | (7420) |
|  | $(7806) | $(7445) |

---

3) Receivables

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Subsidiaries | $1182998 | $1780838 |
|  Associates | 26308 | 9121 |
|  | $1209306 | $1789959 |

---

4) Payables

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Subsidiaries | $3381460 | $3070035 |
|  Associates | 333662 | 378224 |
|  | $3715122 | $3448259 |

---

5) Customers' deposits

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Subsidiaries | $15155 | $34982 |
|  Associates | 65658 | 15970 |
|  Others | 284 |  |
|  | $81097 | $50952 |

---

------

6) Acquisition of property, plant and equipment

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Subsidiaries | $711318 | $604431 |
|  Associates | 32232 | 397884 |
|  | $743550 | $1002315 |

---

7) Lease-in agreements

The Company entered into a contract with ST-2 Satellite Ventures Pte., Ltd. on March 12, 2010 to lease capacity on the ST-2 satellite. This lease term is for 15 years which should start from the official operation of ST-2 satellite and the total contract value is approximately $6,000,000 thousand (SGD$260,723 thousand), including a prepayment of $3,067,711 thousand at the inception of the lease, and the rest of amount should be paid annually when ST-2 satellite starts its official operation. ST-2 satellite was launched in May 2011, and began its official operation in August 2011. As ST-2 satellite is in good operating condition, the useful life is extended for another 3 years and 3 months after evaluation in 2021. The Board of Directors of the Company approved to extend the lease period accordingly with the original contract terms in December 2021; therefore, the Company acquired right-of-use asset of $1,124,780 thousand from the aforementioned lease extension.

The lease liabilities of ST-2 Satellite Ventures Pte., Ltd. as of balance sheet dates were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Lease liabilities - current | $193805 | $173306 |
|  Lease liabilities - noncurrent | 1760815 | 1740557 |
|  | $1954620 | $1913863 |

---

The interest expense recognized for the aforementioned lease liabilities were $8,165 thousand and $7,420 thousand for the years ended December 31, 2022 and 2021, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Compensation of key management personnel

The compensation of directors and key management personnel was as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Short-term employee benefits | $65846 | $69204 |
|  Post-employment benefits | 2406 | 2880 |
|  | $68252 | $72084 |

---

The compensation of directors and key management personnel was mainly determined by the compensation committee having regard to the performances.

------

**34.** **SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS** 

Except for those disclosed in other notes, the Company's significant commitments and contingent liabilities as of December 31, 2022 were as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Acquisitions of telecommunications-related inventory and equipment of $33,772,525 thousand.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. A commitment to contribute $2,000,000 thousand to a Piping Fund administered by the Taipei City Government, of
which $1,000,000 thousand was contributed by the Company on August 15, 1996 (classified as other financial assets—noncurrent). If the fund is not sufficient, the Company will contribute the remaining $1,000,000 thousand upon notification
from the Taipei City Government.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. The Company committed that when its ownership interest in NCB is greater than 25% and NCB encounters financial
difficulty or the capital adequacy ratio of NCB cannot meet the related regulation requirements, the Company will provide financial support to assist NCB in maintaining a healthy financial condition.

**35**. **OTHER MATTERS** 

The Company has assessed the economic impact of COVID-19 pandemic and determined that there were no significant impacts on the Company's financial statements as of the date the financial statements were authorized for issue. The Company will continue to monitor developments of the pandemic and assess the related impacts.

**36.** **SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES** 

The information of significant assets and liabilities denominated in foreign currencies was as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
|  | **Foreign<br>Currencies<br>(Thousands)** | **Exchange Rate** | **New Taiwan<br>Dollars<br>(Thousands)** |
|  <u>Assets denominated in foreign currencies</u> |  |  |  |
|  Monetary items |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; USD | $25272 | 30.71 | $776107 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EUR | 2252 | 32.72 | 73685 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; HKD | 1720 | 3.938 | 6772 |
|  Non-monetary items |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Investments accounted for using equity method |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; USD | 55933 | 30.71 | 1717713 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; HKD | 179716 | 3.938 | 707721 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; JPY | 535285 | 0.232 | 124400 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; VND | 515206133 | 0.001 | 662040 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; RMB | 36961 | 4.408 | 162922 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; THB | 128186 | 0.894 | 114611 |

---

(Continued)

------

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
|  | **Foreign<br>Currencies<br>(Thousands)** | **Exchange<br>Rate** | **New Taiwan<br>Dollars<br>(Thousands)** |
|  <u>Liabilities denominated in foreign currencies</u> |  |  |  |
|  Monetary items |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; USD | $21510 | 30.71 | $660582 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EUR | 26100 | 32.72 | 853992 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SGD | 87685 | 22.88 | 2006225 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; JPY | 61838 | 0.232 | 14371 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; HKD | 4297 | 3.938 | 16922 |

---

(Concluded)

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
|  | **Foreign<br>Currencies<br>(Thousands)** | **Exchange<br>Rate** | **New Taiwan<br>Dollars<br>(Thousands)** |
|  <u>Assets denominated in foreign currencies</u> |  |  |  |
|  Monetary items |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; USD | $27093 | 27.68 | $749945 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EUR | 1286 | 31.32 | 40282 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SGD | 3 | 20.46 | 57 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; JPY | 2596 | 0.241 | 624 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; HKD | 19158 | 3.549 | 67992 |
|  Non-monetary items |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Investments accounted for using equity method |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; USD | 54986 | 27.68 | 1522001 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; HKD | 172876 | 3.549 | 613536 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; JPY | 411029 | 0.241 | 98852 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; VND | 455322761 | 0.0012 | 544111 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; RMB | 35355 | 4.344 | 153582 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; THB | 119628 | 0.8347 | 99853 |
|  <u>Liabilities denominated in foreign currencies</u> |  |  |  |
|  Monetary items |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; USD | 23461 | 27.68 | 649400 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EUR | 27422 | 31.32 | 858843 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SGD | 95756 | 20.46 | 1959171 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; JPY | 25114 | 0.241 | 6040 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; HKD | 4373 | 3.549 | 15520 |

---

The unrealized foreign currency exchange gains and losses were loss of $301,817 thousand and gain of $124,824 thousand for the years ended December 31, 2022 and 2021, respectively. Due to the various foreign currency transactions of the Company, foreign exchange gains and losses cannot be disclosed by the respective significant foreign currency.

------

**37.** **ADDITIONAL DISCLOSURES** 

Following are the additional disclosures required by the FSC for the Company:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Financing provided: None.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Endorsement/guarantee provided: Please see Table 1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Marketable securities held (excluding investments in subsidiaries, associates and joint ventures): Please see
Table 2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Marketable securities acquired or disposed of at costs or prices at least $300 million or 20% of the paid-in
capital: Please see Table 3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. Acquisition of individual real estate at costs of at least $300 million or 20% of the paid-in capital: Please
see Table 4.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. Disposal of individual real estate at prices of at least $300 million or 20% of the paid-in capital: None.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. Total purchases from or sales to related parties amounting to at least $100 million or 20% of the paid-in
capital: Please see Table 5.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h. Receivables from related parties amounting to $100 million or 20% of the paid-in capital: Please see Table 6.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. Names, locations, and other information of investees on which the Company exercises significant influence
(excluding investment in Mainland China): Please see Table 7.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j. Derivative instruments transactions: Please see Notes 7, 19 and 32.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;k. Investment in Mainland China: Please see Table 8.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;l. Information of main stakeholders: Please see Table 9.

**38.** **SEGMENT INFORMATION** 

In response to changes in the operating environment and new business challenges, the Company launched its organizational transformation and redesigned the operational decision-making processes and the performance assessment under the new structure. The aforementioned organizational transformation was effective from January 1, 2022. The Company redefined the reportable segments as "Consumer Business", "Enterprise Business", "International Business" and "Others" and restated the corresponding items of segment information for the comparative period. The reportable segments are managed separately because each segment represents a strategic business unit that serves different customers. Segment information is provided to the CEO who allocates resources and assesses segment performance. The Company's measure of segment performance is mainly based on revenues and income before income tax.

Some operating segments have been aggregated into a single operating segment taking into account the following factors: (a) the type or class of customer for the telecommunications products and services are similar; (b) the nature of the telecommunications products and services are similar; and (c) the methods used to provide the services to the customers are similar.

The accounting policies of the operating segments are the same as those described in Note 3.

------

**Segment Revenues and Operating Results** 

Analysis by reportable segment of revenues and operating results of continuing operations are as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Consumer<br>Business** | **Enterprise<br>Business** | **International<br>Business** | **Others** | **Total** |
|  <u>Year ended December 31, 2022</u> |  |  |  |  |  |
|  Revenues |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; From external customers | $110959617 | $65181004 | $5079008 | $1034710 | $182254339 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Intersegment revenues | 195362 | 9739 | 166400 |  | 371501 |
|  Segment revenues | $111154979 | $65190743 | $5245408 | $1034710 | 182625840 |
|  Intersegment elimination |  |  |  |  | (371501) |
|  Consolidated revenues |  |  |  |  | $182254339 |
|  Segment income before income tax | $27314209 | $15217660 | $1645274 | $731822 | $44908965 |
|  <u>Year ended December 31, 2021</u> |  |  |  |  |  |
|  Revenues |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; From external customers | $109823194 | $63984675 | $3953775 | $1081706 | $178843350 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Intersegment revenues | 171481 | 29216 | 166400 |  | 367097 |
|  Segment revenues | $109994675 | $64013891 | $4120175 | $1081706 | 179210447 |
|  Intersegment elimination |  |  |  |  | (367097) |
|  Consolidated revenues |  |  |  |  | $178843350 |
|  Segment income before income tax | $26744090 | $14407145 | $1167126 | $1569095 | $43887456 |

---

**Other Segment Information** 

Other information reviewed by the chief operating decision maker or regularly provided to the chief operating decision maker was as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Consumer<br>Business** | **Enterprise<br>Business** | **International<br>Business** | **Others** | **Total** |
|  <u>Year ended December 31, 2022</u> |  |  |  |  |  |
|  Share of profits of associates and joint ventures accounted for using equity method | $60365 | $796127 | $515658 | $412214 | $1784364 |
|  Interest income | $137 | $8285 | $2676 | $180834 | $191932 |
|  Interest expenses | $136386 | $76333 | $6826 | $953 | $220498 |
|  Depreciation and amortization | $32640212 | $10067228 | $1008331 | $255489 | $43971260 |
|  Reversal of impairment loss on investment properties | $— | $— | $— | $107467 | $107467 |
|  <u>Year ended December 31, 2021</u> |  |  |  |  |  |
|  Share of profits of associates and joint ventures accounted for using equity method | $195156 | $607749 | $333984 | $474472 | $1611361 |
|  Interest income | $— | $1816 | $— | $54655 | $56471 |
|  Interest expenses | $119228 | $63427 | $6594 | $844 | $190093 |
|  Depreciation and amortization | $31792536 | $10136336 | $717565 | $263052 | $42909489 |
|  Impairment loss on right-of-use assets | $5346 | $382321 | $32923 | $— | $420590 |
|  Reversal of impairment loss on investment properties | $— | $— | $— | $83429 | $83429 |

---

------

**Main Products and Service Revenues** 

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Consumer Business |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mobile services | $55175520 | $52328559 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fixed-line services | 42771843 | 42421519 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Sales | 11738414 | 13574737 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 1273840 | 1498379 |
|  | 110959617 | 109823194 |
|  Enterprise Business |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fixed-line services | 33121636 | 33271911 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Project business | 20412957 | 19097773 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mobile services | 9465830 | 9022102 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 2180581 | 2592889 |
|  | 65181004 | 63984675 |
|  International Business |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fixed-line services | 3469927 | 2939897 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Project business | 1250761 | 717371 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 358320 | 296507 |
|  | 5079008 | 3953775 |
|  Others | 1034710 | 1081706 |
|  | $182254339 | $178843350 |

---

**Geographic Information** 

The users of the Company's services are mainly from Taiwan, ROC. The revenues it derived outside Taiwan are mainly revenues from international long distance telephone and leased line services. The geographic information for revenues was as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Taiwan, ROC | $179474677 | $176712913 |
|  Overseas | 2779662 | 2130437 |
|  | $182254339 | $178843350 |

---

The Company does not have material noncurrent assets in foreign operations.

**Major Customers** 

As of December 31, 2022 and 2021, the Company did not have any single customer whose revenue exceeded 10% of the total revenues.

------

**<u>TABLE 1</u>**

**CHUNGHWA TELECOM CO., LTD. AND INVESTEES** 

**ENDORSEMENTS/GUARANTEES PROVIDED** 

**YEAR ENDED DECEMBER 31, 2022** 

**(Amounts in Thousands of New Taiwan Dollars)** 

------

---

| | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **No.**<br> **(Note 1)** | **Endorsement/<br>Guarantee**<br>**Provider** | **Guaranteed Party** | **Limits on<br>Endorsement/**<br>**Guarantee Amount<br>Provided to Each<br>Guaranteed Party** | **Maximum Balance<br>for the**<br>**Period** | **Ending**<br>**Balance** | **Actual Borrowing<br>Amount** | **Amount of<br>Endorsement/**<br>**Guarantee<br>Collateralized by<br>Properties** | **Ratio of<br>Accumulated<br>Endorsement/<br>Guarantee to Net<br>Equity Per Latest<br>Financial<br>Statements** | **Maximum<br>Endorsement/**<br>**Guarantee Amount<br>Allowable** | **Endorsement/**<br>**Guarantee**<br>**Given by**<br>**Parent on**<br>**Behalf of<br>Subsidiaries** | **Endorsement/**<br>**Guarantee**<br>**Given by<br>Subsidiaries**<br>**on<br>Behalf of**<br>**Parent** | **Endorsement/**<br>**Guarantee**<br>**Given on**<br>**Behalf of<br>Companies**<br>**in Mainland**<br>**China** | **Note** |
| **No.**<br> **(Note 1)** | **Endorsement/<br>Guarantee**<br>**Provider** | **Name** | **Limits on<br>Endorsement/**<br>**Guarantee Amount<br>Provided to Each<br>Guaranteed Party** | **Maximum Balance<br>for the**<br>**Period** | **Ending**<br>**Balance** | **Actual Borrowing<br>Amount** | **Amount of<br>Endorsement/**<br>**Guarantee<br>Collateralized by<br>Properties** | **Ratio of<br>Accumulated<br>Endorsement/<br>Guarantee to Net<br>Equity Per Latest<br>Financial<br>Statements** | **Maximum<br>Endorsement/**<br>**Guarantee Amount<br>Allowable** | **Endorsement/**<br>**Guarantee**<br>**Given by**<br>**Parent on**<br>**Behalf of<br>Subsidiaries** | **Endorsement/**<br>**Guarantee**<br>**Given by<br>Subsidiaries**<br>**on<br>Behalf of**<br>**Parent** | **Endorsement/**<br>**Guarantee**<br>**Given on**<br>**Behalf of<br>Companies**<br>**in Mainland**<br>**China** | **Note** |
| 1 | Senao<br>International<br>Co., Ltd. | Aval<br>Technologies<br>Co., Ltd. b | $630851 | $300000 | $300000 | $300000 | $— | 4.76 | $3154258 | Yes | No | No | Notes 3 and 4 |
|  |  | Wiin<br>Technology<br>Co., Ltd. b | 630851 | 200000 | 200000 | 200000 |  | 3.17 | 3154258 | Yes | No | No | Notes 3 and 4 |

---

Note 1: Significant transactions between the Company and its subsidiaries or among subsidiaries are numbered as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. "0" for the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Subsidiaries are numbered from "1".

Note 2: Relationships between the endorsement/guarantee provider and the guaranteed party:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. A company with which it does business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. A company in which the Company directly and indirectly holds more than 50 percent of the voting shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. A company that directly and indirectly holds more than 50 percent of the voting shares in the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Companies in which the Company holds, directly or indirectly, 90% or more of the voting shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. The Company fulfills its contractual obligations by providing mutual endorsements/guarantees for another
company in the same industry or for joint builders for purposes of undertaking a construction project.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. All capital contributing shareholders make endorsements/guarantees for their jointly invested company in
proportion to their shareholding percentages.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. Companies in the same industry provide among themselves jointly and severally guarantee for a performance
guarantee of a sales contract for pre-construction homes pursuant to the Consumer Protection Act for each other.

---

| | |
|:---|:---|
| Note 3: | The limits on endorsement or guarantee amount provided to each guaranteed party is up to 10% of the net assets value of the latest financial statements of Senao International Co., Ltd.  |

---

---

| | |
|:---|:---|
| Note 4: | The total amount of endorsement or guarantee that the Company is allowed to provide is up to 50% of the net assets value of the latest financial statements of Senao International Co., Ltd.  |

---

------

**<u>TABLE 2</u>**

**CHUNGHWA TELECOM CO., LTD. AND INVESTEES** 

**MARKETABLE SECURITIES HELD** 

**DECEMBER 31, 2022** 

**(Amounts in Thousands of New Taiwan Dollars)** 

------

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Held Company Name** | **Marketable Securities<br>Type and Name** | **Relationship with<br>the Company** | **Financial Statement**<br> **Account** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **Note** |
| **Held Company Name** | **Marketable Securities<br>Type and Name** | **Relationship with<br>the Company** | **Financial Statement**<br> **Account** | **Shares**<br>**(Thousands/**<br>**Thousand Units)** | **Carrying Value**<br>**(Note 1)** | **Percentage of<br>Ownership** | **Fair<br>Value** | **Note** |
|  Chunghwa Telecom Co., Ltd. | <u>Stocks</u> |  |  |  |  |  |  |  |
|  | Taipei Financial Center Corp. |  | Financial assets at FVOCI | 172927 | $3008391 | 12 | $3008391 |  |
|  | Innovation Works Development Fund, L.P. |  | Financial assets at FVTPL - noncurrent |  | 102648 | 4 | 102648 |  |
|  | Industrial Bank of Taiwan II Venture Capital Co., Ltd. (IBT II) |  | Financial assets at FVOCI | 5252 | 13412 | 17 | 13412 |  |
|  | Global Mobile Corp. |  | Financial assets at FVOCI | 7617 |  | 3 |  |  |
|  | Innovation Works Limited |  | Financial assets at FVOCI | 1000 | 2401 | 2 | 2401 |  |
|  | RPTI Intergroup International Ltd. |  | Financial assets at FVOCI | 4765 |  | 10 |  |  |
|  | Taiwan mobile payment Co., Ltd. |  | Financial assets at FVOCI | 1200 | 4246 | 2 | 4246 |  |
|  | Taiwania Capital Buffalo Fund Co., Ltd. |  | Financial assets at FVTPL - noncurrent | 555600 | 567203 | 13 | 567203 |  |
|  | 4 Gamers Entertainment Inc. |  | Financial assets at FVOCI | 136 | 115416 | 19.9 | 115416 |  |
|  | TOP TAIWAN XIV VENTURE CAPITAL CO., LTD. |  | Financial assets at FVTPL - noncurrent | 20000 | 191109 | 9 | 191109 |  |
|  | <u>Limited partnership</u> |  |  |  |  |  |  |  |
|  | Taiwania Capital Buffalo Fund VI, L.P. |  | Financial assets at FVTPL - noncurrent |  | 93114 | 10 | 93114 |  |
|  Senao International Co., Ltd. | <u>Stocks</u> |  |  |  |  |  |  |  |
|  | N.T.U. Innovation Incubation Corporation |  | Financial assets at FVOCI | 1200 | 10428 | 9 | 10428 |  |
|  CHIEF Telecom Inc. | <u>Stocks</u> |  |  |  |  |  |  |  |
|  | 3 Link Information Service Co., Ltd. |  | Financial assets at FVOCI | 374 | 1204 | 10 | 1204 |  |
|  | WPG Holdings Limited |  | Financial assets at FVTPL - current | 9 | 439 |  | 439 | Note 2 |
|  | WPG Holdings Limited |  | Financial assets at FVOCI | 2102 | 102998 |  | 102998 | Note 2 |
|  | WT Microelectronics Co., Ltd. |  | Financial assets at FVOCI | 361 | 17238 |  | 17238 | Note 2 |
|  Chunghwa Investment Co., Ltd. | <u>Stocks</u> |  |  |  |  |  |  |  |
|  | Tatung Technology Inc. |  | Financial assets at FVOCI | 4571 | 46989 | 11 | 46989 |  |
|  | iSing99 Inc. |  | Financial assets at FVOCI | 10000 |  | 7 |  |  |
|  | Powtec ElectroChemical Corporation |  | Financial assets at FVOCI | 20000 |  | 2 |  |  |
|  | Bossdom Digiinnovation Co., Ltd. |  | Financial assets at FVOCI | 2200 | 52800 | 7 | 52800 | Note 2 |
|  | PChome Online Inc. |  | Financial assets at FVOCI | 1875 | 99766 | 1 | 99766 | Note 2 |
|  | <u>Limited partnership</u> |  |  |  |  |  |  |  |
|  | Taiwania Capital Buffalo Fund V, L.P. |  | Financial assets at FVTPL - noncurrent |  | 42007 | 3 | 42007 |  |
|  CHT Security Co., Ltd. | <u>Stocks</u> |  |  |  |  |  |  |  |
|  | TXOne Networks Inc. |  | Financial assets at FVOCI | 91 | 16092 |  | 16092 |  |

---

---

| | |
|:---|:---|
| Note 1: | Showed at carrying amounts with fair value adjustments.  |

---

Note 2: Fair value was based on the closing price on December 30, 2022.

------

**<u>TABLE 3</u>**

**CHUNGHWA TELECOM CO., LTD. AND INVESTEES** 

**MARKETABLE SECURITIES ACQUIRED AND DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL** 

**YEAR ENDED DECEMBER 31, 2022** 

**(Amounts in Thousands of New Taiwan Dollars)** 

------

---

| | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Company<br>Name** | **Marketable<br>Securities<br>Type and<br>Name** | **Financial<br>Statement<br>Account** | **Counter-<br>party** | **Nature of<br>Relationship** | **Beginning Balance** | **Beginning Balance** | **Acquisition** | **Acquisition** | **Disposal** | **Disposal** | **Disposal** | **Disposal** | **Ending Balance** | **Ending Balance** |
| **Company<br>Name** | **Marketable<br>Securities<br>Type and<br>Name** | **Financial<br>Statement<br>Account** | **Counter-<br>party** | **Nature of<br>Relationship** | **Shares<br>(Thousands/**<br>**Thousand<br>Units)** | **Amount** | **Shares<br>(Thousands/**<br>**Thousand<br>Units)** | **Amount** | **Shares<br>(Thousands/**<br>**Thousand<br>Units)** | **Amount** | **Carrying<br>Value** | **Gain on<br>Disposal** | **Shares<br>(Thousands/**<br>**Thousand<br>Units)** | **Amount** |
|  Chunghwa Precision Test Tech. Co., Ltd. | <u>Stocks</u><br> TestPro<br>Investment<br>Co., Ltd. | Investments<br>accounted<br>for using<br>equity<br>method | Invested<br>and<br>established | Subsidiary |  | $— | 13500 | $135000 |  | $— | $— | $— | 13500 | $135,000<br> (Note) |
|  TestPro Investment Co., Ltd. | <u>Stocks</u> |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | NavCore<br>Tech. Co.,<br>Ltd | Investments<br>accounted<br>for using<br>equity<br>method | Invested<br>and<br>established | Subsidiary |  |  | 10850 | 108500 |  |  |  |  | 10850 | 108,500<br> (Note) |

---

Note : Showing at their original investment amounts.

------

**<u>TABLE 4</u>**

**CHUNGHWA TELECOM CO., LTD. AND INVESTEES** 

**ACQUISITION OF INDIVIDUAL REAL ESTATE AT COSTS OF AT LEAST $300 MILLION OR 20% OF THE PAID-IN CAPITAL** 

**YEAR ENDED DECEMBER 31, 2022** 

**(Amounts in Thousands of New Taiwan Dollars)** 

------

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Buyer** | **Event**<br>**Date** | **Transaction<br>Amount** | **Payment<br>Status** | **Counterparty** | **Relationship** | **Information on Previous Title Transfer If Counterparty is a**<br>**Related Party** | **Information on Previous Title Transfer If Counterparty is a**<br>**Related Party** | **Information on Previous Title Transfer If Counterparty is a**<br>**Related Party** | **Information on Previous Title Transfer If Counterparty is a**<br>**Related Party** | **Pricing<br>Reference** | **Purpose of<br>Acquisition** | **Other Terms** |
| **Buyer** | **Event**<br>**Date** | **Transaction<br>Amount** | **Payment<br>Status** | **Counterparty** | **Relationship** | **Property Owner** | **Relationship** | **Transaction Date** | **Amount** | **Pricing<br>Reference** | **Purpose of<br>Acquisition** | **Other Terms** |
|  Chunghwa Precision Test Tech. Co., Ltd.<br> Land | 2021.01~2022.05 | $534030 | Fully<br>paid | Taiwan<br>Powder<br>Technologies<br>Co., Ltd. |  | Not applicable | Not applicable | Not applicable | Not applicable | According to<br>appraisal<br>report | Space<br>requirements<br>for future<br>business<br>expansion and<br>operational<br>considerations |  |

---

------

**<u>TABLE 5</u>** 

**CHUNGHWA TELECOM CO., LTD. AND INVESTEES** 

**TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL** 

**YEAR ENDED DECEMBER 31, 2022** 

**(Amounts in Thousands of New Taiwan Dollars)** 

------

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Company Name** | **Related Party** | **Nature of Relationship** | **Transaction Details** | **Transaction Details** | **Transaction Details** | **Transaction Details** | **Abnormal Transaction** | **Abnormal Transaction** | **Notes /Accounts Payable<br>or Receivable** | **Notes /Accounts Payable<br>or Receivable** |
| **Company Name** | **Related Party** | **Nature of Relationship** | **Purchases/Sales**<br>**(Note 1)** | **Amount** | **% to Total** | **Payment Terms** | **Unit Price** | **Payment Terms** | **Ending Balance**<br>**(Notes 2)** | **% to Total** |
|  Chunghwa Telecom Co., Ltd. | Senao International Co., Ltd. | Subsidiary | Sales | $3961183 | 2 | 30 days | $— |  | $411867 | 2 |
|  |  |  | Purchase | 1010242 | 1 | 30~90 days |  |  | (951467) | (6) |
|  | Aval Technologies Co., Ltd. | Subsidiary | Purchase | 345739 |  | 30 days |  |  | (20066) |  |
|  | CHIEF Telecom Inc. | Subsidiary | Sales | 482253 |  | 30 days |  |  | 60896 |  |
|  |  |  | Purchase | 100884 |  | 60 days |  |  | (29434) |  |
|  | Chunghwa System Integration Co., Ltd. | Subsidiary | Purchase | 1383311 | 1 | 30 days |  |  | (548279) | (3) |
|  | CHYP Multimedia Marketing & Communications Co., Ltd. | Subsidiary | Purchase | 144904 |  | 30 days |  |  | (70901) |  |
|  | Honghwa International Co., Ltd. | Subsidiary | Purchase | 6398667 | 6 | 30~60 days |  |  | (889437) | (6) |
|  | Donghwa Telecom Co., Ltd. | Subsidiary | Sales | 181714 |  | 30 days |  |  | 43519 |  |
|  |  |  | Purchase | 526207 |  | 90 days |  |  | (136772) | (1) |
|  | Chunghwa Telecom Global, Inc. | Subsidiary | Sales | 130426 |  | 90 days |  |  | 20368 |  |
|  |  |  | Purchase | 314688 |  | 90 days |  |  | (45523) |  |
|  | CHT Security Co., Ltd. | Subsidiary | Purchase | 365383 |  | 30 days |  |  | (132146) | (1) |
|  | International Integrated Systems, Inc. | Subsidiary | Purchase | 644072 | 1 | 30 days |  |  | (105962) | (1) |
|  | Senyoung Insurance Agent Co., Ltd. | Subsidiary | Sales | 137915 |  | 90 days |  |  | 41775 |  |
|  | Next Commercial Bank Co., Ltd. | Associate | Sales | 153022 |  | 30~60 days |  |  | 15663 |  |
|  | Taiwan International Standard Electronics Co., Ltd. | Associate | Purchase | 811060 | 1 | 30~90 days |  |  | (274242) | (2) |
|  | KingwayTek Technology Co., Ltd. | Associate | Purchase | 102505 |  | 30 days |  |  | (12310) |  |
|  Senao International Co., Ltd. | Aval Technologies Co., Ltd. | Subsidiary | Sales | 354836 | 1 | 60 days |  |  | 54984 | 3 |
|  |  |  | Purchase | 239559 | 1 | 30 days |  |  | (12561) | (1) |
|  CHIEF Telecom Inc. | So-net Entertainment Taiwan Limited | Associate | Sales | 141493 | 5 | 30 days |  |  | 24244 | 11 |
|  Aval Technologies Co., Ltd. | Youth Co., Ltd. | Fellow<br>subsidiary | Sales | 129705 |  | 30 days |  |  | 16404 | 1 |
|  | ISPOT Co., Ltd. | Fellow<br>subsidiary | Sales | 105031 |  | 30 days |  |  | 13907 | 1 |
|  Chunghwa Precision Test Tech. Co., Ltd. | Su Zhou Precision Test Tech. Ltd. | Subsidiary | Sales | 185105 | 4 | 90 days |  |  | 39884 | 5 |

---

Note 1: Purchases include costs to acquire services.

Note 2: Notes and accounts receivable did not include the amounts collected for others and other receivables.

Note 3: Transaction terms with related parties were determined in accordance with mutual agreements when there were no similar transactions with third parties. Other transactions with related parties were not significantly different from those with third parties.

------

**<u>TABLE 6</u>**

**CHUNGHWA TELECOM CO., LTD. AND INVESTEES** 

**RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL** 

**DECEMBER 31, 2022** 

**(Amounts in Thousands of New Taiwan Dollars)** 

------

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Company Name** | **Related Party** | **Nature of Relationship** | **Ending Balance** | **Turnover Rate**<br>**(Note)** | **Overdue** | **Overdue** | **Amounts<br>Received in<br>Subsequent<br>Period** | **Allowance for**<br>**Bad Debts** |
| **Company Name** | **Related Party** | **Nature of Relationship** | **Ending Balance** | **Turnover Rate**<br>**(Note)** | **Amounts** | **Action Taken** | **Amounts<br>Received in<br>Subsequent<br>Period** | **Allowance for**<br>**Bad Debts** |
|  Chunghwa Telecom Co., Ltd. | Senao International Co., Ltd. | Subsidiary | $553907 | 11.07 | $— |  | $542039 | $— |
|  Senao International Co., Ltd. | Chunghwa Telecom Co., Ltd. | Parent company | 1096214 | 8.10 |  |  | 80373 |  |
|  Chunghwa System Integration Co., Ltd. | Chunghwa Telecom Co., Ltd. | Parent company | 547598 | 3.97 |  |  | 304798 |  |
|  Honghwa International Co., Ltd. | Chunghwa Telecom Co., Ltd. | Parent company | 888955 | 7.30 |  |  | 159406 |  |
|  CHT Security Co., Ltd. | Chunghwa Telecom Co., Ltd. | Parent company | 132146 | 4.13 |  |  | 100210 |  |
|  CHYP Multimedia Marketing & Communications Co., Ltd. | Chunghwa Telecom Co., Ltd. | Parent company | 106751 | 2.89 |  |  | 65982 |  |
|  Donghwa Telecom Co., Ltd. | Chunghwa Telecom Co., Ltd. | Parent company | 136772 | 3.10 |  |  | 43210 |  |

---

Note: Payments and receipts collected in trust for others are excluded from the accounts receivable in calculating the turnover rate.

------

**<u>TABLE 7</u>**

**CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES** 

**NAMES, LOCATIONS, AND OTHER INFORMATION OF INVESTEES IN WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE (EXCLUDING INVESTMENT IN MAINLAND CHINA)** 

**YEAR ENDED DECEMBER 31, 2022** 

**(Amounts in Thousands of New Taiwan Dollars)** 

------

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Investor Company** | **Investee Company** | **Location** | **Main Businesses and Products** | **Original Investment<br>Amount** | **Original Investment<br>Amount** | **Balance as of December 31, 2022** | **Balance as of December 31, 2022** | **Balance as of December 31, 2022** | **Net Income<br>(Loss) of the<br>Investee** | **Recognized<br>Gain (Loss)**<br>**(Notes 1, 2 and 3)** | **Note** |
| **Investor Company** | **Investee Company** | **Location** | **Main Businesses and Products** | **December 31,<br>2022** | **December 31,<br>2021** | **Shares**<br>**(Thousands)** | **Percentage of<br>Ownership (%)** | **Carrying Value**<br>**(Note 3)** | **Net Income<br>(Loss) of the<br>Investee** | **Recognized<br>Gain (Loss)**<br>**(Notes 1, 2 and 3)** | **Note** |
|  Chunghwa Telecom Co., Ltd. | Senao International Co., Ltd. | Taiwan | Handset and peripherals retailer; sales of CHT mobile phone plans as an agent | $1065813 | $1065813 | 71773 | 28 | $1727055 | $658038 | $177150 | Subsidiary |
|  | Light Era Development Co., Ltd. | Taiwan | Planning and development of real estate and intelligent buildings, and property management | 3000000 | 3000000 | 300000 | 100 | 3839742 | 20995 | 13323 | Subsidiary |
|  | Donghwa Telecom Co., Ltd. | Hong Kong | International private leased circuit, IP VPN service, and IP transit services | 691163 | 691163 | 178590 | 100 | 707721 | 26033 | 26033 | Subsidiary |
|  | Chunghwa Telecom Singapore Pte., Ltd. | Singapore | International private leased circuit, IP VPN service, and IP transit services | 574112 | 574112 | 26383 | 100 | 1120634 | 250922 | 250982 | Subsidiary |
|  | Chunghwa System Integration Co., Ltd. | Taiwan | Providing system integration services and telecommunications equipment | 838506 | 838506 | 60000 | 100 | 718130 | 32836 | 25296 | Subsidiary |
|  | CHIEF Telecom Inc. | Taiwan | Network integration, internet data center ("IDC"), communications integration and cloud application services | 459652 | 459652 | 39426 | 56 | 1983440 | 836809 | 480237 | Subsidiary |
|  | Chunghwa Investment Co., Ltd. | Taiwan | Investment | 639559 | 639559 | 68085 | 89 | 3176735 | 246304 | 219339 | Subsidiary |
|  | Prime Asia Investments Group Ltd. | British Virgin<br>Islands | Investment | 385274 | 385274 | 1 | 100 | 162922 | 7100 | 7100 | Subsidiary |
|  | Honghwa International Co., Ltd. | Taiwan | Telecommunication engineering, sales agent of mobile phone plan application and other business services, etc. | 180000 | 180000 | 18000 | 100 | 739508 | 464271 | 438179 | Subsidiary |
|  | CHYP Multimedia Marketing & Communications Co., Ltd. | Taiwan | Digital information supply services and advertisement services | 150000 | 150000 | 15000 | 100 | 204188 | 22296 | 22846 | Subsidiary |
|  | Chunghwa Telecom Vietnam Co., Ltd. | Vietnam | Intelligent energy saving solutions, international circuit, and information and communication technology ("ICT") services | 148275 | 148275 |  | 100 | 103508 | (764) | (764) | Subsidiary |
|  | Chunghwa Telecom Global, Inc. | United States | International private leased circuit, internet services, and transit services | 70429 | 70429 | 6000 | 100 | 597080 | 79803 | 80191 | Subsidiary |
|  | CHT Security Co., Ltd. | Taiwan | Computing equipment installation, wholesale of computing and business machinery equipment and software, management consulting services, data processing services, digital information supply services and internet identify services | 240000 | 240000 | 24000 | 73 | 405032 | 201332 | 133820 | Subsidiary |
|  | Chunghwa Telecom (Thailand) Co., Ltd. | Thailand | International private leased circuit, IP VPN service, ICT and cloud VAS services | 119624 | 119624 | 1300 | 100 | 114611 | 7322 | 7322 | Subsidiary |
|  | Spring House Entertainment Tech. Inc. | Taiwan | Software design services, internet contents production and play, and motion picture production and distribution | 62209 | 62209 | 8251 | 56 | 158406 | 44541 | 24961 | Subsidiary |
|  | Chunghwa leading Photonics Tech Co., Ltd. | Taiwan | Production and sale of electronic components and finished products | 70500 | 70500 | 7050 | 75 | 150071 | 37590 | 28192 | Subsidiary |
|  | Smartfun Digital Co., Ltd. | Taiwan | Providing diversified family education digital services | 65000 | 65000 | 6500 | 65 | 81764 | 19479 | 12388 | Subsidiary |
|  | Chunghwa Telecom Japan Co., Ltd. | Japan | International private leased circuit, IP VPN service, and IP transit services | 17291 | 17291 | 1 | 100 | 124400 | 28268 | 28268 | Subsidiary |
|  | Chunghwa Sochamp Technology Inc. | Taiwan | Design, development and production of Automatic License Plate Recognition software and hardware | 20400 | 20400 | 2040 | 37 | (2217) | (3575) | (2462) | Subsidiary |
|  | International Integrated Systems, Inc. | Taiwan | IT solution provider, IT application consultation, system integration and package solution | 517423 | 517423 | 37211 | 51 | 642709 | 191147 | 112461 | Subsidiary |
|  | Viettel-CHT Co., Ltd. | Vietnam | IDC services | 288327 | 288327 |  | 30 | 558532 | 389161 | 116780 | Associate |

---

(Continued)

------

**CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES** 

**NAMES, LOCATIONS, AND OTHER INFORMATION OF INVESTEES IN WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE (EXCLUDING INVESTMENT IN MAINLAND CHINA)** 

**YEAR ENDED DECEMBER 31, 2022** 

**(Amounts in Thousands of New Taiwan Dollars)** 

------

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Investor Company** | **Investee Company** | **Location** | **Main Businesses and Products** | **Original Investment Amount** | **Original Investment Amount** | **Balance as of December 31, 2022** | **Balance as of December 31, 2022** | **Balance as of December 31, 2022** | **Net Income<br>(Loss) of the<br>Investee** | **Recognized<br>Gain (Loss)**<br>**(Notes 1, 2 and 3)** | **Note** |
| **Investor Company** | **Investee Company** | **Location** | **Main Businesses and Products** | **December 31, 2022** | **December 31, 2021** | **Shares**<br>**(Thousands)** | **Percentage of<br>Ownership (%)** | **Carrying Value**<br>**(Note 3)** | **Net Income<br>(Loss) of the<br>Investee** | **Recognized<br>Gain (Loss)**<br>**(Notes 1, 2 and 3)** | **Note** |
|  | Taiwan International Standard Electronics Co., Ltd. | Taiwan | Manufacturing, selling, designing, and maintaining of telecommunications systems and equipment | $164000 | $164000 | 1760 | 40 | $296501 | $162479 | $84401 | Associate |
|  | KKBOX Taiwan Co., Ltd. | Taiwan | Providing of music on-line, software, electronic information, and advertisement services | 67025 | 67025 | 4438 | 30 | 173634 | 38348 | 11504 | Associate |
|  | So-net Entertainment Taiwan Limited | Taiwan | Online service and sale of computer hardware | 120008 | 120008 | 9429 | 30 | 228184 | 35925 | 10777 | Associate |
|  | KingwayTek Technology Co., Ltd. | Taiwan | Design and sale of digital map, technical support for computer peripherals device, design and development of system programming projects | 66684 | 66684 | 10512 | 23 | 267125 | 78927 | 18316 | Associate |
|  | Taiwan International Ports Logistics Corporation | Taiwan | Import and export storage, logistic warehouse, and ocean shipping service | 80000 | 80000 | 8000 | 27 | 101078 | 116075 | 30957 | Associate |
|  | Chunghwa PChome Fund I Co., Ltd. | Taiwan | Investment, venture capital, investment advisor, management consultant and other consultancy service | 200000 | 200000 | 20000 | 50 | 277776 | 133610 | 66805 | Associate |
|  | Cornerstone Ventures Co., Ltd. | Taiwan | Investment, venture capital, investment advisor, management consultant and other consultancy service | 4900 | 4900 | 490 | 49 | 6743 | 315 | 155 | Associate |
|  | Next Commercial Bank Co., Ltd. | Taiwan | Online banking business | 4190000 | 4190000 | 419000 | 42 | 3173309 | (1004331) | (414635) | Associate |
|  | Chunghwa SEA Holdings | Taiwan | Investment business | 10200 | 10200 | 1020 | 51 | 9677 | (501) | (255) | Joint<br>venture |
|  | WiAdvance Technology Corporation | Taiwan | Software solution integration | 273800 | 273800 | 3700 | 20 | 227868 | (94522) | (25344) | Associate |
|  Senao International Co., Ltd. | Senao Networks, Inc. | Taiwan | Telecommunication facilities manufactures and sales | 202758 | 202758 | 16579 | 34 | 1395858 | 1064850 | 359842 | Associate |
|  | Senao International (Samoa) Holding Ltd. | Samoa<br>Islands | International investment | 2046143 | 2046143 | 1191 | 100 | 36848 | 278 | 278 | Subsidiary |
|  | Youth Co., Ltd. | Taiwan | Sale of information and communication technologies products | 427850 | 427850 | 14752 | 96 | 180344 | (10463) | (16082) | Subsidiary |
|  | Aval Technologies Co., Ltd. | Taiwan | Sale of information and communication technologies products | 89550 | 89550 | 11660 | 100 | 129560 | 9945 | 9946 | Subsidiary |
|  | Senyoung Insurance Agent Co., Ltd. | Taiwan | Property and liability insurance agency | 59000 | 59000 | 5900 | 100 | 100817 | 33444 | 33450 | Subsidiary |
|  CHIEF Telecom Inc. | Unigate Telecom Inc. | Taiwan | Telecommunications and internet service | 2000 | 2000 | 200 | 100 | 1213 | 134 | 134 | Subsidiary |
|  | Chief International Corp. | Samoa<br>Islands | Telecommunications and internet service | 6068 | 6068 | 200 | 100 | 101660 | 8450 | 8450 | Subsidiary |
|  Chunghwa Telecom Singapore Pte., Ltd. | ST-2 Satellite Ventures Pte., Ltd. | Singapore | Operation of ST-2 telecommunications satellite | 21309 | 409061 | 943 | 38 | 246815 | 517590 | 196684 | Associate |
|  | CHT Infinity Singapore Pte. Ltd. | Singapore | Investment business | 55720 | 55720 | 2000 | 40 | 62948 | 4808 | 1923 | Associate |
|  Chunghwa Investment Co., Ltd. | Chunghwa Precision Test Tech. Co., Ltd. | Taiwan | Production and sale of semiconductor testing components and printed circuit board | 178608 | 178608 | 11230 | 34 | 2700070 | 770620 | 263929 | Subsidiary |
|  | CHIEF Telecom Inc. | Taiwan | Network integration, internet data center ("IDC"), communications integration and cloud application services | 19064 | 19064 | 2078 | 3 | 97306 | 836809 | 24616 | Associate |
|  | Senao International Co., Ltd. | Taiwan | Selling and maintaining mobile phones and its peripheral products | 49731 | 49731 | 1001 |  | 45196 | 658038 | 2551 | Associate |
|  | AgriTalk Technology Inc. | Taiwan | Providing smart agricultural solutions, scientific agricultural product, biological inhibitor, and biochips | 65175 | 33000 | 3300 | 29 | 34738 | (8500) | (757) | Associate |
|  | Imedtac Co., Ltd. | Taiwan | Providing medical AIoT solution, biomedical engineering services, and sales of medical device as an agent | 48000 | 48000 | 960 | 7 | 40866 | (36145) | (4568) | Associate |
|  Chunghwa Precision Test Tech. Co., Ltd. | Chunghwa Precision Test Tech USA Corporation | United<br>States | Design and after-sale services of semiconductor testing components and printed circuit board | 74192 | 74192 | 2600 | 100 | 99700 | 4996 | 4996 | Subsidiary |

---

(Continued)

------

**CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES** 

**NAMES, LOCATIONS, AND OTHER INFORMATION OF INVESTEES IN WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE (EXCLUDING INVESTMENT IN MAINLAND CHINA)** 

**YEAR ENDED DECEMBER 31, 2022** 

**(Amounts in Thousands of New Taiwan Dollars)** 

------

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Investor Company** | **Investee Company** | **Location** | **Main Businesses and Products** | **Original Investment Amount** | **Original Investment Amount** | **Balance as of December 31, 2022** | **Balance as of December 31, 2022** | **Balance as of December 31, 2022** | **Net Income<br>(Loss) of the<br>Investee** | **Recognized<br>Gain (Loss)**<br>**(Notes 1, 2 and 3)** | **Note** |
| **Investor Company** | **Investee Company** | **Location** | **Main Businesses and Products** | **December 31, 2022** | **December 31, 2021** | **Shares**<br>**(Thousands)** | **Percentage of<br>Ownership (%)** | **Carrying Value**<br>**(Note 3)** | **Net Income<br>(Loss) of the<br>Investee** | **Recognized<br>Gain (Loss)**<br>**(Notes 1, 2 and 3)** | **Note** |
|  | CHPT Japan Co., Ltd. | Japan | Related services of electronic parts, machinery processed products and printed circuit board | $2008 | $2008 | 1 | 100 | $2255 | $67 | $67 | Subsidiary |
|  | Chunghwa Precision Test Tech. International, Ltd. | Samoa<br>Islands | Wholesale and retail of electronic materials, and investment | 173649 | 173649 | 5700 | 100 | 168997 | 11138 | 11856 | Subsidiary |
|  | TestPro Investment Co., Ltd. | Taiwan | Investment | 135000 |  | 13500 | 100 | 98422 | (13775) | (34429) | Subsidiary |
|  TestPro Investment Co., Ltd. | NavCore Tech. Co., Ltd | Taiwan | Sale and manufacturing of smart equipment, smart factory software and hardware integration and technical consulting service | 108500 |  | 10850 | 54 | 92692 | (25177) | (13659) | Subsidiary |
|  Prime Asia Investments Group, Ltd. | Chunghwa Hsingta Co., Ltd. | Hong<br>Kong | Investment | 375274 | 375274 | 1 | 100 | 162922 | 7100 | 7100 | Subsidiary |
|  Senao International (Samoa) Holding Ltd. | Senao International HK Limited | Hong<br>Kong | International investment | 2060467 | 2060467 | 80440 | 100 | 34207 |  |  | Subsidiary |
|  Youth Co., Ltd. | ISPOT Co., Ltd. | Taiwan | Sale of information and communication technologies products | 53021 | 53021 |  | 100 | 14131 | 2420 | 2228 | Subsidiary |
|  | Youyi Co., Ltd. | Taiwan | Maintenance of information and communication technologies products | 21354 | 21354 |  | 100 | 5150 | (2013) | (12474) | Subsidiary |
|  Aval Technologies Co., Ltd. | Wiin Technology Co., Ltd. | Taiwan | Sale of information and communication technologies products | 29550 | 29550 | 3845 | 100 | 45810 | 6370 | 6370 | Subsidiary |
|  Senyoung Insurance Agent Co., Ltd. | Senaolife Insurance Agent Co., Ltd. | Taiwan | Life insurance services | 29500 | 29500 | 2950 | 100 | 21804 | (1685) | (1685) | Subsidiary |
|  CHYP Multimedia Marketing & Communications Co., Ltd. | Click Force Marketing Company | Taiwan | Advertisement services | 44607 | 44607 | 1401 | 49 | 40932 | 14887 | 7079 | Associate |
|  International Integrated Systems, Inc. | Infoexplorer International Co., Ltd. | Samoa | Investment | 24806 | 24806 | 795 | 100 | 28893 | (44) | (44) | Subsidiary |
|  | IISI Investment Co., Ltd. | Mauritius | Investment |  | 81302 |  |  |  | 4013 | 4013 | Subsidiary<br>(Note 5) |
|  | Unitronics Technology Corp. | Taiwan | Development and maintenance of information system | 55569 | 55569 | 5065 | 99.96 | 83036 | 8085 | 8082 | Subsidiary |
|  Infoexplorer International Co., Ltd. | International Integrated Systems (Hong Kong) Limited | Hong<br>Kong | Investment and engaging in technical consulting service | 24336 | 24336 | 780 | 100 | 28887 | (44) | (44) | Subsidiary |
|  IISI Investment Co., Ltd. | Leading Tech Co., Ltd. | Mauritius | Investment |  | 65374 |  |  |  | 3774 | 3774 | Subsidiary<br>(Note 5) |
|  Leading Tech Co., Ltd. | Leading Systems Co., Ltd. | Mauritius | Investment |  | 100693 |  |  |  | 24 | 24 | Subsidiary<br>(Note 5) |
|  CHT Security Co., Ltd. | Baohwa Trust Co., Ltd. | Taiwan | VR integration and AIoT security services | 20000 |  | 2000 | 40 | 13267 | (16833) | (6733) | Associate |

---

---

| | |
|:---|:---|
| Note 1: | The amounts were based on audited financial statements.  |

---

Note 2: Recognized gain (loss) of investees includes amortization of differences between the investment cost and net value and elimination of unrealized transactions.

Note 3: Recognized gain (loss) and carrying value of the investees did not include the adjustment of the difference between the accounting treatment on standalone basis and consolidated basis as a result of the application of IFRS 15.

Note 4: Investments in mainland China are included in Table 8.

Note 5: IICL, LTCL and LSCL completed the cancellation of registration in September 2022.

(Concluded)

------

**<u>TABLE 8</u>**

**CHUNGHWA TELECOM CO., LTD. AND INVESTEES** 

**INVESTMENTS IN MAINLAND CHINA** 

**YEAR ENDED DECEMBER 31, 2022** 

**(Amounts in Thousands of New Taiwan Dollars)** 

------

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| | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Investee** | **Main**<br> **Businesses**<br> **and**<br> **Products** | **Total Amount<br>of Paid-in<br>Capital** | **Investment<br>Type**<br>**(Note 1)** | **Accumulated<br>Outflow of<br>Investment<br>from Taiwan**<br>**as of<br>January 1,**<br>**2022** | **Investment**<br>**Flows** | **Investment**<br>**Flows** | **Accumulated<br>Outflow of<br>Investment from<br>Taiwan as of<br>December 31, 2022** | **Net Income<br>(Loss) of the<br>Investee** | **% Ownership<br>of Direct or<br>Indirect<br>Investment** | **Investment**<br>**Gain (Loss)**<br>**(Note 2)** | **Carrying Value**<br>**as of**<br>**December 31, 2022** | **Accumulated<br>Inward<br>Remittance**<br>**of Earnings <br>as of <br>December 31,<br>2022** | **Note** |
| **Investee** | **Main**<br> **Businesses**<br> **and**<br> **Products** | **Total Amount<br>of Paid-in<br>Capital** | **Investment<br>Type**<br>**(Note 1)** | **Accumulated<br>Outflow of<br>Investment<br>from Taiwan**<br>**as of<br>January 1,**<br>**2022** | **Outflow** | **Inflow** | **Accumulated<br>Outflow of<br>Investment from<br>Taiwan as of<br>December 31, 2022** | **Net Income<br>(Loss) of the<br>Investee** | **% Ownership<br>of Direct or<br>Indirect<br>Investment** | **Investment**<br>**Gain (Loss)**<br>**(Note 2)** | **Carrying Value**<br>**as of**<br>**December 31, 2022** | **Accumulated<br>Inward<br>Remittance**<br>**of Earnings <br>as of <br>December 31,<br>2022** | **Note** |
|  Senao International Trading (Shanghai) Co., Ltd. | Sale of information and communication technologies products | $955838 | 2 | $955838 | $— | $— | $955838 | $— | 100 | $— | $— | $— | Note<br>8 |
|  Chunghwa Telecom (China) Co., Ltd. | Integrated information and communication solution services for enterprise clients, and intelligent energy network service | 177176 | 2 | 177176 |  |  | 177176 | (4725) | 100 | (4725) |  |  | Note<br>10 |
|  Jiangsu Zhenghua Information Technology Company, LLC | Providing intelligent energy saving solution and intelligent buildings services | 189410 | 2 | 142057 |  |  | 142057 |  | 75 |  |  |  | Note<br>9 |
|  Shanghai Taihua Electronic Technology Limited | Design of printed circuit board and related consultation service | 51233 | 2 | 51233 |  |  | 51233 | 176 | 100 | 176 | 9231 |  |  |
|  Su Zhou Precision Test Tech. Ltd. | Assembly processed of circuit board, design of printed circuit board and related consultation service | 119199 | 2 | 119199 |  |  | 119199 | 10983 | 100 | 10983 | 162919 |  |  |
|  Shanghai Chief Telecom Co., Ltd. | Telecommunications and internet service | 10150 | 1 | 4973 |  |  | 4973 | 871 | 49 | 428 | 14459 |  |  |
|  International Integrated Systems Inc. (Shanghai) | Development and maintenance of information system | 48753 | 2 | 39923 |  | 15701 | 24222 |  | 100 |  |  |  | Note<br>11 |

---

(Continued)

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| | | | |
|:---|:---|:---|:---|
| **Investee** | **Accumulated Investment in**<br>**Mainland China as of**<br>**December 31, 2022** | **Investment Amounts**<br>**Authorized by Investment<br>Commission, MOEA** | **Upper Limit on Investment<br>Stipulated by Investment<br>Commission, MOEA** |
|  SENAO and its subsidiaries (Note 3) | $955838 | $2047858 | $3792099 |
|  Chunghwa Telecom (China) Co., Ltd. (Note 4) | 177176 | 177176 | 236267056 |
|  Jiangsu Zhenghua Information Technology Company, LLC (Note 4) | 142057 | 142057 | 236267056 |
|  Chunghwa Precision Test Tech Co., Ltd and its subsidiaries (Note 5) | 170432 | 216185 | 4775580 |
|  Shanghai Chief Telecom Co., Ltd. (Note 6) | 4973 | 4973 | 1996687 |
|  IISI and its subsidiaries (Note 7) | 24222 | 39923 | 715297 |

---

Note 1: Investments are divided into three categories as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Direct investment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Investments through a holding company registered in a third region.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Others.

---

| | |
|:---|:---|
| Note 2: | The amounts were calculated based on the investee's audited financial statements.  |

---

Note 3: Senao International Co., Ltd. and its subsidiaries were calculated based on the consolidated net assets value of Senao International Co., Ltd.

Note 4: Chunghwa Telecom (China) Co., Ltd. and Jiangsu Zhenghua Information Technology Company, LLC were calculated based on the consolidated net assets value of Chunghwa Telecom Co., Ltd.

Note 5: Chunghwa Precision Test Tech. Co., Ltd. and its subsidiaries were calculated based on the consolidated net assets value of Chunghwa Precision Test Tech. Co., Ltd

Note 6: Shanghai Chief Telecom Co., Ltd. was calculated based on the consolidated net assets value of CHIEF Telecom Inc.

Note 7: IISI and its subsidiaries were calculated based on the consolidated net assets value of IISI.

Note 8: Senao International Trading (Shanghai) Co., Ltd. completed its liquidation in April 2021.

Note 9: Jiangsu Zhenhua Information Technology Company, LLC. completed its liquidation in December 2018.

Note 10: Chunghwa Telecom (China) Co., Ltd. completed its liquidation in October 2022.

Note 11: International Integrated Systems Inc. (Shanghai) completed its liquidation in August 2021.

(Concluded)

------

**<u>TABLE 9</u>**

**CHUNGHWA TELECOM CO., LTD.** 

**INFORMATION OF MAJOR STOCKHOLDERS** 

**DECEMBER 31, 2022** 

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| | | |
|:---|:---|:---|
| **Name of Major Stockholders** | **Shares** | **Shares** |
| **Name of Major Stockholders** | **Number of<br>Shares** | **Percentage of<br>Ownership (%)** |
|  Ministry of Transportation and Communications | 2737718976 | 35.29 |
|  Shin Kong Life Insurance Co., Ltd. | 416466184 | 5.36 |

---

---

| | |
|:---|:---|
| Note: | This table presents information provided by the Taiwan Depository & Clearing Corporation on stockholders holding greater than 5% of Chunghwa's dematerialized securities that have completed the process of registration and delivery by book-entry transfer as of the last business day for the current quarter.  |

---

------

**THE CONTENTS OF STATEMENTS OF MAJOR** 

**ACCOUNTING ITEMS** 

---

| | |
|:---|:---|
| **ITEM** | **STATEMENT INDEX** |
|  MAJOR ACCOUNTING ITEMS IN ASSETS, LIABILITIES AND EQUITY |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; STATEMENT OF CASH AND CASH EQUIVALENTS | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; STATEMENT OF FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS | Note 7 and 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; STATEMENT OF HEDGING FINANCIAL INSTRUMENTS | Note 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; STATEMENT OF TRADE NOTES AND ACCOUNTS RECEIVABLE, NET | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; STATEMENT OF INVENTORIES | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; STATEMENT OF PREPAYMENTS | Note 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; STATEMENT OF OTHER CURRENT MONETARY ASSETS | Note 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; STATEMENT OF OTHER CURRENT ASSETS | Note 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; STATEMENT OF CHANGES IN FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME—NONCURRENT | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; STATEMENT OF CHANGES IN PROPERTY, PLANT AND EQUIPMENT | Note 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; STATEMENT OF CHANGES IN RIGHT-OF-USE ASSETS | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; STATEMENT OF CHANGES IN INVESTMENT PROPERTIES | Note 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; STATEMENT OF CHANGES IN INTANGIBLE ASSETS | Note 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; STATEMENT OF DEFERRED INCOME TAX ASSETS | Note 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; STATEMENT OF OTHER NONCURRENT ASSETS | Note 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; STATEMENT OF TRADE NOTES AND ACCOUNTS PAYABLE | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; STATEMENT OF OTHER PAYABLES | Note 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; STATEMENT OF PROVISIONS | Note 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; STATEMENT OF BONDS PAYABLE | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; STATEMENT OF LEASE LIABILITIES | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; STATEMENT OF DEFERRED INCOME TAX LIABILITIES | Note 28 |
|  MAJOR ACCOUNTING ITEMS IN PROFIT OR LOSS |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; STATEMENT OF REVENUES | Note 38 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; STATEMENT OF OPERATING COSTS | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; STATEMENT OF OPERATING EXPENSES | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; STATEMENT OF OTHER INCOME AND EXPENSES | Note 27 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; STATEMENT OF INTEREST EXPENSES | Note 27 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; STATEMENT OF EMPLOYEE BENEFIT, DEPRECIATION AND AMORTIZATION BY FUNCTION | 13 |

---

------

**<u>STATEMENT 1</u>**

**CHUNGHWA TELECOM CO., LTD.** 

**STATEMENT OF CASH AND CASH EQUIVALENTS** 

**DECEMBER 31, 2022** 

**(In Thousands of New Taiwan Dollars, Unless Specified Otherwise)** 

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Item** | **Period** | **Annual Interest<br>Rate / Earnings<br>Rate** |  | **Amount** |
|  Cash |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash on hand |  |  |  | $126582 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bank deposits |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Checking deposits |  |  |  | 747559 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Demand deposits |  |  |  | 2558200 |
|  |  |  |  | 3432341 |
|  Cash equivalents |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Commercial paper |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Dah Chung Bills Finance Corporation | 2022.11.04~2023.01.18 | 1.04 | %~1.30% | 3133226 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Grand Bills Finance | 2022.12.14~2023.01.18 | 1.04 | %~1.08% | 2990210 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Ta Ching Bills Finance Corporation | 2022.12.14~2023.01.18 | 1.03 | %~1.09% | 2303509 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; China Bills Finance Corporation | 2022.12.09~2023.01.18 | 1.02 | %~1.09% | 2263655 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Taiwan Finance Corporation | 2022.11.04~2023.01.18 | 1.04 | %~1.24% | 1881006 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; International Bills Finance Corporation | 2022.12.05~2023.01.13 | 1.02 | %~1.09% | 1794016 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mega Bills Finance Co., Ltd | 2022.12.12~2023.01.18 | 1.02 | %~1.09% | 1705268 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Taiwan Cooperative Bills Finance Corporation | 2022.11.30~2023.01.18 | 1.04 | %~1.10% | 1694297 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; CTBC Bank Co., Ltd. | 2022.12.28~2023.01.13 | 0.90 | % | 849125 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Taishin International Bank Co., Ltd. | 2022.12.12~2023.01.04 | 1.02 | % | 429409 |
|  |  |  |  | 19043721 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Negotiable certificates of deposit | 2022.10.21~2023.03.30 | 1.20 | %~1.45% | 15500000 |
|  |  |  |  | 34543721 |
|  |  |  |  | $37976062 |

---

Note: Including USD9,262 thousand @30.71, EUR2,252 thousand @32.72 and HKD1,720 thousand @3.938.

------

**<u>STATEMENT 2</u>**

**CHUNGHWA TELECOM CO., LTD.** 

**STATEMENT OF CHANGES IN FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS-NONCURRENT** 

**FOR THE YEAR ENDED DECEMBER 31, 2022** 

**(In Thousands of New Taiwan Dollars)** 

------

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Balance, January 1, 2022** | **Balance, January 1, 2022** | **Additions in Investment** | **Additions in Investment** | **Decrease in Investment** | **Decrease in Investment** | **Balance, December 31, 2022** | **Balance, December 31, 2022** | **Balance, December 31, 2022** | **Balance, December 31, 2022** |
| **Investee Company** | **Shares<br>(In Thousand)** | **Amount** | **Shares**<br>**(In Thousand)** | **Amount** | **Shares**<br>**(In Thousand)** | **Amount** | **Shares**<br>**(In Thousand)** | **Percentage of<br>Ownership (%)** | **Amount** | **Note** |
|  Financial assets at fair value through profit or loss |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Taiwania Capital Buffalo Fund Co., Ltd. | 555600 | $647998 |  | $— |  | $80795 | 555600 | 12.90 | $567203 | Note 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; TOP TAIWAN XIV VENTURE CAPITAL CO., LTD. |  |  | 20000 | 191109 |  |  | 20000 | 9.17 | 191109 | Note 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Innovation Works Development Fund, L.P. |  | 236672 |  |  |  | 134024 |  | 3.55 | 102648 | Notes 1 and 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Taiwania Capital Buffalo Fund VI, L.P. |  |  |  | 93114 |  |  |  | 10.00 | 93114 | Note 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Film and drama investing agreements |  |  |  | 24122 |  |  |  |  | 24122 | Note 2 |
|  |  | $884670 |  | $308345 |  | $214819 |  |  | $978196 |  |

---

Note 1: Decrease in investment was fair value adjustments.

Note 2: Additions in investment were the investment in a new company and fair value adjustments.

Note 3: Decrease in investment was cash refund from capital reduction.

------

**<u>STATEMENT 3</u>**

**CHUNGHWA TELECOM CO., LTD.** 

**STATEMENT OF TRADE NOTES AND ACCOUNTS RECEIVABLE, NET** 

**DECEMBER 31, 2022** 

**(In Thousands of New Taiwan Dollars)** 

------

---

| | |
|:---|:---|
| **Item** | **Amount** |
|  Mobile broadband services revenue | $6925685 |
|  Project services revenue | 4531261 |
|  Leased line services revenue | 3860717 |
|  Internet and value-added services revenue | 2326745 |
|  Local telephone services revenue | 1867430 |
|  Others (Note) | 3272992 |
|  | 22784830 |
|  Less: Loss allowance | (1335778) |
|  | $21449052 |

---

Note: The amount of individual item included in others does not exceed 5% of the account balance.

------

**<u>STATEMENT 4</u>**

**CHUNGHWA TELECOM CO., LTD.** 

**STATEMENT OF INVENTORIES** 

**DECEMBER 31, 2022** 

**(In Thousands of New Taiwan Dollars)** 

------

---

| | | |
|:---|:---|:---|
|  | **Amount** | **Amount** |
| **Item** | **Cost** | **Market Price (Note)** |
|  Merchandise | $1026261 | $1381961 |
|  Project in process | 3876742 | 5519182 |
|  | $4903003 | $6901143 |

---

Note: Amount of net realizable value.

------

**<u>STATEMENT 5</u>**

**CHUNGHWA TELECOM CO., LTD.** 

**STATEMENT OF CHANGES IN FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME-NONCURRENT** 

**FOR THE YEAR ENDED DECEMBER 31, 2022** 

**(In Thousands of New Taiwan Dollars)** 

------

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Balance, January 1, 2022** | **Balance, January 1, 2022** | **Additions in Investment** | **Additions in Investment** | **Decrease in Investment** | **Decrease in Investment** | **Balance, December 31, 2022** | **Balance, December 31, 2022** | **Balance, December 31, 2022** | **Balance, December 31, 2022** |
| **Investee Company** | **Shares**<br>**(In Thousand)** | **Amount** | **Shares**<br>**(In Thousand)** | **Amount** | **Shares**<br>**(In Thousand)** | **Amount** | **Shares**<br>**(In Thousand)** | **Percentage of<br>Ownership (%)** | **Amount** | **Note** |
|  Financial assets at fair value through other comprehensive income |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-listed stocks |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Taipei Financial Center Corp. | 172927 | $2911585 |  | $96806 |  | $— | 172927 | 11.76 | $3008391 | Note 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4 Gamers Entertainment Inc. | 136 | 123432 |  |  |  | 8016 | 136 | 19.93 | 115416 | Note 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Industrial Bank of Taiwan II Venture Capital Co., Ltd. (IBT II) | 5252 | 15475 |  |  |  | 2063 | 5252 | 16.67 | 13412 | Note 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Taiwan mobile payment Co., Ltd. | 1200 | 4197 |  | 49 |  |  | 1200 | 2.00 | 4246 | Note 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Innovation Works Limited | 1000 | 3917 |  | 5668 |  | 7184 | 1000 | 1.93 | 2401 | Note 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Global Mobile Corp. | 7617 |  |  |  |  |  | 7617 | 2.76 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; RPTI Intergroup International Ltd. | 4765 |  |  |  |  |  | 4765 | 10.19 |  |  |
|  |  | $3058606 |  | $102523 |  | $17263 |  |  | $3143866 |  |

---

Note 1: Change in investment was fair value adjustments.

Note 2: Addition in investment was fair value adjustments. Decrease in investment was cash refund from capital reduction.

------

**<u>STATEMENT 6</u>** 

**CHUNGHWA TELECOM CO., LTD.** 

**STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD** 

**FOR THE YEAR ENDED DECEMBER 31, 2022** 

**(In Thousands of New Taiwan Dollars)** 

------

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Balance, January 1, 2022** | **Balance, January 1, 2022** | **Additions in Investment** | **Additions in Investment** | **Decrease in Investment** | **Decrease in Investment** | | | **Balance,<br>December 31,<br>2022** | | | |
| **Investee Company** | **Shares**<br>**(In Thousand)** | **Amount** | **Shares**<br>**(In Thousand)** | **Amount** | **Shares**<br>**(In Thousand)** | **Amount** | **Increase<br>(Decrease)**<br>**in Using the**<br>**Equity Method** | <br>**Shares**<br>**(In Thousand)** | **Percentage of**<br>**Ownership (%)** | <br>**Amount** | <br>**Market Value /**<br>**Net Asset Value** | <br>**Note** |
|  Investments accounted for using equity method |  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Subsidiaries |  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Listed stocks |  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Senao International Co., Ltd. | 71773 | $211023 |  | $— |  | $143546 | $(10782) | 71773 | 28 | $56695 | $2203431 | Notes 2 and 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; CHIEF Telecom Inc. | 39426 | 1845072 |  |  |  | 366660 | 505028 | 39426 | 56 | 1983440 | 11078706 | Notes 2 and 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-listed stocks |  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Light Era Development Co., Ltd. | 300000 | 3856921 |  |  |  | 30502 | 13323 | 300000 | 100 | 3839742 | 3878164 | Notes 1 and 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Chunghwa Investment Co., Ltd. | 68085 | 3202188 |  |  |  | 34043 | 8590 | 68085 | 89 | 3176735 | 3252190 | Notes 1 and 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Chunghwa Telecom Singapore Pte., Ltd. | 26383 | 1057720 |  |  |  | 279767 | 342681 | 26383 | 100 | 1120634 | 1120686 | Notes 1 and 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Honghwa International Co., Ltd. | 18000 | 616610 |  |  |  | 322890 | 436364 | 18000 | 100 | 730084 | 818163 | Notes 1 and 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Chunghwa System Integration Co., Ltd. | 60000 | 716992 |  |  |  | 25890 | 27028 | 60000 | 100 | 718130 | 683033 | Notes 1 and 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Donghwa Telecom Co., Ltd. | 178590 | 613536 |  |  |  |  | 94185 | 178590 | 100 | 707721 | 707721 | Note 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; International Integrated Systems, Inc. | 37211 | 586133 |  |  |  | 61397 | 117973 | 37211 | 51 | 642709 | 608224 | Notes 1 and 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Chunghwa Telecom Global, Inc. | 6000 | 464281 |  |  |  |  | 132799 | 6000 | 100 | 597080 | 591067 | Note 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; CHT Security Co., Ltd. | 24000 | 375827 |  |  |  | 109980 | 139185 | 24000 | 73 | 405032 | 463796 | Notes 1 and 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; CHYP Multimedia Marketing & Communications Co., Ltd. | 15000 | 201424 |  |  |  | 20082 | 22846 | 15000 | 100 | 204188 | 202988 | Notes 1 and 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prime Asia Investments Group Ltd. | 1 | 153582 |  |  |  |  | 9340 | 1 | 100 | 162922 | 162922 | Note 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Spring House Entertainment Tech. Inc. | 8251 | 143613 |  |  |  | 10726 | 25519 | 8251 | 56 | 158406 | 142671 | Notes 1 and 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Chunghwa Leading Photonics Tech. Co., Ltd. | 7050 | 121879 |  |  |  |  | 28192 | 7050 | 75 | 150071 | 151905 | Note 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Chunghwa Telecom Japan Co., Ltd. | 1 | 98852 |  |  |  |  | 25548 | 1 | 100 | 124400 | 124400 | Note 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Chunghwa Telecom (Thailand) Co., Ltd. | 1300 | 99853 |  |  |  |  | 14758 | 1300 | 100 | 114611 | 114611 | Note 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Chunghwa Telecom Vietnam Co., Ltd. |  | 97014 |  |  |  |  | 6494 |  | 100 | 103508 | 103508 | Note 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Smartfun Digital Co., Ltd. | 6500 | 79876 |  |  |  | 10500 | 12388 | 6500 | 65 | 81764 | 82334 | Notes 1 and 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Chunghwa Sochamp Technology Inc. | 2040 | (4908) |  |  |  |  | 2691 | 2040 | 37 | (2217) | 6554 | Note 1 |
|  |  | 14537488 |  |  |  | 1415983 | 1954150 |  |  | 15075655 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Associates |  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Listed stocks |  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; KingwayTek Technology Co., Ltd. | 9557 | 258943 | 955 |  |  | 8410 | 16592 | 10512 | 23 | 267125 | 804187 | Notes 2, 3<br>and 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-listed stocks |  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Next Commercial Bank Co., Ltd. | 419000 | 3592054 |  |  |  |  | (418745) | 419000 | 42 | 3173309 | 3208839 | Note 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Viettel-CHT Co., Ltd. |  | 447097 |  |  |  | 40850 | 152285 |  | 30 | 558532 | 558532 | Notes 1 and 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Taiwan International Standard Electronics Co., Ltd. | 1760 | 347269 |  |  |  | 136527 | 85759 | 1760 | 40 | 296501 | 340066 | Notes 1 and 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Chunghwa PChome Fund I Co., Ltd. | 20000 | 222491 |  |  |  | 11520 | 66805 | 20000 | 50 | 277776 | 277776 | Notes 1 and 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; So-net Entertainment Taiwan Limited | 9429 | 217021 |  |  |  |  | 11163 | 9429 | 30 | 228184 | 210329 | Note 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; WiAdvance Technology Corporation | 3700 | 253873 |  |  |  |  | (26005) | 3700 | 20 | 227868 | 45380 | Note 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; KKBOX Taiwan Co., Ltd. | 4438 | 157524 |  |  |  |  | 16110 | 4438 | 30 | 173634 | 134394 | Note 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Taiwan International Ports Logistics Corporation | 8000 | 70121 |  |  |  |  | 30957 | 8000 | 27 | 101078 | 101078 | Note 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cornerstone Ventures Co., Ltd. | 490 | 6588 |  |  |  |  | 155 | 490 | 49 | 6743 | 6743 | Note 1 |
|  |  | 5572981 |  |  |  | 197307 | (64924) |  |  | 5310750 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Joint Ventures |  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-listed stocks |  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Chunghwa SEA Holdings | 1020 | 9932 |  |  |  |  | (255) | 1020 | 51 | 9677 | 9677 | Note 1 |
|  |  | $20120401 |  | $— |  | $1613290 | $1888971 |  |  | $20396082 |  |  |

---

Note 1: The amounts of net asset value were based on audited financial statements.

Note 2: Fair value was based on the closing price on December 30, 2022.

Note 3: Decrease in investment was cash dividends received.

Note 4: Additions in shares of investment was stock dividends received.

------

**<u>STATEMENT 7</u>**

**CHUNGHWA TELECOM CO., LTD.** 

**STATEMENT OF CHANGES IN RIGHT-OF-USE ASSETS** 

**DECEMBER 31, 2022** 

**(In Thousands of New Taiwan Dollars)** 

------

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Land and<br>Buildings**<br>**(Handsets Base<br>Stations)** | **Land and<br>Buildings<br>(Others)** | **Equipment** | **Total** |
|  <u>Cost</u> |  |  |  |  |
|  Balance on January 1, 2022 | $14880430 | $2103640 | $4124561 | $21108631 |
|  Additions | 3240608 | 426547 | 4650 | 3671805 |
|  Decreases | (459805) | (572268) | (15530) | (1047603) |
|  Balance on December 31, 2022 | $17661233 | $1957919 | $4113681 | $23732833 |
|  <u>Accumulated depreciation and impairment</u> |  |  |  |  |
|  Balance on January 1, 2022 | $7890932 | $866653 | $1613502 | $10371087 |
|  Depreciation expenses | 2863650 | 376338 | 327848 | 3567836 |
|  Decreases | (270194) | (453385) | (15530) | (739109) |
|  Balance on December 31, 2022 | $10484388 | $789606 | $1925820 | $13199814 |
|  Balance on January 1, 2022, net | $6989498 | $1236987 | $2511059 | $10737544 |
|  Balance on December 31, 2022, net | $7176845 | $1168313 | $2187861 | $10533019 |

---

------

**<u>STATEMENT 8</u>**

**CHUNGHWA TELECOM CO., LTD.** 

**STATEMENT OF TRADE NOTES AND ACCOUNTS PAYABLE** 

**DECEMBER 31, 2022** 

**(In Thousands of New Taiwan Dollars)** 

------

---

| | |
|:---|:---|
| **Item** | **Amount** |
|  Payable of spare parts for equipment | $4650381 |
|  Payable of products | 1049614 |
|  Other (Note) | 6738052 |
|  | $12438047 |

---

Note: The amount of each item in others does not exceed 5% of the account balance.

------

**<u>STATEMENT 9</u>**

**CHUNGHWA TELECOM CO., LTD.** 

**STATEMENT OF BONDS PAYABLE** 

**FOR THE YEAR ENDED DECEMBER 31, 2022** 

**(In Thousands of New Taiwan Dollars)** 

------

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Bond Name** | **Trustee** | **Issuance Period** | **Repayment of the Principal and<br>Interest Payment Date** | **Coupon<br>Rate<br>(%)** | **Total<br>Amount** | **Repayments<br>Made** | **Balance at<br>December 31,<br>2022** | **Balance of<br>unamortized<br>discount** | **Carrying<br>Value** | **Guarantee** |
|  Unsecured domestic bonds | Bank of Taiwan | 2020.07~2025.07 | Interest payable in July annually and<br>one-time repayment upon maturity | 0.50 | $8800000 | $– $| 8800000 | $(4840) | $8795160 |  |
|  | Bank of Taiwan | 2020.07~2027.07 | Interest payable in July annually and<br>one-time repayment upon maturity | 0.54 | 7500000 | – | 7500000 | (5227) | 7494773 |  |
|  | Bank of Taiwan | 2020.07~2030.07 | Interest payable in July annually and<br>one-time repayment upon maturity | 0.59 | 3700000 | – | 3700000 | (2990) | 3697010 |  |
|  | Bank of Taiwan | 2021.04~2026.04 | Interest payable in April annually<br>and one-time repayment upon<br>maturity | 0.42 | 1900000 | – | 1900000 | (1398) | 1898602 |  |
|  | Bank of Taiwan | 2021.04~2028.04 | Interest payable in April annually<br>and one-time repayment upon<br>maturity | 0.46 | 4100000 | – | 4100000 | (3445) | 4096555 |  |
|  | Bank of Taiwan | 2021.04~2031.04 | Interest payable in April annually<br>and one-time repayment upon<br>maturity | 0.50 | 1000000 | – | 1000000 | (923) | 999077 |  |
|  | Bank of Taiwan | 2022.03~2027.03 | Interest payable in March annually<br>and one-time repayment upon<br>maturity | 0.69 | 3500000 | – | 3500000 | (3820) | 3496180 |  |
|  |  |  |  |  | $30500000 | $– $| 30500000 | $(22643) | $30477357 |  |

---

------

**<u>STATEMENT 10</u>**

**CHUNGHWA TELECOM CO., LTD.** 

**STATEMENT OF LEASE LIABILITIES** 

**DECEMBER 31, 2022** 

**(In Thousands of New Taiwan Dollars)** 

------

---

| | | | |
|:---|:---|:---|:---|
| **Item** | **Period** | **Discount Rate<br>(%)** | **Amount** |
|  Land and buildings |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Handsets base stations | 1~20 years | 0.37~1.71 | $6892045 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 1~30 years | 0.37~1.68 | 1205212 |
|  Equipment | 1~8 years | 0.37~1.35 | 2008190 |
|  |  |  | 10105447 |
|  Less: Lease Liabilities-current |  |  | (3038698) |
|  Lease Liabilities-noncurrent |  |  | $7066749 |

---

------

**<u>STATEMENT 11</u>**

**CHUNGHWA TELECOM CO., LTD.** 

**STATEMENT OF OPERATING COSTS** 

**FOR THE YEAR ENDED DECEMBER 31, 2022** 

**(In Thousands of New Taiwan Dollars)** 

------

---

| | |
|:---|:---|
| **Item** | **Amount** |
|  Depreciation | $30281487 |
|  Cost of products | 14663150 |
|  Amortization | 12220683 |
|  Salaries | 9632320 |
|  Compensation | 5897900 |
|  Repair, maintenance and warranty expenses | 5886735 |
|  Other (Note) | 34628423 |
|  | $113210698 |

---

Note: The amount of each item in others does not exceed 5% of the account balance.

------

**<u>STATEMENT 12</u>**

**CHUNGHWA TELECOM CO., LTD.** 

**STATEMENT OF OPERATING EXPENSES** 

**FOR THE YEAR ENDED DECEMBER 31, 2022** 

**(In Thousands of New Taiwan Dollars)** 

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Item** | **Marketing** | **General and<br>Administrative** | **Research and<br>Development** | **Expected<br>Credit Loss** | **Total** |
|  Salaries | $5744357 | $1621026 | $1140391 | $— | $8505774 |
|  Compensation | 3569922 | 982227 | 717443 |  | 5269592 |
|  Professional service fee | 2163430 | 388477 | 352370 |  | 2904277 |
|  Welfare fee | 1073210 | 274150 | 196060 |  | 1543420 |
|  Depreciation | 689335 | 532413 | 134480 |  | 1356228 |
|  Marketing and promotion expenses | 1012267 |  |  |  | 1012267 |
|  Expected credit loss |  |  |  | 115870 | 115870 |
|  Other (Note) | 3330898 | 1444371 | 271481 |  | 5046750 |
|  | $17583419 | $5242664 | $2812225 | $115870 | $25754178 |

---

Note: The amount of each item in others does not exceed 5% of the account balance.

------

**<u>STATEMENT 13</u>**

**CHUNGHWA TELECOM CO., LTD.** 

**STATEMENT OF EMPLOYEE BENEFIT, DEPRECIATION AND AMORTIZATION BY FUNCTION** 

**FOR THE YEAR ENDED DECEMBER 31, 2022 and 2021** 

**(In Thousands of New Taiwan Dollars)** 

------

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** |
|  | **Classified as<br>Operating<br>Costs** | **Classified as<br>Operating<br>Expenses** | **Total** | **Classified as<br>Operating<br>Costs** | **Classified as<br>Operating<br>Expenses** | **Total** |
|  Employee benefit expenses |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Salaries | $9632320 | $8505774 | $18138094 | $10406347 | $7915159 | $18321506 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Insurance | 1070168 | 910003 | 1980171 | 1160738 | 896858 | 2057596 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Pension | 784327 | 686134 | 1470461 | 913816 | 679325 | 1593141 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Remuneration to directors |  | 45018 | 45018 |  | 44017 | 44017 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 6665712 | 6005635 | 12671347 | 7053247 | 5372048 | 12425295 |
|  | $18152527 | $16152564 | $34305091 | $19534148 | $14907407 | $34441555 |
|  Depreciation | $30281487 | $1356228 | $31637715 | $29654574 | $1094289 | $30748863 |
|  Amortization | $12220683 | $112862 | $12333545 | $12026219 | $134407 | $12160626 |

---

Note 1: The average numbers of the Company's employees were 19,882 and 20,351, including 10 non-employee directors in 2022 and 2021, respectively.

---

| | |
|:---|:---|
| Note 2: | The average employee benefits expense were $1,724 thousand and $1,691 thousand for the years ended December 31, 2022 and 2021, respectively. (Which refers to [total employee benefits-total directors' remuneration] divided by [number of employees-number of non-employee directors].)  |

---

---

| | |
|:---|:---|
| Note 3: | The average salary expenses were $913 thousand and $901 thousand for the years ended December 31, 2022 and 2021, respectively. (Which refers to [salary expenses] divided by [number of employees-number of non-employee directors]). The change of average salary expenses is approximately 1.3%.  |

---

Note 4: The Company does not have supervisors; therefore, there is no remuneration to supervisors.

Note 5: The remuneration policies for directors, management personnel, and employees were as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. General directors and independent directors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Fixed remuneration is based on monthly basis resolved by the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Floating remuneration is based on distribution stated in the Company's Articles of Incorporation. Please
refer to Note 27(7) for details. Independent directors are excluded from the aforementioned distribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. The remuneration to management personnel is based on the executive performance management and guidelines which
are linked to the Company's performance, business unit performance and personal performance. In addition, the result of corporate social responsibilities is a reference item taking into consideration for the floating remuneration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Compensation to employees is based on the Company's salary guidance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. The remuneration to directors and management personnel are evaluated regularly and determined by the
compensation committee of the Company.

Note 6: The Company's salary expenses refer to recurring grants such as base salary, job premiums, and overtime pay, etc.

## Exhibit 99.2

**Exhibit 99.2** 

**Chunghwa Telecom Co., Ltd. and Subsidiaries**

**Consolidated Financial Statements for the** 

**Years Ended December 31, 2022 and 2021 and** 

**Independent Auditors' Report** 

------

**REPRESENTATION LETTER** 

The entities that are required to be included in the consolidated financial statements of affiliates in accordance with the "Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises" for the year ended December 31, 2022 are all the same as those included in the consolidated financial statements of Chunghwa Telecom Co., Ltd. and its subsidiaries prepared in conformity with the International Financial Reporting Standard 10 "Consolidated Financial Statements". Relevant information that should be disclosed in the consolidated financial statements of affiliates is included in the consolidated financial statements of Chunghwa Telecom Co., Ltd. and its subsidiaries. Hence, we do not prepare a separate set of consolidated financial statements of affiliates.

Very truly yours,

---

| |
|:---|
| CHUNGHWA TELECOM CO., LTD. |
| By /s/ Chi-Mau Sheih |
| Chi-Mau Sheih |
| Chairman |
| February 24, 2023 |

---

------

**INDEPENDENT AUDITORS' REPORT** 

The Board of Directors and Stockholders

Chunghwa Telecom Co., Ltd.

**Opinion** 

We have audited the accompanying consolidated financial statements of Chunghwa Telecom Co., Ltd. and its subsidiaries (the "Company"), which comprise the consolidated balance sheets as of December 31, 2022 and 2021, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2022 and 2021, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

**Basis for Opinion** 

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

**Key Audit Matters** 

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2022. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

------

The key audit matter of the consolidated financial statements for the year ended December 31, 2022 is as follows:

<u>Revenue Recognition on Mobile Service</u> 

Refer to Notes 3 and 43 to the consolidated financial statements.

The Company's mobile service revenue consists of subscriber-based charges made up of a significant volume of low-dollar transactions. Because of the complexity and a variety of subscriber-based charges as well as a large number of transactions, the Company uses highly automated systems to process and record its revenue transactions.

Given the Company's systems to process and record revenue are highly automated, auditing revenue was complex and challenging due to the extent of audit effort required and involvement of professionals with expertise in information technology (IT) necessary for us to identify, test, and evaluate the Company's IT systems.

Our audit procedures related to the Company's systems to process revenue transactions included the following, among others:

• With the assistance of our IT specialists, we:

– Identified the significant systems used to process revenue transactions and tested the general IT controls over each of these systems, including testing of user access controls and change management controls.

– Performed testing of system interface controls and automated controls within the relevant revenue streams, as well as the controls designed to ensure the accuracy and completeness of revenue.

• We tested manual controls within the relevant revenue business processes, including those in place to reconcile
the various systems to the Company's accounting system.

• We selected samples from mobile service revenue and agreed to customer contracts and records of cash receipts.

**Other Matter** 

We have also audited the parent company only financial statements of Chunghwa Telecom Co., Ltd. as of and for the years ended December 31, 2022 and 2021, on which we have issued an unmodified opinion.

**Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements** 

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRS, IAS, IFRIC, and SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the audit committee, are responsible for overseeing the Company's financial reporting process.

------

**Auditors' Responsibilities for the Audit of the Consolidated Financial Statements** 

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Standards on Auditing of the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.

4. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we
are required to draw attention in our auditors' report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.

5. Evaluate the overall presentation, structure and content of the consolidated financial statements, including
the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

6. Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business
activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

------

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2022, and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audits resulting in this independent auditors' report are Yih-Shin Kao and Mei Yen Chiang.

---

| | |
|:---|:---|
| /s/ Yih-Shin Kao  | /s/ Mei Yen Chiang  |

---

Deloitte & Touche

Taipei, Taiwan

Republic of China

February 24, 2023

*<u>Notice to Readers</u>*

*The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally applied in the Republic of China.* 

*For the convenience of readers, the independent auditors' report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors' report and consolidated financial statements shall prevail.* 

------

**CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES** 

**CONSOLIDATED BALANCE SHEETS** 

**DECEMBER 31, 2022 AND 2021** 

**(In Thousands of New Taiwan Dollars)** 

------

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2022** | **2022** | **2021** | **2021** |
|  | **Amount** | **%** | **Amount** | **%** |
|  **ASSETS** |  |  |  |  |
|  CURRENT ASSETS |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash and cash equivalents (Notes 3 and 6) | $50192604 | 10 | $39778624 | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial assets at fair value through profit or loss (Notes 3, 4 and 7) | 3953 |  | 2566 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Hedging financial assets (Notes 3 and 20) | 12891 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Contract assets (Notes 3 and 29) | 6055343 | 1 | 5554070 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Trade notes and accounts receivable, net (Notes 3, 4, 9 and 29) | 24672473 | 5 | 23947107 | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Receivables from related parties (Note 37) | 75061 |  | 41528 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventories (Notes 3, 4 and 10) | 11316406 | 2 | 11327409 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepayments (Note 11) | 2398608 |  | 2330097 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other current monetary assets (Notes 12, 27 and 34) | 3618902 | 1 | 5060878 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other current assets (Notes 18, 19, 31 and 38) | 3555423 | 1 | 2978780 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current assets | 101901664 | 20 | 91021059 | 18 |
|  NONCURRENT ASSETS |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial assets at fair value through profit or loss (Notes 3, 4 and 7) | 1020203 |  | 908775 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial assets at fair value through other comprehensive income (Notes 3, 4, 8 and 34) | 3491381 | 1 | 3615888 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Investments accounted for using equity method (Notes 3, 14 and 34) | 7155851 | 1 | 7332774 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Contract assets (Notes 3 and 29) | 3136801 | 1 | 2607744 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Property, plant and equipment (Notes 3, 4, 15, 34, 37 and 38) | 291527910 | 56 | 289100461 | 56 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Right-of-use assets (Notes 3, 4, 16 and 37) | 11102549 | 2 | 11050936 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Investment properties (Notes 3, 4 and 17) | 9803861 | 2 | 9662638 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Intangible assets (Notes 3, 4, 18 and 37) | 79187087 | 15 | 83945083 | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred income tax assets (Notes 3 and 31) | 2196645 |  | 2785006 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Incremental costs of obtaining contracts (Notes 3 and 29) | 979914 |  | 987656 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net defined benefit assets (Notes 3, 4 and 27) | 5265721 | 1 | 3391077 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepayments (Note 11) | 1728277 |  | 1798463 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other noncurrent assets (Notes 19, 38 and 39) | 4705624 | 1 | 4862800 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total noncurrent assets | 421301824 | 80 | 422049301 | 82 |
|  TOTAL | $523203488 | 100 | $513070360 | 100 |
|  **LIABILITIES AND EQUITY** |  |  |  |  |
|  CURRENT LIABILITIES |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Short-term loans (Note 21) | $722000 |  | $65000 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial liabilities at fair value through profit or loss (Notes 3, 4 and 7) |  |  | 6180 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Hedging financial liabilities (Notes 3 and 20) |  |  | 8286 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Contract liabilities (Notes 3 and 29) | 13390439 | 3 | 12234276 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Trade notes and accounts payable (Note 24) | 16428856 | 3 | 18063288 | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Payables to related parties (Note 37) | 539194 |  | 391358 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Current tax liabilities (Notes 3 and 31) | 4956465 | 1 | 4593458 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Lease liabilities (Notes 3, 4, 16, 34 and 37) | 3338813 | 1 | 3210564 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other payables (Notes 25 and 34) | 25079960 | 5 | 24436708 | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provisions (Notes 3 and 26) | 226019 |  | 284813 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other current liabilities | 1016179 |  | 998367 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current liabilities | 65697925 | 13 | 64292298 | 13 |
|  NONCURRENT LIABILITIES |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Long-term loans (Notes 22 and 38) | 1600000 |  | 1600000 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bonds payable (Note 23) | 30477357 | 6 | 26976675 | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Contract liabilities (Notes 3 and 29) | 7674095 | 2 | 6840056 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred income tax liabilities (Notes 3 and 31) | 2300845 |  | 2189411 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provisions (Notes 3 and 26) | 173033 |  | 141865 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Lease liabilities (Notes 3, 4, 16, 34 and 37) | 7333694 | 2 | 7061689 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Customers' deposits (Note 37) | 5156700 | 1 | 5336343 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net defined benefit liabilities (Notes 3, 4 and 27) | 2285224 |  | 2287663 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other noncurrent liabilities | 6726187 | 1 | 5081910 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total noncurrent liabilities | 63727135 | 12 | 57515612 | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities | 129425060 | 25 | 121807910 | 24 |
|  EQUITY ATTRIBUTABLE TO STOCKHOLDERS OF THE PARENT (Notes 13 and 28) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Common stocks | 77574465 | 15 | 77574465 | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Additional paid-in capital | 171300898 | 32 | 171279625 | 33 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Retained earnings |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Legal reserve | 77574465 | 15 | 77574465 | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Special reserve | 3083569 | 1 | 2675419 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Unappropriated earnings | 51868574 | 10 | 50639022 | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total retained earnings | 132526608 | 26 | 130888906 | 26 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | (223084) |  | (408150) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total equity attributable to stockholders of the parent | 381178887 | 73 | 379334846 | 74 |
|  NONCONTROLLING INTERESTS (Notes 13 and 28) | 12599541 | 2 | 11927604 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total equity | 393778428 | 75 | 391262450 | 76 |
|  TOTAL | $523203488 | 100 | $513070360 | 100 |

---

The accompanying notes are an integral part of the consolidated financial statements.

------

**CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES** 

**CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME** 

**YEARS ENDED DECEMBER 31, 2022 AND 2021** 

**(In Thousands of New Taiwan Dollars, Except Earnings Per Share)** 

------

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2022** | **2022** | **2021** | **2021** |
|  | **Amount** | **%** | **Amount** | **%** |
|  REVENUES (Notes 3, 29, 37 and 43) | $216739234 | 100 | $210477948 | 100 |
|  OPERATING COSTS (Notes 3, 10, 27, 30 and 37) | 136717375 | 63 | 135110751 | 64 |
|  GROSS PROFIT | 80021859 | 37 | 75367197 | 36 |
|  OPERATING EXPENSES (Notes 3, 9, 27, 30 and 37) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Marketing | 22819067 | 10 | 20944091 | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; General and administrative | 6579537 | 3 | 5293136 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Research and development | 3774309 | 2 | 3687747 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Expected credit loss | 117070 |  | 142991 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total operating expenses | 33289983 | 15 | 30067965 | 14 |
|  OTHER INCOME AND EXPENSES (Notes 16, 17, 18, 30 and 43) | 93013 |  | (369411) |  |
|  INCOME FROM OPERATIONS | 46824889 | 22 | 44929821 | 22 |
|  NON-OPERATING INCOME AND EXPENSES |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest income (Note 43) | 249129 |  | 94684 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other income (Notes 8, 30 and 37) | 368523 |  | 377820 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other gains and losses (Notes 14, 30, 36 and 37) | (403784) |  | 460830 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest expense (Notes 16, 30, 37 and 43) | (262738) |  | (218171) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Share of profits of associates and joint ventures accounted for using equity method (Notes 14 and 43) | 452931 |  | 421640 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total non-operating income and expenses | 404061 |  | 1136803 |  |
|  INCOME BEFORE INCOME TAX | 47228950 | 22 | 46066624 | 22 |
|  INCOME TAX EXPENSE (Notes 3 and 31) | 9228911 | 4 | 8871745 | 4 |
|  NET INCOME | 38000039 | 18 | 37194879 | 18 |

---

(Continued)

------

**CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES** 

**CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME** 

**YEARS ENDED DECEMBER 31, 2022 AND 2021** 

**(In Thousands of New Taiwan Dollars, Except Earnings Per Share)** 

------

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2022** | **2022** | **2021** | **2021** |
|  | **Amount** | **%** | **Amount** | **%** |
|  TOTAL OTHER COMPREHENSIVE INCOME (LOSS) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Items that will not be reclassified to profit or loss: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Remeasurements of defined benefit pension plans (Note 27) | $1153576 |  | $390441 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Unrealized gain or loss on investments in equity instruments at fair value through other comprehensive income (Notes 3, 28 and 36) | (136563) |  | (1185849) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Gain or loss on hedging instruments subject to basis adjustment (Notes 3 and 20) | 21177 |  | (10038) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Share of other comprehensive income (loss) of associates and joint ventures (Note 14) | 2802 |  | (4154) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income tax relating to items that will not be reclassified to profit or loss (Note 31) | (230715) |  | (78088) |  |
|  | 810277 |  | (887688) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Items that may be reclassified subsequently to profit or loss: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exchange differences arising from the translation of the foreign operations | 296484 |  | (76620) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Share of other comprehensive income (loss) of associates and joint ventures (Note 14) | 5961 |  | (1523) |  |
|  | 302445 |  | (78143) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total other comprehensive income (loss), net of income tax | 1112722 |  | (965831) |  |
|  TOTAL COMPREHENSIVE INCOME | $39112761 | 18 | $36229048 | 18 |
|  NET INCOME ATTRIBUTABLE TO |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stockholders of the parent | $36477157 | 17 | $35753579 | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Noncontrolling interests | 1522882 | 1 | 1441300 | 1 |
|  | $38000039 | 18 | $37194879 | 18 |

---

(Continued)

------

**CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES** 

**CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME** 

**YEARS ENDED DECEMBER 31, 2022 AND 2021** 

**(In Thousands of New Taiwan Dollars, Except Earnings Per Share)** 

------

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2022** | **2022** | **2021** | **2021** |
|  | **Amount** | **%** | **Amount** | **%** |
|  COMPREHENSIVE INCOME ATTRIBUTABLE TO |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stockholders of the parent | $37569082 | 17 | $34789149 | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Noncontrolling interests | 1543679 | 1 | 1439899 | 1 |
|  | $39112761 | 18 | $36229048 | 18 |
|  EARNINGS PER SHARE (Note 32) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basic | $4.70 |  | $4.61 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Diluted | $4.70  |  | $4.60  |  |

---

The accompanying notes are an integral part of the consolidated financial statements. (Concluded)

------

**CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES** 

**CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY** 

**YEARS ENDED DECEMBER 31, 2022 AND 2021** 

**(In Thousands of New Taiwan Dollars)** 

------

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Equity Attributable to Stockholders of the Parent (Notes 13, 20 and 28)** | **Equity Attributable to Stockholders of the Parent (Notes 13, 20 and 28)** | **Equity Attributable to Stockholders of the Parent (Notes 13, 20 and 28)** | **Equity Attributable to Stockholders of the Parent (Notes 13, 20 and 28)** | **Equity Attributable to Stockholders of the Parent (Notes 13, 20 and 28)** | **Equity Attributable to Stockholders of the Parent (Notes 13, 20 and 28)** | **Equity Attributable to Stockholders of the Parent (Notes 13, 20 and 28)** | **Equity Attributable to Stockholders of the Parent (Notes 13, 20 and 28)** | **Equity Attributable to Stockholders of the Parent (Notes 13, 20 and 28)** | | |
|  | | | | | | **Others** | **Others** | **Others** | | | |
|  | | | | | | | **Unrealized<br>Gain**<br> **or Loss on**<br> **Financial<br>Assets**<br> **at Fair<br>Value**<br> **Through<br>Other**<br> **Comp-<br>rehensive<br>Income** | | | | |
|  | | | | | | **Exchange**<br> **Differences**<br> **Arising<br>from the**<br> **Translation<br>of**<br> **the Foreign<br>Operations** | **Unrealized<br>Gain**<br> **or Loss on**<br> **Financial<br>Assets**<br> **at Fair<br>Value**<br> **Through<br>Other**<br> **Comp-<br>rehensive<br>Income** | | | | |
|  | | | | | | **Exchange**<br> **Differences**<br> **Arising<br>from the**<br> **Translation<br>of**<br> **the Foreign<br>Operations** | **Unrealized<br>Gain**<br> **or Loss on**<br> **Financial<br>Assets**<br> **at Fair<br>Value**<br> **Through<br>Other**<br> **Comp-<br>rehensive<br>Income** | | | | |
|  | | | | | | **Exchange**<br> **Differences**<br> **Arising<br>from the**<br> **Translation<br>of**<br> **the Foreign<br>Operations** | **Unrealized<br>Gain**<br> **or Loss on**<br> **Financial<br>Assets**<br> **at Fair<br>Value**<br> **Through<br>Other**<br> **Comp-<br>rehensive<br>Income** | | | | |
|  | | | **Retained Earnings** | **Retained Earnings** | **Retained Earnings** | **Exchange**<br> **Differences**<br> **Arising<br>from the**<br> **Translation<br>of**<br> **the Foreign<br>Operations** | **Unrealized<br>Gain**<br> **or Loss on**<br> **Financial<br>Assets**<br> **at Fair<br>Value**<br> **Through<br>Other**<br> **Comp-<br>rehensive<br>Income** | **Gain or<br>Loss**<br> **on Hedging**<br> **Instruments** | | **Non-<br>controlling**<br> **Interests**<br> **(Notes 13<br>and 28)** | |
|  | **Common<br>Stocks** | **Additional**<br> **Paid-in<br>Capital** | **Legal<br>Reserve** | **Special<br>Reserve** | **Unappro-<br>priated**<br> **Earnings** | **Exchange**<br> **Differences**<br> **Arising<br>from the**<br> **Translation<br>of**<br> **the Foreign<br>Operations** | **Unrealized<br>Gain**<br> **or Loss on**<br> **Financial<br>Assets**<br> **at Fair<br>Value**<br> **Through<br>Other**<br> **Comp-<br>rehensive<br>Income** | **Gain or<br>Loss**<br> **on Hedging**<br> **Instruments** | **Total** | **Non-<br>controlling**<br> **Interests**<br> **(Notes 13<br>and 28)** | **Total Equity** |
|  BALANCE, JANUARY 1, 2021 | $77574465 | $171261379 | $77574465 | $2675419 | $47918166 | $(314531) | $1239901 | $1752 | $377931016 | $11327441 | $389258457 |
|  Appropriation of 2020 earnings |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash dividends distributed by Chunghwa |  |  |  |  | (33403565) |  |  |  | (33403565) |  | (33403565) |
|  Cash dividends distributed by subsidiaries |  |  |  |  |  |  |  |  |  | (896335) | (896335) |
|  Unclaimed dividend |  | 1968 |  |  |  |  |  |  | 1968 |  | 1968 |
|  Change in additional paid-in capital from investments in associates and joint ventures accounted for using equity method |  | (437) |  |  |  |  |  |  | (437) | (136) | (573) |
|  Net income for the year ended December 31, 2021 |  |  |  |  | 35753579 |  |  |  | 35753579 | 1441300 | 37194879 |
|  Other comprehensive income (loss) for the year ended December 31, 2021 |  |  |  |  | 311189 | (77745) | (1187836) | (10038) | (964430) | (1401) | (965831) |
|  Total comprehensive income (loss) for the year ended December 31, 2021 |  |  |  |  | 36064768 | (77745) | (1187836) | (10038) | 34789149 | 1439899 | 36229048 |
|  Disposal of investments in equity instruments at fair value through other comprehensive income |  |  |  |  | 59653 |  | (59653) |  |  |  |  |
|  Share-based payment transactions of subsidiaries |  | 16715 |  |  |  |  |  |  | 16715 | 56735 | 73450 |
|  BALANCE, DECEMBER 31, 2021 | 77574465 | 171279625 | 77574465 | 2675419 | 50639022 | (392276) | (7588) | (8286) | 379334846 | 11927604 | 391262450 |
|  Appropriation of 2021 earnings  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Special reserve |  |  |  | 408150 | (408150) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash dividends distributed by Chunghwa |  |  |  |  | (35746314) |  |  |  | (35746314) |  | (35746314) |
|  Cash dividends distributed by subsidiaries |  |  |  |  |  |  |  |  |  | (1053240) | (1053240) |
|  Unclaimed dividend |  | 1632 |  |  |  |  |  |  | 1632 |  | 1632 |
|  Change in investments in associates and joint ventures accounted for using equity method |  | (12719) |  |  |  |  |  |  | (12719) | (1491) | (14210) |
|  Change in additional paid-in capital for not proportionately participating in the capital increase of subsidiaries |  | 5153 |  |  |  |  |  |  | 5153 | 9847 | 15000 |
|  Net income for the year ended December 31, 2022 |  |  |  |  | 36477157 |  |  |  | 36477157 | 1522882 | 38000039 |
|  Other comprehensive income (loss) for the year ended December 31, 2022 |  |  |  |  | 906975 | 281063 | (117290) | 21177 | 1091925 | 20797 | 1112722 |
|  Total comprehensive income (loss) for the year ended December 31, 2022 |  |  |  |  | 37384132 | 281063 | (117290) | 21177 | 37569082 | 1543679 | 39112761 |
|  Disposal of investments in equity instruments at fair value through other comprehensive income |  |  |  |  | (116) |  | 116 |  |  |  |  |
|  Share-based payment transactions of subsidiaries |  | 27207 |  |  |  |  |  |  | 27207 | 62385 | 89592 |
|  Net increase in noncontrolling interests |  |  |  |  |  |  |  |  |  | 110757 | 110757 |
|  BALANCE, DECEMBER 31, 2022 | $77574465 | $171300898 | $77574465 | $3083569 | $51868574 | $(111213) | $(124762) | $12891 | $381178887 | $12599541 | $393778428 |

---

The accompanying notes are an integral part of the consolidated financial statements.

------

**CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES** 

**CONSOLIDATED STATEMENTS OF CASH FLOWS** 

**YEARS ENDED DECEMBER 31, 2022 AND 2021** 

**(In Thousands of New Taiwan Dollars)** 

------

---

| | | |
|:---|:---|:---|
|  | **2022** | **2021** |
|  CASH FLOWS FROM OPERATING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income before income tax | $47228950 | $46066624 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Adjustments for: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation | 32785526 | 31832326 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amortization | 6642657 | 6568547 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amortization of incremental costs of obtaining contracts | 840553 | 815241 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Expected credit loss | 117070 | 142991 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest expense | 262738 | 218171 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest income | (249129) | (94684) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Dividend income | (157465) | (154008) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Compensation cost of share-based payment transactions | 15513 | 19371 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Share of profits of associates and joint ventures accounted for using equity method | (452931) | (421640) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loss on disposal of property, plant and equipment | 4907 | 3349 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Gain on disposal of financial instruments | (726) | (353) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Gain on disposal of investments accounted for using equity method |  | (3239) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provision for impairment loss and obsolescence of inventory | 34167 | 206824 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Impairment loss on right-of-use assets |  | 420590 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reversal of impairment loss on investment properties | (107467) | (83429) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Impairment loss on intangible assets | 9547 | 28901 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Valuation loss (gain) on financial assets and liabilities at fair value through profit or loss, net | 205805 | (243381) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 254276 | (132924) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Decrease (increase) in: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Contract assets | (1031379) | (335554) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Trade notes and accounts receivable | (785476) | (1339250) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Receivables from related parties | (33533) | 189168 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventories | (23164) | 874670 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepayments | 1675 | 391207 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other current monetary assets | (164346) | (385757) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other current assets | (576643) | (629683) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Incremental cost of obtaining contracts | (832811) | (803304) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase (decrease) in: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Contract liabilities | 1990202 | (1651461) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Trade notes and accounts payable | (1630693) | 2468093 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Payables to related parties | 147836 | (254586) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other payables | 782340 | 248112 |

---

(Continued)

------

**CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES** 

**CONSOLIDATED STATEMENTS OF CASH FLOWS** 

**YEARS ENDED DECEMBER 31, 2022 AND 2021** 

**(In Thousands of New Taiwan Dollars)** 

------

---

| | | |
|:---|:---|:---|
|  | **2022** | **2021** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provisions | $(27626) | $12507 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other current liabilities | 60163 | (12390) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net defined benefit plans | (723507) | (755749) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash generated from operations | 84587029 | 83205300 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interests paid | (239357) | (192064) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income taxes paid | (8396824) | (8155036) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash provided by operating activities | 75950848 | 74858200 |
|  CASH FLOWS FROM INVESTING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Acquisition of financial assets at fair value through other comprehensive income | (19394) | (313171) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from disposal of financial assets at fair value through other comprehensive income | 154 | 2911570 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from capital reduction of financial assets at fair value through other comprehensive income | 7184 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Acquisition of financial assets at fair value through profit or loss | (360214) | (44072) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from disposal of financial assets at fair value through profit or loss | 14573 | 25201 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from capital reduction of financial assets at fair value through profit or loss | 65967 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Acquisition of time deposits and negotiable certificates of deposit with maturities of more than three months | (5669860) | (17369138) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from disposal of time deposits and negotiable certificates of deposit with maturities of more than three months | 7310021 | 18446270 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Acquisition of investments accounted for using equity method | (52175) | (329520) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from disposal of investments accounted for using equity method |  | 8519 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from capital reduction of investments accounted for using equity method | 340182 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Acquisition of property, plant and equipment | (31534946) | (35333028) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from disposal of property, plant and equipment | 15743 | 27038 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Acquisition of intangible assets | (1892675) | (255852) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Acquisition of investment properties | (18333) | (146) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Decrease in other noncurrent assets | 235178 | 336878 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interests received | 219092 | 95118 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Dividends received | 550310 | 621972 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash used in investing activities | (30789193) | (31172361) |

---

(Continued)

------

**CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES** 

**CONSOLIDATED STATEMENTS OF CASH FLOWS** 

**YEARS ENDED DECEMBER 31, 2022 AND 2021** 

**(In Thousands of New Taiwan Dollars)** 

------

---

| | | |
|:---|:---|:---|
|  | **2022** | **2021** |
|  CASH FLOWS FROM FINANCING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from short-term loans | $1292000 | $154000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Repayments of short-term loans | (635000) | (156000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from short-term bills payable |  | 5000000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Repayments of short-term bills payable |  | (12000000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from issuance of bonds | 3500000 | 7000000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Payments for transaction costs attributable to the issuance of bonds | (4463) | (7675) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase (decrease) in customers' deposits | (221994) | 477444 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Payments for the principal of lease liabilities | (3776965) | (3728949) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase in other noncurrent liabilities | 1644277 | 3191105 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash dividends paid | (35746314) | (33403565) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash dividends distributed to noncontrolling interests | (1053240) | (896335) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Change in other noncontrolling interests | 199836 | 54079 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Unclaimed dividend | 1632 | 1968 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash used in financing activities | (34800231) | (34313928) |
|  EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 52556 | (12942) |
|  NET INCREASE IN CASH AND CASH EQUIVALENTS | 10413980 | 9358969 |
|  CASH AND CASH EQUIVALENTS, BEGINNING OF THE YEAR | 39778624 | 30419655 |
|  CASH AND CASH EQUIVALENTS, END OF THE YEAR | $50192604 | $39778624 |

---

The accompanying notes are an integral part of the consolidated financial statements. (Concluded)

------

**CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES** 

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** 

**YEARS ENDED DECEMBER 31, 2022 AND 2021** 

**(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)** 

------

**1.** **GENERAL** 

Chunghwa Telecom Co., Ltd. ("Chunghwa"; Chunghwa together with its subsidiaries are hereinafter referred to collectively as the "Company".) was incorporated on July 1, 1996 in the Republic of China ("ROC"). Chunghwa is a company limited by shares and, prior to August 2000, was wholly owned by the Ministry of Transportation and Communications ("MOTC"). Prior to July 1, 1996, the current operations of Chunghwa were carried out under the Directorate General of Telecommunications ("DGT"). The DGT was established by the MOTC in June 1943 to take primary responsibility in the development of telecommunications infrastructure and to formulate policies related to telecommunications. On July 1, 1996, the telecom operations of the DGT were spun-off as Chunghwa which continues to carry out the business and the DGT continues to be the industry regulator.

Effective August 12, 2005, the MOTC completed the process of privatizing Chunghwa by reducing the government ownership to below 50% in various stages. In July 2000, Chunghwa received approval from the Securities and Futures Commission (the "SFC") for a domestic initial public offering and its common stocks were listed and traded on the Taiwan Stock Exchange (the "TWSE") on October 27, 2000. Certain of Chunghwa's common stocks were sold, in connection with the foregoing privatization plan, in domestic public offerings at various dates from August 2000 to July 2003. Certain of Chunghwa's common stocks were also sold in an international offering of securities in the form of American Depository Shares ("ADS") on July 17, 2003 and were listed and traded on the New York Stock Exchange (the "NYSE"). The MOTC sold common stocks of Chunghwa by auction in the ROC on August 9, 2005 and completed the second international offering on August 10, 2005. Upon completion of the share transfers associated with these offerings on August 12, 2005, the MOTC owned less than 50% of the outstanding shares of Chunghwa and completed the privatization plan.

Chunghwa launched its organizational transformation based on customer-centric structure effective from January 2022. Please refer to Note 43 Segment Information for details.

The consolidated financial statements are presented in Chunghwa's functional currency, New Taiwan dollars.

**2.** **APPROVAL OF FINANCIAL STATEMENTS** 

The consolidated financial statements were approved by the Board of Directors on February 24, 2023.

**3.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** 

**Statement of Compliance** 

The accompanying consolidated financial statements have been prepared in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), International Financial Reporting Interpretations Committee (IFRIC) and SIC Interpretations (SIC) (collectively, the "IFRSs") endorsed and issued into effect by the Financial Supervisory Commission (the "FSC") (collectively, the "Taiwan-IFRS").

------

**Basis of Preparation** 

The consolidated financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at fair values and net defined benefit liabilities (assets) which are measured at the present value of the defined benefit obligations less the fair value of plan assets.

**Current and Noncurrent Assets and Liabilities** 

Current assets include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Assets held primarily for the purpose of trading;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Assets expected to be realized within twelve months after the reporting period; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for
at least twelve months after the reporting period.

Current liabilities include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Liabilities held primarily for the purpose of trading;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Liabilities due to be settled within twelve months after the reporting period; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Liabilities for which the Company does not have an unconditional right to defer settlement for at least twelve
months after the reporting period.

Assets and liabilities that are not classified as current are classified as noncurrent.

Light Era Development Co., Ltd. ("LED") engages mainly in development of property for rent and sale. The assets and liabilities of LED related to property development within its operating cycle, which is over one year, are classified as current items.

**Basis of Consolidation** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Principles for preparing consolidated financial statements

The consolidated financial statements incorporate the financial statements of Chunghwa and entities controlled by Chunghwa (its subsidiaries).

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with those used by the Company.

All inter-company transactions, balances, income and expenses are eliminated in full upon consolidation.

<u>Attribution of total comprehensive income to noncontrolling interests</u>

Total comprehensive income of subsidiaries is attributed to the stockholders of the parent and to the noncontrolling interests even if it results in the noncontrolling interests having a deficit balance.

------

<u>Changes in the Company's ownership interests in subsidiaries</u>

Changes in the Company's ownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Company's interests and the noncontrolling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the noncontrolling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to stockholders of the parent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. The subsidiaries in the consolidated financial statements

The detail information of the subsidiaries at the end of reporting period was as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  |  | **Percentage of Ownership<br>Interests** | **Percentage of Ownership<br>Interests** |  |
|  |  |  | **December 31** | **December 31** |  |
|  **Name of Investor** | **Name of Investee** | **Main Businesses and**<br> **Products** | **2022** | **2021** | **Note** |
|  Chunghwa Telecom Co., Ltd. | Senao International Co., Ltd. ("SENAO") | Handset and peripherals retailer, sales of CHT mobile phone plans as an agent | 28 | 28 | a) |
|  | Light Era Development Co., Ltd. ("LED") | Planning and development of real estate and intelligent buildings, and property management | 100 | 100 |  |
|  | Donghwa Telecom Co., Ltd. ("DHT") | International private leased circuit, IP VPN service, and IP transit services | 100 | 100 | b) |
|  | Chunghwa Telecom Singapore Pte., Ltd. ("CHTS") | International private leased circuit, IP VPN service, and IP transit services | 100 | 100 |  |
|  | Chunghwa System Integration Co., Ltd. ("CHSI") | Providing system integration services and telecommunications equipment | 100 | 100 |  |
|  | Chunghwa Investment Co., Ltd. ("CHI") | Investment | 89 | 89 |  |
|  | CHIEF Telecom Inc. ("CHIEF") | Network integration, internet data center ("IDC"), communications integration and cloud application services | 56 | 56 | c) |
|  | CHYP Multimedia Marketing & Communications Co., Ltd. ("CHYP") | Digital information supply services and advertisement services | 100 | 100 |  |
|  | Prime Asia Investments Group Ltd. ("Prime Asia") | Investment | 100 | 100 |  |
|  | Spring House Entertainment Tech. Inc. ("SHE") | Software design services, internet contents production and play, and motion picture production and distribution | 56 | 56 |  |
|  | Chunghwa Telecom Global, Inc. ("CHTG") | International private leased circuit, internet services, and transit services | 100 | 100 |  |
|  | Chunghwa Telecom Vietnam Co., Ltd. ("CHTV") | Intelligent energy saving solutions, international circuit, and information and communication technology ("ICT") services. | 100 | 100 |  |
|  | Smartfun Digital Co., Ltd. ("SFD") | Providing diversified family education digital services | 65 | 65 |  |
|  | Chunghwa Telecom Japan Co., Ltd. ("CHTJ") | International private leased circuit, IP VPN service, and IP transit services | 100 | 100 |  |
|  | Chunghwa Sochamp Technology Inc. ("CHST") | Design, development and production of Automatic License Plate Recognition software and hardware | 37 | 51 | d) |
|  | Honghwa International Co., Ltd. ("HHI") | Telecommunications engineering, sales agent of mobile phone plan application and other business services, etc. | 100 | 100 |  |
|  | Chunghwa Leading Photonics Tech Co., Ltd. ("CLPT") | Production and sale of electronic components and finished products | 75 | 75 |  |
|  | Chunghwa Telecom (Thailand) Co., Ltd. ("CHTT") | International private leased circuit, IP VPN service, ICT and cloud VAS services | 100 | 100 |  |

---

(Continued)

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  |  | **Percentage of Ownership<br>Interests** | **Percentage of Ownership<br>Interests** |  |
|  |  |  | **December 31** | **December 31** |  |
| **Name of Investor** | **Name of Investee** | **Main Businesses and**<br> **Products** | **2022** | **2021** | **Note** |
|  | CHT Security Co., Ltd. ("CHTSC") | Computing equipment installation, wholesale of computing and business machinery equipment and software, management consulting services, data processing services, digital information supply services and internet identity services | 73 | 77 | e) |
|  | International Integrated Systems, Inc. ("IISI") | IT solution provider, IT application consultation, system integration and package solution | 51 | 51 | f) |
|  Senao International Co., Ltd. | Senao International (Samoa) Holding Ltd. ("SIS") | International investment | 100 | 100 | g) |
|  | Youth Co., Ltd. ("Youth") | Sale of information and communication technologies products | 96 | 96 |  |
|  | Aval Technologies Co., Ltd. ("Aval") | Sale of information and communication technologies products | 100 | 100 |  |
|  | Senyoung Insurance Agent Co., Ltd. ("SENYOUNG") | Property and liability insurance agency | 100 | 100 |  |
|  Youth Co., Ltd. | ISPOT Co., Ltd. ("ISPOT") | Sale of information and communication technologies products | 100 | 100 |  |
|  | Youyi Co., Ltd. ("Youyi") | Maintenance of information and communication technologies products | 100 | 100 |  |
|  Aval Technologies Co., Ltd. | Wiin Technology Co., Ltd. ("Wiin") | Sale of information and communication technologies products | 100 | 100 |  |
|  Senyoung Insurance Agent Co., Ltd. | Senaolife Insurance Agent Co., Ltd. ("Senaolife") | Life insurance services | 100 | 100 | h) |
|  CHIEF Telecom Inc. | Unigate Telecom Inc. ("Unigate") | Telecommunications and internet service | 100 | 100 |  |
|  | Chief International Corp. ("CIC") | Telecommunications and internet service | 100 | 100 |  |
|  | Shanghai Chief Telecom Co., Ltd. ("SCT") | Telecommunications and internet service | 49 | 49 | i) |
|  Chunghwa Investment Co., Ltd. | Chunghwa Precision Test Tech. Co., Ltd. ("CHPT") | Production and sale of semiconductor testing components and printed circuit board | 34 | 34 | j) |
|  Chunghwa Precision Test Tech. Co., Ltd. | Chunghwa Precision Test Tech. USA Corporation ("CHPT (US)") | Design and after-sale services of semiconductor testing components and printed circuit board | 100 | 100 | k) |
|  | CHPT Japan Co., Ltd. ("CHPT (JP)") | Related services of electronic parts, machinery processed products and printed circuit board | 100 | 100 |  |
|  | Chunghwa Precision Test Tech. International, Ltd. ("CHPT (International)") | Wholesale and retail of electronic materials, and investment | 100 | 100 | l) |
|  | TestPro Investment Co., Ltd. ("TestPro") | Investment | 100 |  | m) |
|  TestPro Investment Co., Ltd. | NavCore Tech. Co., Ltd ("NavCore") | Sale and manufacturing of smart equipment, smart factory software and hardware integration and technical consulting service | 54 |  | n) |
|  Senao International (Samoa) Holding Ltd. | Senao International HK Limited ("SIHK") | International investment | 100 | 100 | o) |
|  Senao International HK Limited | Senao International Trading (Shanghai) Co., Ltd. ("SITS") | Sale of information and communication technologies products |  |  | p) |

---

(Continued)

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  |  | **Percentage of Ownership**<br>**Interests** | **Percentage of Ownership**<br>**Interests** |  |
|  |  |  | **December 31** | **December 31** |  |
| **Name of Investor** | **Name of Investee** | **Main Businesses and**<br> **Products** | **2022** | **2021** | **Note** |
|  Prime Asia Investments Group Ltd. | Chunghwa Hsingta Co., Ltd. ("CHC") | Investment | 100 | 100 |  |
|  Chunghwa Hsingta Co., Ltd. | Chunghwa Telecom (China) Co., Ltd. ("CTC") | Integrated information and communication solution services for enterprise clients, and intelligent energy network service |  | 100 | q) |
|  Chunghwa Precision Test Tech. International, Ltd. | Shanghai Taihua Electronic Technology Limited ("STET") | Design of printed circuit board and related consultation service | 100 | 100 |  |
|  | Su Zhou Precision Test Tech. Ltd. ("SZPT") | Assembly processed of circuit board, design of printed circuit board and related consultation service | 100 | 100 | r) |
|  International Integrated Systems, Inc. | Infoexplorer International Co., Ltd.("IESA") | Investment | 100 | 100 | s) |
|  | IISI Investment Co., Ltd. ("IICL") | Investment |  | 100 | t) |
|  | Unitronics Technology Corp. ("UTC") | Development and maintenance of information system | 99.96 | 99.96 |  |
|  Infoexplorer International Co., Ltd. | International Integrated Systems (Hong Kong) Limited ("IEHK") | Investment and technical consulting service | 100 | 100 | s) |
|  IISI Investment Co., Ltd. | Leading Tech Co., Ltd. ("LTCL") | Investment |  | 100 | t) |
|  Leading Tech Co., Ltd. | Leading Systems Co., Ltd. ("LSCL") | Investment |  | 100 | t) |
|  Leading Systems Co., Ltd. | International Integrated Systems Inc. (Shanghai) ("IISS") | Development and maintenance of information system |  |  | u) |

---

(Concluded)

a) Chunghwa continues to control seven out of thirteen seats of the Board of Directors of SENAO through the
support of large beneficial stockholders. As a result, the Company treated SENAO as a subsidiary.

b) DHT reduced and returned its capital to its stakeholders in March 2021. The Company's ownership interest
in DHT remained the same.

c) CHIEF issued new shares in March 2021, December 2021, March 2022 and December 2022 as its employees
exercised options. Therefore, the Company's ownership interest in CHIEF decreased to 58.89% and 58.67% as of December 31, 2021 and 2022, respectively.

d) Chunghwa did not participate in the capital increase of CHST in November 2022. Therefore, the Company's
ownership interest in CHST decreased to 37.09% as of December 31, 2022. However, Chunghwa continues to control three out of five seats of the Board of Directors of CHST. As a result, the Company treated CHST as a subsidiary.

e) CHTSC issued new shares in February 2021, February 2022 and May 2022 as its employees exercised options.
Therefore, the Company's ownership interest in CHTSC decreased to 77.46% and 73.09% as of December 31, 2021 and 2022, respectively.

f) IISI issued new shares in January 2021 as its employees exercised options. Therefore, the Company's
ownership interest in IISI decreased to 51.02%.

------

g) SIS reduced and returned its capital to its stakeholders in November 2020 and July 2021. SIS reduced 8.14%,
48.15% and 96.26% of its capital to offset accumulated deficits in February 2021, October 2021 and November 2022, respectively. The Company's ownership interest in SIS remained the same.

h) In order to coordinate with financial planning and adjustment of organizational resources, the Board of
Directors of SENYOUNG approved the merger with Senaolife. Senaolife will be the dissolved company. In January 2023, the Board of Directors of SENYOUNG approved the merger completion date as March 1, 2023.

i) CHIEF has two out of three seats of the Board of Directors of SCT according to the mutual agreements among
stockholders and gained control over SCT; hence, SCT is deemed as a subsidiary of the Company.

j) Though the Company's ownership interest in CHPT is less than 50%, the management considered the absolute
and relative size of ownership interest, and the dispersion of shares owned by the other stockholders and concluded that the Company has a sufficiently dominant voting interest to direct the relevant activities; hence, CHPT is deemed as a subsidiary
of the Company.

k) CHPT increased its investment in CHPT (US) proportionally in August 2021 and the Company's ownership
interest in CHPT (US) remained the same.

l) CHPT increased its investment in CHPT (International) proportionally in April 2021 and the Company's
ownership interest in CHPT (International) remained the same.

m) CHPT invested and established TestPro in March 2022. CHPT obtained 100% ownership interest of TestPro.

n) TestPro invested and established NavCore in May 2022. TestPro obtained 54.25% ownership interest of NavCore.

o) SIHK reduced and returned its capital to its stakeholders in November 2020 and May 2021. SIHK reduced 8.15% and
47.79% of its capital to offset accumulated deficits in January and August 2021, respectively. The Company's ownership interest in SIHK remained the same. SIHK was approved to end and dissolve its business in August 2022. The liquidation of
SIHK is still in process.

p) SITS completed its liquidation in April 2021.

q) CTC completed its liquidation in October 2022.

r) CHPT (International) increased its investment in SZPT proportionally in July 2021. The Company's ownership
interest in SZPT remained the same.

s) The Board of Directors of IISI approved to end and dissolve the business of IESA and IEHK. The liquidation of
IESA and IEHK is still in process.

t) IICL, LTCL and LSCL completed the cancellation of registration in September 2022.

u) IISS completed its liquidation in August 2021.

------

The following diagram presented information regarding the relationship and percentages of ownership interests between Chunghwa and its subsidiaries as of December 31, 2022.

![LOGO](g461941page133.jpg)

**Foreign Currencies** 

In preparing the financial statements of each individual entity, transactions in currencies other than the entity's functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period in which they arise.

Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined and related exchange differences are recognized in profit or loss. Conversely, when the fair value changes were recognized in other comprehensive income, related exchange difference shall be recognized in other comprehensive income.

Non-monetary items that are measured at historical cost in a foreign currency are not retranslated.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Company's foreign operations (including those subsidiaries, associates and joint ventures in other countries or currencies used different with Chunghwa) are translated into New Taiwan dollars using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising, if any, are recognized in other comprehensive income and attributed to stockholders of the parent and noncontrolling interests as appropriate.

**Cash Equivalents** 

Cash equivalents include those maturities within three months from the date of acquisition, highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value such as commercial papers, negotiable certificates of deposit, time deposits and stimulus vouchers. These cash equivalents are held for the purpose of meeting short-term cash commitments.

------

**Inventories** 

Inventories are stated at the lower of cost or net realizable value item by item, except for those that may be appropriate to group items of similar or related inventories. Net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. The calculation of the cost of inventory is derived using the weighted-average method.

**Buildings and Land Consigned to Construction Contractors** 

Inventories of LED are stated at the lower of cost or net realizable value item by item, except for those that may be appropriate to group as similar items or related inventories. Land acquired before construction is classified as land held for development and then reclassified as land held under development after LED begins its construction project.

Upon the completion of the construction project, LED recognizes revenues in the amount of proceeds from customers for land and buildings and related costs when ownership is transferred to the customers. The unsold portion of the completed construction project is transferred to land and building held for sale.

**Investments in Associates and Joint Ventures** 

An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor an interest in a joint venture. A joint venture is a joint arrangement whereby the Company and other parties that have joint control of the arrangement have rights to the net assets of the arrangement.

Investments accounted for using the equity method include investments in associates and interests in joint ventures. Under the equity method, an investment in an associate and a joint venture is initially recognized at cost and adjusted thereafter to recognize the Company's share of profit or loss and other comprehensive income of the associate and joint venture as well as the distribution received. The Company also recognizes its share in changes in the associates and joint ventures.

When the Company subscribes for new shares of an associate and a joint venture at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Company's proportionate interest in the associate and joint venture. The Company records such a difference as an adjustment to investments with the corresponding amount charged or credited to additional paid-in capital. When the adjustment should be debited to additional paid-in capital but the additional paid-in capital recognized from investments accounted for using equity method is insufficient, the shortage is debited to retained earnings.

Any excess of the cost of acquisition over the Company's share of the fair value of the identifiable net assets and liabilities of an associate and a joint venture at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and shall not be amortized. Any excess of the Company's share of the net fair value of the identifiable assets and liabilities over the cost of acquisition is recognized immediately in profit or loss.

The entire carrying amount of an investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized is not allocated to any asset, including goodwill, that forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

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The Company discontinues the use of the equity method from the date on which its investment ceases to be an associate and a joint venture. Any retained investment is measured at fair value at that date, and the fair value is regarded as the investment's fair value on initial recognition as a financial asset. The difference between the previous carrying amount of the associate and joint venture attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate and joint venture. The Company accounts for all amounts previously recognized in other comprehensive income in relation to that associate and joint venture on the same basis as would be required had that associate and joint venture directly disposed of the related assets or liabilities.

When the Company transacts with its associate and joint venture, profits and losses resulting from the transactions with the associate and joint venture are recognized in the Company's consolidated financial statements only to the extent of interests in the associate and joint venture that are not related to the Company.

**Property, Plant and Equipment** 

Property, plant and equipment are initially measured at cost and subsequently measured at cost less accumulated depreciation and accumulated impairment loss.

Property, plant and equipment in the course of construction are depreciated and classified to the appropriate categories of property, plant and equipment when completed and ready for their intended use.

Depreciation on property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. Freehold land is not depreciated. The estimated useful lives, residual values and depreciation method are reviewed at the end of each year, with the effect of any changes in estimate accounted for on a prospective basis.

On derecognition of an item of property, plant and equipment, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss in the period in which the property is derecognized.

**Investment Properties** 

Investment properties are properties held to earn rentals and/or for capital appreciation. Investment properties also include land held for a currently undetermined future use.

Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation and accumulated impairment loss. Depreciation is recognized using the straight-line method.

For a transfer from the investment properties to property, plant and equipment, the deemed cost of the property, plant and equipment for subsequent accounting is its carrying amount at the commencement of owner-occupation.

For a transfer from the property, plant and equipment to investment properties, the deemed cost of the investment properties for subsequent accounting is its carrying amount at the end of owner-occupation.

On derecognition of the investment properties, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss in the period in which the property is derecognized.

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**Goodwill** 

Goodwill arising from the acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment loss.

For the purpose of impairment testing, goodwill is allocated to each of the Company's cash-generating units or groups of cash-generating units (referred to as "cash-generating unit") that are expected to benefit from the synergies of the business combination.

A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired, by comparing its carrying amount, including the attributable goodwill, with its recoverable amount. However, if the goodwill allocated to a cash-generating unit was acquired in a business combination during the current annual period, that unit shall be tested for impairment before the end of the current annual period. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss is recognized directly in profit or loss. An impairment loss recognized for goodwill is not reversed in subsequent periods.

**Intangible Assets Other Than Goodwill** 

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful life, residual value, and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. The residual value of an intangible asset with a finite useful life shall be assumed to be zero unless the Company expects to dispose of the intangible asset before the end of its economic life.

Intangible assets acquired in a business combination and recognized separately from goodwill are initially recognized at their fair value at the acquisition date (which is regarded as their cost). Subsequent to initial recognition, they are measured on the same basis as intangible assets that are acquired separately.

Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in profit or loss in the period in which the asset is derecognized.

**Impairment of Property, Plant and Equipment, Right-of-use Assets, Investment Properties, Intangible Assets Other Than Goodwill and Incremental Costs of Obtaining Contracts** 

At the end of each reporting period, the Company reviews the carrying amounts of its property, plant and equipment, right-of-use assets, investment properties and intangible assets, excluding goodwill, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

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Impairment loss from the assets related to incremental cost of obtaining contracts is recognized to the extent that the carrying amount of the assets exceeds the remaining amount of consideration that the Company expects to receive in exchange for related goods or services less the costs which relate directly to providing those goods or services.

When an impairment loss is subsequently reversed, the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss.

**Financial Instruments** 

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

1) Measurement category

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Financial assets at fair value through profit or loss (FVTPL)

Financial asset is classified as at FVTPL when the financial asset is mandatorily classified as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at fair value through other comprehensive income (FVOCI).

Financial assets at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss does not incorporate any dividend earned on the financial asset. Fair value is determined in the manner described in Note 36.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Financial assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. The financial asset is held within a business model whose objective is to hold financial assets in order to
collect contractual cash flows; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. The contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.

Subsequent to initial recognition, financial assets at amortized cost are measured at amortized cost, which equals to gross carrying amount determined by the effective interest method less any impairment loss, except for short-term receivables as the effect of discounting is immaterial. Exchange differences are recognized in profit or loss.

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Interest income is calculated by applying the effective interest rate to the gross carrying amount of such financial assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Investments in equity instruments at FVOCI

On initial recognition, the Company may make an irrevocable election to designate investments in equity instruments as at FVOCI. Designation at FVOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

Investments in equity instruments at FVOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments. Instead, it will be transferred to retained earnings.

Dividends on these investments in equity instruments are recognized in profit or loss when the Company's right to receive the dividends is established, unless the dividends clearly represent a recovery of part of the cost of the investment.

2) Impairment of financial assets and contract assets

The Company recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including accounts receivable) and contract assets.

The Company recognizes lifetime Expected Credit Loss (ECL) for accounts receivable and contract assets. For all other financial instruments, the Company recognizes lifetime ECL when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on the financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month ECL.

Expected credit losses reflect the weighted average of credit losses with the respective risks of a default occurring as the weights. Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECL represents the portion of ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

The Company recognizes an impairment loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account.

3) Derecognition of financial assets

The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.

On derecognition of a financial asset measured at amortized cost in its entirety, the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognized in profit or loss.

On derecognition of investments in equity instruments at FVOCI in its entirety, the cumulative gain or loss is directly transferred to retained earnings, and it is not reclassified to profit or loss.

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b. Financial liabilities

1) Subsequent measurement

Except for financial liabilities at FVTPL, all the financial liabilities are subsequently measured at amortized cost using the effective interest method.

2) Derecognition of financial liabilities

The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

c. Derivative financial instruments

The Company enters into derivative financial instruments to manage its exposure to foreign exchange rate risks, including forward exchange contracts.

Derivatives are initially measured at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship. When the fair value of derivative financial instruments is positive, the derivative is recognized as a financial asset; when the fair value of derivative financial instruments is negative, the derivative is recognized as a financial liability.

**Hedge Accounting** 

The Company designates some derivatives instruments as cash flow hedges. Hedges of foreign exchange risk on firm commitments are accounted for as cash flow hedges.

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss.

The associated gains or losses that were recognized in other comprehensive income are reclassified from equity to profit or loss as a reclassification adjustment in the line item relating to the hedged item in the same period when the hedged item affects profit or loss. If a hedge of a forecast transaction subsequently results in the recognition of a non-financial asset or a non-financial liability, the associated gains and losses that were recognized in other comprehensive income are removed from equity and are included in the initial cost of the non-financial asset or non-financial liability.

The Company discontinues hedge accounting only when the hedging relationship ceases to meet the qualifying criteria; for instance, when the hedging instrument expires or is sold, terminated or exercised. The cumulative gain or loss on the hedging instrument that has been previously recognized in other comprehensive income from the period when the hedge was effective remains separately in equity until the forecast transaction occurs. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognized immediately in profit or loss.

**Provisions** 

Provisions are measured at the best estimate of the expenditure required to settle the Company's obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. The provisions for warranties claims are made by management according to the sales agreements which represent the management's best estimate of the future outflow of economic benefits. The provisions of warranties claims are recognized as operating cost in the period in which the goods are sold. The provision for onerous contracts represents the present obligation resulting from the measurement for the unavoidable costs of meeting the Company's contractual obligations exceed the economic benefits expected to be received from the contracts. In assessing whether a contract is onerous, the cost of fulfilling a contract includes both the incremental costs of fulfilling that contract and an allocation of other costs that are related directly to fulfilling contracts.

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**Revenue Recognition** 

The Company identifies the performance obligations in the contract with the customers, allocates transaction price to each performance obligation and recognizes revenue when performance obligations are satisfied.

Sales of products are recognized as revenue when the Company delivers products and the customer accepts and controls the product. Except for the consumer electronic products such as mobile devices sold in channel stores which are usually in cash sale, the Company recognizes revenues for sale of other electronic devices and corresponding trade notes and accounts receivable.

Usage revenues from fixed-line services (including local, domestic long distance and international long distance telephone services), mobile services, internet and data services, and interconnection and call transfer fees from other telecommunications companies and carriers are billed in arrears and are recognized based upon seconds or minutes of traffic processed when the services are provided in accordance with contract terms. The usage revenues and corresponding trade notes and accounts receivable are recognized monthly.

Other revenues are recognized as follows: (a) one-time subscriber connection fees (on fixed-line services) are first recognized as contract liabilities and revenues are recognized subsequently over the average expected customer service periods, (b) monthly fees (on fixed-line services, mobile, internet and data services) and related receivables are accrued monthly, and (c) prepaid services (fixed-line, mobile, internet and data services) are recognized as contract liabilities upon collection considerations from customers and are recognized as revenues subsequently based upon actual usage by customers.

Where the Company enters into transactions which involve both the provision of telecommunications service bundled with products such as handsets, total consideration received from products and telecommunications service in these arrangements are allocated based on their relative stand-alone selling price. The amount of sales revenue recognized for products is not limited to the amount paid by the customer for the products. When the amount of sales revenue recognized for products exceeded the amount paid by the customer for the products, the difference is recognized as contract assets. Contract assets are reclassified to accounts receivable when the amounts become collectible from customers subsequently. When the amount of sales revenue recognized for products was less than the amount paid by the customer for the products, the difference is recognized as contract liabilities and revenues are recognized subsequently when the telecommunications service are provided.

For project business contracts, if a substantial part of the Company's promise to customers is to manage and coordinate the various tasks and assume the risks of those tasks to ensure the individual goods or services are incorporated into the combined output, they are treated as a single performance obligation since the Company provides a significant integration service. The Company recognizes revenues and corresponding accounts receivable when the project business contract is completed and accepted by customers. For some project contracts, the Company does not create an asset with an alternative use to the Company and has an enforceable right to payment for performance completed to date; therefore, performance obligations are satisfied and revenues are recognized over time.

For service contracts such as maintenance and warranties, customers simultaneously receive and consume the benefits provided by the Company; thus, revenues and corresponding accounts receivable of service contracts are recognized over the related service period.

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When another party is involved in providing goods or services to a customer, the Company is acting as a principal if it controls the specified good or service before that good or service is transferred to a customer; otherwise, the Company is acting as an agent. When the Company is acting as a principal, gross inflow of economic benefits arising from transactions is recognized as revenue. When the Company is acting as an agent, revenue is recognized as its share of transaction.

**Incremental Costs of Obtaining Contracts** 

Commissions and equipment subsidy related to telecommunications service as a result of obtaining contracts are recognized as an asset under the incremental costs of obtaining contracts to the extent the costs are expected to be recovered and are amortized over the contract period. However, the Company elects not to capitalize the incremental costs of obtaining contracts if the amortization period of the assets that the Company otherwise would have recognized is expected to be one year or less.

**Leasing**

At inception of a contract, the Company assesses whether the contract is, or contains, a lease.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. The Company as lessor

Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. The Company as lessee

The Company recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for lease payments for low-value assets are recognized as expenses on a straight-line basis over the lease terms accounted for applying recognition exemption.

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities and for lease payments made at or before the commencement date. Right-of-use assets are subsequently measured at cost less accumulated depreciation and accumulated impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented separately on the consolidated balance sheets.

Right-of-use assets are depreciated using the straight-line basis from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

Lease liabilities were initially measured at the present value of the lease payments, which comprise fixed payments, in-substance fixed payments, variable lease payments which depend on an index or a rate. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If such rate cannot be readily determined, the lessee's incremental borrowing rate is used.

Lease liabilities are subsequently measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term or a change in future lease payments resulting from a change in an index or a rate used to determine those payments, the Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. The Company accounts for the remeasurement of the lease liability as a result of the decrease of lease scope by decreasing the carrying amount of the right-of-use assets and recognizes in profit or loss any gain or loss on the partial or full termination of the lease. Lease liabilities are presented separately on the consolidated balance sheets.

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Variable lease payments not depending on an index or a rate are recognized as expenses in the periods in which they are incurred.

**Borrowing Costs** 

All borrowing costs are recognized in profit or loss in the period in which they are incurred.

**Government Grants** 

Government grants are not recognized until there is reasonable assurance that the Company will comply with the conditions attached to government grants and that the grants will be received.

Government grants related to income are recognized in profit or loss on a systematic basis over the periods in which the Company recognizes expenses of the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Company should construct noncurrent assets are recognized as deferred revenue and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.

Government grants that become receivable as compensation for expenses or losses already incurred are recognized in profit or loss in the period in which they become receivable.

**Employee Benefits** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.

Defined benefit costs (including service cost, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost and gains or losses on settlements) and net interest on the net defined benefit liability (asset) are recognized as employee benefits expense in the period they occur. Remeasurement, comprising (a) actuarial gains and losses; and (b) the return on plan assets, excluding amounts included in net interest on the net defined benefit liability (asset), is recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit liability (asset) represents the actual deficit (surplus) in the Company's defined benefit plan. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Other long-term employee benefits

Other long-term employee benefits are accounted for in the same way as the accounting required for defined benefit plan except that remeasurement is recognized in profit or loss.

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**Share-based Payment Arrangements - Employee Stock Options** 

The fair value determined at the grant date of the employee share options is expensed on a straight-line basis over the vesting period, based on the Company's estimate of employee stock options that are expected to ultimately vest, with a corresponding increase in additional paid-in capital - employee stock options. If the equity instruments granted vest immediately at the grant date, expenses are recognized in full in profit or loss.

At the end of each reporting period, the Company revises its estimate of the number of employee share options expected to vest. The impact of the revision of the original estimates, if any, is recognized in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to additional paid-in capital - employee stock options.

**Income Tax** 

Income tax expense represents the sum of the tax currently payable and deferred tax.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Current tax

Income tax payable or recoverable is based on taxable profit or loss for the period determined according to the applicable tax laws of each tax jurisdiction.

According to the Income Tax Act in the ROC, an additional tax of unappropriated earnings is provided for in the year the stockholders approve to retain the earnings.

Adjustments of prior years' tax liabilities are added to or deducted from the current year's tax provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. A deferred tax liability is not recognized on taxable temporary difference arising from initial recognition of goodwill.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences, unused loss carry forward and unused tax credits from purchases of machinery, equipment and technology and research, and development expenditures, etc. to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, associates, and joint ventures, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

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Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax assets and liabilities reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Current and deferred tax

Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income, in which case, the current and deferred tax are also recognized in other comprehensive income.

Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

**4.** **CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY AND ASSUMPTION** 

In the application of the Company's accounting policies, the management is required to make judgments, estimates and assumptions which are based on historical experience and other factors that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed by the management on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Critical accounting judgments

1) Principal versus agent

The Company's project agreements are mainly to provide one or more customized equipment or services to customers. In order to fulfill the agreements, another party may be involved in some agreements. The Company considers the following factors to determine whether the Company is a principal of the transaction: whether the Company is the primary obligation provider of the agreements, its exposures to inventory risks and the discretion in establishing prices, etc. The determination of whether the Company is a principal or an agent will affect the amount of revenue recognized by the Company. Only when the Company is acting as a principal, gross inflows of economic benefits arising from transactions is recognized as revenue. <br>

2) Control over subsidiaries

As discussed in Note 3, "Summary of Significant Accounting Policies - Basis of Consolidation", some entities are subsidiaries of the Company although the Company only owns less than 50% ownership interests in these entities. After considering the Company's absolute size of holding in the entity and the relative size of and the dispersion of shares owned by the other stockholders, and the contractual arrangements between the Company and other investors, potential voting interests and the written agreement between stockholders, the management concluded that the Company has a sufficiently dominant voting interest to direct the relevant activities of the entity and therefore the Company has control over these entities. <br>

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Key sources of estimation uncertainty and assumption

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period. Actual results may differ from these estimates.

1) Impairment of trade notes and accounts receivable

The provision for impairment of trade notes and accounts receivable is based on assumptions on probability of default and expected credit loss rates. The Company uses judgment in making these assumptions and in selecting the inputs to the impairment calculation, based on the Company's past experience, current market conditions as well as forward looking information at the end of each reporting period. For details of the key assumptions and inputs used, see Note 9. Where the actual future cash flows are less than expected, a material impairment loss may arise. <br>

2) Fair value measurements and valuation processes

For the assets and liabilities measured at fair value without quoted prices in active markets, the Company's management determines the appropriate valuation techniques for the fair value measurements and whether to engage third party qualified appraisers based on the related regulations and professional judgments. <br>

Information about the valuation techniques and inputs used in determining the fair value of various assets and liabilities was disclosed in Note 36. If the actual changes of inputs in the future differ from expectation, the fair value may vary accordingly. The Company updates inputs periodically to monitor the appropriateness of the fair value measurement. <br>

3) Provision for inventory valuation and obsolescence

Inventories are stated at the lower of cost or net realizable value. Net realizable value is calculated as the estimated selling price less the estimated costs necessary to make a sale. Comparison of net realizable value and cost is determined on an item by item basis, except for those similar items which could be categorized into the same groups. The Company uses the inventory holding period and turnover as the evaluation basis for inventory obsolescence losses. <br>

4) Impairment of property, plant and equipment, right-of-use assets, investment properties and intangible assets

When an indication of impairment is assessed with objective evidence, the Company considers whether the recoverable amount of an asset is less than its carrying amount and recognizes the impairment loss based on difference between the recoverable amount and its carrying amount. The estimate of recoverable amount would impact on the timing and the amount of impairment loss recognition. <br>

5) Useful lives of property, plant and equipment

As discussed in Note 3, "Summary of Significant Accounting Policies - Property, Plant and Equipment", the Company reviews estimated useful lives of property, plant and equipment at the end of each year.

6) Recognition and measurement of defined benefit plans

Net defined benefit liabilities (assets) and the resulting pension expense under defined benefit pension plans are calculated using the Projected Unit Credit Method. Actuarial assumptions comprise the discount rate, employee turnover rate, average future salary increase and etc. Changes in economic circumstances and market conditions will affect these assumptions and may have a material impact on the amount of the expense and the liability. <br>

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7) Lessees' incremental borrowing rates

In determining a lessee's incremental borrowing rate used in discounting lease payments, a risk-free rate for relevant duration and the same currency is selected as a reference rate. The lessee's credit spread adjustments and lease specific adjustments are also taken into account.

**5.** **APPLICATION OF NEW AND REVISED STANDARDS AND INTERPRETATIONS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Initial application of the amendments to the IFRSs endorsed and issued into effect by the FSC

The initial application of the amendments to the IFRS, IAS, IFRIC and SIC issued by the International Accounting Standards Board and endorsed and issued into effect by the FSC does not have material impacts on the Company's consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Amendments to IFRSs endorsed by the FSC for application starting from January 1, 2023

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| | | |
|:---|:---|:---|
| **New, Revised or Amended Standards and Interpretations** | **New, Revised or Amended Standards and Interpretations** | **Effective Date**<br> **Announced by IASB** |
| Amendments to IAS 1 | Disclosure of Accounting Policies | January 1, 2023 (Note 1) |
| Amendments to IAS 8 | Definition of Accounting Estimates | January 1, 2023 (Note 2) |
| Amendments to IAS 12 | Deferred Tax related to Assets and Liabilities arising from a Single Transaction | January 1, 2023 (Note 3) |

---

Note 1: The amendments will be applied for annual reporting periods beginning on or after January 1, 2023.

Note 2: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.

Note 3: Except for deferred taxes that were recognized on January 1, 2022 for temporary differences associated with leases and decommissioning obligations, the amendments were applied prospectively to transactions that occur on or after January 1, 2022.

The application of the above new, revised or amended standards and interpretations will not have a material impact on the Company's consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. IFRSs issued by the IASB but not yet endorsed and issued into effect by the FSC

---

| | | |
|:---|:---|:---|
| **New, Revised or Amended Standards and Interpretations** | **New, Revised or Amended Standards and Interpretations** | **Effective Date**<br>**Announced by IASB<br>(Note 1)** |
|  Amendments to IFRS 10 and IAS 28 | Sale or Contribution of Assets between An Investor and Its Associate or Joint Venture | To be determined<br>by IASB |
|  Amendments to IFRS 16 | Leases Liability in a Sale and Leaseback | January 1, 2024 (Note 2) |
|  Amendments to IAS 1 | Classification of Liabilities as Current or Non-current | January 1, 2024 |
|  Amendments to IAS 1 | Non-current Liabilities with Covenants | January 1, 2024 |

---

------

Note 1: Unless stated otherwise, the above new IFRSs are effective for annual periods beginning on or after their respective effective dates.

Note 2: A seller-lessee shall apply the Amendments to IFRS 16 retrospectively to sale and leaseback transactions entered into after the date of initial application of IFRS 16.

As of the date the consolidated financial statements were authorized for issue, the Company is continuously assessing the possible impact that the application of above standards and interpretations will have on the Company's financial position and operating result and will disclose the relevant impact when the assessment is completed.

**6.** **CASH AND CASH EQUIVALENTS** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Cash |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash on hand | $471751 | $439989 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bank deposits | 10423195 | 15646840 |
|  | 10894946 | 16086829 |
|  Cash equivalents (with maturities of less than three months) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Commercial papers | 19592233 | 13530111 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Negotiable certificates of deposit | 15500000 | 7500000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Time deposits | 4205425 | 2656545 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stimulus vouchers |  | 5139 |
|  | 39297658 | 23691795 |
|  | $50192604 | $39778624 |

---

The annual yield rates of bank deposits, commercial papers, negotiable certificates of deposit and time deposits as of balance sheet dates were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Bank deposits | 0.00%~2.62% | 0.00%~0.45% |
|  Commercial papers | 0.56%~1.30% | 0.17%~0.30% |
|  Negotiable certificates of deposit | 1.20%~1.45% | 0.27%~0.30% |
|  Time deposits | 0.01%~4.65% | 0.01%~3.60% |

---

**7.** **FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  <u>Financial assets-current</u> |  |  |
|  Mandatorily measured at FVTPL |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Derivatives (not designated for hedge) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Forward exchange contracts | $3514 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-derivatives |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Listed stocks - domestic | 439 | 2566 |
|  | $3953 | $2566 |

---

(Continued)

------

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  <u>Financial assets-noncurrent</u> |  |  |
|  Mandatorily measured at FVTPL |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-derivatives |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-listed stocks - domestic | $758312 | $647998 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-listed stocks - foreign | 102648 | 236672 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Limited partnership - domestic | 135121 | 24105 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Film and drama investing agreements | 24122 |  |
|  | $1020203 | $908775 |
|  <u>Financial liabilities-current</u> |  |  |
|  Held for trading |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Derivatives (not designated for hedge) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Forward exchange contracts | $— | $6180 |

---

(Concluded)

Chunghwa's Board of Directors approved an investment in Taiwania Capital Buffalo Fund VI, L.P. at the amount of $600,000 thousand in January 2022. As of December 31, 2022, Chunghwa invested $100,000 thousand.

Outstanding forward exchange contracts not designated for hedge as of balance sheet dates were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Currency** | **Maturity<br>Period** | **Contract Amount<br>(In Thousands)** |
| December 31, 2022 |  |  |  |
|  Forward exchange contracts - buy | NT$/EUR | 2023.03 | NT$61,746/EUR2,000 |
| December 31, 2021 |  |  |  |
|  Forward exchange contracts - buy | NT$/EUR | 2022.03 | NT$257,081/EUR8,000 |

---

The Company entered into the above forward exchange contracts to manage its exposure to foreign currency risk due to fluctuations in exchange rates. However, the aforementioned derivatives did not meet the criteria for hedge accounting.

**8.** **FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - NONCURRENT** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Domestic investments |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Listed stocks | $272802 | $458582 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-listed stocks | 3084670 | 3029957 |

---

(Continued)

------

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Foreign investments |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-listed stocks | $133909 | $127349 |
|  | $3491381 | $3615888 |

---

(Concluded)

The Company holds the above foreign and domestic stocks for medium to long-term strategic purposes and expects to profit from long-term investment. Accordingly, the management elected to designate these investments in equity instruments at FVOCI as they believe that recognizing short-term fair value fluctuations of these investments in profit or loss is not consistent with the Company's strategy of holding these investments for long-term purposes.

The Company disposed of all its investments in UUPON Inc. (UUPON) in December 2022 and the fair value of the disposed investment was $154 thousand. The Company disposed of its investment in China Airlines, Ltd. starting from December 2020 and sold all its shares by February 2021. The total fair value of the disposed investment was $2,635,568 thousand in 2021. The Company disposed of its investments in UUPON and Cotech Engineering Fuzhou Corp. in October and December 2021 and the fair value of the disposed investment were $1,478 thousand and $4,203 thousand, respectively.

CHI obtained significant influence over Imedtac Co., Ltd. ("IME") and AgriTalk Technology Inc. ("ATT") in August 2021 and July 2021, respectively. Therefore, the aforementioned investments were reclassified from financial asset at FVOCI to investments in associates at fair value of $44,850 thousand and $18,509 thousand, respectively. (Please refer to Note 14 (a)).

The related unrealized gains and losses on financial assets at FVOCI of loss of $116 thousand and gain of $59,653 thousand were transferred from other equity to retained earnings upon the aforementioned disposals in 2022 and 2021, respectively.

CHI participated in the private placement of PChome Online Inc. in the amount of $200,000 thousand in October 2021.

The Company recognized dividend income of $157,465 thousand and $154,008 thousand for the years ended December 31, 2022 and 2021, respectively, of which $157,465 thousand and $153,984 thousand were from the outstanding investments on December 31, 2022 and 2021, respectively.

**9.** **TRADE NOTES AND ACCOUNTS RECEIVABLE, NET** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Trade notes and accounts receivable | $26037695 | $25551942 |
|  Less: Loss allowance | (1365222) | (1604835) |
|  | $24672473 | $23947107 |

---

The main credit terms range from 30 to 90 days.

------

The Company serves a large consumer base for telecommunications business; therefore, the concentration of credit risk is limited. When having transactions with customers, the Company considers the record of arrears in the past. In addition, the Company may also collect some telecommunication charges in advance to reduce the payment arrears in subsequent periods.

The Company adopted a policy of dealing with counterparties with certain credit ratings for project business and to obtain collateral where necessary to mitigate the risk of loss arising from defaults. Credit rating information is provided by independent rating agencies where available and, if such credit rating information is not available, the Company uses other publicly available financial information and its own historical transaction experience to rate its major customers. The Company continues to monitor the credit exposure and credit ratings of its counterparties and spread the credit risk amongst qualified counterparties.

In order to mitigate credit risk, the management of the Company has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure the recoverability of receivables. In addition, the Company reviews the recoverable amount of receivables at balance sheet dates to ensure that adequate allowance is provided for possible irrecoverable amounts. In this regard, the management believes the Company's credit risk could be reasonably reduced.

The Company applies the simplified approach to recognize expected credit losses prescribed by IFRS 9, which permits the use of lifetime expected loss provision for receivables. The expected credit losses on receivables are estimated using a provision matrix by reference to past default experience of the customers and an analysis of the customers' current financial positions, as well as the forward-looking indicators such as macroeconomic business indicator.

When there is evidence indicating that the counterparty is in evasion, bankruptcy, deregistration or the accounts receivable are over two years past due and the recoverable amount cannot be reasonable estimated, the Company writes off the trade notes and accounts receivable. For accounts receivable that have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

Except for receivables arising from telecommunications business and project business, the Company's remaining accounts receivable are limited. Therefore, only Chunghwa's provision matrix arising from telecommunications business and project business is disclosed below:

<u>December 31, 2022</u> 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Not Past Due** | **Past Due Less<br>than 30 Days** | **Pass Due**<br> **31 to 60 Days** | **Pass Due**<br> **61 to 90 Days** | **Pass Due**<br> **91 to 120 Days** | **Pass Due**<br> **121 to 180 Days** | **Pass Due**<br> **over 180 Days** | **Total** |
|  Telecommunications<br> business |  |  |  |  |  |  |  |  |
|  Expected credit loss rate (Note a) | 0%~1% | 1%~20% | 3%~64% | 11%~80% | 25%~90% | 45%~96% | 100% |  |
|  Gross carrying amount | $17162634 | $310392 | $86500 | $32826 | $27774 | $34127 | $599316 | $18253569 |
|  Loss allowance (lifetime ECL) | (49644) | (22309) | (19806) | (20927) | (20085) | (29244) | (599316) | (761331) |
|  Amortized cost | $17112990 | $288083 | $66694 | $11899 | $7689 | $4883 | $— | $17492238 |
|  Project business |  |  |  |  |  |  |  |  |
|  Expected credit loss rate (Note b) | 0%~5% | 5% | 10% | 30% | 50% | 80% | 100% |  |
|  Gross carrying amount | $3797905 | $119329 | $11424 | $53189 | $1360 | $785 | $547269 | $4531261 |
|  Loss allowance (lifetime ECL) | (2604) | (6138) | (1142) | (15986) | (680) | (628) | (547269) | (574447) |
|  Amortized cost | $3795301 | $113191 | $10282 | $37203 | $680 | $157 | $— | $3956814 |

---

------

<u>December 31, 2021</u> 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Not Past<br>Due** | **Past Due Less<br>than 30 Days** | **Pass Due**<br> **31 to 60 Days** | **Pass Due**<br> **61 to 90 Days** | **Pass Due**<br> **91 to 120 Days** | **Pass Due**<br> **121 to 180 Days** | **Pass Due**<br> **over 180 Days** | **Total** |
|  Telecommunications<br> business |  |  |  |  |  |  |  |  |
|  Expected credit loss rate (Note a) | 0%~1% | 1%~22% | 3%~62% | 11%~80% | 25%~90% | 49%~97% | 100% |  |
|  Gross carrying amount | $16410725 | $282040 | $82062 | $44539 | $31065 | $31000 | $602833 | $17484264 |
|  Loss allowance (lifetime ECL) | (50733) | (23465) | (28596) | (29800) | (25402) | (28423) | (602833) | (789252) |
|  Amortized cost | $16359992 | $258575 | $53466 | $14739 | $5663 | $2577 | $— | $16695012 |
|  Project business |  |  |  |  |  |  |  |  |
|  Expected credit loss rate (Note b) | 0%~5% | 5% | 10% | 30% | 50% | 80% | 100% |  |
|  Gross carrying amount | $3988010 | $136 | $6960 | $14271 | $411 | $799 | $769762 | $4780349 |
|  Loss allowance (lifetime ECL) | (7835) | (68) | (890) | (4293) | (210) | (639) | (769762) | (783697) |
|  Amortized cost | $3980175 | $68 | $6070 | $9978 | $201 | $160 | $— | $3996652 |

---

Note a: Please refer to Note 43 for the information of disaggregation of telecommunications service revenue. The expected credit loss rate applicable to different business revenue varies so as to reflect the risk level indicating by factors like historical experience.

---

| | |
|:---|:---|
| Note b: | The project business has different loss types according to the customer types. The expected credit loss rate listed above is for general customers. When the customer is a government-affiliated entity, it is anticipated that there will not be an instance of credit loss. Customers with past history of bounced checks or accounts receivable exceeding six months overdue are classified as high-risk customers, with an expected credit loss rate of 50%, increasing by period as the days overdue increase.  |

---

Movements of loss allowance for trade notes and accounts receivable were as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Beginning balance | $1604835 | $2154364 |
|  Add: Provision for credit loss | 108746 | 122911 |
|  Less: Amounts written off | (348359) | (672440) |
|  Ending balance | $1365222 | $1604835 |

---

1**0.** **INVENTORIES** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Merchandise | $3977853 | $4070189 |
|  Project in process | 4859226 | 4805196 |
|  Work in process | 98712 | 144847 |
|  Raw materials | 279022 | 224338 |
|  | 9214813 | 9244570 |
|  Land held under development | 1998733 | 1998733 |
|  Construction in progress | 102860 | 84106 |
|  | $11316406 | $11327409 |

---

------

The operating costs related to inventories were $49,544,267 thousand (including the valuation loss on inventories of $34,167 thousand) and $51,180,060 thousand (including the valuation loss on inventories of $206,824 thousand) for the years ended December 31, 2022 and 2021, respectively.

As of December 31, 2022 and 2021, inventories of $2,101,593 thousand and $2,082,839 thousand, respectively, were expected to be recovered after more than twelve months. The aforementioned amount of inventories is related to property development owned by LED.

Land held under development and construction in progress was mainly developed by LED for Qingshan Sec., Dayuan Dist., Taoyuan City project. The Board of Directors of LED resolved to sign a joint construction and separate sale contract with Farglory Land Development Co., Ltd. in June 2021. LED entrusts Land Bank of Taiwan to execute fund control and property right management for the land held under development.

**11.** **PREPAYMENTS** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Prepaid rents | $2316088 | $2349236 |
|  Others | 1810797 | 1779324 |
|  | $4126885 | $4128560 |
|  Current |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid rents | $589506 | $565950 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 1809102 | 1764147 |
|  | $2398608 | $2330097 |
|  Noncurrent |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid rents | $1726582 | $1783286 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 1695 | 15177 |
|  | $1728277 | $1798463 |

---

Prepaid rents comprised the prepayments from the lease agreements applying the recognition exemption and the prepayments for leases that do not meet the definition of leases under IFRS 16.

**12.** **OTHER CURRENT MONETARY ASSETS** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Time deposits and negotiable certificates of deposit with<br>maturities of more than three months | $1915755 | $3498534 |
|  Accrued custodial receipts | 815547 | 765339 |
|  Others | 887600 | 797005 |
|  | $3618902 | $5060878 |

---

------

The annual yield rates of time deposits and negotiable certificates of deposit with maturities of more than three months at the balance sheet dates were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Time deposits and negotiable certificates of deposit with<br>maturities of more than three months | 0.03%~3.00% | 0.03%~2.70% |

---

**13.** **SUBSIDIARIES** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Information on subsidiaries with material noncontrolling interests

---

| | | | |
|:---|:---|:---|:---|
|  | | **Proportion of Ownership<br>Interests and Voting Rights Held<br>by Noncontrolling Interests** | **Proportion of Ownership<br>Interests and Voting Rights Held<br>by Noncontrolling Interests** |
| **Subsidiaries** | **Principal Place<br>of Business** | **December 31** | **December 31** |
|  |  | **2022** | **2021** |
|  SENAO | Taiwan | 72% | 72% |
|  CHPT | Taiwan | 66% | 66% |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Profit Allocated to<br>Noncontrolling Interests** | **Profit Allocated to<br>Noncontrolling Interests** | **Accumulated<br>Noncontrolling Interests** | **Accumulated<br>Noncontrolling Interests** |
|  | **Year Ended December 31** | **Year Ended December 31** | **December 31** | **December 31** |
|  | **2022** | **2021** | **2022** | **2021** |
|  SENAO | $471454 | $427817 | $4592326 | $4465587 |
|  CHPT | $492637 | $586332 | 5259231 | 4960977 |
|  Individually immaterial subsidiaries with noncontrolling interests |  |  | 2747984 | 2501040 |
|  |  |  | $12599541 | $11927604 |

---

Summarized financial information in respect of SENAO and its subsidiaries that has material noncontrolling interests is set out below. The summarized financial information below represented amounts before intercompany eliminations.

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Current assets | $7249222 | $7962726 |
|  Noncurrent assets | 3211081 | 3129886 |
|  Current liabilities | (3680470) | (4531148) |
|  Noncurrent liabilities | (459666) | (418431) |
|  Equity | $6320167 | $6143033 |
|  Equity attributable to the parent | $1727841 | $1677446 |
|  Equity attributable to noncontrolling interests | 4592326 | 4465587 |
|  | $6320167 | $6143033 |

---

------

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Revenues and income | $31611424 | $31303161 |
|  Costs and expenses | 30954539 | 30707150 |
|  Profit for the year | $656885 | $596011 |
|  Profit attributable to the parent | $185431 | $168194 |
|  Profit attributable to noncontrolling interests | 471454 | 427817 |
|  Profit for the year | $656885 | $596011 |
|  Other comprehensive income attributable to the parent | $10512 | $2340 |
|  Other comprehensive income attributable to noncontrolling interests | 26242 | 4941 |
|  | $36754 | $7281 |
|  Total comprehensive income attributable to the parent | $195943 | $170534 |
|  Total comprehensive income attributable to noncontrolling interests | 497696 | 432758 |
|  | $693639 | $603292 |
|  Net cash flow from operating activities | $(329154) | $654179 |
|  Net cash flow from investing activities | 36666 | 215473 |
|  Net cash flow from financing activities | (826206) | (690084) |
|  Effect of exchange rate changes on cash and cash equivalents | 732 | (209) |
|  Net cash inflow (outflow) | $(1117962) | $179359 |
|  Dividends paid to noncontrolling interests | $370957 | $278218 |

---

Summarized financial information in respect of CHPT and its subsidiaries that has material noncontrolling interests is set out below. The summarized financial information below represented amounts before intercompany eliminations.

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Current assets | $4406032 | $4656928 |
|  Noncurrent assets | 4630788 | 4063611 |
|  Current liabilities | (1051544) | (1143341) |
|  Noncurrent liabilities | (25975) | (31986) |
|  Equity | $7959301 | $7545212 |
|  Equity attributable to CHI | $2700070 | $2584235 |
|  Equity attributable to noncontrolling interests | 5259231 | 4960977 |
|  | $7959301 | $7545212 |

---

------

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Revenues and income | $4434662 | $4254027 |
|  Costs and expenses | 3678096 | 3362267 |
|  Profit for the year | $756566 | $891760 |
|  Profit attributable to CHI | $263929 | $305428 |
|  Profit attributable to noncontrolling interests | 492637 | 586332 |
|  Profit for the year | $756566 | $891760 |
|  Other comprehensive income (loss) attributable to CHI | $4631 | $(988) |
|  Other comprehensive income (loss) attributable to noncontrolling interests | 7321 | (1886) |
|  | $11952 | $(2874) |
|  Total comprehensive income attributable to CHI | $268560 | $304440 |
|  Total comprehensive income attributable to noncontrolling interests | 499958 | 584446 |
|  | $768518 | $888886 |
|  Net cash flow from operating activities | $1400873 | $1089645 |
|  Net cash flow from investing activities | (1010681) | (518789) |
|  Net cash flow from financing activities | (387845) | (413663) |
|  Effect of exchange rate changes on cash and cash equivalents | 7496 | (1671) |
|  Net cash inflow | $9843 | $155522 |
|  Dividends paid to noncontrolling interests | $293204 | $258710 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Equity transactions with noncontrolling interests

Chunghwa did not participate in the capital increase of CHST in November 2022. Therefore, the Company's ownership interest in CHST decreased.

CHIEF issued new shares in March 2021, December 2021, March 2022 and December 2022 as its employees exercised options. Therefore, the Company's ownership interest in CHIEF decreased. See Note 33(a) for details.

CHTSC issued new shares in February 2021, February 2022 and May 2022 as its employees exercised options. Therefore, the Company's ownership interest in CHTSC decreased. See Note 33(b) for details.

IISI issued new shares in January 2021 as its employees exercised options. Therefore, the Company's ownership interest in IISI decreased. See Note 33(c) for details.

The above transactions were accounted for as equity transactions since the Company did not cease to have control over these subsidiaries.

------

Information of the Company's equity transactions with noncontrolling interests for the years ended December 31, 2022 and 2021 were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** |
|  | **CHIEF<br>Share-Based<br>Payment** | **CHTSC**<br> **Share-Based<br>Payment** | **Chunghwa Not<br>Proportionately<br>Participating in<br>the Capital<br>Increase of<br>CHST** |
|  Cash consideration received from noncontrolling interests | $38677 | $35402 | $15000 |
|  The proportionate share of the carrying amount of the net assets of the subsidiary transferred to noncontrolling interests | (16835) | (30037) | (9847) |
|  Differences arising from equity transactions | $21842 | $5365 | $5153 |
|  <u>Line items for equity transaction adjustments</u> |  |  |  |
|  Additional paid-in capital - arising from changes in equities of subsidiaries | $21842 | $5365 | $5153 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** |
|  | **CHIEF<br>Share-Based<br>Payment** | **CHTSC**<br> **Share-Based<br>Payment** | **IISI**<br> **Share-Based<br>Payment** |
|  Cash consideration received from noncontrolling interests | $29775 | $20650 | $3654 |
|  The proportionate share of the carrying amount of the net assets of the subsidiary transferred to noncontrolling interests | (17506) | (19066) | (792) |
|  Differences arising from equity transactions | $12269 | $1584 | $2862 |
|  <u>Line items for equity transaction adjustments</u> |  |  |  |
|  Additional paid-in capital - arising from changes in equities of subsidiaries | $12269 | $1584 | $2862 |

---

------

**14.** **INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Investments in associates | $7146174 | $7322842 |
|  Investment in joint venture | 9677 | 9932 |
|  | $7155851 | $7332774 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Investments in associates

Investments in associates were as follows:

---

| | | |
|:---|:---|:---|
|  | **Carrying Amount** | **Carrying Amount** |
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  <u>Material associate</u> |  |  |
|  <u>Non-listed</u> |  |  |
|  Next Commercial Bank Co., Ltd. ("NCB") | $3173309 | $3592054 |
|  <u>Associates that are not individually material</u> |  |  |
|  <u>Listed</u> |  |  |
|  Senao Networks, Inc. ("SNI") | 1395858 | 1077604 |
|  KingwayTek Technology Co., Ltd. ("KWT") | 267125 | 258943 |
|  <u>Non-listed</u> |  |  |
|  Viettel-CHT Co., Ltd. ("Viettel-CHT") | 558532 | 447097 |
|  Taiwan International Standard Electronics Co., Ltd. ("TISE") | 296501 | 347269 |
|  Chunghwa PChome Fund I Co., Ltd. ("CPFI") | 277776 | 222491 |
|  ST-2 Satellite Ventures Pte., Ltd. ("STS") | 246815 | 518165 |
|  So-net Entertainment Taiwan Limited ("So-net") | 228184 | 217021 |
|  WiAdvance Technology Corporation ("WATC") | 227868 | 253873 |
|  KKBOX Taiwan Co., Ltd. ("KKBOXTW") | 173634 | 157524 |
|  Taiwan International Ports Logistics Corporation ("TIPL") | 101078 | 70121 |
|  CHT Infinity Singapore Pte. Ltd. ("CISG") | 62948 | 54952 |
|  Click Force Co., Ltd. ("CF") | 40932 | 36938 |
|  Imedtac Co., Ltd. ("IME") | 40866 | 44565 |
|  AgriTalk Technology Inc. ("ATT") | 34738 | 17637 |
|  Baohwa Trust Co., Ltd. ("BHT") | 13267 |  |
|  Cornerstone Ventures Co., Ltd. ("CVC") | 6743 | 6588 |
|  Alliance Digital Tech Co., Ltd. ("ADT") |  |  |
|  | 3972865 | 3730788 |
|  | $7146174 | $7322842 |

---

------

The percentages of ownership interests and voting rights in associates held by the Company as of balance sheet dates were as follows:

---

| | | |
|:---|:---|:---|
|  | **% of Ownership Interests and<br>Voting Rights** | **% of Ownership Interests and<br>Voting Rights** |
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  <u>Material associate</u> |  |  |
|  <u>Non-listed</u> |  |  |
|  Next Commercial Bank Co., Ltd. ("NCB") | 42 | 42 |
|  <u>Associates that are not individually material</u> |  |  |
|  <u>Listed</u> |  |  |
|  Senao Networks, Inc. ("SNI") | 34 | 34 |
|  KingwayTek Technology Co., Ltd. ("KWT") | 23 | 23 |
|  <u>Non-listed</u> |  |  |
|  Viettel-CHT Co., Ltd. ("Viettel-CHT") | 30 | 30 |
|  Taiwan International Standard Electronics Co., Ltd. ("TISE") | 40 | 40 |
|  Chunghwa PChome Fund I Co., Ltd. ("CPFI") | 50 | 50 |
|  ST-2 Satellite Ventures Pte., Ltd. ("STS") | 38 | 38 |
|  So-net Entertainment Taiwan Limited ("So-net") | 30 | 30 |
|  WiAdvance Technology Corporation ("WATC") | 20 | 20 |
|  KKBOX Taiwan Co., Ltd. ("KKBOXTW") | 30 | 30 |
|  Taiwan International Ports Logistics Corporation ("TIPL") | 27 | 27 |
|  CHT Infinity Singapore Pte. Ltd. ("CISG") | 40 | 40 |
|  Click Force Co., Ltd. ("CF") | 49 | 49 |
|  Imedtac Co., Ltd. ("IME") | 7 | 7 |
|  AgriTalk Technology Inc. ("ATT") | 29 | 17 |
|  Baohwa Trust Co., Ltd. ("BHT") | 40 |  |
|  Cornerstone Ventures Co., Ltd. ("CVC") | 49 | 49 |
|  Alliance Digital Tech Co., Ltd. ("ADT") |  |  |

---

Summarized financial information of NCB was set out below:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Assets | $33540595 | $9197280 |
|  Liabilities | (25882268) | (524813) |
|  Equity | $7658327 | $8672467 |
|  The percentage of ownership interest held by the Company | 41.90% | 41.90% |
|  Equity attributable to the Company | $3208839 | $3633764 |
|  Unrealized gain or loss from downstream transactions | (35530) | (41710) |
|  The carrying amount of investment | $3173309 | $3592054 |

---

------

---

| | | |
|:---|:---|:---|
|  | **Year Ended<br>December 31, 2022** | **Year Ended<br>December 31, 2021** |
|  Net revenues (losses) | $(47349) | $14907 |
|  Net loss for the year | $(1004331) | $(445665) |
|  Other comprehensive income | (9809) |  |
|  Total comprehensive loss for the year | $(1014140) | $(445665) |

---

Except for NCB, no associate is considered individually material to the Company. Summarized financial information of associates that are not individually material to the Company was as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  The Company's share of profits | $867821 | $606730 |
|  The Company's share of other comprehensive loss | 12873 | (5677) |
|  The Company's share of total comprehensive income | $880694 | $601053 |

---

The Level 1 fair values of associates based on the closing market prices as of the balance sheet dates were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  SNI | $3299228 | $1699351 |
|  KWT | $804187 | $909787 |

---

The Company originally invested and obtained 17.19% ownership interest in ATT and treated it as a financial asset at FVOCI. However, as the Company obtained one out of three seats of the Board of Directors of ATT in July 2021 and has significant influence over ATT, the Company reclassified it as an associate. The Company subscribed for all the shares in the capital increase of ATT at the price of $32,175 thousand in November 2022. Therefore, the Company's ownership interest in ATT increased to 29.33% as of December 31, 2022.

The Company invested $273,800 thousand and obtained 20.33% ownership interest by participating in the capital increase of WATC in March 2021. WATC mainly engages in software solution integration. WATC issued new shares in March 2022 and October 2022 as its employees exercised option. Therefore, the Company's ownership interest in WATC decreased to 20.05% as of December 31, 2022.

STS reduced its capital in April 2022 and the Company received $340,182 thousand from capital reduction. The Company's ownership interest in STS remained the same.

The Company invested $20,000 thousand and obtained 40.00% ownership interest in BHT in March 2022. BHT mainly engages in VR integration and AIoT security services

The Company invested $55,720 thousand and obtained 40.00% ownership interest in CISG in June 2021. CISG mainly engages in investment business.

------

The Company's ownership interest in NCB is 41.90%. Although Chunghwa is the single largest stockholder of NCB, it only obtained six out of fifteen seats of the Board of Directors of NCB. In addition, the management considered the size of ownership interest and the dispersion of shares owned by the other stockholders, other holdings are not extremely dispersed. Chunghwa is not able to direct its relevant activities. Therefore, Chunghwa does not have control over NCB and merely has significant influence over NCB and treats it as an associate.

The Company invested and obtained 50% ownership interest in CPFI. However, as the Company has only two out of five seats of the Board of Directors of CPFI and has no control but significant influence over CPFI. Therefore, the Company recognized CPFI as an investment in associate.

The Company invested and obtained 49% ownership interest in CVC. However, as the Company has only two out of five seats of the Board of Directors of CVC and has no control but significant influence over CVC. Therefore, the Company recognized CVC as an investment in associate.

The Company invested and obtained 7.54% ownership interest in IME. The Company originally treated it as a financial asset at FVOCI. However, as the Company obtained one out of five seats of the Board of Directors of IME in August 2021 and has significant influence over IME, the Company reclassified it as an associate. IME issued new shares in December 2021 as its employees exercised options; therefore, the Company's ownership interest in IME decreased to 6.74% as of December 31, 2021.

The Company owns 14% ownership interest in ADT. Considering the seats that the Company controls in the Board of Directors of ADT and the relative size of ownership interest and the dispersion of shares owned by the other stockholders, the Company has significant influence over ADT. ADT completed its liquidation in August 2021. The Company received the liquidation distribution of $8,519 thousand and recognized gain on disposal of $3,239 thousand under "other gains and losses" on the consolidated statements of comprehensive income.

The Company's share of profits and other comprehensive income (loss) of associates was recognized based on the audited financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Investment in joint venture

Investment in joint venture was as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Carrying Amount** | **Carrying Amount** | **% of Ownership Interests and<br>Voting Rights** | **% of Ownership Interests and<br>Voting Rights** |
|  | **December 31** | **December 31** | **December 31** | **December 31** |
| **Name of Joint Venture** | **2022** | **2021** | **2022** | **2021** |
|  <u>Non-listed</u> |  |  |  |  |
|  Chunghwa SEA Holdings ("CHT SEA") | $9677 | $9932 | 51 | 51 |

---

The Company invested and established a joint venture, CHT SEA, with Delta Electronics, Inc. and Kwang Hsing Industrial Co., Ltd. and obtained 51% ownership interest of CHT SEA. However, according to the mutual agreements among stockholders, the Company does not individually direct CHT SEA's relevant activities and has joint control with the other party; therefore, the Company treated CHT SEA as a joint venture.

------

The joint venture is not considered individually material to the Company. Summarized financial information of CHT SEA was set out below:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  The Company's share of loss | $(255) | $(268) |
|  The Company's share of other comprehensive income |  |  |
|  The Company's share of total comprehensive loss | $(255) | $(268) |

---

The Company's share of loss and other comprehensive income of the joint venture was recognized based on the audited financial statements.

**15.** **PROPERTY, PLANT AND EQUIPMENT** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Assets used by the Company | $285328919 | $281849188 |
|  Assets subject to operating leases | 6198991 | 7251273 |
|  | $291527910 | $289100461 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Assets used by the Company

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Land** | **Land<br>Improvements** | **Buildings** | **Computer<br>Equipment** | **Telecommuni-<br>cations<br>Equipment** | **Transportation<br>Equipment** | **Miscellaneous<br>Equipment** | **Construction in<br>Progress and<br>Equipment to<br>be Accepted** | **Total** |
|  <u>Cost</u> |  |  |  |  |  |  |  |  |  |
|  Balance on January 1, 2021 | $101990645 | $1630362 | $70889578 | $12405580 | $710775709 | $3894243 | $10299819 | $8529416 | $920415352 |
|  Additions |  |  | 37437 | 71587 | 83812 |  | 198069 | 35222533 | 35613438 |
|  Disposal |  | (1025) | (29418) | (1733431) | (27916170) | (84271) | (470175) |  | (30234490) |
|  Effect of foreign exchange differences |  |  |  | 135 | (64331) | (389) | (1643) | (5366) | (71594) |
|  Others | 654069 | 32291 | 460439 | 473177 | 30655202 | 117754 | 782803 | (32960434) | 215301 |
|  Balance on December 31, 2021 | $102644714 | $1661628 | $71358036 | $11217048 | $713534222 | $3927337 | $10808873 | $10786149 | $925938007 |
|  Accumulated depreciation<br> and impairment |  |  |  |  |  |  |  |  |  |
|  Balance on January 1, 2021 | $— | $(1399204) | $(29247331) | $(10638967) | $(593662932) | $(3718392) | $(7925938) | $— | $(646592764) |
|  Depreciation expenses |  | (43433) | (1401187) | (715817) | (24801815) | (65024) | (700648) |  | (27727924) |
|  Disposal |  | 1025 | 29418 | 1724140 | 27900053 | 83646 | 465821 |  | 30204103 |
|  Effect of foreign exchange differences |  |  |  | (134) | 30948 | 164 | 934 |  | 31912 |
|  Others |  |  | 41530 | (1268) | 457 | 628 | (45493) |  | (4146) |
|  Balance on December 31, 2021 | $— | $(1441612) | $(30577570) | $(9632046) | $(590533289) | $(3698978) | $(8205324) | $— | $(644088819) |
|  Balance on January 1, 2021, net | $101990645 | $231158 | $41642247 | $1766613 | $117112777 | $175851 | $2373881 | $8529416 | $273822588 |
|  Balance on December 31, 2021, net | $102644714 | $220016 | $40780466 | $1585002 | $123000933 | $228359 | $2603549 | $10786149 | $281849188 |
|  <u>Cost</u> |  |  |  |  |  |  |  |  |  |
|  Balance on January 1, 2022 | $102644714 | $1661628 | $71358036 | $11217048 | $713534222 | $3927337 | $10808873 | $10786149 | $925938007 |
|  Additions | 460000 |  | 133496 | 101549 | 149182 | 1217 | 253312 | 30166736 | 31265492 |
|  Disposal | (3558) | (6042) | (6988) | (807795) | (18395302) | (104132) | (391932) |  | (19715749) |
|  Effect of foreign exchange differences |  |  |  | 143 | 209156 | 183 | 3500 | 19187 | 232169 |
|  Others | 562372 | 19669 | 1045230 | 577932 | 24571065 | 146434 | 793774 | (26544575) | 1171901 |
|  Balance on December 31, 2022 | $103663528 | $1675255 | $72529774 | $11088877 | $720068323 | $3971039 | $11467527 | $14427497 | $938891820 |
|  Accumulated depreciation<br> and impairment |  |  |  |  |  |  |  |  |  |
|  Balance on January 1, 2022 | $— | $(1441612) | $(30577570) | $(9632046) | $(590533289) | $(3698978) | $(8205324) | $— | $(644088819) |
|  Depreciation expenses |  | (38515) | (1452152) | (725191) | (25653845) | (77357) | (753520) |  | (28700580) |
|  Disposal |  | 6042 | 6988 | 807453 | 18382027 | 104132 | 388457 |  | 19695099 |
|  Effect of foreign exchange differences |  |  |  | (140) | (110073) | (108) | (2139) |  | (112460) |
|  Others |  |  | (240466) | (3656) | (42105) | (417) | (69497) |  | (356141) |
|  Balance on December 31, 2022 | $— | $(1474085) | $(32263200) | $(9553580) | $(597957285) | $(3672728) | $(8642023) | $— | $(653562901) |
|  Balance on January 1, 2022, net | $102644714 | $220016 | $40780466 | $1585002 | $123000933 | $228359 | $2603549 | $10786149 | $281849188 |
|  Balance on December 31, 2022, net | $103663528 | $201170 | $40266574 | $1535297 | $122111038 | $298311 | $2825504 | $14427497 | $285328919 |

---

There was no indication that property, plant and equipment was impaired; therefore, the Company did not recognize any impairment loss for the years ended December 31, 2022 and 2021.

------

Depreciation expense for assets used by the Company is computed using the straight-line method over the following estimated service lives:

---

| | |
|:---|:---|
| Land improvements | 10~30 years |
| Buildings |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Main buildings | 20~60 years |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other building facilities | 3~15 years |
| Computer equipment | 2~8 years |
| Telecommunications equipment |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Telecommunication circuits | 2~30 years |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Telecommunication machinery and antennas equipment | 2~30 years |
| Transportation equipment | 3~10 years |
| Miscellaneous equipment |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Leasehold improvements | 1~9 years |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mechanical and air conditioner equipment | 3~16 years |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 1~15 years |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Assets subject to operating leases

---

| | | | |
|:---|:---|:---|:---|
|  | **Land** | **Buildings** | **Total** |
|  <u>Cost</u> |  |  |  |
|  Balance on January 1, 2021 | $4972920 | $4236156 | $9209076 |
|  Others | (163994) | (102167) | (266161) |
|  Balance on December 31, 2021 | $4808926 | $4133989 | $8942915 |
|  <u>Accumulated depreciation and impairment</u> |  |  |  |
|  Balance on January 1, 2021 | $— | $(1615721) | $(1615721) |
|  Depreciation expenses |  | (76959) | (76959) |
|  Others |  | 1038 | 1038 |
|  Balance on December 31, 2021 | $— | $(1691642) | $(1691642) |
|  Balance on January 1, 2021, net | $4972920 | $2620435 | $7593355 |
|  Balance on December 31, 2021, net | $4808926 | $2442347 | $7251273 |
|  <u>Cost</u> |  |  |  |
|  Balance on January 1, 2022 | $4808926 | $4133989 | $8942915 |
|  Additions |  | 196 | 196 |
|  Others | (432730) | (949088) | (1381818) |
|  Balance on December 31, 2022 | $4376196 | $3185097 | $7561293 |
|  <u>Accumulated depreciation and impairment</u> |  |  |  |
|  Balance on January 1, 2022 | $— | $(1691642) | $(1691642) |
|  Depreciation expenses |  | (59475) | (59475) |
|  Others |  | 388815 | 388815 |
|  Balance on December 31, 2022 | $— | $(1362302) | $(1362302) |
|  Balance on January 1, 2022, net | $4808926 | $2442347 | $7251273 |
|  Balance on December 31, 2022, net | $4376196 | $1822795 | $6198991 |

---

------

The Company leases out land and buildings with lease terms between 1 to 20 years. The lessees do not have bargain purchase options to acquire the assets at the expiry of the lease periods.

The future aggregate lease collection under operating lease for the freehold plant, property and equipment was as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Year 1 | $389376 | $371380 |
|  Year 2 | 280705 | 300591 |
|  Year 3 | 211059 | 210073 |
|  Year 4 | 176548 | 158541 |
|  Year 5 | 149434 | 135208 |
|  Onwards | 1122237 | 1177460 |
|  | $2329359 | $2353253 |

---

The above items of property, plant and equipment subject to operating leases are depreciated on a straight-line basis over their estimated useful lives as follows:

---

| | |
|:---|:---|
|  Buildings |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Main buildings | 35~60 years |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other building facilities | 3~15 years |

---

**16.** **LEASE ARRANGEMENTS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Right-of-use assets

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Land and buildings |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Handsets base stations | $7175277 | $6987731 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 1726510 | 1537852 |
|  Equipment | 2200762 | 2525353 |
|  | $11102549 | $11050936 |

---

------

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Additions to right-of-use assets | $4369219 | $4669219 |
|  Depreciation charge for right-of-use assets |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Land and buildings |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Handsets base stations | $2862478 | $2788774 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 770276 | 786645 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Equipment | 348963 | 409765 |
|  | $3981717 | $3985184 |

---

Chunghwa entered into a contract with ST-2 Satellite Ventures Pte., Ltd. to lease capacity on the ST-2 satellite. However, certain frequency that ST-2 satellite originally used was transferred for the use of 5G spectrum to the government, Chunghwa evaluated and determined that the recoverable amount of the related right-of-use assets was nil. Therefore, Chunghwa recognized an impairment loss of $420,590 thousand for the year ended December 31, 2021. The impairment loss was included under "other income and expenses" in the consolidated statement of comprehensive income.

The Company did not have significant sublease or impairment of right-of-use assets for the year ended December 31, 2022. The Company did not have significant sublease of right-of-use assets for the year ended December 31, 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Lease liabilities

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Lease liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Current | $3338813 | $3210564 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Noncurrent | 7333694 | 7061689 |
|  | $10672507 | $10272253 |

---

Ranges of discount rates for lease liabilities were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Land and buildings |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Handsets base stations | 0.37%~1.71% | 0.37%~1.18% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 0.37%~9.00% | 0.37%~9.00% |
|  Equipment | 0.37%~2.99% | 0.37%~2.99% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Important lease-in activities and terms

The Company mainly enters into lease-in agreements of land and buildings for handsets base stations located throughout Taiwan with lease terms ranging from 1 to 20 years. The lease agreements do not contain bargain purchase options to acquire the assets at the expiration of the respective leases. For majority of the lease-in agreements on handsets base station, the Company has the right to terminate the agreement prior to the expiration date if the Company is unable to build the required telecommunication equipment, either due to legal restrictions, controversial events, or other events.

------

The Company also leases land and buildings for the use of offices, server rooms, and stores with lease terms from 1 to 30 years. Most of the lease agreements for national land adjust the lease payment according to the changes of the announced land values by the authority. At the expiry of the lease term, the Company does not have bargain purchase options to acquire the assets.

The lease agreements for equipment include a contract between Chunghwa and ST-2 Satellite Ventures Pte., Ltd. to lease capacity on the ST-2 satellite. For the information of lease agreements with related parties, please refer to Note 37 to the consolidated financial statements for details.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Other lease information

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Expenses relating to low-value asset leases | $8952 | $8297 |
|  Expenses relating to variable lease payments not included in the measurement of lease liabilities | $8078 | $7462 |
|  Total cash outflow for leases | $3869421 | $3813681 |

---

The Company leases certain equipment which qualifies as low-value asset leases. The Company has elected to apply the recognition exemption and, thus, not to recognize right-of-use assets and lease liabilities for these leases.

Lease-out arrangements under operating leases for freehold property, plant, and equipment and investment properties were set out in Notes 15 and 17 to the consolidated financial statements.

**17.** **INVESTMENT PROPERTIES** 

---

| | |
|:---|:---|
|  <u>Cost</u> |  |
|  Balance on January 1, 2021 | $10662450 |
|  Additions | 146 |
|  Balance on December 31, 2021 | $10662596 |
|  <u>Accumulated depreciation and impairment</u> |  |
|  Balance on January 1, 2021 | $(1041128) |
|  Depreciation expense | (42259) |
|  Reversal of impairment loss | 83429 |
|  Balance on December 31, 2021 | $(999958) |
|  Balance on January 1, 2021, net | $9621322 |
|  Balance on December 31, 2021, net | $9662638 |
|  <u>Cost</u> |  |
|  Balance on January 1, 2022 | $10662596 |
|  Additions | 18333 |
|  Reclassification | 99100 |
|  Balance on December 31, 2022 | $10780029 |

---

(Continued)

------

---

| | |
|:---|:---|
|  <u>Accumulated depreciation and impairment</u> |  |
|  Balance on January 1, 2022 | $(999958) |
|  Depreciation expense | (43754) |
|  Reversal of impairment loss | 107467 |
|  Reclassification | (39923) |
|  Balance on December 31, 2022 | $(976168) |
|  Balance on January 1, 2022, net | $9662638 |
|  Balance on December 31, 2022, net | $9803861 |

---

(Concluded)

After the evaluation of land and buildings, the Company concluded the recoverable amount which represented the fair value less costs to sell of some land and buildings was higher than the carrying amount. Therefore, the Company recognized reversal of impairment losses of $107,467 thousand and $83,429 thousand for the years ended December 31, 2022 and 2021, respectively, and the amounts were recognized only to the extent of impairment losses that had been recognized in prior years. The reversal of impairment loss was included in other income and expenses in the consolidated statements of comprehensive income.

Depreciation expense is computed using the straight-line method over the following estimated service lives:

---

| | |
|:---|:---|
|  Land improvements | 10~30 years |
|  Buildings |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Main buildings | 35~60 years |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other building facilities | 4~10 years |

---

The fair values of the Company's investment properties as of December 31, 2022 and 2021 were determined by Level 3 fair value measurements inputs based on the appraisal reports conducted by independent appraisers. Those appraisal reports are based on the comparison approach, income approach or cost approach. Key assumptions and the fair values were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Fair value | $26861591 | $25547766 |
|  Overall capital interest rate | 1.31%~4.91% | 0.91%~3.05% |
|  Profit margin ratio | 8%~20% | 8%~20% |
|  Discount rate |  |  |
|  Capitalization rate | 0.23%~2.16% | 0.53%~2.11% |

---

All of the Company's investment properties are held under freehold interest.

The future aggregate lease collection under operating lease for investment properties is as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Year 1 | $118370 | $107183 |
|  Year 2 | 99077 | 82505 |
|  Year 3 | 89821 | 61629 |
|  Year 4 | 69934 | 55510 |

---

(Continued)

------

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Year 5 | $43608 | $38605 |
|  Onwards | 149168 | 77626 |
|  | $569978 | $423058 |

---

(Concluded)

**18.** **INTANGIBLE ASSETS** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Mobile<br>Broadband<br>Concession** | **Computer<br>Software** | **Goodwill** | **Others** | **Total** |
|  <u>Cost</u> |  |  |  |  |  |
|  Balance on January 1, 2021 | $108338000 | $3319223 | $291206 | $392326 | $112340755 |
|  Additions-acquired separately |  | 224797 |  | 31055 | 255852 |
|  Disposal |  | (342938) |  | (10867) | (353805) |
|  Effect of foreign exchange differences |  | (364) |  | (37) | (401) |
|  Others |  | 2183 |  |  | 2183 |
|  Balance on December 31, 2021 | $108338000 | $3202901 | $291206 | $412477 | $112244584 |
|  <u>Accumulated amortization and impairment</u> |  |  |  |  |  |
|  Balance on January 1, 2021 | $(19318842) | $(2532910) | $(44926) | $(159517) | $(22056195) |
|  Amortization expenses | (6198911) | (340298) |  | (29338) | (6568547) |
|  Disposal |  | 342938 |  | 10867 | 353805 |
|  Impairment losses |  |  | (28698) | (203) | (28901) |
|  Effect of foreign exchange differences |  | 355 |  | 8 | 363 |
|  Others |  | (26) |  |  | (26) |
|  Balance on December 31, 2021 | $(25517753) | $(2529941) | $(73624) | $(178183) | $(28299501) |
|  Balance on January 1, 2021, net | $89019158 | $786313 | $246280 | $232809 | $90284560 |
|  Balance on December 31, 2021, net | $82820247 | $672960 | $217582 | $234294 | $83945083 |
|  <u>Cost</u> |  |  |  |  |  |
|  Balance on January 1, 2022 | $108338000 | $3202901 | $291206 | $412477 | $112244584 |
|  Additions-acquired separately | 1625431 | 256932 |  | 10312 | 1892675 |
|  Disposal |  | (663617) |  | (1008) | (664625) |
|  Effect of foreign exchange differences |  | 167 |  | 32 | 199 |
|  Others |  | 1452 |  |  | 1452 |
|  Balance on December 31, 2022 | $109963431 | $2797835 | $291206 | $421813 | $113474285 |
|  <u>Accumulated amortization and impairment</u> |  |  |  |  |  |
|  Balance on January 1, 2022 | $(25517753) | $(2529941) | $(73624) | $(178183) | $(28299501) |
|  Amortization expenses | (6294525) | (309800) |  | (38332) | (6642657) |
|  Disposal |  | 663617 |  | 1008 | 664625 |
|  Impairment losses |  |  |  | (9547) | (9547) |
|  Effect of foreign exchange differences |  | (110) |  | (8) | (118) |
|  Balance on December 31, 2022 | $(31812278) | $(2176234) | $(73624) | $(225062) | $(34287198) |
|  Balance on January 1, 2022, net | $82820247 | $672960 | $217582 | $234294 | $83945083 |
|  Balance on December 31, 2022, net | $78151153 | $621601 | $217582 | $196751 | $79187087 |

---

------

Chunghwa's Board of Directors approved the acquisition of the 900MHz frequency band and equipment from Asia Pacific Telecom Co., Ltd. in November 2021. The aforementioned tax-excluded transaction amount was $1,800,113 thousand included in intangible assets- mobile broadband concession and other assets- spare parts. The transaction was approved by the related authority in May 2022 and completed in July 2022.

The concessions are granted and issued by the National Communications Commission ("NCC"). The concession fees are amortized using the straight-line method over the period from the date operations commence through the date the license expires or the useful life, whichever is shorter. The 4G concession fees will be fully amortized by December 2030 and December 2033 and 5G concession fees will be fully amortized by December 2040.

The computer software is amortized using the straight-line method over the estimated useful lives of 1 to 10 years. Other intangible assets are amortized using the straight-line method over the estimated useful lives of 1 to 20 years. Goodwill is not amortized.

SENAO evaluated the goodwill, license agreement and the right of trademark that arose in the acquisition of Youth and its subsidiaries at the end of each year. Due to the competition in the industrial environment, the gross profit margin decreased. SENAO concluded the recoverable amount of the goodwill was lower than the carrying value and recognized impairment loss of $28,698 thousand for the years ended December 31, 2021. In addition, SENAO concluded the recoverable amount of the license agreement and the right of trademark were lower than the carrying value and recognized impairment loss of $9,547 thousand and $203 thousand for the years ended December 31, 2022 and 2021, respectively. The aforementioned impairment losses were included in other income and expenses of consolidated statements of comprehensive income. The recoverable amount of license agreement and right of trademark was measured at the fair value less costs to sell. The fair value was calculated based on asset approach by reference to the net assets value of Youth.

**19.** **OTHER ASSETS** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Spare parts | $3379837 | $2836191 |
|  Refundable deposits | 1964648 | 1971058 |
|  Other financial assets | 1000000 | 1000000 |
|  Others | 1916562 | 2034331 |
|  | $8261047 | $7841580 |
|  Current |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Spare parts | $3379837 | $2836191 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 175586 | 142589 |
|  | $3555423 | $2978780 |
|  Noncurrent |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Refundable deposits | $1964648 | $1971058 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other financial assets | 1000000 | 1000000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 1740976 | 1891742 |
|  | $4705624 | $4862800 |

---

------

Other financial assets - noncurrent was Piping Fund. As part of the government's effort to upgrade the existing telecommunications infrastructure, Chunghwa and other public utility companies were required by the ROC government to contribute to a Piping Fund administered by the Taipei City Government. This fund was used to finance various telecommunications infrastructure projects. Net assets of this fund will be returned proportionately after the project is completed.

2**0.** **HEDGING FINANCIAL INSTRUMENTS** 

Chunghwa's hedge strategy is to enter into forward exchange contracts - buy to avoid its foreign currency exposure to certain foreign currency denominated equipment payments in the following six months. In addition, Chunghwa's management considers the market condition to determine the hedge ratio and enters into forward exchange contracts with the banks to avoid the foreign currency risk.

Chunghwa signed equipment purchase contracts with suppliers and entered into forward exchange contracts to avoid foreign currency risk exposure to Euro-denominated purchase commitments. Those forward exchange contracts were designated as cash flow hedges. When forecast purchases actually take place, basis adjustments are made to the initial carrying amounts of hedged items.

For the hedges of highly probable forecast sales and purchases, as the critical terms (i.e. the notional amount, life and underlying) of the forward foreign exchange contracts and their corresponding hedged items are the same, the Company performs a qualitative assessment of effectiveness and it is expected that the value of the forward contracts and the value of the corresponding hedged items will systematically change in opposite direction in response to movements in the underlying exchange rates.

The main source of hedge ineffectiveness in these hedging relationships is the effect of credit risks of the Company and the counterparty on the fair value of the forward exchange contracts. Such credit risks do not impact the fair value of the hedged item attributable to changes in foreign exchange rates. No other sources of ineffectiveness emerged from these hedging relationships.

The following tables summarized the information relating to the hedges for foreign currency risk.

<u>December 31, 2022</u> 

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Hedging Instruments** | **Currency** | **Notional<br>Amount**<br> **(In Thousands)** | **Maturity** | **Forward**<br> **Rate** | **Line Item in**<br> **Balance Sheet** | | **Carrying Amount** | **Carrying Amount** | **Change in Fair<br>Values of<br>Hedging<br>Instruments Used<br>for Calculating<br>Hedge**<br> **Ineffectiveness** |  |  |
| **Hedging Instruments** | **Currency** | **Notional<br>Amount**<br> **(In Thousands)** | **Maturity** | **Forward**<br> **Rate** | **Line Item in**<br> **Balance Sheet** | | **Carrying Amount** | **Carrying Amount** | **Change in Fair<br>Values of<br>Hedging<br>Instruments Used<br>for Calculating<br>Hedge**<br> **Ineffectiveness** | **Asset** | **Liability** |
| **Hedging Instruments** | **Currency** | **Notional<br>Amount**<br> **(In Thousands)** | **Maturity** | **Forward**<br> **Rate** | **Line Item in**<br> **Balance Sheet** | Cash flow hedge |  |  | **Change in Fair<br>Values of<br>Hedging<br>Instruments Used<br>for Calculating<br>Hedge**<br> **Ineffectiveness** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Forecast purchases - forward exchange contracts | NT$/EUR | NT$423,024<br>/EUR 13,350 | 2023.03 | $31.69 | Hedging financial<br>assets (liabilities) |  | $12891 | $— | $21177 |  |  |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Change in<br>Value of<br>Hedged Item<br>Used for**<br> **Calculating<br>Hedge<br>Ineffectiveness** | **Accumulated Gain or Loss<br>on Hedging Instruments <br>in Other Equity** | **Accumulated Gain or Loss<br>on Hedging Instruments <br>in Other Equity** |
| **Hedged Items** | **Change in<br>Value of<br>Hedged Item<br>Used for**<br> **Calculating<br>Hedge<br>Ineffectiveness** | **Continuing<br>Hedges** | **Hedge<br>Accounting<br>no Longer<br>Applied** |
|  Cash flow hedge |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Forecast equipment purchases | $(21177) | $12891 | $— |

---

------

<u>December 31, 2021</u> 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | | | | | | **Carrying Amount** | **Carrying Amount** | **Change in Fair<br>Values of<br>Hedging<br>Instruments Used<br>for Calculating<br>Hedge**<br> **Ineffectiveness** |
| **Hedging Instruments** | **Currency** | **Notional<br>Amount**<br> **(In Thousands)** | **Maturity** | **Forward**<br> **Rate** | **Line Item in**<br> **Balance Sheet** | **Carrying Amount** | **Carrying Amount** | **Change in Fair<br>Values of<br>Hedging<br>Instruments Used<br>for Calculating<br>Hedge**<br> **Ineffectiveness** |
| **Hedging Instruments** | **Currency** | **Notional<br>Amount**<br> **(In Thousands)** | **Maturity** | **Forward**<br> **Rate** | **Line Item in**<br> **Balance Sheet** | **Asset** | **Liability** | **Change in Fair<br>Values of<br>Hedging<br>Instruments Used<br>for Calculating<br>Hedge**<br> **Ineffectiveness** |
|  Cash flow hedge |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Forecast purchases - forward exchange contracts | NT$/EUR | NT$227,780/<br> EUR 7,000 | 2022.03 | $32.54 | Hedging financial<br>assets (liabilities) | $— | $8286 | $(10038) |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Change in<br>Value of<br>Hedged Item<br>Used for**<br> **Calculating<br>Hedge<br>Ineffectiveness** | **Accumulated Gain or Loss on<br>Hedging Instruments <br>in Other Equity** | **Accumulated Gain or Loss on<br>Hedging Instruments <br>in Other Equity** |
| **Hedged Items** | **Change in<br>Value of<br>Hedged Item<br>Used for**<br> **Calculating<br>Hedge<br>Ineffectiveness** | **Continuing<br>Hedges** | **Hedge<br>Accounting no<br>Longer Applied** |
|  Cash flow hedge |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Forecast equipment purchases | $10038 | $(8286) | $— |

---

<u>Year ended December 31, 2022</u> 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Comprehensive Income** | **Comprehensive Income** | **Comprehensive Income** | **Reclassification from Equity<br>to Assets and the Adjusted Line Item** | **Reclassification from Equity<br>to Assets and the Adjusted Line Item** |
| **Hedge Transaction** | **Hedging<br>Gain or Loss<br>Recognized<br>in OCI** | **Amount of<br>Hedge<br>Ineffectiveness<br>Recognized in<br>Profit or Loss** | **Line Item in**<br> **Which Hedge**<br> **Ineffectiveness**<br> **is Included** | **Amount<br>Reclassified to<br>Assets and the<br>Adjusted Line<br>Item** | **Due to Hedged<br>Future Cash<br>Flows No Longer<br>Expected to<br>Occur** |
|  Cash flow hedge |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Forecast equipment purchases | $21177 | $— |  | $6273 | $— |
|  |  |  |  | Construction in<br> progress and<br> equipment to<br> be accepted | Other gains and<br>losses |

---

<u>Year ended December 31, 2021</u> 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Comprehensive Income** | **Comprehensive Income** | **Comprehensive Income** | **Reclassification from Equity<br>to Assets and the Adjusted Line Item** | **Reclassification from Equity<br>to Assets and the Adjusted Line Item** |
| **Hedge Transaction** | **Hedging<br>Gain or Loss<br>Recognized<br>in OCI** | **Amount of<br>Hedge<br>Ineffectiveness<br>Recognized in<br>Profit or Loss** | **Line Item in<br>Which Hedge<br>Ineffectiveness<br>is Included** | **Amount<br>Reclassified to<br>Assets and the<br>Adjusted Line<br>Item** | **Due to Hedged<br>Future Cash<br>Flows No Longer<br>Expected to<br>Occur** |
|  Cash flow hedge |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Forecast equipment purchases | $(10038) | $— |  | $(42574) | $— |
|  |  |  |  | Construction in<br> progress and<br> equipment<br> to be<br> accepted | Other gains and<br>losses |

---

------

**21.** **SHORT-TERM LOANS** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Unsecured bank loans | $722000 | $65000 |

---

The annual interest rates of bank loans were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Unsecured bank loans | 1.30%~3.19% | 1.97%~2.43% |

---

**22.** **LONG-TERM LOANS** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Secured bank loans (Note 38) | $1600000 | $1600000 |

---

The annual interest rates of bank loans were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Secured bank loans | 1.80% | 0.89% |

---

LED obtained a secured loan from Chang Hwa Bank in September 2010. Interest is paid monthly. $300,000 thousand and $1,350,000 thousand were originally due in December 2014 and September 2015, respectively. In October 2014, the bank borrowing mentioned above was extended to September 2018 for one time repayment. LED made an early repayment of $50,000 thousand in April 2015. LED entered into a contract with Chang Hwa Bank to renew the contract upon the maturity of the aforementioned contract in December 2017 and the due date of the renewed contract is September 2021. Furthermore, LED entered into another contract with Chang Hwa Bank to renew the contract upon the maturity of the aforementioned contract in August 2021 and the due date of the renewed contract is September 2024.

**23.** **BONDS PAYABLE** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Unsecured domestic bonds | $30500000 | $27000000 |
|  Less: Discounts on bonds payable | (22643) | (23325) |
|  | $30477357 | $26976675 |

---

------

The major terms of unsecured domestic bonds issued by Chunghwa were as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Issuance** | **Tranche** | **Issuance Period** | **Total<br>Amount** | **Coupon<br>Rate** | **Repayment and Interest<br>Payment** |
| 2020-1 | A | July 2020 to July 2025 | $8800000 | 0.50% | One-time repayment upon maturity;<br>interest payable annually |
|  | B | July 2020 to July 2027 | 7500000 | 0.54% | The same as above |
|  | C | July 2020 to July 2030 | 3700000 | 0.59% | The same as above |
| 2021-1 | A | April 2021 to April 2026 | 1900000 | 0.42% | The same as above |
|  | B | April 2021 to April 2028 | 4100000 | 0.46% | The same as above |
|  | C | April 2021 to April 2031 | 1000000 | 0.50% | The same as above |
|  2022-1<br> (Sustainable Bond) |  | March 2022 to March 2027 | 3500000 | 0.69% | The same as above |

---

**24.** **TRADE NOTES AND ACCOUNTS PAYABLE** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Trade notes and accounts payable | $16428856 | $18063288 |

---

Trade notes and accounts payable were attributable to operating activities and the trading conditions were agreed separately.

**25.** **OTHER PAYABLES** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Accrued salary and compensation | $10409299 | $10125732 |
|  Payables to contractors | 2571376 | 3014677 |
|  Accrued compensation to employees and remuneration to directors and supervisors | 2143523 | 1997277 |
|  Amounts collected for others | 1596341 | 1426443 |
|  Payables to equipment suppliers | 1278738 | 1153550 |
|  Accrued maintenance costs | 1060534 | 1010892 |
|  Others | 6020149 | 5708137 |
|  | $25079960 | $24436708 |

---

**26.** **PROVISIONS** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Warranties | $235308 | $213537 |
|  Onerous contracts | 95201 | 146541 |
|  Employee benefits | 64776 | 62833 |
|  Others | 3767 | 3767 |
|  | $399052 | $426678 |

---

(Continued)

------

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Current | $226019 | $284813 |
|  Noncurrent | 173033 | 141865 |
|  | $399052 | $426678 |

---

(Concluded)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Warranties** | **Onerous<br>Contracts** | **Employee<br>Benefits** | **Others** | **Total** |
|  Balance on January 1, 2021 | $182431 | $170433 | $57210 | $4097 | $414171 |
|  Additional / (reversal of) provisions recognized | 102475 | (23892) | 6963 | (330) | 85216 |
|  Used / forfeited during the year | (71367) |  | (1340) |  | (72707) |
|  Effect of foreign exchange differences | (2) |  |  |  | (2) |
|  Balance on December 31, 2021 | $213537 | $146541 | $62833 | $3767 | $426678 |
|  Balance on January 1, 2022 | $213537 | $146541 | $62833 | $3767 | $426678 |
|  Additional / (reversal of) provisions recognized | 107714 | (51340) | 2217 |  | 58591 |
|  Used / forfeited during the year | (85953) |  | (274) |  | (86227) |
|  Effect of foreign exchange differences | 10 |  |  |  | 10 |
|  Balance on December 31, 2022 | $235308 | $95201 | $64776 | $3767 | $399052 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. The provision for warranty claims represents the present value of the management's best estimate of the
future outflow of economic benefits that will be required under the Company's obligation for warranties in sales agreements. The estimate has been made based on historical warranty experience.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. The provision for employee benefits represents vested long-term service compensation accrued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. The provision for onerous contracts represents the present obligation resulting from the measurement for the
unavoidable costs of meeting the Company's contractual obligations exceed the economic benefits expected to be received from the contracts.

**27. RETIREMENT BENEFIT PLANS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Defined contribution plans

The pension plan under the Labor Pension Act of ROC (the "LPA") is considered as a defined contribution plan. Based on the LPA, Chunghwa and its domestic subsidiaries make monthly contributions to employees' individual pension accounts at 6% of monthly salaries and wages. Its foreign subsidiaries would make monthly contributions based on the local pension requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Defined benefit plans

Chunghwa completed its privatization plans on August 12, 2005. Chunghwa is required to pay all accrued pension obligations including service clearance payment, lump sum payment under civil service plan, additional separation payments, etc. upon the completion of the privatization in accordance with the Statute Governing Privatization of Stated-owned Enterprises. After paying all pension obligations for privatization, the plan assets of Chunghwa should be transferred to the Fund for Privatization of Government-owned Enterprises (the "Privatization Fund") under the Executive Yuan. On August 7, 2006, Chunghwa transferred the remaining balance of fund to the Privatization Fund. However, according to the instructions of MOTC, Chunghwa was requested to administer the distributions to employees for pension obligations including service clearance payment, lump sum payment under civil service plan, additional separation payments, etc. upon the completion of the privatization and recognized in other current monetary assets.

------

Chunghwa and its subsidiaries SENAO, CHIEF, CHSI, SHE, IISI and UTC with the pension mechanism under the Labor Standards Law in the ROC are considered as defined benefit plans. These pension plans provide benefits based on an employee's length of service and average six-month salary prior to retirement. Chunghwa and its subsidiaries contribute an amount no more than 15% of salaries paid each month to their respective pension funds (the Funds), which are administered by the Labor Pension Fund Supervisory Committee (the Committee) and deposited in the names of the Committees in the Bank of Taiwan. The plan assets are held in a commingled fund which is operated and managed by the government's designated authorities; as such, the Company does not have any right to intervene in the investments of the funds. According to the Article 56 of the Labor Standards Law in the ROC, entities are required to contribute the difference in one appropriation to their pension funds before the end of next March when the balance of the Funds is insufficient to pay the eligible employees who meet the retirement criteria in the following year.

The amounts included in the consolidated balance sheets arising from the Company's obligation in respect of its defined benefit plans were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Present value of funded defined benefit obligations | $33599272 | $35501968 |
|  Fair value of plan assets | (36579769) | (36605382) |
|  Funded status - surplus | $(2980497) | $(1103414) |
|  Net defined benefit liabilities | $2285224 | $2287663 |
|  Net defined benefit assets | (5265721) | (3391077) |
|  | $(2980497) | $(1103414) |

---

Movements in the defined benefit obligations and the fair value of plan assets were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Present Value<br>of Funded<br>Defined Benefit<br>Obligations** | **Fair Value<br>of Plan<br>Assets** | **Net<br>Defined<br>Benefit<br>Liabilities<br>(Assets)** |
|  Balance on January 1, 2021 | $39536563 | $39493787 | $42776 |
|  Current service cost | 1253241 |  | 1253241 |
|  Interest expense / interest income | 189488 | 195225 | (5737) |
|  Amounts recognized in profit or loss | 1442729 | 195225 | 1247504 |
|  Remeasurement on the net defined benefit liability |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Return on plan assets (excluding amounts included in net interest) |  | 500851 | (500851) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Actuarial gain recognized from changes in demographic assumptions | (433952) |  | (433952) |

---

(Continued)

------

---

| | | | |
|:---|:---|:---|:---|
|  | **Present Value<br>of Funded<br>Defined Benefit<br>Obligations** | **Fair Value<br>of Plan<br>Assets** | **Net<br>Defined<br>Benefit<br>Liabilities<br>(Assets)** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Actuarial loss recognized from experience adjustments | $544362 | $— | $544362 |
|  Amounts recognized in other comprehensive income | 110410 | 500851 | (390441) |
|  Contributions from employer |  | 1727329 | (1727329) |
|  Benefits paid | (5311810) | (5311810) |  |
|  Benefits paid directly by the Company | (275924) |  | (275924) |
|  Balance on December 31, 2021 | 35501968 | 36605382 | (1103414) |
|  Current service cost | 1085437 |  | 1085437 |
|  Interest expense / interest income | 170797 | 181249 | (10452) |
|  Amounts recognized in profit or loss | 1256234 | 181249 | 1074985 |
|  Remeasurement on the net defined benefit liability |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Return on plan assets (excluding amounts included in net interest) |  | 2968012 | (2968012) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Actuarial loss recognized from changes in financial assumptions | 208369 |  | 208369 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Actuarial loss recognized from experience adjustments | 1606067 |  | 1606067 |
|  Amounts recognized in other comprehensive income | 1814436 | 2968012 | (1153576) |
|  Contributions from employer |  | 1554804 | (1554804) |
|  Benefits paid | (4729678) | (4729678) |  |
|  Benefits paid directly by the Company | (243688) |  | (243688) |
|  Balance on December 31, 2022 | $33599272 | $36579769 | $(2980497) |

---

(Concluded)

Relevant pension costs recognized in profit and loss for defined benefit plans were as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended<br>December 31** | **Year Ended<br>December 31** |
|  | **2022** | **2021** |
|  Operating costs | $564616 | $724943 |
|  Marketing expenses | 360415 | 366925 |
|  General and administrative expenses | 86182 | 80248 |
|  Research and development expenses | 36595 | 44362 |
|  | $1047808 | $1216478 |

---

The Company is exposed to following risks for the defined benefits plans under the Labor Standards Law in the ROC:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Investment risk

Under the Labor Standards Law in the ROC, the rate of return on assets shall not be lower than the average interest rate on a two-year time deposit published by the local banks and the government is responsible for any shortfall in the event that the rate of return is less than the required rate of return. The plan assets are held in a commingled fund mainly invested in foreign and domestic equity and debt securities and bank deposits which is operated and managed by the government's designated authorities; as such, the Company does not have any right to intervene in the investments of the funds.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Interest rate risk

The decline in government bond interest rate will increase the present value of the obligation on the defined benefit plan, while the return on plan assets will increase. The net effect on the present value of the obligation on defined benefit plan is partially offset by the return on plan assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Salary risk

The calculation of the present value of defined benefit obligations is referred to the plan participants' future salary. Hence, the increase in plan participants' salary will increase the present value of the defined benefit obligations.

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligations were carried out by the independent actuary.

The principal assumptions used for the purpose of the actuarial valuations were as follows:

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| | | |
|:---|:---|:---|
|  | **Measurement Date** | **Measurement Date** |
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Discount rates | 1.25% | 0.50% |
|  Expected rates of salary increase | 1.00%~2.25% | 1.00%~2.25% |

---

If reasonably possible changes of the respective significant actuarial assumptions occur at the end of reporting periods, while holding all other assumptions constant, the present values of the defined benefit obligations would increase (decrease) as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Discount rates |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.5% increase | $(995704) | $(1073185) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.5% decrease | $1055779 | $1139142 |
|  Expected rates of salary increase |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.5% increase | $1129812 | $1217115 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.5% decrease | $(1075216) | $(1157095) |

---

The sensitivity analysis presented above may not be representative of the actual change in the present value of the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated. There is no change in the methods and assumptions used in preparing the sensitivity analysis from the previous period.

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  The expected contributions to the plan for the next year | $1542033 | $1681091 |
|  The average duration of the defined benefit obligations | 6.2~11 years | 6.3~12 years |

---

------

As of December 31, 2022, the Company's maturity analysis of the undiscounted benefit payments was as follows:

---

| | |
|:---|:---|
| **Year** | **Amount** |
| 2023 | $2673046 |
| 2024 | 6184201 |
| 2025 | 9312821 |
| 2026 | 10556293 |
|  2027 and thereafter | 36622841 |
|  | $65349202 |

---

**28.** **EQUITY** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Share capital

1) Common stocks

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Number of authorized shares (thousand) | 12000000 | 12000000 |
|  Authorized shares | $120000000 | $120000000 |
|  Number of issued and paid shares (thousand) | 7757447 | 7757447 |
|  Issued shares | $77574465 | $77574465 |

---

Each issued common stock with par value of $10 is entitled the right to vote and receive dividends.

2) Global depositary receipts

The MOTC and some stockholders sold some common stocks of Chunghwa in an international offering of securities in the form of American Depositary Shares ("ADS") (one ADS represents 10 common stocks) in July 2003, August 2005, and September 2006. The ADSs were traded on the New York Stock Exchange since July 17, 2003. As of December 31, 2022, the outstanding ADSs were 195,211 thousand common stocks, which equaled 19,521 thousand units and represented 2.52% of Chunghwa's total outstanding common stocks.

The ADS holders generally have the same rights and obligations as other common stockholders, subject to the provision of relevant laws. The exercise of such rights and obligations shall comply with the related regulations and deposit agreement, which stipulate, among other things, that ADS holders are entitled to, through deposit agents:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Exercise their voting rights,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Sell their ADSs, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Receive dividends declared and subscribe to the issuance of new shares.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Additional paid-in capital

The adjustments of additional paid-in capital for the years ended December 31, 2022 and 2021 were as follows:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share<br>Premium** | **Movements of<br>Additional<br>Paid-in Capital<br>for Associates<br>and Joint<br>Ventures<br>Accounted for<br>Using Equity<br>Method** | **Movements of<br>Additional<br>Paid-in Capital<br>Arising from<br>Changes in<br>Equities of<br>Subsidiaries** | **Difference<br>between<br>Consideration<br>Received and<br>Carrying<br>Amount of the<br>Subsidiaries'<br>Net Assets<br>upon Disposal** | **Donated Capital** | **Stockholders'<br>Contribution due<br>to Privatization** | **Total** |
|  Balance on January 1, 2021 | $147329386 | $186828 | $2087957 | $987611 | $21519 | $20648078 | $171261379 |
|  Unclaimed dividend |  |  |  |  | 1968 |  | 1968 |
|  Change in additional paid-in capital from investments in associates and joint ventures accounted for using equity method |  | (437) |  |  |  |  | (437) |
|  Share-based payment transactions of subsidiaries |  |  | 16715 |  |  |  | 16715 |
|  Balance on December 31, 2021 | 147329386 | 186391 | 2104672 | 987611 | 23487 | 20648078 | 171279625 |
|  Unclaimed dividend |  |  |  |  | 1632 |  | 1632 |
|  Change in additional paid-in capital from investments in associates and joint ventures accounted for using equity method |  | (12719) |  |  |  |  | (12719) |
|  Change in additional paid-in capital for not proportionately participating in the capital increase of subsidiaries |  |  | 5153 |  |  |  | 5153 |
|  Share-based payment transactions of subsidiaries |  |  | 27207 |  |  |  | 27207 |
|  Balance on December 31, 2022 | $147329386 | $173672 | $2137032 | $987611 | $25119 | $20648078 | $171300898 |

---

Additional paid-in capital from share premium, donated capital and the difference between consideration received and the carrying amount of the subsidiaries' net assets upon disposal may be utilized to offset deficits. Furthermore, when Chunghwa has no deficit, it may be distributed in cash or capitalized, which however is limited to a certain percentage of Chunghwa's paid-in capital except the additional paid-in capital arising from unclaimed dividend can only be utilized to offset deficits.

The additional paid-in capital from movements of paid-in capital arising from changes in equities of subsidiaries may only be utilized to offset deficits.

Among additional paid-in capital from movements of investments in associates and joint ventures accounted for using equity method, the portion arising from the difference between consideration received and the carrying amount of the subsidiaries' net assets upon disposal may be utilized to offset deficits; furthermore, when the Company has no deficit, it may be distributed in cash or capitalized. However, other additional paid-in capital recognized in proportion of share ownership may only be utilized to offset deficits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Retained earnings and dividends policy

In accordance with the Chunghwa's Articles of Incorporation, Chunghwa must pay all outstanding taxes, offset deficits in prior years and set aside a legal reserve equal to 10% of its net income before distributing a dividend or making any other distribution to stockholders, except when the accumulated amount of such legal reserve equals to Chunghwa's total issued capital, and depending on its business needs or requirements, may also set aside or reverse special reserves. No less than 50% of the remaining earnings comprising remaining balance of net income, if any, plus cumulative undistributed earnings shall be distributed as stockholders' dividends, of which cash dividends to be distributed shall not be less than 50% of the total amount of dividends to be distributed. If cash dividend to be distributed is less than $0.10 per share, such cash dividend shall be distributed in the form of common stocks.

------

The Company should appropriate a special reserve when the net amount of other equity items is negative at the end of reporting period upon the earnings distribution. Distributions can be made out of any subsequent reversal of the debit to other equity items.

The appropriation for legal reserve shall be made until the accumulated reserve equals the aggregate par value of the outstanding capital stock of Chunghwa. This reserve can only be used to offset a deficit, or when the legal reserve has exceeded 25% of Chunghwa's paid-in capital, the excess may be transferred to capital or distributed in cash.

The appropriations of the 2021 and 2020 earnings of Chunghwa approved by the stockholders in their meetings on May 27, 2022 and August 20, 2021, respectively, were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Appropriation of Earnings** | **Appropriation of Earnings** | **Dividends Per Share**<br>**(NT$)** | **Dividends Per Share**<br>**(NT$)** |
|  | **For Fiscal<br>Year 2021** | **For Fiscal<br>Year 2020** | **For Fiscal<br>Year 2021** | **For Fiscal<br>Year 2020** |
|  Special reserve | $408150 | $— |  |  |
|  Cash dividends | 35746314 | 33403565 | $4.608 | $4.306 |

---

The appropriations of earnings for 2022 had been proposed by Chunghwa's Board of Directors on February 24, 2023. The appropriations and dividends per share were as follows:

---

| | | |
|:---|:---|:---|
|  | **Appropriation<br>of Earnings** | **Dividends Per<br>Share (NT$)** |
|  Reversal of special reserve | $185066 |  |
|  Cash dividends | 36475514 | $4.702 |

---

The appropriations of earnings for 2022 are subject to the resolution of the stockholders' meeting planned to be held on May 26, 2023. Information of the appropriation of Chunghwa's earnings proposed by the Board of Directors and approved by the stockholders is available on the Market Observation Post System website.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Others

1) Exchange differences arising from the translation of the foreign operations

The exchange differences arising from the translation of the foreign operations from their functional currency to New Taiwan dollars were recognized as exchange differences arising from the translation of the foreign operations in other comprehensive income.

2) Unrealized gain or loss on financial assets at FVOCI

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Beginning balance | $(7588) | $1239901 |
|  Unrealized gain or loss for the year |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Equity instruments | (111551) | (1187836) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Share of loss of associates and joint ventures accounted for using equity method | (5739) |  |
|  Transferred accumulated gain or loss to unappropriated earnings resulting from the disposal of equity instruments (Note 8) | 116 | (59653) |
|  Ending balance | $(124762) | $(7588) |

---

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. Noncontrolling interests

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Beginning balance | $11927604 | $11327441 |
|  Shares attributed to noncontrolling interests |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net income for the year | 1522882 | 1441300 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exchange differences arising from the translation of the foreign operations | 20710 | 602 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Unrealized gain or loss on financial assets at FVOCI | (25012) | 1987 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Remeasurements of defined benefit pension plans | 24040 | (5426) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income tax relating to remeasurements of defined benefit pension plans | (4808) | 1085 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Share of other comprehensive income of associates and joint ventures accounted for using equity method | 5867 | 351 |
|  Cash dividends distributed by subsidiaries | (1053240) | (896335) |
|  Changes in additional paid-in capital from investments in associates and joint ventures accounted for using equity method | (1491) | (136) |
|  Share-based payment transactions of subsidiaries | 62385 | 56735 |
|  Change in additional paid-in capital for not proportionately participating in the capital increase of subsidiaries | 9847 |  |
|  Net increase in noncontrolling interests | 110757 |  |
|  Ending balance | $12599541 | $11927604 |

---

**29.** **REVENUES** 

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Revenue from contracts with customers | $214497968 | $208412156 |
|  Other revenues |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Government grants income | 1030506 | 1037057 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Rental income | 1021709 | 863719 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 189051 | 165016 |
|  | 2241266 | 2065792 |
|  | $216739234 | $210477948 |

---

For the information of performance obligations related to customer contracts, please refer to Note 3 Summary of Significant Accounting Policies for details.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Disaggregation of revenue

Please refer to Note 43 Segment Information for details.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Contract balances

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31,<br>2022** | **December 31,<br>2021** | **January 1,<br>2021** |
|  Trade notes and accounts receivable (Note 9) | $24672473 | $23947107 | $22621902 |
|  Contract assets |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Products and service bundling | $7955689 | $7197206 | $7232134 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 1255584 | 982688 | 612206 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Less: Loss allowance | (19129) | (18080) | (17792) |
|  | $9192144 | $8161814 | $7826548 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Current | $6055343 | $5554070 | $5331246 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Noncurrent | 3136801 | 2607744 | 2495302 |
|  | $9192144 | $8161814 | $7826548 |
|  Contract liabilities |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Telecommunications business | $14081316 | $13143598 | $13601662 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Project business | 6586384 | 5435268 | 6686561 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Products and service bundling | 8559 | 4168 | 16404 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 388275 | 491298 | 421166 |
|  | $21064534 | $19074332 | $20725793 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Current | $13390439 | $12234276 | $13436706 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Noncurrent | 7674095 | 6840056 | 7289087 |
|  | $21064534 | $19074332 | $20725793 |

---

The changes in the contract asset and the contract liability balances primarily result from the timing difference between the satisfaction of performance obligations and the payments collected from customers. Significant changes of contract assets and liabilities recognized resulting from product and service bundling were as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Contract assets |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net increase of customer contracts | $6933294 | $6034998 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reclassified to trade receivables | (6148501) | (6039413) |
|  | $784793 | $(4415) |
|  Contract liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net increase of customer contracts | $9161 | $162 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Recognized as revenues | (4770) | (12398) |
|  | $4391 | $(12236) |

---

------

The Company applies the simplified approach to recognize expected credit losses prescribed by IFRS 9, which permits the use of lifetime expected loss provision for receivables. Contract assets will be reclassified to trade receivables when the corresponding invoice is billed to the client. Contract assets have substantially the same risk characteristics as the trade receivables of the same types of contracts. Therefore, the Company concluded that the expected loss rates for trade receivables can be applied to the contract assets.

Revenue recognized for the year that was included in the contract liability at the beginning of the year was as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Telecommunications business | $6625564 | $5952356 |
|  Project business | 4066613 | 4630103 |
|  Others | 440093 | 430982 |
|  | $11132270 | $11013441 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Incremental costs of obtaining contracts

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Noncurrent |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Incremental costs of obtaining contracts | $979914 | $987656 |

---

The Company considered the past experience and the default clauses in the telecommunications service contracts and believes the commissions and equipment subsidies paid for obtaining such contracts are expected to be recoverable; therefore, such costs were capitalized. Amortization expenses for the years ended December 31, 2022 and 2021 were $840,553 thousand and $815,241 thousand, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Remaining Performance Obligations

As of December 31, 2022, the aggregate amount of transaction price allocated to performance obligations for non-cancellable telecommunications service contracts that are unsatisfied is $31,247,091 thousand. The Company recognizes revenue when service is provided over contract terms. The Company expects to recognize such revenue of $18,976,104 thousand, $9,516,800 thousand and $2,754,187 thousand in 2023, 2024 and 2025, respectively. The variable consideration collected from customers on nonrecurring basis resulting from exceeded usage from monthly fee and revenue recognized for contracts that the Company has a right to consideration from customers in the amount corresponding directly with the value to the customers of the Company's performance completed to date have been excluded from the disclosure of remaining performance obligations.

As of December 31, 2022, the aggregate amount of transaction price allocated to performance obligations for non-cancellable project business contracts that are unsatisfied is $25,007,150 thousand. The Company recognizes revenues when the project business contract is completed and accepted by customers. The Company expects to recognize such revenue of $9,373,665 thousand, $6,447,143 thousand and $9,186,342 thousand in 2023, 2024 and 2025, respectively. Project business contracts whose expected duration are less than a year have been excluded from the aforementioned disclosure.

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**30.** **NET INCOME** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Other income and expenses

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Loss on disposal of property, plant and equipment, net | $(4907) | $(3349) |
|  Impairment loss on right-of-use assets |  | (420590) |
|  Reversal of impairment loss on investment properties | 107467 | 83429 |
|  Impairment loss on intangible assets | (9547) | (28901) |
|  | $93013 | $(369411) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Other income

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Dividend income | $157465 | $154008 |
|  Rental income | 78089 | 69669 |
|  Others | 132969 | 154143 |
|  | $368523 | $377820 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Other gains and losses

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Valuation gain (loss) on financial assets and liabilities at fair value through profit or loss, net | $(205805) | $243381 |
|  Foreign currency exchange gain or loss, net | (185243) | 229502 |
|  Gain on disposal of investments accounted for using equity method, net |  | 3239 |
|  Gain on disposal of financial instruments, net | 726 | 353 |
|  Others | (13462) | (15645) |
|  | $(403784) | $460830 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Interest expenses

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Interest on bonds payable | $161427 | $131635 |
|  Interest on lease liabilities | 75426 | 68973 |
|  Interest paid to financial institutions | 25830 | 16587 |
|  Others | 55 | 976 |
|  | $262738 | $218171 |

---

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. Impairment loss (reversal of impairment loss)

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Contract assets | $1049 | $288 |
|  Trade notes and accounts receivable | $108746 | $122911 |
|  Other receivables | $7275 | $19792 |
|  Inventories | $34167 | $206824 |
|  Right-of-use assets | $— | $420590 |
|  Investment properties | $(107467) | $(83429) |
|  Intangible assets | $9547 | $28901 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. Depreciation and amortization expenses

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Property, plant and equipment | $28760055 | $27804883 |
|  Right-of-use assets | 3981717 | 3985184 |
|  Investment properties | 43754 | 42259 |
|  Intangible assets | 6642657 | 6568547 |
|  Incremental costs of obtaining contracts | 840553 | 815241 |
|  Total depreciation and amortization expenses | $40268736 | $39216114 |
|  Depreciation expenses summarized by functions |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating costs | $30734623 | $30020758 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating expenses | 2050903 | 1811568 |
|  | $32785526 | $31832326 |
|  Amortization expenses summarized by functions |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating costs | $7285987 | $7171851 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Marketing expenses | 76209 | 92823 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; General and administrative expenses | 71127 | 75331 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Research and development expenses | 49887 | 43783 |
|  | $7483210 | $7383788 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. Employee benefit expenses

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Post-employment benefit |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Defined contribution plans | $862200 | $783762 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Defined benefit plans | 1047808 | 1216478 |
|  | 1910008 | 2000240 |
|  Share-based payment |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Equity-settled share-based payment | 15513 | 19371 |
|  Other employee benefit (Note) | 43746874 | 42653703 |
|  Total employee benefit expenses | $45672395 | $44673314 |

---

(Continued)

------

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Summary by functions |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating costs | $21857680 | $22734259 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating expenses | 23814715 | 21939055 |
|  | $45672395 | $44673314 |

---

(Concluded)

Note: Other employee benefit mainly includes salaries, compensation and labor and health insurance expenses, etc.

Chunghwa distributes employees' compensation at the rates from 1.7% to 4.3% and remuneration to directors not higher than 0.17%, respectively, of pre-tax income. As of December 31, 2022, the payables of the employees' compensation and the remuneration to directors were $1,498,374 thousand and $39,480 thousand, respectively. Such amounts have been approved by the Chunghwa's Board of Directors on February 24, 2023 and will be reported to the stockholders in their meeting planned to be held on May 26, 2023.

If there is a change in the proposed amounts after the annual consolidated financial statements are authorized for issue, the difference is recorded as a change in accounting estimate.

The compensation to the employees and remuneration to the directors of 2021 and 2020 approved by the Board of Directors on February 23, 2022 and 2021, respectively, were as follows:

---

| | | |
|:---|:---|:---|
|  | **Cash** | **Cash** |
|  | **2021** | **2020** |
|  Compensation distributed to the employees | $1429000 | $1202448 |
|  Remuneration paid to the directors | 38552 | 35803 |

---

There was no difference between the initial accrued amounts recognized in 2021 and 2020 and the amounts approved by the Board of Directors in 2022 and 2021 of the aforementioned compensation to employees and the remuneration to directors.

Information of the appropriation of Chunghwa's employees compensation and remuneration to directors and those approved by the Board of Directors is available on the Market Observation Post System website.

**31.** **INCOME TAX** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Income tax recognized in profit or loss

The major components of income tax expense were as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Current tax |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Current tax expenses recognized for the year | $8863349 | $8490402 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income tax on unappropriated earnings | 31209 | 32728 |

---

(Continued)

------

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income tax adjustments on prior years | $(141850) | $(150719) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 7123 | 6842 |
|  | 8759831 | 8379253 |
|  Deferred tax |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred tax expenses recognized for the year | 318191 | 489181 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income tax adjustments on prior years | 150889 | 3311 |
|  | 469080 | 492492 |
|  Income tax recognized in profit or loss | $9228911 | $8871745 |

---

(Concluded)

Reconciliation of accounting profit and income tax expense was as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Income before income tax | $47228950 | $46066624 |
|  Income tax expense calculated at the statutory rate | $9445790 | $9213325 |
|  Nondeductible income and expenses in determining taxable income | (19903) | 7809 |
|  Tax-exempt income | (8050) | (30181) |
|  Income tax on unappropriated earnings | 31209 | 32728 |
|  Investment credits | (206815) | (217318) |
|  Effect of different tax rates of group entities operating in other jurisdictions | (30878) | (10374) |
|  Income tax adjustments on prior years | 9039 | (147408) |
|  Others | 8519 | 23164 |
|  Income tax expense recognized in profit or loss | $9228911 | $8871745 |

---

The applicable tax rate used by the entities subject to the Income Tax Act of the Republic of China is 20%, while the applicable tax rate used by subsidiaries in China is 25%. Tax rates used by other entities of the Company operating in other jurisdictions are based on the tax laws in those jurisdictions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Income tax recognized in other comprehensive income

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Deferred tax |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Remeasurement on defined benefit pension plans | $230715 | $78088 |

---

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Current tax assets and liabilities

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Current tax assets |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Tax refund receivable (included in other current assets - others) | $1553 | $4532 |
|  Current tax liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income tax payable | $4956465 | $4593458 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Deferred income tax assets and liabilities

The movements of deferred income tax assets and liabilities were as follows:

<u>For the year ended December 31, 2022</u>

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Beginning<br>Balance** | **Recognized in<br>Profit or Loss** | **Recognized in<br>Other<br>Comprehensive<br>Income** | **Ending Balance** |
|  <u>Deferred income tax assets</u> |  |  |  |  |
|  Temporary differences |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Defined benefit pension plans | $1744030 | $900 | $(230282) | $1514648 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Allowance for doubtful receivables over quota | 264797 | (80823) |  | 183974 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Valuation loss on inventory | 197071 | (92204) |  | 104867 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Unrealized foreign exchange loss, net | 1638 | 56225 |  | 57863 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Estimated warranty liabilities | 42741 | 4358 |  | 47099 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred revenue | 48678 | (19323) |  | 29355 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Valuation loss on financial instruments |  | 23668 |  | 23668 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Valuation loss on onerous contracts | 26519 | (8166) |  | 18353 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued award credits liabilities | 8935 | 2577 |  | 11512 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Share of profit or loss of associates and joint ventures accounted for using equity method | 400951 | (398892) |  | 2059 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 37840 | (4953) |  | 32887 |
|  | 2773200 | (516633) | (230282) | 2026285 |
|  Loss carryforwards | 11806 | 158554 |  | 170360 |
|  | $2785006 | $(358079) | $(230282) | $2196645 |
|  <u>Deferred income tax liabilities</u> |  |  |  |  |
|  Temporary differences |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Defined benefit pension plans | $1968873 | $145151 | $433 | $2114457 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Land value incremental tax | 94986 |  |  | 94986 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred revenue for award credits | 55708 | 14394 |  | 70102 |

---

(Continued)

------

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Beginning<br>Balance** | **Recognized in<br>Profit or Loss** | **Recognized in<br>Other<br>Comprehensive<br>Income** | **Ending Balance** |
|  Intangible assets | $24444 | $(4420) | $— | $20024 |
|  Others | 45400 | (44124) |  | 1276 |
|  | $2189411 | $111001 | $433 | $2300845 |

---

(Concluded)

<u>For the year ended December 31, 2021</u>

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Beginning<br>Balance** | **Recognized in<br>Profit or Loss** | **Recognized in<br>Other<br>Comprehensive<br>Income** | **Ending Balance** |
|  <u>Deferred income tax assets</u> |  |  |  |  |
|  Temporary differences |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Defined benefit pension plans | $1816158 | $5928 | $(78056) | $1744030 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Allowance for doubtful receivables over quota | 364607 | (99810) |  | 264797 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Valuation loss on inventory | 299199 | (102128) |  | 197071 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Unrealized foreign exchange loss, net | 4698 | (3060) |  | 1638 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Estimated warranty liabilities | 36165 | 6576 |  | 42741 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred revenue | 73067 | (24389) |  | 48678 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Valuation loss on financial instruments | 32609 | (32609) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Valuation loss on onerous contracts | 33997 | (7478) |  | 26519 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued award credits liabilities | 18409 | (9474) |  | 8935 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Share of profit or loss of associates and joint ventures accounted for using equity method | 400776 | 175 |  | 400951 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 32157 | 5683 |  | 37840 |
|  | 3111842 | (260586) | (78056) | 2773200 |
|  Loss carryforwards | 20871 | (9065) |  | 11806 |
|  | $3132713 | $(269651) | $(78056) | $2785006 |
|  <u>Deferred income tax liabilities</u> |  |  |  |  |
|  Temporary differences |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Defined benefit pension plans | $1812193 | $156648 | $32 | $1968873 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Land value incremental tax | 94986 |  |  | 94986 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred revenue for award credits | 30207 | 25501 |  | 55708 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Intangible assets | 26999 | (2555) |  | 24444 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 2153 | 43247 |  | 45400 |
|  | $1966538 | $222841 | $32 | $2189411 |

---

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. Unused loss carryforwards and deductible temporary differences for which no deferred tax assets have been
recognized in the consolidated balance sheets

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Loss carryforwards |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Expire in 2022 | $— | $21 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Expire in 2023 | 24 | 25 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Expire in 2024 | 770 | 1255 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Expire in 2025 | 15223 | 15223 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Expire in 2026 | 8423 | 8423 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Expire in 2027 | 2585 | 2585 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Expire in 2028 | 930 | 930 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Expire in 2029 | 697 | 697 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Expire in 2030 | 198 | 198 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Expire in 2031 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Expire in 2032 | 286 |  |
|  | $29136 | $29357 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deductible temporary differences | $12743 | $— |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. Information about unused loss carryforwards

As of December 31, 2022, information about loss carryforwards was as follows:

---

| | |
|:---|:---|
| **Remaining**<br> **Creditable Amount** | **Expiry Year** |
| $697 | 2023 |
| 953 | 2024 |
| 18018 | 2025 |
| 10172 | 2026 |
| 3503 | 2027 |
| 930 | 2028 |
| 2034 | 2029 |
| 1615 | 2030 |
| 62618 | 2031 |
| 98956 | 2032 |
| $199496 |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. Income tax examinations

Income tax returns of Chunghwa has been examined by the tax authorities through 2019. Income tax returns of SENAO, ISPOT, Youth, Youyi, Aval, Wiin, SENYOUNG, Senaolife, CHYP, CHSI, CHI, CHPT, CHIEF, Unigate, SFD, CLPT, CHTSC, LED, SHE, CHST, HHI, IISI and UTC have been examined by the tax authorities through 2020.

------

**32.** **EARNINGS PER SHARE ("EPS")** 

Net income and weighted average number of common stocks used in the calculation of earnings per share were as follows:

**Net Income** 

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Net income used to compute the basic earnings per share |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net income attributable to the parent | $36477157 | $35753579 |
|  Assumed conversion of all dilutive potential common stocks |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Employee stock options and employee compensation of subsidiaries | (7370) | (6258) |
|  Net income used to compute the diluted earnings per share | $36469787 | $35747321 |

---

**Weighted Average Number of Common Stocks**

**(Thousand Shares)** 

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Weighted average number of common stocks used to compute the basic earnings per share | 7757447 | 7757447 |
|  Assumed conversion of all dilutive potential common stocks |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Employee compensation | 8342 | 7773 |
|  Weighted average number of common stocks used to compute the diluted earnings per share | 7765789 | 7765220 |

---

As Chunghwa may settle the employee compensation in shares or cash, Chunghwa shall presume that it will be settled in shares and take those shares into consideration when calculating the weighted average number of outstanding shares used in the calculation of diluted EPS if the shares have a dilutive effect. The dilutive effect of the shares needs to be considered until the approval of the number of shares to be distributed to employees as compensation in the following year.

**33.** **SHARE-BASED PAYMENT ARRANGEMENT** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. CHIEF share-based compensation plan ("CHIEF Plan") described as follows:

---

| | | | |
|:---|:---|:---|:---|
| **Effective Date for Plan Registration** | **Resolution Date by<br>CHIEF's Board of<br>Directors** | **Stock Options Units** | **Exercise Price**<br> **(NT$)** |
| 2020.09.16 | 2020.10.26 | 200.00 | $193.50 |
|  |  |  | (Original price$206.00) |
| 2017.12.18 | 2018.10.31 | 50.00 | $130.30 |
|  |  |  | (Original price$147.00) |
|  | 2017.12.19 | 950.00 | $124.70 |
|  |  |  | (Original price$147.00) |

---

------

Each option is eligible to subscribe for one thousand common stocks when exercisable. The options are granted to specific employees that meet the vesting conditions. The CHIEF Plan has an exercise price adjustment formula upon the changes in common stocks or distribution of cash dividends. The options of the CHIEF Plan are valid for five years and the graded vesting schedule will vest two years after the grant date.

The Board of Directors of CHIEF resolved to issue stock options on October 26, 2020 and authorized the chairman to decide the grant date. Afterwards, the grant date was decided as November 13, 2020.

The compensation costs for stock options for the year ended December 31, 2022 and 2021 were as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Granted on November 13, 2020 | $8780 | $9729 |
|  Granted on October 31, 2018 | 58 | 153 |
|  Granted on December 19, 2017 |  | 152 |
|  | $8838 | $10034 |

---

CHIEF modified the plan terms of stock options granted on November 13, 2020 in September 2021 and July 2022; therefore, the exercise price changed from $206.00 to $199.70 and $193.50 per share, repectively. The modification did not cause any incremental fair value granted.

CHIEF modified the plan terms of stock options granted on October 31, 2018 in September 2021 and July 2022; therefore, the exercise price changed from $138.70 to $134.50 and $130.30 per share, respectively. The modification did not cause any incremental fair value granted.

CHIEF modified the plan terms of stock options granted on December 19, 2017 in September 2021 and July 2022; therefore, the exercise price changed from $132.70 to $128.70 and $124.70 per share, respectively. The modification did not cause any incremental fair value granted.

Information about CHIEF's outstanding stock options for the years ended December 31, 2022 and 2021 was as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** |
|  | **Granted on<br>November 13, 2020** | **Granted on<br>November 13, 2020** | **Granted on<br>October 31, 2018** | **Granted on<br>October 31, 2018** | **Granted on<br>December 19, 2017** | **Granted on<br>December 19, 2017** |
|  | **Number of**<br> **Options** | **Weighted<br>Average<br>Exercise<br>Price<br>(NT$)** | **Number of**<br> **Options** | **Weighted<br>Average<br>Exercise<br>Price<br>(NT$)** | **Number of**<br> **Options** | **Weighted<br>Average<br>Exercise<br>Price<br>(NT$)** |
|  <u>Employee stock options</u> |  |  |  |  |  |  |
|  Options outstanding at beginning of the year | 194.00 | $199.70 | 10.50 | $134.50 | 213.25 | $128.70 |
|  Options exercised | (51.00) | 193.50 | (10.50) | 130.30 | (213.25) | 124.70 |
|  Options forfeited | (0.75) |  |  |  |  |  |
|  Options outstanding at end of the year | 142.25 | 193.50 |  |  |  |  |
|  Options exercisable at end of the year | 0.50 | 193.50 |  |  |  |  |
|  Weighted average remaining contractual life (years) | 2.87 |  | 0.83 |  |  |  |

---

------

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** |
|  | **Granted on <br>November 13, 2020** | **Granted on <br>November 13, 2020** | **Granted on <br>October 31, 2018** | **Granted on <br>October 31, 2018** | **Granted on <br>December 19, 2017** | **Granted on <br>December 19, 2017** |
|  | **Number of**<br> **Options** | **Weighted<br>Average<br>Exercise<br>Price<br>(NT$)** | **Number of**<br> **Options** | **Weighted<br>Average<br>Exercise<br>Price<br>(NT$)** | **Number of**<br> **Options** | **Weighted<br>Average<br>Exercise<br>Price<br>(NT$)** |
|  <u>Employee stock options</u> |  |  |  |  |  |  |
|  Options outstanding at beginning of the year | 200.00 | $206.00 | 21.00 | $138.70 | 427.50 | $132.70 |
|  Options exercised |  |  | (10.50) | 134.50 | (213.75) | 132.70 |
|  Options forfeited | (6.00) |  |  |  | (0.50) |  |
|  Options outstanding at end of the year | 194.00 | 199.70 | 10.50 | 134.50 | 213.25 | 128.70 |
|  Options exercisable at end of the year |  |  |  |  | 213.25 | 128.70 |
|  Weighted average remaining contractual life (years) | 3.87 |  | 1.83 |  | 0.96 |  |

---

CHIEF used the fair value method to evaluate the options using the Black-Scholes model and binomial option pricing model and the related assumptions and the fair value of the options were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Stock Options<br>Granted on<br>November 13,<br>2020** | **Stock Options<br>Granted on<br>October 31,<br>2018** | **Stock Options<br>Granted on<br>December 19,<br>2017** |
|  Grant-date share price (NT$) | $356.00 | $166.00 | $95.92 |
|  Exercise price (NT$) | $206.00 | $147.00 | $147.00 |
|  Dividend yield |  |  |  |
|  Risk-free interest rate | 0.18% | 0.72% | 0.62% |
|  Expected life | 5 years | 5 years | 5 years |
|  Expected volatility | 34.61% | 16.60% | 17.35% |
|  Weighted average fair value of grants (NT$) | $173893 | $33540 | $2318 |

---

The expected volatility for the options granted in 2020 was based on CHIEF's average annualized historical share price volatility from June 5, 2018, CHIEF's listing date on Taipei Exchange, to the grant date. The expected volatilities for the options granted from 2017 to 2018 were based on the average annualized historical share price volatility of CHIEF's comparable companies before the grant date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. CHTSC share-based compensation plan ("CHTSC Plan") described as follows:

The Board of Directors of CHTSC resolved to issue 4,500 and 3,500 stock options on December 20, 2019 and February 20, 2021, respectively. Each option is eligible to subscribe for one thousand common stocks when exercisable and the exercise price are both $19.085 per share. The options are granted to specific employees that meet the vesting conditions. The CHTSC Plan has an exercise price adjustment formula upon the changes in common stocks. The options of the CHTSC Plan are valid for five years and the graded vesting schedule will vest one year after the grant date.

------

The compensation costs for stock options for the years ended December 31, 2022 and 2021 were as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Granted on February 20, 2021 | $3555 | $5511 |
|  Granted on December 20, 2019 | 1577 | 2923 |
|  | $5132 | $8434 |

---

Information about CHTSC's outstanding stock options for the years ended December 31, 2022 and 2021 was as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** |
|  | **Granted on**<br>**February 20, 2021** | **Granted on**<br>**February 20, 2021** | **Granted on**<br>**December 20, 2019** | **Granted on**<br>**December 20, 2019** |
|  | **Number of**<br> **Options** | **Weighted<br>Average<br>Exercise<br>Price<br>(NT$)** | **Number of**<br> **Options** | **Weighted<br>Average<br>Exercise<br>Price<br>(NT$)** |
|  <u>Employee stock options</u> |  |  |  |  |
|  Options outstanding at beginning of the year | 3324 | $19.085 | 3174 | $19.085 |
|  Options exercised | (815) | 19.085 | (2049) | 19.085 |
|  Options forfeited | (166) |  | (42) |  |
|  Options outstanding at end of the year | 2343 | 19.085 | 1083 | 19.085 |
|  Options exercisable at end of the year | 7 | 19.085 | 31 | 19.085 |
|  Weighted average remaining contractual life (years) | 3.14 |  | 1.97 |  |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** |
|  | **Granted on**<br>**February 20, 2021** | **Granted on**<br>**February 20, 2021** | **Granted on<br>December 20, 2019** | **Granted on<br>December 20, 2019** |
|  | **Number of**<br> **Options** | **Weighted<br>Average<br>Exercise<br>Price<br>(NT$)** | **Number of**<br> **Options** | **Weighted<br>Average<br>Exercise<br>Price<br>(NT$)** |
|  <u>Employee stock options</u> |  |  |  |  |
|  Options outstanding at beginning of the year |  | $— | 4328 | $19.085 |
|  Options granted | 3500 | 19.085 |  |  |
|  Options exercised |  |  | (1082) | 19.085 |

---

(Continued)

------

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** | **Year Ended December 31, 2021** |
|  | **Granted on<br>February 20, 2021** | **Granted on<br>February 20, 2021** | **Granted on**<br>**December 20, 2019** | **Granted on**<br>**December 20, 2019** |
|  | **Number of**<br> **Options** | **Weighted<br>Average<br>Exercise<br>Price<br>(NT$)** | **Number of**<br> **Options** | **Weighted<br>Average<br>Exercise<br>Price<br>(NT$)** |
|  Options forfeited | (176) |  | (72) |  |
|  Options outstanding at end of the year | 3324 | 19.085 | 3174 | 19.085 |
|  Options exercisable at end of the year |  |  | 1058 | 19.085 |
|  Weighted average remaining contractual life (years) | 4.14 |  | 2.97 |  |

---

(Concluded)

CHTSC used the fair value method to evaluate the options using the Black-Scholes model and the related assumptions and the fair value of the options were as follows:

---

| | | |
|:---|:---|:---|
|  | **Stock Options<br>Granted on<br>Ferbuary 20,<br>2021** | **Stock Options<br>Granted on<br>December 20,<br>2019** |
|  Grant-date share price (NT$) | $23.76 | $20.17 |
|  Exercise price (NT$) | $19.085 | $19.085 |
|  Dividend yield | 15.18% | 12.49% |
|  Risk-free interest rate | 0.25% | 0.54% |
|  Expected life | 5 years | 5 years |
|  Expected volatility | 47.35% | 42.41% |
|  Weighted average fair value of grants (NT$) | $3350 | $2470 |

---

Expected volatility was based on the average annualized historical share price volatility of CHTSC's comparable companies before the grant date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. IISI share-based compensation plan ("IISI Plan") described as follows:

IISI issued 1,665 stock options in January 2014. Each option is eligible to subscribe for one thousand common stocks when exercisable. The options are granted to specific employees of IISI and its subsidiaries that meet the vesting conditions. The options of the IISI Plan are valid for seven years and the graded vesting schedule will vest at certain percentages starting from two years after the grant date. The exercise price of the original options is $14 per share. After the options are issued, if the common stocks of IISI change, the exercise price of the options should be adjusted according to the prescribed formula.

------

Information about IISI's outstanding stock options for the years ended December 31, 2021 was as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended**<br>**December 31, 2021** | **Year Ended**<br>**December 31, 2021** |
|  | **Granted in January 2014** | **Granted in January 2014** |
|  | **Number of**<br> **Options** | **Weighted<br>Average<br>Exercise<br>Price<br>(NT$)** |
|  <u>Employee stock options</u> |  |  |
|  Options outstanding at beginning of the year | 530.00 | $14.00 |
|  Options exercised | (261.00) | 14.00 |
|  Options forfeited | (269.00) |  |
|  Options outstanding at end of the year |  |  |
|  Options exercisable at end of the year |  |  |
|  Weighted average remaining contractual life (years) |  |  |

---

No compensation cost of stock options granted was recognized for the year ended December 31, 2021.

IISI used the fair value method to evaluate the options using the Black-Scholes model and the related assumptions and the fair value of the options were as follows:

---

| | |
|:---|:---|
|  | **Stock Options<br>Granted in<br>January 2014** |
|  Grant-date share price (NT$) | $14.51 |
|  Exercise price (NT$) | $14.00 |
|  Dividend yield | 6% |
|  Risk-free interest rate | 1.16%~1.32% |
|  Expected life | 4.5~5.5 years |
|  Expected volatility | 35.28%~35.97% |
|  Weighted average fair value of grants (NT$) | $2345 |

---

Expected volatility was based on the average annualized historical share price volatility of IISI's comparable companies before the grant date.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. CLPT share-based compensation plan ("CLPT Plan") described as follows:

The Board of Directors of CLPT resolved to issue 690 and 600 stock options on February 26, 2021 and May 31, 2022, respectively. Each option is eligible to subscribe for one thousand common stocks when exercisable and the exercise price are both $16.87 per share. The options are granted to specific employees that meet the vesting conditions. The CLPT Plan has an exercise price adjustment formula upon the changes in common stocks or distribution of cash dividends. The options of the CLPT Plan are valid for four years and the graded vesting schedule will vest two years after the grant date.

The compensation costs for stock options for the year ended December 31, 2022 and 2021 were as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Granted on May 31, 2022 | $604 | $— |
|  Granted on February 26, 2021 | 939 | 903 |
|  | $1543 | $903 |

---

CLPT modified the plan terms of stock options granted on February 26, 2021 in September 2021; therefore, the exercise price changed from $16.87 to $15.90 per share. The modification did not cause any incremental fair value granted.

Information about CLPT's outstanding stock options for the year ended December 31, 2022 and 2021 was as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** | **Year Ended December 31, 2022** |
|  | **Granted on May 31, 2022** | **Granted on May 31, 2022** | **Granted on February 26,<br>2021** | **Granted on February 26,<br>2021** |
|  | **Number of**<br> **Options** | **Weighted<br>Average<br>Exercise<br>Price<br>(NT$)** | **Number of**<br> **Options** | **Weighted<br>Average<br>Exercise<br>Price<br>(NT$)** |
|  <u>Employee stock options</u> |  |  |  |  |
|  Options outstanding at beginning of the year |  | $— | 550 | $15.90 |
|  Options granted | 600 | 16.87 |  |  |
|  Options forfeited | (160) |  | (40) |  |
|  Options outstanding at end of the year | 440 | 16.87 | 510 | 15.90 |
|  Options exercisable at end of the year |  |  |  |  |
|  Weighted average remaining contractual life (years) | 3.41 |  | 2.16 |  |

---

------

---

| | | |
|:---|:---|:---|
|  | **Year Ended<br>December 31, 2021** | **Year Ended<br>December 31, 2021** |
|  | **Granted on February 26, 2021** | **Granted on February 26, 2021** |
|  | **Number<br>of**<br> **Options** | **Weighted<br>Average<br>Exercise Price**<br> **(NT$)** |
|  <u>Employee stock options</u> |  |  |
|  Options outstanding at beginning of the year |  | $— |
|  Options granted | 690 | 16.87 |
|  Options forfeited | (140) |  |
|  Options outstanding at end of the year | 550 | 15.90 |
|  Options exercisable at end of the year |  |  |
|  Weighted average remaining contractual life (years) | 3.16 |  |

---

CLPT used the fair value method to evaluate the options using the Black-Scholes model and the related assumptions and the fair value of the options were as follows:

---

| | | |
|:---|:---|:---|
|  | **Stock Options<br>Granted on<br>May 31, 2022** | **Stock Options<br>Granted on<br>February 26,<br>2021** |
|  Grant-date share price (NT$) | $18.66 | $17.63 |
|  Exercise price (NT$) | $16.87 | $16.87 |
|  Dividend yield |  |  |
|  Risk-free interest rate | 0.98% | 0.31% |
|  Expected life | 4 years | 4 years |
|  Expected volatility | 35.76% | 35.22% |
|  Weighted average fair value of grants (NT$) | $5665 | $4750 |

---

Expected volatility was based on the average annualized historical share price volatility of CLPT's comparable companies before the grant date.

**34.** **CASH FLOW INFORMATION** 

Except for those disclosed in other notes, the Company entered into the following non-cash investing and financing activities:

---

| | | |
|:---|:---|:---|
| **Investing activities** | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Additions of property, plant and equipment | $31265688 | $35613438 |
|  Changes in other payables | 269258 | (280410) |
|  Payments for acquisition of property, plant and equipment | $31534946 | $35333028 |
|  The carrying amounts of disposal of financial assets at fair value through other comprehensive income | $154 | $2704608 |
|  Changes in other current monetary assets |  | 270321 |
|  Reclassified to investment accounted for using equity method |  | (63359) |
|  Proceeds from disposal of financial assets at fair value through other comprehensive income | $154 | $2911570 |

---

(Concluded)

------

**Financing Activities** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Balance on**<br> **January 1,** | **Cash Flows**<br> **from<br>Financing** | **Changes in Non-Cash<br>Transactions** | **Changes in Non-Cash<br>Transactions** | **Cash Flows**<br> **from**<br> **Operation<br>Activities -** | **Balance on**<br> **December 31,** |
|  | **2022** | **Activities** | **New Leases** | **Others** | **Interest Paid** | **2022** |
|  Lease liabilities | $10272253 | $(3776965) | $4369219 | $(116574) | $(75426) | $10672507 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Balance on**<br> **January 1,** | **Cash Flows**<br> **from<br>Financing** | **Changes in Non-Cash<br>Transactions** | **Changes in Non-Cash<br>Transactions** | **Cash Flows**<br> **from**<br> **Operation<br>Activities -** | **Balance on**<br> **December 31,** |
|  | **2021** | **Activities** | **New Leases** | **Others** | **Interest Paid** | **2021** |
|  Lease liabilities | $9596667 | $(3728949) | $4669219 | $(195711) | $(68973) | $10272253 |

---

**35.** **CAPITAL MANAGEMENT** 

The Company manages its capital to ensure that entities in the Company will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance.

The capital structure of the Company consists of debt of the Company and the equity attributable to the parent.

Some consolidated entities are required to maintain minimum paid-in capital amount as prescribed by the applicable laws.

The management reviews the capital structure of the Company as needed. As part of this review, the management considers the cost of capital and the risks associated with each class of capital. According to the management's suggestions, the Company maintains a balanced capital structure through paying cash dividends, increasing its share capital, purchasing outstanding shares, and issuing new debt or repaying debt.

**36.** **FINANCIAL INSTRUMENTS** 

**Fair Value Information** 

The fair value measurement guidance establishes a framework for measuring fair value and expands disclosure about fair value measurements. The standard describes a fair value hierarchy based on three levels of inputs that may be used to measure fair value. These levels are:

Level 1 fair value measurements: These measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

------

Level 2 fair value measurements: These measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 fair value measurements: These measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Financial instruments that are not measured at fair value but for which fair value is disclosed

Except those listed in the table below, the Company considers that the carrying amounts of financial assets and liabilities not measured at fair value approximate their fair values or the fair values cannot be reliable estimated.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31** | **December 31** | **December 31** | **December 31** |
|  | **2022** | **2022** | **2021** | **2021** |
|  | **Carrying Value** | **Fair Value** | **Carrying Value** | **Fair Value** |
|  <u>Financial liabilities</u> |  |  |  |  |
|  Financial liabilities measured at amortized cost |  |  |  |  |
|  Bonds payable | $30477357 | $30452475 | $26976675 | $27082090 |

---

The fair value of bonds payable is measured using Level 2 inputs. The valuation of fair value is based on the quoted market prices provided by third party pricing services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Financial instruments that are measured at fair value on a recurring basis

<u>December 31, 2022</u>

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
|  Financial assets at FVTPL |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Derivatives | $— | $3514 | $— | $3514 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Listed stocks | 439 |  |  | 439 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-listed stocks |  |  | 860960 | 860960 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Limited partnership |  |  | 135121 | 135121 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Film and drama investing agreements |  |  | 24122 | 24122 |
|  | $439 | $3514 | $1020203 | $1024156 |
|  Hedging financial assets | $— | $12891 | $— | $12891 |
|  Financial assets at FVOCI |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Listed stocks | $272802 | $— | $— | $272802 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-listed stocks |  |  | 3218579 | 3218579 |
|  | $272802 | $— | $3218579 | $3491381 |

---

------

<u>December 31, 2021</u>

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
|  Financial assets at FVTPL |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Listed stocks | $2566 | $— | $— | $2566 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-listed stocks |  |  | 884670 | 884670 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Limited partnership |  |  | 24105 | 24105 |
|  | $2566 | $— | $908775 | $911341 |
|  Financial assets at FVOCI |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Listed stocks | $458582 | $— | $— | $458582 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-listed stocks |  |  | 3157306 | 3157306 |
|  | $458582 | $— | $3157306 | $3615888 |
|  Financial liabilities at FVTPL |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Derivatives | $— | $6180 | $— | $6180 |
|  Hedging financial liabilities | $— | $8286 | $— | $8286 |

---

There were no transfers between Levels 1 and 2 for the years ended December 31, 2022 and 2021.

The reconciliations for financial assets measured at Level 3 were listed below:

<u>2022</u> 

---

| | | | |
|:---|:---|:---|:---|
| **Financial Assets** | **Measured at<br>Fair Value<br>through Profit<br>or Loss** | **Measured at<br>Fair Value<br>through Other<br>Comprehensive<br>Income** | **Total** |
|  Balance on January 1, 2022 | $908775 | $3157306 | $4066081 |
|  Acquisition | 348321 | 16092 | 364413 |
|  Disposal |  | (154) | (154) |
|  Recognized in profit or loss under "Other gains and losses" | (215326) |  | (215326) |
|  Recognized in other comprehensive income under "Unrealized gain or loss on financial assets at fair value through other comprehensive income" |  | 52519 | 52519 |
|  Proceeds from capital reduction of the investees | (21567) | (7184) | (28751) |
|  Balance on December 31, 2022 | $1020203 | $3218579 | $4238782 |
|  Unrealized gain or loss in 2022 | $(208809) |  |  |

---

------

<u>2021</u> 

---

| | | | |
|:---|:---|:---|:---|
| **Financial Assets** | **Measured at<br>Fair Value<br>through Profit<br>or Loss** | **Measured at<br>Fair Value<br>through Other<br>Comprehensive<br>Income** | **Total** |
|  Balance on January 1, 2021 | $677202 | $4438999 | $5116201 |
|  Acquisition | 25000 | 81000 | 106000 |
|  Disposal |  | (5681) | (5681) |
|  Reclassified to investments accounted for using equity method |  | (63359) | (63359) |
|  Recognized in profit or loss under "Other gains and losses" | 250973 |  | 250973 |
|  Recognized in other comprehensive income under "Unrealized gain or loss on financial assets at fair value through other comprehensive income" |  | (1293653) | (1293653) |
|  Proceeds from capital reduction of the investees | (44400) |  | (44400) |
|  Balance on December 31, 2021 | $908775 | $3157306 | $4066081 |
|  Unrealized gain or loss in 2021 | $232377 |  |  |

---

The fair values of financial assets and financial liabilities of Level 2 are determined as follows:

1) The fair values of financial assets and financial liabilities with standard terms and conditions and traded in active markets are determined with reference to quoted market prices.

2) For derivatives, fair values are estimated using discounted cash flow model. Future cash flows are estimated based on observable inputs including forward exchange rates at the end of the reporting periods and the forward and spot exchange rates stated in the contracts, discounted at a rate that reflects the credit risk of various counterparties. 

The fair values of non-listed domestic and foreign equity investments and film and drama investing agreements were Level 3 financial assets and determined using the market approach by reference the Price-to-Book ratios (P/B ratios) of peer companies that traded in active markets, using the income approach, in which the discounted cash flow is used to capture the present value of the expected future economic benefits to be derived from the investments, or using assets approach. The Company originally used the market approach to measure the fair value of its investment in Taipei Financial Center Corp.; however, as the stock market was impacted by COVID-19 pandemic, the multiples of the referenced companies were changed significantly. With continuing impact of COVID-19 pandemic, the Company evaluated that the income approach, instead of the former market approach, would better reflect the future cash flows of Taipei Financial Center Corp. Therefore, the Company changed its valuation technique to the income approach starting from the second quarter of 2021. The significant unobservable inputs used were listed in the below table. An increase in growth rate of long—term revenue, a decrease in discount for the lack of marketability or noncontrolling interests discount, or a decrease in the discount rate would result in increases in the fair values.

------

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Discount for lack of marketability | 14.09%~20.00% | 16.05%~20.00% |
|  Noncontrolling interests discount | 17.29%~20.00% | 17.29%~25.00% |
|  Growth rate of long-term revenue | 0.19% | 0.19% |
|  Discount rate | 7.20%~8.80% | 8.50% |

---

If the inputs to the valuation model were changed to reflect reasonably possible alternative assumptions while all the other variables were held constant, the fair values of Level 3 financial assets would increase (decrease) as below table.

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Discount for lack of marketability |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5% increase | $(33111) | $(31655) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5% decrease | $33111 | $31655 |
|  Noncontrolling interests discount |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5% increase | $(23794) | $(18998) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5% decrease | $23794 | $18998 |
|  Long-term revenue growth rates |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.1% increase | $29506 | $25190 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.1% decrease | $(28938) | $(24733) |
|  Discount rate |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1% increase | $(329863) | $(287845) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1% decrease | $406648 | $350328 |

---

**Categories of Financial Instruments** 

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  <u>Financial assets</u> |  |  |
|  Measured at FVTPL |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mandatorily measured at FVTPL | $1024156 | $911341 |
|  Hedging financial assets | 12891 |  |
|  Financial assets at amortized cost (Note a) | 81523688 | 71799195 |
|  Financial assets at FVOCI | 3491381 | 3615888 |
|  <u>Financial liabilities</u> |  |  |
|  Measured at FVTPL |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Held for trading |  | 6180 |
|  Hedging financial liabilities |  | 8286 |
|  Measured at amortized cost (Note b) | 67451245 | 64746363 |

---

---

| | |
|:---|:---|
| Note a: | The balances included cash and cash equivalents, trade notes and accounts receivable, receivables from related parties, other current monetary assets and refundable deposits (classified as other noncurrent assets), which were financial assets measured at amortized cost. |
| Note b: | The balances included short-term loans, trade notes and accounts payable, payables to related parties, partial other payables, customers' deposits, bonds payable and long-term loans which were financial liabilities carried at amortized cost. |

---

------

**Financial Risk Management Objectives** 

The main financial instruments of the Company include equity investments, trade notes and accounts receivable, trade notes and accounts payable, lease liabilities, loans, short-term bills payable and bonds payable. The Company's Finance Department provides services to its business units, co-ordinates access to domestic and international capital markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including foreign currency risk, interest rate risk and other price risk), credit risk, and liquidity risk.

The Company seeks to minimize the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives is governed by the Company's policies approved by the Board of Directors. Those derivatives are used to hedge the risks of exchange rate fluctuation arising from operating or investment activities. Compliance with policies and risk exposure limits is reviewed by the Company's Finance Department on a continuous basis. The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

Chunghwa reports the significant risk exposures and related action plans timely and actively to the audit committee and if needed to the Board of Directors.

a. Market risk

The Company is exposed to market risks of changes in foreign currency exchange rates and interest rates. The Company uses forward exchange contracts to hedge the exchange rate risk arising from assets and liabilities denominated in foreign currencies.

There were no changes to the Company's exposure to market risks or the manner in which these risks are managed and measured.

1) Foreign currency risk

The carrying amounts of the Company's foreign currency denominated monetary assets and monetary liabilities at the balance sheet dates were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Assets |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; USD | $2354691 | $2009607 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EUR | 89645 | 48962 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SGD | 626538 | 259571 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; JPY | 27855 | 37123 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; RMB | 36591 | 88654 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; HKD | 9669 | 69776 |
|  Liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; USD | 852302 | 889578 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EUR | 875256 | 861481 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SGD | 2010250 | 1964490 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; JPY | 15748 | 12662 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; RMB | 37386 | 38521 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; HKD | 17193 | 15792 |

---

------

The carrying amounts of the Company's derivatives with exchange rate risk exposures at the balance sheet dates were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Assets |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EUR | $16405 | $— |
|  Liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EUR |  | 14466 |

---

<u>Foreign currency sensitivity analysis</u>

The Company is mainly exposed to the fluctuations of the currencies USD, EUR, SGD, JPY, RMB and HKD as listed above.

The following table details the Company's sensitivity to a 5% increase and decrease in the functional currency against the relevant foreign currencies. 5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management's assessment of the reasonably possible changes in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and forward exchange contracts. A positive number below indicates an increase in pre-tax profit or equity where the functional currency weakens 5% against the relevant currency.

---

| | | |
|:---|:---|:---|
|  | **Year Ended<br>December 31** | **Year Ended<br>December 31** |
|  | **2022** | **2021** |
|  Profit or loss |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Monetary assets and liabilities (a) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; USD | $75119 | $56001 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EUR | (39281) | (40626) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SGD | (69186) | (85246) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; JPY | 605 | 1223 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; RMB | (40) | 2507 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; HKD | (376) | 2699 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Derivatives (b) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EUR | 3272 | 12528 |
|  Equity |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Derivatives (c) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EUR | 21841 | 10962 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) This is mainly attributable to the exposure to foreign currency denominated receivables and payables of the
Company outstanding at the balance sheet dates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) This is mainly attributable to forward exchange contracts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) This is mainly attributable to the changes in the fair value of derivatives that are designated as cash flow
hedges.

For a 5% strengthening of the functional currency against the relevant currencies, there would be an equal and opposite effect on the pre-tax profit or equity for the amounts shown above.

------

2) Interest rate risk

The carrying amounts of the Company's exposures to interest rates on financial assets and financial liabilities at the balance sheet dates were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Fair value interest rate risk |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial assets | $41593475 | $27670982 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial liabilities | 41149864 | 37248928 |
|  Cash flow interest rate risk |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial assets | 9631079 | 14171472 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial liabilities | 2322000 | 1665000 |

---

<u>Interest rate sensitivity analysis</u>

The sensitivity analyses below have been determined based on the exposure to interest rates for non-derivative instruments at the end of the reporting period. A 25 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management's assessment of the reasonably possible change in interest rates.

If interest rates had been 25 basis points higher/lower and all other variables were held constant, the Company's pre-tax income would increase/decrease by $18,273 thousand and $31,266 thousand for the years ended December 31, 2022 and 2021, respectively. This is mainly attributable to the Company's exposure to floating interest rates on its financial assets, short-term and long-term loans.

3) Other price risk

The Company is exposed to equity price risks arising from holding other company's equity. Equity investments are held for strategic rather than trading purposes. The management managed the risk through holding various risk portfolios. Further, the Company assigned finance and investment departments to monitor the price risk.

<u>Equity price sensitivity analysis</u>

The sensitivity analyses below have been determined based on the exposure to equity price risks at the end of the reporting period.

If equity prices had been 5% higher/lower, pre-tax profit and pre-tax other comprehensive income would have increased/decreased by $49,826 thousand and $174,569 thousand, respectively, as a result of the changes in fair value of financial assets at FVTPL and financial assets at FVOCI for the year ended December 31, 2022. If equity prices had been 5% higher/lower, pre-tax profit and pre-tax other comprehensive income would have increased/decreased by $45,567 thousand and $180,794 thousand, respectively, as a result of the changes in fair value of financial assets at FVTPL and financial assets at FVOCI for the year ended December 31, 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Credit risk

Credit risk refers to the risk that a counterparty would default on its contractual obligations resulting in financial loss to the Company. The maximum credit exposure of the aforementioned financial instruments is equal to their carrying amounts recognized in the consolidated balance sheet as of the balance sheet date.

------

The Company has large trade receivables outstanding with its customers. A substantial majority of the Company's outstanding trade receivables are not covered by collateral or credit insurance. The Company has implemented ongoing measures including enhancing credit assessments and strengthening overall risk management to reduce its credit risk. While the Company has procedures to monitor and limit exposure to credit risk on trade receivables, there can be no assurance such procedures will effectively limit its credit risk and avoid losses. This risk is heightened during periods when economic conditions worsen.

As the Company serves a large number of unrelated consumers, the concentration of credit risk was limited.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Liquidity risk

The Company manages and maintains sufficient cash and cash equivalent position to support the operations and reduce the impact on fluctuation of cash flow.

1) Liquidity and interest risk tables

The following tables detailed the Company's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables had been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company is required to pay.

<u>December 31, 2022</u>

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Weighted<br>Average<br>Effective<br>Interest Rate<br>(%)** | **Less than <br>1 Month** | **1-3 Months** | **3 Months to<br>1 Year** | **1-5 Years** | **More than<br>5 Years** | **Total** |
|  Non-derivative financial liabilities |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-interest bearing |  | $39904488 | $— | $2143523 | $5156700 | $— | $47204711 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Floating interest rate instruments | 1.79 |  | 300000 | 422000 | 1600000 |  | 2322000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fixed interest rate instruments | 0.53 |  |  |  | 21700000 | 8800000 | 30500000 |
|  |  | $39904488 | $300000 | $2565523 | $28456700 | $8800000 | $80026711 |

---

Information about the maturity analysis for lease liabilities was as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Less than<br>1 Year** | **1-3 Years** | **3-5 Years** | **More than<br>5 Years** | **Total** |
|  Lease liabilities | $3390348 | $4445772 | $2142864 | $869994 | $10848978 |

---

<u>December 31, 2021</u>

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Weighted<br>Average<br>Effective<br>Interest Rate<br>(%)** | **Less than <br>1 Month** | **1-3 Months** | **3 Months to<br>1 Year** | **1-5 Years** | **More than<br>5 Years** | **Total** |
|  Non-derivative financial liabilities |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-interest bearing |  | $40894077 | $— | $1997277 | $5336343 | $— | $48227697 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Floating interest rate instruments | 0.95 |  | 15000 | 50000 | 1600000 |  | 1665000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fixed interest rate instruments | 0.51 |  |  |  | 10700000 | 16300000 | 27000000 |
|  |  | $40894077 | $15000 | $2047277 | $17636343 | $16300000 | $76892697 |

---

Information about the maturity analysis for lease liabilities was as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Less than<br>1 Year** | **1-3 Years** | **3-5 Years** | **More than<br>5 Years** | **Total** |
|  Lease liabilities | $3227909 | $4125893 | $1808056 | $1243987 | $10405845 |

---

------

The following table detailed the Company's liquidity analysis for its derivative financial instruments. The table had been drawn up based on the undiscounted gross inflows and outflows on those derivatives that require gross settlement.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Less than<br>1 Month** | **1-3 Months** | **3 Months to**<br> **1 Year** | **1-5 Years** | **Total** |
|  <u>December 31, 2022</u> |  |  |  |  |  |
|  <u>Gross settled</u> |  |  |  |  |  |
|  Forward exchange contracts |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inflow | $— | $501175 | $— | $— | $501175 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Outflow |  | 484770 |  |  | 484770 |
|  | $**—** | $16405 | $— | $— | $16405 |
|  <u>December 31, 2021</u> |  |  |  |  |  |
|  <u>Gross settled</u> |  |  |  |  |  |
|  Forward exchange contracts |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inflow | $— | $470395 | $— | $— | $470395 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Outflow |  | 484861 |  |  | 484861 |
|  | $**—** | $(14466) | $— | $— | $(14466) |

---

2) Financing facilities

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Unsecured bank loan facilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amount used | $722000 | $65000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amount unused | 56861505 | 61620489 |
|  | $57583505 | $61685489 |
|  Secured bank loan facilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amount used | $1600000 | $1600000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amount unused |  |  |
|  | $1600000 | $1600000 |

---

**37.** **RELATED PARTIES TRANSACTIONS** 

The ROC Government, one of Chunghwa's customers, has significant equity interest in Chunghwa. Chunghwa provides fixed-line services, wireless services, internet and data and other services to the various departments and institutions of the ROC Government in the normal course of business and at arm's-length prices. Except for those disclosed in other notes or this note, the transactions with the ROC government bodies have not been disclosed because the transactions are not individually or collectively significant. However, the related revenues and operating costs have been appropriately recorded.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. The Company engages in business transactions with the following related parties:

---

| | |
|:---|:---|
| **Company** | **Relationship** |
|  Taiwan International Standard Electronics Co., Ltd. | Associate |
|  So-net Entertainment Taiwan Limited | Associate |
|  KKBOX Taiwan Co., Ltd. | Associate |
|  KingwayTek Technology Co., Ltd. | Associate |
|  Taiwan International Ports Logistics Corporation | Associate |
|  Senao Networks, Inc. | Associate |
|  EnRack Tech. Co., Ltd. | Subsidiary of the Company's associate, Senao Networks, Inc. |
|  ST-2 Satellite Ventures Pte., Ltd. | Associate |
|  CHT Infinity Singapore Pte. Ltd. | Associate |
|  Viettel-CHT Co., Ltd. | Associate |
|  Click Force Co., Ltd. | Associate |
|  Alliance Digital Tech Co., Ltd. | Associate (Note 1) |
|  Chunghwa PChome Fund I Co., Ltd. | Associate |
|  Cornerstone Ventures Co., Ltd. | Associate |
|  Next Commercial Bank Co., Ltd. | Associate |
|  WiAdvance Technology Corporation | Associate |
|  AgriTalk Technology Inc. | Associate (Note 2) |
|  Imedtac Co., Ltd. | Associate (Note 2) |
|  Baohwa Trust Co., Ltd. | Associate |
|  Chunghwa SEA Holdings | Joint venture |
|  Other related parties |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Chunghwa Telecom Foundation | A nonprofit organization of which the funds donated by Chunghwa exceeds one third of its total funds |
| &nbsp;&nbsp;&nbsp;&nbsp; Senao Technical and Cultural Foundation | A nonprofit organization of which the funds donated by SENAO exceeds one third of its total funds |
| &nbsp;&nbsp;&nbsp;&nbsp; Sochamp Technology Co., Ltd. | Investor of significant influence over CHST |
| &nbsp;&nbsp;&nbsp;&nbsp; E-Life Mall Co., Ltd. | Substantial related party of SENAO |
| &nbsp;&nbsp;&nbsp;&nbsp; Engenius Technologies Co., Ltd. | Substantial related party of SENAO |
| &nbsp;&nbsp;&nbsp;&nbsp; Cheng Keng Investment Co., Ltd. | Substantial related party of SENAO |
| &nbsp;&nbsp;&nbsp;&nbsp; Cheng Feng Investment Co., Ltd. | Substantial related party of SENAO |
| &nbsp;&nbsp;&nbsp;&nbsp; All Oriented Investment Co., Ltd. | Substantial related party of SENAO |
| &nbsp;&nbsp;&nbsp;&nbsp; Hwa Shun Investment Co., Ltd. | Substantial related party of SENAO |
| &nbsp;&nbsp;&nbsp;&nbsp; Yu Yu Investment Co., Ltd. | Substantial related party of SENAO |
| &nbsp;&nbsp;&nbsp;&nbsp; Divine Fine Foods & Wine Inc. | Substantial related party of SENAO (Note 3) |
| &nbsp;&nbsp;&nbsp;&nbsp; Kangsin Co., Ltd. | Substantial related party of SENAO |
| &nbsp;&nbsp;&nbsp;&nbsp; United Daily News Co., Ltd. | Investor of significant influence over SFD |
| &nbsp;&nbsp;&nbsp;&nbsp; Shenzhen Century Communication Co., Ltd. | Investor of significant influence over SCT |
| &nbsp;&nbsp;&nbsp;&nbsp; Advantech Co., Ltd. | Investor of significant influence over IISI |

---

Note 1: ADT completed its liquidation in August 2021. Please refer to Note 14.

---

| | |
|:---|:---|
| Note 2: | ATT and IME were previously treated as financial assets at FVOCI. As the Company acquired seats in the Board of Directors of each company and has significant influence over ATT and IME in July and August 2021, respectively, these investments are reclassified as associates. Please refer to Note 14.  |

---

Note 3: Divine Fine Foods & Wine Inc. replaced its responsible persons in October 2021. Since then, Divine Fine Foods & Wine Inc. is no longer a related party of the Company.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Balances and transactions between Chunghwa and its subsidiaries, which are related parties of Chunghwa, have
been eliminated on consolidation and are not disclosed in this note. Terms of the foregoing transactions with related parties were not significantly different from transactions with non-related parties. When no similar transactions with non-related
parties can be referenced, terms were determined in accordance with mutual agreements. Details of transactions between the Company and other related parties are disclosed below:

1) Operating transactions

---

| | | |
|:---|:---|:---|
|  | **Revenues** | **Revenues** |
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Associates | $416922 | $499321 |
|  Others | 60767 | 54453 |
|  | $477689 | $553774 |

---

---

| | | |
|:---|:---|:---|
|  | **Operating Costs and Expenses** | **Operating Costs and Expenses** |
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Associates | $1246744 | $852909 |
|  Others | 79759 | 73825 |
|  | $1326503 | $926734 |

---

2) Non-operating transactions

---

| | | |
|:---|:---|:---|
|  | **Non-operating Income and Expenses** | **Non-operating Income and Expenses** |
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Associates | $37014 | $38192 |
|  Others | 1928 | 2936 |
|  | $38942 | $41128 |

---

3) Receivables

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Associates | $70091 | $34864 |
|  Others | 4970 | 6664 |
|  | $75061 | $41528 |

---

------

4) Payables

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Associates | $534515 | $385327 |
|  Others | 4679 | 6031 |
|  | $539194 | $391358 |

---

5) Customers' deposits

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Associates | $68942 | $16120 |
|  Others | 284 |  |
|  | $69226 | $16120 |

---

6) Acquisition of property, plant and equipment

---

| | | |
|:---|:---|:---|
|  | **Year Ended<br>December 31** | **Year Ended<br>December 31** |
|  | **2022** | **2021** |
|  Associates | $32477 | $397884 |

---

7) Acquisition of intangible assets

---

| | | |
|:---|:---|:---|
|  | **Year Ended<br>December 31** | **Year Ended<br>December 31** |
|  | **2022** | **2021** |
|  Associates | $677 | $— |

---

8) Disposal of property, plant and equipment

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Proceeds** | **Proceeds** | **Gain on Disposal** | **Gain on Disposal** |
|  | **Year Ended December 31** | **Year Ended December 31** | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** | **2022** | **2021** |
|  Associates | $— | $9800 | $— | $1628 |

---

9) Lease-in agreements

Chunghwa entered into a contract with ST-2 Satellite Ventures Pte., Ltd. on March 12, 2010 to lease capacity on the ST-2 satellite. This lease term is for 15 years which should start from the official operation of ST-2 satellite and the total contract value is approximately $6,000,000 thousand (SGD 260,723 thousand), including a prepayment of $3,067,711 thousand at the inception of the lease, and the rest of amount should be paid annually when ST-2 satellite starts its official operation. ST-2 satellite was launched in May 2011 and began its official operation in August 2011. As ST-2 satellite is in good operating condition, the useful life is extended for another 3 years and 3 months after evaluation in 2021. The Board of Directors of Chunghwa approved to extend the lease period accordingly with the original contract terms in December 2021; therefore, Chunghwa acquired right-of-use asset of $1,124,780 thousand from the aforementioned lease extension.

------

The lease liabilities of ST-2 Satellite Ventures Pte., Ltd. as of balance sheet dates were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Lease liabilities - current | $193805 | $173306 |
|  Lease liabilities - noncurrent | 1760815 | 1740557 |
|  | $1954620 | $1913863 |

---

The interest expense recognized for the aforementioned lease liabilities for the years ended December 31, 2022 and 2021 were $8,165 thousand and $7,420 thousand, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Compensation of key management personnel

The compensation of directors and key management personnel was as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Short-term employee benefits | $359936 | $320619 |
|  Post-employment benefits | 7974 | 7568 |
|  Share-based payment | 1481 | 1648 |
|  Termination benefits | 237 |  |
|  | $369628 | $329835 |

---

The compensation of directors and key management personnel was mainly determined by the compensation committee having regard to the performances and market trends.

**38.** **PLEDGED ASSETS** 

The following assets are pledged as collaterals for bank loans, custom duties of the imported materials, and warranties of contract performance as well as the bank deposits for the restricted purpose in accordance with The Management, Utilization, and Taxation of Repatriated Offshore Funds Act.

---

| | | |
|:---|:---|:---|
|  | **December 31** | **December 31** |
|  | **2022** | **2021** |
|  Property, plant and equipment | $2402781 | $2432296 |
|  Restricted assets (included in other assets - others) | 131136 | 163012 |
|  | $2533917 | $2595308 |

---

**39.** **SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS** 

Except for those disclosed in other notes, the Company's significant commitments and contingent liabilities as of December 31, 2022 were as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Acquisitions of land and buildings of $73,769 thousand.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Acquisitions of telecommunications-related inventory and equipment of $34,999,322 thousand.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Unused letters of credit amounting to $10,000 thousand.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. A commitment to contribute $2,000,000 thousand to a Piping Fund administered by the Taipei City Government, of
which $1,000,000 thousand was contributed by Chunghwa on August 15, 1996 (classified as other financial assets - noncurrent). If the fund is not sufficient, Chunghwa will contribute the remaining $1,000,000 thousand upon notification from the
Taipei City Government.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. Chunghwa committed that when its ownership interest in NCB is greater than 25% and NCB encounters financial
difficulty or the capital adequacy ratio of NCB cannot meet the related regulation requirements, Chunghwa will provide financial support to assist NCB in maintaining a healthy financial condition.

**40.** **OTHER MATTERS** 

The Company has assessed the economic impact of COVID-19 pandemic and determined that there were no significant impacts on the Company's consolidated financial statements as of the date the consolidated financial statements were authorized for issue. The Company will continue to monitor developments of the pandemic and assess the related impacts.

**41.** **SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES** 

The following information summarizes the disclosure of foreign currencies other than the functional currency of Chunghwa and its subsidiaries. The following exchange rates are the exchange rates used to translate to the presentation currency of the consolidated financial statements, which is the NTD:

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
|  | **Foreign<br>Currencies<br>(Thousands)** | **Exchange<br>Rate** | **New Taiwan<br>Dollars<br>(Thousands)** |
|  <u>Assets denominated in foreign currencies</u> |  |  |  |
|  Monetary items |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; USD | $76675 | 30.71 | $2354691 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EUR | 2740 | 32.72 | 89645 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SGD | 27384 | 22.88 | 626538 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; JPY | 119858 | 0.232 | 27855 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; RMB | 8301 | 4.408 | 36591 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; HKD | 2455 | 3.938 | 9669 |
|  Non-monetary items |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Investments accounted for using equity method |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SGD | 10787 | 22.88 | 246815 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; VND | 434655397 | 0.0013 | 558532 |
|  <u>Liabilities denominated in foreign currencies</u> |  |  |  |
|  Monetary items |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; USD | 27753 | 30.71 | 852302 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EUR | 26750 | 32.72 | 875256 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SGD | 87861 | 22.88 | 2010250 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; JPY | 67762 | 0.232 | 15748 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; RMB | 8481 | 4.408 | 37386 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; HKD | 4366 | 3.938 | 17193 |

---

------

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
|  | **Foreign<br>Currencies<br>(Thousands)** | **Exchange<br>Rate** | **New Taiwan<br>Dollars<br>(Thousands)** |
|  <u>Assets denominated in foreign currencies</u> |  |  |  |
|  Monetary items |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; USD | $72601 | 27.68 | $2009607 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EUR | 1563 | 31.32 | 48962 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SGD | 12687 | 20.46 | 259571 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; JPY | 154358 | 0.241 | 37123 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; RMB | 20408 | 4.344 | 88654 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; HKD | 19661 | 3.549 | 69776 |
|  Non-monetary items |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Investments accounted for using equity method |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SGD | 25326 | 20.46 | 518165 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; VND | 374139749 | 0.0012 | 447097 |
|  <u>Liabilities denominated in foreign currencies</u> |  |  |  |
|  Monetary items |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; USD | 32138 | 27.68 | 889578 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EUR | 27506 | 31.32 | 861481 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SGD | 96016 | 20.46 | 1964490 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; JPY | 52648 | 0.241 | 12662 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; RMB | 8868 | 4.344 | 38521 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; HKD | 4450 | 3.549 | 15792 |

---

The unrealized foreign currency exchange gains and losses were loss of $265,035 thousand and gain of $113,174 thousand for the years ended December 31, 2022 and 2021, respectively. Due to the various foreign currency transactions and the functional currency of each individual entity of the Company, foreign exchange gains and losses cannot be disclosed by the respective significant foreign currency.

**42.** **ADDITIONAL DISCLOSURES** 

Following are the additional disclosures required by the FSC for the Company:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Financing provided: None.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Endorsement/guarantee provided: Please see Table 1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Marketable securities held (excluding investments in subsidiaries, associates and joint ventures): Please see
Table 2.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Marketable securities acquired or disposed of at costs or prices at least $300 million or 20% of the paid-in
capital: Please see Table 3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. Acquisition of individual real estate at costs of at least $300 million or 20% of the paid-in capital: Please
see Table 4.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. Disposal of individual real estate at prices of at least $300 million or 20% of the paid-in capital: None

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. Total purchases from or sales to related parties amounting to at least $100 million or 20% of the paid-in
capital: Please see Table 5.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h. Receivables from related parties amounting to $100 million or 20% of the paid-in capital: Please see Table 6.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. Names, locations, and other information of investees on which the Company exercises significant influence
(excluding investments in Mainland China): Please see Table 7.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j. Derivative instruments transactions: Please see Notes 7, 20 and 36.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;k. Investments in Mainland China: Please see Table 8.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;l. Intercompany relationships and significant intercompany transactions: Please see Table 9.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;m. Information of main stakeholders: Please see Table 10.

**43.** **SEGMENT INFORMATION** 

In response to changes in the operating environment and new business challenges, the Company launched its organizational transformation and redesigned the operational decision-making processes and the performance assessment under the new structure. The aforementioned organizational transformation was effective from January 1, 2022. The Company redefined the reportable segments as "Consumer Business", "Enterprise Business", "International Business" and "Others" and restated the corresponding items of segment information for the comparative period. The reportable segments are managed separately because each segment represents a strategic business unit that serves different customers. Segment information is provided to the CEO who allocates resources and assesses segment performance. The Company's measure of segment performance is mainly based on revenues and income before income tax.

Some operating segments have been aggregated into a single operating segment taking into account the following factors: (a) the type or class of customer for the telecommunications products and services are similar; (b) the nature of the telecommunications products and services are similar; and (c) the methods used to provide the services to the customers are similar.

The accounting policies of the operating segments are the same as those described in Note 3.

------

**Segment Revenues and Operating Results** 

Analysis by reportable segment of revenues and operating results of continuing operations are as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Consumer<br>Business** | **Enterprise<br>Business** | **International<br>Business** | **Others** | **Total** |
|  <u>Year ended December 31, 2022</u> |  |  |  |  |  |
|  Revenues |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; From external customers | $132062750 | $72152293 | $7188697 | $5335494 | $216739234 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Intersegment revenues | 2166085 | 951518 | 864792 | 348017 | 4330412 |
|  Segment revenues | $134228835 | $73103811 | $8053489 | $5683511 | 221069646 |
|  Intersegment elimination |  |  |  |  | (4330412) |
|  Consolidated revenues |  |  |  |  | $216739234 |
|  Segment income before income tax | $28515614 | $15608640 | $1693789 | $1410907 | $47228950 |
|  <u>Year ended December 31, 2021</u> |  |  |  |  |  |
|  Revenues |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; From external customers | $129912418 | $69258462 | $6121699 | $5185369 | $210477948 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Intersegment revenues | 2857212 | 1693026 | 960825 | 340298 | 5851361 |
|  Segment revenues | $132769630 | $70951488 | $7082524 | $5525667 | 216329309 |
|  Intersegment elimination |  |  |  |  | (5851361) |
|  Consolidated revenues |  |  |  |  | $210477948 |
|  Segment income before income tax | $27526976 | $15094067 | $1246398 | $2199183 | $46066624 |

---

**Other Segment Information** 

Other information reviewed by the chief operating decision maker or regularly provided to the chief operating decision maker was as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Consumer<br>Business** | **Enterprise<br>Business** | **International<br>Business** | **Others** | **Total** |
|  <u>Year ended December 31, 2022</u> |  |  |  |  |  |
|  Share of profits of associates and joint ventures accounted for using equity method | $(32511) | $24275 | $315133 | $146034 | $452931 |
|  Interest income | $11020 | $28273 | $7599 | $202237 | $249129 |
|  Interest expenses | $150875 | $83296 | $6587 | $21980 | $262738 |
|  Depreciation and amortization | $28702921 | $9713909 | $1113039 | $738867 | $40268736 |
|  Reversal of impairment loss on investment properties | $— | $— | $— | $107467 | $107467 |
|  Impairment loss on intangible assets | $9547 | $— | $— | $— | $9547 |
|  <u>Year ended December 31, 2021</u> |  |  |  |  |  |
|  Share of profits of associates and joint ventures accounted for using equity method | $(48691) | $10441 | $271542 | $188348 | $421640 |
|  Interest income | $6671 | $16431 | $5153 | $66429 | $94684 |
|  Interest expenses | $130889 | $65726 | $7009 | $14547 | $218171 |
|  Depreciation and amortization | $27953387 | $9700088 | $865020 | $697619 | $39216114 |
|  Impairment loss on right-of-use assets | $5346 | $382321 | $32923 | $— | $420590 |
|  Reversal of impairment loss on investment properties | $— | $— | $— | $83429 | $83429 |
|  Impairment loss on intangible assets | $28901 | $— | $— | $— | $28901 |

---

------

**Main Products and Service Revenues** 

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Consumer Business |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mobile services | $51821044 | $49042476 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fixed-line services | 42766155 | 42277164 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Sales | 35171564 | 36145331 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 2303987 | 2447447 |
|  | 132062750 | 129912418 |
|  Enterprise Business |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fixed-line services | 34536513 | 34711557 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Project business | 24247914 | 22298743 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mobile services | 8942259 | 8446406 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 4425607 | 3801756 |
|  | 72152293 | 69258462 |
|  International Business |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fixed-line services | 5063377 | 5007780 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Project business | 1506495 | 679315 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 618825 | 434604 |
|  | 7188697 | 6121699 |
|  Others |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Sales | 4553403 | 4334998 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Others | 782091 | 850371 |
|  | 5335494 | 5185369 |
|  | $216739234 | $210477948 |

---

**Geographic Information** 

The users of the Company's services are mainly from Taiwan, ROC. The revenues it derived outside Taiwan are mainly revenues from international long distance telephone and leased line services. The geographic information for revenues was as follows:

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** |
|  | **2022** | **2021** |
|  Taiwan, ROC | $209727262 | $204472965 |
|  Overseas | 7011972 | 6004983 |
|  | $216739234 | $210477948 |

---

The Company has long-lived assets in U.S., Singapore, Hong Kong, China, Vietnam, Japan and Thailand for $3,212,396 thousand and $3,234,183 thousand at December 31, 2022 and 2021, respectively, in the aforementioned areas, the other long-lived assets are located in Taiwan, ROC.

**Major Customers** 

As of December 31, 2022, and 2021, the Company did not have any single customer whose revenue exceeded 10% of the total revenues.

------

**<u>TABLE 1</u>**

**CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES** 

**ENDORSEMENTS/GUARANTEES PROVIDED** 

**YEAR ENDED DECEMBER 31, 2022** 

**(Amounts in Thousands of New Taiwan Dollars)** 

------

---

| | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **No.**<br> **(Note 1)** | **Endorsement/<br>Guarantee**<br>**Provider** | **Guaranteed Party** | **Limits on<br>Endorsement/**<br>**Guarantee Amount<br>Provided to Each<br>Guaranteed Party** | **Maximum Balance<br>for the**<br>**Period** | **Ending**<br>**Balance** | **Actual Borrowing<br>Amount** | **Amount of<br>Endorsement/**<br>**Guarantee<br>Collateralized by<br>Properties** | **Ratio of<br>Accumulated<br>Endorsement/<br>Guarantee to Net<br>Equity Per Latest<br>Financial<br>Statements** | **Maximum<br>Endorsement/**<br>**Guarantee Amount<br>Allowable** | **Endorsement/**<br>**Guarantee Given<br>by Parent on<br>Behalf of<br>Subsidiaries** | **Endorsement/**<br>**Guarantee Given<br>by Subsidiaries on<br>Behalf of Parent** | **Endorsement/**<br>**Guarantee Given<br>on Behalf of<br>Companies in<br>Mainland China** | **Note** |
| **No.**<br> **(Note 1)** | **Endorsement/<br>Guarantee**<br>**Provider** | **Name** | **Limits on<br>Endorsement/**<br>**Guarantee Amount<br>Provided to Each<br>Guaranteed Party** | **Maximum Balance<br>for the**<br>**Period** | **Ending**<br>**Balance** | **Actual Borrowing<br>Amount** | **Amount of<br>Endorsement/**<br>**Guarantee<br>Collateralized by<br>Properties** | **Ratio of<br>Accumulated<br>Endorsement/<br>Guarantee to Net<br>Equity Per Latest<br>Financial<br>Statements** | **Maximum<br>Endorsement/**<br>**Guarantee Amount<br>Allowable** | **Endorsement/**<br>**Guarantee Given<br>by Parent on<br>Behalf of<br>Subsidiaries** | **Endorsement/**<br>**Guarantee Given<br>by Subsidiaries on<br>Behalf of Parent** | **Endorsement/**<br>**Guarantee Given<br>on Behalf of<br>Companies in<br>Mainland China** | **Note** |
| 1 | Senao<br>International<br>Co., Ltd. | Aval<br>Technologies<br>Co., Ltd. b | $630851 | $300000 | $300000 | $300000 | $— | 4.76 | $3154258 | Yes | No | No | Notes<br>3 and<br>4 |
|  |  | Wiin<br>Technology<br>Co., Ltd. b | 630851 | 200000 | 200000 | 200000 |  | 3.17 | 3154258 | Yes | No | No | Notes<br>3 and<br>4 |

---

Note 1: Significant transactions between the Company and its subsidiaries or among subsidiaries are numbered as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. "0" for the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Subsidiaries are numbered from "1".

Note 2: Relationships between the endorsement/guarantee provider and the guaranteed party:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. A company with which it does business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. A company in which the Company directly and indirectly holds more than 50 percent of the voting shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. A company that directly and indirectly holds more than 50 percent of the voting shares in the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Companies in which the Company holds, directly or indirectly, 90% or more of the voting shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. The Company fulfills its contractual obligations by providing mutual endorsements/guarantees for another
company in the same industry or for joint builders for purposes of undertaking a construction project.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. All capital contributing shareholders make endorsements/guarantees for their jointly invested company in
proportion to their shareholding percentages.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. Companies in the same industry provide among themselves jointly and severally guarantee for a performance
guarantee of a sales contract for pre-construction homes pursuant to the Consumer Protection Act for each other.

---

| | |
|:---|:---|
| Note 3: | The limits on endorsement or guarantee amount provided to each guaranteed party is up to 10% of the net assets value of the latest financial statements of Senao International Co., Ltd.  |

---

---

| | |
|:---|:---|
| Note 4: | The total amount of endorsement or guarantee that the Company is allowed to provide is up to 50% of the net assets value of the latest financial statements of Senao International Co., Ltd.  |

---

------

**<u>TABLE 2</u>**

**CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES** 

**MARKETABLE SECURITIES HELD** 

**DECEMBER 31, 2022** 

**(Amounts in Thousands of New Taiwan Dollars)** 

------

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Held Company Name** | **Marketable Securities**<br> **Type and Name** | **Relationship with<br>the Company** | **Financial Statement**<br> **Account** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **Note** |
| **Held Company Name** | **Marketable Securities**<br> **Type and Name** | **Relationship with<br>the Company** | **Financial Statement**<br> **Account** | **Shares**<br>**(Thousands/**<br>**Thousand Units)** | **Carrying Value**<br>**(Note 1)** | **Percentage of<br>Ownership** | **Fair Value** | **Note** |
|  Chunghwa Telecom Co., Ltd. | <u>Stocks</u> |  |  |  |  |  |  |  |
|  | Taipei Financial Center Corp. |  | Financial assets at FVOCI | 172927 | $3008391 | 12 | $3008391 |  |
|  | Innovation Works Development Fund, L.P. |  | Financial assets at FVTPL - noncurrent |  | 102648 | 4 | 102648 |  |
|  | Industrial Bank of Taiwan II Venture Capital Co., Ltd. (IBT II) |  | Financial assets at FVOCI | 5252 | 13412 | 17 | 13412 |  |
|  | Global Mobile Corp. |  | Financial assets at FVOCI | 7617 |  | 3 |  |  |
|  | Innovation Works Limited |  | Financial assets at FVOCI | 1000 | 2401 | 2 | 2401 |  |
|  | RPTI Intergroup International Ltd. |  | Financial assets at FVOCI | 4765 |  | 10 |  |  |
|  | Taiwan mobile payment Co., Ltd. |  | Financial assets at FVOCI | 1200 | 4246 | 2 | 4246 |  |
|  | Taiwania Capital Buffalo Fund Co., Ltd. |  | Financial assets at FVTPL - noncurrent | 555600 | 567203 | 13 | 567203 |  |
|  | 4 Gamers Entertainment Inc. |  | Financial assets at FVOCI | 136 | 115416 | 19.9 | 115416 |  |
|  | TOP TAIWAN XIV VENTURE CAPITAL CO., LTD. |  | Financial assets at FVTPL - noncurrent | 20000 | 191109 | 9 | 191109 |  |
|  | <u>Limited partnership</u> |  |  |  |  |  |  |  |
|  | Taiwania Capital Buffalo Fund VI, L.P. |  | Financial assets at FVTPL - noncurrent |  | 93114 | 10 | 93114 |  |
|  Senao International Co., Ltd. | <u>Stocks</u> |  |  |  |  |  |  |  |
|  | N.T.U. Innovation Incubation Corporation |  | Financial assets at FVOCI | 1200 | 10428 | 9 | 10428 |  |
|  CHIEF Telecom Inc. | <u>Stocks</u> |  |  |  |  |  |  |  |
|  | 3 Link Information Service Co., Ltd. |  | Financial assets at FVOCI | 374 | 1204 | 10 | 1204 |  |
|  | WPG Holdings Limited |  | Financial assets at FVTPL - current | 9 | 439 |  | 439 | Note 2 |
|  | WPG Holdings Limited |  | Financial assets at FVOCI | 2102 | 102998 |  | 102998 | Note 2 |
|  | WT Microelectronics Co., Ltd. |  | Financial assets at FVOCI | 361 | 17238 |  | 17238 | Note 2 |
|  Chunghwa Investment Co., Ltd. | <u>Stocks</u> |  |  |  |  |  |  |  |
|  | Tatung Technology Inc. |  | Financial assets at FVOCI | 4571 | 46989 | 11 | 46989 |  |
|  | iSing99 Inc. |  | Financial assets at FVOCI | 10000 |  | 7 |  |  |
|  | Powtec ElectroChemical Corporation |  | Financial assets at FVOCI | 20000 |  | 2 |  |  |
|  | Bossdom Digiinnovation Co., Ltd. |  | Financial assets at FVOCI | 2200 | 52800 | 7 | 52800 | Note 2 |
|  | PChome Online Inc. |  | Financial assets at FVOCI | 1875 | 99766 | 1 | 99766 | Note 2 |
|  | <u>Limited partnership</u> |  |  |  |  |  |  |  |
|  | Taiwania Capital Buffalo Fund V, L.P. |  | Financial assets at FVTPL - noncurrent |  | 42007 | 3 | 42007 |  |
|  CHT Security Co., Ltd. | <u>Stocks</u> |  |  |  |  |  |  |  |
|  | TXOne Networks Inc. |  | Financial assets at FVOCI | 91 | 16092 |  | 16092 |  |

---

Note 1: Showed at carrying amounts with fair value adjustments.

Note 2: Fair value was based on the closing price on December 30, 2022.

------

**<u>TABLE 3</u>**

**CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES** 

**MARKETABLE SECURITIES ACQUIRED AND DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL** 

**YEAR ENDED DECEMBER 31, 2022** 

**(Amounts in Thousands of New Taiwan Dollars)** 

------

---

| | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Company<br>Name** | **Marketable<br>Securities<br>Type and<br>Name** | **Financial<br>Statement<br>Account** | **Counter-<br>party** | **Nature of<br>Relationship** | **Beginning Balance** | **Beginning Balance** | **Acquisition** | **Acquisition** | **Disposal** | **Disposal** | **Disposal** | **Disposal** | **Ending Balance** | **Ending Balance** |
| **Company<br>Name** | **Marketable<br>Securities<br>Type and<br>Name** | **Financial<br>Statement<br>Account** | **Counter-<br>party** | **Nature of<br>Relationship** | **Shares<br>(Thousands/**<br>**Thousand<br>Units)** | **Amount** | **Shares<br>(Thousands/**<br>**Thousand<br>Units)** | **Amount** | **Shares<br>(Thousands/**<br>**Thousand<br>Units)** | **Amount** | **Carrying<br>Value** | **Gain on<br>Disposal** | **Shares<br>(Thousands/**<br>**Thousand<br>Units)** | **Amount** |
|  Chunghwa Precision Test Tech. Co., Ltd. | <u>Stocks</u> |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | TestPro<br>Investment<br>Co., Ltd. | Investments<br>accounted<br>for using<br>equity<br>method | Invested<br>and<br>established | Subsidiary |  | $— | 13500 | $135000 |  | $— | $— | $— | 13500 | $135,000<br> (Note) |
|  TestPro Investment Co., Ltd. | <u>Stocks</u> |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | NavCore<br>Tech. Co.,<br>Ltd | Investments<br>accounted<br>for using<br>equity<br>method | Invested<br>and<br>established | Subsidiary |  |  | 10850 | 108500 |  |  |  |  | 10850 | 108,500<br> (Note) |

---

Note: Showing at their original investment amounts. The amount was eliminated upon consolidation.

------

**<u>TABLE 4</u>**

**CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES** 

**ACQUISITION OF INDIVIDUAL REAL ESTATE AT COSTS OF AT LEAST $300 MILLION OR 20% OF THE PAID-IN CAPITAL** 

**YEAR ENDED DECEMBER 31, 2022** 

**(Amounts in Thousands of New Taiwan Dollars)** 

------

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Buyer** | **Event Date** | **Transaction<br>Amount** | **Payment<br>Status** | **Counterparty** | **Relationship** | **Information on Previous Title Transfer If<br>Counterparty is a Related Party** | **Information on Previous Title Transfer If<br>Counterparty is a Related Party** | **Information on Previous Title Transfer If<br>Counterparty is a Related Party** | **Information on Previous Title Transfer If<br>Counterparty is a Related Party** | **Pricing<br>Reference** | **Purpose of<br>Acquisition** | **Other<br>Terms** |
| **Buyer** | **Event Date** | **Transaction<br>Amount** | **Payment<br>Status** | **Counterparty** | **Relationship** | **Property<br>Owner** | **Relationship** | **Transaction<br>Date** | **Amount** | **Pricing<br>Reference** | **Purpose of<br>Acquisition** | **Other<br>Terms** |
|  Chunghwa Precision Test Tech. Co., Ltd.<br> Land | 2021.01~2022.05 | $534030 | Fully<br>paid | Taiwan<br>Powder<br>Technologies<br>Co., Ltd. |  | Not applicable | Not applicable | Not applicable | Not applicable | According to<br>appraisal<br>report | Space<br>requirements<br>for future<br>business<br>expansion and<br>operational<br>considerations |  |

---

------

**<u>TABLE 5</u>** 

**CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES** 

**TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL** 

**YEAR ENDED DECEMBER 31, 2022** 

**(Amounts in Thousands of New Taiwan Dollars)** 

------

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Company Name** | **Related Party** | **Nature of Relationship** | **Transaction Details** | **Transaction Details** | **Transaction Details** | **Transaction Details** | **Abnormal Transaction** | **Abnormal Transaction** | **Notes / Accounts Payable <br>or Receivable** | **Notes / Accounts Payable <br>or Receivable** |
| **Company Name** | **Related Party** | **Nature of Relationship** | **Purchases/Sales**<br>**(Note 1)** | **Amount**<br>**(Note 4)** | **% to Total** | **Payment Terms** | **Unit Price** | **Payment Terms** | **Ending Balance**<br>**(Notes 2 and 4)** | **% to Total** |
|  Chunghwa Telecom Co., Ltd. | Senao International Co., Ltd. | Subsidiary | Sales | $3961183 | 2 | 30 days | $— |  | $411867 | 2 |
|  |  |  | Purchase | 1010242 | 1 | 30~90 days |  |  | (951467) | (6) |
|  | Aval Technologies Co., Ltd. | Subsidiary | Purchase | 345739 |  | 30 days |  |  | (20066) |  |
|  | CHIEF Telecom Inc. | Subsidiary | Sales | 482253 |  | 30 days |  |  | 60896 |  |
|  |  |  | Purchase | 100884 |  | 60 days |  |  | (29434) |  |
|  | Chunghwa System Integration Co., Ltd. | Subsidiary | Purchase | 1383311 | 1 | 30 days |  |  | (548279) | (3) |
|  | CHYP Multimedia Marketing & Communications Co., Ltd. | Subsidiary | Purchase | 144904 |  | 30 days |  |  | (70901) |  |
|  | Honghwa International Co., Ltd. | Subsidiary | Purchase | 6398667 | 6 | 30~60 days |  |  | (889437) | (6) |
|  | Donghwa Telecom Co., Ltd. | Subsidiary | Sales | 181714 |  | 30 days |  |  | 43519 |  |
|  |  |  | Purchase | 526207 |  | 90 days |  |  | (136772) | (1) |
|  | Chunghwa Telecom Global, Inc. | Subsidiary | Sales | 130426 |  | 90 days |  |  | 20368 |  |
|  |  |  | Purchase | 314688 |  | 90 days |  |  | (45523) |  |
|  | CHT Security Co., Ltd. | Subsidiary | Purchase | 365383 |  | 30 days |  |  | (132146) | (1) |
|  | International Integrated Systems, Inc. | Subsidiary | Purchase | 644072 | 1 | 30 days |  |  | (105962) | (1) |
|  | Senyoung Insurance Agent Co., Ltd. | Subsidiary | Sales | 137915 |  | 90 days |  |  | 41775 |  |
|  | Next Commercial Bank Co., Ltd. | Associate | Sales | 153022 |  | 30~60 days |  |  | 15663 |  |
|  | Taiwan International Standard Electronics Co., Ltd. | Associate | Purchase | 811060 | 1 | 30~90 days |  |  | (274242) | (2) |
|  | KingwayTek Technology Co., Ltd. | Associate | Purchase | 102505 |  | 30 days |  |  | (12310) |  |
|  Senao International Co., Ltd. | Aval Technologies Co., Ltd. | Subsidiary | Sales | 354836 | 1 | 60 days |  |  | 54984 | 3 |
|  |  |  | Purchase | 239559 | 1 | 30 days |  |  | (12561) | (1) |
|  CHIEF Telecom Inc. | So-net Entertainment Taiwan Limited | Associate | Sales | 141493 | 5 | 30 days |  |  | 24244 | 11 |
|  Aval Technologies Co., Ltd. | Youth Co., Ltd. | Fellow<br>subsidiary | Sales | 129705 |  | 30 days |  |  | 16404 | 1 |
|  | ISPOT Co., Ltd. | Fellow<br>subsidiary | Sales | 105031 |  | 30 days |  |  | 13907 | 1 |
|  Chunghwa Precision Test Tech. Co., Ltd. | Su Zhou Precision Test Tech. Ltd. | Subsidiary | Sales | 185105 | 4 | 90 days |  |  | 39884 | 5 |

---

Note 1: Purchases include costs to acquire services.

Note 2: Notes and accounts receivable did not include the amounts collected for others and other receivables.

Note 3: Transaction terms with related parties were determined in accordance with mutual agreements when there were no similar transactions with third parties. Other transactions with related parties were not significantly different from those with third parties.

Note 4: All intercompany transactions, balances, income and expenses are eliminated upon consolidation.

------

**<u>TABLE 6</u>**

**CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES** 

**RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL** 

**DECEMBER 31, 2022** 

**(Amounts in Thousands of New Taiwan Dollars)** 

------

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Company Name** | **Related Party** | **Nature of Relationship** | **Ending Balance** | **Turnover Rate**<br>**(Note 1)** | **Overdue** | **Overdue** | **Amounts<br>Received in<br>Subsequent<br>Period** | **Allowance for**<br>**Bad Debts** |
| **Company Name** | **Related Party** | **Nature of Relationship** | **Ending Balance** | **Turnover Rate**<br>**(Note 1)** | **Amounts** | **Action Taken** | **Amounts<br>Received in<br>Subsequent<br>Period** | **Allowance for**<br>**Bad Debts** |
|  Chunghwa Telecom Co., Ltd. | Senao International Co., Ltd. | Subsidiary | $553,907<br> (Note 2)  | 11.07 | $— |  | $542039 | $— |
|  Senao International Co., Ltd. | Chunghwa Telecom Co., Ltd. | Parent company | 1,096,214<br> (Note 2)  | 8.10 |  |  | 80373 |  |
|  Chunghwa System Integration Co., Ltd. | Chunghwa Telecom Co., Ltd. | Parent company | 547,598<br> (Note 2)  | 3.97 |  |  | 304798 |  |
|  Honghwa International Co., Ltd. | Chunghwa Telecom Co., Ltd. | Parent company | 888,955<br> (Note 2)  | 7.30 |  |  | 159406 |  |
|  CHT Security Co., Ltd. | Chunghwa Telecom Co., Ltd. | Parent company | 132,146<br> (Note 2)  | 4.13 |  |  | 100210 |  |
|  CHYP Multimedia Marketing & Communications Co., Ltd. | Chunghwa Telecom Co., Ltd. | Parent company | 106,751<br> (Note 2)  | 2.89 |  |  | 65982 |  |
|  Donghwa Telecom Co.,Ltd. | Chunghwa Telecom Co., Ltd. | Parent company | 136,772<br> (Note 2)  | 3.10 |  |  | 43210 |  |

---

Note 1: Payments and receipts collected in trust for others are excluded from the accounts receivable in calculating the turnover rate.

Note 2: The amount was eliminated upon consolidation.

------

**<u>TABLE 7</u>**

**CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES** 

**NAMES, LOCATIONS, AND OTHER INFORMATION OF INVESTEES IN WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE (EXCLUDING INVESTMENT IN MAINLAND CHINA)** 

**YEAR ENDED DECEMBER 31, 2022** 

**(Amounts in Thousands of New Taiwan Dollars)** 

------

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Investor Company** | **Investee Company** | **Location** | **Main Businesses and Products** | **Original Investment Amount** | **Original Investment Amount** | **Balance as of December 31, 2022** | **Balance as of December 31, 2022** | **Balance as of December 31, 2022** | **Net Income<br>(Loss) of the<br>Investee** | **Recognized<br>Gain (Loss)**<br>**(Notes 1, 2 and 3)** | **Note** |
| **Investor Company** | **Investee Company** | **Location** | **Main Businesses and Products** | **December 31, 2022** | **December 31, 2021** | **Shares**<br>**(Thousands)** | **Percentage of<br>Ownership (%)** | **Carrying Value**<br>**(Note 3)** | **Net Income<br>(Loss) of the<br>Investee** | **Recognized<br>Gain (Loss)**<br>**(Notes 1, 2 and 3)** | **Note** |
|  Chunghwa Telecom Co., Ltd. | Senao International Co., Ltd. | Taiwan | Handset and peripherals retailer; sales of CHT mobile phone plans as an agent | $1065813 | $1065813 | 71773 | 28 | $1727055 | $658038 | $177150 | Subsidiary<br>(Note 5) |
|  | Light Era Development Co., Ltd. | Taiwan | Planning and development of real estate and intelligent buildings, and property management | 3000000 | 3000000 | 300000 | 100 | 3839742 | 20995 | 13323 | Subsidiary<br>(Note 5) |
|  | Donghwa Telecom Co., Ltd. | Hong Kong | International private leased circuit, IP VPN service, and IP transit services | 691163 | 691163 | 178590 | 100 | 707721 | 26033 | 26033 | Subsidiary<br>(Note 5) |
|  | Chunghwa Telecom Singapore Pte., Ltd. | Singapore | International private leased circuit, IP VPN service, and IP transit services | 574112 | 574112 | 26383 | 100 | 1120634 | 250922 | 250982 | Subsidiary<br>(Note 5) |
|  | Chunghwa System Integration Co., Ltd. | Taiwan | Providing system integration services and telecommunications equipment | 838506 | 838506 | 60000 | 100 | 718130 | 32836 | 25296 | Subsidiary<br>(Note 5) |
|  | CHIEF Telecom Inc. | Taiwan | Network integration, internet data center ("IDC"), communications integration and cloud application services | 459652 | 459652 | 39426 | 56 | 1983440 | 836809 | 480237 | Subsidiary<br>(Note 5) |
|  | Chunghwa Investment Co., Ltd. | Taiwan | Investment | 639559 | 639559 | 68085 | 89 | 3176735 | 246304 | 219339 | Subsidiary<br>(Note 5) |
|  | Prime Asia Investments Group Ltd. | British Virgin<br>Islands | Investment | 385274 | 385274 | 1 | 100 | 162922 | 7100 | 7100 | Subsidiary<br>(Note 5) |
|  | Honghwa International Co., Ltd. | Taiwan | Telecommunication engineering, sales agent of mobile phone plan application and other business services, etc. | 180000 | 180000 | 18000 | 100 | 739508 | 464271 | 438179 | Subsidiary<br>(Note 5) |
|  | CHYP Multimedia Marketing & Communications Co., Ltd. | Taiwan | Digital information supply services and advertisement services | 150000 | 150000 | 15000 | 100 | 204188 | 22296 | 22846 | Subsidiary<br>(Note 5) |
|  | Chunghwa Telecom Vietnam Co., Ltd. | Vietnam | Intelligent energy saving solutions, international circuit, and information and communication technology ("ICT") services | 148275 | 148275 |  | 100 | 103508 | (764) | (764) | Subsidiary<br>(Note 5) |
|  | Chunghwa Telecom Global, Inc. | United States | International private leased circuit, internet services, and transit services | 70429 | 70429 | 6000 | 100 | 597080 | 79803 | 80191 | Subsidiary<br>(Note 5) |
|  | CHT Security Co., Ltd. | Taiwan | Computing equipment installation, wholesale of computing and business machinery equipment and software, management consulting services, data processing services, digital information supply services and internet identify services | 240000 | 240000 | 24000 | 73 | 405032 | 201332 | 133820 | Subsidiary<br>(Note 5) |
|  | Chunghwa Telecom (Thailand) Co., Ltd. | Thailand | International private leased circuit, IP VPN service, ICT and cloud VAS services | 119624 | 119624 | 1300 | 100 | 114611 | 7322 | 7322 | Subsidiary<br>(Note 5) |
|  | Spring House Entertainment Tech. Inc. | Taiwan | Software design services, internet contents production and play, and motion picture production and distribution | 62209 | 62209 | 8251 | 56 | 158406 | 44541 | 24961 | Subsidiary<br>(Note 5) |
|  | Chunghwa leading Photonics Tech Co., Ltd. | Taiwan | Production and sale of electronic components and finished products | 70500 | 70500 | 7050 | 75 | 150071 | 37590 | 28192 | Subsidiary<br>(Note 5) |
|  | Smartfun Digital Co., Ltd. | Taiwan | Providing diversified family education digital services | 65000 | 65000 | 6500 | 65 | 81764 | 19479 | 12388 | Subsidiary<br>(Note 5) |
|  | Chunghwa Telecom Japan Co., Ltd. | Japan | International private leased circuit, IP VPN service, and IP transit services | 17291 | 17291 | 1 | 100 | 124400 | 28268 | 28268 | Subsidiary<br>(Note 5) |
|  | Chunghwa Sochamp Technology Inc. | Taiwan | Design, development and production of Automatic License Plate Recognition software and hardware | 20400 | 20400 | 2040 | 37 | (2217) | (3575) | (2462) | Subsidiary<br>(Note 5) |
|  | International Integrated Systems, Inc. | Taiwan | IT solution provider, IT application consultation, system integration and package solution | 517423 | 517423 | 37211 | 51 | 642709 | 191147 | 112461 | Subsidiary<br>(Note 5) |
|  | Viettel-CHT Co., Ltd. | Vietnam | IDC services | 288327 | 288327 |  | 30 | 558532 | 389161 | 116780 | Associate |

---

(Continued)

------

**CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES** 

**NAMES, LOCATIONS, AND OTHER INFORMATION OF INVESTEES IN WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE (EXCLUDING INVESTMENT IN MAINLAND CHINA)** 

**YEAR ENDED DECEMBER 31, 2022** 

**(Amounts in Thousands of New Taiwan Dollars)** 

------

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Investor Company** | **Investee Company** | **Location** | **Main Businesses and Products** | **Original Investment Amount** | **Original Investment Amount** | **Balance as of December 31, 2022** | **Balance as of December 31, 2022** | **Balance as of December 31, 2022** | **Net Income<br>(Loss) of the<br>Investee** | **Recognized<br>Gain (Loss)**<br>**(Notes 1, 2 and 3)** | **Note** |
| **Investor Company** | **Investee Company** | **Location** | **Main Businesses and Products** | **December 31, 2022** | **December 31, 2021** | **Shares**<br>**(Thousands)** | **Percentage of<br>Ownership (%)** | **Carrying Value**<br>**(Note 3)** | **Net Income<br>(Loss) of the<br>Investee** | **Recognized<br>Gain (Loss)**<br>**(Notes 1, 2 and 3)** | **Note** |
|  | Taiwan International Standard Electronics Co., Ltd. | Taiwan | Manufacturing, selling, designing, and maintaining of telecommunications systems and equipment | $164000 | $164000 | 1760 | 40 | $296501 | $162479 | $84401 | Associate |
|  | KKBOX Taiwan Co., Ltd. | Taiwan | Providing of music on-line, software, electronic information, and advertisement services | 67025 | 67025 | 4438 | 30 | 173634 | 38348 | 11504 | Associate |
|  | So-net Entertainment Taiwan Limited | Taiwan | Online service and sale of computer hardware | 120008 | 120008 | 9429 | 30 | 228184 | 35925 | 10777 | Associate |
|  | KingwayTek Technology Co., Ltd. | Taiwan | Design and sale of digital map, technical support for computer peripherals device, design and development of system programming projects | 66684 | 66684 | 10512 | 23 | 267125 | 78927 | 18316 | Associate |
|  | Taiwan International Ports Logistics Corporation | Taiwan | Import and export storage, logistic warehouse, and ocean shipping service | 80000 | 80000 | 8000 | 27 | 101078 | 116075 | 30957 | Associate |
|  | Chunghwa PChome Fund I Co., Ltd. | Taiwan | Investment, venture capital, investment advisor, management consultant and other consultancy service | 200000 | 200000 | 20000 | 50 | 277776 | 133610 | 66805 | Associate |
|  | Cornerstone Ventures Co., Ltd. | Taiwan | Investment, venture capital, investment advisor, management consultant and other consultancy service | 4900 | 4900 | 490 | 49 | 6743 | 315 | 155 | Associate |
|  | Next Commercial Bank Co., Ltd. | Taiwan | Online banking business | 4190000 | 4190000 | 419000 | 42 | 3173309 | (1004331) | (414635) | Associate |
|  | Chunghwa SEA Holdings | Taiwan | Investment business | 10200 | 10200 | 1020 | 51 | 9677 | (501) | (255) | Joint<br>venture |
|  | WiAdvance Technology Corporation | Taiwan | Software solution integration | 273800 | 273800 | 3700 | 20 | 227868 | (94522) | (25344) | Associate |
|  Senao International Co., Ltd. | Senao Networks, Inc. | Taiwan | Telecommunication facilities manufactures and sales | 202758 | 202758 | 16579 | 34 | 1395858 | 1064850 | 359842 | Associate |
|  | Senao International (Samoa) Holding Ltd. | Samoa<br>Islands | International investment | 2046143 | 2046143 | 1191 | 100 | 36848 | 278 | 278 | Subsidiary<br>(Note 5) |
|  | Youth Co., Ltd. | Taiwan | Sale of information and communication technologies products | 427850 | 427850 | 14752 | 96 | 180344 | (10463) | (16082) | Subsidiary<br>(Note 5) |
|  | Aval Technologies Co., Ltd. | Taiwan | Sale of information and communication technologies products | 89550 | 89550 | 11660 | 100 | 129560 | 9945 | 9946 | Subsidiary<br>(Note 5) |
|  | Senyoung Insurance Agent Co., Ltd. | Taiwan | Property and liability insurance agency | 59000 | 59000 | 5900 | 100 | 100817 | 33444 | 33450 | Subsidiary<br>(Note 5) |
|  CHIEF Telecom Inc. | Unigate Telecom Inc. | Taiwan | Telecommunications and internet service | 2000 | 2000 | 200 | 100 | 1213 | 134 | 134 | Subsidiary<br>(Note 5) |
|  | Chief International Corp. | Samoa<br>Islands | Telecommunications and internet service | 6068 | 6068 | 200 | 100 | 101660 | 8450 | 8450 | Subsidiary<br>(Note 5) |
|  Chunghwa Telecom Singapore Pte., Ltd. | ST-2 Satellite Ventures Pte., Ltd. | Singapore | Operation of ST-2 telecommunications satellite | 21309 | 409061 | 943 | 38 | 246815 | 517590 | 196684 | Associate |
|  | CHT Infinity Singapore Pte. Ltd. | Singapore | Investment business | 55720 | 55720 | 2000 | 40 | 62948 | 4808 | 1923 | Associate |
|  Chunghwa Investment Co., Ltd. | Chunghwa Precision Test Tech. Co., Ltd. | Taiwan | Production and sale of semiconductor testing components and printed circuit board | 178608 | 178608 | 11230 | 34 | 2700070 | 770620 | 263929 | Subsidiary<br>(Note 5) |
|  | CHIEF Telecom Inc. | Taiwan | Network integration, internet data center ("IDC"), communications integration and cloud application services | 19064 | 19064 | 2078 | 3 | 97306 | 836809 | 24616 | Associate<br>(Note 5) |
|  | Senao International Co., Ltd. | Taiwan | Selling and maintaining mobile phones and its peripheral products | 49731 | 49731 | 1001 |  | 45196 | 658038 | 2551 | Associate<br>(Note 5) |
|  | AgriTalk Technology Inc. | Taiwan | Providing smart agricultural solutions, scientific agricultural product, biological inhibitor, and biochips | 65175 | 33000 | 3300 | 29 | 34738 | (8500) | (757) | Associate |
|  | Imedtac Co., Ltd. | Taiwan | Providing medical AIoT solution, biomedical engineering services, and sales of medical device as an agent | 48000 | 48000 | 960 | 7 | 40866 | (36145) | (4568) | Associate |
|  Chunghwa Precision Test Tech. Co., Ltd. | Chunghwa Precision Test Tech USA Corporation | United<br>States | Design and after-sale services of semiconductor testing components and printed circuit board | 74192 | 74192 | 2600 | 100 | 99700 | 4996 | 4996 | Subsidiary<br>(Note 5) |

---

(Continued)

------

**CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES** 

**NAMES, LOCATIONS, AND OTHER INFORMATION OF INVESTEES IN WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE (EXCLUDING INVESTMENT IN MAINLAND CHINA)** 

**YEAR ENDED DECEMBER 31, 2022** 

**(Amounts in Thousands of New Taiwan Dollars)** 

------

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Investor Company** | **Investee Company** | **Location** | **Main Businesses and Products** | **Original Investment Amount** | **Original Investment Amount** | **Balance as of December 31, 2022** | **Balance as of December 31, 2022** | **Balance as of December 31, 2022** | **Net Income<br>(Loss) of the<br>Investee** | **Recognized<br>Gain (Loss)**<br>**(Notes 1, 2 and 3)** | **Note** |
| **Investor Company** | **Investee Company** | **Location** | **Main Businesses and Products** | **December 31, 2022** | **December 31, 2021** | **Shares**<br>**(Thousands)** | **Percentage of<br>Ownership (%)** | **Carrying Value**<br>**(Note 3)** | **Net Income<br>(Loss) of the<br>Investee** | **Recognized<br>Gain (Loss)**<br>**(Notes 1, 2 and 3)** | **Note** |
|  | CHPT Japan Co., Ltd. | Japan | Related services of electronic parts, machinery processed products and printed circuit board | $2008 | $2008 | 1 | 100 | $2255 | $67 | $67 | Subsidiary<br>(Note 5) |
|  | Chunghwa Precision Test Tech. International, Ltd. | Samoa<br>Islands | Wholesale and retail of electronic materials, and investment | 173649 | 173649 | 5700 | 100 | 168997 | 11138 | 11856 | Subsidiary<br>(Note 5) |
|  | TestPro Investment Co., Ltd. | Taiwan | Investment | 135000 |  | 13500 | 100 | 98422 | (13775) | (34429) | Subsidiary<br>(Note 5) |
|  TestPro Investment Co., Ltd. | NavCore Tech. Co., Ltd | Taiwan | Sale and manufacturing of smart equipment, smart factory software and hardware integration and technical consulting service | 108500 |  | 10850 | 54 | 92692 | (25177) | (13659) | Subsidiary<br>(Note 5) |
|  Prime Asia Investments Group, Ltd. | Chunghwa Hsingta Co., Ltd. | Hong<br>Kong | Investment | 375274 | 375274 | 1 | 100 | 162922 | 7100 | 7100 | Subsidiary<br>(Note 5) |
|  Senao International (Samoa) Holding Ltd. | Senao International HK Limited | Hong<br>Kong | International investment | 2060467 | 2060467 | 80440 | 100 | 34207 |  |  | Subsidiary<br>(Note 5) |
|  Youth Co., Ltd. | ISPOT Co., Ltd. | Taiwan | Sale of information and communication technologies products | 53021 | 53021 |  | 100 | 14131 | 2420 | 2228 | Subsidiary<br>(Note 5) |
|  | Youyi Co., Ltd. | Taiwan | Maintenance of information and communication technologies products | 21354 | 21354 |  | 100 | 5150 | (2013) | (12474) | Subsidiary<br>(Note 5) |
|  Aval Technologies Co., Ltd. | Wiin Technology Co., Ltd. | Taiwan | Sale of information and communication technologies products | 29550 | 29550 | 3845 | 100 | 45810 | 6370 | 6370 | Subsidiary<br>(Note 5) |
|  Senyoung Insurance Agent Co., Ltd. | Senaolife Insurance Agent Co., Ltd. | Taiwan | Life insurance services | 29500 | 29500 | 2950 | 100 | 21804 | (1685) | (1685) | Subsidiary<br>(Note 5) |
|  CHYP Multimedia Marketing & Communications Co., Ltd | Click Force Marketing Company | Taiwan | Advertisement services | 44607 | 44607 | 1401 | 49 | 40932 | 14887 | 7079 | Associate |
|  International Integrated Systems, Inc. | Infoexplorer International Co., Ltd. | Samoa | Investment | 24806 | 24806 | 795 | 100 | 28893 | (44) | (44) | Subsidiary<br>(Note 5) |
|  | IISI Investment Co., Ltd. | Mauritius | Investment |  | 81302 |  |  |  | 4013 | 4013 | Subsidiary<br>(Notes 5<br>and 6) |
|  | Unitronics Technology Corp. | Taiwan | Development and maintenance of information system | 55569 | 55569 | 5065 | 99.96 | 83036 | 8085 | 8082 | Subsidiary<br>(Note 5) |
|  Infoexplorer International Co., Ltd. | International Integrated Systems (Hong Kong) Limited | Hong<br>Kong | Investment and engaging in technical consulting service | 24336 | 24336 | 780 | 100 | 28887 | (44) | (44) | Subsidiary<br>(Note 5) |
|  IISI Investment Co., Ltd. | Leading Tech Co., Ltd. | Mauritius | Investment |  | 65374 |  |  |  | 3774 | 3774 | Subsidiary<br>(Notes 5<br>and 6) |
|  Leading Tech Co., Ltd. | Leading Systems Co., Ltd. | Mauritius | Investment |  | 100693 |  |  |  | 24 | 24 | Subsidiary<br>(Notes 5<br>and 6) |
|  CHT Security Co., Ltd. | Baohwa Trust Co., Ltd. | Taiwan | VR integration and AIoT security services | 20000 |  | 2000 | 40 | 13267 | (16833) | (6733) | Associate |

---

---

| | |
|:---|:---|
| Note 1: | The amounts were based on audited financial statements.  |

---

Note 2: Recognized gain (loss) of investees includes amortization of differences between the investment cost and net value and elimination of unrealized transactions.

Note 3: Recognized gain (loss) and carrying value of the investees did not include the adjustment of the difference between the accounting treatment on standalone basis and consolidated basis as a result of the application of IFRS 15.

Note 4: Investments in mainland China are included in Table 8.

---

| | |
|:---|:---|
| Note 5: | The amount was eliminated upon consolidation.  |

---

Note 6: IICL , LTCL and LSCL completed the cancellation of registration in September 2022.

(Concluded)

------

**<u>TABLE 8</u>**

**CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES** 

**INVESTMENTS IN MAINLAND CHINA** 

**YEAR ENDED DECEMBER 31, 2022** 

**(Amounts in Thousands of New Taiwan Dollars)** 

------

---

| | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Investee** | **Main<br>Businesses<br>and<br>Products** | **Total Amount<br>of Paid-in<br>Capital** | **Investment<br>Type**<br>**(Note 1)** | **Accumulated<br>Outflow of<br>Investment<br>from Taiwan<br>as of<br>January 1,<br>2022** | **Investment<br>Flows** | **Investment<br>Flows** | **Accumulated<br>Outflow of<br>Investment from<br>Taiwan<br>as of<br>December 31, 2022** | **Net Income<br>(Loss) of the<br>Investee** | **% Ownership<br>of Direct or<br>Indirect<br>Investment** | **Investment**<br>**Gain (Loss)**<br>**(Note 2)** | **Carrying Value<br>as of**<br>**December 31,<br>2022** | **Accumulated<br>Inward<br>Remittance of<br>Earnings<br>as of<br>December 31,<br>2022** | **Note** |
| **Investee** | **Main<br>Businesses<br>and<br>Products** | **Total Amount<br>of Paid-in<br>Capital** | **Investment<br>Type**<br>**(Note 1)** | **Accumulated<br>Outflow of<br>Investment<br>from Taiwan<br>as of<br>January 1,<br>2022** | **Outflow** | **Inflow** | **Accumulated<br>Outflow of<br>Investment from<br>Taiwan<br>as of<br>December 31, 2022** | **Net Income<br>(Loss) of the<br>Investee** | **% Ownership<br>of Direct or<br>Indirect<br>Investment** | **Investment**<br>**Gain (Loss)**<br>**(Note 2)** | **Carrying Value<br>as of**<br>**December 31,<br>2022** | **Accumulated<br>Inward<br>Remittance of<br>Earnings<br>as of<br>December 31,<br>2022** | **Note** |
|  Senao International Trading (Shanghai) Co., Ltd. | Sale of information and communication technologies products | $955838 | 2 | $955838 | $— | $— | $955838 | $— | 100 | $— | $— | $— | Notes<br>8 and<br>12 |
|  Chunghwa Telecom (China) Co., Ltd. | Integrated information and communication solution services for enterprise clients, and intelligent energy network service | 177176 | 2 | 177176 |  |  | 177176 | (4725) | 100 | (4725) |  |  | Notes<br>10<br>and<br>12 |
|  Jiangsu Zhenghua Information Technology Company, LLC | Providing intelligent energy saving solution and intelligent buildings services | 189410 | 2 | 142057 |  |  | 142057 |  | 75 |  |  |  | Notes<br>9 and<br>12 |
|  Shanghai Taihua Electronic Technology Limited | Design of printed circuit board and related consultation service | 51233 | 2 | 51233 |  |  | 51233 | 176 | 100 | 176 | 9231 |  | Note<br>12 |
|  Su Zhou Precision Test Tech. Ltd. | Assembly processed of circuit board, design of printed circuit board and related consultation service | 119199 | 2 | 119199 |  |  | 119199 | 10983 | 100 | 10983 | 162919 |  | Note<br>12 |
|  Shanghai Chief Telecom Co., Ltd. | Telecommunications and internet service | 10150 | 1 | 4973 |  |  | 4973 | 871 | 49 | 428 | 14459 |  | Note<br>12 |
|  International Integrated Systems Inc. (Shanghai) | Development and maintenance of information system | 48753 | 2 | 39923 |  | 15701 | 24222 |  | 100 |  |  |  | Notes<br>11<br>and<br>12 |

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(Continued)

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| | | | |
|:---|:---|:---|:---|
| **Investee** | **Accumulated Investment in**<br>**Mainland China as of**<br>**December 31, 2022** | **Investment Amounts<br>Authorized by Investment<br>Commission, MOEA** | **Upper Limit on Investment<br>Stipulated by Investment<br>Commission, MOEA** |
|  SENAO and its subsidiaries (Note 3) | $955838 | $2047858 | $3792099 |
|  Chunghwa Telecom (China) Co., Ltd. (Note 4) | 177176 | 177176 | 236267056 |
|  Jiangsu Zhenghua Information Technology Company, LLC (Note 4) | 142057 | 142057 | 236267056 |
|  Chunghwa Precision Test Tech Co., Ltd and its subsidiaries (Note 5) | 170432 | 216185 | 4775580 |
|  Shanghai Chief Telecom Co., Ltd. (Note 6) | 4973 | 4973 | 1996687 |
|  IISI and its subsidiaries (Note 7) | 24222 | 39923 | 715297 |

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Note 1: Investments are divided into three categories as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Direct investment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Investments through a holding company registered in a third region.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Others.

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| | |
|:---|:---|
| Note 2: | The amounts were calculated based on the investee's audited financial statements.  |

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Note 3: Senao International Co., Ltd. and its subsidiaries were calculated based on the consolidated net assets value of Senao International Co., Ltd.

Note 4: Chunghwa Telecom (China) Co., Ltd. and Jiangsu Zhenghua Information Technology Company, LLC were calculated based on the consolidated net assets value of Chunghwa Telecom Co., Ltd.

Note 5: Chunghwa Precision Test Tech. Co., Ltd. and its subsidiaries were calculated based on the consolidated net assets value of Chunghwa Precision Test Tech. Co., Ltd

Note 6: Shanghai Chief Telecom Co., Ltd. was calculated based on the consolidated net assets value of CHIEF Telecom Inc.

Note 7: IISI and its subsidiaries were calculated based on the consolidated net assets value of IISI.

Note 8: Senao International Trading (Shanghai) Co., Ltd. completed its liquidation in April 2021.

Note 9: Jiangsu Zhenhua Information Technology Company, LLC. completed its liquidation in December 2018.

Note 10: Chunghwa Telecom (China) Co., Ltd. completed its liquidation in October 2022.

Note 11: International Integrated Systems Inc. (Shanghai) completed its liquidation in August 2021.

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| | |
|:---|:---|
| Note 12: | The amount was eliminated upon consolidation.  |

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(Concluded)

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**<u>TABLE 9</u>**

**CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES** 

**INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT TRANSACTIONS** 

**YEAR ENDED DECEMBER 31, 2022** 

**(Amounts in Thousands of New Taiwan Dollars)** 

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Year** | **No.**<br>**(Note 1)** | **Company Name** | **Related Party** | **Transaction Details** | **Transaction Details** | **Transaction Details** | **Transaction Details** |
| **Year** | **No.**<br>**(Note 1)** | **Company Name** | **Related Party** | **Financial Statement Account** | **Amount**<br>**(Note 5)** | **Payment Terms**<br>**(Note 3)** | **% to Total <br>Sales or Assets<br>(Note 4)** |
| 2022 | 0 | Chunghwa Telecom Co., Ltd. | Senao International Co., Ltd. | Accounts receivable | $411867 |  |  |
|  |  |  |  | Accrued custodial receipts | 142040 |  |  |
|  |  |  |  | Accounts payable | 951467 |  |  |
|  |  |  |  | Amounts collected for others | 144967 |  |  |
|  |  |  |  | Revenues | 3961183 |  | 2 |
|  |  |  |  | Operating costs and expenses | 865491 |  |  |
|  |  |  |  | Inventories | 144751 |  |  |
|  |  |  | CHIEF Telecom Inc. a | Accounts receivable | 60896 |  |  |
|  |  |  |  | Revenues | 482253 |  |  |
|  |  |  |  | Accounts payable | 29434 |  |  |
|  |  |  |  | Operating costs and expenses | 100884 |  |  |
|  |  |  | CHYP Multimedia Marketing & Communications Co., Ltd. | Accounts payable | 70901 |  |  |
|  |  |  |  | Operating costs and expenses | 144904 |  |  |
|  |  |  | Chunghwa System Integration Co., Ltd. | Accounts payable | 548279 |  |  |
|  |  |  |  | Operating costs and expenses | 1369194 |  | 1 |
|  |  |  |  | Inventories | 14117 |  |  |
|  |  |  | Chunghwa Telecom Global Inc. | Accounts receivable | 20368 |  |  |
|  |  |  |  | Accounts payable | 45523 |  |  |
|  |  |  |  | Revenues | 130426 |  |  |
|  |  |  |  | Operating costs and expenses | 314688 |  |  |
|  |  |  | Donghwa Telecom Co., Ltd. | Accounts receivable | 43519 |  |  |
|  |  |  |  | Accounts payable | 136772 |  |  |
|  |  |  |  | Revenues | 181714 |  |  |
|  |  |  |  | Operating costs and expenses | 526207 |  |  |
|  |  |  | Honghwa International Co., Ltd. | Accounts payable | 889437 |  |  |
|  |  |  |  | Operating costs and expenses | 6311140 |  | 3 |
|  |  |  |  | Inventories | 87527 |  |  |
|  |  |  | CHT Security Co., Ltd. a | Accounts payable | 132146 |  |  |
|  |  |  |  | Operating costs and expenses | 320770 |  |  |
|  |  |  |  | Inventories | 44613 |  |  |
|  |  |  | International Integrated Systems, Inc. | Accounts payable | 105962 |  |  |
|  |  |  |  | Operating costs and expenses | 628518 |  |  |
|  |  |  |  | Inventories | 15554 |  |  |
|  |  |  | Aval Technologies Co., Ltd. | Accounts payable | 20066 |  |  |
|  |  |  |  | Operating costs and expenses | 345739 |  |  |
|  |  |  | Senyoung Insurance Agent Co., Ltd. | Accounts receivable | 41775 |  |  |
|  |  |  |  | Revenues | 137915 |  |  |

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Note 1: Significant transactions between the Company and its subsidiaries or among subsidiaries are numbered as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. "0" for the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Subsidiaries are numbered from "1".

Note 2: Related party transactions are divided into three categories as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. The Company to subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Subsidiaries to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Subsidiaries to subsidiaries.

Note 3: Transaction terms with the related parties were determined in accordance with mutual agreements when there were no similar transactions with third parties. Other transactions with related parties were not significantly different from those with third parties.

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| | |
|:---|:---|
| Note 4: | For assets and liabilities, amount is shown as a percentage to consolidated total assets as of December 31, 2022, while revenues, costs and expenses are shown as a percentage to consolidated revenues for the year ended December 31, 2022.  |

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| | |
|:---|:---|
| Note 5: | The amount was eliminated upon consolidation.  |

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**<u>TABLE 10</u>**

**CHUNGHWA TELECOM CO., LTD.** 

**INFORMATION OF MAJOR STOCKHOLDERS** 

**DECEMBER 31, 2022** 

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| | | |
|:---|:---|:---|
| **Name of Major Stockholders** | **Shares** | **Shares** |
| **Name of Major Stockholders** | **Number of<br>Shares** | **Percentage of<br>Ownership (%)** |
|  Ministry of Transportation and Communications | 2737718976 | 35.29 |
|  Shin Kong Life Insurance Co., Ltd. | 416466184 | 5.36 |

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| | |
|:---|:---|
| Note: | This table presents information provided by the Taiwan Depository & Clearing Corporation on stockholders holding greater than 5% of Chunghwa's dematerialized securities that have completed the process of registration and delivery by book-entry transfer as of the last business day for the current quarter.  |

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