EX-99.2 3 d349974dex992.htm EX-99.2

EX-99.2

Exhibit 99.2

Chunghwa Telecom Co., Ltd. and Subsidiaries

Consolidated Financial Statements for the

Three Months Ended March 31, 2022 and 2021 and

Independent Auditors’ Review Report

INDEPENDENT AUDITORS’ REVIEW REPORT

The Board of Directors and Stockholders

Chunghwa Telecom Co., Ltd.

Introduction

We have reviewed the accompanying consolidated balance sheets of Chunghwa Telecom Co., Ltd. and its subsidiaries (the “Company”) as of March 31, 2022 and 2021, the related consolidated statements of comprehensive income, changes in equity, and cash flows for the three months then ended, and the related notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as 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 International Accounting Standard 34 “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

We conducted our reviews in accordance with Statement of Auditing Standards No. 65 “Review of Financial Information Performed by the Independent Auditor of the Entity”. A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our reviews, nothing has come to our attention that caused us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Company as of March 31, 2022 and 2021, and of its consolidated financial performance and its consolidated cash flows for the three months then ended March 31, 2022 and 2021 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34 “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

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The engagement partners on the reviews resulting in this independent auditors’ review report are Dien Sheng Chang and Cheng Hung Kuo.

/s/ Dien Sheng Chang				/s/ Cheng Hung Kuo
Deloitte & Touche
Taipei, Taiwan
Republic of China
May 6, 2022

Notice to Readers

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 review such consolidated financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ review 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’ review report and consolidated financial statements shall prevail.

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CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

		March 31, 2022 (Reviewed)								December 31, 2021 (Audited)								March 31, 2021 (Reviewed)
ASSETS		Amount				%				Amount				%				Amount				%
CURRENT ASSETS
Cash and cash equivalents (Note 6)		$	46,500,497				9			$	39,778,624				8			$	30,043,910				6
Financial assets at fair value through profit or loss (Note 7)			3,190				—				2,566				—				8,061				—
Hedging financial assets (Note 20)			8,055				—				—				—				—				—
Contract assets (Note 30)			5,539,500				1				5,554,070				1				5,246,566				1
Trade notes and accounts receivable, net (Notes 9 and 30)			21,069,723				4				23,947,107				5				21,391,359				4
Receivables from related parties (Note 38)			39,645				—				41,528				—				34,203				—
Inventories (Notes 10 and 39)			12,512,537				2				11,327,409				2				12,348,605				3
Prepayments (Note 11)			5,281,217				1				2,330,097				—				5,486,706				1
Other current monetary assets (Notes 12 and 35)			6,758,881				1				5,060,878				1				11,620,376				2
Other current assets (Notes 19 and 39)			3,352,163				1				2,978,780				1				2,233,007				—
Total current assets			101,065,408				19				91,021,059				18				88,412,793				17
NONCURRENT ASSETS
Financial assets at fair value through profit or loss (Note 7)			805,944				—				908,775				—				816,602				—
Financial assets at fair value through other comprehensive income (Notes 8 and 35)			3,574,284				1				3,615,888				1				3,650,340				1
Investments accounted for using equity method (Note 14)			7,463,988				2				7,332,774				2				7,195,375				2
Contract assets (Note 30)			2,756,204				1				2,607,744				—				2,486,990				—
Property, plant and equipment (Notes 15, 35, 38 and 39)			285,930,724				54				289,100,461				56				280,150,750				55
Right-of-use assets (Notes 16 and 38)			10,744,006				2				11,050,936				2				10,765,100				2
Investment properties (Note 17)			9,652,091				2				9,662,638				2				9,610,754				2
Intangible assets (Notes 18 and 38)			82,328,310				16				83,945,083				16				88,664,522				18
Deferred income tax assets (Note 3)			2,760,894				1				2,785,006				1				3,073,603				1
Incremental costs of obtaining contracts (Note 30)			967,462				—				987,656				—				961,667				—
Net defined benefit assets (Note 3)			3,581,626				1				3,391,077				1				3,577,381				1
Prepayments (Note 11)			1,820,461				—				1,798,463				—				2,144,737				—
Other noncurrent assets (Notes 19, 39 and 40)			4,923,591				1				4,862,800				1				4,990,582				1
Total noncurrent assets			417,309,585				81				422,049,301				82				418,088,403				83
TOTAL		$	518,374,993				100			$	513,070,360				100			$	506,501,196				100
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term loans (Note 21)		$	65,000				—			$	65,000				—			$	60,000				—
Short-term bills payable (Note 22)			—				—				—				—				4,999,489				1
Financial liabilities at fair value through profit or loss (Note 7)			—				—				6,180				—				3,867				—
Hedging financial liabilities (Note 20)			—				—				8,286				—				1,864				—
Contract liabilities (Notes 30 and 38)			12,701,430				3				12,234,276				2				13,264,677				3
Trade notes and accounts payable (Note 25)			11,823,029				2				18,063,288				4				9,689,794				2
Payables to related parties (Note 38)			214,092				—				391,358				—				324,619				—
Current tax liabilities (Note 3)			6,830,152				1				4,593,458				1				6,449,723				1
Lease liabilities (Notes 16, 35 and 38)			2,994,856				1				3,210,564				1				3,296,580				1
Other payables (Notes 26 and 35)			21,665,000				4				24,436,708				5				22,596,518				5
Provisions (Note 27)			251,488				—				284,813				—				325,747				—
Current portion of long-term loans (Notes 23 and 39)			—				—				—				—				1,600,000				—
Other current liabilities			1,026,505				—				998,367				—				957,627				—
Total current liabilities			57,571,552				11				64,292,298				13				63,570,505				13
NONCURRENT LIABILITIES
Long-term loans (Notes 23 and 39)			1,600,000				—				1,600,000				—				—				—
Bonds payable (Note 24)			30,473,352				6				26,976,675				6				19,981,108				4
Contract liabilities (Note 30)			6,900,647				2				6,840,056				1				7,216,060				2
Deferred income tax liabilities (Note 3)			2,197,088				—				2,189,411				—				2,017,828				—
Provisions (Note 27)			141,275				—				141,865				—				104,417				—
Lease liabilities (Notes 16, 35 and 38)			6,909,109				2				7,061,689				2				6,022,381				1
Customers’ deposits (Note 38)			4,916,202				1				5,336,343				1				4,731,909				1
Net defined benefit liabilities (Note 3)			2,290,631				—				2,287,663				—				3,420,564				1
Other noncurrent liabilities			4,992,300				1				5,081,910				1				1,985,684				—
Total noncurrent liabilities			60,420,604				12				57,515,612				11				45,479,951				9
Total liabilities			117,992,156				23				121,807,910				24				109,050,456				22
EQUITY ATTRIBUTABLE TO STOCKHOLDERS OF THE PARENT (Notes 13 and 29)
Common stocks			77,574,465				15				77,574,465				15				77,574,465				15
Additional paid-in capital			171,291,613				33				171,279,625				33				171,276,947				34
Retained earnings
Legal reserve			77,574,465				15				77,574,465				15				77,574,465				15
Special reserve			2,675,419				1				2,675,419				1				2,675,419				1
Unappropriated earnings			59,700,126				11				50,639,022				10				56,818,260				11
Total retained earnings			139,950,010				27				130,888,906				26				137,068,144				27
Others			(362,831	)			—				(408,150	)			—				(152,567	)			—
Total equity attributable to stockholders of the parent			388,453,257				75				379,334,846				74				385,766,989				76
NONCONTROLLING INTERESTS (Notes 13 and 29)			11,929,580				2				11,927,604				2				11,683,751				2
Total equity			400,382,837				77				391,262,450				76				397,450,740				78
TOTAL		$	518,374,993				100			$	513,070,360				100			$	506,501,196				100

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

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CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

(Reviewed, Not Audited)

		Three Months Ended March 31
		2022								2021
		Amount				%				Amount				%
REVENUES (Notes 30, 38 and 44)		$	51,294,739				100			$	50,100,995				100
OPERATING COSTS (Notes 10, 28, 30, 31, 38 and 44)			31,690,894				62				31,892,915				64
GROSS PROFIT			19,603,845				38				18,208,080				36
OPERATING EXPENSES (Notes 9, 28, 31, 38 and 44)
Marketing			5,445,221				11				4,885,176				10
General and administrative			1,547,548				2				1,302,592				2
Research and development			848,452				2				875,401				2
Expected credit loss			101,386				—				43,569				—
Total operating expenses			7,942,607				15				7,106,738				14
OTHER INCOME AND EXPENSES (Note 31)			(1,357	)			—				2,569				—
INCOME FROM OPERATIONS			11,659,881				23				11,103,911				22
NON-OPERATING INCOME AND EXPENSES
Interest income			24,398				—				17,880				—
Other income (Notes 31 and 38)			44,383				—				41,971				—
Other gains and losses (Notes 31, 37 and 38)			(108,326	)			—				164,121				—
Interest expense (Notes 16, 31 and 38)			(56,012	)			—				(50,726	)			—
Share of profits of associates and joint ventures accounted for using equity method (Note 14)			110,069				—				43,191				—
Total non-operating income and expenses			14,512				—				216,437				—
INCOME BEFORE INCOME TAX			11,674,393				23				11,320,348				22
INCOME TAX EXPENSE (Notes 3 and 32)			2,283,416				5				2,198,718				4
NET INCOME			9,390,977				18				9,121,630				18
TOTAL OTHER COMPREHENSIVE INCOME (LOSS)
Items that will not be reclassified to profit or loss:
Unrealized gain or loss on investments in equity instruments at fair value through other comprehensive income (Notes 29 and 37)			(44,560	)			—				(945,349	)			(2	)

(Continued)

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CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

(Reviewed, Not Audited)

		Three Months Ended March 31
		2022								2021
		Amount				%				Amount				%
Gain or loss on hedging instruments subject to basis adjustment (Note 20)		$	16,341				—			$	(3,616	)			—
Share of remeasurements of defined benefit pension plans of associates and joint ventures (Note 14)			1,524				—				758				—
			(26,695	)			—				(948,207	)			(2	)
Items that may be reclassified subsequently to profit or loss:
Exchange differences arising from the translation of the foreign operations			77,050				—				(38,328	)			—
Share of other comprehensive income (loss) of associates and joint ventures (Note 14)			(194	)			—				459				—
			76,856				—				(37,869	)			—
Total other comprehensive income (loss), net of income tax			50,161				—				(986,076	)			(2	)
TOTAL COMPREHENSIVE INCOME		$	9,441,138				18			$	8,135,554				16
NET INCOME ATTRIBUTABLE TO
Stockholders of the parent		$	9,059,580				18			$	8,804,944				18
Noncontrolling interests			331,397				—				316,686				—
		$	9,390,977				18			$	9,121,630				18
COMPREHENSIVE INCOME ATTRIBUTABLE TO
Stockholders of the parent		$	9,106,423				18			$	7,820,405				16
Noncontrolling interests			334,715				—				315,149				—
		$	9,441,138				18			$	8,135,554				16
EARNINGS PER SHARE (Note 33)
Basic		$	1.17							$	1.14
Diluted		$	1.17							$	1.13

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

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CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In Thousands of New Taiwan Dollars)

(Reviewed, Not Audited)

		Equity Attributable to Stockholders of the Parent (Notes 13, 20 and 29)
																						Others
																										Unrealized Gain
																						Exchange				or Loss on
																						Differences				Financial Assets
																						Arising from the				at Fair Value
										Retained Earnings												Translation of				Through Other				Gain or Loss								Noncontrolling
						Additional												Unappropriated				the Foreign				Comprehensive				on Hedging								Interests
		Common Stocks				Paid-in Capital				Legal Reserve				Special Reserve				Earnings				Operations				Income				Instruments				Total				(Notes 13 and 29)				Total Equity
BALANCE, JANUARY 1, 2021		$	77,574,465			$	171,261,379			$	77,574,465			$	2,675,419			$	47,918,166			$	(314,531	)		$	1,239,901			$	1,752			$	377,931,016			$	11,327,441			$	389,258,457
Net income for the three months ended March 31, 2021			—				—				—				—				8,804,944				—				—				—				8,804,944				316,686				9,121,630
Other comprehensive income (loss) for the three months ended March 31, 2021			—				—				—				—				758				(35,695	)			(945,986	)			(3,616	)			(984,539	)			(1,537	)			(986,076	)
Total comprehensive income (loss) for the three months ended March 31, 2021			—				—				—				—				8,805,702				(35,695	)			(945,986	)			(3,616	)			7,820,405				315,149				8,135,554
Disposal of investments in equity instruments at fair value through other comprehensive income			—				—				—				—				94,392				—				(94,392	)			—				—				—				—
Share-based payment transactions of subsidiaries			—				15,568				—				—				—				—				—				—				15,568				41,161				56,729
BALANCE, MARCH 31, 2021		$	77,574,465			$	171,276,947			$	77,574,465			$	2,675,419			$	56,818,260			$	(350,226	)		$	199,523			$	(1,864	)		$	385,766,989			$	11,683,751			$	397,450,740
BALANCE, JANUARY 1, 2022		$	77,574,465			$	171,279,625			$	77,574,465			$	2,675,419			$	50,639,022			$	(392,276	)		$	(7,588	)		$	(8,286	)		$	379,334,846			$	11,927,604			$	391,262,450
Cash dividends distributed by subsidiaries			—				—				—				—				—				—				—				—				—				(370,957	)			(370,957	)
Change in additional paid-in capital from investments in associates and joint ventures accounted for using equity method			—				(1,159	)			—				—				—				—				—				—				(1,159	)			(51	)			(1,210	)
Net income for the three months ended March 31, 2022			—				—				—				—				9,059,580				—				—				—				9,059,580				331,397				9,390,977
Other comprehensive income (loss) for the three months ended March 31, 2022			—				—				—				—				1,524				66,473				(37,495	)			16,341				46,843				3,318				50,161
Total comprehensive income (loss) for the three months ended March 31, 2022			—				—				—				—				9,061,104				66,473				(37,495	)			16,341				9,106,423				334,715				9,441,138
Share-based payment transactions of subsidiaries			—				13,147				—				—				—				—				—				—				13,147				38,269				51,416
BALANCE, MARCH 31, 2022		$	77,574,465			$	171,291,613			$	77,574,465			$	2,675,419			$	59,700,126			$	(325,803	)		$	(45,083	)		$	8,055			$	388,453,257			$	11,929,580			$	400,382,837

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

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CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

(Reviewed, Not Audited)

		Three Months Ended March 31
		2022				2021
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax		$	11,674,393			$	11,320,348
Adjustments for:
Depreciation			8,051,310				7,848,148
Amortization			1,634,584				1,641,037
Amortization of incremental costs of obtaining contracts			210,872				194,880
Expected credit loss			101,386				43,569
Interest expense			56,012				50,726
Interest income			(24,398	)			(17,880	)
Compensation cost of share-based payment transactions			4,003				4,061
Share of profits of associates and joint ventures accounted for using equity method			(110,069	)			(43,191	)
Loss (gain) on disposal of property, plant and equipment			1,357				(2,569	)
Gain on disposal of financial instruments			(728	)			(186	)
Provision for impairment loss and obsolescence of inventory			40,452				32,919
Valuation loss (gain) on financial assets and liabilities at fair value through profit or loss, net			94,077				(133,841	)
Others			89,100				(50,602	)
Changes in operating assets and liabilities:
Decrease (increase) in:
Contract assets			(134,298	)			92,885
Trade notes and accounts receivable			2,794,654				1,220,042
Receivables from related parties			1,883				196,493
Inventories			(1,225,580	)			27,379
Prepayments			(2,973,118	)			(3,111,676	)
Other current monetary assets			92,957				(146,861	)
Other current assets			(373,383	)			116,090
Incremental cost of obtaining contracts			(190,678	)			(156,954	)
Increase (decrease) in:
Contract liabilities			527,745				(245,056	)
Trade notes and accounts payable			(6,236,259	)			(5,901,532	)
Payables to related parties			(177,266	)			(321,325	)
Other payables			(1,891,622	)			(2,490,458	)
Provisions			(33,915	)			15,993
Other current liabilities			36,050				(76,689	)
Net defined benefit plans			(187,581	)			(199,593	)
Cash generated from operations			11,851,940				9,906,157
Interests paid			(20,329	)			(23,016	)
Income taxes paid			(14,933	)			(7,836	)
Net cash provided by operating activities			11,816,678				9,875,305

(Continued)

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CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

(Reviewed, Not Audited)

		Three Months Ended March 31
		2022				2021
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at fair value through other comprehensive income		$	(2,956	)		$	(38,083	)
Proceeds from disposal of financial assets at fair value through other comprehensive income			—				2,905,889
Acquisition of financial assets at fair value through profit or loss			(6,002	)			(9,423	)
Proceeds from disposal of financial assets at fair value through profit or loss			8,680				9,610
Proceeds from capital reduction of financial assets at fair value through profit or loss			44,400				—
Acquisition of time deposits and negotiable certificates of deposit with maturities of more than three months			(2,707,812	)			(7,726,466	)
Proceeds from disposal of time deposits and negotiable certificates of deposit with maturities of more than three months			878,813				1,999,094
Acquisition of investments accounted for using equity method			(20,000	)			(273,800	)
Acquisition of property, plant and equipment			(5,227,651	)			(4,443,242	)
Proceeds from disposal of property, plant and equipment			2,128				5,752
Acquisition of intangible assets			(17,472	)			(20,453	)
Decrease (increase) in other noncurrent assets			(59,864	)			214,548
Interests received			23,375				17,444
Dividends received			—				102,757
Net cash used in investing activities			(7,084,361	)			(7,256,373	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term loans			13,000				63,000
Repayments of short-term loans			(13,000	)			(70,000	)
Proceeds from short-term bills payable			—				5,000,000
Repayments of short-term bills payable			—				(7,000,000	)
Proceeds from issuance of bonds			3,500,000				—
Payments for transaction costs attributable to the issuance of bonds			(4,463	)			—
Decrease in customers’ deposits			(428,053	)			(103,431	)
Payments for the principal of lease liabilities			(1,057,594	)			(1,018,514	)
Increase (decrease) in other noncurrent liabilities			(89,610	)			94,879
Change in other noncontrolling interests			47,413				52,668
Net cash provided by (used in) financing activities			1,967,693				(2,981,398	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS			21,863				(13,279	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		$	6,721,873			$	(375,745	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD			39,778,624				30,419,655
CASH AND CASH EQUIVALENTS, END OF PERIOD		$	46,500,497			$	30,043,910

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

(Concluded)

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CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2022 AND 2021

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

(Reviewed, Not Audited)

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 44 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 May 6, 2022.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Except for the following items, the accounting policies applied in these consolidated financial statements are consistent with those applied in the consolidated financial statements for the year ended December 31, 2021. Please refer to the consolidated financial statements for the year ended December 31, 2021 for the details.

Statement of Compliance

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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 Accounting Standard 34 “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission (the “FSC”). The consolidated financial statements do not present all the disclosures required for a complete set of annual consolidated financial statements as required by 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 FSC.

Basis of Consolidation

The detail information of the subsidiaries at the end of reporting period was as follows:

						Percentage of Ownership Interests
Name of Investor		Name of Investee		Main Businesses and Products		March 31, 2022				December 31, 2021				March 31, 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				28			a.
		Light Era Development Co., Ltd. (“LED”)		Planning and development of real estate and intelligent buildings, and property management			100				100				100
		Donghwa Telecom Co., Ltd. (“DHT”)		International private leased circuit, IP VPN service, and IP transit services			100				100				100			b.
		Chunghwa Telecom Singapore Pte., Ltd. (“CHTS”)		International private leased circuit, IP VPN service, and IP transit services			100				100				100
		Chunghwa System Integration Co., Ltd. (“CHSI”)		Providing system integration services and telecommunications equipment			100				100				100
		Chunghwa Investment Co., Ltd. (“CHI”)		Investment			89				89				89
		CHIEF Telecom Inc. (“CHIEF”)		Network integration, internet data center (“IDC”), communications integration and cloud application services			56				56				56			c.
		CHYP Multimedia Marketing & Communications Co., Ltd. (“CHYP”)		Digital information supply services and advertisement services			100				100				100
		Prime Asia Investments Group Ltd. (B.V.I.) (“Prime Asia”)		Investment			100				100				100
		Spring House Entertainment Tech. Inc. (“SHE”)		Software design services, internet contents production and play, and motion picture production and distribution			56				56				56
		Chunghwa Telecom Global, Inc. (“CHTG”)		International private leased circuit, internet services, and transit services			100				100				100
		Chunghwa Telecom Vietnam Co., Ltd. (“CHTV”)		Intelligent energy saving solutions, international circuit, and information and communication technology (“ICT”) services.			100				100				100
		Smartfun Digital Co., Ltd. (“SFD”)		Providing diversified family education digital services			65				65				65
		Chunghwa Telecom Japan Co., Ltd. (“CHTJ”)		International private leased circuit, IP VPN service, and IP transit services			100				100				100
		Chunghwa Sochamp Technology Inc. (“CHST”)		Design, development and production of Automatic License Plate Recognition software and hardware			51				51				51
		Honghwa International Co., Ltd. (“HHI”)		Telecommunications engineering, sales agent of mobile phone plan application and other business services, etc.			100				100				100
															(Continued)

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						Percentage of Ownership Interests
Name of Investor		Name of Investee		Main Businesses and Products		March 31, 2022				December 31, 2021				March 31, 2021				Note
		Chunghwa Leading Photonics Tech Co., Ltd. (“CLPT”)		Production and sale of electronic components and finished products			75				75				75
		Chunghwa Telecom (Thailand) Co., Ltd. (“CHTT”)		International private leased circuit, IP VPN service, ICT and cloud VAS services			100				100				100
		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 identify services			75				77				77			d.
		International Integrated Systems, Inc. (“IISI”)		IT solution provider, IT application consultation, system integration and package solution			51				51				51			e.
Senao International Co., Ltd.		Senao International (Samoa) Holding Ltd. (“SIS”)		International investment			100				100				100			f.
		Youth Co., Ltd. (“Youth”)		Sale of information and communication technologies products			96				96				96
		Aval Technologies Co., Ltd. (“Aval”)		Sale of information and communication technologies products			100				100				100
		Senyoung Insurance Agent Co., Ltd. (“SENYOUNG”)		Property and liability insurance agency			100				100				100
Youth Co., Ltd.		ISPOT Co., Ltd. (“ISPOT”)		Sale of information and communication technologies products			100				100				100
		Youyi Co., Ltd. (“Youyi”)		Maintenance of information and communication technologies products			100				100				100
Aval Technologies Co., Ltd.		Wiin Technology Co., Ltd. (“Wiin”)		Sale of information and communication technologies products			100				100				100
Senyoung Insurance Agent Co., Ltd.		Senaolife Insurance Agent Co., Ltd. (“Senaolife”)		Life insurance services			100				100				100
CHIEF Telecom Inc.		Unigate Telecom Inc. (“Unigate”)		Telecommunications and internet service			100				100				100
		Chief International Corp. (“CIC”)		Telecommunications and internet service			100				100				100
		Shanghai Chief Telecom Co., Ltd. (“SCT”)		Telecommunications and internet service			49				49				49			g.
Chunghwa Investment Co., Ltd.		Chunghwa Precision Test Tech. Co., Ltd. (“CHPT”)		Production and sale of semiconductor testing components and printed circuit board			34				34				34			h.
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				100			i.
		CHPT Japan Co., Ltd. (“CHPT (JP)”)		Related services of electronic parts, machinery processed products and printed circuit board			100				100				100
		Chunghwa Precision Test Tech. International, Ltd. (“CHPT (International)”)		Wholesale and retail of electronic materials, and investment			100				100				100			j.
		TestPro Investment Co., Ltd. (“TestPro”)		Investment			100				—				—			k.

(Continued)

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						Percentage of Ownership Interests
Name of Investor		Name of Investee		Main Businesses and Products		March 31, 2022				December 31, 2021				March 31, 2021				Note
Senao International (Samoa) Holding Ltd.		Senao International HK Limited (“SIHK”)		International investment			100				100				100			l.
Senao International HK Limited		Senao International Trading (Shanghai) Co., Ltd. (“SITS”)		Sale of information and communication technologies products			—				—				100			m.
Prime Asia Investments Group Ltd. (B.V.I.)		Chunghwa Hsingta Co., Ltd. (“CHC”)		Investment			100				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				100				100			n.
Chunghwa Precision Test Tech. International, Ltd.		Shanghai Taihua Electronic Technology Limited (“STET”)		Design of printed circuit board and related consultation service			100				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				100			o.
International Integrated Systems, Inc.		Infoexplorer International Co., Ltd.(“IESA”)		Investment			100				100				100
		IISI Investment Co., Ltd. (“IICL”)		Investment			100				100				100
		Unitronics Technology Corp. (“UTC”)		Development and maintenance of information system			99.96				99.96				99.96
Infoexplorer International Co., Ltd.		International Integrated Systems (Hong Kong) Limited (“IEHK”)		Investment and technical consulting service			100				100				100
IISI Investment Co., Ltd.		Leading Tech Co., Ltd. (“LTCL”)		Investment			100				100				100
Leading Tech Co., Ltd.		Leading Systems Co., Ltd. (“LSCL”)		Investment			100				100				100
Leading Systems Co., Ltd.		International Integrated Systems Inc. (Shanghai) (“IISS”)		Development and maintenance of information system			—				—				100			p.

(Concluded)

a. Chunghwa continues to control six out of eleven 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 and March 2022 as its employees exercised options. Therefore, the Company’s ownership interest in CHIEF decreased to 58.89% and 58.72% as of December 31, 2021 and March 31, 2022, respectively.

d. CHTSC issued new shares in February 2021 and February 2022 as its employees exercised options. Therefore, the Company’s ownership interest in CHTSC decreased to 77.46% and 74.92% as of December 31, 2021 and March 31, 2022, respectively.

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

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f. SIS reduced and returned its capital to its stakeholders in November 2020 and July 2021. SIS reduced 8.14% and 48.15% of its capital to offset accumulated deficits in February and October 2021, respectively. The Company’s ownership interest in SIS remained the same.

g. 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.

h. 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.

i. CHPT increased its investment in CHPT (US) proportionally in August 2021 and the Company’s ownership interest in CHPT (US) remained the same.

j. CHPT increased its investment in CHPT (International) proportionally in April 2021 and the Company’s ownership interest in CHPT (International) remained the same.

k. CHPT invested and established TestPro in March 2022. CHPT obtained 100% ownership interest of TestPro.

l. 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.

m. SITS completed its liquidation in April 2021.

n. CTC was approved to end and dissolve its business in August 2020. The liquidation of CTC is still in process.

o. CHPT (International) increased its investment in SZPT proportionally in July 2021. The Company’s ownership interest in SZPT remained the same.

p. 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 March 31, 2022.

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Other Significant Accounting Policies

a. Defined benefit retirement benefits

Pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior financial year, adjusted for significant market fluctuations since that time and for other significant one-off events.

b. Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax. Income taxes for interim period are assessed on an annual basis and calculated by applying to an interim period’s pre-tax income the tax rate that would be applicable to expected total annual earnings.

The measurement of deferred tax assets and liabilities reflects the tax consequences that would follow from the manner in which the Company expects to recover or settle the carrying amount of its assets and liabilities at balance sheet date.

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.

For the critical accounting judgments and key sources of estimation, uncertainty and assumption applied in these consolidated financial statements, please refer to the consolidated financial statements for the year ended December 31, 2021.

5. APPLICATION OF NEW AND REVISED STANDARDS AND INTERPRETATIONS

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 IFRSs 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.

b. IFRSs issued by the IASB but not yet endorsed and issued into effect by the FSC

New, Revised or Amended Standards and Interpretations				Effective Date Announced by IASB (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 by IASB
Amendments to IAS 1		Classification of liabilities as current or noncurrent		January 1, 2023

(Continued)

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New, Revised or Amended Standards and Interpretations				Effective Date Announced by IASB (Note 1)
Amendments to IAS 1		Disclosure of Accounting Policies		January 1, 2023 (Note 2)
Amendments to IAS 8		Definition of Accounting Estimates		January 1, 2023 (Note 3)
Amendments to IAS 12		Deferred Tax related to Assets and Liabilities arising from a Single Transaction		January 1, 2023 (Note 4)

(Concluded)

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

Note 2: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.

Note 3: 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 4: Except that deferred taxes will be recognized for temporary differences associated with leases and decommissioning obligations on January 1, 2022, the amendments will be applied prospectively to transactions that occur on or after January 1, 2022.

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

		March 31, 2022				December 31, 2021				March 31, 2021
Cash
Cash on hand		$	315,194			$	439,989			$	281,714
Bank deposits			12,639,031				15,646,840				10,936,182
			12,954,225				16,086,829				11,217,896
Cash equivalents (with maturities of less than three months)
Commercial papers			15,639,346				13,530,111				15,778,753
Negotiable certificates of deposit			15,000,000				7,500,000				500,000
Time deposits			2,905,535				2,656,545				2,547,261
Stimulus vouchers			1,391				5,139				—
			33,546,272				23,691,795				18,826,014
		$	46,500,497			$	39,778,624			$	30,043,910

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

		March 31, 2022		December 31, 2021		March 31, 2021
Bank deposits		0.00%~0.45%		0.00%~0.45%		0.00%~0.40%
Commercial papers		0.24%~0.47%		0.17%~0.30%		0.17%~0.23%
Negotiable certificates of deposit		0.30%~0.47%		0.27%~0.30%		0.24%
Time deposits		0.01%~1.48%		0.01%~3.60%		0.06%~3.60%

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

		March 31, 2022				December 31, 2021				March 31, 2021
Financial assets-current
Mandatorily measured at FVTPL
Derivatives (not designated for hedge)
Forward exchange contracts		$	2,738			$	—			$	—
Non-derivatives
Listed stocks—domestic			452				2,566				8,061
		$	3,190			$	2,566			$	8,061
Financial assets-noncurrent
Mandatorily measured at FVTPL
Non-derivatives
Non-listed stocks—domestic		$	618,472			$	647,998			$	584,838
Non-listed stocks—foreign			165,021				236,672				231,764
Limited partnership—domestic			22,451				24,105				—
		$	805,944			$	908,775			$	816,602
Financial liabilities-current
Held for trading
Derivatives (not designated for hedge)
Forward exchange contracts		$	—			$	6,180			$	3,867

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

Currency

Maturity Period

Contract Amount (In Thousands)

March 31, 2022

Forward exchange contracts - buy

NT$

/EUR

2022.06

NT$

173,035/EUR5,500

(Continued)

- 16 -

Currency

Maturity Period

Contract Amount (In Thousands)

December 31, 2021

Forward exchange contracts - buy

NT$

/EUR

2022.03

NT$

257,081/EUR8,000

March 31, 2021

Forward exchange contracts - buy

NT$

/EUR

2021.06

NT$

176,940/EUR5,160

(Concluded)

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

		March 31, 2022				December 31, 2021				March 31, 2021
Domestic investments
Listed stocks		$	366,443			$	458,582			$	150,803
Non-listed stocks			3,079,631				3,029,957				3,394,657
Foreign investments
Non-listed stocks			128,210				127,349				104,880
		$	3,574,284			$	3,615,888			$	3,650,340

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 for the three months ended March 31, 2021. The related unrealized gain on financial assets at FVOCI of $94,392 thousand was transferred from other equity to retained earnings upon the aforementioned disposal.

9. TRADE NOTES AND ACCOUNTS RECEIVABLE, NET

		March 31, 2022				December 31, 2021				March 31, 2021
Trade notes and accounts receivable		$	22,526,866			$	25,551,942			$	23,429,713
Less: Loss allowance			(1,457,143	)			(1,604,835	)			(2,038,354	)
		$	21,069,723			$	23,947,107			$	21,391,359

The main credit terms range from 30 to 90 days.

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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 amounts 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 providing for 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 of its company 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:

March 31, 2022

		Not Past Due				Past Due Less than 30 Days				Pass Due 31 to 60 Days				Pass Due 61 to 90 Days				Pass Due 91 to 120 Days				Pass Due 121 to 180 Days				Pass Due over 180 Days				Total
Telecommunications business
Expected credit loss rate (Note a)			0%~1%				1%~21%				3%~60%				10%~78%				23%~89%				48%~96%				100	%
Gross carrying amount		$	15,695,361			$	307,656			$	102,985			$	40,670			$	29,179			$	29,192			$	605,564			$	16,810,607
Loss allowance (lifetime ECL)			(50,967	)			(46,549	)			(21,000	)			(20,768	)			(23,508	)			(26,964	)			(605,564	)			(795,320	)
Amortized cost		$	15,644,394			$	261,107			$	81,985			$	19,902			$	5,671			$	2,228			$	—			$	16,015,287
Project business
Expected credit loss rate (Note b)			0%~5%				5%				10%				30%				50%				80%				100%
Gross carrying amount		$	1,919,824			$	26,885			$	22,284			$	143,256			$	293			$	223			$	579,337			$	2,692,102
Loss allowance (lifetime ECL)			(2,520	)			(1,698	)			(5,340	)			(42,977	)			(151	)			(200	)			(579,337	)			(632,223	)
Amortized cost		$	1,917,304			$	25,187			$	16,944			$	100,279			$	142			$	23			$	—			$	2,059,879

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December 31, 2021

		Not Past Due				Past Due Less than 30 Days				Pass Due 31 to 60 Days				Pass Due 61 to 90 Days				Pass Due 91 to 120 Days				Pass Due 121 to 180 Days				Pass Due 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		$	16,410,725			$	282,040			$	82,062			$	44,539			$	31,065			$	31,000			$	602,833			$	17,484,264
Loss allowance (lifetime ECL)			(50,733	)			(23,465	)			(28,596	)			(29,800	)			(25,402	)			(28,423	)			(602,833	)			(789,252	)
Amortized cost		$	16,359,992			$	258,575			$	53,466			$	14,739			$	5,663			$	2,577			$	—			$	16,695,012
Project business
Expected credit loss rate (Note b)			0%~5%				5	%			10	%			30	%			50	%			80	%			100	%
Gross carrying amount		$	3,988,010			$	136			$	6,960			$	14,271			$	411			$	799			$	769,762			$	4,780,349
Loss allowance (lifetime ECL)			(7,835	)			(68	)			(890	)			(4,293	)			(210	)			(639	)			(769,762	)			(783,697	)
Amortized cost		$	3,980,175			$	68			$	6,070			$	9,978			$	201			$	160			$	—			$	3,996,652

March 31, 2021

		Not Past Due				Past Due Less than 30 Days				Pass Due 31 to 60 Days				Pass Due 61 to 90 Days				Pass Due 91 to 120 Days				Pass Due 121 to 180 Days				Pass Due over 180 Days				Total
Telecommunications business
Expected credit loss rate (Note a)			0%~1%				2%~24%				3%~77%				9%~90%				26%~94%				53%~99%				100	%
Gross carrying amount		$	16,377,984			$	261,602			$	88,785			$	40,500			$	26,316			$	21,586			$	627,560			$	17,444,333
Loss allowance (lifetime ECL)			(56,948	)			(40,949	)			(23,952	)			(21,305	)			(19,803	)			(20,529	)			(627,560	)			(811,046	)
Amortized cost		$	16,321,036			$	220,653			$	64,833			$	19,195			$	6,513			$	1,057			$	—			$	16,633,287
Project business
Expected credit loss rate (Note b)			0%~5%				5	%			10	%			30	%			50	%			80	%			100	%
Gross carrying amount		$	1,737,112			$	129,145			$	7,206			$	64,226			$	10,807			$	2,058			$	1,146,102			$	3,096,656
Loss allowance (lifetime ECL)			(2,813	)			(11,285	)			(2,641	)			(20,084	)			(5,403	)			(1,852	)			(1,146,102	)			(1,190,180	)
Amortized cost		$	1,734,299			$	117,860			$	4,565			$	44,142			$	5,404			$	206			$	—			$	1,906,476

Note a: Please refer to Note 44 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:

		Three Months Ended March 31
		2022				2021
Beginning balance		$	1,604,835			$	2,154,364
Add: Provision for credit loss			86,521				42,751
Less: Amounts written off			(234,213	)			(158,761	)
Ending balance		$	1,457,143			$	2,038,354

- 19 -

10. INVENTORIES

		March 31, 2022				December 31, 2021				March 31, 2021
Merchandise		$	4,292,665			$	4,070,189			$	3,587,627
Project in process			5,705,341				4,805,196				6,383,176
Work in process			164,914				144,847				133,548
Raw materials			263,359				224,338				168,393
			10,426,279				9,244,570				10,272,744
Land held under development			1,998,733				1,998,733				1,998,733
Construction in progress			87,525				84,106				77,128
		$	12,512,537			$	11,327,409			$	12,348,605

The operating costs related to inventories were $11,500,100 thousand (including the valuation loss on inventories of $40,452 thousand) and $11,876,607 thousand (including the valuation loss on inventories of $32,919 thousand) for the three months ended March 31, 2022 and 2021, respectively.

As of March 31, 2022, December 31, 2021 and March 31, 2021, inventories of $2,086,258 thousand, $2,082,839 thousand and $2,075,861 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.

11. PREPAYMENTS

		March 31, 2022				December 31, 2021				March 31, 2021
Prepaid salary and bonus		$	2,898,477			$	4,201			$	2,971,619
Prepaid rents			2,383,155				2,349,236				2,786,987
Others			1,820,046				1,775,123				1,872,837
		$	7,101,678			$	4,128,560			$	7,631,443
Current
Prepaid salary and bonus		$	2,898,477			$	4,201			$	2,971,619
Prepaid rents			576,577				565,950				642,420
Others			1,806,163				1,759,946				1,872,667
		$	5,281,217			$	2,330,097			$	5,486,706
Noncurrent
Prepaid rents		$	1,806,578			$	1,783,286			$	2,144,567
Others			13,883				15,177				170
		$	1,820,461			$	1,798,463			$	2,144,737

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.

- 20 -

12. OTHER CURRENT MONETARY ASSETS

		March 31, 2022				December 31, 2021				March 31, 2021
Time deposits and negotiable certificates of deposit with maturities of more than three months		$	5,348,049			$	3,498,534			$	10,318,964
Accrued custodial receipts			748,544				765,339				806,182
Others			662,288				797,005				495,230
		$	6,758,881			$	5,060,878			$	11,620,376

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:

March 31, 2022

December 31, 2021

March 31, 2021

Time deposits and negotiable certificates of deposit with maturities of more than three months

0.03

%~2.70%

0.03

%~2.70%

0.06

%~2.20%

13. SUBSIDIARIES

a. Information on subsidiaries with material noncontrolling interests

		Principal				Proportion of Ownership Interests and Voting Rights Held by Noncontrolling Interests
Subsidiaries		Place of Business				March 31, 2022				December 31, 2021				March 31, 2021
SENAO			Taiwan				72	%			72	%			72	%
CHPT			Taiwan				66	%			66	%			66	%

		Profit Allocated to Noncontrolling Interests								Accumulated Noncontrolling Interests
		Three Months Ended March 31								March 31,				December 31,				March 31,
		2022				2021				2022				2021				2021
SENAO		$	130,080			$	110,391			$	4,227,052			$	4,465,587			$	4,421,248
CHPT		$	73,917			$	110,246				5,040,697				4,960,977				4,745,076
Individually immaterial subsidiaries with noncontrolling interests											2,661,831				2,501,040				2,517,427
										$	11,929,580			$	11,927,604			$	11,683,751

- 21 -

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.

		March 31, 2022				December 31, 2021				March 31, 2021
Current assets		$	7,560,573			$	7,962,726			$	6,509,675
Noncurrent assets			3,246,500				3,129,886				3,162,089
Current liabilities			(4,566,584	)			(4,531,148	)			(3,182,190	)
Noncurrent liabilities			(429,533	)			(418,431	)			(408,458	)
Equity		$	5,810,956			$	6,143,033			$	6,081,116
Equity attributable to the parent		$	1,583,904			$	1,677,446			$	1,659,868
Equity attributable to noncontrolling interests			4,227,052				4,465,587				4,421,248
		$	5,810,956			$	6,143,033			$	6,081,116

		Three Months Ended March 31
		2022				2021
Revenues and income		$	8,170,902			$	7,607,390
Costs and expenses			7,989,690				7,453,618
Profit for the period		$	181,212			$	153,772
Profit attributable to the parent		$	51,132			$	43,381
Profit attributable to noncontrolling interests			130,080				110,391
Profit for the period		$	181,212			$	153,772
Other comprehensive income attributable to the parent		$	874			$	415
Other comprehensive income (loss) attributable to noncontrolling interests			2,342				(191	)
Other comprehensive income for the period		$	3,216			$	224
Total comprehensive income attributable to the parent		$	52,006			$	43,796
Total comprehensive income attributable to noncontrolling interests			132,422				110,200
Total comprehensive income for the period		$	184,428			$	153,996
Net cash flow from operating activities		$	(710,738	)		$	(674,639	)
Net cash flow from investing activities			(14,170	)			175,596
Net cash flow from financing activities			(77,414	)			(75,577	)
Effect of exchange rate changes on cash and cash equivalents			176				(1	)
Net cash outflow		$	(802,146	)		$	(574,621	)

- 22 -

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.

		March 31, 2022				December 31, 2021				March 31, 2021
Current assets		$	4,641,005			$	4,656,928			$	4,234,587
Noncurrent assets			4,076,157				4,063,611				4,066,561
Current liabilities			(1,020,733	)			(1,143,341	)			(1,074,242	)
Noncurrent liabilities			(29,970	)			(31,986	)			(10,060	)
Equity		$	7,666,459			$	7,545,212			$	7,216,846
Equity attributable to CHI		$	2,625,762			$	2,584,235			$	2,471,770
Equity attributable to noncontrolling interests			5,040,697				4,960,977				4,745,076
		$	7,666,459			$	7,545,212			$	7,216,846

		Three Months Ended March 31
		2022				2021
Revenues and income		$	846,318			$	813,967
Costs and expenses			733,896				646,293
Profit for the period		$	112,422			$	167,674
Profit attributable to CHI		$	38,505			$	57,428
Profit attributable to noncontrolling interests			73,917				110,246
Profit for the period		$	112,422			$	167,674
Other comprehensive income (loss) attributable to CHI		$	3,022			$	(213	)
Other comprehensive income (loss) attributable to noncontrolling interests			5,803				(409	)
Other comprehensive income (loss) for the period		$	8,825			$	(622	)
Total comprehensive income attributable to CHI		$	41,527			$	57,215
Total comprehensive income attributable to noncontrolling interests			79,720				109,837
Total comprehensive income for the period		$	121,247			$	167,052
Net cash flow from operating activities		$	293,306			$	302,185
Net cash flow from investing activities			(115,488	)			(163,985	)
Net cash flow from financing activities			(5,829	)			(5,043	)
Effect of exchange rate changes on cash and cash equivalents			11,863				1,887
Net cash inflow		$	183,852			$	135,044

- 23 -

b. Equity transactions with noncontrolling interests

CHIEF issued new shares in March 2021, December 2021 and March 2022 as its employees exercised options. Therefore, the Company’s ownership interest in CHIEF decreased. See Note 34(a) for details.

CHTSC issued new shares in February 2021 and February 2022 as its employees exercised options. Therefore, the Company’s ownership interest in CHTSC decreased. See Note 34(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 34(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 three months ended March 31, 2022 and 2021 was as follows:

		Three Months Ended March 31, 2022
		CHIEF Share-Based Payment				CHTSC Share-Based Payment
Cash consideration received from noncontrolling interests		$	27,317			$	20,096
The proportionate share of the carrying amount of the net assets of the subsidiary transferred to noncontrolling interests			(16,977	)			(17,289	)
Differences arising from equity transactions		$	10,340			$	2,807
Line items for equity transaction adjustments
Additional paid-in capital - arising from changes in equities of subsidiaries		$	10,340			$	2,807

		Three Months Ended March 31, 2021
		CHIEF Share-Based Payment				CHTSC Share-Based Payment				IISI Share-Based Payment
Cash consideration received from noncontrolling interests		$	28,364			$	20,650			$	3,654
The proportionate share of the carrying amount of the net assets of the subsidiary transferred to noncontrolling interests			(17,242	)			(19,066	)			(792	)
Differences arising from equity transactions		$	11,122			$	1,584			$	2,862
Line items for equity transaction adjustments
Additional paid-in capital - arising from changes in equities of subsidiaries		$	11,122			$	1,584			$	2,862

- 24 -

14. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

		March 31, 2022				December 31, 2021				March 31, 2021
Investments in associates		$	7,454,115			$	7,322,842			$	7,185,195
Investment in joint venture			9,873				9,932				10,180
		$	7,463,988			$	7,332,774			$	7,195,375

a. Investments in associates

Investments in associates were as follows:

		Carrying Amount
		March 31, 2022				December 31, 2021				March 31, 2021
Material associate
Next Commercial Bank Co., Ltd. (“NCB”)		$	3,528,438			$	3,592,054			$	3,695,467
Associates that are not individually material
Listed
Senao Networks, Inc. (“SNI”)			1,158,873				1,077,604				1,022,121
KingwayTek Technology Co., Ltd. (“KWT”)			262,792				258,943				251,359
Non-listed
ST-2 Satellite Ventures Pte., Ltd. (“STS”)			567,103				518,165				500,350
Viettel-CHT Co., Ltd. (“Viettel-CHT”)			470,707				447,097				385,247
Taiwan International Standard Electronics Co., Ltd. (“TISE”)			356,600				347,269				358,027
WiAdvance Technology Corporation (“WATC”)			245,706				253,873				272,615
So-net Entertainment Taiwan Limited (“So-net”)			224,689				217,021				225,129
Chunghwa PChome Fund I Co., Ltd. (“CPFI”)			219,253				222,491				214,986
KKBOX Taiwan Co., Ltd. (“KKBOXTW”)			161,236				157,524				156,501
Taiwan International Ports Logistics Corporation (“TIPL”)			76,080				70,121				58,158
CHT Infinity Singapore Pte. Ltd. (“CISG”)			56,713				54,952				—
Imedtac Co., Ltd. (“IME”)			43,258				44,565				—
Click Force Co., Ltd. (“CF”)			38,989				36,938				33,962

(Continued)

- 25 -

		Carrying Amount
		March 31, 2022				December 31, 2021				March 31, 2021
Baohwa Trust Co., Ltd. (“BHT”)		$	20,000			$	—			$	—
AgriTalk Technology Inc. (“ATT”)			17,061				17,637				—
Cornerstone Ventures Co., Ltd. (“CVC”)			6,617				6,588				6,193
Alliance Digital Tech Co., Ltd. (“ADT”)			—				—				5,080
			3,925,677				3,730,788				3,489,728
		$	7,454,115			$	7,322,842			$	7,185,195

(Concluded)

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
		March 31, 2022				December 31, 2021				March 31, 2021
Material associate
Next Commercial Bank Co., Ltd. (“NCB”)			42				42				42
Associates that are not individually material
Senao Networks, Inc. (“SNI”)			34				34				34
KingwayTek Technology Co., Ltd. (“KWT”)			23				23				23
ST-2 Satellite Ventures Pte., Ltd. (“STS”)			38				38				38
Viettel-CHT Co., Ltd. (“Viettel-CHT”)			30				30				30
Taiwan International Standard Electronics Co., Ltd. (“TISE”)			40				40				40
WiAdvance Technology Corporation (“WATC”)			20				20				20
So-net Entertainment Taiwan Limited (“So-net”)			30				30				30
Chunghwa PChome Fund I Co., Ltd. (“CPFI”)			50				50				50
KKBOX Taiwan Co., Ltd. (“KKBOXTW”)			30				30				30
Taiwan International Ports Logistics Corporation (“TIPL”)			27				27				27
CHT Infinity Singapore Pte. Ltd. (“CISG”)			40				40				—
Imedtac Co., Ltd. (“IME”)			7				7				—
Click Force Co., Ltd. (“CF”)			49				49				49
Baohwa Trust Co., Ltd. (“BHT”)			40				—				—
AgriTalk Technology Inc. (“ATT”)			17				17				—
Cornerstone Ventures Co., Ltd. (“CVC”)			49				49				49
Alliance Digital Tech Co., Ltd. (“ADT”)			—				—				14

- 26 -

Summarized financial information of NCB was set out below:

		March 31, 2022				December 31, 2021				March 31, 2021
Assets		$	9,576,927			$	9,197,280			$	9,468,537
Liabilities			(1,059,976	)			(524,813	)			(548,056	)
Equity		$	8,516,951			$	8,672,467			$	8,920,481
The percentage of ownership interest held by the Company			41.90	%			41.90	%			41.90	%
Equity attributable to the Company		$	3,568,603			$	3,633,764			$	3,737,682
Unrealized gain or loss from downstream transactions			(40,165	)			(41,710	)			(42,215	)
The carrying amount of investment		$	3,528,438			$	3,592,054			$	3,695,467

		Three Months Ended March 31
		2022				2021
Net revenues		$	28,106			$	5,222
Net loss for the period		$	(147,879	)		$	(197,651	)
Other comprehensive loss			(7,638	)			—
Total comprehensive loss for the period		$	(155,517	)		$	(197,651	)

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:

		Three Months Ended March 31
		2022				2021
The Company’s share of profits		$	170,545			$	124,620
The Company’s share of other comprehensive income			4,530				1,217
The Company’s share of total comprehensive income		$	175,075			$	125,837

The Level 1 fair values of associates based on the closing market prices as of the balance sheet dates were as follows:

		March 31, 2022				December 31, 2021				March 31, 2021
SNI		$	2,619,487			$	1,699,351			$	1,840,273
KWT		$	856,270			$	909,787			$	1,372,673

The Company invested and obtained 40.00% ownership interest in BHT in March 2022. BHT mainly engages in VR integration and AIoT security services.

The Company invested and obtained 40.00% ownership interest in CISG in June 2021. CISG mainly engages in investment business.

- 27 -

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 as its employees exercised option. Therefore, the Company’s ownership interest in WATC decreased to 20.08% as of March 31, 2022.

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 invested and obtained 17.19% ownership interest in ATT. The Company originally 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 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’s share of profits and other comprehensive income (loss) of associates was recognized based on the reviewed financial statements.

b. Investment in joint venture

Investment in joint venture was as follows:

		Carrying Amount												% of Ownership Interests and Voting Rights
Name of Joint Venture		March 31, 2022				December 31, 2021				March 31, 2021				March 31, 2022				December 31, 2021				March 31, 2021
Non-listed
Chunghwa SEA Holdings (“CHT SEA”)		$	9,873			$	9,932			$	10,180				51	%			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.

- 28 -

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

		Three Months Ended March 31
		2022				2021
The Company’s share of loss		$	(60	)		$	(20	)
The Company’s share of other comprehensive income			—				—
The Company’s share of total comprehensive loss		$	(60	)		$	(20	)

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

15. PROPERTY, PLANT AND EQUIPMENT

		March 31, 2022				December 31, 2021				March 31, 2021
Assets used by the Company		$	278,660,259			$	281,849,188			$	272,591,103
Assets subject to operating leases			7,270,465				7,251,273				7,559,647
		$	285,930,724			$	289,100,461			$	280,150,750

a. Assets used by the Company

		Land				Land Improvements				Buildings				Computer Equipment				Telecommuni- cations Equipment				Transportation Equipment				Miscellaneous Equipment				Construction in Progress and Equipment to be Accepted				Total
Cost
Balance on January 1, 2021		$	101,990,645			$	1,630,362			$	70,889,578			$	12,405,580			$	710,775,709			$	3,894,243			$	10,299,819			$	8,529,416			$	920,415,352
Additions			—				—				4,720				9,823				9,606				—				35,013				5,494,890				5,554,052
Disposal			—				—				(491	)			(246,431	)			(4,417,893	)			(27,162	)			(91,113	)			—				(4,783,090	)
Effect of foreign exchange differences			—				—				—				13				(1,438	)			(155	)			(777	)			(115	)			(2,472	)
Others			2,155				—				24,336				59,915				6,923,250				615				65,181				(7,034,870	)			40,582
Balance on March 31, 2021		$	101,992,800			$	1,630,362			$	70,918,143			$	12,228,900			$	713,289,234			$	3,867,541			$	10,308,123			$	6,989,321			$	921,224,424
Accumulated depreciation and impairment
Balance on January 1, 2021		$	—			$	(1,399,204	)		$	(29,247,331	)		$	(10,638,967	)		$	(593,662,932	)		$	(3,718,392	)		$	(7,925,938	)		$	—			$	(646,592,764	)
Depreciation expenses			—				(11,225	)			(346,396	)			(182,104	)			(6,088,917	)			(15,716	)			(178,297	)			—				(6,822,655	)
Disposal			—				—				491				246,328				4,414,844				27,162				91,082				—				4,779,907
Effect of foreign exchange differences			—				—				—				(13	)			502				60				395				—				944
Others			—				—				6,725				(1,063	)			3,206				(55	)			(7,566	)			—				1,247
Balance on March 31, 2021		$	—			$	(1,410,429	)		$	(29,586,511	)		$	(10,575,819	)		$	(595,333,297	)		$	(3,706,941	)		$	(8,020,324	)		$	—			$	(648,633,321	)
Balance on January 1, 2021, net		$	101,990,645			$	231,158			$	41,642,247			$	1,766,613			$	117,112,777			$	175,851			$	2,373,881			$	8,529,416			$	273,822,588
Balance on March 31, 2021, net		$	101,992,800			$	219,933			$	41,331,632			$	1,653,081			$	117,955,937			$	160,600			$	2,287,799			$	6,989,321			$	272,591,103
Cost
Balance on January 1, 2022		$	102,644,714			$	1,661,628			$	71,358,036			$	11,217,048			$	713,534,222			$	3,927,337			$	10,808,873			$	10,786,149			$	925,938,007
Additions			—				—				3,353				26,227				29,636				—				28,517				3,815,312				3,903,045
Disposal			—				—				—				(164,374	)			(3,640,158	)			(33,776	)			(42,105	)			—				(3,880,413	)
Effect of foreign exchange differences			—				—				—				78				56,894				58				3,531				4,844				65,405
Others			(89,232	)			1,239				146,163				31,785				5,242,886				—				64,103				(5,357,263	)			39,681
Balance on March 31, 2022		$	102,555,482			$	1,662,867			$	71,507,552			$	11,110,764			$	715,223,480			$	3,893,619			$	10,862,919			$	9,249,042			$	926,065,725
Accumulated depreciation and impairment
Balance on January 1, 2022		$	—			$	(1,441,612	)		$	(30,577,570	)		$	(9,632,046	)		$	(590,533,289	)		$	(3,698,978	)		$	(8,205,324	)		$	—			$	(644,088,819	)
Depreciation expenses			—				(10,157	)			(356,721	)			(172,013	)			(6,337,429	)			(19,625	)			(175,980	)			—				(7,071,925	)
Disposal			—				—				—				164,272				3,636,779				33,776				42,101				—				3,876,928
Effect of foreign exchange differences			—				—				—				(73	)			(29,766	)			(30	)			(2,173	)			—				(32,042	)
Others			—				—				(82,484	)			(3,535	)			(3,765	)			(95	)			271				—				(89,608	)
Balance on March 31, 2022		$	—			$	(1,451,769	)		$	(31,016,775	)		$	(9,643,395	)		$	(593,267,470	)		$	(3,684,952	)		$	(8,341,105	)		$	—			$	(647,405,466	)
Balance on January 1, 2022, net		$	102,644,714			$	220,016			$	40,780,466			$	1,585,002			$	123,000,933			$	228,359			$	2,603,549			$	10,786,149			$	281,849,188
Balance on March 31, 2022, net		$	102,555,482			$	211,098			$	40,490,777			$	1,467,369			$	121,956,010			$	208,667			$	2,521,814			$	9,249,042			$	278,660,259

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

- 29 -

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
Main buildings			20~60 years
Other building facilities			3~15 years
Computer equipment			1~8 years
Telecommunications equipment
Telecommunication circuits			2~30 years
Telecommunication machinery and antennas equipment			2~30 years
Transportation equipment			3~10 years
Miscellaneous equipment
Leasehold improvements			1~9 years
Mechanical and air conditioner equipment			3~16 years
Others			1~15 years

b. Assets subject to operating leases

		Land				Buildings				Total
Cost
Balance on January 1, 2021		$	4,972,920			$	4,236,156			$	9,209,076
Others			(2,155	)			(12,149	)			(14,304	)
Balance on March 31, 2021		$	4,970,765			$	4,224,007			$	9,194,772
Accumulated depreciation and impairment
Balance on January 1, 2021		$	—			$	(1,615,721	)		$	(1,615,721	)
Depreciation expenses			—				(19,615	)			(19,615	)
Others			—				211				211
Balance on March 31, 2021		$	—			$	(1,635,125	)		$	(1,635,125	)
Balance on January 1, 2021, net		$	4,972,920			$	2,620,435			$	7,593,355
Balance on March 31, 2021, net		$	4,970,765			$	2,588,882			$	7,559,647
Cost
Balance on January 1, 2022		$	4,808,926			$	4,133,989			$	8,942,915
Others			89,232				(137,960	)			(48,728	)
Balance on March 31, 2022		$	4,898,158			$	3,996,029			$	8,894,187
Accumulated depreciation and impairment
Balance on January 1, 2022		$	—			$	(1,691,642	)		$	(1,691,642	)
Depreciation expenses			—				(19,098	)			(19,098	)
Others			—				87,018				87,018
Balance on March 31, 2022		$	—			$	(1,623,722	)		$	(1,623,722	)
Balance on January 1, 2022, net		$	4,808,926			$	2,442,347			$	7,251,273
Balance on March 31, 2022, net		$	4,898,158			$	2,372,307			$	7,270,465

- 30 -

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:

		March 31, 2022				December 31, 2021				March 31, 2021
Year 1		$	379,499			$	371,380			$	368,058
Year 2			302,986				300,591				291,898
Year 3			199,364				210,073				240,251
Year 4			157,340				158,541				159,376
Year 5			136,793				135,208				132,988
Onwards			1,156,427				1,177,460				1,240,687
		$	2,332,409			$	2,353,253			$	2,433,258

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
Main buildings			35~60 years
Other building facilities			3~15 years

16. LEASE ARRANGEMENTS

a. Right-of-use assets

		March 31, 2022				December 31, 2021				March 31, 2021
Land and buildings
Handsets base stations		$	6,745,398			$	6,987,731			$	6,988,843
Others			1,554,451				1,537,852				1,644,335
Equipment			2,444,157				2,525,353				2,131,922
		$	10,744,006			$	11,050,936			$	10,765,100

		Three Months Ended March 31
		2022				2021
Additions to right-of-use assets		$	667,148			$	814,854
Depreciation charge for right-of-use assets
Land and buildings
Handsets base stations		$	702,183			$	688,544
Others			162,546				201,761
Equipment			85,011				105,005
		$	949,740			$	995,310

The Company did not have significant sublease or impairment of right-of-use assets for the three months ended March 31, 2022 and 2021.

- 31 -

b. Lease liabilities

		March 31, 2022				December 31, 2021				March 31, 2021
Lease liabilities
Current		$	2,994,856			$	3,210,564			$	3,296,580
Noncurrent			6,909,109				7,061,689				6,022,381
		$	9,903,965			$	10,272,253			$	9,318,961

Ranges of discount rates for lease liabilities were as follows:

March 31, 2022

December 31, 2021

March 31, 2021

Land and buildings

Handsets base stations

0.37%~1.18%

0.37%~1.18%

0.37%~1.18%

Others

0.37%~9.00%

0.37%~9.00%

0.37%~9.00%

Equipment

0.37%~2.99%

0.37%~2.99%

0.37%~2.99%

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 38 to the consolidated financial statements for details.

d. Other lease information

		Three Months Ended March 31
		2022				2021
Expenses relating to low-value asset leases		$	2,014			$	2,019
Expenses relating to variable lease payments not included in the measurement of lease liabilities		$	1,827			$	1,431
Total cash outflow for leases		$	1,077,766			$	1,039,924

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.

- 32 -

17. INVESTMENT PROPERTIES

Cost
Balance on January 1 and March 31, 2021		$	10,662,450
Accumulated depreciation and impairment
Balance on January 1, 2021		$	(1,041,128	)
Depreciation expense			(10,568	)
Balance on March 31, 2021		$	(1,051,696	)
Balance on January 1, 2021, net		$	9,621,322
Balance on March 31, 2021, net		$	9,610,754
Cost
Balance on January 1 and March 31, 2022		$	10,662,596
Accumulated depreciation and impairment
Balance on January 1, 2022		$	(999,958	)
Depreciation expense			(10,547	)
Balance on March 31, 2022		$	(1,010,505	)
Balance on January 1, 2022, net		$	9,662,638
Balance on March 31, 2022, net		$	9,652,091

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

Land improvements			10~30 years
Buildings
Main buildings			35~60 years
Other building facilities			4~10 years

The fair values of the Company’s investment properties as of December 31, 2021 and 2020 were determined by Level 3 fair value measurements inputs based on the appraisal reports conducted by independent appraisers. The Company used the aforementioned appraisal reports as the basis to determine the fair values as of March 31, 2022 and 2021 because there was no material change in the economic environment or the market transaction price. Those appraisal reports are based on the comparison approach, income approach or cost approach. Key assumptions and the fair values were as follows:

March 31, 2022

December 31, 2021

March 31, 2021

Fair value

$

25,547,766

$

25,547,766

$

22,644,318

Overall capital interest rate

0.91%~3.05%

0.91%~3.05%

0.93%~3.03%

Profit margin ratio

8%~20%

8%~20%

12%~20%

Discount rate

—

—

—

Capitalization rate

0.53%~2.11%

0.53%~2.11%

0.73%~2.20%

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

- 33 -

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

		March 31, 2022				December 31, 2021				March 31, 2021
Year 1		$	107,288			$	107,183			$	120,645
Year 2			82,937				82,505				93,409
Year 3			65,683				61,629				74,241
Year 4			53,526				55,510				49,793
Year 5			34,196				38,605				34,937
Onwards			79,914				77,626				51,836
		$	423,544			$	423,058			$	424,861

18. INTANGIBLE ASSETS

		Mobile Broadband Concession				Computer Software				Goodwill				Others				Total
Cost
Balance on January 1, 2021		$	108,338,000			$	3,319,223			$	291,206			$	392,326			$	112,340,755
Additions-acquired separately			—				19,247				—				1,206				20,453
Disposal			—				(40,659	)			—				—				(40,659	)
Effect of foreign exchange differences			—				(156	)			—				(8	)			(164	)
Others			—				553				—				—				553
Balance on March 31, 2021		$	108,338,000			$	3,298,208			$	291,206			$	393,524			$	112,320,938
Accumulated amortization and impairment
Balance on January 1, 2021		$	(19,318,842	)		$	(2,532,910	)		$	(44,926	)		$	(159,517	)		$	(22,056,195	)
Amortization expenses			(1,549,728	)			(84,067	)			—				(7,242	)			(1,641,037	)
Disposal			—				40,659				—				—				40,659
Effect of foreign exchange differences			—				155				—				2				157
Balance on March 31, 2021		$	(20,868,570	)		$	(2,576,163	)		$	(44,926	)		$	(166,757	)		$	(23,656,416	)
Balance on January 1, 2021, net		$	89,019,158			$	786,313			$	246,280			$	232,809			$	90,284,560
Balance on March 31, 2021, net		$	87,469,430			$	722,045			$	246,280			$	226,767			$	88,664,522
Cost
Balance on January 1, 2022		$	108,338,000			$	3,202,901			$	291,206			$	412,477			$	112,244,584
Additions-acquired separately			—				11,404				—				6,068				17,472
Disposal			—				(62,926	)			—				(899	)			(63,825	)
Effect of foreign exchange differences			—				55				—				15				70
Others			—				300				—				—				300
Balance on March 31, 2022		$	108,338,000			$	3,151,734			$	291,206			$	417,661			$	112,198,601

(Continued)

- 34 -

		Mobile Broadband Concession				Computer Software				Goodwill				Others				Total
Accumulated amortization and impairment
Balance on January 1, 2022		$	(25,517,753	)		$	(2,529,941	)		$	(73,624	)		$	(178,183	)		$	(28,299,501	)
Amortization expenses			(1,549,728	)			(76,912	)			—				(7,944	)			(1,634,584	)
Disposal			—				62,926				—				899				63,825
Effect of foreign exchange differences			—				(28	)			—				(3	)			(31	)
Balance on March 31, 2022		$	(27,067,481	)		$	(2,543,955	)		$	(73,624	)		$	(185,231	)		$	(29,870,291	)
Balance on January 1, 2022, net		$	82,820,247			$	672,960			$	217,582			$	234,294			$	83,945,083
Balance on March 31, 2022, net		$	81,270,519			$	607,779			$	217,582			$	232,430			$	82,328,310

(Concluded)

The concessions are granted and issued by the 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.

19. OTHER ASSETS

		March 31, 2022				December 31, 2021				March 31, 2021
Spare parts		$	3,154,141			$	2,836,191			$	2,074,582
Refundable deposits			2,059,771				1,971,058				1,938,725
Other financial assets			1,000,000				1,000,000				1,000,000
Others			2,061,842				2,034,331				2,210,282
		$	8,275,754			$	7,841,580			$	7,223,589
Current
Spare parts		$	3,154,141			$	2,836,191			$	2,074,582
Others			198,022				142,589				158,425
		$	3,352,163			$	2,978,780			$	2,233,007
Noncurrent
Refundable deposits		$	2,059,771			$	1,971,058			$	1,938,725
Other financial assets			1,000,000				1,000,000				1,000,000
Others			1,863,820				1,891,742				2,051,857
		$	4,923,591			$	4,862,800			$	4,990,582

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.

- 35 -

This fund was used to finance various telecommunications infrastructure projects. Net assets of this fund will be returned proportionately after the project is completed.

20. 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.

March 31, 2022

Notional Amount (In Thousands)

Forward Rate

Line Item in Balance Sheet

Carrying Amount

Change in Fair Values of Hedging Instruments Used for Calculating Hedge Ineffectiveness

Hedging Instruments

Currency

Maturity

Asset

Liability

Cash flow hedge

Forecast purchases - forward exchange contracts

NT$

/EUR

NT$

238,038 /EUR 7,700

2022.06

$

30.91

Hedging financial assets (liabilities)

$

8,055

$

—

$

16,341

		Change in Value of Hedged Item Used for Calculating Hedge Ineffectiveness				Accumulated Gain or Loss on Hedging Instruments in Other Equity
Hedged Items						Continuing Hedges				Hedge Accounting no Longer Applied
Cash flow hedge
Forecast equipment purchases		$	(16,341	)		$	8,055			$	—

- 36 -

December 31, 2021

Notional Amount

Forward

Line Item in

Carrying Amount

Change in Fair Values of Hedging Instruments Used for Calculating Hedge

Hedging Instruments

Currency

(In Thousands)

Maturity

Rate

Balance Sheet

Asset

Liability

Ineffectiveness

Cash flow hedge

Forecast purchases -forward exchange contracts

NT$

/EUR

NT$

227,780/ EUR 7,000

2022.03

$

32.54

Hedging financial assets

(liabilities)

$

—

$

8,286

$

(10,038

)

		Change in Value of Hedged Item Used for Calculating Hedge Ineffectiveness				Accumulated Gain or Loss on Hedging Instruments in Other Equity
Hedged Items						Continuing Hedges				Hedge Accounting no Longer Applied
Cash flow hedge
Forecast equipment purchases		$	10,038			$	(8,286	)		$	—

March 31, 2021

Notional Amount

Forward

Line Item in

Carrying Amount

Change in Fair Values of Hedging Instruments Used for Calculating Hedge

Hedging Instruments

Currency

(In Thousands)

Maturity

Rate

Balance Sheet

Asset

Liability

Ineffectiveness

Cash flow hedge

Forecast purchases -forward exchange contracts

NT$

/EUR

NT$

495,142 /EUR 14,700

2021.06

$

33.68

Hedging financial assets

(liabilities)

$

—

$

1,864

$

(3,616

)

		Change in Value of Hedged Item Used for Calculating Hedge Ineffectiveness				Accumulated Gain or Loss on Hedging Instruments in Other Equity
Hedged Items						Continuing Hedges				Hedge Accounting no Longer Applied
Cash flow hedge
Forecast equipment purchases		$	3,616			$	(1,864	)		$	—

- 37 -

Three months ended March 31, 2022

		Comprehensive Income
														Reclassification from Equity to Profit or Loss and the Adjusted Line Item
Hedge Transaction		Hedging Gain or Loss Recognized in OCI				Amount of Hedge Ineffectiveness Recognized in Profit or Loss				Line Item in Which Hedge Ineffectiveness is Included				Amount Reclassified to P/L and the Adjusted Line Item				Due to Hedged Future Cash Flows No Longer Expected to Occur
Cash flow hedge
Forecast equipment purchases		$	16,341			$	—				—			$	(7,816	)		$	—
															Construction in progress and equipment to be accepted				Other gains and losses

Three months ended March 31, 2021

		Comprehensive Income
														Reclassification from Equity to Profit or Loss and the Adjusted Line Item
Hedge Transaction		Hedging Gain or Loss Recognized in OCI				Amount of Hedge Ineffectiveness Recognized in Profit or Loss				Line Item in Which Hedge Ineffectiveness is Included				Amount Reclassified to P/L and the Adjusted Line Item				Due to Hedged Future Cash Flows No Longer Expected to Occur
Cash flow hedge
Forecast equipment purchases		$	(3,616	)		$	—				—			$	154			$	—
															Construction in progress and equipment to be accepted				Other gains and losses

21. SHORT-TERM LOANS

		March 31, 2022				December 31, 2021				March 31, 2021
Unsecured bank loans		$	65,000			$	65,000			$	60,000

The annual interest rates of bank loans were as follows:

		March 31, 2022		December 31, 2021		March 31, 2021
Unsecured bank loans		1.97%~2.71%		1.97%~2.43%		1.97%~2.43%

- 38 -

22. SHORT-TERM BILLS PAYABLE

		March 31, 2022				December 31, 2021				March 31, 2021
Commercial paper payable		$	—			$	—			$	5,000,000
Less: Discounts on commercial paper payable			—				—				(511	)
		$	—			$	—			$	4,999,489

The annual interest rates of commercial paper payable were as follows:

March 31, 2022

December 31, 2021

March 31, 2021

Commercial paper payable

—

—

0.13%~0.21

%

23. LONG-TERM LOANS

		March 31, 2022				December 31, 2021				March 31, 2021
Secured bank loans (Note 39)		$	1,600,000			$	1,600,000			$	1,600,000
Less: Current portion			—				—				(1,600,000	)
		$	1,600,000			$	1,600,000			$	—

The annual interest rates of bank loans were as follows:

		March 31, 2022				December 31, 2021				March 31, 2021
Secured bank loans			0.89	%			0.89	%			0.72	%

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.

24. BONDS PAYABLE

		March 31, 2022				December 31, 2021				March 31, 2021
Unsecured domestic bonds		$	30,500,000			$	27,000,000			$	20,000,000
Less: Discounts on bonds payable			(26,648	)			(23,325	)			(18,892	)
		$	30,473,352			$	26,976,675			$	19,981,108

- 39 -

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

Issuance		Tranche				Issuance Period				Total Amount				Coupon Rate				Repayment and Interest Payment
2020-1			A				July 2020 to July 2025			$	8,800,000				0.50	%		One-time repayment upon maturity; interest payable annually
			B				July 2020 to July 2027				7,500,000				0.54	%		The same as above
			C				July 2020 to July 2030				3,700,000				0.59	%		The same as above
2021-1			A				April 2021 to April 2026				1,900,000				0.42	%		The same as above
			B				April 2021 to April 2028				4,100,000				0.46	%		The same as above
			C				April 2021 to April 2031				1,000,000				0.50	%		The same as above
2022-1 (Sustainable Bond)			-				March 2022 to March 2027				3,500,000				0.69	%		The same as above

25. TRADE NOTES AND ACCOUNTS PAYABLE

		March 31, 2022				December 31, 2021				March 31, 2021
Trade notes and accounts payable		$	11,823,029			$	18,063,288			$	9,689,794

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

26. OTHER PAYABLES

		March 31, 2022				December 31, 2021				March 31, 2021
Accrued salary and compensation		$	7,484,267			$	10,125,732			$	6,413,928
Accrued compensation to employees and remuneration to directors and supervisors			2,530,745				1,997,277				2,174,260
Payables to contractors			1,850,128				3,014,677				3,068,961
Amounts collected for others			1,692,412				1,426,443				1,347,333
Payables to equipment suppliers			993,714				1,153,550				859,084
Accrued maintenance costs			899,657				1,010,892				923,021
Others			6,214,077				5,708,137				7,809,931
		$	21,665,000			$	24,436,708			$	22,596,518

27. PROVISIONS

		March 31, 2022				December 31, 2021				March 31, 2021
Warranties		$	203,065			$	213,537			$	186,249
Onerous contracts			121,481				146,541				181,539
Employee benefits			64,450				62,833				58,279
Others			3,767				3,767				4,097
		$	392,763			$	426,678			$	430,164

(Continued)

- 40 -

		March 31, 2022				December 31, 2021				March 31, 2021
Current		$	251,488			$	284,813			$	325,747
Noncurrent			141,275				141,865				104,417
		$	392,763			$	426,678			$	430,164

(Concluded)

		Warranties				Onerous Contracts				Employee Benefits				Others				Total
Balance on January 1, 2021		$	182,431			$	170,433			$	57,210			$	4,097			$	414,171
Additional provisions recognized			16,594				11,106				1,457				—				29,157
Used / forfeited during the period			(12,776	)			—				(388	)			—				(13,164	)
Balance on March 31, 2021		$	186,249			$	181,539			$	58,279			$	4,097			$	430,164
Balance on January 1, 2022		$	213,537			$	146,541			$	62,833			$	3,767			$	426,678
Additional / (reversal of) provisions recognized			11,440				(25,060	)			1,617				—				(12,003	)
Used / forfeited during the period			(21,928	)			—				—				—				(21,928	)
Effect of foreign exchange differences			16				—				—				—				16
Balance on March 31, 2022		$	203,065			$	121,481			$	64,450			$	3,767			$	392,763

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.

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

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.

28. RETIREMENT BENEFIT PLANS

Relevant pension costs for defined benefit plans which were determined by the pension cost rates of actuarial valuation as of December 31, 2021 and 2020 were as follows:

		Three Months Ended March 31
		2022				2021
Operating costs		$	142,112			$	181,663
Marketing expenses			89,873				91,888
General and administrative expenses			21,011				19,659
Research and development expenses			9,101				10,905
		$	262,097			$	304,115

- 41 -

29. EQUITY

a. Share capital

1) Common stocks

		March 31, 2022				December 31, 2021				March 31, 2021
Number of authorized shares (thousand)			12,000,000				12,000,000				12,000,000
Authorized shares		$	120,000,000			$	120,000,000			$	120,000,000
Number of issued and paid shares (thousand)			7,757,447				7,757,447				7,757,447
Issued shares		$	77,574,465			$	77,574,465			$	77,574,465

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 March 31, 2022, the outstanding ADSs were 207,381 thousand common stocks, which equaled 20,738 thousand units and represented 2.67% 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:

a) Exercise their voting rights,

b) Sell their ADSs, and

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

b. Additional paid-in capital

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

		Share Premium				Movements of Additional Paid-in Capital for Associates and Joint Ventures Accounted for Using Equity Method				Movements of Additional Paid-in Capital Arising from Changes in Equities of Subsidiaries				Difference between Consideration Received and Carrying Amount of the Subsidiaries’ Net Assets upon Disposal				Donated Capital				Stockholders’ Contribution due to Privatization				Total
Balance on January 1, 2021		$	147,329,386			$	186,828			$	2,087,957			$	987,611			$	21,519			$	20,648,078			$	171,261,379
Share-based payment transactions of subsidiaries			—				—				15,568				—				—				—				15,568
Balance on March 31, 2021		$	147,329,386			$	186,828			$	2,103,525			$	987,611			$	21,519			$	20,648,078			$	171,276,947

(Continued)

- 42 -

		Share Premium				Movements of Additional Paid-in Capital for Associates and Joint Ventures Accounted for Using Equity Method				Movements of Additional Paid-in Capital Arising from Changes in Equities of Subsidiaries				Difference between Consideration Received and Carrying Amount of the Subsidiaries’ Net Assets upon Disposal				Donated Capital				Stockholders’ Contribution due to Privatization				Total
Balance on January 1, 2022		$	147,329,386			$	186,391			$	2,104,672			$	987,611			$	23,487			$	20,648,078			$	171,279,625
Change in additional paid-in capital from investments in associates and joint ventures accounted for using equity method			—				(1,159	)			—				—				—				—				(1,159	)
Share-based payment transactions of subsidiaries			—				—				13,147				—				—				—				13,147
Balance on March 31, 2022		$	147,329,386			$	185,232			$	2,117,819			$	987,611			$	23,487			$	20,648,078			$	171,291,613

(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 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.

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.

- 43 -

The appropriations of the 2021 earnings of Chunghwa proposed by the Chunghwa’s Board of Directors on February 23, 2022 and the appropriations of the 2020 earnings of Chunghwa approved by the stockholders in their meetings on August 20, 2021 were as follows:

		Appropriation of Earnings								Dividends Per Share (NT$)
		For Fiscal Year 2021				For Fiscal Year 2020				For Fiscal Year 2021				For Fiscal Year 2020
Special reserve		$	408,150			$	—
Cash dividends			35,746,314				33,403,565			$	4.608			$	4.306

The appropriations of earnings for 2021 are subject to the resolution of the stockholders’ meeting planned to be held on May 27, 2022. 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.

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

		Three Months Ended March 31
		2022				2021
Beginning balance		$	(7,588	)		$	1,239,901
Unrealized gain or loss for the period
Equity instruments			(34,295	)			(945,986	)
Share of loss of associates and joint ventures accounted for using equity method			(3,200	)			—
Transferred accumulated gain or loss to unappropriated earnings  resulting from the disposal of equity instruments (Note 8)			—				(94,392	)
Ending balance		$	(45,083	)		$	199,523

e. Noncontrolling interests

		Three Months Ended March 31
		2022				2021
Beginning balance		$	11,927,604			$	11,327,441
Shares attributed to noncontrolling interests
Net income for the period			331,397				316,686
Exchange differences arising from the translation of the foreign operations			12,094				(2,261	)
Unrealized gain or loss on financial assets at FVOCI			(10,265	)			637
Share of other comprehensive income of associates and joint  ventures accounted for using equity method			1,489				87

(Continued)

- 44 -

		Three Months Ended March 31
		2022				2021
Cash dividends distributed by subsidiaries		$	(370,957	)		$	—
Changes in additional paid-in capital from investments in associates and joint ventures accounted for using equity method			(51	)			—
Share-based payment transactions of subsidiaries			38,269				41,161
Ending balance		$	11,929,580			$	11,683,751

(Concluded)

30. REVENUES

		Three Months Ended March 31
		2022				2021
Revenue from contracts with customers		$	50,871,121			$	49,814,836
Other revenues
Rental income			244,646				227,079
Government grants income			125,199				19,622
Others			53,773				39,458
			423,618				286,159
		$	51,294,739			$	50,100,995

For the information of performance obligations related to customer contracts, please refer to Note 3 Summary of Significant Accounting Policies to the consolidated financial statements for the year ended December 31, 2021 for details.

a. Disaggregation of revenue

Please refer to Note 44 Segment Information for details.

b. Contract balances

		March 31, 2022				December 31, 2021				March 31, 2021				January 1, 2021
Trade notes and accounts receivable (Note 9)		$	21,069,723			$	23,947,107			$	21,391,359			$	22,621,902
Contract assets
Products and service bundling		$	7,363,726			$	7,197,206			$	7,205,888			$	7,232,134
Others			950,466				982,688				545,567				612,206
Less: Loss allowance			(18,488	)			(18,080	)			(17,899	)			(17,792	)
		$	8,295,704			$	8,161,814			$	7,733,556			$	7,826,548

(Continued)

- 45 -

		March 31, 2022				December 31, 2021				March 31, 2021				January 1, 2021
Current		$	5,539,500			$	5,554,070			$	5,246,566			$	5,331,246
Noncurrent			2,756,204				2,607,744				2,486,990				2,495,302
		$	8,295,704			$	8,161,814			$	7,733,556			$	7,826,548
Contract liabilities
Telecommunications business		$	13,079,286			$	13,143,598			$	13,303,693			$	13,601,662
Project business			6,099,624				5,435,268				6,615,715				6,686,561
Products and service bundling			2,878				4,168				12,794				16,404
Others			420,289				491,298				548,535				421,166
		$	19,602,077			$	19,074,332			$	20,480,737			$	20,725,793
Current		$	12,701,430			$	12,234,276			$	13,264,677			$	13,436,706
Noncurrent			6,900,647				6,840,056				7,216,060				7,289,087
		$	19,602,077			$	19,074,332			$	20,480,737			$	20,725,793

(Concluded)

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.

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.

c. Incremental costs of obtaining contracts

		March 31, 2022				December 31, 2021				March 31, 2021
Noncurrent
Incremental costs of obtaining contracts		$	967,462			$	987,656			$	961,667

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 three months ended March 31, 2022 and 2021 are $210,872 thousand and $194,880 thousand, respectively.

- 46 -

31. NET INCOME

a. Other income and expenses

		Three Months Ended March 31
		2022				2021
Gain (loss) on disposal of property, plant and equipment, net		$	(1,357	)		$	2,569

b. Other income

		Three Months Ended March 31
		2022				2021
Rental income		$	19,449			$	16,072
Others			24,934				25,899
		$	44,383			$	41,971

c. Other gains and losses

		Three Months Ended March 31
		2022				2021
Valuation gain (loss) on financial assets and liabilities at fair value through profit or loss, net		$	(94,077	)		$	133,841
Foreign currency exchange gain or loss, net			(28,908	)			38,204
Gain on disposal of financial instruments, net			728				186
Others			13,931				(8,110	)
		$	(108,326	)		$	164,121

d. Interest expenses

		Three Months Ended March 31
		2022				2021
Interest on bonds payable		$	35,683			$	27,419
Interest on lease liabilities			16,331				17,960
Interest paid to financial institutions			3,992				5,322
Others			6				25
		$	56,012			$	50,726

e. Impairment loss

		Three Months Ended March 31
		2022				2021
Contract assets		$	408			$	107
Trade notes and accounts receivable		$	86,521			$	42,751
Other receivables		$	14,457			$	711
Inventories		$	40,452			$	32,919

- 47 -

f. Depreciation and amortization expenses

		Three Months Ended March 31
		2022				2021
Property, plant and equipment		$	7,091,023			$	6,842,270
Right-of-use assets			949,740				995,310
Investment properties			10,547				10,568
Intangible assets			1,634,584				1,641,037
Incremental costs of obtaining contracts			210,872				194,880
Total depreciation and amortization expenses		$	9,896,766			$	9,684,065
Depreciation expenses summarized by functions
Operating costs		$	7,565,322			$	7,384,251
Operating expenses			485,988				463,897
		$	8,051,310			$	7,848,148
Amortization expenses summarized by functions
Operating costs		$	1,797,521			$	1,784,636
Marketing expenses			19,976				23,656
General and administrative expenses			16,789				17,792
Research and development expenses			11,170				9,833
		$	1,845,456			$	1,835,917

g. Employee benefit expenses

		Three Months Ended March 31
		2022				2021
Post-employment benefit
Defined contribution plans		$	206,808			$	192,547
Defined benefit plans			262,097				304,115
			468,905				496,662
Share-based payment
Equity-settled share-based payment			4,003				4,061
Other employee benefit (Note)			10,865,724				10,549,101
Total employee benefit expenses		$	11,338,632			$	11,049,824
Summary by functions
Operating costs		$	5,506,617			$	5,692,531
Operating expenses			5,832,015				5,357,293
		$	11,338,632			$	11,049,824

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.

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.

- 48 -

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. The compensation to the employees and remuneration to the directors of 2021 will be reported to the stockholders in their meeting planned to be held on May 27, 2022.

		Cash
		2021				2020
Compensation distributed to the employees		$	1,429,000			$	1,202,448
Remuneration paid to the directors			38,552				35,803

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.

32. INCOME TAX

a. Income tax recognized in profit or loss

The major components of income tax expense were as follows:

		Three Months Ended March 31
		2022				2021
Current tax
Current tax expenses recognized for the period		$	2,251,068			$	2,117,788
Income tax adjustments on prior years			—				(29,722	)
Others			391				154
			2,251,459				2,088,220
Deferred tax
Deferred tax expenses recognized for the period			31,949				112,983
Income tax adjustments on prior years			8				(2,485	)
			31,957				110,498
Income tax recognized in profit or loss		$	2,283,416			$	2,198,718

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.

b. Income tax examinations

Income tax returns of Chunghwa, Aval, Wiin, CHYP, CHSI, CHPT, SHE, CHST and HHI have been examined by the tax authorities through 2019. Income tax returns of SENAO, ISPOT, Youth, Youyi, SENYOUNG, Senaolife, CHI, CHIEF, Unigate, SFD, CLPT, CHTSC, LED, IISI and UTC has been examined by the tax authorities through 2020.

- 49 -

33. 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

		Three Months Ended March 31
		2022				2021
Net income used to compute the basic earnings per share
Net income attributable to the parent		$	9,059,580			$	8,804,944
Assumed conversion of all dilutive potential common stocks
Employee stock options and employee compensation of subsidiaries			(1,002	)			(922	)
Net income used to compute the diluted earnings per share		$	9,058,578			$	8,804,022

Weighted Average Number of Common Stocks

(Thousand Shares)

		Three Months Ended March 31
		2022				2021
Weighted average number of common stocks used to compute the basic earnings per share			7,757,447				7,757,447
Assumed conversion of all dilutive potential common stocks
Employee compensation			8,421				8,124
Weighted average number of common stocks used to compute the diluted earnings per share			7,765,868				7,765,571

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.

34. SHARE-BASED PAYMENT ARRANGEMENT

a. CHIEF share-based compensation plan (“CHIEF Plan”) described as follows:

Effective Date for Plan Registration		Resolution Date by CHIEF’s Board of Directors				Stock Options Units				Exercise Price (NT$)
2020.09.16			2020.10.26				200.00			$199.70
										(Original price $ 206.00)
2017.12.18			2018.10.31				50.00			$134.50
										(Original price$147.00)
			2017.12.19				950.00			$128.70
										(Original price$147.00)

- 50 -

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 three months ended March 31, 2022 and 2021 were as follows:

		Three Months Ended March 31
		2022				2021
Granted on November 13, 2020		$	2,431			$	2,432
Granted on October 31, 2018			17				42
Granted on December 19, 2017			—				52
		$	2,448			$	2,526

CHIEF modified the plan terms of stock options granted on November 13, 2020 in September 2021; therefore, the exercise price changed from $206.00 to $199.70 per share. 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; therefore, the exercise price changed from $138.70 to $134.50 per share. 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; therefore, the exercise price changed from $132.70 to $128.70 per share. The modification did not cause any incremental fair value granted.

Information about CHIEF’s outstanding stock options for the three months ended March 31, 2022 and 2021 was as follows:

		Three Months Ended March 31, 2022
		Granted on November 13, 2020								Granted on October 31, 2018								Granted on December 19, 2017
		Number of Options				Weighted Average Exercise Price (NT$)				Number of Options				Weighted Average Exercise Price (NT$)				Number of Options				Weighted Average Exercise Price (NT$)
Employee stock options
Options outstanding at beginning of the period			194.00			$	199.70				10.50			$	134.50				213.25			$	128.70
Options exercised			—				—				—				—				(212.25	)			128.70
Options outstanding at end of the period			194.00				199.70				10.50				134.50				1.00				128.70
Options exercisable at end of the period			—				—				—				—				1.00				128.70
Weighted average remaining contractual life (years)			3.62								1.58								0.72

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		Three Months Ended March 31, 2021
		Granted on November 13, 2020								Granted on October 31, 2018								Granted on December 19, 2017
		Number of Options				Weighted Average Exercise Price (NT$)				Number of Options				Weighted Average Exercise Price (NT$)				Number of Options				Weighted Average Exercise Price (NT$)
Employee stock options
Options outstanding at beginning of the period			200.00			$	206.00				21.00			$	138.70				427.50			$	132.70
Options exercised			—				—				—				—				(213.75	)			132.70
Options outstanding at end of the period			200.00				206.00				21.00				138.70				213.75				132.70
Options exercisable at end of the period			—				—				—				—				—				—
Weighted average remaining contractual life (years)			4.62								2.58								1.72

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 Granted on November 13, 2020				Stock Options Granted on October 31, 2018				Stock Options Granted on December 19, 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$)		$	173,893			$	33,540			$	2,318

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 and 2018 were based on the average annualized historical share price volatility of CHIEF’s comparable companies before the grant date.

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.

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The compensation costs for stock options for the three months ended March 31, 2022 and 2021 were as follows:

		Three Months Ended March 31
		2022				2021
Granted on February 20, 2021		$	889			$	691
Granted on December 20, 2019			395				731
		$	1,284			$	1,422

Information about CHTSC’s outstanding stock options for the three months ended March 31, 2022 and 2021 were as follows:

		Three Months Ended March 31, 2022
		Granted on February 20, 2021								Granted on December 20, 2019
		Number of Options				Weighted Average Exercise Price (NT$)				Number of Options				Weighted Average Exercise Price (NT$)
Employee stock options
Options outstanding at beginning of the period			3,324			$	19.085				3,174			$	19.085
Options exercised			—				—				(1,053	)			19.085
Options forfeited			(16	)			—				—
Options outstanding at end of the period			3,308				19.085				2,121				19.085
Options exercisable at end of the period			820				19.085				5				19.085
Weighted average remaining contractual life (years)			3.89								2.72

		Three Months Ended March 31, 2021
		Granted on February 20, 2021								Granted on December 20, 2019
		Number of Options				Weighted Average Exercise Price (NT$)				Number of Options				Weighted Average Exercise Price (NT$)
Employee stock options
Options outstanding at beginning of the period			—			$	—				4,328			$	19.085
Options granted			3,500				19.085				—				—

(Continued)

- 53 -

		Three Months Ended March 31, 2021
		Granted on February 20, 2021								Granted on December 20, 2019
		Number of Options				Weighted Average Exercise Price (NT$)				Number of Options				Weighted Average Exercise Price (NT$)
Options exercised			—			$	—				(1,082	)		$	19.085
Options outstanding at end of the period			3,500				19.085				3,246				19.085
Options exercisable at end of the period			—				—				—				—
Weighted average remaining contractual life (years)			4.89								3.72

(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 Granted on Ferbuary 20, 2021				Stock Options Granted on December 20, 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$)		$	3,350			$	2,470

Expected volatility was based on the average annualized historical share price volatility of CHTSC’s comparable companies before the grant date.

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.

- 54 -

Information about IISI’s outstanding stock options for the three months ended March 31, 2021 was as follows:

		Three Months Ended March 31, 2021
		Granted in January 2014
		Number of Options				Weighted Average Exercise Price (NT$)
Employee stock options
Options outstanding at beginning of the period			530.00			$	14.00
Options exercised			(261.00	)			14.00
Options forfeited			(269.00	)			—
Options outstanding at end of the period			—				—
Options exercisable at end of the period			—				—
Weighted average remaining contractual life (years)			—

No compensation cost of stock options granted was recognized for the three months ended March 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 Granted in January 2014
Grant-date share price (NT$)		$14.51
Exercise price (NT$)		$14.00
Dividend yield		6%
Risk-free interest rate		1.16%~1.32%
Expected life		4.5~5.5 years
Expected volatility		35.28%~35.97%
Weighted average fair value of grants (NT$)		$2,345

Expected volatility was based on the average annualized historical share price volatility of IISI’s comparable companies before the grant date.

d. CLPT share-based compensation plan (“CLPT Plan”) described as follows:

The Board of Directors of CLPT resolved to issue 690 stock options on February 26, 2021. Each option is eligible to subscribe for one thousand common stocks when exercisable and the exercise price is $15.90 per share (original price is $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

- 55 -

CLPT Plan are valid for four years and the graded vesting schedule will vest two years after the grant date.

The compensation costs were $271 thousand and $113 thousand for the three months ended March 31, 2022 and 2021, respectively.

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 three months ended March 31, 2022 and 2021 was as follows:

		Three Months Ended March 31
		2022								2021
		Granted on February 26, 2021								Granted on February 26, 2021
		Number of Options				Weighted Average Exercise Price (NT$)				Number of Options				Weighted Average Exercise Price (NT$)
Employee stock options
Options outstanding at beginning of the period			550			$	15.90				—			$	—
Options granted			—				—				690				16.87
Options outstanding at end of the period			550				15.90				690				16.87
Options exercisable at end of the period			—				—				—				—
Weighted average remaining contractual life (years)			2.91								3.91

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 Granted on February 26, 2021
Grant-date share price (NT$)		$17.63
Exercise price (NT$)		$16.87
Dividend yield		—
Risk-free interest rate		0.31%
Expected life		4 years
Expected volatility		35.22%
Weighted average fair value of grants (NT$)		$4,750

Expected volatility was based on the average annualized historical share price volatility of CLPT’s comparable companies before the grant date.

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35. CASH FLOW INFORMATION

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

Investing activities		Three Months Ended March 31
		2022				2021
Increase in property, plant and equipment		$	3,903,045			$	5,554,052
Changes in other payables			1,324,606				(1,110,810	)
Acquisition of property, plant and equipment		$	5,227,651			$	4,443,242
Disposal of financial assets at fair value through other comprehensive income		$	—			$	2,635,568
Changes in other current monetary assets			—				270,321
Proceeds from disposal of financial assets at fair value through other comprehensive income		$	—			$	2,905,889

Financing Activities

		Balance on January 1,				Cash Flows From Financing				Changes in Non-Cash Transactions								Cash Flows From Operation Activities -				Balance on March 31,
		2022				Activities				New Leases				Others				Interest Paid				2022
Lease liabilities		$	10,272,253			$	(1,057,594	)		$	667,148			$	38,489			$	(16,331	)		$	9,903,965

		Balance on January 1,				Cash Flows From Financing				Changes in Non-Cash Transactions								Cash Flows From Operation Activities -				Balance on March 31,
		2021				Activities				New Leases				Others				Interest Paid				2021
Lease liabilities		$	9,596,667			$	(1,018,514	)		$	814,854			$	(56,086	)		$	(17,960	)		$	9,318,961

36. 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.

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37. 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).

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.

		March 31, 2022								December 31, 2021								March 31, 2021
		Carrying Value				Fair Value				Carrying Value				Fair Value				Carrying Value				Fair Value
Financial liabilities
Financial liabilities measured at amortized cost
Bonds payable		$	30,473,352			$	30,509,155			$	26,976,675			$	27,082,090			$	19,981,108			$	20,083,133

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.

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

March 31, 2022

		Level 1				Level 2				Level 3				Total
Financial assets at FVTPL
Derivatives		$	—			$	2,738			$	—			$	2,738
Listed stocks			452				—				—				452
Non-listed stocks			—				—				783,493				783,493
Limited partnership			—				—				22,451				22,451
		$	452			$	2,738			$	805,944			$	809,134
Hedging financial assets		$	—			$	8,055			$	—			$	8,055
Financial assets at FVOCI
Listed stocks		$	366,443			$	—			$	—			$	366,443
Non-listed stocks			—				—				3,207,841				3,207,841
		$	366,443			$	—			$	3,207,841			$	3,574,284

- 58 -

December 31, 2021

		Level 1				Level 2				Level 3				Total
Financial assets at FVTPL
Listed stocks		$	2,566			$	—			$	—			$	2,566
Non-listed stocks			—				—				884,670				884,670
Limited partnership			—				—				24,105				24,105
		$	2,566			$	—			$	908,775			$	911,341
Financial assets at FVOCI
Listed stocks		$	458,582			$	—			$	—			$	458,582
Non-listed stocks			—				—				3,157,306				3,157,306
		$	458,582			$	—			$	3,157,306			$	3,615,888
Financial liabilities at FVTPL
Derivatives		$	—			$	6,180			$	—			$	6,180
Hedging financial liabilities		$	—			$	8,286			$	—			$	8,286

March 31, 2021

		Level 1				Level 2				Level 3				Total
Financial assets at FVTPL
Listed stocks		$	8,061			$	—			$	—			$	8,061
Non-listed stocks			—				—				816,602				816,602
		$	8,061			$	—			$	816,602			$	824,663
Financial assets at FVOCI
Listed stocks		$	150,803			$	—			$	—			$	150,803
Non-listed stocks			—				—				3,499,537				3,499,537
		$	150,803			$	—			$	3,499,537			$	3,650,340
Financial liabilities at FVTPL
Derivatives		$	—			$	3,867			$	—			$	3,867
Hedging financial liabilities		$	—			$	1,864			$	—			$	1,864

There were no transfers between Levels 1 and 2 for the three months ended March 31, 2022 and 2021.

- 59 -

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

Three months ended March 31, 2022

Financial Assets		Measured at Fair Value through Profit or Loss				Measured at Fair Value through Other Comprehensive Income				Total
Balance on January 1, 2022		$	908,775			$	3,157,306			$	4,066,081
Recognized in profit or loss under “Other gains and losses”			(102,831	)			—				(102,831	)
Recognized in other comprehensive income under “Unrealized gain or loss on financial assets at fair value through other comprehensive income”			—				50,535				50,535
Balance on March 31, 2022		$	805,944			$	3,207,841			$	4,013,785
Unrealized gain or loss for the three months ended March 31, 2022		$	(102,831	)

Three months ended March 31, 2021

Financial Assets		Measured at Fair Value through Profit or Loss				Measured at Fair Value through Other Comprehensive Income				Total
Balance on January 1, 2021		$	677,202			$	4,438,999			$	5,116,201
Acquisition			—				33,000				33,000
Recognized in profit or loss under “Other gains and losses”			139,400				—				139,400
Recognized in other comprehensive income under “Unrealized gain or loss on financial assets at fair value through other comprehensive income”			—				(972,462	)			(972,462	)
Balance on March 31, 2021		$	816,602			$	3,499,537			$	4,316,139
Unrealized gain or loss for the three months ended March 31, 2021		$	139,400

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.

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The fair values of non-listed domestic and foreign equity investments 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 ownership of these investees, 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.

		March 31, 2022				December 31, 2021				March 31, 2021
Discount for lack of marketability			16.05%~20.00	%			16.05%~20.00	%			14.73%~20.00	%
Noncontrolling interests discount			17.29%~25.00	%			17.29%~25.00	%			17.29%~25.00	%
Growth rate of long-term revenue			0.19	%			0.19	%			-
Discount rate			7.22	%			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 equity investments would increase (decrease) as below table.

		March 31, 2022				March 31, 2021
Discount for lack of marketability
5% increase		$	(26,748	)		$	(233,202	)
5% decrease		$	26,748			$	233,202
Noncontrolling interests discount
5% increase		$	(13,976	)		$	(17,205	)
5% decrease		$	13,976			$	17,205
Long-term revenue growth rates
0.1% increase		$	27,996			$	—
0.1% decrease		$	(27,458	)		$	—
Discount rate
1% increase		$	(330,677	)		$	—
1% decrease		$	409,131			$	—

Categories of Financial Instruments

		March 31, 2022				December 31, 2021				March 31, 2021
Financial assets
Measured at FVTPL
Mandatorily measured at FVTPL		$	809,134			$	911,341			$	824,663
Hedging financial assets			8,055				—				—
Financial assets at amortized cost (Note a)			77,428,517				71,799,195				66,028,573
Financial assets at FVOCI			3,574,284				3,615,888				3,650,340

(Continued)

- 61 -

		March 31, 2022				December 31, 2021				March 31, 2021
Financial liabilities
Measured at FVTPL
Held for trading		$	—			$	6,180			$	3,867
Hedging financial liabilities			—				8,286				1,864
Measured at amortized cost (Note b)			60,741,663				64,746,363				55,395,249

(Concluded)

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, short-term bills payable, trade notes and accounts payable, payables to related parties, partial other payables, customers’ deposits, bonds payable and long-term loans (included current portion) 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.

- 62 -

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:

		March 31, 2022				December 31, 2021				March 31, 2021
Assets
USD		$	1,913,819			$	2,009,607			$	2,473,347
EUR			50,475				48,962				33,152
SGD			121,252				259,571				266,901
JPY			33,487				37,123				18,616
RMB			83,858				88,654				40,062
HKD			6,505				69,776				69,033
Liabilities
USD			859,584				889,578				705,777
EUR			694,643				861,481				721,827
SGD			1,990,100				1,964,490				989,769
JPY			10,143				12,662				7,706
RMB			41,873				38,521				102
HKD			20,585				15,792				7,695

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

		March 31, 2022				December 31, 2021				March 31, 2021
Assets
EUR		$	10,793			$	—			$	—
Liabilities
EUR			—				14,466				5,731

Foreign currency sensitivity analysis

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.

		Three Months Ended March 31
		2022				2021
Profit or loss
Monetary assets and liabilities (a)
USD		$	52,712			$	88,379
EUR			(32,208	)			(34,434	)
SGD			(93,442	)			(36,143	)

(Continued)

- 63 -

		Three Months Ended March 31
		2022				2021
JPY		$	1,167			$	546
RMB			2,099				1,998
HKD			(704	)			3,067
Derivatives (b)
EUR			8,778				8,638
Equity
Derivatives (c)
EUR			12,289				24,608

(Concluded)

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

b) This is mainly attributable to forward exchange contracts.

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:

		March 31, 2022				December 31, 2021				March 31, 2021
Fair value interest rate risk
Financial assets		$	39,301,834			$	27,670,982			$	29,746,090
Financial liabilities			40,377,317				37,248,928				34,299,558
Cash flow interest rate risk
Financial assets			11,877,021				14,171,472				10,204,551
Financial liabilities			1,665,000				1,665,000				1,660,000

Interest rate sensitivity analysis

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 $25,530 thousand and $21,361 thousand for the three months ended March 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.

- 64 -

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.

Equity price sensitivity analysis

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 $40,320 thousand and $178,714 thousand, respectively, as a result of the changes in fair value of financial assets at FVTPL and financial assets at FVOCI for the three months ended March 31, 2022. If equity prices had been 5% higher/lower, pre-tax profit and pre-tax other comprehensive income would have increased/decreased by $41,233 thousand and $182,517 thousand, respectively, as a result of the changes in fair value of financial assets at FVTPL and financial assets at FVOCI for the three months ended March 31, 2021.

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.

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.

- 65 -

March 31, 2022

		Weighted Average Effective Interest Rate (%)				Less than 1 Month				1-3 Months				3 Months to 1 Year				1-5 Years				More than 5 Years				Total
Non-derivative financial liabilities
Non-interest bearing			—			$	31,171,376			$	—			$	2,530,745			$	4,916,202			$	—			$	38,618,323
Floating interest rate instruments			0.96				—				65,000				—				1,600,000				—				1,665,000
Fixed interest rate instruments			0.53				—				—				—				14,200,000				16,300,000				30,500,000
						$	31,171,376			$	65,000			$	2,530,745			$	20,716,202			$	16,300,000			$	70,783,323

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

		Less than 1 Year				1-3 Years				3-5 Years				More than 5 Years				Total
Lease liabilities		$	3,048,931			$	4,019,354			$	1,791,040			$	1,170,445			$	10,029,770

December 31, 2021

		Weighted Average Effective Interest Rate (%)				Less than 1 Month				1-3 Months				3 Months to 1 Year				1-5 Years				More than 5 Years				Total
Non-derivative financial liabilities
Non-interest bearing			—			$	40,894,077			$	—			$	1,997,277			$	5,336,343			$	—			$	48,227,697
Floating interest rate instruments			0.95				—				15,000				50,000				1,600,000				—				1,665,000
Fixed interest rate instruments			0.51				—				—				—				10,700,000				16,300,000				27,000,000
						$	40,894,077			$	15,000			$	2,047,277			$	17,636,343			$	16,300,000			$	76,892,697

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

		Less than 1 Year				1-3 Years				3-5 Years				More than 5 Years				Total
Lease liabilities		$	3,227,909			$	4,125,893			$	1,808,056			$	1,243,987			$	10,405,845

March 31, 2021

		Weighted Average Effective Interest Rate (%)				Less than 1 Month				1-3 Months				3 Months to 1 Year				1-5 Years				More than 5 Years				Total
Non-derivative financial liabilities
Non-interest bearing			—			$	29,650,602			$	786,069			$	2,174,260			$	4,731,909			$	—			$	37,342,840
Floating interest rate instruments			0.77				—				50,000				1,610,000				—				—				1,660,000
Fixed interest rate instruments			0.48				5,000,000				—				—				8,800,000				11,200,000				25,000,000
						$	34,650,602			$	836,069			$	3,784,260			$	13,531,909			$	11,200,000			$	64,002,840

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

		Less than 1 Year				1-3 Years				3-5 Years				More than 5 Years				Total
Lease liabilities		$	3,316,670			$	4,146,909			$	1,658,759			$	354,212			$	9,476,550

- 66 -

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 1 Month				1-3 Months				3 Months to 1 Year				1-5 Years				Total
March 31, 2022
Gross settled
Forward exchange contracts
Inflow		$	—			$	421,866			$	—			$	—			$	421,866
Outflow			—				411,073				—				—				411,073
		$	—			$	10,793			$	—			$	—			$	10,793
December 31, 2021
Gross settled
Forward exchange contracts
Inflow		$	—			$	470,395			$	—			$	—			$	470,395
Outflow			—				484,861				—				—				484,861
		$	—			$	(14,466	)		$	—			$	—			$	(14,466	)
March 31, 2021
Gross settled
Forward exchange contracts
Inflow		$	—			$	666,351			$	—			$	—			$	666,351
Outflow			—				672,082				—				—				672,082
		$	—			$	(5,731	)		$	—			$	—			$	(5,731	)

2) Financing facilities

		March 31, 2022				December 31, 2021				March 31, 2021
Facilities of unsecured bank loan and commercial paper payable
Amount used		$	65,000			$	65,000			$	5,060,800
Amount unused			62,154,055				61,620,489				51,862,487
		$	62,219,055			$	61,685,489			$	56,923,287
Secured bank loan facility
Amount used		$	1,600,000			$	1,600,000			$	1,600,000
Amount unused			—				—				20,000
		$	1,600,000			$	1,600,000			$	1,620,000

- 67 -

38. 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.

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.
Emplus Technologies, Inc.		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
Chunghwa Telecom Foundation		A nonprofit organization of which the funds donated by Chunghwa exceeds one third of its total funds
Senao Technical and Cultural Foundation		A nonprofit organization of which the funds donated by SENAO exceeds one third of its total funds
Sochamp Technology Co., Ltd.		Investor of significant influence over CHST
E-Life Mall Co., Ltd.		One of the directors of E-Life Mall and a director of SENAO are members of an immediate family
Engenius Technologies Co., Ltd.		Chairman of Engenius Technologies Co., Ltd. is a member of SENAO’s management
Cheng Keng Investment Co., Ltd.		Chairman of Cheng Keng Investment Co., Ltd. and SENAO’s chief executive officer are members of an immediate family

(Continued)

- 68 -

Company		Relationship
Cheng Feng Investment Co., Ltd.		Chairman of Cheng Feng Investment Co., Ltd. and SENAO’s chief executive officer are members of an immediate family
All Oriented Investment Co., Ltd.		Chairman of All Oriented Investment Co., Ltd. and SENAO’s chief executive officer are members of an immediate family
Hwa Shun Investment Co., Ltd.		Chairman of Hwa Shun Investment Co., Ltd. and SENAO’s chief executive officer are members of an immediate family
Yu Yu Investment Co., Ltd.		Chairman of Yu Yu Investment Co., Ltd. and SENAO’s chief executive officer are members of an immediate family
Divine Fine Foods & Wine Inc.		Chairman of Divine Fine Foods & Wine Inc. and SENAO’s chief executive officer are members of an immediate family (Note 3)
Kangsin Co., Ltd.		Chairman of Kangsin Co., Ltd. and SENAO’s chief executive officer are members of an immediate family
United Daily News Co., Ltd.		Investor of significant influence over SFD
Shenzhen Century Communication Co., Ltd.		Investor of significant influence over SCT
Advantech Co., Ltd.		Investor of significant influence over IISI

(Concluded)

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.

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
		Three Months Ended March 31
		2022				2021
Associates		$	70,588			$	70,391
Others			14,307				12,778
		$	84,895			$	83,169

- 69 -

		Operating Costs and Expenses
		Three Months Ended March 31
		2022				2021
Associates		$	237,676			$	138,287
Others			62,818				55,929
		$	300,494			$	194,216

2) Non-operating transactions

		Non-operating Income and Expenses
		Three Months Ended March 31
		2022				2021
Associates		$	9,391			$	9,418
Others			287				351
		$	9,678			$	9,769

3) Receivables

		March 31, 2022				December 31, 2021				March 31, 2021
Associates		$	34,351			$	34,864			$	31,200
Others			5,294				6,664				3,003
		$	39,645			$	41,528			$	34,203

4) Contract liabilities-current

		March 31, 2022				December 31, 2021				March 31, 2021
Associates		$	—			$	—			$	182,857

5) Payables

		March 31, 2022				December 31, 2021				March 31, 2021
Associates		$	206,595			$	385,327			$	321,139
Others			7,497				6,031				3,480
		$	214,092			$	391,358			$	324,619

6) Customers’ deposits

		March 31, 2022				December 31, 2021				March 31, 2021
Associates		$	24,686			$	16,120			$	8,420

- 70 -

7) Acquisition of property, plant and equipment

		Three Months Ended March 31
		2022				2021
Associates		$	—			$	40,428

8) Acquisition of intangible assets

		Three Months Ended March 31
		2022				2021
Associates		$	677			$	—

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:

		March 31, 2022				December 31, 2021				March 31, 2021
Lease liabilities - current		$	179,235			$	173,306			$	179,229
Lease liabilities - noncurrent			1,757,259				1,740,557				760,297
		$	1,936,494			$	1,913,863			$	939,526

The interest expense recognized for the aforementioned lease liabilities for the three months ended March 31, 2022 and 2021 were $2,021 thousand and $1,994 thousand, respectively.

c. Compensation of key management personnel

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

		Three Months Ended March 31
		2022				2021
Short-term employee benefits		$	94,024			$	90,780
Post-employment benefits			1,794				1,941
Share-based payment			401				404
		$	96,219			$	93,125

- 71 -

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

39. 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.

		March 31, 2022				December 31, 2021				March 31, 2021
Property, plant and equipment		$	2,424,917			$	2,432,296			$	2,454,431
Land held under development (included in inventories)			—				—				1,998,733
Restricted assets (included in other assets - others)			112,748				163,012				196,914
		$	2,537,665			$	2,595,308			$	4,650,078

40. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

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

a. Acquisitions of land and buildings of $539,867 thousand.

b. Acquisitions of telecommunications-related inventory and equipment of $28,824,891 thousand.

c. Unused letters of credit amounting to $10,000 thousand.

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.

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.

f. 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 transaction amount is expected to be in the range from $1,626,000 thousand to $2,081,000 thousand; however, the actual amount will be determined according to the approval date of the related authority and mutual negotiations.

g. 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.

- 72 -

41. 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.

42. 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:

		March 31, 2022
		Foreign Currencies (Thousands)				Exchange Rate				New Taiwan Dollars (Thousands)
Assets denominated in foreign currencies
Monetary items
USD		$	66,858				28.63			$	1,913,819
EUR			1,581				31.92				50,475
SGD			5,730				21.16				121,252
JPY			142,316				0.235				33,487
RMB			18,610				4.506				83,858
HKD			1,779				3.656				6,505
Non-monetary items
Investments accounted for using equity method
SGD			26,801				21.16				567,103
VND			381,139,399				0.0012				470,707
Liabilities denominated in foreign currencies
Monetary items
USD			30,029				28.63				859,584
EUR			21,762				31.92				694,643
SGD			94,050				21.16				1,990,100
JPY			43,107				0.235				10,143
RMB			9,293				4.506				41,873
HKD			5,630				3.656				20,585

- 73 -

		December 31, 2021
		Foreign Currencies (Thousands)				Exchange Rate				New Taiwan Dollars (Thousands)
Assets denominated in foreign currencies
Monetary items
USD		$	72,601				27.68			$	2,009,607
EUR			1,563				31.32				48,962
SGD			12,687				20.46				259,571
JPY			154,358				0.241				37,123
RMB			20,408				4.344				88,654
HKD			19,661				3.549				69,776
Non-monetary items
Investments accounted for using equity method
SGD			25,326				20.46				518,165
VND			374,139,749				0.0012				447,097
Liabilities denominated in foreign currencies
Monetary items
USD			32,138				27.68				889,578
EUR			27,506				31.32				861,481
SGD			96,016				20.46				1,964,490
JPY			52,648				0.241				12,662
RMB			8,868				4.344				38,521
HKD			4,450				3.549				15,792

		March 31, 2021
		Foreign Currencies (Thousands)				Exchange Rate				New Taiwan Dollars (Thousands)
Assets denominated in foreign currencies
Monetary items
USD		$	86,678				28.54			$	2,473,347
EUR			990				33.48				33,152
SGD			12,584				21.21				266,901
JPY			72,238				0.258				18,616
RMB			9,222				4.344				40,062
HKD			18,810				3.670				69,033
Non-monetary items
Investments accounted for using equity method
SGD			23,590				21.21				500,350
VND			347,069,369				0.0011				385,247

(Continued)

- 74 -

		March 31, 2021
		Foreign Currencies (Thousands)				Exchange Rate				New Taiwan Dollars (Thousands)
Liabilities denominated in foreign currencies
Monetary items
USD		$	24,734				28.54			$	705,777
EUR			21,560				33.48				721,827
SGD			46,665				21.21				989,769
JPY			29,902				0.258				7,706
RMB			23				4.344				102
HKD			2,097				3.670				7,695

(Concluded)

The unrealized foreign currency exchange gains and losses were loss $86,776 thousand and gain $61,025 thousand for the three months ended March 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.

43. ADDITIONAL DISCLOSURES

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

a. Financing provided: None.

b. Endorsement/guarantee provided: Please see Table 1.

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

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.

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

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

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.

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

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

j. Derivative instruments transactions: Please see Notes 7, 20 and 37.

k. Investments in Mainland China: Please see Table 8.

- 75 -

l. Intercompany relationships and significant intercompany transactions: Please see Table 9.

m. Information of main stakeholders: Please see Table 10.

44. 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 earlier 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 Business				Enterprise Business				International Business				Others				Total
Three months ended March 31, 2022
Revenues
From external customers		$	32,715,489			$	15,811,959			$	1,714,226			$	1,053,065			$	51,294,739
Intersegment revenues			408,344				263,608				179,244				82,124				933,320
Segment revenues		$	33,123,833			$	16,075,567			$	1,893,470			$	1,135,189				52,228,059
Intersegment elimination																			(933,320	)
Consolidated revenues																		$	51,294,739
Segment operating costs and expenses		$	25,648,974			$	11,660,074			$	1,439,531			$	884,922			$	39,633,501
Segment income before income tax		$	7,236,214			$	3,805,907			$	449,464			$	182,808			$	11,674,393
Three months ended March 31, 2021
Revenues
From external customers		$	32,008,295			$	15,484,737			$	1,506,697			$	1,101,266			$	50,100,995
Intersegment revenues			724,395				487,230				232,369				74,635				1,518,629
Segment revenues		$	32,732,690			$	15,971,967			$	1,739,066			$	1,175,901				51,619,624
Intersegment elimination																			(1,518,629	)
Consolidated revenues																		$	50,100,995
Segment operating costs and expenses		$	25,216,910			$	11,434,894			$	1,449,007			$	898,842			$	38,999,653
Segment income before income tax		$	7,008,401			$	3,671,096			$	191,376			$	449,475			$	11,320,348

- 76 -

Main Products and Service Revenues

		Three Months Ended March 31
		2022				2021
Consumer Business
Mobile services		$	12,618,195			$	12,029,330
Fixed-line services			9,753,898				9,564,738
Sales			8,988,287				9,126,681
Others			1,355,109				1,287,546
			32,715,489				32,008,295
Enterprise Business
Fixed-line services			6,862,843				6,844,370
Project business			3,622,676				3,901,936
Mobile services			2,170,008				2,026,732
Others			3,156,432				2,711,699
			15,811,959				15,484,737
International Business
International leased line			471,468				447,317
Fixed-line services			425,272				432,503
Project business			368,328				198,821
International intelligent network services			183,758				214,635
Others			265,400				213,421
			1,714,226				1,506,697
Others
Sales			863,190				831,699
Others			189,875				269,567
			1,053,065				1,101,266
		$	51,294,739			$	50,100,995

- 77 -

TABLE 1

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED

THREE MONTHS ENDED MARCH 31, 2022

(Amounts in Thousands of New Taiwan Dollars)

No. (Note 1)		Endorsement/ Guarantee Provider		Guaranteed Party				Limits on Endorsement/ Guarantee Amount Provided to Each Guaranteed Party				Maximum Balance for the Period				Ending Balance				Actual Borrowing Amount				Amount of Endorsement/ Guarantee Collateralized by Properties				Ratio of Accumulated Endorsement/ Guarantee to Net Equity Per Latest Financial Statements				Maximum Endorsement/ Guarantee Amount Allowable				Endorsement/ Guarantee Given by Parent on Behalf of Subsidiaries		Endorsement/ Guarantee Given by Subsidiaries on Behalf of Parent		Endorsement/ Guarantee Given on Behalf of Companies in Mainland China		Note
				Name		Nature of Relationship (Note 2)
1		Senao International Co., Ltd.		Aval Technologies Co., Ltd.		b		$	579,839			$	300,000			$	300,000			$	300,000			$	—				5.17			$	2,899,196			Yes		No		No		Notes 3 and 4
				Wiin Technology Co., Ltd.		b			579,839				200,000				200,000				200,000				—				3.45				2,899,196			Yes		No		No		Notes 3 and 4

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

a. “0” for the Company.

b. Subsidiaries are numbered from “1”.

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

a. A company with which it does business.

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

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

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

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.

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

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.

- 78 -

TABLE 2

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

MARKETABLE SECURITIES HELD

MARCH 31, 2022

(Amounts in Thousands of New Taiwan Dollars)

Held Company Name		Marketable Securities Type and Name		Relationship with the Company				Financial Statement Account		March 31, 2022																Note
										Shares (Thousands/ Thousand Units)				Carrying Value (Note 1)				Percentage of Ownership				Fair Value
Chunghwa Telecom Co., Ltd.		Stocks
		Taipei Financial Center Corp.			—			Financial assets at FVOCI			172,927			$	2,967,333				12			$	2,967,333				—
		Innovation Works Development Fund, L.P.			—			Financial assets at FVTPL - noncurrent			—				165,021				4				165,021				—
		Industrial Bank of Taiwan II Venture Capital Co., Ltd. (IBT II)			—			Financial assets at FVOCI			5,252				13,412				17				13,412				—
		Global Mobile Corp.			—			Financial assets at FVOCI			7,617				—				3				—				—
		Innovation Works Limited			—			Financial assets at FVOCI			1,000				3,949				2				3,949				—
		RPTI Intergroup International Ltd.			—			Financial assets at FVOCI			4,765				—				10				—				—
		Taiwan mobile payment Co., Ltd.			—			Financial assets at FVOCI			1,200				4,206				2				4,206				—
		Taiwania Capital Buffalo Fund Co., Ltd.			—			Financial assets at FVTPL - noncurrent			555,600				618,472				13				618,472				—
		4 Gamers Entertainment Inc.			—			Financial assets at FVOCI			136				124,261				19.9				124,261				—
Senao International Co., Ltd.		Stocks
		N.T.U. Innovation Incubation Corporation			—			Financial assets at FVOCI			1,200				9,498				9				9,498				—
		UUPON Inc.			—			Financial assets at FVOCI			109				340				2				340				—
CHIEF Telecom Inc.		Stocks
		3 Link Information Service Co., Ltd.			—			Financial assets at FVOCI			374				284				10				284				—
		WPG Holdings Limited			—			Financial assets at FVTPL - current			9				452				—				452				Note 2
		WPG Holdings Limited			—			Financial assets at FVOCI			2,102				105,941				—				105,941				Note 2
		WT Microelectronics Co., Ltd.			—			Financial assets at FVOCI			354				17,575				—				17,575				Note 2
Chunghwa Investment Co., Ltd.		Stocks
		Tatung Technology Inc.			—			Financial assets at FVOCI			4,571				84,558				11				84,558				—
		iSing99 Inc.			—			Financial assets at FVOCI			10,000				—				7				—				—
		Powtec ElectroChemical Corporation			—			Financial assets at FVOCI			20,000				—				2				—				—
		Bossdom Digiinnovation Co., Ltd.			—			Financial assets at FVOCI			2,000				71,900				7				71,900				Note 2
		Limited partnership
		Taiwania Capital Buffalo Fund V, L.P.			—			Financial assets at FVTPL - noncurrent			—				22,451				3				22,451				—
		Stocks
		PChome Online Inc.			—			Financial assets at FVOCI			1,875				171,027				1				171,027				Note 2

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

Note 2: Fair value was based on the closing price on March 31, 2022.

- 79 -

TABLE 3

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

THREE MONTHS ENDED MARCH 31, 2022

(Amounts in Thousands of New Taiwan Dollars)

Company Name

Marketable Securities Type and Name

Financial Statement Account

Counter-party

Nature of Relationship

Beginning Balance

Acquisition

Disposal

Ending Balance

Shares (Thousands/ Thousand Units)

Amount

Shares (Thousands/ Thousand Units)

Amount

Shares (Thousands/ Thousand Units)

Amount

Carrying Value

Gain on Disposal

Shares (Thousands/ Thousand Units)

Amount

Chunghwa Precision Test Tech. Co., Ltd.

Stocks

TestPro Investment Co., Ltd.

Investments accounted for using equity method

Invested and established

Subsidiary

—

$

—

13,500

$

135,000

—

$

—

$

—

$

—

13,500

$

135,000 (Note)

Note: Showing at their original investment amounts. The amount was eliminated upon consolidation.

- 80 -

TABLE 4

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

THREE MONTHS ENDED MARCH 31, 2022

(Amounts in Thousands of New Taiwan Dollars)

Buyer

Property

Event Date

Transaction Amount

Payment Status

Counterparty

Relationship

Information on Previous Title Transfer If Counterparty is a Related Party

Pricing Reference

Purpose of Acquisition

Other Terms

Property Owner

Relationship

Transaction Date

Amount

Chunghwa Precision Test Tech. Co., Ltd.

Land

2021.01.18

$

534,030

The first installment $80,104 thousand was paid.

Taiwan Powder Technologies Co., Ltd.

—

Not applicable

Not applicable

Not applicable

Not applicable

According to appraisal report

Space requirements for future business expansion and operational considerations

—

- 81 -

TABLE 5

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

THREE MONTHS ENDED MARCH 31, 2022

(Amounts in Thousands of New Taiwan Dollars)

Company Name		Related Party		Nature of Relationship		Transaction Details												Abnormal Transaction								Notes / Accounts Payable or Receivable
						Purchases/Sales (Note 1)		Amount (Notes 2 and 5)				% to Total				Payment Terms		Unit Price				Payment Terms				Ending Balance (Notes 3 and 5)				% to Total
Chunghwa Telecom Co., Ltd.		Senao International Co., Ltd.		Subsidiary		Sales		$	904,236				2			30 days		$	—				—			$	222,391				1
						Purchase			255,133				1			30~90 days			—				—				(1,085,793	)			(10	)
		CHIEF Telecom Inc.		Subsidiary		Sales			119,101				—			30 days			—				—				59,710				—
		Chunghwa System Integration Co., Ltd.		Subsidiary		Purchase			441,214				2			30 days			—				—				(230,227	)			(2	)
		Honghwa International Co., Ltd.		Subsidiary		Purchase			1,540,510				6			30~60 days			—				—				(932,927	)			(8	)
		Donghwa Telecom Co., Ltd.		Subsidiary		Purchase			122,144				—			90 days			—				—				(175,518	)			(2	)
		CHT Security Co., Ltd.		Subsidiary		Purchase			124,709				—			30 days			—				—				(118,409	)			(1	)
		International Integrated Systems, Inc.		Subsidiary		Purchase			137,113				1			30 days			—				—				(56,759	)			(1	)
		Taiwan International Standard Electronics Co., Ltd.		Associate		Purchase			142,199				1			30~90 days			—				—				(106,549	)			(1	)
Senao International Co., Ltd.		Chunghwa Telecom Co., Ltd.		Parent company		Sales			1,782,692				22			30~90 days			—				—				1,085,793				55
						Purchase			863,229				12			30 days			—				—				(203,196	)			(8	)
		Aval Technologies Co., Ltd.		Subsidiary		Sales			107,338				1			60 days			—				—				60,842				3
CHIEF Telecom Inc.		Chunghwa Telecom Co., Ltd.		Parent company		Purchase			119,232				31			30 days			—				—				(59,710	)			(50	)
Chunghwa System Integration Co., Ltd.		Chunghwa Telecom Co., Ltd.		Parent company		Sales			443,377				92			30 days			—				—				227,140				65
Honghwa International Co., Ltd.		Chunghwa Telecom Co., Ltd.		Parent company		Sales			1,543,192				97			30~60 days			—				—				932,431				98
Donghwa Telecom Co., Ltd.		Chunghwa Telecom Co., Ltd.		Parent company		Sales			122,144				44			90 days			—				—				175,518				47
CHT Security Co., Ltd.		Chunghwa Telecom Co., Ltd.		Parent company		Sales			120,409				34			30 days			—				—				118,409				46

Note 1: Purchases include costs to acquire services.

Note 2: The differences were because Chunghwa Telecom Co., Ltd. and subsidiaries classified the amount as incremental costs of obtaining contracts, property, plant and equipment, intangible assets, and operating expenses.

Note 3: Notes and accounts receivable did not include the amounts collected for others and other receivables.

Note 4: 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 5: All intercompany transactions, balances, income and expenses are eliminated upon consolidation.

- 82 -

TABLE 6

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

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

MARCH 31, 2022

(Amounts in Thousands of New Taiwan Dollars)

Company Name		Related Party		Nature of Relationship		Ending Balance				Turnover Rate (Note 1)				Overdue								Amounts Received in Subsequent Period				Allowance for Bad Debts
														Amounts				Action Taken
Chunghwa Telecom Co., Ltd.		Senao International Co., Ltd.		Subsidiary		$	307,854 (Note 2	)			11.20			$	—				—			$	44,286			$	—
Senao International Co., Ltd.		Chunghwa Telecom Co., Ltd.		Parent company			1,326,761 (Note 2	)			7.44				—				—				227,155				—
Chunghwa System Integration Co., Ltd.		Chunghwa Telecom Co., Ltd.		Parent company			227,140 (Note 2	)			5.62				—				—				24,417				—
Honghwa International Co., Ltd.		Chunghwa Telecom Co., Ltd.		Parent company			932,431 (Note 2	)			6.73				—				—				230,425				—
Donghwa Telecom Co., Ltd.		Chunghwa Telecom Co., Ltd.		Parent company			175,518 (Note 2	)			2.76				—				—				61,588				—
CHT Security Co., Ltd.		Chunghwa Telecom Co., Ltd.		Parent company			118,409 (Note 2	)			4.14				—				—				88,834				—

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.

- 83 -

TABLE 7

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)

THREE MONTHS ENDED MARCH 31, 2022

(Amounts in Thousands of New Taiwan Dollars)

Investor Company		Investee Company		Location				Main Businesses and Products		Original Investment Amount								Balance as of March 31, 2022												Net Income (Loss) of the Investee				Recognized Gain (Loss) (Notes 1, 2 and 3)				Note
										March 31, 2022				December 31, 2021				Shares (Thousands)				Percentage of Ownership (%)				Carrying Value (Note 3)
Chunghwa Telecom Co., Ltd.		Senao International Co., Ltd.			Taiwan			Handset and peripherals retailer; sales of CHT mobile phone plans as an agent		$	1,065,813			$	1,065,813				71,773				28			$	1,589,562			$	181,451			$	48,978				Subsidiary (Note 5)
		Light Era Development Co., Ltd.			Taiwan			Planning and development of real estate and intelligent buildings, and property management			3,000,000				3,000,000				300,000				100				3,859,279				5,808				2,358				Subsidiary (Note 5)
		Donghwa Telecom Co., Ltd.			Hong Kong			International private leased circuit, IP VPN service, and IP transit services			691,163				691,163				178,590				100				643,501				11,247				11,247				Subsidiary (Note 5)
		Chunghwa Telecom Singapore Pte., Ltd.			Singapore			International private leased circuit, IP VPN service, and IP transit services			574,112				574,112				26,383				100				992,529				52,956				52,983				Subsidiary (Note 5)
		Chunghwa System Integration Co., Ltd.			Taiwan			Providing system integration services and telecommunications equipment			838,506				838,506				60,000				100				728,061				2,378				11,070				Subsidiary (Note 5)
		CHIEF Telecom Inc.			Taiwan			Network integration, internet data center (“IDC”), communications integration and cloud application services			459,652				459,652				39,426				56				1,971,407				196,460				113,244				Subsidiary (Note 5)
		Chunghwa Investment Co., Ltd.			Taiwan			Investment			639,559				639,559				68,085				89				3,146,798				35,855				31,945				Subsidiary (Note 5)
		Prime Asia Investments Group Ltd. (B.V.I.)			British Virgin Islands			Investment			385,274				385,274				1				100				158,082				(1,201	)			(1,201	)			Subsidiary (Note 5)
		Honghwa International Co., Ltd.			Taiwan			Telecommunication engineering, sales agent of mobile phone plan application and other business services, etc.			180,000				180,000				18,000				100				799,379				175,932				175,161				Subsidiary (Note 5)
		CHYP Multimedia Marketing & Communications Co., Ltd.			Taiwan			Digital information supply services and advertisement services			150,000				150,000				15,000				100				209,116				6,391				7,691				Subsidiary (Note 5)
		Chunghwa Telecom Vietnam Co., Ltd.			Vietnam			Intelligent energy saving solutions, international circuit, and information and communication technology (“ICT”) services			148,275				148,275				—				100				96,550				(3,638	)			(3,638	)			Subsidiary (Note 5)
		Chunghwa Telecom Global, Inc.			United States			International private leased circuit, internet services, and transit services			70,429				70,429				6,000				100				497,329				16,918				17,015				Subsidiary (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			240,000				240,000				24,000				75				442,152				87,511				63,518				Subsidiary (Note 5)
		Chunghwa Telecom (Thailand) Co., Ltd.			Thailand			International private leased circuit, IP VPN service, ICT and cloud VAS services			119,624				119,624				1,300				100				107,894				4,345				4,345				Subsidiary (Note 5)
		Spring House Entertainment Tech. Inc.			Taiwan			Software design services, internet contents production and play, and motion picture production and distribution			62,209				62,209				8,251				56				150,994				13,170				7,381				Subsidiary (Note 5)
		Chunghwa leading Photonics Tech Co., Ltd.			Taiwan			Production and sale of electronic components and finished products			70,500				70,500				7,050				75				125,256				4,503				3,377				Subsidiary (Note 5)
		Smartfun Digital Co., Ltd.			Taiwan			Providing diversified family education digital services			65,000				65,000				6,500				65				82,877				4,618				3,001				Subsidiary (Note 5)
		Chunghwa Telecom Japan Co., Ltd.			Japan			International private leased circuit, IP VPN service, and IP transit services			17,291				17,291				1				100				101,057				4,447				4,447				Subsidiary (Note 5)
		Chunghwa Sochamp Technology Inc.			Taiwan			Design, development and production of Automatic License Plate Recognition software and hardware			20,400				20,400				2,040				51				(6,919	)			(4,115	)			(2,011	)			Subsidiary (Note 5)
		International Integrated Systems, Inc.			Taiwan			IT solution provider, IT application consultation, system integration and package solution			517,423				517,423				37,211				51				601,299				16,862				14,282				Subsidiary (Note 5)
																																							(Continued	)

- 84 -

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)

THREE MONTHS ENDED MARCH 31, 2022

(Amounts in Thousands of New Taiwan Dollars)

Investor Company		Investee Company		Location				Main Businesses and Products		Original Investment Amount								Balance as of March 31, 2022												Net Income (Loss) of the Investee				Recognized Gain (Loss) (Notes 1, 2 and 3)				Note
										March 31, 2022				December 31, 2021				Shares (Thousands)				Percentage of Ownership (%)				Carrying Value (Note 3)
		Viettel-CHT Co., Ltd.			Vietnam			IDC services		$	288,327			$	288,327				—				30			$	470,707			$	78,663			$	23,610				Associate
		Taiwan International Standard Electronics Co., Ltd.			Taiwan			Manufacturing, selling, designing, and maintaining of telecommunications systems and equipment			164,000				164,000				1,760				40				356,600				7,155				7,973				Associate
		KKBOX Taiwan Co., Ltd.			Taiwan			Providing of music on-line, software, electronic information, and advertisement services			67,025				67,025				4,438				30				161,236				9,593				2,878				Associate
		So-net Entertainment Taiwan Limited			Taiwan			Online service and sale of computer hardware			120,008				120,008				9,429				30				224,689				24,674				7,402				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			66,684				66,684				9,557				23				262,792				16,498				3,849				Associate
		Taiwan International Ports Logistics Corporation			Taiwan			Import and export storage, logistic warehouse, and ocean shipping service			80,000				80,000				8,000				27				76,080				22,344				5,959				Associate
		Chunghwa PChome Fund I Co., Ltd.			Taiwan			Investment, venture capital, investment advisor, management consultant and other consultancy service			200,000				200,000				20,000				50				219,253				(6,476	)			(3,238	)			Associate
		Cornerstone Ventures Co., Ltd.			Taiwan			Investment, venture capital, investment advisor, management consultant and other consultancy service			4,900				4,900				490				49				6,617				59				29				Associate
		Next Commercial Bank Co., Ltd.			Taiwan			Online banking business			4,190,000				4,190,000				419,000				42				3,528,438				(147,879	)			(60,416	)			Associate
		Chunghwa SEA Holdings			Taiwan			Investment business			10,200				10,200				1,020				51				9,873				(117	)			(60	)			Joint venture
		WiAdvance Technology Corporation			Taiwan			Software solution integration			273,800				273,800				3,700				20				245,706				(28,214	)			(7,431	)			Associate
Senao International Co., Ltd.		Senao Networks, Inc.			Taiwan			Telecommunication facilities manufactures and sales			202,758				202,758				16,579				34				1,158,873				234,358				79,196				Associate
		Senao International (Samoa) Holding Ltd.			Samoa Islands			International investment			2,046,143				2,046,143				31,875				100				34,071				(7	)			(7	)			Subsidiary (Note 5)
		Youth Co., Ltd.			Taiwan			Sale of information and communication technologies products			427,850				427,850				14,752				96				194,541				244				(1,885	)			Subsidiary (Note 5)
		Aval Technologies Co., Ltd.			Taiwan			Sale of information and communication technologies products			89,550				89,550				10,840				100				121,739				2,127				2,125				Subsidiary (Note 5)
		Senyoung Insurance Agent Co., Ltd.			Taiwan			Property and liability insurance agency			59,000				59,000				5,900				100				108,300				8,477				8,483				Subsidiary (Note 5)
CHIEF Telecom Inc.		Unigate Telecom Inc.			Taiwan			Telecommunications and internet service			2,000				2,000				200				100				1,114				35				35				Subsidiary (Note 5)
		Chief International Corp.			Samoa Islands			Telecommunications and internet service			6,068				6,068				200				100				88,500				1,817				1,817				Subsidiary (Note 5)
Chunghwa Telecom Singapore Pte., Ltd.		ST-2 Satellite Ventures Pte., Ltd.			Singapore			Operation of ST-2 telecommunications satellite			409,061				409,061				18,102				38				567,103				130,564				49,784				Associate
		CHT Infinity Singapore Pte. Ltd.			Singapore			Investment business			55,720				55,720				2,000				40				56,713				(279	)			(111	)			Associate
Chunghwa Investment Co., Ltd.		Chunghwa Precision Test Tech. Co., Ltd.			Taiwan			Production and sale of semiconductor testing components and printed circuit board			178,608				178,608				11,230				34				2,625,762				112,422				38,505				Subsidiary (Note 5)
		CHIEF Telecom Inc.			Taiwan			Network integration, internet data center (“IDC”), communications integration and cloud application services			19,064				19,064				2,078				3				97,313				196,460				5,792				Associate (Note 5)
		Senao International Co., Ltd.			Taiwan			Selling and maintaining mobile phones and its peripheral products			49,731				49,731				1,001				—				43,219				181,451				703				Associate (Note 5)
		AgriTalk Technology Inc.			Taiwan			Providing smart agricultural solutions, scientific agricultural product, biological inhibitor, and biochips			33,000				33,000				1,650				17				17,061				(3,541	)			(575	)			Associate
		Imedtac Co., Ltd.			Taiwan			Providing medical AIoT solution, biomedical engineering services, and sales of medical device as an agent			48,000				48,000				960				7				43,258				(11,068	)			(831	)			Associate
																																							(Continued	)

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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)

THREE MONTHS ENDED MARCH 31, 2022

(Amounts in Thousands of New Taiwan Dollars)

Investor Company		Investee Company		Location		Main Businesses and Products		Original Investment Amount								Balance as of March 31, 2022												Net Income (Loss) of the Investee				Recognized Gain (Loss) (Notes 1, 2 and 3)				Note
								March 31, 2022				December 31, 2021				Shares (Thousands)				Percentage of Ownership (%)				Carrying Value (Note 3)
Chunghwa Precision Test Tech. Co., Ltd.		Chunghwa Precision Test Tech USA Corporation		United States		Design and after-sale services of semiconductor testing components and printed circuit board		$	74,192			$	74,192				2,600				100			$	88,207			$	73			$	73			Subsidiary (Note 5)
		CHPT Japan Co., Ltd.		Japan		Related services of electronic parts, machinery processed products and printed circuit board			2,008				2,008				1				100				2,220				6				6			Subsidiary (Note 5)
		Chunghwa Precision Test Tech. International, Ltd.		Samoa Islands		Wholesale and retail of electronic materials, and investment			173,649				173,649				5,700				100				153,120				(2,540	)			(2,361	)		Subsidiary (Note 5)
		TestPro Investment Co., Ltd.		Taiwan		Investment			135,000				—				13,500				100				134,936				(64	)			(64	)		Subsidiary (Note 5)
Prime Asia Investments Group, Ltd. (B.V.I.)		Chunghwa Hsingta Co., Ltd.		Hong Kong		Investment			375,274				375,274				1				100				158,082				(1,201	)			(1,201	)		Subsidiary (Note 5)
Senao International (Samoa) Holding Ltd.		Senao International HK Limited		Hong Kong		International investment			2,060,467				2,060,467				80,440				100				31,883				—				—			Subsidiary (Note 5)
Youth Co., Ltd.		ISPOT Co., Ltd.		Taiwan		Sale of information and communication technologies products			53,021				53,021				—				100				12,428				573				525			Subsidiary (Note 5)
		Youyi Co., Ltd.		Taiwan		Maintenance of information and communication technologies products			21,354				21,354				—				100				17,313				(325	)			(311	)		Subsidiary (Note 5)
Aval Technologies Co., Ltd.		Wiin Technology Co., Ltd.		Taiwan		Sale of information and communication technologies products			29,550				29,550				3,305				100				41,028				1,588				1,588			Subsidiary (Note 5)
Senyoung Insurance Agent Co., Ltd.		Senaolife Insurance Agent Co., Ltd.		Taiwan		Life insurance services			29,500				29,500				2,950				100				23,019				(470	)			(470	)		Subsidiary (Note 5)
CHYP Multimedia Marketing & Communications Co., Ltd		Click Force Marketing Company		Taiwan		Advertisement services			44,607				44,607				1,154				49				38,989				4,454				2,051			Associate
International Integrated Systems, Inc.		Infoexplorer International Co., Ltd.		Samoa		Investment			24,806				24,806				795				100				26,896				(77	)			(77	)		Subsidiary (Note 5)
		IISI Investment Co., Ltd.		Mauritius		Investment			81,302				81,302				244				100				25,568				—				—			Subsidiary (Note 5)
		Unitronics Technology Corp.		Taiwan		Development and maintenance of information system			55,569				55,569				5,065				99.96				79,280				2,490				2,489			Subsidiary (Note 5)
Infoexplorer International Co., Ltd.		International Integrated Systems (Hong Kong) Limited		Hong Kong		Investment and engaging in technical consulting service			24,336				24,336				780				100				26,890				(77	)			(77	)		Subsidiary (Note 5)
IISI Investment Co., Ltd.		Leading Tech Co., Ltd.		Mauritius		Investment			65,374				65,374				316				100				16,079				—				—			Subsidiary (Note 5)
Leading Tech Co., Ltd.		Leading Systems Co., Ltd.		Mauritius		Investment			100,693				100,693				300				100				11,203				—				—			Subsidiary (Note 5)
CHT Security Co., Ltd.		Baohwa Trust Co., Ltd.		Taiwan		VR integration and AIoT security services			20,000				—				2,000				40				20,000				—				—			Associate

Note 1: The amounts were based on reviewed 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.

(Concluded)

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TABLE 8

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

INVESTMENTS IN MAINLAND CHINA

THREE MONTHS ENDED MARCH 31, 2022

(Amounts in Thousands of New Taiwan Dollars)

Investee		Main Businesses and Products		Total Amount of Paid-in Capital				Investment Type (Note 1)				Accumulated Outflow of Investment from Taiwan as of January 1, 2022				Investment Flows								Accumulated Outflow of Investment from Taiwan as of March 31, 2022				Net Income (Loss) of the Investee				% Ownership of Direct or Indirect Investment				Investment Gain (Loss) (Note 2)				Carrying Value as of March 31, 2022				Accumulated Inward Remittance of Earnings as of March 31, 2022				Note
																Outflow				Inflow
Senao International Trading (Shanghai) Co., Ltd.		Sale of information and communication technologies products		$	955,838				2			$	955,838			$	—			$	—			$	955,838			$	—				100			$	—			$	—			$	—				Notes 8 and 12
Chunghwa Telecom (China) Co., Ltd.		Integrated information and communication solution services for enterprise clients, and intelligent energy network service			177,176				2				177,176				—				—				177,176				(1,026	)			100				(1,026	)			29,355				—				Notes 10 and 12
Jiangsu Zhenghua Information Technology Company, LLC		Providing intelligent energy saving solution and intelligent buildings services			189,410				2				142,057				—				—				142,057				—				75				—				—				—				Notes 9 and 12
Shanghai Taihua Electronic Technology Limited		Design of printed circuit board and related consultation service			51,233				2				51,233				—				—				51,233				(245	)			100				(245	)			9,010				—				Note 12
Su Zhou Precision Test Tech. Ltd.		Assembly processed of circuit board, design of printed circuit board and related consultation service			119,199				2				119,199				—				—				119,199				(2,283	)			100				(2,283	)			153,100				—				Note 12
Shanghai Chief Telecom Co., Ltd.		Telecommunications and internet service			10,150				1				4,973				—				—				4,973				113				49				55				14,401				—				Note 12
International Integrated Systems Inc. (Shanghai)		Development and maintenance of information system			48,753				2				39,923				—				—				39,923				—				100				—				—				—				Notes 11 and 12
																																																	(Continued	)

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Investee		Accumulated Investment in Mainland China as of March 31, 2022				Investment Amounts Authorized by Investment Commission, MOEA				Upper Limit on Investment Stipulated by Investment Commission, MOEA
SENAO and its subsidiaries (Note 3)		$	955,838			$	2,047,858			$	3,486,573
Chunghwa Telecom (China) Co., Ltd. (Note 4)			177,176				177,176				240,229,702
Jiangsu Zhenghua Information Technology Company, LLC (Note 4)			142,057				142,057				240,229,702
Chunghwa Precision Test Tech Co., Ltd and its subsidiaries (Note 5)			170,432				216,185				4,599,875
Shanghai Chief Telecom Co., Ltd. (Note 6)			4,973				4,973				1,994,983
IISI and its subsidiaries (Note 7)			39,923				39,923				677,487

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

a. Direct investment.

b. Investments through a holding company registered in a third region.

c. Others.

Note 2: The amounts were calculated based on the investee’s reviewed 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. was approved to end and dissolve its business in August 2020. The liquidation of Chunghwa Telecom (China) Co., Ltd. is still in process.

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

Note 12: The amount was eliminated upon consolidation.

(Concluded)

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TABLE 9

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT TRANSACTIONS

THREE MONTHS ENDED MARCH 31, 2022

(Amounts in Thousands of New Taiwan Dollars)

Year		No. (Note 1)				Company Name		Related Party		Nature of Relationship (Note 2)		Transaction Details
												Financial Statement Account		Amount (Note 5)				Payment Terms (Note 3)				% to Total Sales or Assets (Note 4)
2022			0			Chunghwa Telecom Co., Ltd.		Senao International Co., Ltd.		a		Accounts receivable		$	222,391				—				—
												Accrued custodial receipts			85,463				—				—
												Accounts payable			1,085,793				—				—
												Amounts collected for others			240,968				—				—
												Revenues			904,236				—				2
												Operating costs and expenses			217,422				—				—
												Inventories			37,711				—				—
								CHIEF Telecom Inc.		a		Accounts receivable			59,710				—				—
												Revenues			119,101				—				—
								Chunghwa System Integration Co., Ltd.		a		Accounts payable			230,227				—				—
												Operating costs and expenses			441,214				—				1
								Honghwa International Co., Ltd.		a		Accounts payable			932,927				—				—
												Operating costs and expenses			1,540,510				—				3
								Donghwa Telecom Co., Ltd.		a		Accounts payable			175,518				—				—
												Operating costs and expenses			122,144				—				—
								CHT Security Co., Ltd.		a		Accounts payable			118,409				—				—
												Operating costs and expenses			80,164				—				—
												Inventories			44,545				—				—
								International Integrated Systems, Inc.		a		Accounts payable			56,759				—				—
												Operating costs and expenses			127,177				—				—
												Inventories			9,936				—				—

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

a. “0” for the Company.

b. Subsidiaries are numbered from “1”.

Note 2: Related party transactions are divided into three categories as follows:

a. The Company to subsidiaries.

b. Subsidiaries to the Company.

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.

Note 4: For assets and liabilities, amount is shown as a percentage to consolidated total assets as of March 31, 2022, while revenues, costs and expenses are shown as a percentage to consolidated revenues for the three months ended March 31, 2022.

Note 5: The amount was eliminated upon consolidation.

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TABLE 10

CHUNGHWA TELECOM CO., LTD.

INFORMATION OF MAJOR STOCKHOLDERS

MARCH 31, 2022

Name of Major Stockholders		Shares
		Number of Shares				Percentage of Ownership (%)
Ministry of Transportation and Communications			2,737,718,976				35.29
Shin Kong Life Insurance Co., Ltd.			403,786,184				5.20

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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