	December 31
	2018		2019
	NT$		NT$
	(In Millions)
Financial assets
Measured at FVTPL
Mandatorily measured at FVTPL	$	517	$	779
Hedging financial assets		1		—
Financial assets at amortized cost (Note a)		70,241		71,852
Financial assets at FVOCI		6,933		7,154
Financial liabilities
Measured at FVTPL
Held for trading		1		—
Measured at amortized cost (Note b)		40,334		34,434

Note a:

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

Note b:

The balances included short-term loans, trade notes and accounts payable, payables to related parties, partial other payables, customers’ deposits and long-term loans which were financial liabilities carried at amortized cost.

The main financial instruments of the Company include equity investments, trade notes and accounts receivable, trade notes and accounts payable, lease liabilities and loans. 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.

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.

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
	2018		2019
	NT$		NT$
	(In Millions)
Assets
USD	$	5,903	$	5,782
EUR		34		12
SGD		124		225
JPY		17		17
RMB		2		9
Liabilities
USD		6,999		4,121
EUR		1,217		206
SGD		51		1,263
JPY		14		14
RMB		—		—

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

	December 31
	2018		2019
	NT$		NT$
	(In Millions)
Assets
USD	$	—	$	—
EUR		1		—
Liabilities
USD		—		—
EUR		1		—

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.

	Year Ended December 31
	2017			2018			2019
	NT$			NT$			NT$
	(In Millions)
Profit or loss
Monetary assets and liabilities (a)
USD	$	31		$	(55	)	$	83
EUR		(65	)		(59	)		(10	)
SGD		(2	)		4			(52	)
JPY		1			—			—
RMB		—			—			—
Derivatives (b)
USD		6			3			1
EUR		3			10			3
Equity
Derivatives (c)
EUR		7			9			4

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

This is mainly attributable to forward exchange contracts.

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

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

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:

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 $13 million, $19 million and $15 million for the years ended December 31, 2017, 2018 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.

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.

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 other comprehensive income for the year ended December 31, 2017 would have increased/decreased by $156 million as a result of the changes in fair value of available-for-sale assets. If equity prices had been 5% higher/lower, pre-tax profit and pre-tax other comprehensive income for the year ended December 31, 2018 would have increased/decreased by $26 million, and $347 million as a result of the changes in fair value of financial assets at FVTPL and financial assets at FVTOCI, respectively. If equity prices had been 5% higher/lower, pre-tax profit and pre-tax other comprehensive income for the year ended December 31, 2019 would have increased/decreased by $39 million and $358 million as a result of the changes in fair value of financial assets at FVTPL and financial assets at FVTOCI, respectively.

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.

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.

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

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

	Weighted Average Effective Interest Rate (%)		Less than 1 Month		1-3 Months		3 Months to 1 Year		1-5 Years		More than 5 Years		Total
			NT$		NT$		NT$		NT$		NT$		NT$
			(In Millions)
December 31, 2018
Non-derivative financial liabilities
Non-interest bearing		—	$	41,808	$	—	$	2,890	$	4,717	$	—	$	49,415
Floating interest rate instruments		0.98		—		—		100		1,600		—		1,700
			$	41,808	$	—	$	2,990	$	6,317	$	—	$	51,115

	Weighted Average Effective Interest Rate (%)		Less than 1 Month		1-3 Months		3 Months to 1 Year		1-5 Years		More than 5 Years		Total
			NT$		NT$		NT$		NT$		NT$		NT$
			(In Millions)
December 31, 2019
Non-derivative financial liabilities
Non-interest bearing		—	$	36,387	$	—	$	2,532	$	4,748	$	—	$	43,667
Floating interest rate instruments		0.98		50		10		30		1,600		—		1,690
			$	36,437	$	10	$	2,562	$	6,348	$	—	$	45,357

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

	Less than 1 Month		1-3 Months		3 Months to 1 Year		1-5 Years		Total
	NT$		NT$		NT$		NT$		NT$
	(In Millions)
December 31, 2018
Gross settled
Forward exchange contracts
Inflows	$	62	$	238	$	126	$	—	$	426
Outflows		62		238		126		—		426
	$	—	$	—	$	—	$	—	$	—
December 31, 2019
Gross settled
Forward exchange contracts
Inflows	$	26	$	135	$	—	$	—	$	161
Outflows		26		135		—		—		161
	$	—	$	—	$	—	$	—	$	—

	December 31
	2018		2019
	NT$		NT$
	(In Millions)
Unsecured bank loan facility
Amount used	$	133	$	121
Amount unused		46,328		46,109
	$	46,461	$	46,230
Secured bank loan facility
Amount used	$	1,600	$	1,600
Amount unused		1,340		1,340
	$	2,940	$	2,940