Chunghwa Telecom Co Ltd 6-K, filed May 7, 2020

1934 Act Registration No. 1-31731

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 6-K

REPORT OFFOREIGN PRIVATE ISSUER

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

THE SECURITIES EXCHANGE ACT OF 1934

Dated May 7, 2020

ChunghwaTelecom Co., Ltd.

(Translation of Registrant’s Name into English)

21-3 Hsinyi Road Sec. 1,

Taipei, Taiwan, 100 R.O.C.

(Address of Principal Executive Office)

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

Form 20-F  ☒        Form 40-F  ☐

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

Yes  ☐             No  ☒

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

Exhibit	Description
99.1	To announce the differences between the first quarter of 2020 financial statements under Taiwan-IFRSs and IFRSs
99.2	Consolidated Financial Statements for the Three Months Ended March <br>31, 2020 and 2019 and Independent Auditors’ Review Report pursuant to International Financial Reporting Standards adopted by ROC (“Taiwan-IFRSs”)
99.3	Consolidated Financial Statements for the Three Months Ended March <br>31, 2020 and 2019 pursuant to International Financial Reporting Standards issued by the International Accounting Standards Board (“IFRSs”)

2

SIGNATURE

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

Date: May 7, 2020

Chunghwa Telecom Co., Ltd.
By:	/s/ Shui-Yi Kuo
Name:	Shui-Yi Kuo
Title:	Chief Financial Officer

3

EX-99.1

Exhibit 99.1

To announce the differences between the first quarter of 2020 financial statements under Taiwan-IFRSs and IFRSs

Date of events: 2020/5/7

Contents:

1.	Date of occurrence of the event: 2020/5/7
2.	Of which year/ quarter financial report required to be adjusted: The first quarter of 2020<br>
---	---
3.	Accounting principles applied (domestic listing securities):
---	---

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 (“Taiwan-IFRSs”)

4.	Inconsistent items/ amounts (domestic listing securities):

Under Taiwan-IFRSs, Chunghwa Telecom Co., Ltd. and its subsidiaries (or the “Company”) reported consolidated net income of NT$8,547,364 thousand, consolidated net income attributable to stockholders of the parent of NT$8,283,334 thousand, and basic earnings per share of NT$1.07 for the three months ended March 31, 2020, respectively. The Company also reported total assets of NT$499,896,930 thousand, total liabilities of NT$106,300,543 thousand, and total equity of NT$393,596,387 thousand as of March 31, 2020.

5.	Accounting principles applied (securities issued overseas):

IAS 34 “Interim Financial Reporting” as issued by the International Accounting Standard Board (“IFRSs”)

6.	Inconsistent items/ amounts (securities issued overseas):

Under IFRSs, the Company reported consolidated net income of NT$8,100 million, consolidated net income attributable to stockholders of the parent of NT$7,850 million, and basic earnings per share of NT$1.01 for the three months ended March 31, 2020, respectively. The Company also reported total assets of NT$499,679 million, total liabilities of NT$108,532 million, and total equity of NT$391,147 million as of March 31, 2020.

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7.	Cause of the inconsistency:

The differences between consolidated net income under Taiwan-IFRSs and that under IFRSs followed by the Company mainly come from the timing of the recognition of income tax on unappropriated earnings. In addition, prior to incorporation, the Company was subject to the laws and regulations applicable to state-owned enterprises in Taiwan which differed from the generally accepted accounting principles as applicable to commercial companies. As such, revenue from providing fixed line connection service and selling prepaid phone cards was recognized at the time the service was performed or the card was sold by the Company. Upon incorporation, net assets greater than the capital stock was credited as additional paid-in-capital and part of the additional paid-in-capital was from the unearned revenues generated from connection fees and prepaid cards as of the date of incorporation. Under IFRSs, revenue from connection fees and prepaid phone cards was deferred at the time of the service performed or sale and recognized as revenue over time as the service is continuously performed or as consumed. This reclassification from additional paid-in capital to retained earnings did not affect total equity.

8.	Any other matters that need to be specified:

Chunghwa Telecom’s earnings distribution and stockholders’ equity matters are in accordance with Taiwan-IFRSs.

• 2 -

EX-99.2

Exhibit 99.2

Chunghwa Telecom Co., Ltd. and Subsidiaries

Consolidated Financial Statements for the

Three Months Ended March 31, 2020 and 2019 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, 2020 and 2019, the related consolidated statements of comprehensive income, the consolidated statements of 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, 2020 and 2019, and of its consolidated financial performance and its consolidated cash flows for the three months then ended March 31, 2020 and 2019 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.

• 1 -

The engagement partners on the reviews resulting in this independent auditors’ review report are Dien Sheng Chang and Ching Pin Shih.

/s/ Dien Sheng Chang	/s/ Ching Pin Shih
Deloitte & Touche
Taipei, Taiwan
Republic of China

May 6, 2020

Notice to Readers

Theaccompanying 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 Chinaand 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 translatedinto 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, theChinese-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 NewTaiwan Dollars)

	March 31, 2020<br>(Reviewed)					December 31, 2019<br>(Audited)				March 31, 2019<br>(Reviewed)
	Amount			%		Amount		%		Amount		%
ASSETS
CURRENT ASSETS
Cash and cash equivalents (Note 6)	$	16,569,950			3	$	34,049,643		7	$	37,228,202		8
Financial assets at fair value through profit or loss (Note 7)		6,631			—		516		—		—		—
Hedging financial assets (Note 20)		—			—		327		—		—		—
Contract assets (Note 29)		4,466,540			1		4,441,196		1		4,606,104		1
Trade notes and accounts receivable, net (Notes 9 and 29)		23,401,540			5		26,407,783		6		27,524,272		6
Receivables from related parties (Note 37)		9,712			—		16,834		—		18,251		—
Inventories (Notes 10 and 38)		17,774,693			4		17,344,276		4		13,904,329		3
Prepayments (Note 11)		5,103,222			1		1,883,259		—		4,855,305		1
Other current monetary assets (Note 12)		6,159,141			1		7,498,564		2		7,169,247		1
Other current assets (Notes 19 and 38)		1,876,171			—		2,429,664		—		2,925,849		1
Total current assets		75,367,600			15		94,072,062		20		98,231,559		21
NONCURRENT ASSETS
Financial assets at fair value through profit or loss (Note 7)		767,362			—		778,105		—		511,274		—
Financial assets at fair value through other comprehensive income (Note 8)		5,903,181			1		7,268,917		2		6,774,106		1
Investments accounted for using equity method (Note 14)		7,358,379			1		7,354,226		2		3,024,908		1
Contract assets (Note 29)		2,567,439			1		2,600,913		—		2,394,383		—
Property, plant and equipment (Notes 15, 37 and 38)		279,867,247			56		283,694,215		59		284,681,139		59
Right-of-use<br>assets (Note 16)		11,494,300			2		11,364,249		2		11,710,079		2
Investment properties (Note 17)		8,164,263			1		8,169,393		2		8,277,484		2
Intangible assets (Note 18)		94,407,682			19		47,046,525		10		49,934,152		11
Deferred income tax assets (Note 3)		3,262,026			1		3,258,607		1		3,557,699		1
Incremental costs of obtaining contracts (Note 29)		929,827			—		942,652		—		1,117,334		—
Net defined benefit assets (Note 3)		2,204,182			1		2,127,335		—		1,088,263		—
Prepayments (Note 11)		2,611,936			1		2,679,335		1		2,931,109		1
Other noncurrent assets (Notes 19, 38 and 39)		4,991,506			1		6,101,704		1		5,798,112		1
Total noncurrent assets		424,529,330			85		383,386,176		80		381,800,042		79
TOTAL	$	499,896,930			100	$	477,458,238		100	$	480,031,601		100
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term loans (Note 21)	$	70,000			—	$	90,000		—	$	175,000		—
Short-term bills payable (Note 22)		19,965,629			4		—		—		—		—
Financial liabilities at fair value through profit or loss (Note 7)		570			—		239		—		2,219		—
Hedging financial liabilities (Note 20)		—			—		—		—		2,719		—
Contract liabilities (Note 29)		17,163,178			4		16,839,830		4		12,417,476		3
Trade notes and accounts payable (Note 24)		11,890,475			2		15,312,274		3		14,948,306		4
Payables to related parties (Note 37)		338,449			—		653,983		—		361,333		—
Current tax liabilities (Note 3)		6,103,903			1		4,020,670		1		6,276,099		1
Lease liabilities (Notes 16, 34 and 37)		3,395,000			1		3,291,330		1		3,500,021		1
Other payables (Note 25)		19,653,578			4		22,952,488		5		20,293,306		4
Provisions (Note 26)		199,804			—		206,942		—		131,367		—
Other current liabilities		972,553			—		983,789		—		1,051,655		—
Total current liabilities		79,753,139			16		64,351,545		14		59,159,501		13
NONCURRENT LIABILITIES
Contract liabilities (Note 29)		6,667,831			1		6,841,485		2		6,324,795		1
Long-term loans (Notes 23 and 38)		1,600,000			—		1,600,000		—		1,600,000		—
Deferred income tax liabilities (Note 3)		1,928,010			1		1,912,305		—		1,984,867		—
Provisions (Note 26)		99,681			—		97,382		—		79,142		—
Lease liabilities (Notes 16, 34 and 37)		6,424,707			1		6,466,808		1		6,353,362		2
Customers’ deposits (Note 37)		4,601,704			1		4,747,644		1		4,646,233		1
Net defined benefit liabilities (Note 3)		3,539,441			1		3,504,617		1		3,579,648		1
Other noncurrent liabilities		1,686,030			—		1,542,687		—		1,400,139		—
Total noncurrent liabilities		26,547,404			5		26,712,928		5		25,968,186		5
Total liabilities		106,300,543			21		91,064,473		19		85,127,687		18
EQUITY ATTRIBUTABLE TO STOCKHOLDERS OF THE PARENT (Notes 13 and 28)
Common stocks		77,574,465			16		77,574,465		16		77,574,465		16
Additional paid-in capital		171,274,394			34		171,255,985		36		171,135,080		36
Retained earnings
Legal reserve		77,574,465			16		77,574,465		16		77,574,465		16
Special reserve		2,675,419			1		2,675,419		1		2,675,419		1
Unappropriated earnings		54,625,420			10		46,341,361		10		55,446,604		11
Total retained earnings		134,875,304			27		126,591,245		27		135,696,488		28
Others		(708,698	)		—		688,548		—		309,142		—
Total equity attributable to stockholders of the parent		383,015,465			77		376,110,243		79		384,715,175		80
NONCONTROLLING INTERESTS (Notes 13 and 28)		10,580,922			2		10,283,522		2		10,188,739		2
Total equity		393,596,387			79		386,393,765		81		394,903,914		82
TOTAL	$	499,896,930			100	$	477,458,238		100	$	480,031,601		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

(InThousands of New Taiwan Dollars, Except Earnings Per Share)

(Reviewed, Not Audited)

	Three Months Ended March 31
	2020					2019
	Amount			%		Amount			%
REVENUES (Notes 29, 37 and 43)	$	48,149,999			100	$	51,331,161			100
OPERATING COSTS (Notes 10, 27, 29, 30, 37 and 43)		30,390,800			63		33,480,788			65
GROSS PROFIT		17,759,199			37		17,850,373			35
OPERATING EXPENSES (Notes 9, 27, 30, 37 and 43)
Marketing		5,072,556			11		5,407,891			11
General and administrative		1,213,500			3		1,171,158			2
Research and development		936,176			2		920,959			2
Expected credit loss (reversal of credit loss)		6,137			—		(55,953	)		—
Total operating expenses		7,228,369			16		7,444,055			15
OTHER INCOME AND EXPENSES (Note 30)		(680	)		—		(4,505	)		—
INCOME FROM OPERATIONS		10,530,150			21		10,401,813			20
NON-OPERATING INCOME AND EXPENSES
Interest income		39,386			—		52,603			—
Other income (Notes 30 and 37)		43,192			—		56,346			—
Other gains and losses (Notes 30, 36 and 37)		43,989			—		(19,368	)		—
Interest expenses (Notes 16, 30 and 37)		(42,387	)		—		(25,844	)		—
Share of profits of associates accounted for using equity method (Note 14)		37,074			—		79,173			—
Total non-operating income and expenses		121,254			—		142,910			—
INCOME BEFORE INCOME TAX		10,651,404			21		10,544,723			20
INCOME TAX EXPENSE (Notes 3 and 31)		2,104,040			4		2,018,010			4
NET INCOME		8,547,364			17		8,526,713			16

(Continued)

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CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(InThousands of New Taiwan Dollars, Except Earnings Per Share)

(Reviewed, Not Audited)

	Three Months Ended March 31
	2020						2019
	Amount			%			Amount			%
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<br>comprehensive income (Note 36)	$	(1,400,916	)		(3	)	$	(158,988	)		—
Gain or loss on hedging instruments subject to basis adjustment (Note 20)		(327	)		—			(3,788	)		—
Share of remeasurements of defined benefit pension plans of associates (Note 14)		725			—			—			—
		(1,400,518	)		(3	)		(162,776	)		—
Items that may be reclassified subsequently to profit or loss:
Exchange differences arising from the translation of the foreign operations		(11,776	)		—			23,530			—
Share of exchange differences arising from the translation of the foreign operations of associates<br>(Note 14)		(188	)		—			170			—
		(11,964	)		—			23,700			—
Total other comprehensive loss, net of income tax		(1,412,482	)		(3	)		(139,076	)		—
TOTAL COMPREHENSIVE INCOME	$	7,134,882			14		$	8,387,637			16
NET INCOME ATTRIBUTABLE TO
Stockholders of the parent	$	8,283,334			17		$	8,356,082			16
Noncontrolling interests		264,030			—			170,631			—
	$	8,547,364			17		$	8,526,713			16
COMPREHENSIVE INCOME ATTRIBUTABLE TO
Stockholders of the parent	$	6,886,813			14		$	8,205,310			16
Noncontrolling interests		248,069			—			182,327			—
	$	7,134,882			14		$	8,387,637			16
EARNINGS PER SHARE (Note 32)
Basic	$	1.07					$	1.08
Diluted	$	1.07					$	1.08

(Concluded)

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 CHANGES IN EQUITY

(InThousands of New Taiwan Dollars)

(Reviewed, Not Audited)

	Equity Attributable to Stockholders of the Parent (Notes 13, 20 and 28)
																	Others
																					Unrealized Gain
																	Exchange				or Loss on
																	Differences				Financial Assets
																	Arising from the				at Fair Value
				Additional<br><br><br>Paid-inCapital				Retained Earnings									Translation of				Through Other				Gain or Loss							Noncontrolling
	CommonStocks						LegalReserve			Special<br><br><br>Reserve			Unappropriated			the Foreign				Comprehensive				on Hedging							Interests
			Earnings											Operations			Income				Instruments				Total			(Notes 13 and 28)				Total Equity
BALANCE, JANUARY 1, 2019	$	77,574,465		$	171,136,764			$	77,574,465		$	2,675,419		$	47,090,522		$	(79,427	)		$	538,272			$	1,069		$	376,511,549			$	9,990,345		$	386,501,894
Change in additional paid-in capital from investments in<br>associates accounted for using equity method		—			(872	)			—			—			—			—				—				—			(872	)			497			(375	)
Net income for the three months ended March 31, 2019		—			—				—			—			8,356,082			—				—				—			8,356,082				170,631			8,526,713
Other comprehensive income (loss) for the three months ended March 31, 2019		—			—				—			—			—			15,223				(162,207	)			(3,788	)		(150,772	)			11,696			(139,076	)
Total comprehensive income (loss) for the three months ended March 31, 2019		—			—				—			—			8,356,082			15,223				(162,207	)			(3,788	)		8,205,310				182,327			8,387,637
Share-based payment transactions of subsidiaries		—			(812	)			—			—			—			—				—				—			(812	)			15,570			14,758
BALANCE, MARCH 31, 2019	$	77,574,465		$	171,135,080			$	77,574,465		$	2,675,419		$	55,446,604		$	(64,204	)		$	376,065			$	(2,719	)	$	384,715,175			$	10,188,739		$	394,903,914
BALANCE, JANUARY 1, 2020	$	77,574,465		$	171,255,985			$	77,574,465		$	2,675,419		$	46,341,361		$	(148,377	)		$	836,598			$	327		$	376,110,243			$	10,283,522		$	386,393,765
Change in additional paid-in capital from investments in<br>associates accounted for using equity method		—			(5,580	)			—			—			—			—				—				—			(5,580	)			47			(5,533	)
Net income for the three months ended March 31, 2020		—			—				—			—			8,283,334			—				—				—			8,283,334				264,030			8,547,364
Other comprehensive income (loss) for the three months ended March 31, 2020		—			—				—			—			725			(12,593	)			(1,384,326	)			(327	)		(1,396,521	)			(15,961	)		(1,412,482	)
Total comprehensive income (loss) for the three months ended March 31, 2020		—			—				—			—			8,284,059			(12,593	)			(1,384,326	)			(327	)		6,886,813				248,069			7,134,882
Share-based payment transactions of subsidiaries		—			23,989				—			—			—			—				—				—			23,989				49,284			73,273
BALANCE, MARCH 31, 2020	$	77,574,465		$	171,274,394			$	77,574,465		$	2,675,419		$	54,625,420		$	(160,970	)		$	(547,728	)		$	—		$	383,015,465			$	10,580,922		$	393,596,387

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 Thousandsof New Taiwan Dollars)

(Reviewed, Not Audited)

	Three Months Ended March 31
	2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax	$	10,651,404		$	10,544,723
Adjustments to reconcile income before income tax to net cash provided by operating<br>activities:
Depreciation		7,759,282			7,693,369
Amortization		1,059,023			1,064,194
Amortization of incremental costs of obtaining contracts		196,659			376,902
Expected credit loss (reversal of credit loss)		6,137			(55,953	)
Interest expenses		42,387			25,844
Interest income		(39,386	)		(52,603	)
Compensation cost of share-based payment transactions		1,646			430
Share of profits of associates accounted for using equity method		(37,074	)		(79,173	)
Loss on disposal of property, plant and equipment		680			4,505
Loss on disposal of financial instruments		1,788			—
Provision for inventory and obsolescence		23,601			95,682
Valuation loss on financial assets and liabilities at fair value through profit or loss,<br>net		12,374			7,193
Others		(50,887	)		(23,594	)
Changes in operating assets and liabilities:
Decrease (increase) in:
Contract assets		8,189			212,752
Trade notes and accounts receivable		3,042,468			2,615,369
Receivable from related parties		7,122			6,019
Inventories		(454,018	)		1,120,704
Prepayments		(3,152,564	)		(3,108,829	)
Other current monetary assets		122,464			(42,281	)
Other current assets		553,493			(349,765	)
Incremental cost of obtaining contracts		(183,834	)		(159,206	)
Increase (decrease) in:
Contract liabilities		149,694			1,762,269
Trade notes and accounts payable		(3,422,773	)		(5,516,944	)
Payables to related parties		(315,534	)		(556,618	)
Other payables		(2,523,167	)		(2,240,856	)
Provisions		(4,839	)		3,682
Other current liabilities		(6,481	)		(107,442	)
Net defined benefit plans		(42,023	)		121,537
Cash generated from operations		13,405,831			13,361,910
Interest paid		(76,758	)		(25,844	)
Income tax paid		(8,521	)		(117,351	)
Net cash provided by operating activities		13,320,552			13,218,715

(Continued)

• 7 -

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousandsof New Taiwan Dollars)

(Reviewed, Not Audited)

	Three Months Ended March 31
	2020			2019
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of financial assets at fair value through other comprehensive income	$	(35,433	)	$	—
Purchase of financial assets at fair value through profit or loss		(38,944	)		—
Proceeds from disposal of financial assets at fair value through profit or loss		29,741			—
Acquisition of time deposits and negotiable certificates of deposit with maturities of more than<br>three months		(1,391,556	)		(1,563,562	)
Proceeds from disposal of time deposits and negotiable certificates of deposit with maturities of<br>more than three months		2,616,599			3,931,264
Acquisition of property, plant and equipment		(3,729,411	)		(4,492,381	)
Proceeds from disposal of property, plant and equipment		14,465			9,618
Acquisition of intangible assets		(47,420,261	)		(54,332	)
Decrease (increase) in other noncurrent assets		70,533			(618,400	)
Interest received		45,620			58,028
Net cash used in investing activities		(49,838,647	)		(2,729,765	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term loans		70,000			300,000
Repayment of short-term loans		(90,000	)		(225,000	)
Proceeds from short-term bills payable		29,000,000			—
Repayment of short-term bills payable		(9,000,000	)		—
Decrease in customers’ deposits		(150,695	)		(78,673	)
Payment for the principal of lease liabilities		(992,494	)		(1,019,347	)
Increase in other noncurrent liabilities		143,343			89,809
Change in other noncontrolling interests		71,627			14,328
Net cash provided by (used in) financing activities		19,051,781			(918,883	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS		(13,379	)		13,355
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(17,479,693	)		9,583,422
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		34,049,643			27,644,780
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	16,569,950		$	37,228,202

(Concluded)

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

• 8 -

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

THREEMONTHS ENDED MARCH 31, 2020 AND 2019

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

(Reviewed, Not Audited)

1.	GENERAL

Chunghwa Telecom Co., Ltd. (“Chunghwa”) was incorporated on July 1, 1996 in the Republic of China (“ROC”) pursuant to the Article 30 of the Telecommunications Act. 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 together with its subsidiaries are hereinafter referred to collectively as the “Company”.

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, 2020.

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, 2019. Please refer to the consolidated financial statements for the year ended December 31, 2019 for the details.

• 9 -

Statement of Compliance

The accompanying consolidated financial statements have been prepared in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and 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 Financing Reporting Interpretations Committee (IFRIC) and SIC Interpretation (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
Name of Investor	Name of Investee	Main Businesses and Products	March 31,<br><br><br>2020		December 31,2019		March 31,<br><br><br>2019		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
	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<br>application services		56		57		57	b.
	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<br>distribution		56		56		56	c.
	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<br>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<br>hardware		51		51		51

(Continued)

• 10 -

			Percentage of Ownership
Name of Investor	Name of Investee	Main Businesses and Products	March 31,<br><br><br>2020		December 31,2019		March 31,<br><br><br>2019		Note
	Honghwa International Co., Ltd. (“HHI”)	Telecommunications engineering, sales agent of mobile phone plan application and other business<br>services, etc		100		100		100
	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	d.
	CHT Security Co., Ltd. (“CHTSC”)	Computing equipment installation, wholesale of computing and business machinery equipment and<br>software, management consulting services, data processing services, digital information supply services and internet identify services		80		80		80
Senao International Co., Ltd.	Senao International (Samoa) Holding Ltd. (“SIS”)	International investment		100		100		100
	Youth Co., Ltd. (“Youth”)	Sale of information and communication technologies products		93		93		93
	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		—	e.
Senyoung Insurance Agent Co., Ltd.	Senaolife Insurance Agent Co., Ltd. (“Senaolife”)	Life insurance services		100		100		—	f.
Light Era Development Co., Ltd.	Taoyuan Asia Silicon Valley Innovation Co., Ltd. (“TASVI”)	Development of real estate		—		—		60	g.
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	h.
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	i.
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<br>board		100		100		100
	CHPT Japan Co., Ltd. (“CHPT (JP)”)	Related services of electronic parts, machinery processed products and printed circuit<br>board		100		100		100

(Continued)

• 11 -

			Percentage of Ownership
Name of Investor	Name of Investee	Main Businesses and Products	March 31,<br><br><br>2020		December 31,2019		March 31,<br><br><br>2019		Note
	Chunghwa Precision Test Tech. International, Ltd. (“CHPT (International)”)	Wholesale and retail of electronic materials, and investment		100		100		100
Senao International (Samoa) Holding Ltd.	Senao International HK Limited (“SIHK”)	International investment		100		100		100
Senao International HK Limited	Senao Trading (Fujian) Co., Ltd. (“STF”)	Sale of information and communication technologies products		—		—		100	j.
	Senao International Trading (Shanghai) Co., Ltd. (“SITS”)	Sale of information and communication technologies products		100		100		100
	Senao International Trading (Jiangsu) Co., Ltd. (“SITJ”)	Sale of information and communication technologies products		—		—		—	k.
Prime Asia Investments Group Ltd. (B.V.I.)	Chunghwa Hsingta Co., Ltd. (“CHC”)	Investment		100		100		100
Chunghwa Hsingta Co., Ltd. (“CHC”)	Chunghwa Telecom (China) Co., Ltd. (“CTC”)	Integrated information and communication solution services for enterprise clients, and intelligent<br>energy network service		100		100		100
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<br>service		100		100		—	l.

(Concluded)

a.	Chunghwa continues to control over half of the seats of the Board of Directors of SENAO (six out of eleven<br>seats as of March 31, 2020) through the support of large beneficial stockholders. As a result, the accounts of SENAO are included in the consolidated financial statements.
b.	CHIEF issued new shares in March 2020, March and November 2019 as its employees exercised their options.<br>Therefore, the Company’s ownership interest in CHIEF decreased to 59.75% and 59.10% as of December 31, 2019 and March 31, 2020, respectively.
---	---
c.	SHE reduced 19.72% of its capital to offset accumulated deficits in December 2019 and the Company’s<br>ownership interest in SHE remained the same.
---	---
d.	The Company increased its investment in CHTT proportionally in October 2019 and the Company’s ownership<br>interest in CHTT remained the same.
---	---
e.	Aval invested 100% equity shares of Wiin Technology Co., Ltd. (“Wiin”) in September 2019.<br>
---	---
f.	SENYOUNG invested 100% equity shares of Senaolife Insurance Agent Co., Ltd. (“Senaolife”) in November<br>2019.
---	---
g.	TASVI completed its liquidation in September 2019.
---	---
h.	CHIEF obtained two out of three seats of the Board of Directors of SCT according to the mutual agreements among<br>stockholders and gained control over SCT; hence, SCT is deemed as a subsidiary of the Company.
---	---

• 12 -

i.	Though the Company’s ownership interest in CHPT is less than 50%, the management considered the absolute<br>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<br>of the Company.
j.	STF completed its liquidation in May 2019.
---	---
k.	SITJ completed its liquidation in March 2019.
---	---
i.	CHPT (International) invested 100% equity shares of Su Zhou Precision Test Tech. Ltd. (“SZPT”) in<br>October 2019.
---	---

The following diagram presented information regarding the relationship and ownership percentages between Chunghwa and its subsidiaries as of March 31, 2020.

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.

• 13 -

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, 2019.

5.	APPLICATION OF NEW AND REVISED STANDARDS AND INTERPRETATIONS
a.	Initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by<br>Securities Issuers and the IFRSs endorsed and issued into effect by the FSC
---	---

The initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRSs issued by the International Accounting Standards Board and endorsed and issued into effect by the FSC (collectively, the “Taiwan-IFRSs”) does not have material impacts on the Company’s 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<br><br><br>Announced by IASB<br><br><br>(Note)
---	---	---
Amendments to IFRS 10 and IAS 28	Sale or Contribution of<br>Assets between An Investor<br>and Its Associate or Joint<br>Venture	To be determined<br>by IASB
Amendments to IAS 1	Classification of liabilities as<br>current or noncurrent	January 1, 2022
Note:	The above New IFRSs are effective for annual periods beginning on or after their respective effective dates.<br>
---	---

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.

• 14 -

6.	CASH AND CASH EQUIVALENTS
	March 31,2020		December 31,2019		March 31,2019
---	---	---	---	---	---	---
Cash
Cash on hand	$	311,405	$	353,499	$	413,478
Bank deposits		8,437,027		9,432,814		9,199,415
		8,748,432		9,786,313		9,612,893
Cash equivalents (investments with maturities of less than three months)
Commercial paper		4,955,878		20,109,823		12,303,571
Negotiable certificates of deposit		550,000		1,700,000		12,400,000
Time deposits		2,312,602		2,450,509		2,911,738
Repurchase agreements collateralized by bonds		3,038		2,998		—
		7,821,518		24,263,330		27,615,309
	$	16,569,950	$	34,049,643	$	37,228,202

The annual yield rates of bank deposits, commercial paper, negotiable certificates of deposit, time deposits and repurchase agreements collateralized by bonds as of balance sheet dates were as follows:

	March 31,2020			December 31,2019			March 31,2019
Bank deposits		0.00%-0.50	%		0.00%-0.74	%		0.00%-0.85	%
Commercial paper		0.34%-0.52	%		0.47%-0.54	%		0.46%-0.52	%
Negotiable certificates of deposit		0.60	%		0.58%-0.60	%		0.54%-0.63	%
Time deposits		0.09%-4.40	%		0.09%-4.40	%		0.09%-4.40	%
Repurchase agreements collateralized by bonds		1.45	%		1.90	%		—
7.	FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
---	---
	March 31,2020		December 31,2019		March 31,2019
---	---	---	---	---	---	---
Financial assets-current
Mandatorily measured at FVTPL
Derivatives (not designated for hedge)
Forward exchange contracts	$	—	$	53	$	—
Non-derivatives
Listed stocks - domestic		6,631		463		—
	$	6,631	$	516	$	—

(Continued)

• 15 -

	March 31,2020		December 31,2019		March 31,2019
Financial assets-noncurrent
Mandatorily measured at FVTPL
Non-derivatives
Non-listed stocks - domestic	$	502,249	$	510,801	$	287,259
Non-listed stocks - foreign		265,113		267,304		224,015
	$	767,362	$	778,105	$	511,274
Financial liabilities-current
Held for trading
Derivatives (not designated for hedge)
Forward exchange contracts	$	570	$	239	$	2,219

(Concluded)

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

				Contract Amount
	Currency			(Thousands)
March 31, 2020
Forward exchange contracts - buy		/NT	2020.06		EUR1,063/NT$35,905
December 31, 2019
Forward exchange contracts - buy		/NT	2020.03		EUR1,500/NT$50,910
Forward exchange contracts - buy		US/NT	2020.01		US$850/NT$25,524
March 31, 2019
Forward exchange contracts - buy		/NT	2019.06		EUR6,050/NT$212,082
Forward exchange contracts - buy		US/NT	2019.04		US$300/NT$9,245

All values are in US Dollars.

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, 2020		December 31,2019		March 31, 2019
---	---	---	---	---	---	---
Domestic investments
Listed stocks	$	1,823,534	$	2,453,616	$	2,599,314
Non-listed stocks		3,983,097		4,680,931		3,997,088

(Continued)

• 16 -

	March 31, 2020		December 31,2019		March 31, 2019
Foreign investments
Non-listed stocks	$	96,550	$	134,370	$	177,704
	$	5,903,181	$	7,268,917	$	6,774,106

(Concluded)

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

The Company holds Powtec ElectroChemical Corporation (“Powtec”) as financial assets at FVOCI. The Board of Directors of Powtec resolved in February 2020 to file a petition with court for the declaration of its bankruptcy which was adjudged by the court in April 2020. The Company evaluated and determined the fair value of such investment was nil on March 31, 2020.

9.	TRADE NOTES AND ACCOUNTS RECEIVABLE, NET
	March 31,2020			December 31,2019			March 31,2019
---	---	---	---	---	---	---	---	---	---
Trade notes and accounts receivable	$	25,763,047		$	28,767,539		$	30,074,822
Less: Loss allowance		(2,361,507	)		(2,359,756	)		(2,550,550	)
	$	23,401,540		$	26,407,783		$	27,524,272

The main credit terms range from 30 to 90 days.

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

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

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

• 17 -

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, 2020

	Not PastDue			Past Due Lessthan 30 Days			Pass Due<br><br><br>31 to 60 Days			Pass Due<br><br><br>61 to 90 Days			Pass Due<br><br><br>91 to 120 Days			Pass Due<br><br><br>121 to 180 Days			Pass Due<br><br><br>over 180 Days			Total
Telecommunications business
Expected credit loss rate (Note a)		0%-2	%		0%-24	%		0%-68	%		0%-83	%		17%-90	%		25%-96	%		100	%
Gross carrying amount	$	17,985,058		$	247,357		$	76,261		$	44,069		$	28,652		$	26,575		$	662,490		$	19,070,462
Loss allowance (lifetime ECL)		(55,180	)		(29,938	)		(25,869	)		(26,350	)		(25,732	)		(24,799	)		(662,490	)		(850,358	)
Amortized cost	$	17,929,878		$	217,419		$	50,392		$	17,719		$	2,920		$	1,776		$	—		$	18,220,104
Project business
Expected credit loss rate (Note b)		0%-5	%		5	%		10	%		30	%		50	%		80	%		100	%
Gross carrying amount	$	2,008,876		$	128,593		$	7,150		$	35,195		$	24,960		$	17,489		$	1,404,358		$	3,626,621
Loss allowance (lifetime ECL)		(2,445	)		(7,044	)		(715	)		(11,109	)		(12,554	)		(14,061	)		(1,404,358	)		(1,452,286	)
Amortized cost	$	2,006,431		$	121,549		$	6,435		$	24,086		$	12,406		$	3,428		$	—		$	2,174,335

December 31, 2019

	Not PastDue			Past Due Lessthan 30 Days			Pass Due<br><br><br>31 to 60 Days			Pass Due<br><br><br>61 to 90 Days			Pass Due<br><br><br>91 to 120 Days			Pass Due<br><br><br>121 to 180 Days			Pass Due<br><br><br>over 180 Days			Total
Telecommunications business
Expected credit loss rate (Note a)		0%- 2	%		0%-25	%		0%-68	%		0%-83	%		11%-90	%		17%-96	%		100	%
Gross carrying amount	$	19,020,326		$	267,902		$	74,775		$	46,782		$	40,771		$	28,021		$	600,985		$	20,079,562
Loss allowance (lifetime ECL)		(55,903	)		(25,517	)		(27,630	)		(34,624	)		(26,281	)		(27,366	)		(600,985	)		(798,306	)
Amortized cost	$	18,964,423		$	242,385		$	47,145		$	12,158		$	14,490		$	655		$	—		$	19,281,256
Project business
Expected credit loss rate (Note b)		0%-5	%		5	%		10	%		30	%		50	%		80	%		100	%
Gross carrying amount	$	4,053,681		$	78,147		$	52,227		$	29,527		$	12,688		$	1,040		$	1,471,840		$	5,699,150
Loss allowance (lifetime ECL)		(2,637	)		(4,892	)		(5,223	)		(10,577	)		(6,344	)		(832	)		(1,471,840	)		(1,502,345	)
Amortized cost	$	4,051,044		$	73,255		$	47,004		$	18,950		$	6,344		$	208		$	—		$	4,196,805

• 18 -

March 31, 2019

	Not PastDue			Past Due Lessthan 30 Days			Pass Due<br><br><br>31 to 60 Days			Pass Due<br><br><br>61 to 90 Days			Pass Due<br><br><br>91 to 120 Days			Pass Due<br><br><br>121 to 180 Days			Pass Due<br><br><br>over 180 Days			Total
Telecommunications business
Expected credit loss rate (Note a)		0%-3	%		3%-29	%		8%-70	%		19%-83	%		30%-90	%		58%-96	%		100	%
Gross carrying amount	$	22,471,713		$	484,292		$	121,606		$	57,219		$	130,153		$	29,607		$	439,878		$	23,734,468
Loss allowance (lifetime ECL)		(74,225	)		(30,867	)		(28,169	)		(25,686	)		(26,075	)		(26,339	)		(439,878	)		(651,239	)
Amortized cost	$	22,397,488		$	453,425		$	93,437		$	31,533		$	104,078		$	3,268		$	—		$	23,083,229
Project business
Expected credit loss rate (Note b)		0%-5	%		5	%		10	%		30	%		50	%		80	%		100	%
Gross carrying amount	$	2,069,173		$	130,563		$	75,300		$	207,572		$	47,669		$	17,095		$	1,692,221		$	4,239,593
Loss allowance (lifetime ECL)		(10,785	)		(9,189	)		(7,678	)		(70,693	)		(31,909	)		(13,808	)		(1,692,221	)		(1,836,283	)
Amortized cost	$	2,058,388		$	121,374		$	67,622		$	136,879		$	15,760		$	3,287		$	—		$	2,403,310

Note a: Please refer to Notes 29 and 43 for the information of disaggregation of telecommunications service revenue. The expected credit loss rate applicable to different business revenue varies so as to reflect the risk level indicating by factors like historical experience.

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

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

	Three Months EndedMarch 31
	2020			2019
Beginning balance	$	2,359,756		$	2,602,055
Add: Provision for (reversal of) credit loss		5,930			(2,227	)
Less: Amounts written off		(4,179	)		(49,278	)
Ending balance	$	2,361,507		$	2,550,550
10.	INVENTORIES
---	---
	March 31,2020		December 31,2019		March 31,2019
---	---	---	---	---	---	---
Merchandise	$	3,443,108	$	3,858,034	$	3,607,408
Project in process		11,864,846		11,113,286		7,991,698
Work in process		161,540		141,417		108,766
Raw materials		228,875		155,495		120,584
		15,698,369		15,268,232		11,828,456
Land held under development		1,998,733		1,998,733		1,998,733
Construction in progress		77,591		77,311		77,140
	$	17,774,693	$	17,344,276	$	13,904,329

• 19 -

The operating costs related to inventories were $10,154,244 thousand (including the valuation loss on inventories of $23,601 thousand) and $12,163,408 thousand (including the valuation loss on inventories of $95,682 thousand) for the three months ended March 31, 2020 and 2019, respectively.

As of March 31, 2020, December 31, 2019 and March 31, 2019, inventories of $2,076,324 thousand, $2,076,044 thousand and $2,075,873 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 developed by LED for Qingshan Sec., Dayuan Dist., Taoyuan City project.

11.	PREPAYMENTS
	March 31,<br><br><br>2020		December 31,2019		March 31,<br><br><br>2019
---	---	---	---	---	---	---
Prepaid rents	$	3,317,182	$	3,382,560	$	3,629,909
Prepaid salary and bonus		3,085,701		5,117		3,105,568
Others		1,312,275		1,174,917		1,050,937
	$	7,715,158	$	4,562,594	$	7,786,414
Current
Prepaid salary and bonus	$	3,085,701	$	5,117	$	3,105,568
Prepaid rents		705,322		704,607		699,428
Others		1,312,199		1,173,535		1,050,309
	$	5,103,222	$	1,883,259	$	4,855,305
Noncurrent
Prepaid rents	$	2,611,860	$	2,677,953	$	2,930,481
Others		76		1,382		628
	$	2,611,936	$	2,679,335	$	2,931,109

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

12.	OTHER CURRENT MONETARY ASSETS
	March 31,<br><br><br>2020		December 31,2019		March 31,<br><br><br>2019
---	---	---	---	---	---	---
Time deposits and negotiable certificates of deposit with maturities of more than three<br>months	$	4,747,464	$	5,959,074	$	5,789,466
Repurchase agreements collateralized by bonds with maturities of more than three months		15,113		14,990		—
Others		1,396,564		1,524,500		1,379,781
	$	6,159,141	$	7,498,564	$	7,169,247

• 20 -

The annual yield rates of time deposits, negotiable certificates of deposit and repurchase agreements collateralized by bonds with maturities of more than three months at balance sheet dates were as follows:

	March 31,<br><br><br>2020			December 31,2019			March 31,<br><br><br>2019
Time deposits and negotiable certificates of deposit with maturities of more than three<br>months		0.03%-2.73	%		0.03%-2.73	%		0.03%-2.95	%
Repurchase agreements collateralized by bonds with maturities of more than three months		2.50	%		2.50	%		—
13.	SUBSIDIARIES
---	---
a.	Information on significant noncontrolling interest subsidiary
---	---
	Principal		Proportion of Ownership Interests and VotingRights Held by Noncontrolling Interests
---	---	---	---	---	---	---	---	---	---	---	---
Subsidiaries	Place ofBusiness		March 31,2020			December 31,2019			March 31,2019
SENAO		Taiwan		72	%		72	%		72	%
CHPT		Taiwan		66	%		66	%		66	%
	Profit Allocated toNoncontrolling Interests				Accumulated Noncontrolling Interests
---	---	---	---	---	---	---	---	---	---	---
	Three Months Ended March 31				March 31,		December 31,		March 31,
	2020		2019		2020		2019		2019
SENAO	$	63,212	$	45,219	$	4,331,638	$	4,267,547	$	4,273,647
CHPT	$	117,684	$	61,937		4,354,343		4,236,872		4,106,192
Individually immaterial subsidiaries with noncontrolling interests						1,894,941		1,779,103		1,808,900
					$	10,580,922	$	10,283,522	$	10,188,739

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,<br><br><br>2020			December 31,2019			March 31,<br><br><br>2019
Current assets	$	7,108,725		$	6,751,385		$	7,016,462
Noncurrent assets		3,362,736			3,321,252			3,527,483
Current liabilities		(3,928,940	)		(3,617,165	)		(3,950,067	)
Noncurrent liabilities		(587,578	)		(589,882	)		(719,587	)
Equity	$	5,954,943		$	5,865,590		$	5,874,291

(Continued)

• 21 -

	March 31, 2020		December 31,2019		March 31, 2019
Equity attributable to the parent	$	1,623,305	$	1,598,043	$	1,600,644
Equity attributable to noncontrolling interests		4,331,638		4,267,547		4,273,647
	$	5,954,943	$	5,865,590	$	5,874,291

(Concluded)

	Three Months Ended March 31
	2020			2019
Revenues and income	$	6,776,807		$	7,827,185
Costs and expenses		6,688,643			7,763,979
Profit for the period	$	88,164		$	63,206
Profit attributable to the parent	$	24,952		$	17,987
Profit attributable to noncontrolling interests		63,212			45,219
Profit for the period	$	88,164		$	63,206
Other comprehensive income attributable to the parent	$	261		$	3,159
Other comprehensive income attributable to noncontrolling interests		665			7,199
Other comprehensive income for the period	$	926		$	10,358
Total comprehensive income attributable to the parent	$	25,213		$	21,146
Total comprehensive income attributable to noncontrolling interests		63,877			52,418
Total comprehensive income for the period	$	89,090		$	73,564
Net cash flow from operating activities	$	181,557		$	34,785
Net cash flow from investing activities		(5,776	)		186,604
Net cash flow from financing activities		(81,563	)		(86,449	)
Effect of exchange rate changes on cash and cash equivalents		92			63
Net cash inflow	$	94,310		$	135,003

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,<br><br><br>2020		December 31,2019		March 31,<br><br><br>2019
Current assets	$	3,890,284	$	3,709,630	$	4,277,957
Noncurrent assets		4,025,176		4,043,881		3,114,279

(Continued)

• 22 -

	March 31,<br><br><br>2020			December 31,2019			March 31,<br><br><br>2019
Current liabilities	$	(1,274,059	)	$	(1,287,597	)	$	(1,135,278	)
Noncurrent liabilities		(18,827	)		(22,003	)		(11,903	)
Equity	$	6,622,574		$	6,443,911		$	6,245,055
Equity attributable to CHI	$	2,268,231		$	2,207,039		$	2,138,863
Equity attributable to noncontrolling interests		4,354,343			4,236,872			4,106,192
	$	6,622,574		$	6,443,911		$	6,245,055

(Concluded)

	Three Months Ended March 31
	2020			2019
Revenues and income	$	909,295		$	611,749
Costs and expenses		730,309			517,548
Profit for the period	$	178,986		$	94,201
Profit attributable to CHI	$	61,302		$	32,264
Profit attributable to noncontrolling interests		117,684			61,937
Profit for the period	$	178,986		$	94,201
Other comprehensive income attributable to CHI	$	(110	)	$	338
Other comprehensive income (loss) attributable to noncontrolling interests		(213	)		649
	$	(323	)	$	987
Total comprehensive income attributable to the CHI	$	61,192		$	32,602
Total comprehensive income attributable to noncontrolling interests		117,471			62,586
	$	178,663		$	95,188
Net cash flow from operating activities	$	175,028		$	205,270
Net cash flow from investing activities		(103,378	)		(235,104	)
Net cash flow from financing activities		(5,482	)		(5,364	)
Effect of exchange rate changes on cash and cash equivalents		4,403			714
Net cash inflow (outflow)	$	70,571		$	(34,484	)
b.	Equity transactions with noncontrolling interests
---	---

CHIEF issued new shares in March 2020, March and November 2019 as its employees exercised their options. Therefore, the Company’s equity ownership interest in CHIEF decreased. See Note 33(b) for details.

The above transactions were accounted for as equity transactions since the Company did not cease to have control over these subsidiaries.

• 23 -

Information of the Company’s equity transactions with noncontrolling interests for the three months ended March 31, 2020 and 2019 were as follows:

	CHIEF Share-Based Payment
	Three Months Ended March 31
	2020			2019
Cash consideration received from noncontrolling interests	$	71,627		$	14,328
The proportionate share of the carrying amount of the net assets of the subsidiary transferred to<br>noncontrolling interests		(47,638	)		(15,140	)
Differences arising from equity transactions	$	23,989		$	(812	)
Line items for equity transaction adjustments
Additional paid-in capital - arising from changes in<br>equities of subsidiaries	$	23,989		$	(812	)
14.	INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD
---	---

Investments in associates were as follows:

	Carrying Amount
	March 31,<br><br><br>2020		December 31,2019		March 31,<br><br><br>2019
Material associate
Next Commercial Bank Co., Ltd. (“NCB”) (Note)	$	4,040,695	$	4,074,168	$	—
Associates that are not individually material
Listed
Senao Networks, Inc. (“SNI”)		982,484		953,685		944,463
KingwayTek Technology Co., Ltd. (“KWT”)		245,294		253,021		—
Non-listed
ST-2 Satellite Ventures Pte., Ltd.<br>(“STS”)		504,119		500,930		522,084
International Integrated System, Inc. (“IISI”)		330,805		340,240		307,978
Viettel-CHT Co., Ltd. (“Viettel-CHT”)		329,843		316,535		302,794
Taiwan International Standard Electronics Co., Ltd. (“TISE”)		270,338		272,166		234,238
Chunghwa PChome Fund I Co., Ltd. (“CPFI”)		199,145		194,081		197,740
So-net Entertainment Taiwan Limited (“So-net”)		191,140		189,396		127,980
KKBOX Taiwan Co., Ltd. (“KKBOXTW”)		160,061		150,789		139,951
Taiwan International Ports Logistics Corporation (“TIPL”)		51,765		50,979		49,887
Click Force Co., Ltd. (“CF”)		36,823		37,120		37,835

(Continued)

• 24 -

	Carrying Amount
	March 31,<br><br><br>2020		December 31,2019		March 31,<br><br><br>2019
Cornerstone Ventures Co., Ltd. (“CVC”)	$	5,646	$	5,507	$	4,950
UUPON Inc. (“UUPON”)		5,141		10,529		14,238
Alliance Digital Tech Co., Ltd. (“ADT”)		5,080		5,080		5,080
KingwayTek Technology Co., Ltd. (“KWT”)		—		—		135,690
MeWorks Limited (HK) (“MeWorks”)		—		—		—
		3,317,684		3,280,058		3,024,908
	$	7,358,379	$	7,354,226	$	3,024,908
				(Concluded)

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

	% of Ownership and Voting Rights
	March 31,<br><br><br>2020		December 31,2019		March 31,<br><br><br>2019
Material associate
Next Commercial Bank Co., Ltd. (“NCB”) (Note)		42		42		—
Associates that are not individually material
Senao Networks, Inc. (“SNI”)		34		34		34
KingwayTek Technology Co., Ltd. (“KWT”)		23		23		26
ST-2 Satellite Ventures Pte., Ltd.<br>(“STS”)		38		38		38
International Integrated System, Inc. (“IISI”)		31		31		32
Viettel-CHT Co., Ltd. (“Viettel-CHT”)		30		30		30
Taiwan International Standard Electronics Co., Ltd. (“TISE”)		40		40		40
Chunghwa PChome Fund I Co., Ltd. (“CPFI”)		50		50		50
So-net Entertainment Taiwan Limited (“So-net”)		30		30		30
KKBOX Taiwan Co., Ltd. (“KKBOXTW”)		30		30		30
Taiwan International Ports Logistics Corporation (“TIPL”)		27		27		27
Click Force Co., Ltd. (“CF”)		49		49		49
Cornerstone Ventures Co., Ltd. (“CVC”)		49		49		49
UUPON Inc. (“UUPON”)		22		22		22
Alliance Digital Tech Co., Ltd. (“ADT”)		14		14		14
MeWorks Limited (HK) (“MeWorks”)		20		20		20

Note: NCB was a preparatory office on December 31, 2019.

• 25 -

Summarized financial information of NCB was set out below:

	March 31,2020			December 31,2019
Current assets	$	9,647,964		$	10,000,028
Noncurrent assets		596,270			451,897
Current liabilities		(30,848	)		(291,399	)
Noncurrent liabilities		(569,723	)		(436,975	)
Equity	$	9,643,663		$	9,723,551
The percentage of ownership held by the company		41.9	%		41.9	%
Equity attributable to the Company and carrying amount of investment	$	4,040,695		$	4,074,168
				Three MonthsEnded March 31,2019
Revenues				$	—
Net loss for the period				$	(79,888	)
Other comprehensive income					—
Total comprehensive loss for the period				$	(79,888	)

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
	2020		2019
The Company’s share of profits	$	70,547	$	79,173
The Company’s share of other comprehensive income		537		170
The Company’s share of total comprehensive income	$	71,084	$	79,343

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

	March 31,<br><br><br>2020		December 31,2019		March 31,<br><br><br>2019
SNI	$	1,424,139	$	2,014,353	$	1,765,667
KWT	$	591,561	$	872,729	$	—

The participation of establishing NCB was approved by Chunghwa’s Board of Directors in January 2019. The establishment of NCB was approved by the FSC in July 2019 and the incorporation of NCB was approved by the Ministry of Economic Affairs Department of Commerce in January 2020. Chunghwa prepaid investment funds to NCB in February and November 2019 amounting to $4,190,000 thousand (included in other assets), for ownership interest of 41.90%. Chunghwa obtained six out of fifteen seats of the Board of Directors of NCB; therefore, Chunghwa does not have control over NCB and merely has significant influence over NCB and treats it as an associate. NCB mainly engages in online banking business in Taiwan.

• 26 -

The Company disposed some shares of KWT in April 2019 before KWT traded its shares on the General Stock Market of the Taipei Exchange according to the local requirements. In addition, the Company did not participate in the capital increase of KWT in May 2019 and KWT repurchased its stock from December 2019 to February 2020. Therefore, the Company’s ownership interest in KWT changed to 22.52% and 22.72% as of December 31, 2019 and March 31, 2020, respectively.

IISI issued new shares in March and September 2019 as its employees exercised their options; therefore, the Company’s ownership interest in IISI decreased to 31.47% as of December 31, 2019. The investment of 20.58% of ownership interest in IISI was approved by Chunghwa’s Board of Directors in January 2020. As of March 31,2020, the equity transaction was not completed. Chunghwa expects to obtain more than 50% of ownership interest and half of the seats of the Board of Directors in IISI, therefore, Chunghwa will gain control over IISI and treat it as a subsidiary.

The Company invested and obtained 50% equity shares of CPFI. 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 investment in associate.

The Company invested and obtained 49% equity shares of CVC. 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 investment in associate.

The Company owns 14% equity shares of ADT. As the Company remains the seat in the Board of Directors of ADT and considers the relative size of ownership interest and the dispersion of shares owned by the other stockholders, the Company remains significant influence over ADT. In June 2018, the stockholders of ADT approved to dissolve. The liquidation of ADT is still in process.

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

15.	PROPERTY, PLANT AND EQUIPMENT
	March 31,<br><br><br>2020		December 31,2019		March 31,<br><br><br>2019
---	---	---	---	---	---	---
Assets used by the Company	$	272,137,995	$	276,370,003	$	278,763,541
Assets subject to operating leases		7,729,252		7,324,212		5,917,598
	$	279,867,247	$	283,694,215	$	284,681,139
a.	Assets used by the Company
---	---
	Land			LandImprovements			Buildings			ComputerEquipment			Telecommuni-cationsEquipment			TransportationEquipment			MiscellaneousEquipment			Construction inProgress andEquipment tobe Accepted			Total
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Cost
Balance on January 1, 2019	$	100,354,425		$	1,599,634		$	69,328,236		$	14,258,485		$	711,863,697		$	3,882,534		$	9,873,589		$	18,644,766		$	929,805,366
Additions		—			—			2,297			11,941			14,678			—			12,126			3,754,329			3,795,371
Disposal		(9,310	)		—			(2,285	)		(292,201	)		(13,396,265	)		(7,522	)		(75,245	)		—			(13,782,828	)
Effect of foreign exchange differences		—			—			—			154			2,647			3			1,226			16			4,046
Others		88			—			(1,676	)		16,133			5,861,350			4,444			36,813			(5,912,730	)		4,422
Balance on March 31, 2019	$	100,345,203		$	1,599,634		$	69,326,572		$	13,994,512		$	704,346,107		$	3,879,459		$	9,848,509		$	16,486,381		$	919,826,377
Accumulated depreciation and impairment
Balance on January 1, 2019	$	—		$	(1,337,192	)	$	(26,861,627	)	$	(12,143,307	)	$	(596,850,343	)	$	(3,651,139	)	$	(7,291,742	)	$	—		$	(648,135,350	)
Depreciation expenses		—			(10,762	)		(324,803	)		(212,324	)		(5,946,959	)		(26,372	)		(171,444	)		—			(6,692,664	)
Disposal		—			—			2,285			291,500			13,392,872			7,522			74,526			—			13,768,705
Effect of foreign exchange differences		—			—			—			(94	)		(884	)		(3	)		(580	)		—			(1,561	)
Others		—			—			6,133			(6,716	)		1,374			(938	)		(1,819	)		—			(1,966	)
Balance on March 31, 2019	$	—		$	(1,347,954	)	$	(27,178,012	)	$	(12,070,941	)	$	(589,403,940	)	$	(3,670,930	)	$	(7,391,059	)	$	—		$	(641,062,836	)

(Continued)

• 27 -

	Land			LandImprovements			Buildings			ComputerEquipment			Telecommuni-cationsEquipment			TransportationEquipment			MiscellaneousEquipment			Construction inProgress andEquipment tobe Accepted			Total
Balance on January 1, 2019, net	$	100,354,425		$	262,442		$	42,466,609		$	2,115,178		$	115,013,354		$	231,395		$	2,581,847		$	18,644,766		$	281,670,016
Balance on March 31, 2019, net	$	100,345,203		$	251,680		$	42,148,560		$	1,923,571		$	114,942,167		$	208,529		$	2,457,450		$	16,486,381		$	278,763,541
Cost
Balance on January 1, 2020	$	99,102,251		$	1,618,481		$	71,000,783		$	13,004,827		$	706,032,448		$	3,912,298		$	10,090,170		$	13,752,197		$	918,513,455
Additions		—			—			7,565			4,524			9,371			—			23,336			2,906,083			2,950,879
Disposal		(9,310	)		—			—			(292,573	)		(3,081,614	)		(8,494	)		(74,093	)		—			(3,466,084	)
Effect of foreign exchange differences		—			—			—			(28	)		24,568			(78	)		(923	)		1,554			25,093
Others		86,927			1,909			(677,900	)		33,151			6,051,748			—			32,341			(6,126,932	)		(598,756	)
Balance on March 31, 2020	$	99,179,868		$	1,620,390		$	70,330,448		$	12,749,901		$	709,036,521		$	3,903,726		$	10,070,831		$	10,532,902		$	917,424,587
Accumulated depreciation and impairment
Balance on January 1, 2020	$	—		$	(1,374,602	)	$	(27,976,732	)	$	(11,068,245	)	$	(590,337,891	)	$	(3,694,325	)	$	(7,662,299	)	$	(29,358	)	$	(642,143,452	)
Depreciation expenses		—			(11,115	)		(338,931	)		(194,766	)		(6,024,528	)		(17,907	)		(163,865	)		—			(6,751,112	)
Disposal		—			—			—			292,300			3,076,100			8,494			74,045			—			3,450,939
Effect of foreign exchange differences		—			—			—			26			(10,022	)		(4	)		296			—			(9,704	)
Others		—			—			176,864			(3,718	)		(2,249	)		(373	)		(3,787	)		—			166,737
Balance on March 31, 2020	$	—		$	(1,385,717	)	$	(28,138,799	)	$	(10,974,403	)	$	(593,298,590	)	$	(3,704,115	)	$	(7,755,610	)	$	(29,358	)	$	(645,286,592	)
Balance on January 1, 2020, net	$	99,102,251		$	243,879		$	43,024,051		$	1,936,582		$	115,694,557		$	217,973		$	2,427,871		$	13,722,839		$	276,370,003
Balance on March 31, 2020, net	$	99,179,868		$	234,673		$	42,191,649		$	1,775,498		$	115,737,931		$	199,611		$	2,315,221		$	10,503,544		$	272,137,995
																				(Concluded)

There was no indication that property, plant and equipment was impaired so the Company did not recognize any impairment loss for the three months ended March 31, 2020 and 2019.

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	2-8 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			LandImprovements		Buildings			Total
---	---	---	---	---	---	---	---	---	---	---	---
Cost
Balance on January 1, 2019	$	3,617,627		$	689	$	3,582,774		$	7,201,090
Additions		—			—		310			310
Others		(88	)		—		(2,341	)		(2,429	)
Balance on March 31, 2019	$	3,617,539		$	689	$	3,580,743		$	7,198,971

(Continued)

• 28 -

	Land			LandImprovements			Buildings			Total
Accumulated depreciation and impairment
Balance on January 1, 2019	$	—		$	(512	)	$	(1,265,356	)	$	(1,265,868	)
Depreciation expenses		—			(16	)		(16,014	)		(16,030	)
Others		—			—			525			525
Balance on March 31, 2019	$	—		$	(528	)	$	(1,280,845	)	$	(1,281,373	)
Balance on January 1, 2019, net	$	3,617,627		$	177		$	2,317,418		$	5,935,222
Balance on March 31, 2019, net	$	3,617,539		$	161		$	2,299,898		$	5,917,598
Cost
Balance on January 1, 2020	$	4,979,650		$	—		$	3,841,560		$	8,821,210
Others		(86,927	)		—			689,992			603,065
Balance on March 31, 2020	$	4,892,723		$	—		$	4,531,552		$	9,424,275
Accumulated depreciation and impairment
Balance on January 1, 2020	$	—		$	—		$	(1,496,998	)	$	(1,496,998	)
Depreciation expenses		—			—			(23,105	)		(23,105	)
Others		—			—			(174,920	)		(174,920	)
Balance on March 31, 2020	$	—		$	—		$	(1,695,023	)	$	(1,695,023	)
Balance on January 1, 2020, net	$	4,979,650		$	—		$	2,344,562		$	7,324,212
Balance on March 31, 2020, net	$	4,892,723		$	—		$	2,836,529		$	7,729,252

(Concluded)

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

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

	March 31,<br><br><br>2020		December 31,2019		March 31,<br><br><br>2019
Year 1	$	329,167	$	301,674	$	245,048
Year 2		289,963		272,899		142,144
Year 3		234,707		233,434		91,914
Year 4		191,157		191,128		59,084
Year 5		116,675		130,066		37,657
Onwards		1,203,039		1,224,416		94,223
	$	2,364,708	$	2,353,617	$	670,070

• 29 -

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:

Land improvements	10 years
Buildings
Main buildings	35-60 years
Other building facilities	3-15 years
16.	LEASE ARRANGEMENTS
---	---
a.	Right-of-use assets<br>
---	---
	March 31,<br><br><br>2020		December 31,2019		March 31,<br><br><br>2019
---	---	---	---	---	---	---
Land and buildings
Handsets base stations	$	7,008,413	$	6,844,687	$	6,846,186
Others		1,972,852		1,916,835		1,959,142
Equipment		2,513,035		2,602,727		2,904,751
	$	11,494,300	$	11,364,249	$	11,710,079
			Three Months Ended March 31
			2020		2019
Additions to<br>right-of-use assets			$	1,162,359	$	799,527
Depreciation charge for<br>right-of-use assets
Land and buildings
Handsets base stations			$	677,376	$	666,476
Others				195,623		203,795
Equipment				106,936		104,676
			$	979,935	$	974,947

The Company did not have significant sublease or impairment of right-of-use assets for the three months ended March 31, 2020 and 2019.

b.	Lease liabilities
	March 31,<br><br><br>2020		December 31,2019		March 31,<br><br><br>2019
---	---	---	---	---	---	---
Lease liabilities
Current	$	3,395,000	$	3,291,330	$	3,500,021
Noncurrent		6,424,707		6,466,808		6,353,362
	$	9,819,707	$	9,758,138	$	9,853,383

• 30 -

Range of discount rate for lease liabilities is as follows:

	March 31,<br><br><br>2020	December 31,<br><br><br>2019	March 31,<br><br><br>2019
Land and buildings
Handsets base stations	0.58%-1.18%	0.58%-1.18%	0.59%-1.18%
Others	0.58%-9.00%	0.58%-9.00%	0.59%-9.00%
Equipment	0.58%-3.07%	0.58%-4.50%	0.59%-4.50%
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. on March 12, 2010 to lease capacity on the ST-2 satellite. For the information of lease agreements with related parties, please refer to Note 37 to the consolidated financial statements for details.

d.	Other lease information
	Three Months Ended March 31
---	---	---	---	---
	2020		2019
Expenses relating to low-value asset leases	$	1,841	$	1,481
Expenses relating to variable lease payments not included in the measurement of lease<br>liabilities	$	1,147	$	1,131
Total cash outflow for leases	$	1,016,954	$	1,041,865

The Company leases certain equipment which qualify 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.

• 31 -

17.	INVESTMENT PROPERTIES
Cost
---	---	---	---
Balance on January 1, 2019	$	9,392,452
Disposal		(5,831	)
Balance on March 31, 2019	$	9,386,621
Accumulated depreciation and impairment
Balance on January 1, 2019	$	(1,105,240	)
Depreciation expense		(9,728	)
Disposal		5,831
Balance on March 31, 2019	$	(1,109,137	)
Balance on January 1, 2019, net	$	8,287,212
Balance on March 31, 2019, net	$	8,277,484
Cost
Balance on January 1 and March 31, 2020	$	9,213,979
Accumulated depreciation and impairment
Balance on January 1, 2020	$	(1,044,586	)
Depreciation expense		(5,130	)
Balance on March 31, 2020	$	(1,049,716	)
Balance on January 1, 2020, net	$	8,169,393
Balance on March 31, 2020, net	$	8,164,263

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, 2019 and 2018 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, 2020 and 2019 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:

• 32 -

	March 31,<br><br><br>2020	December 31,<br><br><br>2019	March 31,<br><br><br>2019
Fair value	$    18,701,398	$    18,701,398	$    18,514,801
Overall capital interest rate	1.03%-4.04%	1.03%-4.04%	1.02%-4.04%
Profit margin ratio	12%-20%	12%-20%	12%-20%
Discount rate	—	—	—
Capitalization rate	0.79%-1.74%	0.79%-1.74%	0.79%-1.75%

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

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

	March 31,<br><br><br>2020		December 31,2019		March 31,<br><br><br>2019
Year 1	$	118,705	$	112,626	$	114,977
Year 2		94,996		90,701		99,711
Year 3		73,199		70,795		80,987
Year 4		58,476		61,115		61,713
Year 5		37,338		39,386		52,534
Onwards		89,825		96,010		105,165
	$	472,539	$	470,633	$	515,087
18.	INTANGIBLE ASSETS
---	---
	Mobilebroadband<br><br><br>Concession			ComputerSoftware			Goodwill			Others			Total
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Cost
Balance on January 1, 2019	$	70,144,000		$	3,425,969		$	236,200		$	373,203		$	74,179,372
Additions-acquired separately		—			53,377			—			955			54,332
Disposal		(10,179,000	)		(37,324	)		—			—			(10,216,324	)
Effect of foreign exchange difference		—			48			—			90			138
Others		—			247			—			—			247
Balance on March 31, 2019	$	59,965,000		$	3,442,317		$	236,200		$	374,248		$	64,017,765
Accumulated amortization and impairment
Balance on January 1, 2019	$	(20,632,474	)	$	(2,467,170	)	$	(26,677	)	$	(109,369	)	$	(23,235,690	)
Amortization expenses		(959,893	)		(98,218	)		—			(6,083	)		(1,064,194	)
Disposal		10,179,000			37,324			—			—			10,216,324
Effect of foreign exchange difference		—			(32	)		—			(21	)		(53	)
Balance on March 31, 2019	$	(11,413,367	)	$	(2,528,096	)	$	(26,677	)	$	(115,473	)	$	(14,083,613	)
Balance on January 1, 2019, net	$	49,511,526		$	958,799		$	209,523		$	263,834		$	50,943,682
Balance on March 31, 2019, net	$	48,551,633		$	914,221		$	209,523		$	258,775		$	49,934,152

(Continued)

• 33 -

	Mobilebroadband<br><br><br>Concession			ComputerSoftware			Goodwill			Others			Total
Cost
Balance on January 1, 2020	$	59,965,000		$	3,428,609		$	236,200		$	378,063		$	64,007,872
Additions-acquired separately		48,373,000			45,456			—			1,805			48,420,261
Disposal		—			(128,598	)		—			(9	)		(128,607	)
Effect of foreign exchange difference		—			27			—			(51	)		(24	)
Others		—			—			—			(45	)		(45	)
Balance on March 31, 2020	$	108,338,000		$	3,345,494		$	236,200		$	379,763		$	112,299,457
Accumulated amortization and impairment
Balance on January 1, 2020	$	(14,293,046	)	$	(2,498,825	)	$	(35,623	)	$	(133,853	)	$	(16,961,347	)
Amortization expenses		(959,893	)		(92,851	)		—			(6,279	)		(1,059,023	)
Disposal		—			128,598			—			9			128,607
Effect of foreign exchange difference		—			(28	)		—			16			(12	)
Balance on March 31, 2020	$	(15,252,939	)	$	(2,463,106	)	$	(35,623	)	$	(140,107	)	$	(17,891,775	)
Balance on January 1, 2020, net	$	45,671,954		$	929,784		$	200,577		$	244,210		$	47,046,525
Balance on March 31, 2020, net	$	93,085,061		$	882,388		$	200,577		$	239,656		$	94,407,682
											(Concluded)

For long-term business development, Chunghwa participated in the 5G mobile broadband license bidding hosted by NCC and paid the deposit for 5G spectrum bidding amounting to $1,000,000 thousand (included in other assets) in October 2019. Chunghwa paid $48,373,000 thousand in February 2020 for the aforementioned license to obtain 90MHz in the 3.5GHz spectrum and 600MHz in the 28GHz spectrum.

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,<br><br><br>2020		December 31,<br><br><br>2019		March 31,<br><br><br>2019
---	---	---	---	---	---	---
Refundable deposits	$	1,793,997	$	1,879,109	$	1,854,102
Spare parts		1,762,816		2,336,082		2,656,342
Other financial assets		1,000,000		1,000,000		1,000,000
Prepayment for investments (Note 14)		—		—		838,000
Deposit for mobile broadband license bidding (Note 18)		—		1,000,000		—
Others		2,310,864		2,316,177		2,375,517
	$	6,867,677	$	8,531,368	$	8,723,961

(Continued)

• 34 -

	March 31,2020		December 31,2019		March 31,2019
Current
Spare parts	$	1,762,816	$	2,336,082	$	2,656,342
Others		113,355		93,582		269,507
	$	1,876,171	$	2,429,664	$	2,925,849
Noncurrent
Refundable deposits	$	1,793,997	$	1,879,109	$	1,854,102
Other financial assets		1,000,000		1,000,000		1,000,000
Prepayment for investments		—		—		838,000
Deposit for mobile broadband license bidding		—		1,000,000		—
Others		2,197,509		2,222,595		2,106,010
	$	4,991,506	$	6,101,704	$	5,798,112

(Concluded)

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

20.	HEDGING FINANCIAL INSTRUMENTS

Chunghwa’s hedge strategy is to enter 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.

• 35 -

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

March 31, 2020

					Forward		Line Item in	Carrying Amount				Change in FairValues ofHedgingInstruments Usedfor CalculatingHedge
Hedging Instruments	Currency		Maturity		Rate		Balance Sheet	Asset		Liability		Ineffectiveness
Cash flow hedge
Forecast purchases - forward exchange contracts	/NT	—		—	$	—	Hedging financial assets (liabilities)	$	—	$	—	$	(327	)

All values are in US Dollars.

	Change inValue ofHedged ItemUsed for		Accumulated Gain or Losson Hedging Instrumentsin Other Equity
Hedged Items	CalculatingHedgeIneffectiveness		ContinuingHedges		HedgeAccounting noLonger Applied
Cash flow hedge
Forecast equipment purchases	$	327	$	—	$	—

December 31, 2019

		Notional<br>Amount		Forward		Line Item in	Carrying Amount				Change in FairValues ofHedgingInstruments Usedfor CalculatingHedge
Hedging Instruments	Currency	(In Thousands)		Rate		Balance Sheet	Asset		Liability		Ineffectiveness
Cash flow hedge
Forecast purchases - forward exchange contracts	EUR/NT$	2,498/NT 84,066	2020.03	$	33.66	Hedging financial assets (liabilities)	$	327	$	—	$	(742	)

All values are in US Dollars.

	Change inValue ofHedged ItemUsed for		Accumulated Gain or Losson Hedging Instrumentsin Other Equity
Hedged Items	CalculatingHedgeIneffectiveness		ContinuingHedges		HedgeAccounting NoLonger Applied
Cash flow hedge
Forecast equipment purchases	$	742	$	327	$	—

March 31, 2019

		Notional<br>Amount		Forward		Line Item in	Carrying Amount				Change in FairValues ofHedgingInstruments Usedfor CalculatingHedge
Hedging Instruments	Currency	(In Thousands)		Rate		Balance Sheet	Asset		Liability		Ineffectiveness
Cash flow hedge
Forecast purchases - forward exchange contracts	EUR/NT$	7,206/NT 252,668	2019.06	$	35.07	Hedging financial assets (liabilities)	$	—	$	2,719	$	(3,788	)

All values are in US Dollars.

• 36 -

	Change inValue ofHedged ItemUsed for		Accumulated Gain or Losson Hedging Instrumentsin Other Equity
Hedged Items	CalculatingHedgeIneffectiveness		ContinuingHedges			HedgeAccounting noLonger Applied
Cash flow hedge
Forecast equipment purchases	$	3,788	$	(2,719	)	$	—

Three months ended March 31, 2020

	Comprehensive Income
								Reclassification from Equityto Profit or Loss and the Adjusted LineItem
Hedge Transaction	HedgingGain or LossesRecognizedin OCI			Amount ofHedgeIneffectivenessRecognized inProfit or Loss		Line Item inWhich HedgeIneffectiveness is<br><br><br>Included		AmountReclassified to P/L and theAdjusted LineItem			Due to HedgedFuture CashFlows No Longer<br><br><br>Expected toOccur
Cash flow hedge
Forecast equipment purchases	$	(327	)	$	—		—	$	(706	)	$	—
									Construction in<br>progress and<br>equipment to be<br>accepted			Other gains and<br>losses

Three months ended March 31, 2019

	Comprehensive Income
								Reclassification from Equityto Profit or Loss and the Adjusted LineItem
Hedge Transaction	HedgingGain or LossesRecognizedin OCI			Amount ofHedgeIneffectivenessRecognized inProfit or Loss		Line Item inWhich HedgeIneffectiveness is<br><br><br>Included		AmountReclassified to<br><br><br>P/L and the<br><br><br>Adjusted LineItem		Due to HedgedFuture CashFlows No Longer<br><br><br>Expected toOccur
Cash flow hedge
Forecast equipment purchases	$	(3,788	)	$	—		—	$	—	$	—
									Construction in<br>progress and<br>equipment to be<br>accepted		Other gains and<br>losses

• 37 -

21.	SHORT-TERM LOANS
	March 31,2020		December 31,2019		March 31,2019
---	---	---	---	---	---	---
Unsecured bank loans	$	70,000	$	90,000	$	175,000

The annual interest rates of bank loans were as follows:

	March 31,2020			December 31,2019			March 31,2019
Unsecured bank loans		1.20%-2.50	%		1.20%-2.50	%		1.15%-2.50	%
22.	SHORT-TERM BILLS PAYABLE
---	---
	March 31,2020			December 31,2019		March 31,2019
---	---	---	---	---	---	---	---
Commercial paper payable	$	20,000,000		$	—	$	—
Less: Discounts on commercial paper payable		(34,371	)		—		—
	$	19,965,629		$	—	$	—

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

	March 31,2020			December 31,2019		March 31,2019
Commercial paper payable		0.57%-0.69	%		—		—
23.	LONG-TERM LOANS (INCLUDING LONG-TERM LOANS - CURRENT PORTION)
---	---
	March 31,2020		December 31,2019		March 31,2019
---	---	---	---	---	---	---
Secured bank loans (Note 38)	$	1,600,000	$	1,600,000	$	1,600,000

The annual interest rates of loans were as follows:

	March 31,2020			December 31,2019			March 31,2019
Secured bank loans		0.91	%		0.92	%		0.92	%

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 renew contract is September 2021.

• 38 -

24.	TRADE NOTES AND ACCOUNTS PAYABLE
	March 31,2020		December 31,2019		March 31,2019
---	---	---	---	---	---	---
Trade notes and accounts payable	$	11,890,475	$	15,312,274	$	14,948,306

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

25.	OTHER PAYABLES
	March 31,2020		December 31,2019		March 31,2019
---	---	---	---	---	---	---
Accrued salary and compensation	$	6,478,657	$	9,482,606	$	5,531,189
Accrued compensation to employees and remuneration to directors and supervisors		1,807,337		1,440,573		2,136,648
Accrued franchise fees		1,352,266		1,091,148		1,425,770
Amounts collected for others		1,336,273		1,278,796		1,262,882
Payables to contractors		1,182,512		1,892,188		1,293,063
Accrued maintenance costs		847,504		954,761		1,140,817
Payables to equipment suppliers		227,977		295,816		1,190,671
Others		6,421,052		6,516,600		6,312,266
	$	19,653,578	$	22,952,488	$	20,293,306
26.	PROVISIONS
---	---
	March 31,<br><br><br>2020		December 31,2019		March 31,<br><br><br>2019
---	---	---	---	---	---	---
Warranties	$	167,155	$	173,275	$	137,307
Onerous contracts		66,578		66,907		15,919
Employee benefits		61,355		59,745		52,836
Others		4,397		4,397		4,447
	$	299,485	$	304,324	$	210,509
Current	$	199,804	$	206,942	$	131,367
Noncurrent		99,681		97,382		79,142
	$	299,485	$	304,324	$	210,509
	Warranties			Onerouscontracts			EmployeeBenefits		Others		Total
---	---	---	---	---	---	---	---	---	---	---	---	---	---
Balance on January 1, 2019	$	131,664		$	19,323		$	51,393	$	4,447	$	206,827
Additional provisions recognized		22,516			—			1,443		—		23,959
Used / forfeited during the period		(16,873	)		(3,404	)		—		—		(20,277	)
Balance on March 31, 2019	$	137,307		$	15,919		$	52,836	$	4,447	$	210,509

(Continued)

• 39 -

	Warranties			Onerouscontracts			EmployeeBenefits		Others		Total
Balance on January 1, 2020	$	173,275		$	66,907		$	59,745	$	4,397	$	304,324
Additional / (reversal of) provisions recognized		18,870			(329	)		1,610		—		20,151
Used / forfeited during the period		(24,990	)		—			—		—		(24,990	)
Balance on March 31, 2020	$	167,155		$	66,578		$	61,355	$	4,397	$	299,485

(Concluded)

a.	The provision for warranties claims represents the present value of the management’s best estimate of the<br>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 the historical warranty experience.
b.	The provision for employee benefits represents vested long-term service compensation accrued.<br>
---	---
c.	The provision for onerous contracts represents the present obligation resulting from the measurement for the<br>unavoidable costs of meeting the Company’s contractual obligations exceed the economic benefits expected to be received from the contracts.
---	---
27.	RETIREMENT BENEFIT PLANS
---	---

According to the Article 56 of the Labor Standards Law, entities are required to contribute the difference in one appropriation to their pension funds before the end of next March when the balance of the Funds is insufficient to pay the eligible employees who meet the retirement criteria in the following year. There is no difference that requires Chunghwa to contribute into the Fund in 2020 and 2019.

Relevant pension costs for defined benefit plans which were determined by the pension cost rates of actuarial valuation as of December 31, 2019 and 2018 were as follows:

	Three Months Ended March 31
	2020		2019
Operating costs	$	300,673	$	432,574
Marketing expenses		150,910		215,652
General and administrative expenses		29,977		40,300
Research and development expenses		18,036		26,361
	$	499,596	$	714,887
28.	EQUITY
---	---
a.	Share capital
---	---
1)	Common stocks
---	---
	March 31,<br><br><br>2020		December 31,<br><br><br>2019		March 31,<br><br><br>2019
---	---	---	---	---	---	---
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

(Continued)

• 40 -

	March 31,<br><br><br>2020		December 31,2019		March 31,<br><br><br>2019
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

(Concluded)

The issued common stocks of a par value at $10 per share 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, 2020, the outstanding ADSs were 234,291 thousand common stocks, which equaled 23,429 thousand units and represented 3.02% 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, 2020 and 2019 were as follows:

	Share Premium		Movements ofAdditionalPaid-in Capitalfor AssociatesAccounted forUsing EquityMethod			Movements ofAdditionalPaid-in CapitalArising fromChanges inEquities ofSubsidiaries			DifferencebetweenConsiderationReceivedandCarryingAmount of theSubsidiaries’ Net<br> <br>Assets uponDisposal		Donated Capital		Stockholders’Contribution dueto Privatization		Total
Balance on January 1, 2019	$	147,329,386	$	89,893		$	2,063,148		$	987,611	$	18,648	$	20,648,078	$	171,136,764
Change in additional paid-in capital from investments in<br>associates accounted for using equity method		—		(872	)		—			—		—		—		(872	)
Share-based payment transactions of subsidiaries		—		—			(812	)		—		—		—		(812	)
Balance on March 31, 2019	$	147,329,386	$	89,021		$	2,062,336		$	987,611	$	18,648	$	20,648,078	$	171,135,080
Balance on January 1, 2020	$	147,329,386	$	208,746		$	2,062,250		$	987,611	$	19,914	$	20,648,078	$	171,255,985
Change in additional paid-in capital from investments in<br>associates accounted for using equity method		—		(5,580	)		—			—		—		—		(5,580	)
Share-based payment transactions of subsidiaries		—		—			23,989			—		—		—		23,989
Balance on March 31, 2020	$	147,329,386	$	203,166		$	2,086,239		$	987,611	$	19,914	$	20,648,078	$	171,274,394

• 41 -

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 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.

Chunghwa should appropriate or reverse a special reserve in accordance with Rule No. 1010012865 and Rule No. 1010047490 issued by the FSC and the directive entitled “Questions and Answers on Special Reserves Appropriated Following the Adoption of Taiwan-IFRSs”. Distributions can be made out of any subsequent reversal of the debit to other equity items.

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

The appropriations of the 2019 earnings of Chunghwa proposed by the Chunghwa’s Board of Directors on February 26, 2020 and the appropriations of the 2018 earnings of Chunghwa approved by the stockholders in their meetings on June 21, 2019 were as follows:

	Appropriation of Earnings				Dividends Per Share(NT)
	For FiscalYear 2019		For FiscalYear 2018		For FiscalYear 2019	For FiscalYear 2018
Cash dividends	$	32,782,969	$	34,745,603		$	4.479

All values are in US Dollars.

The appropriations of earnings for 2019 are subject to the resolution of the stockholders’ meeting planned to be held on May 29, 2020. 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.

• 42 -

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
---	---	---	---	---	---	---
	2020			2019
Beginning balance	$	836,598		$	538,272
Unrealized gain or loss for the period
Equity instruments		(1,384,326	)		(162,207	)
Ending balance	$	(547,728	)	$	376,065
e.	Noncontrolling interests
---	---
	Three Months Ended March 31
---	---	---	---	---	---
	2020			2019
Beginning balance	$	10,283,522		$	9,990,345
Shares attributed to noncontrolling interests
Net income for the period		264,030			170,631
Exchange differences arising from the translation of the foreign operations		456			8,387
Unrealized valuation gain or loss on financial assets at FVOCI		(16,590	)		3,219
Share of other comprehensive income of associates accounted for using equity method		173			90
Changes in additional paid-in capital from investments in<br>associates accounted for using equity method		47			497
Share-based payment transactions of subsidiaries		49,284			15,570
Ending balance	$	10,580,922		$	10,188,739
29.	REVENUES
---	---
	Three Months Ended March 31
---	---	---	---	---
	2020		2019
Revenue from contracts with customers	$	47,871,762	$	51,048,624
Other revenues
Rental income		203,926		191,711
Others		74,311		90,826
		278,237		282,537
	$	48,149,999	$	51,331,161

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, 2019 for details.

• 43 -

a.	Disaggregation of revenue

Three months ended March 31, 2020

	Domestic FixedCommuni-<br><br><br>cationsBusiness		MobileCommuni-<br><br><br>cationsBusiness		InternetBusiness		InternationalFixedCommuni-<br><br><br>cationsBusiness		Others		Total
Main Products and Service Revenues
Mobile services revenue	$	—	$	14,284,650	$	—	$	—	$	—	$	14,284,650
Sales of products		481,821		8,004,138		18,788		77,732		931,044		9,513,523
Local telephone and domestic long distance telephone services revenue		6,611,740		—		—		—		—		6,611,740
Broadband access and domestic leased line services revenue		5,541,156		—		—		—		—		5,541,156
Data Communications internet services revenue		—		—		5,305,258		—		—		5,305,258
International network and leased telephone services revenue		—		—		—		1,079,323		—		1,079,323
Others		1,900,147		228,436		2,126,029		1,076,424		205,076		5,536,112
	$	14,534,864	$	22,517,224	$	7,450,075	$	2,233,479	$	1,136,120	$	47,871,762

Three months ended March 31, 2019

	Domestic FixedCommuni-<br><br><br>cationsBusiness		MobileCommuni-<br><br><br>cationsBusiness		InternetBusiness		InternationalFixedCommuni-<br><br><br>cationsBusiness		Others		Total
Main Products and Service Revenues
Mobile services revenue	$	—	$	14,721,342	$	—	$	—	$	—	$	14,721,342
Sales of products		416,884		9,482,418		—		68,026		621,915		10,589,243
Local telephone and domestic long distance telephone services revenue		7,004,002		—		—		—		—		7,004,002
Broadband access and domestic leased line services revenue		5,512,974		—		—		—		—		5,512,974
Data Communications internet services revenue		—		—		5,240,314		—		—		5,240,314
International network and leased telephone services revenue		—		—		—		1,810,881		—		1,810,881
Others		2,710,535		254,758		2,102,746		889,646		212,183		6,169,868
	$	15,644,395	$	24,458,518	$	7,343,060	$	2,768,553	$	834,098	$	51,048,624
b.	Contract balances
---	---
	March 31, 2020			December 31,2019			March 31, 2019
---	---	---	---	---	---	---	---	---	---
Trade notes and account receivables (Note 9)	$	23,401,540		$	26,407,783		$	27,524,272
Contract assets
Products and service bundling	$	6,922,587		$	6,942,974		$	6,888,091
Other		128,191			115,993			130,613
Less: Loss allowance		(16,799	)		(16,858	)		(18,217	)
	$	7,033,979		$	7,042,109		$	7,000,487
Current	$	4,466,540		$	4,441,196		$	4,606,104
Noncurrent		2,567,439			2,600,913			2,394,383
	$	7,033,979		$	7,042,109		$	7,000,487

(Continued)

• 44 -

	March 31, 2020		December 31,2019		March 31, 2019
Contract liabilities
Telecommunications business	$	12,457,891	$	12,771,621	$	11,841,556
Project business		10,872,402		10,360,428		6,176,701
Products and service bundling		33,129		38,570		73,002
Other		467,587		510,696		651,012
	$	23,831,009	$	23,681,315	$	18,742,271
Current	$	17,163,178	$	16,839,830	$	12,417,476
Noncurrent		6,667,831		6,841,485		6,324,795
	$	23,831,009	$	23,681,315	$	18,742,271

(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 providing for 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, 2020		December 31,2019		March 31, 2019
---	---	---	---	---	---	---
Noncurrent
Incremental costs of obtaining contracts	$	929,827	$	942,652	$	1,117,334

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 are capitalized. Amortization recognized in the three months ended March 31, 2020 and 2019 are $196,659 thousand and $376,902 thousand, respectively.

30.	NET INCOME
a.	Other income and expenses
---	---
	Three Months Ended March 31
---	---	---	---	---	---	---
	2020			2019
Loss on disposal of property, plant and equipment	$	(680	)	$	(4,505	)

• 45 -

b.	Other income
	Three Months Ended March 31
---	---	---	---	---
	2020		2019
Rental income	$	17,973	$	19,566
Others		25,219		36,780
	$	43,192	$	56,346
c.	Other gains and losses
---	---
	Three Months Ended March 31
---	---	---	---	---	---	---
	2020			2019
Valuation loss on financial assets and liabilities at fair value through profit or loss,<br>net	$	(12,374	)	$	(7,193	)
Net foreign currency exchange gains (losses)		71,070			(4,763	)
Loss on disposal of financial instruments		(1,788	)		—
Others		(12,919	)		(7,412	)
	$	43,989		$	(19,368	)
d.	Interest expenses
---	---
	Three Months Ended March 31
---	---	---	---	---
	2020		2019
Interest on lease liabilities	$	21,472	$	21,388
Other interest expenses		20,915		4,456
	$	42,387	$	25,844
e.	Impairment loss (reversal of impairment loss)
---	---
	Three Months Ended March 31
---	---	---	---	---	---	---
	2020			2019
Contract assets	$	(59	)	$	(553	)
Trade notes and accounts receivable	$	5,930		$	(2,227	)
Other receivables	$	266		$	(53,173	)
Inventories	$	23,601		$	95,682
f.	Depreciation and amortization expenses
---	---
	Three Months Ended March 31
---	---	---	---	---
	2020		2019
Property, plant and equipment	$	6,774,217	$	6,708,694
Right-of-use<br>assets		979,935		974,947
Investment properties		5,130		9,728
Intangible assets		1,059,023		1,064,194
Incremental costs of obtaining contracts		196,659		376,902
Total depreciation and amortization expenses	$	9,014,964	$	9,134,465

(Continued)

• 46 -

	Three Months Ended March 31
	2020		2019
Depreciation expenses summarized by functions
Operating costs	$	7,277,894	$	7,196,349
Operating expenses		481,388		497,020
	$	7,759,282	$	7,693,369
Amortization expenses summarized by functions
Operating costs	$	1,199,273	$	1,384,458
Marketing expenses		23,034		24,608
General and administrative expenses		22,552		23,287
Research and development expenses		10,823		8,743
	$	1,255,682	$	1,441,096

(Concluded)

g.	Employee benefit expenses
	Three Months Ended March 31
---	---	---	---	---
	2020		2019
Post-employment benefit
Defined contribution plans	$	167,292	$	162,553
Defined benefit plans		499,596		714,887
		666,888		877,440
Share-based payment
Equity-settled share-based payment		1,646		430
Other employee benefit
Salaries		6,299,418		6,348,313
Insurance		691,619		714,858
Others		3,553,031		3,453,336
		10,544,068		10,516,507
Total employee benefit expenses	$	11,212,602	$	11,394,377
Summary by functions
Operating costs	$	5,727,372	$	5,888,047
Operating expenses		5,485,230		5,506,330
	$	11,212,602	$	11,394,377

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 financial statements are authorized for issue, the differences are recorded as a change in accounting estimate.

The compensation to the employees and remuneration to the directors of 2019 and 2018 approved by the Board of Directors on February 26, 2020 and March 19, 2019, respectively, were as follows. The compensation to the employees and remuneration to the directors of 2019 will be reported to the stockholders in their meeting planned to be held on May 29, 2020.

• 47 -

	Cash
	2019		2018
Compensation distributed to the employees	$	1,126,194	$	1,404,264
Remuneration paid to the directors		35,210		38,216

There was no difference between the initial accrual amounts and the amounts approved in the Board of Directors in 2020 and 2019 of the aforementioned compensation to employees and the remuneration to directors.

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

31.	INCOME TAX
a.	Income tax recognized in profit or loss
---	---

The major components of income tax expense were as follows:

	Three Months EndedMarch 31
	2020		2019
Current tax
Current tax expenses recognized for the period	$	2,087,951	$	2,007,019
Income tax adjustments on prior years		—		(11,409	)
Others		143		4,497
		2,088,094		2,000,107
Deferred tax
Deferred tax expenses recognized for the period		15,946		17,903
Income tax recognized in profit or loss	$	2,104,040	$	2,018,010

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.

In July 2019, the President of the ROC announced the amendments to the Statute of Industrial Innovation, which stipulate that the unappropriated earnings in 2018 and thereafter that are used to build or acquire certain assets or technologies are allowed as deduction when computing the income tax on unappropriated earnings. Chunghwa has deducted the reinvested capital expenditure from the unappropriated earnings while calculating income tax on unappropriated earnings.

b.	Income tax examinations

Income tax returns of Chunghwa, CHSI, CHST, SENAO, CHIEF, SHE, Youth, SENYOUNG and Aval have been examined by the tax authorities through 2017. Income tax returns of CHI, CHPT, LED, Unigate, CLPT, SFD, Youyi, ISPOT, HHI, CHYP and CHTSC have been examined by the tax authorities through 2018.

• 48 -

32.	EARNINGS PER SHARE (“EPS”)

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

Net Income

	Three Months Ended March 31
	2020			2019
Net income used to compute the basic earnings per share
Net income attributable to the parent	$	8,283,334		$	8,356,082
Assumed conversion of all dilutive potential common stocks
Employee stock options and employee compensation of subsidiaries		(1,386	)		(1,376	)
Net income used to compute the diluted earnings per share	$	8,281,948		$	8,354,706

Weighted Average Number of Common Stocks

(Thousand Shares)

	Three Months Ended March 31
	2020		2019
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		7,731		12,777
Weighted average number of common stocks used to compute the diluted earnings per share		7,765,178		7,770,224

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

33.	SHARE-BASED PAYMENT ARRANGEMENT
a.	SENAO share-based compensation plan (“SENAO Plan”) described as follows:
---	---
Effective Date for<br><br><br>Plan Registration	Resolution Date by<br><br><br>SENAO’s Board of<br><br><br>Directors	Stock Options Units<br><br><br>(Thousand)	Exercise Price<br><br><br>(NT$)
---	---	---	---
2012.05.28	2013.04.29	10,000	$66.20
			(Original price$93.00)

Each option is eligible to subscribe for one common share when exercisable. Under the terms of the SENAO Plan, the options are granted at an exercise price equal to the closing price of the SENAO’s common stocks listed on the TSE on the higher of closing price or par value. The SENAO Plan have exercise price adjustment formula upon the changes in common stocks equity (including cash capital increase, new share issue through capitalization of earnings and additional paid-in capital, merger, spin off and new share issue for Global Depositary Shares, and so on) or distribution of cash dividends. The options of SENAO Plan are valid for six years and the graded vesting schedule for which 50% of option granted will vest two years after the grant date and another two tranches of 25%, each will vest three and four years after the grant date respectively.

• 49 -

No compensation cost of stock options granted on May 7, 2013 was recognized for the three months ended March 31, 2019 and 2020, respectively.

Information about SENAO’s outstanding stock options for the three months ended March 31, 2019 was as follows:

	Three Months EndedMarch 31, 2019
	Granted on May 7, 2013
	Number of<br><br><br>Options<br><br><br>(Thousand)			WeightedAverageExercise Price(NT)
Employee stock options
Options outstanding at beginning of the period		5,318
Options forfeited		(602	)
Options outstanding at end of the period		4,716
Option exercisable at end of the period		4,716

All values are in US Dollars.

As of March 31, 2020 and December 31, 2019, there was no outstanding stock options.

As of March 31, 2019, information about employee stock options outstanding was as follows:

Options Outstanding					Options Exercisable
Range of<br>Exercise Price<br>(NT)		Weighted<br><br><br>Average<br> <br>Remaining<br><br><br>Contractual<br> <br>Life(Years)		Weighted<br>Average Exercise<br>Price (NT)	Number of<br><br><br>Options<br><br><br>(Thousand)		Weighted<br>Average Exercise<br>Price (NT)
66.20	4,716		0.10			4,716

All values are in US Dollars.

SENAO 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 OptionsGranted onMay 7, 2013
Grant-date share price (NT$)	$	93.00
Exercise price (NT$)	$	93.00
Dividends yield		—
Risk-free interest rate		0.91	%
Expected life		4.375 years
Expected volatility		36.22	%
Weighted average fair value of grants (NT$)	$	28.72

• 50 -

Expected volatility was based on the historical share price volatility of SENAO over the period equal to the expected life of SENAO Plan.

b.	CHIEF share-based compensation plan (“CHIEF Plan”) described as follows:
Effective Date for<br> <br>PlanRegistration	Resolution Date byCHIEF’s Board ofDirectors		Stock Options Units		Exercise Price<br>(NT)
---	---	---	---	---	---	---
2017.12.18		2017.12.19		950.00
					(Original price	)
		2018.10.31		50.00
					(Original price	)
2015.11.17		2015.10.22		2,000.00
					(Original price	)

All values are in US Dollars.

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 exercise price adjustment formula upon the changes in common stocks or distribution of cash dividends. The options of CHIEF Plan are valid for five years and the graded vesting schedule will vest two years after the grant date.

The compensation costs for stock options granted on October 31, 2018 were $138 thousand and $138 thousand for the three months ended March 31, 2020 and 2019, respectively.

The compensation costs for stock options granted on December 19, 2017 were $72 thousand and $168 thousand for the three months ended March 31, 2020 and 2019, respectively.

The compensation costs for stock options granted on October 22, 2015 were $124 thousand for the three months ended March 31, 2019. No compensation cost of stock options was recognized for the three months ended March 31, 2020.

CHIEF modified the plan terms of stock options granted on October 31, 2018 in June 2019 and the exercise price changed from $147.00 to $141.70 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 June 2019 and the exercise price changed from $140.60 to $135.60 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, 2020 and 2019 was as follows:

	Three Months Ended March 31, 2020
	Granted on October 31,2018			Granted on December 19,2017				Granted on October 22,2015
	Number of<br><br><br>Options		WeightedAverageExercisePrice(NT)	Number of<br><br><br>Options			WeightedAverageExercisePrice(NT)	Number of<br><br><br>Options			WeightedAverageExercisePrice(NT)
Employee stock options
Options outstanding at beginning of the period		46.00			897.00				314.25
Options exercised		—			(448.50	)			(314.25	)

All values are in US Dollars.

(Continued)

• 51 -

	Three Months Ended March 31, 2020
	Granted on October31, 2018				Granted on December 19,2017					Granted on October 22,2015
Options forfeited		—	$	—		(15.00	)	$	—		—	$	—
Options outstanding at end of the period		46.00		141.70		433.50			135.60		—		—
Options exercisable at end of the period		—		—		—			—		—		—

(Concluded)

	Three Months Ended March 31, 2019
	Granted on October 31,2018			Granted on December 19,2017			Granted on October 22,2015
	Number of<br><br><br>Options		WeightedAverageExercisePrice(NT)	Number of<br><br><br>Options		WeightedAverageExercisePrice(NT)	Number of<br><br><br>Options			WeightedAverageExercisePrice(NT)
Employee stock options
Options outstanding at beginning of the period		50.00			925.00			882.75
Options exercised		—			—			(416.50	)
Options outstanding at end of the period		50.00			925.00			466.25
Options exercisable at end of the period		—			—			—

All values are in US Dollars.

As of March 31, 2020, information about employee stock options outstanding was as follows:

Granted on October 31, 2018
Options Outstanding					Options Exercisable
Range ofExercise Price(NT)		WeightedAverageRemainingContractualLife (Years)		WeightedAverageExercise<br>Price (NT)	Number ofOptions		WeightedAverageExercise<br>Price (NT)
141.70	46.00		3.58			—

All values are in US Dollars.

Granted on December 19, 2017
Options Outstanding					Options Exercisable
Range ofExercise Price(NT)		WeightedAverageRemainingContractualLife (Years)		WeightedAverageExercise<br>Price (NT)	Number ofOptions		WeightedAverageExercise<br>Price (NT)
135.60	433.50		2.72			—

All values are in US Dollars.

As of March 31, 2020, all the stock options granted on October 22, 2015 were exercised.

• 52 -

As of December 31, 2019, information about employee stock options outstanding was as follows:

Granted on October 31, 2018
Options Outstanding						Options Exercisable
Range ofExercise Price(NT)	Number ofOptions		WeightedAverageRemainingContractualLife (Years)		WeightedAverageExercise<br>Price (NT)	Number ofOptions		WeightedAverageExercise<br>Price (NT)
		46.00		3.83			—

All values are in US Dollars.

Granted on December 19, 2017
Options Outstanding						Options Exercisable
Range ofExercise Price(NT)	Number ofOptions		WeightedAverageRemainingContractualLife (Years)		WeightedAverageExercise<br>Price (NT)	Number ofOptions		WeightedAverageExercise<br>Price (NT)
		897.00		2.96			448.50

All values are in US Dollars.

Granted on October 22, 2015
Options Outstanding						Options Exercisable
Range ofExercise Price(NT)	Number ofOptions		WeightedAverageRemainingContractualLife (Years)		WeightedAverageExercise<br>Price (NT)	Number ofOptions		WeightedAverageExercise<br>Price (NT)
		314.25		0.81			314.25

All values are in US Dollars.

As of March 31, 2019, information about employee stock options outstanding was as follows:

Granted on October 31, 2018
Options Outstanding						Options Exercisable
Range ofExercise Price(NT)	Number ofOptions		WeightedAverageRemainingContractualLife (Years)		WeightedAverageExercise<br>Price (NT)	Number ofOptions		WeightedAverageExercise<br>Price (NT)
		50.00		4.58			—

All values are in US Dollars.

Granted on December 19, 2017
Options Outstanding						Options Exercisable
Range ofExercisePrice (NT)	Number ofOptions		WeightedAverageRemainingContractualLife (Years)		WeightedAverageExercise<br>Price (NT)	Number ofOptions		WeightedAverageExercise<br>Price (NT)
		925.00		3.72			—

All values are in US Dollars.

• 53 -

Granted on October 22, 2015
Options Outstanding						Options Exercisable
Range ofExercise Price(NT)	Number ofOptions		WeightedAverageRemainingContractualLife (Years)		WeightedAverageExercise<br>Price (NT)	Number ofOptions		WeightedAverageExercise<br>Price (NT)
		466.25		1.56			—

All values are in US Dollars.

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 OptionsGranted onOctober 31,2018			Stock OptionsGranted onDecember 19,2017			Stock OptionsGranted onOctober 22,2015
Grant-date share price (NT$)	$	166.00		$	95.92		$	39.55
Exercise price (NT$)	$	147.00		$	147.00		$	43.00
Dividends yield		—			—			—
Risk-free interest rate		0.72	%		0.62	%		0.86	%
Expected life		5 years			5 years			5 years
Expected volatility		16.60	%		17.35	%		21.02	%
Weighted average fair value of grants (NT$)	$	33,540		$	2,318		$	4,863

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

c.	CHTSC share-based compensation plan (“CHTSC Plan”) described as follows:

The Board of Directors of CHTSC resolved to issue 4,500 options that are granted to specific employees that meet the vesting conditions on December 20, 2019. Each option is eligible to subscribe for one thousand common stocks when exercisable, and the exercisable price is $19.085. The CHTSC Plan has exercise price adjustment formula upon the changes in common stocks. The options of CHTSC Plan are valid for five years and the graded vesting schedule will vest one year after the grant date.

The compensation cost of stock options granted was $1,436 thousand for the three months ended March 31, 2020.

• 54 -

Information about CHTSC’s outstanding stock options for the three months ended March 31, 2020 was as follows:

	Three Months EndedMarch 31, 2020
	Granted on December 20, 2019
	Number of<br><br><br>Options		WeightedAverageExercise Price(NT)
Employee stock options
Options outstanding at beginning and end of the period		4,500
Options exercisable at end of the period		—

All values are in US Dollars.

As of March 31, 2020, information about employee stock options outstanding was as follows:

Options Outstanding						Options Exercisable
Range ofExercise Price(NT)	Number ofOptions		WeightedAverageRemainingContractualLife (Years)		WeightedAverageExercise<br>Price (NT)	Number ofOptions		WeightedAverageExercise<br>Price (NT)
		4,500		4.72			—

All values are in US Dollars.

As of December 31, 2019, information about employee stock options outstanding was as follows:

Options Outstanding						Options Exercisable
Range ofExercise Price(NT)	Number ofOptions		WeightedAverageRemainingContractualLife (Years)		WeightedAverageExercise<br>Price (NT)	Number ofOptions		WeightedAverageExercise<br>Price (NT)
		4,500		4.97			—

All values are in US Dollars.

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 OptionsGranted onDecember<br><br><br>20,2019
Grant-date share price (NT$)	$	20.17
Exercise price (NT$)	$	19.085
Dividends yield		12.49	%
Risk-free interest rate		0.54	%
Expected life		5 years
Expected volatility		42.41	%
Weighted average fair value of grants (NT$)	$	2,470

• 55 -

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

34.	CASH FLOW INFORMATION

For the three months ended March 31, 2020 and 2019, the Company entered into the following non-cash investing activities:

	Three Months Ended March 31
	2020		2019
Increase in property, plant and equipment	$	2,950,879	$	3,795,681
Changes in other payables		778,532		696,700
	$	3,729,411	$	4,492,381
	Three Months Ended March 31
---	---	---	---	---	---
	2020			2019
Increase in intagible assets	$	48,420,261		$	54,332
Changes in other assets		(1,000,000	)		—
	$	47,420,261		$	54,332

For the three months ended March 31, 2020 and 2019, changes in liabilities arising from financing activities, including non-cash transactions, were as follows:

	Balance on<br><br><br>January 1,		Cash Flows<br><br><br>FromFinancing			Changes In Non-CashTransactions					CashFlows<br><br><br>From<br><br><br>OperationActivities -Interest			Balance on<br><br><br>March 31,
	2020		Activities			New Leases		Others			Paid			2020
Lease liabilities	$	9,758,138	$	(992,494	)	$	1,162,359	$	(86,824	)	$	(21,472	)	$	9,819,707
	Balance on<br><br><br>January 1,		Cash Flows<br><br><br>FromFinancing			Changes In Non-CashTransactions					CashFlows<br><br><br>From<br><br><br>OperationActivities -<br><br><br>Interest			Balance on<br><br><br>March 31,
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	2019		Activities			New Leases		Others			Paid			2019
Lease liabilities	$	10,340,057	$	(1,019,347	)	$	799,527	$	(245,466	)	$	(21,388	)	$	9,853,383
35.	CAPITAL MANAGEMENT
---	---

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

The capital structure of the Company consists of debt of the Company and the equity attributable to the parent.

• 56 -

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 suggestion, the Company maintains a balanced capital structure through paying cash dividends, increasing its share capital, purchasing outstanding shares, and proceeds from new debt or repayment of debt.

36.	FINANCIAL INSTRUMENTS

Fair Value Information

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

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

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

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

a.	Financial instruments that are not measured at fair value but for which fair value is disclosed<br>

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, no financial instruments need to be disclosed on balance sheet date.

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

March 31, 2020

	Level 1		Level 2		Level 3		Total
Financial assets at FVTPL
Listed stocks	$	6,631	$	—	$	—	$	6,631
Non-listed stocks		—		—		767,362		767,362
	$	6,631	$	—	$	767,362	$	773,993
Financial assets at FVOCI
Listed stocks	$	1,823,534	$	—	$	—	$	1,823,534
Non-listed stocks		—		—		4,079,647		4,079,647
	$	1,823,534	$	—	$	4,079,647	$	5,903,181
Financial liabilities at FVTPL
Derivatives	$	—	$	570	$	—	$	570

• 57 -

December 31, 2019

	Level 1		Level 2		Level 3		Total
Financial assets at FVTPL
Derivatives	$	—	$	53	$	—	$	53
Listed stocks		463		—		—		463
Non-listed stocks		—		—		778,105		778,105
	$	463	$	53	$	778,105	$	778,621
Hedging financial assets	$	—	$	327	$	—	$	327
Financial assets at FVOCI
Listed stocks	$	2,453,616	$	—	$	—	$	2,453,616
Non-listed stocks		—		—		4,815,301		4,815,301
	$	2,453,616	$	—	$	4,815,301	$	7,268,917
Financial liabilities at FVTPL
Derivatives	$	—	$	239	$	—	$	239

March 31, 2019

	Level 1		Level 2		Level 3		Total
Financial assets at FVTPL
Non-listed stocks	$	—	$	—	$	511,274	$	511,274
Financial assets at FVOCI
Listed stocks	$	2,599,314	$	—	$	—	$	2,599,314
Non-listed stocks		—		—		4,174,792		4,174,792
	$	2,599,314	$	—	$	4,174,792	$	6,774,106
Financial liabilities at FVTPL
Derivatives	$	—	$	2,219	$	—	$	2,219
Hedging financial liabilities	$	—	$	2,719	$	—	$	2,719

There were no transfers between Levels 1 and 2 for the three months ended March 31, 2020 and 2019.

• 58 -

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

Three months ended March 31, 2020

Financial Assets	Measured atFair Valuethrough Profitor Loss			Measured atFair Valuethrough OtherComprehensiveIncome			Total
Balance on January 1, 2020	$	778,105		$	4,815,301		$	5,593,406
Recognized in profit or loss under “Other gains and losses”		(10,743	)		—			(10,743	)
Recognized in other comprehensive income under “Unrealized gain or loss on investments in<br>equity instruments at fair value through other comprehensive income”		—			(735,654	)		(735,654	)
Balance on March 31, 2020	$	767,362		$	4,079,647		$	4,847,009
Unrealized loss for the three months ended March 31, 2020	$	(10,743	)

Three months ended March 31, 2019

Financial Assets	Measured atFair Valuethrough Profitor Loss			Measured atFair Valuethrough OtherComprehensiveIncome		Total
Balance on January 1, 2019	$	517,362		$	4,032,660	$	4,550,022
Recognized in profit or loss under “Other gains and losses”		(6,088	)		—		(6,088	)
Recognized in other comprehensive income under “Unrealized gain or loss on investments in<br>equity instruments at fair value through other comprehensive income”		—			142,132		142,132
Balance on March 31, 2019	$	511,274		$	4,174,792	$	4,686,066
Unrealized loss for the three months ended March 31, 2019	$	(6,088	)

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<br>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<br>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.<br>
---	---

• 59 -

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 market or using assets approach. The significant unobservable inputs used were listed in the table below. A decrease in discount for the lack of marketability or noncontrolling interests discount would result in increases in the fair values.

	March 31, 2020			December 31,2019			March 31, 2019
Discount for lack of marketability		13.73%-20.00	%		13.73%-20.00	%		12.73%-20.00	%
Noncontrolling interests discount		21.45%-25.00	%		21.45%-25.00	%		24.41%-25.00	%

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 as below table. When related discounts increase, the fair value of equity investments would be the negative amount of the same amount.

	March 31, 2020		March 31, 2019
Discount for lack of marketability 5% decrease	$	302,934	$	271,635
Noncontrolling interests discount 5% decrease	$	52,925	$	16,940

Categories of Financial Instruments

	March 31, 2020		December 31,2019		March 31, 2019
Financial assets
Measured at FVTPL
Mandatorily measured at FVTPL	$	773,993	$	778,621	$	511,274
Hedging financial assets		—		327		—
Financial assets at amortized cost (Note a)		48,934,340		71,851,933		74,794,074
Financial assets at FVOCI		5,903,181		7,268,917		6,774,106
Financial liabilities
Measured at FVTPL
Held for trading		570		239		2,219
Hedging financial liabilities		—		—		2,719
Measured at amortized cost (Note b)		49,833,841		34,433,210		34,356,341
Note a:	The balances included cash and cash equivalents, trade notes and accounts receivable, receivables from related<br>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<br>related parties, partial other payables, customers’ deposits and long-term loans which were financial liabilities carried at amortized cost.
---	---

• 60 -

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

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

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

a.	Market risk

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

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

1)	Foreign currency risk

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

		December 31,2019		March 31, 2019
Assets
	5,699,931	$	5,781,593	$	6,305,055
	16,599		11,792		29,834
SGD	229,967		224,501		128,110
	21,229		17,092		30,103
RMB	15,819		8,854		2,307
Liabilities
	4,097,882		4,120,881		5,643,875
	179,523		206,447		1,061,209
SGD	1,115,049		1,262,926		1,425,877
	8,705		14,206		19,198
RMB	—		310		—

All values are in Euros.

• 61 -

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

		December 31,2019		March 31, 2019
Assets
	—	$	53	$	—
	—		327		—
Liabilities
	—		11		6
	570		228		4,932

All values are in Euros.

Foreign currency sensitivity analysis

The Company is mainly exposed to the fluctuations of the currencies USD, EUR, SGD, JPY and RMB 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.

			2019
Profit or loss
Monetary assets and liabilities (a)
	80,102		$	33,059
	(8,146	)		(51,569	)
SGD	(44,254	)		(64,888	)
	626			545
RMB	791			115
Derivatives (b)
	—			462
	1,767			10,470
Equity
Derivatives (c)
	—			12,469

All values are in Euros.

a)	This is mainly attributable to the exposure to foreign currency denominated receivables and payables of the<br>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<br>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.

• 62 -

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, 2020		December 31,2019		March 31, 2019
Fair value interest rate risk
Financial assets	$	13,211,537	$	30,946,503	$	34,376,501
Financial liabilities		29,785,336		9,758,138		9,908,383
Cash flow interest rate risk
Financial assets		7,326,188		7,681,032		8,558,623
Financial liabilities		1,670,000		1,690,000		1,720,000

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 $14,140 thousand and $17,097 thousand for the three months ended March 31, 2020 and 2019, respectively. This is mainly attributable to the Company’s exposure to floating interest rates on its financial assets and short-term and long-term loan.

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 $38,700 thousand and $295,159 thousand 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, 2020. If equity prices had been 5% higher/lower, pre-tax profit and pre-tax other comprehensive income would have increased/decreased by $25,564 thousand and $338,705 thousand 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, 2019.

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 consolidated balance sheet as of the balance sheet date.

• 63 -

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.

March 31, 2020

	WeightedAverageEffectiveInterest Rate<br><br><br>(%)		Less than1 Month		1-3 Months		3 Months to1 Year		1-5 Years		Add More than5 Years		Total
Non-derivative financial liabilities
Non-interest bearing		—	$	28,722,899	$	1,352,266	$	1,807,337	$	4,601,704	$	—	$	36,484,206
Floating interest rate instruments		0.97		60,000		—		10,000		1,600,000		—		1,670,000
Fixed interest rate instruments		0.62		—		4,000,000		16,000,000		—		—		20,000,000
			$	28,782,899	$	5,352,266	$	17,817,337	$	6,201,704	$	—	$	58,154,206

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

	Less than1 Year		1-3 Years		3-5 Years		Add More than5 Years		Total
Lease liabilities	$	3,409,621	$	4,306,574	$	1,629,653	$	645,022	$	9,990,870

December 31, 2019

	WeightedAverageEffectiveInterest Rate<br><br><br>(%)		Less than1 Month		1-3 Months		3 Months to1 Year		1-5 Years		Add More than5 Years		Total
Non-derivative financial liabilities
Non-interest bearing		—	$	36,387,024	$	—	$	2,531,721	$	4,747,644	$	—	$	43,666,389
Floating interest rate instruments		0.98		50,000		10,000		30,000		1,600,000		—		1,690,000
			$	36,437,024	$	10,000	$	2,561,721	$	6,347,644	$	—	$	45,356,389

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

	Less than1 Year		1-3 Years		3-5 Years		More than5 Years		Total
Lease liabilities	$	3,309,578	$	4,394,009	$	1,581,034	$	645,520	$	9,930,141

• 64 -

March 31, 2019

	WeightedAverageEffectiveInterest Rate(%)		Less than1 Month		1-3 Months		3 Months to1 Year		1-5 Years		Add More than5 Years		Total
Non-derivative financial liabilities
Non-interest bearing		—	$	32,040,527	$	1,425,770	$	2,136,648	$	4,646,233	$	—	$	40,249,178
Floating interest rate instruments		0.99		—		—		120,000		1,600,000		—		1,720,000
Fixed interest rate instruments		1.15		55,000		—		—		—		—		55,000
			$	32,095,527	$	1,425,770	$	2,256,648	$	6,246,233	$	—	$	42,024,178

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

	Less than1 Year		1-3 Years		3-5 Years		Add Morethan 5 Years		Total
Lease liabilities	$	3,555,491	$	4,339,888	$	1,600,769	$	707,739	$	10,203,887

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 than1 Month			1-3 Months			3 Months to<br><br><br>1 Year		1-5 Years		Total
March 31, 2020
Gross settled
Forward exchange contracts
Inflow	$	—		$	35,335		$	—	$	—	$	35,335
Outflow		—			35,905			—		—		35,905
	$	—		$	(570	)	$	—	$	—	$	(570	)
December 31, 2019
Gross settled
Forward exchange contracts
Inflow	$	25,566		$	135,075		$	—	$	—	$	160,641
Outflow		25,524			134,976			—		—		160,500
	$	42		$	99		$	—	$	—	$	141
March 31, 2019
Gross settled
Forward exchange contracts
Inflow	$	9,239		$	459,818		$	—	$	—	$	469,057
Outflow		9,245			464,750			—		—		473,995
	$	(6	)	$	(4,932	)	$	—	$	—	$	(4,938	)

• 65 -

2)	Financing facilities
	March 31, 2020		December 31,2019		March 31, 2019
---	---	---	---	---	---	---
Facilities from unsecured bank loan and commercial paper payable
Amount used	$	20,105,826	$	120,681	$	207,445
Amount unused		46,045,299		46,109,219		46,046,655
	$	66,151,125	$	46,229,900	$	46,254,100
Secured bank loan facility
Amount used	$	1,600,000	$	1,600,000	$	1,600,000
Amount unused		1,340,000		1,340,000		1,340,000
	$	2,940,000	$	2,940,000	$	2,940,000
37.	RELATED PARTIES TRANSACTIONS
---	---

The ROC Government, one of Chunghwa’s customers, has significant equity interest in Chunghwa. Chunghwa provides fixed-line services, wireless services, internet and data and other services to the various departments and institutions of the ROC Government in the normal course of business and at arm’s-length prices. 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
UUPON Inc.	Associate
Taiwan International Ports Logistics Corporation	Associate
International Integrated System, Inc.	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
Viettel-CHT Co., Ltd.	Associate
Click Force Co., Ltd.	Associate
Alliance Digital Tech Co., Ltd.	Associate
MeWorks Limited (HK)	Associate
Chunghwa PChome Fund I Co., Ltd.	Associate
Cornerstone Ventures Co., Ltd.	Associate
Next Commercial Bank Co., Ltd.	Associate

(Continued)

• 66 -

Company	Relationship
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
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
United Daily News Co., Ltd.	Investor of significant influence over SFD
Shenzhen Century Communication Co., Ltd.	Investor of significant influence over SCT

(Concluded)

b.	Balances and transactions between Chunghwa and its subsidiaries, which are related parties of Chunghwa, have<br>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<br>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<br>disclosed below:
1)	Operating transactions
---	---
	Revenues
---	---	---	---	---
	Three Months Ended March 31
	2020		2019
Associates	$	61,699	$	67,181
Others		16,992		25,982
	$	78,691	$	93,163

• 67 -

	Operating Costs and Expenses
	Three Months Ended March 31
	2020		2019
Associates	$	173,950	$	213,958
Others		55,693		62,182
	$	229,643	$	276,140
2)	Non-operating transactions
---	---
	Non-operating Income andExpenses
---	---	---	---	---	---
	Three Months Ended March 31
	2020		2019
Associates	$	63,560	$	(11,955	)
Others		11		9
	$	63,571	$	(11,946	)
3)	Receivables
---	---
	March 31, 2020		December 31,2019		March 31, 2019
---	---	---	---	---	---	---
Associates	$	6,444	$	10,356	$	10,106
Others		3,268		6,478		8,145
	$	9,712	$	16,834	$	18,251
4)	Payables
---	---
	March 31, 2020		December 31,2019		March 31, 2019
---	---	---	---	---	---	---
Associates	$	335,248	$	650,617	$	357,595
Others		3,201		3,366		3,738
	$	338,449	$	653,983	$	361,333
5)	Customers’ deposits
---	---
	March 31, 2020		December 31,2019		March 31, 2019
---	---	---	---	---	---	---
Associates	$	6,734	$	7,595	$	5,870
6)	Acquisition of property, plant and equipment
---	---
	Three Months Ended March 31
---	---	---	---	---
	2020		2019
Associates	$	12,995	$	—

• 68 -

7)	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 (SG$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.

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

	March 31, 2020		December 31,2019		March 31, 2019
Lease liabilities - current	$	179,398	$	188,271	$	192,260
Lease liabilities - noncurrent		932,884		1,023,889		1,230,614
	$	1,112,282	$	1,212,160	$	1,422,874

The interest expense recognized for the aforementioned lease liabilities were $2,412 thousand and $2,837 thousand for the three months ended March 31, 2020 and 2019, respectively.

c.	Compensation of key management personnel

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

	Three Months Ended March 31
	2020		2019
Short-term employee benefits	$	72,366	$	76,035
Post-employment benefits		2,010		2,158
Share-based payment		20		68
	$	74,396	$	78,261

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

38.	PLEDGED ASSETS

The following assets are pledged as collaterals for bank loans and custom duties of the imported materials.

	March 31, 2020		December 31,2019		March 31, 2019
Property, plant and equipment	$	2,483,946	$	2,491,324	$	2,513,460
Land held under development (included in inventories)		1,998,733		1,998,733		1,998,733
Restricted assets (included in other assets - others)		2,850		2,500		2,500
	$	4,485,529	$	4,492,557	$	4,514,693

• 69 -

39.	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, 2020 were as follows:

a.	Acquisitions of land and buildings of $59,769 thousand.
b.	Acquisitions of telecommunications equipment of $23,605,294 thousand.
---	---
c.	Unused letters of credit amounting to $50,000 thousand.
---	---
d.	A commitment to contribute $2,000,000 thousand to a Piping Fund administered by the Taipei City<br>Government, of which $1,000,000 thousand was contributed by Chunghwa on August 15, 1996 (classified as other monetary assets - noncurrent). If the fund is not sufficient, Chunghwa will contribute the remaining $1,000,000 thousand upon<br>notification from the Taipei City Government.
---	---
e.	Chunghwa committed that when its ownership interest in NCB is greater than 25% and NCB encounters financial<br>difficulty or capital adequacy ratio of NCB cannot meet the related regulation requirements, the Company will provide financial support to assist NCB maintain in healthy financial condition.
---	---
f.	CHPT signed the contract for its headquarters construction amounting to $1,613,800 thousand in July 2017.<br>The payment of $1,533,110 thousand has been made as of March 31, 2020.
---	---
40.	SIGNIFICANT EVENTS AFTER REPORTING PERIOD
---	---

Chunghwa signed a joint development agreement with the MOTC which stated that the MOTC would provide the national land and Chunghwa would be in charge of the planning and construction for the MOTC’s office building, Chunghwa’s Renai office building, etc. According to the agreement, the MOTC and Chunghwa would each own a certain percentage of the buildings, and Chunghwa is to pay or get the reimbursement for the difference between the assessed value of the land and the construction cost paid by Chunghwa on behalf of the MOTC. The aforementioned difference amounting to $ 1,056,680 thousand due to the MOTC is reported to Chunghwa’s Board of Directors in May 2020 and Chunghwa will obtain the ownership of the respective property once the payment is made.

41.	SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The following information summarizes the disclosure of the currency which is other than functional currency of Chunghwa and its subsidiaries. The following exchange rates are the exchange rates used to translate to the presentation currency in the consolidated financial statements, which is NTD:

		ExchangeRate		New TaiwanDollars(Thousands)
Assets denominated in foreign currencies
Monetary items
	188,583		30.23	$	5,699,931
	499		33.24		16,599
SGD	10,832		21.23		229,967

All values are in Euros.

(Continued)

• 70 -

		ExchangeRate		New TaiwanDollars(Thousands)
	76,144		0.279	$	21,229
RMB	3,718		4.25		15,819
Non-monetary items
Investments accounted for using equity method
SGD	23,746		21.23		504,119
VND	284,347,414		0.0012		329,843
Liabilities denominated in foreign currencies
Monetary items
	135,579		30.23		4,097,882
	5,401		33.24		179,523
SGD	52,522		21.23		1,115,049
	31,224		0.279		8,705

All values are in US Dollars.

(Concluded)

		ExchangeRate		New TaiwanDollars(Thousands)
Assets denominated in foreign currencies
Monetary items
	192,849		29.98	$	5,781,593
	351		33.59		11,792
SGD	10,076		22.28		224,501
	61,929		0.276		17,092
RMB	2,057		4.305		8,854
Non-monetary items
Investments accounted for using equity method
SGD	22,483		22.28		500,930
VND	270,542,735		0.0012		316,535
Liabilities denominated in foreign currencies
Monetary items
	137,454		29.98		4,120,881
	6,146		33.59		206,447
SGD	56,685		22.28		1,262,926
	51,472		0.276		14,206
RMB	72		4.305		310

All values are in Euros.

• 71 -

		ExchangeRate		New TaiwanDollars(Thousands)
Assets denominated in foreign currencies
Monetary items
	204,577		30.82	$	6,305,055
	862		34.61		29,834
SGD	5,631		22.75		128,110
	108,282		0.278		30,103
RMB	504		4.58		2,307
Non-monetary items
Investments accounted for using equity method
SGD	22,949		22.75		522,084
VND	250,242,975		0.00121		302,794
Liabilities denominated in foreign currencies
Monetary items
	183,123		30.82		5,643,875
	30,662		34.61		1,061,209
SGD	62,676		22.75		1,425,877
	69,059		0.278		19,198

All values are in Euros.

The unrealized foreign exchange gains were $59,759 thousand and $39,394 thousand for the three months ended March 31, 2020 and 2019, respectively. Due to the various foreign currency transactions and the functional currency of each individual entity of the Company, foreign exchange gains and losses cannot be disclosed by the respective significant foreign currency.

42.	ADDITIONAL DISCLOSURES

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

a.	Financing provided: None.
b.	Endorsement/guarantee provided: Please see Table 1.
---	---
c.	Marketable securities held (excluding investments in subsidiaries and associates): Please see Table 2.<br>
---	---
d.	Marketable securities acquired and disposed of at costs or prices at least $300 million or 20% of the paid-in capital: None.
---	---
e.	Acquisition of individual real estate at costs of at least $300 million or 20% of the paid-in capital: Please see Table 3.
---	---
f.	Disposal of individual real estate at prices of at least $300 million or 20% of the paid-in capital: None.
---	---

• 72 -

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 4.
h.	Receivables from related parties amounting to $100 million or 20% of the<br>paid-in capital: Please see Table 5.
---	---
i.	Names, locations, and other information of investees on which the Company exercises significant influence<br>(excluding investment in Mainland China): Please see Table 6.
---	---
j.	Derivative instruments transactions: Please see Notes 7, 20 and 36.
---	---
k.	Investment in Mainland China: Please see Table 7.
---	---
l.	Intercompany relationships and significant intercompany transaction: Please see Table 8.
---	---
m.	Information of main stakeholders: Please see Table 9.
---	---
43.	SEGMENT INFORMATION
---	---

The Company has the following reportable segments that provide different products or services. The reportable segments are managed separately because each segment represents a strategic business unit that serves different markets. Segment information is provided to 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. The Company’s reportable segments are as follows:

a.	Domestic fixed communications business - the provision of local telephone services, domestic long distance<br>telephone services, broadband access, and related services;
b.	Mobile communications business - the provision of mobile services, sales of mobile handsets and data cards, and<br>related services;
---	---
c.	Internet business - the provision of HiNet services and related services;
---	---
d.	International fixed communications business - the provision of international long distance telephone services<br>and related services;
---	---
e.	Others - the provision of non-telecom services and the corporate related items not allocated to reportable<br>segments.
---	---

Some operating segments have been aggregated into a single operating segment taking into account the following factors: (a) similar economic characteristics such as long-term gross profit margins; (b) the nature of the telecommunications products and services are similar; (c) the nature of production processes of the telecommunications products and services are similar; (d) the type or class of customer for the telecommunications products and services are similar; and (e) the methods used to provide the services to the customers are similar.

There was no material differences between the accounting policies of the operating segments and the accounting policies described in Note 3.

• 73 -

Segment Revenues and Operating Results

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

	Domestic FixedCommuni-<br><br><br>cationsBusiness		MobileCommuni-<br><br><br>cationsBusiness		InternetBusiness		InternationalFixedCommuni-<br><br><br>cationsBusiness		Others			Total
Three months ended March 31, 2020
Revenues
From external customers	$	14,691,853	$	22,540,777	$	7,512,040	$	2,236,110	$	1,169,219		$	48,149,999
Intersegment revenues		3,952,209		380,195		923,404		487,817		1,262,553			7,006,178
Segment revenues	$	18,644,062	$	22,920,972	$	8,435,444	$	2,723,927	$	2,431,772			55,156,177
Intersegment elimination													(7,006,178	)
Consolidated revenues												$	48,149,999
Segment operating costs and expenses	$	12,233,189	$	16,696,101	$	3,480,134	$	2,219,609	$	2,990,136		$	37,619,169
Segment income (loss) before income tax	$	5,169,284	$	2,873,707	$	3,034,483	$	242,065	$	(668,135	)	$	10,651,404
Three months ended March 31, 2019
Revenues
From external customers	$	15,788,192	$	24,481,095	$	7,418,363	$	2,770,888	$	872,623		$	51,331,161
Intersegment revenues		4,078,238		392,128		960,639		577,885		1,068,788			7,077,678
Segment revenues	$	19,866,430	$	24,873,223	$	8,379,002	$	3,348,773	$	1,941,411			58,408,839
Intersegment elimination													(7,077,678	)
Consolidated revenues												$	51,331,161
Segment operating costs and expenses	$	13,858,067	$	18,357,933	$	3,367,805	$	2,797,460	$	2,543,578		$	40,924,843
Segment income (loss) before income tax	$	4,668,808	$	3,241,819	$	3,010,735	$	201,982	$	(578,621	)	$	10,544,723

Main Products and Service Revenues

	Three Months Ended March 31
	2020		2019
Mobile services revenue	$	14,284,650	$	14,721,342
Sales of products		9,513,523		10,589,242
Local telephone and domestic long distance telephone services revenue		6,611,740		7,004,002
Broadband access and domestic leased line services revenue		5,541,156		5,512,974
Data Communications internet services revenue		5,305,258		5,240,314
International network and leased telephone services revenue		1,079,323		1,810,881
Others		5,814,349		6,452,406
	$	48,149,999	$	51,331,161

• 74 -

TABLE 1

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED

THREE MONTHS ENDEDMARCH 31, 2020

(Amounts in Thousands of New Taiwan Dollars)

No.<br><br><br>(Note 1)	Endorsement/Guarantee Provider	Guaranteed Party		Limits onEndorsement/<br>GuaranteeAmountProvided toEachGuaranteedParty		MaximumBalance forthe Period		EndingBalance		ActualBorrowingAmount		Amount ofEndorsement/<br>GuaranteeCollateralizedby Properties		Ratio ofAccumulatedEndorsement/Guaranteeto Net EquityPer LatestFinancialStatements		MaximumEndorsement/<br>GuaranteeAmountAllowable		Endorsement/<br>GuaranteeGiven byParent onBehalf ofSubsidiaries	Endorsement/<br>GuaranteeGiven bySubsidiarieson Behalf ofParent	Endorsement/<br>GuaranteeGiven onBehalf ofCompaniesin MainlandChina	Note
		Name	Nature ofRelationship<br>(Note 2)
1	Senao International Co., Ltd.	Aval Technologies Co., Ltd.	b	$	593,925	$	300,000	$	300,000	$	300,000	$	—		5.05	$	2,969,625	Yes	No	No	Notes 3<br> <br>and 4
		Wiin Technology Co., Ltd.	b		593,925		100,000		100,000		100,000		—		1.68		2,969,625	Yes	No	No	Notes 3<br>and 4
Note 1:	Significant transactions between the Company and its subsidiaries or among subsidiaries are numbered as<br>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.<br>
---	---
c.	A company that directly and indirectly holds more than 50 percent of the voting shares in the Company.<br>
---	---
d.	Companies in which the Company holds, directly or indirectly, 90% or more of the voting shares.<br>
---	---
e.	The Company fulfills its contractual obligations by providing mutual endorsements/guarantees for another<br>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<br>proportion to their shareholding percentages.
---	---
g.	Companies in the same industry provide among themselves joint and several security for a performance guarantee<br>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<br>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<br>assets value of the latest financial statements of Senao International Co., Ltd.
---	---

• 75 -

TABLE 2

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

MARKETABLE SECURITIES HELD

MARCH 31, 2020

(Amounts in Thousands of New Taiwan Dollars)

Held Company Name	Marketable Securities Type and Name	Relationship withthe Company		Financial Statement Account		March 31, 2020										Note
					Shares<br>(Thousands/<br>Thousand<br>Units)			Carrying<br>Value<br>(Note 1)			Percentage<br>ofOwnership		Fair Value
Chunghwa Telecom Co., Ltd.	Stocks
	Taipei Financial Center Corp.		—	Financial assets at FVOCI			172,927		$	3,816,731		12		$	3,816,731	—
	Innovation Works Development Fund, L.P.		—	Financial assets at FVTPL - noncurrent			—			265,113		4			265,113	—
	Industrial Bank of Taiwan II Venture Capital Co., Ltd. (IBT II)		—	Financial assets at FVOCI			5,252			17,084		17			17,084	—
	Global Mobile Corp.		—	Financial assets at FVOCI			7,617			—		3			—	—
	Innovation Works Limited		—	Financial assets at FVOCI			1,000			4,045		2			4,045	—
	RPTI Intergroup International Ltd.		—	Financial assets at FVOCI			4,765			—		10			—	—
	Taiwan mobile payment Co., Ltd.		—	Financial assets at FVOCI			1,200			4,470		2			4,470	—
	Taiwania Capital Buffalo Fund Co., Ltd.		—	Financial assets at FVTPL - noncurrent			600,000			502,249		13			502,249	—
	China Airlines Ltd.		—	Financial assets at FVOCI			263,622			1,742,542		5			1,742,542	Note 2
	4 Gamers Entertainment Inc.		—	Financial assets at FVOCI			136			87,516		19.9			87,516	—
Senao International Co., Ltd.	Stocks
	N.T.U. Innovation Incubation Corporation		—	Financial assets at FVOCI			1,200			10,373		9			10,373	—
CHIEF Telecom Inc.	Stocks
	3 Link Information Service Co., Ltd.		—	Financial assets at FVOCI			374			950		10			950	—
	WPG Holdings Limited		—	Financial assets at FVTPL - current			9			421		—			421	Note 2
	WPG Holdings Limited		—	Financial assets at FVOCI			724			33,992		—			33,992	Note 2
	Taichung Commercial Bank Co., Ltd.		—	Financial assets at FVTPL - current			600			6,210		—			6,210	Note 2
Chunghwa Investment Co., Ltd.	Stocks
	Tatung Technology Inc.		—	Financial assets at FVOCI			4,571			133,489		11			133,489	—
	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			47,000		7			47,000	Note 2
Chunghwa Hsingta Co., Ltd.	Stocks
	Cotech Engineering Fuzhou Corp.		—	Financial assets at FVOCI			—			4,989		5			4,989	—
Note 1:	Showed at carrying amounts with fair value adjustments.
---	---
Note 2:	Fair value was based on the closing price on March 31, 2020.
---	---

• 76 -

TABLE 3

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, 2020

(Amounts inThousands of New Taiwan Dollars)

Buyer	Property	Event Date	TransactionAmount		Payment Status	Counterparty	Relationship		Information on Previous Title Transfer IfCounterparty is a Related Party				Pricing<br><br><br>Reference	Purpose ofAcquisition	OtherTerms
								PropertyOwner	Relationship	TransactionDate	Amount
Chunghwa Precision Test Tech. Co., Ltd.	Headquarters	2017.07.29-<br>2019.12.25	$	1,460,105	Monthly settlement based on the construction progress and acceptance	Fu Tsu Construction Co., Ltd.		—	Not<br>applicable	Not<br>applicable	Not<br>applicable	Not<br>applicable	Bidding, price comparison and price negotiation	Manufacturing<br>purpose	None

• 77 -

TABLE 4

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

TOTALPURCHASES 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, 2020

(Amounts inThousands of New Taiwan Dollars)

Company Name	Related Party	Nature ofRelationship	Transaction Details						AbnormalTransaction				Notes /AccountsPayableor Receivable
			Purchase/Sales<br>(Note 1)	Amount<br>(Notes 2<br>and 5)		% toTotal		PaymentTerms	UnitsPrice		PaymentTerms		EndingBalance<br>(Notes 3and 5)			% toTotal
Chunghwa Telecom Co., Ltd.	Senao International Co., Ltd.	Subsidiary	Sales	$	697,609		2	30 days	$	—		—	$	145,385		1
			Purchase		156,273		1	30-90 days		—		—		(801,573	)	(9)
	Chunghwa System Integration Co., Ltd.	Subsidiary	Purchase		325,114		1	30 days		—		—		(333,298	)	(4)
	Honghwa International Co., Ltd.	Subsidiary	Purchase		1,321,672		5	30-60 days		—		—		(702,548	)	(8)
	Donghwa Telecom Co., Ltd.	Subsidiary	Purchase		114,437		—	90 days		—		—		(129,667	)	(2)
	Taiwan International Standard Electronics Co., Ltd.	Associate	Purchase		143,233		1	30-90 days		—		—		(119,130	)	(1)
	International Integrated System, Inc.	Associate	Purchase		167,298		1	30 days		—		—		(34,281	)	—
Senao International Co., Ltd.	Chunghwa Telecom Co., Ltd.	Parent company	Sales		1,460,919		22	30-90 days		—		—		807,501		47
			Purchase		653,674		11	30 days		—		—		(137,736	)	(6)
Chunghwa System Integration Co., Ltd.	Chunghwa Telecom Co., Ltd.	Parent company	Sales		372,348		93	30 days		—		—		330,688		71
Honghwa International Co., Ltd.	Chunghwa Telecom Co., Ltd.	Parent company	Sales		1,282,278		95	30-60 days		—		—		701,269		98
Donghwa Telecom Co., Ltd.	Chunghwa Telecom Co., Ltd.	Parent company	Sales		114,437		32	90 days		—		—		129,667		29
Note 1:	Purchase included acquisition of services costs.
---	---
Note 2:	The differences were because Chunghwa Telecom Co., Ltd. and subsidiaries classified the amount as incremental<br>costs of obtaining contracts, inventories, 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.<br>
---	---
Note 4:	Transaction terms with the related parties were determined in accordance with mutual agreements when there were<br>no similar transactions with third parties. Other transactions with related parties were not significantly different from those with third parties.
---	---
Note 5:	All inter-company transactions, balances, income and expenses are eliminated upon consolidation.<br>
---	---

• 78 -

TABLE 5

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, 2020

(Amounts in Thousands of NewTaiwan Dollars)

Company Name	Related Party	Nature ofRelationship	EndingBalance			TurnoverRate<br>(Note 1)		Overdue				AmountsReceived inSubsequentPeriod		Allowancefor<br>Bad Debts
							Amounts			ActionTaken
Chunghwa Telecom Co., Ltd.	Senao International Co., Ltd.	Subsidiary	$	262,677<br> <br>(Note 2	)		10.55	$	—		—	$	259,326	$	—
Senao International Co., Ltd.	Chunghwa Telecom Co., Ltd.	Parent company		1,021,525<br> <br>(Note 2	)		7.28		—		—		124,613		—
Chunghwa System Integration Co., Ltd.	Chunghwa Telecom Co., Ltd.	Parent company		330,688<br> <br>(Note 2	)		3.01		—		—		173,369		—
Honghwa International Co., Ltd.	Chunghwa Telecom Co., Ltd.	Parent company		701,269<br> <br>(Note 2	)		6.88		—		—		29,941		—
Donghwa Telecom Co., Ltd.	Chunghwa Telecom Co., Ltd.	Parent company		129,667<br> <br>(Note 2	)		3.45		—		—		89,436		—
Note 1:	Payments and receipts collected in trust for others are excluded from the accounts receivable for calculating<br>the turnover rate.
---	---
Note 2:	The amount was eliminated upon consolidation.
---	---

• 79 -

TABLE 6

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

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

THREEMONTHS ENDED MARCH 31, 2020

(Amounts in Thousands of New Taiwan Dollars)

				Original Investment Amount				Balance as of March 31, 2020									Recognized
Investor Company	InvesteeCompany	Location	Main Businessesand Products	March 31,2019		December 31,2019		Shares<br>(Thousands)		Percentage ofOwnership (%)		CarryingValue<br>(Note 3)		Net Income<br>(Loss) of theInvestee			Gain (Loss)<br>(Notes 1, 2and 3)			Note
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	$	1,640,660	$	88,487		$	23,496		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		3,852,126		3,502			2,031		Subsidiary (Note 5)
	Donghwa Telecom Co., Ltd.	Hong Kong	International private leased circuit, IP VPN service, and IP transit services		1,567,453		1,567,453		402,590		100		1,648,451		239			239		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		934,772		21,057			21,059		Subsidiary (Note 5)
	Chunghwa System Integration Co., Ltd.	Taiwan	Providing system integration services and telecommunications equipment		838,506		838,506		60,000		100		709,039		(14,082	)		(8,844	)	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		1,836,701		146,951			85,173		Subsidiary (Note 5)
	Chunghwa Investment Co., Ltd.	Taiwan	Investment		639,559		639,559		68,085		89		3,057,731		60,685			54,043		Subsidiary (Note 5)
	Prime Asia Investments Group Ltd. (B.V.I.)	British Virgin Islands	Investment		385,274		385,274		1		100		176,522		610			610		Subsidiary (Note 5)
	Honghwa International Co., Ltd.	Taiwan	Telecommunication engineering, sales agent of mobile phone plan application and other business services		180,000		180,000		18,000		100		456,237		36,390			33,968		Subsidiary (Note 5)

(Continued)

• 80 -

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

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

THREE MONTHS ENDED MARCH 31, 2020

(Amounts inThousands of New Taiwan Dollars)

				Original Investment Amount				Balance as of March 31, 2020									Recognized
Investor Company	InvesteeCompany	Location	Main Businessesand Products	March 31,2019		December 31,2019		Shares<br>(Thousands)		Percentage ofOwnership (%)		CarryingValue<br>(Note 3)		Net Income<br>(Loss) of theInvestee			Gain (Loss)<br>(Notes 1, 2and 3)			Note
	CHYP Multimedia Marketing & Communications Co., Ltd.	Taiwan	Digital information supply services and advertisement services	$	150,000	$	150,000		15,000		100	$	195,598	$	4,568		$	4,625		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		96,915		(471	)		(471	)	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		367,427		16,621			17,181		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<br>services		240,000		240,000		24,000		80		332,125		30,430			25,274		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		110,126		5,496			5,496		Subsidiary (Note 5)

(Continued)

• 81 -

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

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

THREE MONTHS ENDED MARCH 31, 2020

(Amounts inThousands of New Taiwan Dollars)

				Original Investment Amount				Balance as of March 31, 2020										Recognized
Investor Company	InvesteeCompany	Location	Main Businessesand Products	March 31,2019		December 31,2019		Shares<br>(Thousands)		Percentage ofOwnership (%)		CarryingValue<br>(Note 3)			Net Income<br>(Loss) of theInvestee			Gain (Loss)<br>(Notes 1, 2and 3)			Note
	Spring House Entertainment Tech. Inc.	Taiwan	Software design services, internet contents production and play, and motion picture production and distribution	$	41,941	$	41,941		8,251		56	$	116,484		$	10,934		$	6,128		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		115,495			3,558			3,816		Subsidiary (Note 5)
	Smartfun Digital Co., Ltd.	Taiwan	Providing diversified family education digital services		65,000		65,000		6,500		65		74,043			543			355		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		81,531			4,151			4,151		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		(6,068	)		(2,326	)		4,018		Subsidiary (Note 5)
	International Integrated System, Inc.	Taiwan	IT solution provider, IT application consultation, system integration and package solution		283,500		283,500		22,498		31		330,805			(11,160	)		(8,435	)	Associate

(Concluded)

• 82 -

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, 2020

(Amounts inThousands of New Taiwan Dollars)

				Original Investment Amount				Balance as of December 31, 2020
Investor Company	InvesteeCompany	Location	Main Businessesand Products	March 31,2019		December 31,2019		Shares<br>(Thousands)		PercentageofOwnership(%)		CarryingValue<br>(Note 3)		Net Income(Loss)of theInvestee			RecognizedGain (Loss)<br>(Notes 1, 2and 3)			Note
	Viettel-CHT Co., Ltd.	Vietnam	IDC services	$	288,327	$	288,327		—		30	$	329,843	$	53,815		$	16,152		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		270,338		(33,670	)		(2,894	)	Associate
	KKBOX Taiwan Co., Ltd.	Taiwan	Providing of music on-line, software, electronic information, and advertisement services		67,025		67,025		4,438		30		160,061		30,148			9,044		Associate
	So-net Entertainment Taiwan Limited	Taiwan	Online service and sale of computer hardware		120,008		120,008		9,429		30		191,140		5,805			1,741		Associate
	KingwayTek Technology Co., Ltd.	Taiwan	Publishing books, data processing and software services		66,684		66,684		7,898		23		245,294		(10,525	)		(2,147	)	Associate
	Taiwan International Ports Logistics Corporation	Taiwan	Import and export storage, logistic warehouse, and ocean shipping service		80,000		80,000		8,000		27		51,765		2,933			786		Associate
	UUPON Inc.	Taiwan	Information technology service and general advertisement service		97,598		97,598		5,400		15		3,469		(24,799	)		(3,730	)	Associate
	Alliance Digital Tech Co., Ltd.	Taiwan	Development of mobile payments and information processing service		60,000		60,000		6,000		14		5,080		—			—		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		199,145		10,126			5,063		Associate
	Cornerstone Ventures Co., Ltd.	Taiwan	Investment, venture capital, investment advisor, management consultant and other consultancy service		4,900		4,900		490		49		5,646		284			139		Associate

(Continued)

• 83 -

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, 2020

(Amounts inThousands of New Taiwan Dollars)

				Original Investment Amount				Balance as of December 31, 2020
Investor Company	Investee Company	Location	Main Businesses andProducts	March 31,2019		December 31,2019		Shares<br>(Thousands)		PercentageofOwnership(%)		CarryingValue<br>(Note 3)		Net Income(Loss)of theInvestee			RecognizedGain (Loss)<br>(Notes 1, 2and 3)			Note
	Next Commercial Bank Co., Ltd.	Taiwan	Online banking business	$	4,190,000	$	4,190,000		419,000		42	$	4,040,695	$	(79,888	)	$	(33,473	)	Associate
Senao International Co., Ltd.	Senao Networks, Inc.	Taiwan	Telecommunication facilities manufactures and sales		202,758		202,758		16,579		34		982,484		84,514			28,560		Associate
	Senao International (Samoa) Holding Ltd.	Samoa Islands	International investment		2,333,620		2,333,620		77,775		100		345,490		(7,726	)		(7,726	)	Subsidiary (Note 5)
	UUPON Inc.	Taiwan	Information technology service and general advertisement service		24,000		24,000		2,400		7		1,672		(24,799	)		(1,659	)	Associate
	Youth Co., Ltd.	Taiwan	Sale of information and communication technologies products		364,950		364,950		8,462		93		182,775		(1,035	)		(3,083	)	Subsidiary (Note 5)
	Aval Technologies Co., Ltd.	Taiwan	Sale of information and communication technologies products		89,550		89,550		9,843		100		103,683		1,831			1,832		Subsidiary (Note 5)
	Senyoung Insurance Agent Co., Ltd.	Taiwan	Property and liability insurance agency		59,000		59,000		5,900		100		81,412		5,686			5,683		Subsidiary (Note 5)
CHIEF Telecom Inc.	Unigate Telecom Inc.	Taiwan	Telecommunications and internet service		2,000		2,000		200		100		913		27			27		Subsidiary (Note 5)
	Chief International Corp.	Samoa Islands	Telecommunications and internet service		6,068		6,068		200		100		76,613		2,633			2,633		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		504,119		74,273			28,224		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		2,268,232		178,986			61,303		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		90,971		146,951			4,379		Associate (Note 5)
	Senao International Co., Ltd.	Taiwan	Selling and maintaining mobile phones and its peripheral products		49,731		49,731		1,001		—		43,775		88,487			360		Associate (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, 2020

(Amounts inThousands of New Taiwan Dollars)

Investor Company	Investee Company	Location	Main Businesses andProducts	Original Investment Amount				Balance as of December 31, 2020						Net Income(Loss) oftheInvestee			RecognizedGain (Loss)<br>(Notes 1, 2and 3)			Note
				March 31,<br>2019		December 31,2019		Shares<br>(Thousands)		PercentageofOwnership(%)		CarryingValue<br>(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	$	12,636	$	12,636		400		100	$	23,729	$	(802	)	$	(802	)	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		2,429		24			24		Subsidiary (Note 5)
	Chunghwa Precision Test Tech. International, Ltd.	Samoa Islands	Wholesale and retail of electronic materials, and investment		116,790		116,790		3,700		100		79,860		(4,281	)		(4,281	)	Subsidiary (Note 5)
Prime Asia Investments Group,	Chunghwa Hsingta Co., Ltd.	Hong Kong	Investment		375,274		375,274		1		100		176,523		608			608		Subsidiary (Note 5)
Ltd. (B.V.I.)	MeWorks Limited (HK)	Hong Kong	Investment		10,000		10,000		—		20		—		—			—		Associate
Senao International (Samoa) Holding Ltd.	Senao International HK Limited	Hong Kong	International investment		2,328,754		2,328,754		80,440		100		325,193		(7,801	)		(7,801	)	Subsidiary (Note 5)
Youth Co., Ltd.	ISPOT Co., Ltd.	Taiwan	Sale of information and communication technologies products		53,021		53,021		—		100		9,164		114			66		Subsidiary (Note 5)
	Youyi Co., Ltd.	Taiwan	Maintenance of information and communication technologies products		21,354		21,354		—		100		17,329		239			177		Subsidiary (Note 5)
Aval Technologies Co., Ltd.	Wiin Technology Co., Ltd.	Taiwan	Sale of information and communication technologies products		29,550		29,550		2,955		100		30,527		746			746		Subsidiary (Note 5)
Senyoung Insurance Agent Co., Ltd.	Senaolife Insurance Agent Co., Ltd.	Taiwan	Life insurance services		29,500		29,500		2,950		100		28,186		(1,034	)		(1,034	)	Subsidiary (Note 5)
CHYP Multimedia Marketing & Communications Co., Ltd	Click Force Marketing Company	Taiwan	Advertisement services		44,607		44,607		1,078		49		36,823		478			(297	)	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<br>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<br>between the accounting treatment on standalone basis and consolidated basis as a result of the application of IFRS 15.
---	---
Note 4:	Investment in mainland China is included in Table 7.
---	---
Note 5:	The amount was eliminated upon consolidation.
---	---

(Concluded)

• 85 -

TABLE 7

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

INVESTMENT IN MAINLAND CHINA

THREE MONTHS ENDEDMARCH 31, 2020

(Amounts in Thousands of New Taiwan Dollars)

Investee	Main Businesses andProducts	TotalAmountof Paid-inCapital		InvestmentType<br>(Note 1)		AccumulatedOutflow ofInvestmentfromTaiwanas ofJanuary 1,2020		Investment Flows				AccumulatedOutflow ofInvestmentfromTaiwanas ofMarch 31,		NetIncome(Loss)of theInvestee			%Ownershipof Director IndirectInvestment		Investment<br>Gain(Loss)<br>(Note 2)			CarryingValue asof<br>March 31,2020		AccumulatedInwardRemittanceof Earningsas ofMarch 31,2020		Note
					Outflow				Inflow		2020
Senao Trading (Fujian) Co., Ltd.	Sale of information and communication technologies products	$	1,073,170		2	$	1,073,170	$	—	$	—	$	1,073,170	$	—			100	$	—		$	—	$	—	Notes 7 and 11
Senao International Trading (Shanghai) Co., Ltd.	Sale of information and communication technologies products		955,838		2		955,838		—		—		955,838		(7,983	)		100		(7,983	)		41,992		—	Note 11
Senao International Trading (Shanghai) Co., Ltd. (Note 12)	Maintenance of information and communication technologies products		26,053		2		26,053		—		—		26,053		—			100		—			—		—	Notes 8 and 11
Senao International Trading (Jiangsu) Co., Ltd.	Sale of information and communication technologies products		263,736		2		263,736		—		—		263,736		—			100		—			—		—	Notes 9 and 11
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		(2,017	)		100		(2,017	)		41,967		—	Note 11
Jiangsu Zhenghua Information Technology Company, LLC	Providing intelligent energy saving solution and intelligent buildings services		189,410		2		142,057		—		—		142,057		—			75		—			—		—	Notes 10 and 11
Shanghai Taihua Electronic Technology Limited	Design of printed circuit board and related consultation service		51,233		2		51,233		—		—		51,233		(5,508	)		100		(5,508	)		20,310		—	Note 11
Su Zhou Precision Test Tech. Ltd.	Assembly processed of circuit board, design of printed circuit board and related consultation service		62,340		2		62,340		—		—		62,340		1,239			100		1,239			59,709		—	Note 11
Shanghai Chief Telecom Co., Ltd.	Telecommunications and internet service		10,150		1		4,973		—		—		4,973		2,479			49		1,215			11,925		—	Note 11

(Continued)

• 86 -

Investee	Accumulated Investment in<br>Mainland China as of<br>March 31, 2020		Investment AmountsAuthorized by InvestmentCommission, MOEA		Upper Limit on InvestmentStipulated by InvestmentCommission, MOEA
SENAO and its subsidiaries (Note 3)	$	2,318,797	$	2,318,797	$	3,571,962
Chunghwa Telecom (China) Co., Ltd. (Note 4)		177,176		177,176		236,157,832
Jiangsu Zhenghua Information Technology Company, LLC (Note 4)		142,057		142,057		236,157,832
Chunghwa Precision Test Tech Co., Ltd and its subsidiaries (Note 5)		113,573		159,725		3,973,544
Shanghai Chief Telecom Co., Ltd. (Note 6)		4,973		4,973		1,851,459
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<br>of Senao International Co., Ltd.
---	---
Note 4:	Chunghwa Telecom (China) Co., Ltd. and Jiangsu Zhenghua Information Technology Company, LLC were calculated<br>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<br>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<br>Inc.
---	---
Note 7:	The liquidation of Senao Trading (Fujian) Co., Ltd. was completed in May 2019.
---	---
Note 8:	The liquidation of Senao International Trading (Shanghai) Co., Ltd. was completed in March 2018.<br>
---	---
Note 9:	The liquidation of Senao International Trading (Jiangsu) Co., Ltd. was completed in March 2019.<br>
---	---
Note 10:	The liquidation of Jiangsu Zhenhua Information Technology Company, LLC. was completed in December 2018.<br>
---	---
Note 11:	The amount was eliminated upon consolidation.
---	---
Note 12:	The English name is the same as the above entity; however the Chinese name included in the respective Articles<br>of Incorporations is different from the above entity.
---	---

(Concluded)

• 87 -

TABLE 8

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT TRANSACTIONS

THREE MONTHS ENDED MARCH 31, 2020

(Amounts inThousands of New Taiwan Dollars)

Year	No.<br>(Note 1)		Company Name	Related Party	Nature ofRelationship<br>(Note 2)		Transaction Details
						Financial Statement Account	Amount<br>(Note 5)			PaymentTerms<br>(Note 3)		% to TotalSales or Assets(Note 4)
2020		0	Chunghwa Telecom Co., Ltd.	Senao International Co., Ltd.		a	Accounts receivable	$	145,385		—		—
							Accrued custodial receipts		117,292		—		—
							Accounts payable		801,573		—		—
							Amounts collected for others		219,952		—		—
							Revenues		697,609		—		1
							Operating costs and expenses		144,042		—		—
							Inventories		12,231		—		—
				CHIEF Telecom Inc.		a	Accounts receivable		52,203		—		—
							Accounts payable		13,225		—		—
							Revenues		86,123		—		—
							Operating costs and expenses		30,810		—		—
				CHYP Multimedia Marketing &		a	Amounts collected for others		21,284		—		—
				Communications Co., Ltd.			Operating costs and expenses		29,364		—		—
				Chunghwa System Integration Co., Ltd.		a	Accounts receivable		37,938		—		—
							Accounts payable		333,298		—		—
							Operating costs and expenses		323,507		—		1
							Property, plant and equipment		20,029		—		—
							Intangible assets		27,659		—		—
				Chunghwa Telecom Global Inc.		a	Accounts receivable		18,886		—		—
							Accounts payable		39,186		—		—
							Revenues		25,404		—		—
							Operating costs and expenses		83,428		—		—
				Donghwa Telecom Co., Ltd.		a	Accounts receivable		19,343		—		—
							Accounts payable		129,667		—		—
							Revenues		53,566		—		—
							Operating costs and expenses		114,437		—		—
				Spring House Entertainment Tech. Inc.		a	Amounts collected for others		26,841		—		—
				Chunghwa Telecom Japan Co., Ltd.		a	Operating costs and expenses		23,607		—		—
				Chunghwa Telecom Singapore Pte., Ltd.		a	Accounts receivable		34,844		—		—
							Accounts payable		53,049		—		—
							Revenues		16,622		—		—
							Operating costs and expenses		33,364		—		—
				Honghwa International Co., Ltd.		a	Accounts receivable		56,952		—		—
							Accounts payable		702,548		—		—
							Revenues		26,385		—		—
							Operating costs and expenses		1,306,341		—		3
							Inventories		15,331		—		—

(Continued)

• 88 -

Year	No.<br>(Note 1)		Company Name	Related Party	Nature ofRelationship<br>(Note 2)		Transaction Details
						Financial Statement Account		Amount<br>(Note 5)			PaymentTerms<br>(Note 3)		% to TotalSales or Assets(Note 4)
				Smartfun Digital Co., Ltd.	a		Operating costs and expenses		$	10,321		—		—
				CHT Security Co., Ltd.	a		Accounts payable			25,724		—		—
							Operating costs and expenses			47,697		—		—
							Inventories			28,309		—		—
				Aval Technologies Co., Ltd.	a		Operating costs and expenses			32,906		—		—
							Customers deposits			14,477		—		—
				Senyoung Insurance Agent Co., Ltd.	a		Accounts receivable			40,248		—		—
							Revenues			25,110		—		—
				Light Era Development Co., Ltd.	a		Property, plant and equipment			35,003		—		—
		1	Light Era Development Co., Ltd.	CHIEF Telecom Inc.	c		Revenues			24,190		—		—
		2	Donghwa Telecom Co., Ltd.	Chunghwa Telecom Singapore Pte., Ltd.	c		Prepayments			15,247		—		—
		3	CHIEF Telecom Inc.	Chunghwa Telecom Singapore Pte., Ltd.	c		Operating costs and expenses			24,682		—		—
Note 1:	Significant transactions between the Company and its subsidiaries or among subsidiaries are numbered as<br>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<br>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,<br>2020, while revenues, costs and expenses are shown as a percentage to consolidated revenues for the three months ended March 31, 2020.
---	---
Note 5:	The amount was eliminated upon consolidation.
---	---

(Concluded)

• 89 -

TABLE 9

CHUNGHWA TELECOM CO., LTD.

INFORMATION OF MAJORSTOCKHOLDERS

MARCH 31, 2020

Name of Major Stockholders	Shares
	Number of Shares<br>(Thousands)		Percentage ofOwnership (%)
Ministry of Transportation and Communication		2,737,719		35.29
Shin Kong Life Insurance Co., Ltd.		610,488		7.86
Note:	This table presents information provided by the Taiwan Depository & Clearing Corporation on<br>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.
---	---

• 90 -

EX-99.3

Exhibit 99.3

Chunghwa Telecom Co., Ltd. and Subsidiaries

Consolidated Financial Statements for the

Three MonthsEnded March 31, 2020 and 2019

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Millions of New TaiwanDollars)

	March 31,2020<br>(Unaudited)			December 31,2019<br>(Audited)			March 31,2019<br>(Unaudited)				March 31,2020<br>(Unaudited)				December 31,2019<br>(Audited)			March 31,2019<br>(Unaudited)
ASSETS	****	Amount	%	****	Amount	%	****	Amount	%	LIABILITIES AND EQUITY	****	Amount	****	%	****	Amount	%	****	Amount	%
CURRENT ASSETS										CURRENT LIABILITIES
Cash and cash equivalents	$	16,570	3	$	34,050	7	$	37,228	8	Short-term loans	$	70		—	$	90	—	$	175	—
Financial assets at fair value through profit or loss		7	—		1	—		—	—	Short-term bills payable		19,966		4		—	—		—	—
Hedging financial assets		—	—		—	—		—	—	Financial liabilities at fair value through profit or loss		1		—		—	—		2	—
Contract assets		4,467	1		4,441	1		4,606	1	Hedging financial liabilities		—		—		—	—		3	—
Trade notes and accounts receivable, net		23,401	5		26,408	6		27,524	5	Contract liabilities		17,163		4		16,840	3		12,417	3
Receivables from related parties		10	—		17	—		18	—	Trade notes and accounts payable		11,890		2		15,312	3		14,948	3
Inventories		17,775	4		17,344	4		13,904	3	Payables to related parties		338		—		654	—		361	—
Prepayments		5,103	1		1,883	—		4,855	1	Current tax liabilities		8,335		2		5,812	1		8,541	2
Other current monetary assets		6,159	1		7,498	2		7,170	1	Lease liabilities		3,395		1		3,291	1		3,500	1
Other current assets		1,876	—		2,430	—		2,926	1	Other payables		19,654		4		22,953	5		20,294	4
										Provisions		200		—		207	—		131	—
Total current assets		75,368	15		94,072	20		98,231	20	Other current liabilities		973		—		984	—		1,052	—
NONCURRENT ASSETS										Total current liabilities		81,985		17		66,143	13		61,424	13
Financial assets at fair value through profit or loss		767	—		778	—		511	—	NONCURRENT LIABILITIES
Financial assets at fair value through other comprehensive income		5,903	1		7,154	1		6,774	1	Contract liabilities		6,668		1		6,841	2		6,325	1
Investments accounted for using equity method		7,141	1		7,139	1		2,811	1	Long-term loans		1,600		—		1,600	—		1,600	—
Contract assets		2,567	1		2,601	1		2,395	1	Deferred income taxes liabilities		1,928		1		1,912	—		1,985	1
Property, plant and equipment		279,867	56		283,694	60		284,681	59	Provisions		100		—		97	—		79	—
Right-of-use<br>assets		11,494	2		11,364	2		11,710	2	Lease liabilities		6,425		1		6,467	2		6,353	1
Investment properties		8,164	2		8,169	2		8,278	2	Customers’ deposits		4,602		1		4,748	1		4,646	1
Intangible assets		94,408	19		47,047	10		49,934	11	Net defined benefit liabilities		3,539		1		3,505	1		3,580	1
Deferred income tax assets		3,262	1		3,259	1		3,558	1	Other noncurrent liabilities		1,685		—		1,543	—		1,400	—
Incremental costs of obtaining contracts		930	—		943	—		1,117	—
Net defined benefit assets		2,204	—		2,128	—		1,088	—	Total noncurrent liabilities		26,547		5		26,713	6		25,968	5
Prepayments		2,612	1		2,679	1		2,931	1
Other noncurrent assets		4,992	1		6,101	1		5,798	1	Total liabilities		108,532		22		92,856	19		87,392	18
Total noncurrent assets		424,311	85		383,056	80		381,586	80	EQUITY ATTRIBUTABLE TO STOCKHOLDERS OF
										THE PARENT
										Common stocks		77,574		16		77,574	16		77,574	16
										Additional paid-in capital		149,786		29		149,762	31		149,761	31
										Retained earnings
										Legal reserve		77,574		16		77,574	16		77,574	16
										Special reserve		2,676		1		2,676	1		2,676	1
										Unappropriated earnings		73,834		14		65,984	14		74,504	16
										Total retained earnings		154,084		31		146,234	31		154,754	33
										Other adjustments		(709	)	—		587	—		309	—
										Total equity attributable to stockholders of the parent		380,735		76		374,157	78		382,398	80
										NONCONTROLLING INTERESTS		10,412		2		10,115	3		10,027	2
										Total equity		391,147		78		384,272	81		392,425	82
TOTAL	$	499,679	100	$	477,128	100	$	479,817	100	TOTAL	$	499,679		100	$	477,128	100	$	479,817	100

• 1 -

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(InMillions of New Taiwan Dollars, Except Earnings Per Share)

(Unaudited)

	Three Months Ended March 31
	2020						2019
	Amount			%			Amount			%
REVENUES	$	48,150			100		$	51,331			100
OPERATING COSTS		30,391			63			33,481			65
GROSS PROFIT		17,759			37			17,850			35
OPERATING EXPENSES
Marketing		5,073			10			5,408			11
General and administrative		1,213			3			1,171			2
Research and development		936			2			921			2
Expected credit loss (reversal of credit loss)		6			—			(56	)		—
Total operating expenses		7,228			15			7,444			15
OTHER INCOME AND EXPENSES		(1	)		—			(4	)		—
INCOME FROM OPERATIONS		10,530			22			10,402			20
NON-OPERATING INCOME AND EXPENSES
Interest income		39			—			53			—
Other income		43			—			56			—
Other gains and losses		39			—			(19	)		—
Interest expenses		(42	)		—			(26	)		—
Share of profits of associates accounted for using equity method		35			—			77			—
Total non-operating income and expenses		114			—			141			—
INCOME BEFORE INCOME TAX		10,644			22			10,543			20
INCOME TAX EXPENSE		2,544			5			2,452			5
NET INCOME		8,100			17			8,091			15
TOTAL OTHER COMPREHENSIVE 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<br>comprehensive income		(1,286	)		(3	)		(159	)		—
Gain or loss on hedging instruments subject to basis adjustment		—			—			(4	)		—

(Continued)

• 2 -

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(InMillions of New Taiwan Dollars, Except Earnings Per Share)

(Unaudited)

	Three Months Ended March 31
	2020						2019
	Amount			%			Amount			%
Share of remeasurements of defined benefit pension plans of associates	$	—			—		$	—			—
		(1,286	)		(3	)		(163	)		—
Items that may be reclassified subsequently to profit or loss:
Exchange differences arising from the translation of the foreign operations		(12	)		—			24			—
Share of exchange differences arising from the translation of the foreign operations of<br>associates		—			—			—			—
		(12	)		—			24			—
Total other comprehensive loss, net of income tax		(1,298	)		(3	)		(139	)		—
TOTAL COMPREHENSIVE INCOME	$	6,802			14		$	7,952			15
NET INCOME ATTRIBUTABLE TO
Stockholders of the parent	$	7,850			16		$	7,929			15
Noncontrolling interests		250			1			162			—
	$	8,100			17		$	8,091			15
COMPREHENSIVE INCOME ATTRIBUTABLE TO
Stockholders of the parent	$	6,554			13		$	7,778			15
Noncontrolling interests		248			1			174			—
	$	6,802			14		$	7,952			15
EARNINGS PER SHARE
Basic	$	1.01					$	1.02
Diluted	$	1.01					$	1.02

(Concluded)

• 3 -

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(InMillions of New Taiwan Dollars)

(Unaudited)

	Equity Attributable to Stockholders of the Parent
														Other Adjustments
														Exchange
														Differences
														Arising			Unrealized
						Retained Earnings								from the			Gain or Loss									Total Equity
	CommonStocks		AdditionalPaid-inCapital			LegalReserve		SpecialReserve		UnappropriatedEarnings		TotalRetainedEarnings		Translation of<br><br><br>the ForeignOperations			on Financial<br><br><br>Assets atFVOCI			Gain or Loss<br><br><br>on HedgingInstruments			Total OtherAdjustments			Attributable to<br><br><br>Stockholdersof the Parent			NoncontrollingInterests			TotalEquity
BALANCE, JANUARY 1, 2019	$	77,574	$	149,762		$	77,574	$	2,676	$	66,575	$	146,825	$	(79	)	$	538		$	1		$	460		$	374,621		$	9,837		$	384,458
Net income for the three months ended March 31, 2019		—		—			—		—		7,929		7,929		—			—			—			—			7,929			162			8,091
Other comprehensive income (loss) for the three months ended March 31, 2019		—		—			—		—		—		—		15			(162	)		(4	)		(151	)		(151	)		12			(139	)
Total comprehensive income (loss) for the three months ended March 31, 2019		—		—			—		—		7,929		7,929		15			(162	)		(4	)		(151	)		7,778			174			7,952
Share-based payment transactions of subsidiaries		—		(1	)		—		—		—		—		—			—			—			—			(1	)		16			15
BALANCE, MARCH 31, 2019	$	77,574	$	149,761		$	77,574	$	2,676	$	74,504	$	154,754	$	(64	)	$	376		$	(3	)	$	309		$	382,398		$	10,027		$	392,425
BALANCE, JANUARY 1, 2020	$	77,574	$	149,762		$	77,574	$	2,676	$	65,984	$	146,234	$	(148	)	$	735		$	—		$	587		$	374,157		$	10,115		$	384,272
Net income for the three months ended March 31, 2020		—		—			—		—		7,850		7,850		—			—			—			—			7,850			250			8,100
Other comprehensive loss for the three months ended March 31, 2020		—		—			—		—		—		—		(13	)		(1,283	)		—			(1,296	)		(1,296	)		(2	)		(1,298	)
Total comprehensive income (loss) for the three months ended March 31, 2020		—		—			—		—		7,850		7,850		(13	)		(1,283	)		—			(1,296	)		6,554			248			6,802
Share-based payment transactions of subsidiaries		—		24			—		—		—		—		—			—			—			—			24			49			73
BALANCE, MARCH 31, 2020	$	77,574	$	149,786		$	77,574	$	2,676	$	73,834	$	154,084	$	(161	)	$	(548	)	$	—		$	(709	)	$	380,735		$	10,412		$	391,147

• 4 -

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Millions ofNew Taiwan Dollars)

(Unaudited)

	Three Months Ended March 31
	2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax	$	10,644		$	10,543
Adjustments to reconcile income before income tax to net cash provided by operating<br>activities:
Depreciation		7,759			7,693
Amortization		1,059			1,064
Amortization of incremental costs of obtaining contracts		197			377
Expected credit loss (reversal of credit loss)		6			(56	)
Interest expenses		42			26
Interest income		(39	)		(53	)
Compensation cost of share-based payment transactions		2			—
Share of profits of associates accounted for using equity method		(35	)		(77	)
Loss on disposal of property, plant and equipment		1			4
Loss on disposal of financial instruments		2			—
Loss on disposal of investments accounted for by using equity method		6			—
Provision for inventory and obsolescence		24			96
Valuation loss on financial assets and liabilities at fair value through profit or loss,<br>net		12			7
Others		(51	)		(23	)
Changes in operating assets and liabilities:
Decrease (increase) in:
Contract assets		8			213
Trade notes and accounts receivable		3,042			2,615
Receivables from related parties		7			6
Inventories		(454	)		1,121
Prepayments		(3,153	)		(3,109	)
Other current monetary assets		122			(42	)
Other current assets		554			(350	)
Incremental cost of obtaining contracts		(184	)		(159	)
Increase (decrease) in:
Contract liabilities		150			1,762
Trade notes and accounts payable		(3,423	)		(5,517	)
Payables to related parties		(316	)		(557	)
Other payables		(2,523	)		(2,241	)
Provisions		(5	)		4
Other current liabilities		(6	)		(107	)
Net defined benefit plans		(42	)		122
Cash generated from operations		13,406			13,362
Interest paid		(77	)		(26	)
Income tax paid		(8	)		(117	)
Net cash provided by operating activities		13,321			13,219

(Continued)

• 5 -

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Millions ofNew Taiwan Dollars)

(Unaudited)

	Three Months Ended March 31
	2020			2019
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of financial assets at fair value through other comprehensive income	$	(35	)	$	—
Purchase of financial assets at fair value through profit or loss		(39	)		—
Proceeds from disposal of financial assets at fair value through profit or loss		30			—
Acquisition of time deposits and negotiable certificates of deposit with maturities of more than<br>three months		(1,392	)		(1,564	)
Proceeds from disposal of time deposits and negotiable certificates of deposit with maturities of<br>more than three months		2,616			3,931
Acquisition of property, plant and equipment		(3,729	)		(4,492	)
Proceeds from disposal of property, plant and equipment		14			10
Acquisition of intangible assets		(47,420	)		(54	)
Decrease (increase) in other noncurrent assets		70			(619	)
Interest received		46			58
Net cash used in investing activities		(49,839	)		(2,730	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term loans		70			300
Repayment of short-term loans		(90	)		(225	)
Proceeds from short-term bills payable		29,000			—
Repayment of short-term bills payable		(9,000	)		—
Decrease in customers’ deposits		(150	)		(79	)
Payments for the principal of lease liabilities		(992	)		(1,019	)
Increase in other noncurrent liabilities		142			90
Change in other noncontrolling interests		72			14
Net cash provided by (used in) financing activities		19,052			(919	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS		(14	)		13
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(17,480	)		9,583
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		34,050			27,645
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	16,570		$	37,228

(Concluded)

• 6 -

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

NOTE TO CONSOLIDATED FINANCIAL STATEMENTS

ThreeMonths Ended March 31, 2020 and 2019

(Unaudited)

STATEMENT OF COMPLIANCE

The Company has prepared its consolidated balance sheets as of March 31, 2020 and 2019, the related consolidated statements of comprehensive income, changes in equity and cash flows for the three months ended March 31, 2020 and 2019 in accordance with IAS 34 “Interim Financial Reporting” as issued by the International Accounting Standard Board (IASB). The consolidated financial statements are incomplete as they omit the related footnote disclosures as required under International Financial Reporting Standards as issued by IASB.

• 7 -