Exhibit 99.2

Chunghwa Telecom Co., Ltd. and

Subsidiaries

Consolidated Financial Statements for the

Three Months Ended March 31, 2015 and 2014 and

Independent Auditors’ Review Report

1

INDEPENDENT AUDITORS’ REVIEW REPORT

The Board of Directors and Stockholders

Chunghwa Telecom Co., Ltd.

We have reviewed the accompanying consolidated balance sheets of Chunghwa Telecom Co., Ltd. and subsidiaries (“the Company”) as of March 31, 2015 and 2014, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the three months ended March 31, 2015 and 2014. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to issue a report on these consolidated financial statements based on our review.

We conducted our reviews in accordance with the Statement of Auditing Standards No. 36, “Review of Financial Statements”, issued by the Auditing Committee of the Accounting Research and Development Foundation of the Republic of China. A review consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the Republic of China, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an audit opinion.

Based on our reviews, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting” endorsed by the Financial Supervisory Commission of the Republic of China.

/s/ DELOITTE & TOUCHE                                

Deloitte & Touche

Taipei, Taiwan

The Republic of China

May 11, 2015

Notice to Readers

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

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

2

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollar)

	March 31, 2015 (Reviewed)				December 31,  2014 (Adjusted and Audited) (Note 5)				March 31, 2014 (Adjusted  and Reviewed) (Note 5)				January 1, 2014 (Adjusted and Audited) (Note 5)
	Amount		%		Amount		%		Amount		%		Amount		%
ASSETS
CURRENT ASSETS
Cash and cash equivalents (Note 6)	$	30,801,465		7	$	23,559,603		5	$	18,985,956		5	$	14,585,105		3
Financial assets at fair value through profit or loss (Note 7)		193		—		1,163		—		58		—		337		—
Available-for-sale financial assets (Note 8)		—		—		—		—		—		—		24,267		—
Held-to-maturity financial assets (Note 9)		2,754,230		1		3,456,747		1		4,312,712		1		4,264,104		1
Trade notes and accounts receivable, net (Note 10)		27,605,775		6		26,227,999		6		22,987,820		5		22,900,902		5
Accounts receivable from related parties (Note 39)		60,557		—		81,008		—		62,019		—		69,304		—
Inventories (Notes 11 and 40)		6,877,302		1		7,096,509		2		8,943,748		2		7,848,087		2
Prepayments (Notes 12 and 39)		5,809,257		1		2,444,458		—		5,351,072		1		2,224,130		1
Other current monetary assets (Notes 13 and 28)		2,892,554		1		3,325,354		1		4,621,528		1		4,636,305		1
Other current assets (Note 20)		2,916,670		1		3,219,399		1		4,011,866		1		3,960,798		1
Total current assets		79,718,003		18		69,412,240		16		69,276,779		16		60,513,339		14
NONCURRENT ASSETS
Available-for-sale financial assets (Note 8)		4,316,492		1		3,914,212		1		2,782,364		1		3,046,182		1
Held-to-maturity financial assets (Note 9)		4,025,794		1		4,027,522		1		6,796,169		1		7,501,743		2
Financial assets carried at cost (Note 14)		2,364,992		—		2,366,530		—		2,449,370		—		2,423,646		—
Investments accounted for using equity method (Notes 3 and 16)		3,255,261		1		2,953,625		1		2,770,152		1		2,562,293		—
Property, plant and equipment (Notes 17, 39 and 40)		298,417,054		66		302,650,343		68		299,083,643		67		302,714,116		69
Investment properties (Note 18)		7,670,322		2		7,620,854		2		8,013,889		2		8,018,031		2
Intangible assets (Note 19)		42,128,997		9		42,824,626		9		44,133,669		10		44,398,888		10
Deferred income tax assets		1,874,077		—		1,828,586		—		1,716,547		—		1,509,305		—
Prepayments (Notes 12 and 39)		3,523,081		1		3,504,338		1		3,590,050		1		3,608,487		1
Other noncurrent assets (Notes 20, 28 and 40)		5,401,901		1		5,601,736		1		5,058,850		1		4,882,974		1
Total noncurrent assets		372,977,971		82		377,292,372		84		376,394,703		84		380,665,665		86
TOTAL	$	452,695,974		100	$	446,704,612		100	$	445,671,482		100	$	441,179,004		100

3

	March 31, 2015 (Reviewed)				December 31,  2014 (Adjusted and Audited) (Note 5)				March 31, 2014 (Adjusted  and Reviewed) (Note 5)					January 1, 2014 (Adjusted and Audited) (Note 5)
	Amount		%		Amount		%		Amount			%		Amount			%
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term loans (Note 22)	$	560,000		—	$	564,400		—	$	304,357			—	$	254,357			—
Financial liabilities at fair value through profit or loss (Note 7)		481		—		21		—		771			—		246			—
Hedging derivative liabilities (Note 21)		—		—		283		—		—			—		—			—
Trade notes and accounts payable (Note 24)		14,875,274		3		18,518,977		4		12,354,805			3		15,589,108			4
Payables to related parties (Note 39)		255,651		—		407,965		—		502,784			—		556,809			—
Current tax liabilities		5,447,125		1		3,361,907		1		6,267,318			2		4,144,076			1
Other payables (Note 25)		21,179,943		5		24,334,992		6		22,331,388			5		26,791,769			6
Provisions (Note 26)		211,347		—		179,374		—		143,358			—		129,341			—
Advance receipts (Note 27)		9,544,169		2		9,912,864		2		9,394,148			2		9,463,535			2
Current portion of long-term loans (Notes 23 and 40)		—		—		—		—		300,000			—		300,000			—
Other current liabilities		1,485,615		1		1,618,957		—		1,602,177			—		1,598,017			—
Total current liabilities		53,559,605		12		58,899,740		13		53,201,106			12		58,827,258			13
NONCURRENT LIABILITIES
Long-term loans (Notes 23 and 40)		1,850,000		—		1,900,000		—		1,400,000			1		1,400,000			1
Deferred income taxes liabilities		123,815		—		132,406		—		100,907			—		101,379			—
Provisions (Note 26)		86,158		—		92,660		—		118,987			—		123,464			—
Customers’ deposits (Note 39)		4,639,437		1		4,757,547		1		4,755,169			1		4,834,580			1
Net defined benefit liabilities (Notes 3 and 28)		6,569,832		2		6,469,890		2		5,581,580			1		5,483,205			1
Deferred revenue		3,717,185		1		3,398,087		1		3,615,031			1		3,700,949			1
Other noncurrent liabilities		1,589,141		—		1,514,947		—		1,352,445			—		1,334,220			—
Total noncurrent liabilities		18,575,568		4		18,265,537		4		16,924,119			4		16,977,797			4
Total liabilities		72,135,173		16		77,165,277		17		70,125,225			16		75,805,055			17
EQUITY ATTRIBUTABLE TO STOCKHOLDERS OF THE PARENT (Notes 15 and 29)
Common stock		77,574,465		17		77,574,465		17		77,574,465			17		77,574,465			18
Additional paid-in capital		168,073,694		37		168,047,935		38		184,619,473			42		184,620,065			42
Retained earnings
Legal reserve		76,893,722		17		76,893,722		17		74,819,380			17		74,819,380			17
Special reserve		2,819,899		1		2,819,899		1		2,675,894			—		2,675,894			—
Unappropriated earnings		48,650,142		11		38,231,982		9		31,004,629			7		20,770,064			5
Total retained earnings		128,363,763		29		117,945,603		27		108,499,903			24		98,265,338			22
Other adjustments		1,288,383		—		886,147		—		(371,749	)		—		(144,005	)		—
Total equity attributable to stockholders of the parent		375,300,305		83		364,454,150		82		370,322,092			83		360,315,863			82
NONCONTROLLING INTERESTS (Notes 15 and 29)		5,260,496		1		5,085,185		1		5,224,165			1		5,058,086			1
Total equity		380,560,801		84		369,539,335		83		375,546,257			84		365,373,949			83
TOTAL	$	452,695,974		100	$	446,704,612		100	$	445,671,482			100	$	441,179,004			100

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

4

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

	Three Months Ended March 31
	2015 (Reviewed)					2014 (Adjusted and Reviewed) (Note 5)
	Amount			%		Amount			%
REVENUES (Notes 30 and 39)	$	56,472,807			100	$	55,049,912			100
OPERATING COSTS (Notes 11 and 39)		36,695,881			65		35,022,225			64
GROSS PROFIT		19,776,926			35		20,027,687			36
OPERATING EXPENSES (Note 39)
Marketing		5,982,605			11		6,167,941			11
General and administrative		1,145,124			2		1,083,312			2
Research and development		835,127			1		871,854			2
Total operating expenses		7,962,856			14		8,123,107			15
OTHER INCOME AND EXPENSES (Note 31)		(29,120	)		—		(8,510	)		—
INCOME FROM OPERATIONS		11,784,950			21		11,896,070			21
NON-OPERATING INCOME AND EXPENSES
Interest income		67,297			—		59,123			—
Other income (Notes 31 and 39)		252,684			—		253,067			1
Other gains and losses (Notes 31 and 39)		126,258			—		(31,022	)		—
Interest expenses		(8,657	)		—		(8,726	)		—
Share of the profit of associates and joint ventures accounted for using equity method (Note 16)		300,526			1		172,106			—
Total non-operating income and expenses		738,108			1		444,548			1
INCOME BEFORE INCOME TAX		12,523,058			22		12,340,618			22
INCOME TAX EXPENSE (Notes 3 and 32)		1,955,265			3		1,955,848			3
NET INCOME		10,567,793			19		10,384,770			19
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF INCOME TAX
Items that will not be reclassified to profit or loss:
Share of remeasurements of defined benefit pension plans of associates and joint ventures (Note 16)		(265	)		—		—			—

(Continued)

5

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

	Three Months Ended March 31
	2015 (Reviewed)					2014 (Adjusted and Reviewed) (Note 5)
	Amount			%		Amount			%
Items that may be reclassified subsequently to profit or loss:
Exchange differences arising from the translation of the foreign operations	$	(29,402	)		—	$	14,517			—
Unrealized gain (loss) on available-for-sale financial assets (Note 31)		428,190			—		(259,967	)		(1	)
Cash flow hedges (Notes 21 and 31)		283			—		—			—
Share of exchange differences arising from the translation of the foreign operations of associates joint ventures (Note 16)		875			—		7,604			—
Income tax relating to items that may be reclassified subsequently (Note 32)		(3,328	)		—		1,036			—
Total other comprehensive income (loss), net of income tax		396,353			—		(236,810	)		(1	)
TOTAL COMPREHENSIVE INCOME	$	10,964,146			19	$	10,147,960			18
NET INCOME ATTRIBUTABLE TO
Stockholders of the parent	$	10,418,425			19	$	10,234,565			19
Noncontrolling interest (Note 15)		149,368			—		150,205			—
	$	10,567,793			19	$	10,384,770			19
COMPREHENSIVE INCOME ATTRIBUTABLE TO
Stockholders of the parent	$	10,820,396			19	$	10,006,821			18
Noncontrolling interest		143,750			—		141,139			—
	$	10,964,146			19	$	10,147,960			18
EARNINGS PER SHARE (Note 33)
Basic	$	1.34				$	1.32
Diluted	$	1.34				$	1.32

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

(Concluded)

6

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

THREE MONTHS ENDED MARCH 31, 2015 AND 2014

(In Thousands of New Taiwan Dollars)

(Reviewed, Not Audited)

	Equity Attributable to Stockholders of the Parent (Notes 15 and 29)
												Other Adjustments
						Retained Earnings						Exchange Differences Arising from the Translation		Unrealized Gain (Loss) on Available- for-sale								Noncontrolling
	Common Stock		Additional Paid-in Capital			Legal Reserve		Special Reserve		Unappropriated Earnings		of the Foreign Operations		Financial Assets			Cash Flow Hedges		Total			Interests (Notes 15 and 29)			Total Equity
BALANCE AT JANUARY 1, 2014	$	77,574,465	$	184,620,065		$	74,819,380	$	2,675,894	$	20,744,024	$	5,742	$	(149,747	)	$	—	$	360,289,823		$	5,054,331		$	365,344,154
Effect of retrospective application		—		—			—		—		26,040		—		—			—		26,040			3,755			29,795
BALANCE, JANUARY 1, 2014 AS ADJUSTED		77,574,465		184,620,065			74,819,380		2,675,894		20,770,064		5,742		(149,747	)		—		360,315,863			5,058,086			365,373,949
Other change in additional paid-in capital:
Change in additional paid-in capital from investments in associates and joint ventures accounted for using equity method		—		(592	)		—		—		—		—		—			—		(592	)		(1,626	)		(2,218	)
Net income for the three months ended March 31, 2014		—		—			—		—		10,234,565		—		—			—		10,234,565			150,205			10,384,770
Other comprehensive income (loss) for the three months ended March 31, 2014		—		—			—		—		—		26,464		(254,208	)		—		(227,744	)		(9,066	)		(236,810	)
Total comprehensive income for the three months ended March 31, 2014		—		—			—		—		10,234,565		26,464		(254,208	)		—		10,006,821			141,139			10,147,960
Compensation cost of employee stock option of a subsidiary		—		—			—		—		—		—		—			—		—			26,566			26,566
BALANCE, MARCH 31, 2014	$	77,574,465	$	184,619,473		$	74,819,380	$	2,675,894	$	31,004,629	$	32,206	$	(403,955	)	$	—	$	370,322,092		$	5,224,165		$	375,546,257

(Continued)

7

	Equity Attributable to Stockholders of the Parent (Notes 15 and 29)
													Other Adjustments
						Retained Earnings							Exchange Differences Arising from the Translation			Unrealized Gain (Loss) on Available- for-sale								Noncontrolling
	Common Stock		Additional Paid-in Capital			Legal Reserve		Special Reserve		Unappropriated Earnings			of the Foreign Operations			Financial Assets		Cash Flow Hedges			Total			Interests (Notes 15 and 29)			Total Equity
BALANCE, JANUARY 1, 2015	$	77,574,465	$	168,047,935		$	76,893,722	$	2,819,899	$	38,210,062		$	146,442		$	739,988	$	(283	)	$	364,432,230		$	5,081,617		$	369,513,847
Effect of retrospective application		—		—			—		—		21,920			—			—		—			21,920			3,568			25,488
BALANCE, JANUARY 1, 2015 AS ADJUSTED		77,574,465		168,047,935			76,893,722		2,819,899		38,231,982			146,442			739,988		(283	)		364,454,150			5,085,185			369,539,335
Other change in additional paid-in capital:
Change in additional paid-in capital from investments in associates and joint ventures accounted for using equity method		—		(885	)		—		—		—			—			—		—			(885	)		(1,404	)		(2,289	)
Actual disposal of interests in subsidiaries		—		26,644			—		—		—			—			—		—			26,644			18,484			45,128
Net income for the three months ended March 31, 2015		—		—			—		—		10,418,425			—			—		—			10,418,425			149,368			10,567,793
Other comprehensive income (loss) for the three months ended March 31, 2015		—		—			—		—		(265	)		(21,122	)		423,075		283			401,971			(5,618	)		396,353
Total comprehensive income for the three months ended March 31, 2015		—		—			—		—		10,418,160			(21,122	)		423,075		283			10,820,396			143,750			10,964,146
Compensation cost of employee stock option of a subsidiary		—		—			—		—		—			—			—		—			—			14,481			14,481
BALANCE, MARCH 31, 2015	$	77,574,465	$	168,073,694		$	76,893,722	$	2,819,899	$	48,650,142		$	125,320		$	1,163,063	$	—		$	375,300,305		$	5,260,496		$	380,560,801

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

(Concluded)

8

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

	Three Months Ended March 31
	2015 (Reviewed)			2014 (Adjusted and Reviewed)
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax	$	12,523,058		$	12,340,618
Adjustments to reconcile income before income tax to net cash provided by operating activities:
Depreciation		7,783,538			8,043,905
Amortization		770,295			323,496
Provision for doubtful accounts		180,264			51,292
Interest expenses		8,657			8,726
Interest income		(67,297	)		(59,123	)
Compensation cost of employee stock options		14,481			26,566
Gain on disposal of associates accounted for using equity method		(7,409	)		—
Share of the profit of associates and joint ventures accounted for using equity method		(300,526	)		(172,106	)
Impairment loss on available-for-sale financial assets		25,910			—
Impairment loss on financial assets carried at cost		—			629
Provision for inventory and obsolescence		53,386			156,848
Loss (gain) on disposal of financial instruments		240			(15,662	)
Loss on disposal of property, plant and equipment		29,100			8,510
Loss on disposal of intangible assets		20			—
Valuation loss on financial instruments at fair value through profit or loss, net		288			713
Gain on foreign exchange		(113,624	)		(71,990	)
Changes in operating assets and liabilities:
Decrease (increase) in:
Financial assets held for trading		1,142			91
Trade notes and accounts receivable		(1,545,056	)		(132,198	)
Receivables from related parties		20,451			7,285
Inventories		165,821			(1,252,509	)
Other current monetary assets		292,428			(72,805	)
Prepayments		(3,383,542	)		(3,108,505	)
Other current assets		302,729			(63,673	)
Increase (decrease) in:
Trade notes and accounts payable		(3,622,725	)		(3,192,133	)
Payables to related parties		(152,314	)		(54,025	)
Other payables		(1,205,451	)		(3,077,926	)
Provisions		25,471			9,540
Advance receipts		(368,695	)		(69,387	)
Other current liabilities		(128,225	)		3,077

(Continued)

9

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

	Three Months Ended March 31
	2015 (Reviewed)			2014 (Adjusted and Reviewed)
Deferred revenue	$	319,098		$	(85,918	)
Net defined benefit liabilities		99,942			98,375
Cash generated from operations		11,721,455			9,651,711
Interest paid		(8,775	)		(8,711	)
Income tax refunded (paid)		72,543			(26,679	)
Net cash provided by operating activities		11,785,223			9,616,321
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of available-for-sale financial assets		—			44,217
Acquisition of time deposits and negotiable certificate of deposits with maturities of more than three months		(1,000	)		(230,951	)
Proceeds from disposal of time deposits and negotiable certificate of deposits with maturities of more than three months		135,800			322,212
Proceeds from disposal of held-to-maturity financial assets		700,000			650,388
Acquisition of financial assets carried at cost		—			(26,719	)
Proceeds from disposal of financial assets carried at cost		966			—
Acquisition of investments accounted for using equity method		—			(50,000	)
Proceeds from disposal of investments accounted for using equity method		10,847			—
Acquisition of property, plant and equipment		(5,531,847	)		(5,768,063	)
Proceeds from disposal of property, plant and equipment		397			5,274
Acquisition of intangible assets		(74,653	)		(58,272	)
Decrease (increase) in other noncurrent assets		238,547			(188,118	)
Interest received		68,850			60,952
Net cash used in investing activities		(4,452,093	)		(5,239,080	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term loans		1,050,000			50,000
Repayment of short-term loans		(1,054,400	)		—
Repayment of long-term loans		(50,000	)		—
Decrease in customers’ deposits		(123,227	)		(78,328	)
Increase in other noncurrent liabilities		74,194			18,225
Actual disposal of interests in subsidiaries without losing control		45,128			—
Net cash used in financing activities		(58,305	)		(10,103	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS		(32,963	)		33,713

(Continued)

10

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

	Three Months Ended March 31
	2015 (Reviewed)		2014 (Adjusted and Reviewed)
NET INCREASE IN CASH AND CASH EQUIVALENTS	$	7,241,862	$	4,400,851
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		23,559,603		14,585,105
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	30,801,465	$	18,985,956

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

(Concluded)

11

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2015 AND 2014

(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 to as Chunghwa which continues to carry out the business and the DGT continues to be the industry regulator.

As the dominant telecommunications service provider of domestic and international fixed-line, Global System for Mobile Communications (“GSM”), and Third Generation (“3G”) in the ROC, Chunghwa is subject to additional regulations imposed by the ROC.

Effective August 12, 2005, the MOTC had 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 shares were listed and traded on the Taiwan Stock Exchange (the “TWSE”) on October 27, 2000. Certain of Chunghwa’s common shares 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 shares 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 shares 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 and authorized for issue by the Board of Directors on May 11, 2015.

12

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Statement of Compliance

The accompany consolidated financial statements have been prepared in conformity with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting,” endorsed by the Financial Supervisory Commission (the “FSC”). The consolidated financial statements do not present full disclosures required for a complete set of the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), and the Interpretations as well as related guidance translated by Accounting Research and Development Foundation (ARDF) endorsed by the FSC (collectively, “Taiwan-IFRSs”) annual consolidated financial statements.

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, 2015		December 31, 2014		March 31, 2014		Note
Chunghwa Telecom Co., Ltd.	Senao International Co., Ltd. (“SENAO”)	Selling and maintaining mobile phones and its peripheral products		28		28		28	1)
	Light Era Development Co., Ltd. (“LED”)	Housing, office building development, rent and sale services		100		100		100
	Donghwa Telecom Co., Ltd. (“DHT”)	International telecommunications IP fictitious internet and internet transfer services		100		100		100
	Chunghwa Telecom Singapore Pte., Ltd. (“CHTS”)	Telecommunication wholesale, internet transfer services international data and long distance call wholesales to carriers		100		100		100
	Chunghwa System Integration Co., Ltd. (“CHSI”)	Providing communication and information aggregative services		100		100		100
	Chunghwa Investment Co., Ltd. (“CHI”)	Investment		89		89		89
	CHIEF Telecom Inc. (“CHIEF”)	Internet communication and internet data center (“IDC”) service		69		69		69	2)
	Chunghwa International Yellow Pages Co., Ltd. (“CHYP”)	Yellow pages sales 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”)	Network services, producing digital entertainment contents and broadband visual sound terrace development		56		56		56
	Chunghwa Telecom Global, Inc. (“CHTG”)	International data and internet services and long distance call wholesales to carriers		100		100		100
	Chunghwa Telecom Vietnam Co., Ltd. (“CHTV”)	Information and communications technology, international circuit, and intelligent energy network service		100		100		100
	Smartfun Digital Co., Ltd. (“SFD”)	Software retail		65		65		65
	Chunghwa Telecom Japan Co., Ltd. (“CHTJ”)	Telecom business, information process and information provide service, development and sale of software and consulting services in telecommunication		100		100		100
	Chunghwa Sochamp Technology Inc. (“CHST”)	License plate recognition system		51		51		51
	Honghwa International Co., Ltd. (“HHI”)	Human resources service		100		100		100	3)
	New Prospect Investments Holdings Ltd. (B.V.I.) (“New Prospect”)	Investment		100		100		100
Senao International Co., Ltd.	Senao International (Samoa) Holding Ltd. (“SIS”)	International investment		100		100		100
CHIEF Telecom Inc.	Unigate Telecom Inc. (“Unigate”)	Telecommunication and internet service		100		100		100
	Chief International Corp. (“CIC”)	Investment		100		100		100
Chunghwa System Integrated Co., Ltd.	Concord Technology Co., Ltd. (“Concord”)	Investment		100		100		100
Spring House Entertainment Tech. Inc.	Ceylon Innovation Ltd. (“CEI”)	International trading, general advertisement and book publishment service		100		100		100
Light Era Development Co., Ltd.	Yao Yong Real Property Co., Ltd. (“YYRP”)	Real estate management and leasing business		—		—		100	4)

(Continued)

13

			Percentage of Ownership
Name of Investor	Name of Investee	Main Businesses and Products	March 31, 2015		December 31, 2014		March 31, 2014		Note
Chunghwa Investment Co., Ltd.	Chunghwa Precision Test Tech Co., Ltd. (“CHPT”)	Semiconductor testing components and printed circuit board industry production and marketing of electronic products		46		48		51	5)
	Chunghwa Investment Holding Co., Ltd. (“CIHC”)	Investment		100		100		100
Concord Technology Co., Ltd.	Glory Network System Service (Shanghai) Co., Ltd. (“GNSS (Shanghai)”)	Planning and design of software and hardware system services and integration of information system		100		100		100
Chunghwa Precision Test Tech. Co., Ltd.	Chunghwa Precision Test Tech. USA Corporation (“CHPT (US)”)	Semiconductor testing components and printed circuit board industry production and marketing of electronic products		100		100		100
	CHPT Japan Co., Ltd. (“CHPT (JP)”)	Sale and maintenance of electronic parts and machinery processed products, and design of printed circuit board		100		100		100
	Chunghwa Precision Test Tech. International, Ltd. (“CHPT (International)”)	Electronic materials wholesale and retail and investment		100		100		100
Senao International (Samoa) Holding Ltd.	Senao International HK Limited (“SIHK”)	International investment		100		100		100
Chunghwa Investment Holding Co., Ltd.	CHI One Investment Co., Limited (“COI”)	Investment		100		100		100
Senao International HK Limited	Senao Trading (Fujian) Co., Ltd. (“STF”)	Information technology services and sale of communication products		100		100		100
	Senao International Trading (Shanghai) Co., Ltd. (“SITS”)	Information technology services and sale of communication products		100		100		100
	Senao International Trading (Shanghai) Co., Ltd. (“SEITS”)	Information technology services and maintenance of communication products		100		100		100
	Senao International Trading (Jiangsu) Co., Ltd. (“SITJ”)	Information technology services and sale of communication products		100		100		100
Prime Asia Investments Group Ltd. (B.V.I.)	Chunghwa Hsingta Co., Ltd. (“CHC”)	Investment		100		100		100
Chunghwa Hsingta Company Ltd.	Chunghwa Telecom (China) Co., Ltd. (“CTC”)	Planning and design of energy conservation and software and hardware system services, and integration of information system		100		100		100
	Jiangsu Zhenhua Information Technology Company, LLC. (“JZIT”)	Intelligent energy conserving and intelligent building services		75		75		75
	Hua-Xiong Information Technology Co., Ltd. (“HXIT”)	Intelligent system and energy saving system services in buildings		51		51		51
Chunghwa Precision Test Tech. International, Ltd. (“CHPT (International)”)	Shanghai Taihua Electronic Technology Limited (“STET”)	Design of printed circuit board and related consultation service		100		100		100

(Concluded)

1) The Company owns 28% equity shares of SENAO. However, the Company has four out of seven seats of the board of directors of SENAO through the support of large beneficial shareholders. Therefore, the Company has control over SENAO and the accounts of SENAO are included in the consolidated financial statements.

2) The Company’s equity ownership of CHIEF decreased due to CHIEF issued employee stock bonus in July 2014. The Company owned 73.02%, 72.51% and 72.51% equity shares of CHIFF as of March 31, 2014, December 31, 2014 and March 31, 2015, respectively.

3) Chunghwa established 100% owned subsidiary of Honghwa Human Resources in January 2013. Honghwa Human Resources changed its name to Honghwa International from July 4, 2014.

4) LED merged YYRP by absorption in October 2014.

5) The Company did not participate in the capital increase of CHPT in August and September 2014 and CHI disposed of some shares in January 2015, so the ownership interest of CHI decreased. The Company owned 50.62%, 47.65% and 45.68% equity shares of CHPT as of March 31, 2014, December 31, 2014 and March 31, 2015, respectively. The Company has three out of five seats of the board of directors of CHPT. In addition, considering Company’s absolute size, the relative size and dispersion of the shareholdings owned by the other shareholders, the management concluded that the Company has a sufficiently dominant voting interest to direct the relevant activities; hence, CHPT is deemed as a subsidiary of the Company.

14

The following diagram presents information regarding the relationship and ownership percentages between Chunghwa and its subsidiaries as of March 31, 2015:

Other Significant Accounting Policies

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, 2014, except for those described below:

a. Investments in associates and joint ventures

An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor an interest in a joint venture. Joint venture arrangements that involve the establishment of a separate entity in which venturers have joint control over the economic activity of the entity are referred to as joint venture.

The operating results and identifiable net assets of associates and joint ventures are incorporated in these consolidated financial statements using the equity method of accounting. Under the equity method, an investment in an associate and joint venture is initially recognized in the consolidated balance sheet at cost and adjusted thereafter to recognize the Company’s share of the profit or loss, any impairment losses, and other comprehensive income of the associate and joint venture. The Company also recognizes the changes in the Company’s share of equity of associates and joint venture attributable to the Company.

When the Company reduces its ownership interest in an associate or a joint venture but the Company continues to use the equity method, the Company reclassifies to profit or loss the proportion of the gain or loss that had previously been recognized in other comprehensive income relating to that reduction in ownership interest if that gain or loss would be reclassified to profit or loss on the disposal of the related assets or liabilities.

15

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

The entire carrying amount of the investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

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

b. Defined retirement benefit costs

For defined benefit retirement benefit plans, the cost (including service cost, net interest expense or income and remeasurement) of providing benefits is determined using the Projected Unit Credit Method. Service cost (including current service cost, as well as gains and losses on settlements) and net interest expense or income is recognized in profit or loss when occurs, amendments to pension plans and settlement occurs. Remeasurement (comprising actuarial gains and losses and the return on plan assets excluding interest) recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

The retirement benefit obligation (asset) recognized in the consolidated balance sheet represents the actual deficit or surplus in the Company’s defined retirement benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.

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 significant curtailments, settlements, or other significant one-time events.

c. Taxation

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

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

4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Company’s accounting policies, the managements are 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.

16

The estimates and underlying assumptions are reviewed 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.

The same critical accounting judgments and key sources of estimation uncertainty of consolidated financial statements have been followed in these consolidated financial statements as were applied in the preparation of the consolidated financial statements for the year ended December 31, 2014, except for those described below:

Control over subsidiaries

Note 3 describes that several companies are subsidiaries of the Company although the Company only owns less than 50% ownership interest. After considering the Company’s absolute size of holding and the relative size of and dispersion of the shareholdings owned by the other shareholders, and the contractual arrangements between the Company and other investors, the management concluded that the Company has a sufficiently dominant voting interest to direct the relevant activities and therefore the Company has control over several companies.

5. APPLICATION OF NEW AND REVISED STANDARDS AND INTERPRETATIONS

a. Initial application of the revised Guidelines Governing the Preparation of Financial Reports by Securities Issuers and the 2013 version of the IFRS, IAS, IFRIC, and SIC endorsed by the FSC (collectively, “2013 Taiwan-IFRSs version”) in issue.

According to Rule No. 1030029342 and Rule No. 1030010325 issued by the FSC, the following 2013 IFRS version endorsed by the FSC and the related amendments to the Guidelines Governing the Preparation of Financial Reports by Securities Issuers should be adopted by the Company starting 2015.

The Company believes that as a result of the adoption of aforementioned 2013 Taiwan-IFRSs version and the related amendments to the revised Guidelines Governing the Preparation of Financial Reports by Securities Issuers, the following items have impacted the Company’s consolidated financial statements:

1) IFRS 12 “Disclosure of Interests in Other Entities”

IFRS 12 is a new disclosure standard and is applicable to entities that have interests in subsidiaries, joint arrangements, associates and/or unconsolidated structured entities. In general, the disclosure requirements in IFRS 12 are more extensive than in the previous standards. Refer to Notes 15 and 16 for related disclosures.

2) IFRS 13 “Fair Value Measurement”

IFRS 13 establishes a single source of guidance for fair value measurements. It defines fair value, establishes a framework for measuring fair value, and requires disclosures about fair value measurements. The disclosure requirements in IFRS 13 are more extensive than those required by the current standards. For example, quantitative and qualitative disclosures based on the three-level fair value hierarchy currently required for financial instruments only is extended by IFRS 13 to cover all assets and liabilities within its scope. Refer to Notes 18 and 38 for related disclosures.

17

3) Amendments to IAS 1 “Presentation of Items of Other Comprehensive Income”

The amendments to IAS 1 requires items of other comprehensive income to be grouped into those items that (1) will not be reclassified subsequently to profit or loss; and (2) may be reclassified subsequently to profit or loss. Income taxes on related items of other comprehensive income are grouped on the same basis. Under current IAS 1, there were no such requirements.

The Company retrospectively applied the above amendments starting in 2015. The items that will not be reclassified subsequently to profit or loss include remeasurements of defined benefit pension plans, the share of remeasurements of defined benefit pension plans of associates and joint ventures as well as the related income tax on such items. Items that will be reclassified subsequently to profit or loss include exchange differences arising on translation of foreign operations, changes in fair value of available-for-sale financial assets, cash flow hedges, the share of other comprehensive income of associates and joint ventures as well as the related income tax on items of other comprehensive income (except for the share of remeasurements of defined benefit pension plans of associates and joint ventures). However, the application of the above amendments did not have any impact on the net income, other comprehensive income (net of income tax), and total comprehensive income.

4) Revision to IAS 19 “Employee Benefits”

The amendments to IAS 19 change the accounting for defined benefit plans, which require the Company to recognize changes in defined benefit obligations or assets and to disclose the components of the defined benefit costs. According to the amendments, the past service cost, is expensed immediately when incurred and no longer amortized over the average period before becoming vested on a straight-line basis. In addition, the revised IAS 19 introduces certain changes in the presentation of the defined benefit cost, and also includes more extensive disclosures.

On initial application of the revised IAS 19, the changes in cumulative employee benefit costs as of January 1, 2014 resulting from the retrospective application are adjusted to net defined benefit liabilities, deferred tax assets, retained earnings, and noncontrolling interests as of January 1, 2014. In addition, in preparing the consolidated financial statements for the year ending December 31, 2015, the Company elects not to present 2014 comparative information about the sensitivity analysis of the defined benefit obligation.

On initial application of the revised IAS 19, the Company’s deferred tax assets increased by $221 thousand, net defined benefit liabilities increased by $1,298 thousand as of March 31, 2015. For the three months ended March 31, 2015, pension cost increased by $1,298 thousand which caused an increase in operating expenses, and income tax expenses decreased by $221 thousand.

As a result of the retrospective application of the revised IAS 19, the Company’s deferred tax asset decreased by $5,220, $5,918 and $6,103 thousand as of December 31, 2014, March 31, 2014, and January 1, 2014, respectively. Net defined benefit liabilities decreased by $30,708, $34,814 and $35,898 thousand. Retained earnings increased by $21,920, $25,188, and $26,040 thousand respectively; noncontrolling interests increased by $3,568, $3,708, and $3,755 thousand as of December 31, 2014, March 31, 2014, and January 1, 2014, respectively. For the three months ended March 31, 2014, pension cost increased by $1,084 thousand which caused an increase in operating expenses and income tax expenses decreased by $185 thousand.

b. The IFRSs issued by International Accounting Standard Board (“IASB”) but not endorsed by FSC

The Company has not applied the following IFRSs issued by the IASB but not endorsed by the FSC. As of the date that the consolidated financial statements were authorized for issue, the initial adoption to the following standards and interpretations is still subject to the effective date to be published by the FSC.

18

New, Revised or Amended Standards and Interpretations		Effective Date Issued by IASB (Note 1)
Amendments to IFRSs	Annual Improvements to IFRSs 2010-2012 Cycle	July 1, 2014 (Note 2)
Amendments to IFRSs	Annual Improvements to IFRSs 2011-2013 Cycle	July 1, 2014
Amendments to IFRSs	Annual Improvements to IFRSs 2012-2014 Cycle	January 1, 2016 (Note 3)
IFRS 9	Financial Instruments	January 1, 2018
Amendments to IFRS 9 and IFRS 7	Mandatory Effective Date of IFRS 9 and Transition Disclosures	January 1, 2018
Amendments to IFRS 10 and IAS 28	Sale or Contribution of Assets between an Investor and its Associate or Joint Venture	January 1, 2016 (Note 4)
Amendments to IFRS 10, IFRS 12 and IAS 28	Investment Entities: Applying the Consolidation Exception	January 1, 2016
Amendment to IFRS 11	Acquisitions of Interests in Joint Operations	January 1, 2016
IFRS 14	Regulatory Deferral Accounts	January 1, 2016
IFRS 15	Revenue from Contracts with Customers	January 1, 2017
Amendment to IAS 1	Disclosure Initiative	January 1, 2016
Amendments to IAS 16 and IAS 38	Clarification of Acceptable Methods of Depreciation and Amortization	January 1, 2016
Amendments to IAS 16 and IAS 41	Agriculture: Bearer Plants	January 1, 2016
Amendment to IAS 19	Defined Benefit Plans: Employee Contributions	July 1, 2014
Amendment to IAS 36	Impairment of Assets: Recoverable Amount Disclosures for Non-financial Assets	January 1, 2014
Amendment to IAS 39	Novation of Derivatives and Continuation of Hedge Accounting	January 1, 2014
IFRIC 21	Levies	January 1, 2014

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

Note 2: The amendment to IFRS 2 applies to share-based payment transactions with grant date on or after July 1, 2014; the amendment to IFRS 3 applies to business combinations with acquisition date on or after July 1, 2014; the amendment to IFRS 13 is effective immediately; the remaining amendments are effective for annual periods beginning on or after July 1, 2014.

Note 3: The amendment to IFRS 5 is applied prospectively to changes in a method of disposal that occur in annual periods beginning on or after January 1, 2016; the remaining amendments are effective for annual periods beginning on or after January 1, 2016.

Note 4: Prospectively applicable to transactions occurring in annual periods beginning on or after January 1, 2016.

19

Except for the following, the initial application of the above new standards and interpretations have not had any material impact on the Company’s consolidated financial statements:

- IFRS 15 “Revenue from Contracts with Customers”

IFRS 15 establishes principles for recognizing revenue that apply to all contracts with customers, and will supersedes IAS 18 “Revenue”, IAS 11 “Construction Contracts” and a number of revenue-related interpretations.

When applying IFRS 15, an entity shall recognize revenue by applying the following steps:

• Identify the contract with the customer;

• Identify the performance obligations in the contract;

• Determine the transaction price;

• Allocate the transaction price to the performance obligations in the contracts; and

• Recognize revenue when the entity satisfies a performance obligation.

When IFRS 15 is effective, the Company may elect to apply this Standard either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this Standard recognized at the date of initial application.

Except for the abovementioned impact, as of the date the consolidated financial statements were authorized for issue, the Company is continuingly assessing the possible impact that the application other standards and interpretations will have on the Company’s financial position and operating result, and will disclose the relevant impact when the assessment is complete.

6. CASH AND CASH EQUIVALENTS

	March 31, 2015		December 31, 2014		March 31, 2014
Cash
Cash on hand	$	211,630	$	310,189	$	219,912
Bank deposits		5,347,184		5,588,970		5,860,705
		5,558,814		5,899,159		6,080,617
Cash equivalents
Commercial paper		15,018,453		13,999,986		12,431,722
Negotiable certificate of deposit		9,200,000		3,100,000		56,055
Time deposits with maturities of less than three months		1,024,198		560,458		417,562
		25,242,651		17,660,444		12,905,339
	$	30,801,465	$	23,559,603	$	18,985,956

The annual yield rates of bank deposits, commercial paper, negotiable certificate of deposit, and time deposits with maturities of less than three months were as follows:

	March 31, 2015	December 31, 2014	March 31, 2014
Bank deposits	0.00%-0.95%	0.00%-0.95%	0.00%-0.45%
Commercial paper	0.58%-0.62%	0.58%-0.65%	0.56%-0.65%
Negotiable certificate of deposit	0.58%-0.80%	0.50%-0.80%	0.83%-1.35%
Time deposits with maturities of less than three months	0.32%-5.30%	0.38%-5.45%	0.30%-5.47%

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7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

	March 31, 2015		December 31, 2014		March 31, 2014
Financial assets held for trading
Derivatives (not designated for hedge)
Forward exchange contracts	$	193	$	1,163	$	58
Financial liabilities held for trading
Derivatives (not designated for hedge)
Forward exchange contracts	$	481	$	21	$	771

Outstanding forward exchange contracts as of balance sheet dates were as follows:

			Contract Amount
	Currency	Maturity Period	(In Thousands)
March 31, 2015
Forward exchange contracts - buy	NT$/US$	2015.04	NT$193,505/US$6,156
December 31, 2014
Forward exchange contracts - buy	NT$/US$	2015.01	NT$218,993/US$6,948
March 31, 2014
Forward exchange contracts - buy	NT$/US$	2014.04	NT$373,900/US$12,250

The Company entered into 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 and were classified as financial assets or financial liabilities held for trading.

8. AVAILABLE-FOR-SALE FINANCIAL ASSETS

	March 31, 2015		December 31, 2014		March 31, 2014
Equity securities
Domestic listed stocks and emerging stocks	$	4,316,492	$	3,914,212	$	2,782,364
Current	$	—	$	—	$	—
Noncurrent		4,316,492		3,914,212		2,782,364
	$	4,316,492	$	3,914,212	$	2,782,364

CHI evaluated and concluded its available-for-sale financial assets were partially impaired, and recorded an impairment loss of $25,910 thousand for the three months ended March 31, 2015.

21

9. HELD-TO-MATURITY FINANCIAL ASSETS

	March 31, 2015		December 31, 2014		March 31, 2014
Corporate bonds	$	6,029,794	$	6,533,527	$	9,856,461
Bank debentures		750,230		950,742		1,252,420
	$	6,780,024	$	7,484,269	$	11,108,881
Current	$	2,754,230	$	3,456,747	$	4,312,712
Noncurrent		4,025,794		4,027,522		6,796,169
	$	6,780,024	$	7,484,269	$	11,108,881

The related information of corporate bonds and bank debentures as of balance sheet dates were as follows:

	March 31, 2015		December 31, 2014		March 31, 2014
Corporate bonds
Par value	$	6,015,000	$	6,515,000	$	9,822,500
Nominal interest rate		1.18%-2.49%		1.15%-2.49%		1.15%-2.49%
Effective interest rate		1.15%-1.58%		1.15%-1.58%		1.00%-1.95%
Average expiry date		4 years		4 years		4 years
Bank debentures
Par value	$	750,000	$	950,000	$	1,250,000
Nominal interest rate		1.25%-1.60%		1.25%-1.60%		1.25%-1.60%
Effective interest rate		1.25%-1.40%		1.15%-1.40%		1.15%-1.40%
Average expiry date		4 years		4 years		4 years

10. TRADE NOTES AND ACCOUNTS RECEIVABLE, NET

	March 31, 2015			December 31, 2014			March 31, 2014
Trade notes and accounts receivable	$	28,784,191		$	27,277,401		$	23,934,644
Less: Allowance doubtful accounts		(1,178,416	)		(1,049,402	)		(946,824	)
	$	27,605,775		$	26,227,999		$	22,987,820

The average credit terms range from 30 to 90 days. In determining the recoverability of trade notes and accounts receivable, the Company considers significant change in the credit quality of the trade notes and accounts receivable from the date credit was initially granted up to the end of the reporting period. In general, with few exceptional cases, it is unlikely for the notes and accounts receivable due longer than 180 days to be collected, therefore the Company recognized 100% allowance of notes and accounts receivable overdue longer than 180 days. For the notes and accounts receivable less than 180 days, the allowance for doubtful accounts was estimated based on the Company’s historical recovery experience.

The Company serves a large consumer base; therefore, the concentration of credit risk is limited.

22

The aging of estimated recoverable amount of receivables that were past due but not impaired as of March 31, 2015, December 31, 2014 and March 31, 2014 was as follows:

	March 31, 2015		December 31, 2014		March 31, 2014
Less than 30 days	$	152,753	$	114,155	$	62,856
31-60 days		62,194		20,282		66,265
61-90 days		161,371		19,656		20,425
91-120 days		5,037		19,084		5,980
121-180 days		7,082		634		79,380
More than 181 days		20,750		16,768		12,555
	$	409,187	$	190,579	$	247,461

The above aging analysis was based on days overdue.

Movements of the allowance for doubtful accounts were as follows:

	Individually Assessed for Impairment		Collectively Assessed for Impairment			Total
Balance on January 1, 2014	$	221,164	$	700,938		$	922,102
Add: Provision for doubtful accounts		23,676		24,982			48,658
Deduct: Amounts written off		—		(23,936	)		(23,936	)
Balance on March 31, 2014	$	244,840	$	701,984		$	946,824
Balance on January 1, 2015	$	276,659	$	772,743		$	1,049,402
Add: Provision for doubtful accounts		8,014		165,211			173,225
Deduct: Amounts written off		—		(44,211	)		(44,211	)
Balance on March 31, 2015	$	284,673	$	893,743		$	1,178,416

11. INVENTORIES

	March 31, 2015		December 31, 2014		March 31, 2014
Merchandise	$	3,883,395	$	4,163,434	$	5,958,141
Project in process		814,899		821,644		861,732
Work in process		53,060		13,307		31,651
Raw materials		79,887		52,165		35,385
		4,831,241		5,050,550		6,886,909
Land and building held for sale		—		—		8,166
Land held under development		1,998,733		1,998,733		1,998,733
Construction in progress		47,328		47,226		46,024
Land held for development		—		—		3,916
	$	6,877,302	$	7,096,509	$	8,943,748

The operating costs related to inventories were $13,032,016 thousand (including the valuation loss on inventories of $53,386 thousand) and $11,249,457 thousand (including the valuation loss on inventories of $156,848 thousand) for the three months ended March 31, 2015 and 2014, respectively.

23

As of March 31, 2015, December 31, 2014 and March 31, 2014, inventories of $2,046,061 thousand, $2,061,297 thousand and $2,064,807 thousand, respectively, were expected to be recovered after more than twelve months. The aforementioned amount of inventories is mainly related to property development owned by LED.

Land held under development and construction in progress on March 31, 2015, December 31, 2014 and March 31, 2014, was for Qingshan Sec., Dayuan Township, Taoyuan County project.

12. PREPAYMENTS

	March 31, 2015		December 31, 2014		March 31, 2014
Prepaid rents	$	3,248,515	$	3,330,118	$	3,520,775
Prepaid salary and bonus		3,193,545		4,746		3,201,045
Others		2,890,278		2,613,932		2,219,302
	$	9,332,338	$	5,948,796	$	8,941,122
Current
Prepaid salary and bonus	$	3,193,545	$	4,746	$	3,201,045
Prepaid rents		1,070,437		1,104,778		1,137,733
Others		1,545,275		1,334,934		1,012,294
	$	5,809,257	$	2,444,458	$	5,351,072
Noncurrent
Prepaid rents	$	2,178,078	$	2,225,340	$	2,383,042
Others		1,345,003		1,278,998		1,207,008
	$	3,523,081	$	3,504,338	$	3,590,050

13. OTHER CURRENT MONETARY ASSETS

	March 31, 2015		December 31, 2014		March 31, 2014
Time deposits and negotiable certificate of deposit with maturities of more than three months	$	2,480,167	$	2,616,192	$	2,444,598
Receivables from the Fund for Privatization of Government - owned Enterprises under the Executive Yuan (Note 28)		14,038		19,527		1,332,368
Others		398,349		689,635		844,562
	$	2,892,554	$	3,325,354	$	4,621,528

24

The annual yield rates of time deposits and negotiable certificate of deposit with maturities of more than three months at each balance sheet date were as follows:

	March 31, 2015	December 31, 2014	March 31, 2014
Time deposits and negotiable certificate of deposit with maturities of more than three months	0.11%-3.10%	0.11%-4.95%	0.11%-3.20%

14. FINANCIAL ASSETS CARRIED AT COST

	March 31, 2015		December 31, 2014		March 31, 2014
Non-listed stocks
Domestic	$	2,104,029	$	2,105,235	$	2,223,022
Foreign		260,963		261,295		226,348
	$	2,364,992	$	2,366,530	$	2,449,370

The above non-listed stocks are classified as available-for-sale financial assets based on financial assets categories (see Note 38). Since the range of fair values measurement is significant and difficult to reasonably evaluate the possibilities of the estimations, the fair values of the investments cannot be reliably measured, thus the above non-listed stocks investments owned by the Company were carried at costs less any impairment losses at the balance sheet date.

The Company evaluated and concluded there was no impairment indication for its financial assets carried at cost, thus the Company did not recognize any impairment loss for the three months ended March 31, 2015.

CHI evaluated and concluded its financial assets carried at cost were partially impaired, and recorded an impairment loss of $629 thousand for the three months ended March 31, 2014.

15. NON-WHOLLY OWNED SUBSIDIARIES THAT HAVE NONCONTROLLING MATERIAL INTERESTS

The table below shows details of less than wholly owned subsidiaries of the Company that have material noncontrolling interests:

	Place of Incorporation and Principal Place of Business	Proportion of Ownership Interests and Voting Rights Held by Noncontrolling Interests
Subsidiaries		March 31, 2015	December 31, 2014	March 31, 2014
SENAO	Taiwan	72%	72%	72%

25

	Profit Allocated to Noncontrolling Interests				Accumulated Noncontrolling Interests
	Three Months Ended March 31				March 31, 2015		December 31, 2014		March 31, 2014
	2015		2014
SENAO	$	106,033	$	131,419	$	4,278,159	$	4,165,910		4,566,499
Individually immaterial subsidiaries with noncontrolling interests		43,335		18,786		982,337		919,275		657,666
	$	149,368	$	150,205	$	5,260,496	$	5,085,185	$	5,224,165

Summarized financial information in respect of SENAO that has material noncontrolling interests is set out below. The summarized financial information below represents amounts before intracompany eliminations.

Senao	March 31, 2015			December 31, 2014			March 31, 2014
Current assets	$	7,810,227		$	7,943,537		$	8,843,269
Noncurrent assets		2,512,157			2,497,896			2,452,369
Current liabilities		(4,325,741	)		(4,594,998	)		(4,866,337	)
Noncurrent liabilities		(91,884	)		(93,597	)		(91,230	)
Equity	$	5,904,759		$	5,752,838		$	6,338,071
Equity attributable to the parent	$	1,626,600		$	1,586,928		$	1,771,572
Equity attributable to noncontrolling interests		4,278,159			4,165,910			4,566,499
	$	5,904,759		$	5,752,838		$	6,338,071

	Three Months Ended March 31
	2015			2014
Revenues	$	9,220,106		$	10,638,181
Expenses		9,072,974			10,455,317
Profit for the period	$	147,132		$	182,864
Profit attributable to the parent	$	41,099		$	51,445
Profit attributable to the noncontrolling interests		106,033			131,419
Profit for the period	$	147,132		$	182,864
Other comprehensive loss attributable to the parent	$	(2,447	)	$	(1,984	)
Other comprehensive loss attributable to the noncontrolling interests		(6,357	)		(5,154	)
Other comprehensive loss for the period	$	(8,804	)	$	(7,138	)
Total comprehensive income attributable to the parent	$	38,652		$	49,461
Total comprehensive income attributable to the noncontrolling interests		99,676			126,265
Total comprehensive income for the period	$	138,328		$	175,726
Net cash inflow from operating activities	$	207,922		$	249,378
Net cash inflow (outflow) from investing activities		140			(47,162	)
Net cash outflow from financing activities		(2,510	)		(2,856	)
Net cash inflow	$	205,552		$	199,360

26

CHI disposed of partial shares of CHPT on January 2015, and the ownership interest decreased from 47.65% to 45.68%.

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

	CHPT
Proceeds from disposal	$	45,128
The proportionate share of the carrying amount of the net assets of the subsidiary transferred to noncontrolling interests		(18,484	)
Differences arising from equity transaction	$	26,644
Line items for equity transaction adjustment
Capital surplus - difference between consideration received and the carrying amount of the subsidiaries’ net assets upon disposal	$	26,644

16. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

	March 31, 2015		December 31, 2014		March 31, 2014
Investments in associates	$	3,007,345	$	2,696,959	$	2,497,061
Joint ventures		247,916		256,666		273,091
	$	3,255,261	$	2,953,625	$	2,770,152

27

a. Investments in associates

Investments in associates were as follows:

	Carrying Amount
	March 31, 2015		December 31, 2014		March 31, 2014
Listed
Senao Networks, Inc. (“SNI”)	$	811,003	$	750,918	$	684,187
Non-listed
ST-2 Satellite Ventures Pte., Ltd. (“STS”)		584,038		558,379		559,737
Taiwan International Standard Electronics Co., Ltd. (“TISE”)		463,178		237,097		277,865
Viettel-CHT Co., Ltd.		295,581		277,700		290,264
International Integrated System, Inc. (“IISI”)		287,560		293,809		293,270
Skysoft Co., Ltd. (“SKYSOFT”)		146,042		138,868		168,342
So-net Entertainment Taiwan Limited (“So-net”)		98,096		99,525		93,275
Taiwan International Ports Logistics Corporation (“TIPL”)		77,943		78,981		—
Kingwaytek Technology Co., Ltd. (“KWT”)		76,713		89,527		69,453
Dian Zuan Integrating Marketing Co., Ltd. (“DZIM”)		64,333		67,352		815
ClickForce Co., Ltd.		37,613		39,028		—
HopeTech Technologies Limited (“HopeTech”)		31,694		31,211		27,096
Alliance Digital Tech Co., Ltd. (“ADT”)		19,426		20,290		27,229
MeWorks LIMITED (HK) (“Meworks”)		8,875		8,965		—
Xiamen Sertec Business Technology Co., Ltd. (“Sertec”)		5,250		5,309		5,528
Panda Monium Company Ltd.		—		—		—
	$	3,007,345	$	2,696,959	$	2,497,061

At the end of the reporting period, the percentage of ownership and voting rights in associates held by the Company were as follows:

	% of Ownership and Voting Right
	March 31, 2015		December 31, 2014		March 31, 2014
Senao Networks, Inc. (“SNI”)		34		34		34
ST-2 Satellite Ventures Pte., Ltd. (“STS”)		38		38		38
Taiwan International Standard Electronics Co., Ltd. (“TISE”)		40		40		40
Viettel-CHT Co., Ltd.		30		30		30
International Integrated System, Inc. (“IISI”)		33		33		33
Skysoft Co., Ltd. (“SKYSOFT”)		30		30		30
So-net Entertainment Taiwan Limited (“So-net”)		30		30		30

(Continued)

28

	% of Ownership and Voting Right
	March 31, 2015		December 31, 2014		March 31, 2014
Taiwan International Ports Logistics Corporation (“TIPL”)		27		27		—
Kingwaytek Technology Co., Ltd. (“KWT”)		26		27		33
Dian Zuan Integrating Marketing Co., Ltd. (“DZIM”)		26		26		13
ClickForce Co., Ltd.		49		49		—
HopeTech Technologies Limited (“HopeTech”)		45		45		45
Alliance Digital Tech Co., Ltd. (“ADT”)		13		13		19
MeWorks LIMITED (HK) (“MeWorks”)		20		20		—
Xiamen Sertec Business Technology Co., Ltd. (“Sertec”)		49		49		49
Panda Monium Company Ltd.		43		43		43

(Concluded)

None of the above associates is considered individually material to the Company. Aggregate information of associates that are not individually material was as follows:

	Three Months Ended March 31
	2015		2014
The Company’s share of the profit	$	309,276	$	176,519
The Company’s share of other comprehensive income		610		7,604
The Company’s share of total comprehensive income	$	309,886	$	184,123

The fair value based on the closing market price of SNI as of the balance sheet date is as follows:

	March 31, 2015		December 31, 2014		March 31, 2014
SNI	$	3,348,965	$	2,868,173	$	2,768,888

Chunghwa and Taiwan International Ports Corporation, Ltd. established TIPL in October 2014. Chunghwa invested $80,000 thousand cash and held 27% ownership of TIPL. TIPL engages mainly in logistics service of increasing cargo movement efficiency.

Chunghwa did not participate in the capital increase of KWT in August and November 2014 and the ownership interest decreased from 33% to 27% after the capital increase of KWT. Chunghwa sold of its partial interest in KWT in January 2015. The gain on disposal of KWT was $7,409 thousand and the ownership interest decreased to 26% after the disposal.

Chunghwa, President Chain Store Corporation and EasyCard Corporation established DZIM in May 2011. Chunghwa participated in the capital increase of DZIM by investing $49,485 thousand in April and June 2014. SENAO participated in the capital increase of DZIM by investing $24,000 thousand in April 2014. As of March 31, 2015, the Company held 26% ownership of DZIM. DZIM engages mainly in information technology service and general advertisement service.

Chunghwa International Yellow Pages Co., Ltd. participated in the capital increase of ClickForce Co., Ltd. by investing $39,000 thousand and held 49% ownership in December 2014. ClickForce Co., Ltd. engages mainly in advertisement services.

29

Chunghwa, Taiwan Mobile Corporation, Asia Pacific Telecom, Vibo Telecom, EasyCard Corporation and Far EasTone Telecommunications established an associate, ADT, in November 2013. Chunghwa invested $30,000 thousand cash and held 19% ownership of ADT. Based on the share of capital commitments, Chunghwa has one seat out of five seats in the board of directors; therefore it has significant influence over ADT. Chunghwa did not participate in the capital increase of ADT in April 2014 and the ownership interest decreased to 13% after the capital increase of ADT. Chunghwa still has one seat out of five seats in the board of directors; therefore it remains an investor with significant influence over ADT. ADT engages mainly in the development of mobile payments and information processing service.

Prime Asia participated in the capital increase of MeWorks by investing $10,000 thousand and held 20% ownership in May 2014. Based on the share of capital commitments, Prime Asia has two seats out of five seats in the board of directors; therefore it has significant influence over MeWorks. MeWorks engages mainly in investment business.

The Company’s share of profit (loss) and other comprehensive income (loss) of investees was recorded based on the reviewed financial statements for the three months ended March 31, 2015 and 2014.

b. Investments in joint ventures

Investments in joint ventures were as follows:

	Carrying Amount						% of Ownership and Voting Rights
	March 31, 2015		December 31, 2014		March 31, 2014		March 31, 2015		December 31, 2014		March 31, 2014
Non-listed
Huada Digital Corporation (“HDD”)	$	216,257	$	218,825	$	224,645		50		50		50
Chunghwa Benefit One Co., Ltd. (“CBO”)		31,659		37,841		48,446		50		50		50
	$	247,916	$	256,666	$	273,091

Chunghwa invested in CBO in February 2014 at $50,000 thousand cash to acquire 50% of its shares and the rest of 50% ownership interest was held by Benefit One Asia Pte, Ltd. (“BOA”), and each obtained half of director seats. Thus, neither Chunghwa nor BOA obtained control over CBO. CBO engages mainly in e-commerce business for employees of corporate members.

Summarized financial information of joint ventures that was not material to the Company was as follows:

	Three Months Ended March 31
	2015			2014
The Company’s share of the loss	$	(8,750	)	$	(4,413	)

The Company’s share of profits of the joint ventures was recorded based on the reviewed financial statements for the three months ended March 31, 2015 and 2014.

30

17. PROPERTY, PLANT AND EQUIPMENT

	Land		Land Improvements			Buildings			Computer Equipment			Telecommunications Equipment			Transportation Equipment			Miscellaneous Equipment			Construction in Progress and Advances Related to Acquisition of Equipment			Total
Cost
Balance on January 1, 2014	$	102,263,330	$	1,546,906		$	67,557,865		$	15,995,696		$	683,118,379		$	3,745,148		$	8,415,325		$	22,852,887		$	905,495,536
Additions		—		—			—			9,097			77,999			19			54,441			4,241,758			4,383,314
Disposal		—		—			(3,851	)		(217,558	)		(2,265,625	)		(19,310	)		(132,112	)		—			(2,638,456	)
Effect of foreign exchange differences		—		—			—			(386	)		35,171			34			(1,453	)		—			33,366
Other		—		(82	)		(2,337	)		79,437			7,361,352			7,524			28,754			(7,462,766	)		11,882
Balance on March 31, 2014	$	102,263,330	$	1,546,824		$	67,551,677		$	15,866,286		$	688,327,276		$	3,733,415		$	8,364,955		$	19,631,879		$	907,285,642
Accumulated depreciation and impairment
Balance on January 1, 2014	$	—	$	(1,104,400	)	$	(21,971,843	)	$	(11,600,999	)	$	(560,313,927	)	$	(1,671,798	)	$	(6,118,453	)	$	—		$	(602,781,420	)
Depreciation Expenses		—		(13,413	)		(310,067	)		(363,154	)		(7,008,330	)		(147,332	)		(197,467	)		—			(8,039,763	)
Disposal		—		—			2,556			216,087			2,263,430			19,291			123,308			—			2,624,672
Effect of foreign exchange differences		—		—			—			151			(3,763	)		(13	)		614			—			(3,011	)
Other		—		(11	)		4,613			3,380			(11,357	)		(3,553	)		4,451			—			(2,477	)
Balance on March 31, 2014	$	—	$	(1,117,824	)	$	(22,274,741	)	$	(11,744,535	)	$	(565,073,947	)	$	(1,803,405	)	$	(6,187,547	)	$	—		$	(608,201,999	)
Balance on January 1, 2014, net	$	102,263,330	$	442,506		$	45,586,022		$	4,394,697		$	122,804,452		$	2,073,350		$	2,296,872		$	22,852,887		$	302,714,116
Balance on March 31, 2014, net	$	102,263,330	$	429,000		$	45,276,936		$	4,121,751		$	123,253,329		$	1,930,010		$	2,177,408		$	19,631,879		$	299,083,643
Cost
Balance on January 1, 2015	$	102,773,786	$	1,557,544		$	67,600,416		$	15,318,187		$	695,075,672		$	3,824,783		$	8,643,904		$	20,929,731		$	915,724,023
Additions		—		—			7,467			5,564			8,259			—			37,103			3,610,674			3,669,067
Disposal		—		—			—			(38,588	)		(2,730,099	)		(25,529	)		(97,124	)		—			(2,891,340	)
Effect of foreign exchange differences		—		—			—			(482	)		(19,199	)		(18	)		(1,413	)		—			(21,112	)
Other		6,733		(38	)		20,098			38,576			6,780,157			825			17,695			(6,896,705	)		(32,659	)
Balance on March 31, 2015	$	102,780,519	$	1,557,506		$	67,627,981		$	15,323,257		$	699,114,790		$	3,800,061		$	8,600,165		$	17,643,700		$	916,447,979
Accumulated depreciation and impairment
Balance on January 1, 2015	$	—	$	(1,145,434	)	$	(23,202,169	)	$	(11,307,939	)	$	(568,767,123	)	$	(2,207,400	)	$	(6,443,615	)	$	—		$	(613,073,680	)
Depreciation Expenses		—		(13,496	)		(313,974	)		(373,141	)		(6,752,090	)		(151,345	)		(175,012	)		—			(7,779,058	)
Disposal		—		—			—			36,076			2,725,620			25,499			74,648			—			2,861,843
Effect of foreign exchange differences		—		—			—			289			3,389			15			849			—			4,542
Other		—		2			807			(224	)		(41,184	)		(3,983	)		10			—			(44,572	)
Balance on March 31, 2015	$	—	$	(1,158,928	)	$	(23,515,336	)	$	(11,644,939	)	$	(572,831,388	)	$	(2,337,214	)	$	(6,543,120	)	$	—		$	(618,030,925	)
Balance on January 1, 2015, net	$	102,773,786	$	412,110		$	44,398,247		$	4,010,248		$	126,308,549		$	1,617,383		$	2,200,289		$	20,929,731		$	302,650,343
Balance on March 31, 2015, net	$	102,780,519	$	398,578		$	44,112,645		$	3,678,318		$	126,283,402		$	1,462,847		$	2,057,045		$	17,643,700		$	298,417,054

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

Land improvement	8-30 years
Buildings
Main building	35-60 years
Other building facilities	3-20 years
Computer equipment	2-8 years

(Continued)

31

Telecommunications equipment
Telecommunication circuits	2-30 years
Telecommunication machinery and antennas equipment	2-30 years
Transportation equipment	3-10 years
Miscellaneous equipment
Leasehold improvements	2-6 years
Mechanical and air conditioner equipment	3-16 years
Others	3-10 years

(Concluded)

18. INVESTMENT PROPERTIES

Cost
Balance on January 1 and March 31, 2014	$	9,260,015
Accumulated depreciation and impairment
Balance on January 1, 2014	$	(1,241,984	)
Depreciation expense		(4,142	)
Balance on March 31, 2014	$	(1,246,126	)
Balance on January 1, 2014, net	$	8,018,031
Balance on March 31, 2014, net	$	8,013,889
Cost
Balance on January 1, 2015	$	8,883,051
Reclassification		54,103
Balance on March 31, 2015	$	8,937,154
Accumulated depreciation and impairment
Balance on January 1, 2015	$	(1,262,197	)
Depreciation expense		(4,480	)
Reclassification		(155	)
Balance on March 31, 2015	$	(1,266,832	)
Balance on January 1, 2015, net	$	7,620,854
Balance on March 31, 2015, net	$	7,670,322

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

Land improvements	8-30 years
Buildings
Main buildings	35-60 years
Other building facilities	4-10 years

The fair value of the Company’s investment properties as of December 31, 2014 and 2013 was determined by Level 3 fair value measurements inputs based on the appraisal reports conducted by independent appraisers. The Company used the above mentioned appraisal reports as the basis to determine the fair value as of March 31, 2015 and 2014 because there was no material change in the economic environment and the market transaction price. Those appraisal reports are based on the comparison approach, income approach or cost approach. Key assumptions and the fair values were as follows:

	March 31, 2015		December 31, 2014		March 31, 2014
Fair value	$	17,257,051	$	17,179,780	$	17,501,195
Overall capital interest rate		1.54%-2.36%		1.54%-2.36%		1.46%-2.20%
Profit margin ratio		10%-20%		10%-20%		12%-20%
Discount rate		1.36%		1.36%		1.36%
Capitalization rate		0.44%-1.65%		0.44%-1.65%		0.68%-2.02%

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

19. INTANGIBLE ASSETS

	3G and 4G Concession			Computer Software			Goodwill			Others			Total
Cost
Balance on January 1, 2014	$	49,254,000		$	2,637,454		$	180,631		$	117,887		$	52,189,972
Additions-acquired separately		—			58,100			—			172			58,272
Disposal		—			(831	)		—			—			(831	)
Effect of foreign exchange difference		—			63			—			—			63
Balance on March 31, 2014	$	49,254,000		$	2,694,786		$	180,631		$	118,059		$	52,247,476
Accumulated amortization and impairment
Balance on January 1, 2014	$	(6,435,956	)	$	(1,306,473	)	$	(18,055	)	$	(30,600	)	$	(7,791,084	)
Amortization expenses		(187,152	)		(134,509	)		—			(1,835	)		(323,496	)
Disposal		—			831			—			—			831
Effect of foreign exchange difference		—			(59	)		—			1			(58	)
Balance on March 31, 2014	$	(6,623,108	)	$	(1,440,210	)	$	(18,055	)	$	(32,434	)	$	(8,113,807	)
Balance on January 1, 2014, net	$	42,818,044		$	1,330,981		$	162,576		$	87,287		$	44,398,888
Balance on March 31, 2014, net	$	42,630,892		$	1,254,576		$	162,576		$	85,625		$	44,133,669
Cost
Balance on January 1, 2015	$	49,254,000		$	3,192,652		$	180,631		$	150,565		$	52,777,848
Additions-acquired separately		—			74,467			—			186			74,653
Disposal		—			(161,080	)		—			—			(161,080	)
Effect of foreign exchange difference		—			(147	)		—			—			(147	)
Balance on March 31, 2015	$	49,254,000		$	3,105,892		$	180,631		$	150,751		$	52,691,274
Accumulated amortization and impairment
Balance on January 1, 2015	$	(8,103,833	)	$	(1,793,470	)	$	(18,055	)	$	(37,864	)	$	(9,953,222	)
Amortization expenses		(625,992	)		(142,479	)		—			(1,824	)		(770,295	)
Disposal		—			161,060			—			—			161,060
Effect of foreign exchange difference		—			180			—			—			180
Balance on March 31, 2015	$	(8,729,825	)	$	(1,774,709	)	$	(18,055	)	$	(39,688	)	$	(10,562,277	)
Balance on January 1, 2015, net	$	41,150,167		$	1,399,182		$	162,576		$	112,701		$	42,824,626
Balance on March 31, 2015, net	$	40,524,175		$	1,331,183		$	162,576		$	111,063		$	42,128,997

The concessions are granted and issued by the NCC. The concession fees are amortized using the straight-line method from the date operations commence through the date the license expires. The carrying amount of 3G concession fee will be fully amortized by December 2018, and 4G concession fee will be fully amortized by December 2030.

The computer software is amortized using the straight-line method over the estimated useful lives of 1 to 10 years.

Other intangible assets are amortized using the straight-line method over the estimated useful lives of 3 to 20 years. Goodwill is not amortized.

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20. OTHER ASSETS

	March 31, 2015		December 31, 2014		March 31, 2014
Spare parts	$	2,648,594	$	2,977,585	$	3,546,619
Refundable deposits		2,498,232		2,738,789		2,529,275
Other financial assets		1,000,000		1,000,000		1,000,000
Others		2,171,745		2,104,761		1,994,822
	$	8,318,571	$	8,821,135	$	9,070,716
Current
Spare parts	$	2,648,594	$	2,977,585	$	3,546,619
Others		268,076		241,814		465,247
	$	2,916,670	$	3,219,399	$	4,011,866
Noncurrent
Refundable deposits	$	2,498,232	$	2,738,789	$	2,529,275
Other financial assets		1,000,000		1,000,000		1,000,000
Others		1,903,669		1,862,947		1,529,575
	$	5,401,901	$	5,601,736	$	5,058,850

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.

21. HEDGING DERIVATIVE LIABILITIES

	March 31, 2015		December 31, 2014		March 31, 2014
Cash flow hedge - forward exchange contracts	$	—	$	283	$	—

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

The Company signed equipment purchase contracts with suppliers, and entered into foreign exchange forward contracts to avoid foreign currency risk exposure to Euro-denominated purchase commitments. Those foreign exchange forward contracts were designated as cash flow hedges. For the three months ended March 31, 2015, gain arising from changes in fair value of the hedged items recognized in other comprehensive income was $283 thousand. Upon the completion of the purchase transaction, the amount deferred and recognized in equity initially will be reclassified into equipment as its carrying value.

34

The outstanding foreign exchange forward contracts at the balance sheet date were as follows:

			Contract Amount
	Currency	Maturity Period	(Thousands)
December 31, 2014
Forward exchange contracts - buy	EUR/NT$	2015.3	EUR2,341/NT$90,509

The Company did not have any outstanding forward exchange contracts applied to hedge accounting for the three months ended March 31, 2015 and 2014.

Losses arising from the hedging derivative instruments reclassified from equity to initial cost of the property, plant and equipment were $6,683 thousand for the three months ended March 31, 2015.

22. SHORT-TERM LOANS

	March 31, 2015		December 31, 2014		March 31, 2014
Unsecured loans	$	560,000	$	564,400	$	304,357
Annual interest rate		1.24%-2.40%		1.25%-2.40%		1.18%-2.40%

23. LONG-TERM LOANS (INCLUDING LONG-TERM LOANS - CURRENT PORTION)

	March 31, 2015		December 31, 2014		March 31, 2014
Secured loans (Note 40)	$	1,850,000	$	1,900,000	$	1,700,000
Less: Current portion of long-term loans		—		—		(300,000	)
	$	1,850,000	$	1,900,000	$	1,400,000

The annual interest rates of loans were as follows:

	March 31, 2015	December 31, 2014	March 31, 2014
Secured loans	1.14%-1.50%	1.13%-2.35%	1.13%-2.10%

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 obtained another secured loan from Chang Hwa Bank in December 2012 in the amount of $400,000 thousand which will be due in December 2017; LED has made an early repayment of $350,000 thousand and $50,000 thousand in 2013 and January 2015, respectively.

CHPT entered into a secured loan contract of $348,000 thousand with Bank of Taiwan in April 2014, interest will be paid monthly, amortization of principle will begin in June 2016, and the contract will expire in April 2029. The Company made early repayment of $148,000 thousand from September to December 2014.

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24. TRADE NOTES AND ACCOUNTS PAYABLE

	March 31, 2015		December 31, 2014		March 31, 2014
Trade notes and accounts payable	$	14,875,274	$	18,518,977	$	12,354,805

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

25. OTHER PAYABLES

	March 31, 2015		December 31, 2014		March 31, 2014
Accrued salary and compensation	$	6,458,405	$	9,122,156	$	7,048,796
Accrued bonuses to employees and remuneration to directors and supervisors		2,123,083		1,679,756		1,365,233
Accrued franchise fees		1,942,379		1,585,174		2,374,636
Amounts collected for others		1,289,497		1,330,695		1,335,915
Payables to contractors		1,116,113		2,628,892		1,614,912
Accrued maintenance costs		941,113		867,708		1,086,568
Payables to equipment suppliers		870,370		1,181,777		1,587,016
Others		6,438,983		5,938,834		5,918,312
	$	21,179,943	$	24,334,992	$	22,331,388

26. PROVISIONS

	March 31, 2015		December 31, 2014		March 31, 2014
Warranties	$	235,198	$	211,633	$	209,172
Employee benefits		57,475		55,569		49,131
Others		4,832		4,832		4,042
	$	297,505	$	272,034	$	262,345
Current	$	211,347	$	179,374	$	143,358
Noncurrent		86,158		92,660		118,987
	$	297,505	$	272,034	$	262,345

	Warranties			Employee Benefits		Others			Total
Balance on January 1, 2014	$	201,494		$	47,265	$	4,046		$	252,805
Additional provisions recognized		52,934			1,866		—			54,800
Used during the period		(45,256	)		—		(4	)		(45,260	)
Balance on March 31, 2014	$	209,172		$	49,131	$	4,042		$	262,345

(Continued)

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	Warranties			Employee Benefits		Others		Total
Balance on January 1, 2015	$	211,633		$	55,569	$	4,832	$	272,034
Additional provisions recognized		178,041			1,906		—		179,947
Used during the period		(154,476	)		—		—		(154,476	)
Balance on March 31, 2015	$	235,198		$	57,475	$	4,832	$	297,505

(Concluded)

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

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

27. ADVANCE RECEIPTS

Advance receipts are mainly from advance telecommunication charges. In accordance with NCC’s regulation named “Mandatory and Prohibitory Provisions to Be Included in Standard Contracts for Telecommunication Goods (Services) Coupons”, the Company entered into a contract with Bank of Taiwan to provide a performance guarantee for advance receipts from selling prepaid cards, as of March 31, 2015 amounting to $1,064,996 thousand.

28. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The pension plan under the Labor Pension Act of ROC (the “LPA”) is considered as a defined contribution plan. Based on the LPA, Chunghwa and its domestic subsidiaries make monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages. Its foreign subsidiaries would make monthly contributions based on the local pension requirements.

b. Defined benefit plans

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

The Company’s pension plan is considered as a defined benefit plan under the Labor Standards Law that provide benefits based on an employee’s length of service and average six-month salary prior to retirement. Chunghwa and its subsidiaries contribute an amount no more than 15% of salaries paid each month to their respective pension funds (the Funds), which are administered by the Labor Pension Fund Supervisory Committee (the Committee) and deposited in the names of the Committees in the Bank of Taiwan. The plan assets are held in a commingled fund which is operated and managed by the government’s designated authorities; as such, the Company does not have any right to intervene in the investments of the funds.

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The amount included in the consolidated balance sheet arising from the Company’s obligation in respect of its defined benefit plans was as follows:

	December 31, 2014 (Adjusted)
Present value of funded defined benefit obligation	$	27,958,086
Fair value of plan assets		(21,496,222	)
Funded status	$	6,461,864
Net defined benefit liabilities	$	6,469,890
Net defined benefit assets (included in other noncurrent assets - others)		(8,026	)
	$	6,461,864

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

	Present value of Funded Defined Benefit Obligation			Fair Value of Plan Assets			Accrued Pension Liabilities
Balance on January 1, 2014	$	25,458,306		$	19,981,837		$	5,476,469
Service cost
Current service cost		2,919,397			—			2,919,397
Loss recognized from settlements		75,668			—			75,668
Net interest expense/income		509,518			416,079			93,439
Components of defined benefit costs recognized in profit or loss		3,504,583			416,079			3,088,504
Remeasurement on the net defined benefit liability:
Return on plan assets		—			52,441			(52,441	)
Actuarial losses recognized from changes in demographic assumptions		4,138			—			4,138
Actuarial gains recognized from changes in financial assumptions		(5,216	)		—			(5,216	)
Actuarial losses recognized from experience adjustments		545,877			—			545,877
Components of defined benefit costs recognized in other comprehensive income		544,799			52,441			492,358
Contributions from employer		—			2,486,497			(2,486,497	)
Benefits paid		(455,421	)		(455,421	)		—
Settlements		(993,911	)		(985,211	)		(8,700	)
Benefits paid directly by the Company		(100,270	)		—			(100,270	)
Balance on December 31, 2014	$	27,958,086		$	21,496,222		$	6,461,864

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Relevant pension costs for defined benefit plans for the three months ended March 31, 2015 and 2014 were as follows:

	Three Months Ended March 31
			2014
	2015		(Adjusted)
Operating costs	$	448,890	$	451,320
Marketing expenses		212,327		218,222
General and administrative expenses		41,555		41,414
Research and development expenses		25,641		26,076
	$	728,413	$	737,032

The Company is exposed to following risks under the Labor Standards Law:

a. Investment risk

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

b. Interest rate risk

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

c. Salary risk

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

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation were carried out by the independent actuary.

The principal assumptions used for the purpose of the actuarial valuations were as follows:

	Measurement Date
	December 31, 2014
Discount rates	2.00%
Expected rates of salary increase	1.00%-2.00%

The average duration of the benefit obligation at December 31, 2014 is from 8 to 14 years.

39

The Company’s maturity analysis of the benefit payments was as follows:

Year	Amount
2015	$	1,395,390
2016		2,365,944
2017		3,751,245
2018		5,145,180
2019 and thereafter		36,387,643
	$	49,045,402

29. EQUITY

a. Share capital

1) Common stock

	March 31, 2015		December 31, 2014		March 31, 2014
Number of authorized shares (thousand)		12,000,000		12,000,000		12,000,000
Authorized shares	$	120,000,000	$	120,000,000	$	120,000,000
Number of shares issued and collected proceeds (thousand)		7,757,447		7,757,447		7,757,447
Issued shares	$	77,574,465	$	77,574,465	$	77,574,465

The issued common stock of a par value at $10 per share entitled the right to vote and receive dividends.

2) Global depositary receipts

For the purpose of privatizing Chunghwa, the MOTC sold 1,109,750 thousand common shares of Chunghwa in an international offering of securities in the form of American Depositary Shares (“ADS”) amounting to 110,975 thousand units (one ADS represents 10 common shares) on the New York Stock Exchange on July 17, 2003. Afterwards, the MOTC sold 1,350,682 thousand common shares in the form of ADS amounting to 135,068 thousand units on August 10, 2005. Subsequently, the MOTC and Taiwan Mobile Co., Ltd. sold 505,389 thousand and 58,959 thousand common shares of Chunghwa, respectively, in the form of ADS totally amounting to 56,435 thousand units on September 29, 2006. The MOTC and Taiwan Mobile Co., Ltd. have sold 3,024,780 thousand common shares in the form of ADS amounting to 302,478 thousand units. As of March 31, 2015, the outstanding ADSs were 252,470 thousand common shares, which equaled 25,247 thousand units and represented 3.25% of Chunghwa’s total outstanding common shares.

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 can, 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.

40

b. Additional paid-in capital

The adjustment of additional paid-in capital for the three months ended March 31, 2015 and 2014 were as follows:

	Share Premium		Movements of Paid-in Capital for Associates and Joint Ventures Accounted for Using Equity Method			Movements of Paid-in Capital Arising from Changes in Equities of Subsidiaries		Difference between Consideration Received and the Carrying Amount of the Subsidiaries’ Net Assets upon Disposal		Donated Capital		Stockholders’ Contribution Due to Privatization		Total
Balance on January 1, 2014	$	163,907,049	$	41,396		$	10,372	$	—	$	13,170	$	20,648,078	$	184,620,065
Change in additional paid-in capital from investments in associates and joint ventures accounted for using equity method		—		(592	)		—		—		—		—		(592	)
Balance on March 31, 2014	$	163,907,049	$	40,804		$	10,372	$	—	$	13,170	$	20,648,078	$	184,619,473
Balance on January 1, 2015	$	147,329,386	$	43,648		$	13,653	$	—	$	13,170	$	20,648,078	$	168,047,935
Change in additional paid-in capital from investments in associates and joint ventures accounted for using equity method		—		(885	)		—		—		—		—		(885	)
Disposal of subsidiaries		—		—			—		26,644		—		—		26,644
Balance on March 31, 2015	$	147,329,386	$	42,763		$	13,653	$	26,644	$	13,170	$	20,648,078	$	168,073,694

Additional paid-in capital may only be utilized to offset deficits. However, the additional paid-in capital from shares issued in excess of par and donations may be distributed in cash or capitalized when a company has no deficit, which however is limited to a certain percentage of Chunghwa’s paid-in capital.

Additional paid-in capital from investments accounted for using equity method may not be used for any purpose.

c. Retained earnings and dividends policy

Before distributing a dividend or making any other distribution to stockholders, Chunghwa must pay all outstanding taxes, offset deficits in prior years and set aside a legal reserve equal to 10% of its net income, except when the accumulated amount of such legal reserve equals to the Company’s total authorized capital, and depending on its business needs or requirements, may also set aside or reverse special reserves. In accordance with Chunghwa’s Articles of Incorporation, no less than 50% of the remaining earnings comprising remaining balance of net income, if any, plus cumulative undistributed earnings shall be distributed in the following order: (a) from 2% to 5% of distributable earnings shall be distributed to employees as employee bonus; (b) no more than 0.2% of distributable earnings shall be distributed to board of directors and supervisors as remuneration; and (c) 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 shares.

For the three months ended March 31, 2015 and 2014, the accrual amounts for bonuses to employees and remuneration to directors and supervisors were accrued based on past experiences and the probable amount to be paid in accordance with Chunghwa’s Articles of Incorporation and Implementation Guidance for the Employee’s Bonus Distribution of Chunghwa Telecom Co., Ltd.

If the initial accrual amounts of the aforementioned bonus are significantly different from the amounts proposed by the board of directors, the difference is charged to the earnings of the year making the initial estimate. Otherwise, the difference between initial accrual amount and the amount resolved in the shareholders’ meeting is charged to the earnings of the following year as a result of change in accounting estimate. If the shareholders’ meeting approves to distribute the employee bonus as stocks, the share number of the stock bonus are determined by the amount of bonus divided by the fair value of the common stocks which is the closing market prices one day before shareholders’ meeting after taking into account the effects of ex-rights and ex-dividends.

41

The Company 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 the Chunghwa’s paid-in capital, the excess may be transferred to capital or distributed in cash.

Except for non-ROC resident shareholders, all shareholders receiving the dividends are entitled a tax credit equal to their proportionate share of the income tax paid by the Chunghwa.

The appropriations of the 2014 earnings of Chunghwa have been approved by the board of directors on February 13, 2015 and the appropriations of the 2013 earnings of Chunghwa approved by the stockholders’ meeting on June 24, 2014 were as follows:

	Appropriation of Earnings					Dividends Per Share (NT$)
	For Fiscal Year 2014			For Fiscal Year 2013		For Fiscal Year 2014		For Fiscal Year 2013
Legal reserve	$	680,743		$	2,074,342
Special reserve		(144,005	)		144,005
Cash dividends		37,673,263			18,525,558	$	4.86	$	2.39

In addition, the stockholders of Chunghwa resolved to distribute cash of $2.14 per share and the total amount of $16,577,663 thousand from additional paid-in capital on June 24, 2014.

The bonuses to the employees and remuneration to the directors and supervisors of the 2014 and 2013 approved by the board of directors and the stockholders’ meeting on February 13, 2015 and June 24, 2014 were as follows:

	2014		2013
	Cash Bonus		Cash Bonus
Bonus distributed to the employees	$	1,510,068	$	758,627
Remuneration paid to the directors and supervisors		39,223		19,304

There was no difference between the initial accrual amounts and the amounts resolved in shareholders’ meeting of the aforementioned bonuses to employees and the remuneration to directors and supervisors.

Information of the appropriation of Chunghwa’s earnings, employees bonuses and remuneration to directors and supervisors proposed by the board of directors and approved by the stockholders is available on the Market Observation Post System website.

d. Other equity items

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.

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2) Unrealized gain (loss) on available-for-sale financial assets

	Three Months Ended March 31
	2015			2014
Beginning balance	$	739,988		$	(149,747	)
Unrealized gain (loss) on available-for-sale financial assets		449,097			(243,813	)
Income tax relating to unrealized gain (loss) on available-for-sale financial assets		(2,962	)		922
Amount reclassified from equity to profit or loss on disposal		—			(11,317	)
Amount reclassified from equity to profit or loss on impairment		(23,060	)		—
Ending balance	$	1,163,063		$	(403,955	)

f. Noncontrolling interests

	Three Months Ended March 31
	2015			2014
Beginning balance	$	5,085,185		$	5,058,086
Shares attributed to noncontrolling interests
Net income of current period		149,368			150,205
Exchange differences arising from the translation of the net investment in foreign operations		(6,583	)		(5,406	)
Unrealized gain (loss) on available-for-sale financial assets		2,153			(4,837	)
Income tax relating to unrealized gain (loss) on available-for-sale financial assets		(366	)		114
Share of other comprehensive income (loss) of associates accounted for using equity method		(822	)		1,063
Changes in additional paid-in capital from investments in associates accounted for using equity method		(1,404	)		(1,626	)
Compensation cost of employee stock options of a subsidiary		14,481			26,566
Disposal of subsidiaries		18,484			—
Ending balance	$	5,260,496		$	5,224,165

30. REVENUES

The main source of revenue of the Company includes various telecommunications services in many different streams, and the related information were as discussed in Note 44.

31. NET INCOME AND OTHER COMPREHENSIVE INCOME (LOSS)

a. Net income

1) Other income and expenses

	Three Months Ended March 31
	2015			2014
Loss on disposal of property, plant and equipment	$	(29,100	)	$	(8,510	)
Loss on disposal of intangible assets		(20	)		—
	$	(29,120	)	$	(8,510	)

43

2) Other income

	Three Months Ended March 31
	2015		2014
Income from Piping Fund	$	200,000	$	200,000
Rental income		9,817		10,919
Others		42,867		42,148
	$	252,684	$	253,067

3) Other gains and losses

	Three Months Ended March 31
	2015			2014
Gain (loss) on disposal of financial instruments, net	$	(240	)	$	15,662
Net foreign currency exchange gains (losses)		167,131			(27,653	)
Gain on disposal of associates		7,409			—
Impairment losses on financial assets carried at cost		—			(629	)
Impairment losses on available-for-sale financial assets		(25,910	)		—
Valuation loss on financial assets and liabilities at fair value through profit or loss, net		(288	)		(713	)
Others		(21,844	)		(17,689	)
	$	126,258		$	(31,022	)

4) Impairment loss on financial instruments

	Three Months Ended March 31
	2015		2014
Notes and accounts receivables	$	173,225	$	48,658
Other receivables	$	7,039	$	2,634
Available-for-sale financial assets	$	25,910	$	—
Financial assets carried at cost	$	—	$	629

5) Impairment loss on non-financial assets

	Three Months Ended March 31
	2015		2014
Inventories	$	53,386	$	156,848

6) Depreciation and amortization expenses

	Three Months Ended March 31
	2015		2014
Property, plant and equipment	$	7,779,058	$	8,039,763
Investment property		4,480		4,142
Intangible assets		770,295		323,496
Total depreciation and amortization expenses	$	8,553,833	$	8,367,401

(Continued)

44

	Three Months Ended March 31
	2015		2014
Depreciation expenses summarized by functions
Operating costs	$	7,249,696	$	7,490,177
Operating expenses		533,842		553,728
	$	7,783,538	$	8,043,905
Amortization expenses summarized by functions
Operating costs	$	686,492	$	249,303
Operating expenses		83,803		74,193
	$	770,295	$	323,496

(Concluded)

7) Employee benefit expenses

	Three Months Ended March 31
	2015		2014
Post-employment benefit
Defined contribution plans	$	118,338	$	94,740
Defined benefit plans		728,413		737,032
		846,751		831,772
Share-based payment
Equity - settled share - based payment		14,481		26,566
Other employee benefit
Salaries		6,257,697		6,183,285
Insurance		652,654		619,965
Others		3,680,011		3,387,901
		10,590,362		10,191,151
Total employee benefit expenses	$	11,451,594	$	11,049,489
Summary by functions
Operating costs	$	6,592,497	$	6,009,414
Operating expenses		4,859,097		5,040,075
	$	11,451,594	$	11,049,489

b. Components of other comprehensive income

	Three Months Ended March 31
	2015			2014
Unrealized gain (loss) on available-for-sale financial assets
Arising during the current period	$	454,100		$	(244,305	)
Reclassification adjustments
Upon disposal		—			(15,662	)
Upon impairment		(25,910	)		—
	$	428,190		$	(259,967	)

(Continued)

45

	Three Months Ended March 31
	2015			2014
Cash flow hedges
Losses arising during the current period	$	(6,355	)	$	—
Adjusted against the carrying amount of hedged items		6,638			—
	$	283		$	—

(Concluded)

32. INCOME TAX

a. Income tax recognized in profit or loss

The major components of income tax expense are as follows:

	Three Months Ended March 31
	2015			2014
Current tax
Current tax expenses recognized for the current period	$	2,076,581		$	2,156,752
Income tax adjustments on prior years		(72,410	)		—
Others		130			5,638
		2,004,301			2,162,390
Deferred tax
Deferred tax expenses recognized for the current period		(49,036	)		(206,542	)
Income tax recognised in profit or loss	$	1,955,265		$	1,955,848

b. Income tax recognized in other comprehensive income

	Three Months Ended March 31
	2015		2014
Deferred tax
Unrealized gain (loss) on available-for-sale financial assets	$	3,328	$	(1,036	)

c. The related information under the Integrated Income Tax System is as follows:

Undistributed earnings information

All Chunghwa’s earnings generated prior to June 30, 1998 have been appropriated.

Imputation credit account

	March 31, 2015		December 31, 2014		March 31, 2014
Balance of Imputation Credit Account (“ICA”)	$	8,269,026	$	7,845,495	$	4,047,276

The creditable ratio for distribution of earnings of 2014 and 2013 was 20.48% (expected ratio) and 20.48%, respectively.

46

Effective from January 1, 2015, the creditable ratio for individual shareholders residing in the Republic of China is half of the original creditable ratio according to the revised Article 66-6 of the Income Tax Law.

d. Income tax examinations

Chunghwa and the following subsidiaries income tax returns have been examined by the tax authorities through 2012: SENAO, CHIEF, CHSI, SHE and CEI. CHPT, CHI, CHYP, CHST, Unigate, LED, SFD and HHR’s income tax returns have been examined by the tax authorities through 2013.

33. EARNINGS PER SHARE

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

Net Income

	Three Months Ended March 31
	2015			2014
Net income used to compute the basic earnings per share
Net income attributable to the parent	$	10,418,425		$	10,234,565
Assumed conversion of all dilutive potential common stock
Employee stock options and bonus of subsidiaries		(380	)		(598	)
Net income used to compute the diluted earnings per share	$	10,418,045		$	10,233,967

Weighted Average Number of Common Stock

(Thousand Shares)

	Three Months Ended March 31
	2015		2014
Weighted average number of common stock used to compute the basic earnings per share		7,757,447		7,757,447
Assumed conversion of all dilutive potential common stock
Employee bonus		18,428		10,581
Weighted average number of common stock used to compute the diluted earnings per share		7,775,875		7,768,028

If Chunghwa may settle the employee bonus 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 stockholders approve the number of shares to be distributed to employees in their meeting in the following year.

47

34. SHARE-BASED PAYMENT ARRANGEMENT

SENAO share-based compensation plans (“SENAO Plans”) described as follows:

Effective Date for Plan Registration	Resolution Date by SENAO’s Board of Directors		Stock Options Units (Thousand)		Exercise Price (NT$)
2012.05.28		2013.04.29		10,000	$	84.30 (Original price $93.00	)

Each option is eligible to subscribe for one common share when exercisable. Under the terms of SENAO Plans, the options are granted at an exercise price equal to the closing price of the SENAO’s common shares listed on the TSE on the higher of closing price or par value. The SENAO Plans have exercise price adjustment formula upon the issuance of new common shares, capitalization of retained earnings and/or capital reserves, stock split as well as distribution of cash dividends, except (i) in the case of issuance of new shares in connection with mergers and in the case of cancellation of outstanding shares in connection with capital reduction, and (ii) except if the exercise price after adjustment exceeds the exercise price before adjustment. The options of all the Plans are valid for six years and the graded vesting schedule is that 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.

Stock options granted on May 7, 2013 applied IFRS 2. The recognized compensation cost was $14,481 thousand and $26,566 thousand for the three months ended March 31, 2015 and 2014, respectively.

SENAO modified the plan terms of the outstanding stock options in July 2014 for 2013 Plan, the exercise price changed from $89.40 to $84.30 per share. The modification did not cause any incremental fair value.

Information about SENAO’s outstanding stock options for the three months ended March 31, 2015 and 2014 were as follows:

	Three Months Ended March 31
	2015					2014
	Granted on May 7, 2013					Granted on May 7, 2013
	Number of Options (Thousand)			Weighted- average Exercise Price (NT$)		Number of Options (Thousand)			Weighted- average Exercise Price (NT$)
Employee stock options
Balance on January 1		9,027		$	84.30		9,872		$	89.40
Options forfeited		(481	)		—		(448	)		—
Balance on March 31		8,546			84.30		9,424			89.40
Options exercisable at end of the period		—			—		—			—

48

As of March 31, 2015, information about employee stock options outstanding are as follows:

Options Outstanding								Options Exercisable
Range of Exercise Price (NT$)		Number of Options (Thousand)		Weighted- average Remaining Contractual Life (Years)		Weighted Average Exercise Price (NT$)		Number of Options (Thousand)		Weighted Average Exercise Price (NT$)
$	84.30		8,546		4.10	$	84.30		—	$	—

As of March 31, 2014, information about employee stock options outstanding are as follows:

Options Outstanding								Options Exercisable
Range of Exercise Price (NT$)		Number of Options (Thousand)		Weighted- average Remaining Contractual Life (Years)		Weighted Average Exercise Price (NT$)		Number of Options (Thousand)		Weighted Average Exercise Price (NT$)
$	89.40		9,424		5.10	$	89.40		—	$	—

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 Options Granted as of May 7, 2013
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

35. NON-CASH TRANSACTIONS

For the three months ended March 31, 2015 and 2014, the Company entered into the following non-cash investing activities:

	Three Months Ended March 31
	2015		2014
Increase in property, plant and equipment	$	3,669,067	$	4,383,314
Other payables		1,862,780		1,384,749
	$	5,531,847	$	5,768,063

49

36. OPERATING LEASE ARRANGEMENTS

a. The Company as lessee

Except for the ST-2 satellite referred in Note 39 to the consolidated financial statement, the Company entered into several lease agreements for base stations located all over in Taiwan. The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

	March 31, 2015		December 31, 2014		March 31, 2014
Within one year	$	2,895,820	$	3,050,119	$	3,300,183
Longer than one year but within five years		5,854,980		5,807,675		6,583,686
Longer than five years		1,391,058		1,513,894		1,695,360
	$	10,141,858	$	10,371,688	$	11,579,229

b. The Company as lessor

The Company leases out some land and buildings. The future aggregate minimum lease collection under non-cancellable operating leases are as follows:

	March 31, 2015		December 31, 2014		March 31, 2014
Within one year	$	390,785	$	410,921	$	445,822
Longer than one year but within five years		537,899		524,697		619,929
Longer than five years		382,130		395,675		157,956
	$	1,310,814	$	1,331,293	$	1,223,707

37. CAPITAL MANAGEMENT

The Company manages its capital to ensure that entities in the Company will be able to continue as going concerns while maximising the return to stakeholders through the optimisation 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.

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 treasury stock, proceeds from new debt or repayment of debt.

50

38. FINANCIAL INSTRUMENTS

Fair Value Information

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

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

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

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

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

Except for what disclosed in the following table, the fair values of financial instruments not measured at fair value are considered approximately to their carrying amounts or the fair values cannot be reliable estimated:

March 31, 2015

	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3
Held-to-maturity financial assets
Corporate bonds	$	6,029,794	$	—	$	6,054,541	$	—
Bank debentures		750,230		—		750,357		—
	$	6,780,024	$	—	$	6,804,898	$	—

December 31, 2014

	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3
Held-to-maturity financial assets
Corporate bonds	$	6,533,527	$	—	$	6,564,145	$	—
Bank debentures		950,742		—		951,385		—
	$	7,484,269	$	—	$	7,515,530	$	—

51

March 31, 2014

	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3
Held-to-maturity financial assets
Corporate bonds	$	9,856,461	$	—	$	9,893,307	$	—
Bank debentures		1,252,420		—		1,256,620		—
	$	11,108,881	$	—	$	11,149,927	$	—

The Level 2 fair value are estimated using discounted cash flow model. The model uses market-based observable inputs including duration, yield rate and credit rating.

b. Financial instruments measured at fair value

March 31, 2015

	Level 1		Level 2		Level 3		Total
Financial assets at FVTPL
Derivative financial assets	$	—	$	193	$	—	$	193
Available-for-sale financial assets
Domestic listed securities and emerging market shares
Equity investments	$	4,316,492	$	—	$	—	$	4,316,492
Financial liabilities at FVTPL
Derivative financial liabilities	$	—	$	481	$	—	$	481

December 31, 2014

	Level 1		Level 2		Level 3		Total
Financial assets at FVTPL
Derivative financial assets	$	—	$	1,163	$	—	$	1,163
Available-for-sale financial assets
Domestic listed securities and emerging market shares
Equity investments	$	3,914,212	$	—	$	—	$	3,914,212
Hedging derivative financial liabilities
Derivative financial liabilities	$	—	$	283	$	—	$	283
Financial liabilities at FVTPL
Derivative financial liabilities	$	—	$	21	$	—	$	21

52

March 31, 2014

	Level 1		Level 2		Level 3		Total
Financial assets at FVTPL
Derivative financial assets	$	—	$	58	$	—	$	58
Available-for-sale financial assets
Domestic listed securities and emerging market shares
Equity investments	$	2,782,364	$	—	$	—	$	2,782,364
Financial liabilities at FVTPL
Derivative financial liabilities	$	—	$	771	$	—	$	771

There were no transfers between Levels 1 and 2 for the three months ended March 31, 2015 and 2014.

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

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

2) For derivative financial assets forward exchange contracts, fair values are estimated using discounted cash flow model. The model uses market-based observable inputs including foreign exchange rates, and forward and spot prices for currencies to project fair value.

Categories of Financial Instruments

	March 31, 2015		December 31, 2014		March 31, 2014
Financial assets
Measured at FVTPL
Held for trading	$	193	$	1,163	$	58
Held-to-maturity financial assets		6,780,024		7,484,269		11,108,881
Loans and receivables (Note a)		64,858,583		56,932,753		50,186,598
Available-for-sale financial assets (Note b)		6,681,484		6,280,742		5,231,734
Financial liabilities
Measured at FVTPL
Held for trading		481		21		771
Hedging derivatives financial liabilities		—		283		—
Measured at amortized cost (Note c)		34,778,817		39,681,969		33,534,474

Note a: The balances included cash and cash equivalents, trade notes and accounts receivable, accounts receivable from related parties, other financial assets and refundable deposits (classified as other assets) which were loans and receivables.

Note b: The balances included financial assets carried at cost which were classified as available-for-sale financial assets.

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

53

Financial Risk Management Objectives

The main financial instruments of the Company include equity and debt investments, accounts receivable, accounts payables 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 and interest rate fluctuation arising from operating or investment activities. Compliance with policies and risk exposure limits is reviewed by the Company’s Finance Department on a continuous basis. The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

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

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 end of the reporting period are as follows:

	March 31, 2015		December 31, 2014		March 31, 2014
Assets
USD	$	5,789,436	$	5,308,244	$	4,607,700
EUR		17,395		16,579		60,318
SGD		26,991		77,349		139,506
RMB		167,015		112,158		102
Liabilities
USD		5,990,090		5,365,620		4,904,548
EUR		704,640		766,955		1,227,091
SGD		1,822		1,976		591

54

The carrying amount of the Company’s derivatives with exchange rate risk exposures at the end of the reporting period are as follows:

	March 31, 2015		December 31, 2014		March 31, 2014
Assets
USD	$	193	$	1,163	$	58
Liabilities
USD		481		21		771
EUR		—		283		—

Foreign currency sensitivity analysis

The Company is mainly exposed to the fluctuations of the currencies 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 change 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 where the functional currency weakens 5% against the relevant currency.

	Three Months Ended March 31
	2015			2014
Profit or loss
Monetary assets and liabilities (a)
USD	$	(10,033	)	$	(14,842	)
EUR		(34,362	)		(58,339	)
SGD		1,258			6,946
RMB		8,351			5
Derivatives (b)
USD		9,635			18,662

a) This is mainly attributable to the exposure to foreign currency denominated receivables and payables of the Company outstanding at the end of the reporting period.

b) This is mainly attributable to the forward exchange contracts.

For a 5% strengthening of the functional currency against the relevant currencies, there would be a comparable impact on the pre-tax profit, and the balances above would be negative.

2) Interest rate risk

The carrying amount of the Company’s exposures to interest rates on financial assets and financial liabilities are as follows:

	March 31, 2015		December 31, 2014		March 31, 2014
Fair value interest rate risk
Financial assets	$	28,888,859	$	21,270,570	$	15,834,342
Financial liabilities		560,000		564,400		204,357

(Continued)

55

	March 31, 2015		December 31, 2014		March 31, 2014
Cash flow interest rate risk
Financial assets	$	4,615,504	$	4,625,384	$	4,896,940
Financial liabilities		1,850,000		1,900,000		1,800,000

(Concluded)

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 profit before tax for the three months ended March 31, 2015 would increase/decrease by $6,914 thousand. This is mainly attributable to the Company’s exposure to floating rates on its financial assets and short-term and long-term loans.

If interest rates had been 25 basis points higher/lower and all other variables were held constant, the Company’s profit before tax for the three months ended March 31, 2014 would increase/decrease by $7,742 thousand. This is mainly attributable to the Company’s exposure to floating rates on its financial assets and short-term and long-term loans.

3) Other price risks

The Company is exposed to equity price risks arising from equity investments. 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 of listed equity securities had been 5% higher/lower:

Other comprehensive income would increase/decrease by $215,825 thousand and $139,118 thousand as a result of the changes in fair value of available-for-sale assets for the three months ended March 31, 2015 and 2014, respectively.

b. Credit risk management

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 serves a large consumer base, and the concentration of credit risk was limited.

56

c. Liquidity risk management

The Company manages and contains 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 have 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
March 31, 2015
Non-derivative financial liabilities
Non-interest bearing		—	$	34,187,785	$	1,679,756	$	443,327	$	4,639,437	$	—	$	40,950,305
Floating interest rate instruments		1.83		—		—		—		1,705,128		144,872		1,850,000
Fixed interest rate instruments		1.30		—		530,000		30,000		—		—		560,000
			$	34,187,785	$	2,209,756	$	473,327	$	6,344,565	$	144,872	$	43,360,305
December 31, 2014
Non-derivative financial liabilities
Non-interest bearing		—	$	41,582,178	$	—	$	1,679,756	$	4,757,547	$	—	$	48,019,481
Floating interest rate instruments		1.22		—		—		—		1,755,128		144,872		1,900,000
Fixed interest rate instruments		1.37		—		500,000		64,400		—		—		564,400
			$	41,582,178	$	500,000	$	1,744,156	$	6,512,675	$	144,872	$	50,483,881
March 31, 2014
Non-derivative financial liabilities
Non-interest bearing		—	$	33,823,744	$	980,363	$	384,870	$	4,755,169	$	—	$	39,944,146
Floating interest rate instruments		1.18		—		35,000		365,000		1,400,000		—		1,800,000
Fixed interest rate instruments		1.51		120,000		84,357		—		—		—		204,357
			$	33,943,744	$	1,099,720	$	749,870	$	6,155,169	$	—	$	41,948,503

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

	Less Than 1 Month			1-3 Months		3 Months to 1 Year		1-5 Years		Total
March 31, 2015
Gross settled
Forward exchange contracts
Inflow	$	193,217		$	—	$	—	$	—	$	193,217
Outflow		193,505			—		—		—		193,505
	$	(288	)	$	—	$	—	$	—	$	(288	)

(Continued)

57

	Less Than 1 Month			1-3 Months			3 Months to 1 Year		1-5 Years		Total
December 31, 2014
Gross settled
Forward exchange contracts
Inflow	$	220,135		$	90,226		$	—	$	—	$	310,361
Outflow		218,993			90,509			—		—		309,502
	$	1,142		$	(283	)	$	—	$	—	$	859
March 31, 2014
Gross settled
Forward exchange contracts
Inflow	$	373,187		$	—		$	—	$	—	$	373,187
Outflow		373,900			—			—		—		373,900
	$	(713	)	$	—		$	—	$	—	$	(713	)

(Concluded)

2) Financing facilities

	March 31, 2015		December 31, 2014		March 31, 2014
Unsecured bank loan facility
Amount used	$	560,000	$	564,400	$	304,357
Amount unused		35,739,280		35,314,880		8,824,923
	$	36,299,280	$	35,879,280	$	9,129,280
Secured bank loan facility
Amount used	$	1,850,000	$	1,900,000	$	1,700,000
Amount unused		748,000		818,000		600,000
	$	2,598,000	$	2,718,000	$	2,300,000

39. RELATED PARTIES TRANSACTIONS

The ROC Government, one of Chunghwa’s customers held 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 and other state-owned enterprises in the normal course of business and at arm’s-length prices. The information on service revenues from government bodies and related organizations have not been provided because the ROC government has significant influence over Chunghwa. Chunghwa believes that all revenues and costs of doing business are reflected in the consolidated financial statements.

58

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 Co., Ltd.	Associate
Skysoft Co., Ltd.	Associate
KingWaytek Technology Co., Ltd.	Associate
Dian Zuan Integrating Marketing Co., Ltd.	Associate
Viettel-CHT Co., Ltd.	Associate
Taiwan International Ports Logistics Corporation	Associate
Huada Digital Corporation	Joint ventures
Chunghwa Benefit One Co., Ltd.	Joint ventures
International Integrated System, Inc.	Associate
Senao Networks, Inc.	Associate
HopeTech Technologies Limited	Associate
ST-2 Satellite Ventures Pte., Ltd.	Associate
Xiamen Sertec Business Technology Co., Ltd.	Associate
ClickForce Co., Ltd.	Associate
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
United Daily News Co., Ltd.	Investor of significant influence over SFD

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

1) Operating transactions

	Revenues
	Three Months Ended March 31
	2015		2014
Associates	$	62,162	$	84,109
Joint ventures	$	1,761	$	1,496
Others	$	28,764	$	15,558

	Purchases
	Three Months Ended March 31
	2015		2014
Associates	$	279,172	$	385,216
Joint ventures	$	159	$	—
Others	$	49,442	$	53,057

59

2) Non-operating transactions

	Three Months Ended March 31
	2015		2014
Associates	$	9,480	$	—

3) Receivables

	March 31, 2015		December 31, 2014		March 31, 2014
Associates	$	46,511	$	61,964	$	56,663
Joint ventures		644		80		783
Others		13,402		18,964		4,573
	$	60,557	$	81,008	$	62,019

4) Payables

	March 31, 2015		December 31, 2014		March 31, 2014
Associates	$	250,661	$	402,372	$	495,547
Joint ventures		172		12		326
Others		4,818		5,581		6,911
	$	255,651	$	407,965	$	502,784

5) Customers’ deposits

	March 31, 2015		December 31, 2014		March 31, 2014
Associates	$	9,072	$	9,419	$	6,537
Others		—		247		—
	$	9,072	$	9,666	$	6,537

6) Acquisition of property, plant and equipment

	Three Months Ended March 31
	2015		2014
Associates	$	—	$	170,786

The above amount is mainly attributable to telecommunications equipment bought from TISE.

7) Prepayments

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, 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 total rental expense for the three months ended March 31, 2015 was $98,901 thousand, which consisted of an offsetting credit of the prepayment of $51,100 thousand and an additional accrual of $47,801 thousand. The prepayment was $2,316,513 thousand (classified as prepaid rents-current $204,398 thousand, and prepaid rents-noncurrent $2,112,115 thousand) as of March 31, 2015.

60

c. Compensation of key management personnel

The remuneration of directors and members of key management personnel for the three months ended March 31, 2015 and 2014 were as follows:

	Three Months Ended March 31
	2015		2014
Short-term benefits	$	71,164	$	73,752
Post-employment benefits		2,141		2,100
Share-based payment		1,332		9,776
	$	74,637	$	85,628

The remuneration of directors and key executives is determined by the compensation committee having regard to the performance of individual and market trends.

40. PLEDGED ASSETS

The following assets are pledged as collaterals for long-term loans and contract deposits.

	March 31, 2015		December 31, 2014		March 31, 2014
Property, plant and equipment, net	$	3,074,049	$	3,079,179	$	2,744,890
Land held under development (included in inventories)		1,998,733		1,998,733		1,998,733
Restricted assets (included in other assets - others)		1,041		1,041		10,541
	$	5,073,823	$	5,078,953	$	4,754,164

41. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

At the balance sheet date, the Company’s remaining commitments under non-cancelable contracts with various parties, excluding those disclosed in other notes, were as follows:

a. Acquisitions of land and buildings of $2,007,768 thousand.

b. Acquisitions of telecommunications equipment of $16,697,316 thousand.

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

61

42. EXCHANGE RATE INFORMATION OF FOREIGN FINANCIAL ASSETS AND LIABILITIES

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

	March 31, 2015
	Foreign Currencies (Thousands)		Exchange Rate		New Taiwan Dollars (Thousands)
Financial assets
Monetary items
Cash
USD	$	6,681		31.30	$	209,127
EUR		440		33.65		14,819
SGD		1,088		22.76		24,768
RMB		33,112		5.04		167,015
Accounts receivable
USD		178,285		31.30		5,580,309
EUR		77		33.65		2,576
SGD		98		22.76		2,223
Non-monetary items
Investments accounted for using equity method
USD		1,054		31.30		31,694
SGD		25,661		22.76		584,038
Financial liabilities
Monetary items
Accounts payable
USD		191,377		31.30		5,990,090
EUR		20,940		33.65		704,640
SGD		80		22.76		1,822

	December 31, 2014
	Foreign Currencies (Thousands)		Exchange Rate		New Taiwan Dollars (Thousands)
Financial assets
Monetary items
Cash
USD	$	5,076		31.65	$	160,666
EUR		344		38.47		13,221
SGD		3,175		23.94		76,019
RMB		22,035		5.09		112,158
Accounts receivable
USD		162,641		31.65		5,147,578
EUR		87		38.47		3,358
SGD		56		23.94		1,330
RMB		21		4.88		102

(Continued)

62

	December 31, 2014
	Foreign Currencies (Thousands)		Exchange Rate		New Taiwan Dollars (Thousands)
Non-monetary items
Investments accounted for using equity method
USD	$	986		31.65	$	31,211
SGD		23,324		23.94		558,379
Financial liabilities
Monetary items
Accounts payable
USD		169,530		31.65		5,365,620
EUR		19,936		38.47		766,955
SGD		83		23.94		1,976

(Concluded)

	March 31, 2014
	Foreign Currencies (Thousands)		Exchange Rate		New Taiwan Dollars (Thousands)
Financial assets
Monetary items
Cash
USD	$	8,035		30.47	$	244,813
EUR		1,379		41.93		57,801
SGD		5,678		24.17		137,231
RMB		21		4.88		102
Accounts receivable
USD		143,186		30.47		4,362,887
EUR		60		41.93		2,517
SGD		94		24.17		2,275
Non-monetary items
Investments accounted for using equity method
USD		889		30.47		27,096
SGD		23,158		24.17		559,737
Financial liabilities
Monetary items
Accounts payable
USD		160,963		30.47		4,904,548
EUR		29,265		41.93		1,227,091
SGD		24		24.17		591

The unrealized foreign currency exchange gains were $114,373 thousand and $26,882 thousand for the three months ended March 31, 2015 and 2014, respectively. Due to the various foreign currency transaction and the functional currency of each individual entity of the Company, foreign currency exchange gains and losses on each significant foreign currency is not disclosed.

63

43. ADDITIONAL DISCLOSURES

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

a. Financing provided: None.

b. Endorsement/guarantee provided: None.

c. Marketable securities held (excluding investments in subsidiaries, associates and joint ventures): Please see Table 1.

d. Marketable securities acquired and disposed of at costs or prices at least $300 million or 20% of the paid-in capital: Please see Table 2.

e. Acquisition of individual real estate at costs of at least $300 million or 20% of the paid-in capital: None.

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

g. Total purchases from or sales to related parties amounting to at least $100 million or 20% of the paid-in capital: Please see Table 3.

h. Receivables from related parties amounting to $100 million or 20% of the paid-in capital: Please see Table 4.

i. Names, locations, and other information of investees on which the Company exercises significant influence (excluding investment in Mainland China): Please see Table 5.

j. Financial transactions: Please see Notes 7, 21 and 38.

k. Investment in Mainland China: Please see Table 6.

l. Intercompany relationships and significant intercompany transaction: Please see Table 7.

44. 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 tax. The Company’s reportable segments are as follows:

a. Domestic fixed communications business - the provision of local telephone services, domestic long distance telephone services, broadband access, and related services;

b. Mobile communications business - the provision of mobile services, sales of mobile handsets and data cards, and 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 and related services;

e. Others - the provision of non-Telecom services and the corporate related items not allocated to reportable segments.

64

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

Segment Revenue and Operating Results

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

	Domestic Fixed Communications Business		Mobile Communications Business		Internet Business		International Fixed Communications Business		Others			Total
Three months ended March 31, 2015
Revenues
From external customers	$	17,535,719	$	27,998,148	$	6,218,043	$	4,059,510	$	661,387		$	56,472,807
Intersegment revenues		5,585,391		976,483		1,108,168		477,089		749,102			8,896,233
Segment revenues	$	23,121,110	$	28,974,631	$	7,326,211	$	4,536,599	$	1,410,489			65,369,040
Intersegment elimination													(8,896,233	)
Consolidated revenues												$	56,472,807
Segment income before income tax	$	6,240,095	$	4,189,637	$	2,299,320	$	80,207	$	(286,201	)	$	12,523,058
Three months ended March 31, 2014
Revenues
From external customers	$	17,150,734	$	27,508,058	$	6,134,047	$	3,798,197	$	458,876		$	55,049,912
Intersegment revenues		5,032,705		1,494,751		1,196,814		486,767		173,374			8,384,411
Segment revenues	$	22,183,439	$	29,002,809	$	7,330,861	$	4,284,964	$	632,250			63,434,323
Intersegment elimination													(8,384,411	)
Consolidated revenues												$	55,049,912
Segment income before income tax	$	5,242,788	$	5,475,634	$	2,275,093	$	13,636	$	(666,533	)	$	12,340,618

65

TABLE 1

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

MARKETABLE SECURITIES HELD

MARCH 31, 2015

(Amounts in Thousands of New Taiwan Dollars)

Held Company Name	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account	March 31, 2015								Note
				Shares (Thousands/ Thousand Units)		Carrying Value (Note 1)		Percentage of Ownership		Market Value or Net Asset Value
Chunghwa Telecom Co., Ltd.	Stocks
	Taipei Financial Center Corp.	—	Financial assets carried at cost - noncurrent		172,927	$	1,789,530		12	$	—	—
	Innovation Works Development Fund, L.P.	—	Financial assets carried at cost - noncurrent		—		202,464		4		—	—
	Industrial Bank of Taiwan II Venture Capital Co., Ltd. (IBT II)	—	Financial assets carried at cost - noncurrent		9,461		94,608		17		—	—
	Global Mobile Corp.	—	Financial assets carried at cost - noncurrent		7,617		77,018		3		—	—
	iD Branding Ventures	—	Financial assets carried at cost - noncurrent		2,625		26,250		8		—	—
	Innovation Works Limited	—	Financial assets carried at cost - noncurrent		1,000		31,390		2		—	—
	CQi Energy Infocom Inc.	—	Financial assets carried at cost - noncurrent		2,000		—		18		—	—
	RPTI Intergroup International Ltd.	—	Financial assets carried at cost - noncurrent		4,765		—		10		—	—
	Essence Technology Solution, Inc.	—	Financial assets carried at cost - noncurrent		200		—		7		—	—
	China Airlines Ltd.	—	Available-for-sale financial assets - noncurrent		263,622		4,231,135		5		4,231,135	Note 2
	Bond
	Taiwan Power Co. 2nd Unsecured Bond-EB Issue in 2005	—	Held-to-maturity financial assets		—		150,428		—		150,383	Note 3
	Taiwan Power Co. 2nd Unsecured Bond-EB Issue in 2005	—	Held-to-maturity financial assets		—		100,261		—		100,256	Note 3
	China Petroleum Corporation 1st Unsecured Corporate Bond-C Issue in 2006	—	Held-to-maturity financial assets		—		101,180		—		101,549	Note 3
	China Petroleum Corporation 1st Unsecured Corporate Bond-C Issue in 2006	—	Held-to-maturity financial assets		—		202,406		—		203,097	Note 3
	Taiwan Power Co. 2nd Unsecured Corporate Bond-C Issue in 2006	—	Held-to-maturity financial assets		—		203,134		—		203,808	Note 3
	Taiwan Power Co. 3rd Unsecured Corporate Bond-C Issue in 2006	—	Held-to-maturity financial assets		—		203,870		—		204,168	Note 3
	China Steel Corporation 2nd Unsecured Corporate Bonds-B Issue in 2008	—	Held-to-maturity financial assets		—		100,662		—		101,224	Note 3
	China Steel Corporation 2nd Unsecured Corporate Bonds-B Issue in 2008	—	Held-to-maturity financial assets		—		151,166		—		151,836	Note 3
	FRFC 2nd Unsecured Corporate Bonds Issue in 2010	—	Held-to-maturity financial assets		—		100,053		—		100,298	Note 3
	FRFC 2nd Unsecured Corporate Bonds Issue in 2010	—	Held-to-maturity financial assets		—		50,019		—		50,149	Note 3
	Formosa Petrochemical Corporation 1st Unsecured Corporate Bonds Issue in 2010	—	Held-to-maturity financial assets		—		150,096		—		150,266	Note 3

(Continued)

66

Held Company Name	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account	March 31, 2015								Note
				Shares (Thousands/ Thousand Units)		Carrying Value (Note 1)		Percentage of Ownership		Market Value or Net Asset Value
	Formosa Petrochemical Corporation 1st Unsecured Corporate Bonds Issue in 2010	—	Held-to-maturity financial assets		—	$	50,016		—	$	50,089	Note 3
	Taiwan Power Company 2nd Secured Corporate Bond-A Issue in 2010	—	Held-to-maturity financial assets		—		50,006		—		50,064	Note 3
	Taiwan Power Company 3rd Secured Corporate Bond-A Issue in 2010	—	Held-to-maturity financial assets		—		100,072		—		100,191	Note 3
	Taiwan Power Company 4th Secured Corporate Bond-A Issue in 2010	—	Held-to-maturity financial assets		—		99,990		—		100,316	Note 3
	Taiwan Power Company 4th Secured Corporate Bond-A Issue in 2010	—	Held-to-maturity financial assets		—		49,994		—		50,158	Note 3
	Taiwan Power Company 4th Secured Corporate Bond-A Issue in 2010	—	Held-to-maturity financial assets		—		150,037		—		150,474	Note 3
	NAN YA Company 2nd Unsecured Corporate Bond Issue in 2010	—	Held-to-maturity financial assets		—		25,031		—		25,090	Note 3
	Formosa Petrochemical Corporation 3rd Unsecured Corporate Bonds Issue in 2010	—	Held-to-maturity financial assets		—		149,979		—		150,347	Note 3
	China Steel Corporation 1st Unsecured Corporate Bonds-A Issue in 2011	—	Held-to-maturity financial assets		—		100,112		—		100,429	Note 3
	China Steel Corporation 1st Unsecured Corporate Bonds-A Issue in 2011	—	Held-to-maturity financial assets		—		300,649		—		301,286	Note 3
	FRFC 1st Unsecured Corporate Bonds Issue in 2011	—	Held-to-maturity financial assets		—		299,892		—		301,082	Note 3
	TSMC 1st Unsecured Corporate Bond-A Issue in 2011	—	Held-to-maturity financial assets		—		299,905		—		302,518	Note 3
	TSMC 1st Unsecured Corporate Bond-A Issue in 2011	—	Held-to-maturity financial assets		—		100,292		—		100,839	Note 3
	Fubon Financial Holding Co., Ltd. 1st Unsecured Corporate Bond Issue in 2011	—	Held-to-maturity financial assets		—		300,715		—		303,299	Note 3
	Fubon Financial Holding Co., Ltd. 1st Unsecured Corporate Bond Issue in 2011	—	Held-to-maturity financial assets		—		100,222		—		101,100	Note 3
	Formosa Petrochemical Corporation 1st Unsecured Corporate Bonds Issue in 2011	—	Held-to-maturity financial assets		—		149,959		—		150,548	Note 3
	Formosa Petrochemical Corporation 3rd Unsecured Corporate Bonds Issue in 2011	—	Held-to-maturity financial assets		—		199,914		—		200,879	Note 3
	Chinese Petroleum Corporation 2nd unsecured Corporate Bonds-A Issue in 2012	—	Held-to-maturity financial assets		—		199,900		—		200,882	Note 3
	Taiwan Power Co. 1st Unsecured Corporate Bond-A Issue in 2012	—	Held-to-maturity financial assets		—		99,959		—		99,582	Note 3
	Taiwan Power Co. 1st Unsecured Corporate Bond-A Issue in 2012	—	Held-to-maturity financial assets		—		39,984		—		39,833	Note 3
	Taiwan Power Co. 2nd Unsecured Corporate Bond-A Issue in 2012	—	Held-to-maturity financial assets		—		99,955		—		100,737	Note 3

(Continued)

67

Held Company Name	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account	March 31, 2015								Note
				Shares (Thousands/ Thousand Units)		Carrying Value (Note 1)		Percentage of Ownership		Market Value or Net Asset Value
	TSMC 1st Unsecured Corporate Bond-A Issue in 2012	—	Held-to-maturity financial assets		—	$	199,925		—	$	201,109	Note 3
	TSMC 1st Unsecured Corporate Bond-A Issue in 2012	—	Held-to-maturity financial assets		—		99,964		—		100,555	Note 3
	TSMC 1st Unsecured Corporate Bond-A Issue in 2012	—	Held-to-maturity financial assets		—		200,138		—		201,109	Note 3
	TSMC 2nd Unsecured Corporate Bond-A Issue in 2012	—	Held-to-maturity financial assets		—		199,905		—		200,730	Note 3
	TSMC 3rd Unsecured Corporate Bond-A Issue in 2012	—	Held-to-maturity financial assets		—		199,899		—		201,362	Note 3
	Fubon Financial Holding Co., Ltd. 1st Unsecured Corporate Bond-A Issue in 2012	—	Held-to-maturity financial assets		—		300,000		—		302,006	Note 3
	China Development Holding Corporation 1st Unsecured Corporate Bond-A Issue in 2012	—	Held-to-maturity financial assets		—		150,029		—		150,383	Note 3
	China Development Holding Corporation 1st Unsecured Corporate Bond-A Issue in 2012	—	Held-to-maturity financial assets		—		100,038		—		100,255	Note 3
	China Development Holding Corporation 1st Unsecured Corporate Bond-A Issue in 2012	—	Held-to-maturity financial assets		—		100,038		—		100,255	Note 3
	TaipeiFubon Bank 5th Financial Debentures-A Issue in 2010	—	Held-to-maturity financial assets		—		300,139		—		300,179	Note 3
	TaipeiFubon Bank 5th Financial Debentures-A Issue in 2010	—	Held-to-maturity financial assets		—		200,065		—		200,119	Note 3
	TaipeiFubon Bank 5th Financial Debentures-A Issue in 2010	—	Held-to-maturity financial assets		—		100,026		—		100,060	Note 3
	Eximbank 19-2nd unsecured Financial Debenture	—	Held-to-maturity financial assets		—		150,000		—		149,999	Note 3
Senao International Co., Ltd	Stocks
	N.T.U. Innovation Incubation Corporation	—	Financial assets carried at cost - noncurrent		1,200		12,000		9		—	—
CHIEF Telecom Inc.	Stocks
	3 Link Information Service Co., Ltd.	—	Financial assets carried at cost - noncurrent		374		3,450		10		—	—
	21 Vianet Group, Inc.	—	Available-for-sale financial assets		—		—		—		—	Note 2
Chunghwa Investment Co., Ltd.	Stocks
	Tatung Technology Inc.	—	Financial assets carried at cost - noncurrent		4,571		73,964		11		—	—
	iD Branding Ventures	—	Financial assets carried at cost - noncurrent		875		8,750		3		—	—
	Uni Display Inc.	—	Financial assets carried at cost - noncurrent		500		498		—		—	—
	A2 peak Power Co., Ltd.	—	Financial assets carried at cost - noncurrent		990		—		3		—	—
	VisEra Technologies Company Ltd.	—	Financial assets carried at cost - noncurrent		649		18,175		—		—	—

(Continued)

68

Held Company Name	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account	March 31, 2015								Note
				Shares (Thousands/ Thousand Units)		Carrying Value (Note 1)		Percentage of Ownership		Market Value or Net Asset Value
	Ultra Fine Optical Technology Co., Ltd.	—	Financial assets carried at cost - noncurrent		441	$	—		8	$	—	—
	PChome Store Inc.	—	Available-for-sale financial assets - noncurrent		259		45,692		2		45,692	Note 2
	Tons Lightology Inc.	—	Available-for-sale financial assets - noncurrent		1,242		39,665		3		39,665	Note 2
Chunghwa Hsingta Co., Ltd.	Stocks
	Cotech Engineering Fuzhou Corp.	—	Financial assets carried at cost - noncurrent		—		27,110		5		—	—

Note 1: Showing at carrying amounts with adjustments for fair value and deducted accumulated impairment loss; otherwise, showing at their original carrying amounts on amortized cost deducted the accumulated impairment loss.

Note 2: Market value was based on the closing price of March 31, 2015.

Note 3: Market value of was based on the average trading price on March 31, 2015.

(Concluded)

69

TABLE 2

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

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

THREE MONTHS ENDED MARCH 31, 2015

(Amounts in Thousands of New Taiwan Dollars)

Company Name

Marketable Securities Type and Name

Financial Statement Account

Counter- party

Nature  of Relationship

Beginning Balance

Acquisition

Shares (Thousands/ Thousand Units)

Amount (Note)

Shares (Thousands/ Thousand Units)

Amount

Chunghwa Telecom Co., Ltd.

Bonds

KGI Securities Co., Ltd. 1st Unsecured Corporate Bonds in 2012

Held-to-maturity financial assets

—

—

—

$

300,000

—

$

—

70

Company Name	Marketable Securities Type and Name	Financial Statement Account	Counter- party	Nature  of Relationship		Disposal								Ending Balance
						Shares (Thousands/ Thousand Units)		Amount		Carrying Value (Note)		Gain (Loss) on Disposal		Shares (Thousands/ Thousand Units)		Amount (Note)
Chunghwa Telecom Co., Ltd.	Bonds
	KGI Securities Co., Ltd. 1st Unsecured Corporate Bonds in 2012	Held-to-maturity financial assets	—		—		—	$	—	$	300,000	$	—		—	$	—

Note: Showing at their original carrying amounts without adjustments for fair values (nominal amounts).

71

TABLE 3

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

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

THREE MONTHS ENDED MARCH 31, 2015

(Amounts in Thousands of New Taiwan Dollars)

Company Name	Related Party	Nature of Relationship	Transaction Details						Abnormal Transaction				Notes/Accounts Payable or Receivable
			Purchase/Sale (Note 1)	Amount (Notes 2 and 5)		% to Total		Payment Terms	Units Price		Payment Terms		Ending Balance (Notes 3 and 5)			% to Total
Chunghwa Telecom Co., Ltd.	Senao International Co., Ltd.	Subsidiary	Sales	$	246,483		1	30 days	$	—		—	$	39,326			—
			Purchase		2,789,903		9	30-90 days		—		—		(1,068,561	)		(7	)
	Chunghwa System Integration Co., Ltd.	Subsidiary	Purchase		139,401		—	30 days		—		—		(252,394	)		(2	)
	Honghwa International Co., Ltd.	Subsidiary	Purchase		738,167		2	30 days		—		—		(508,334	)		(4	)
Senao International Co., Ltd.	Chunghwa Telecom Co., Ltd.	Parent company	Sales		2,790,993		31	30-90 days		—		—		1,132,807			60
			Purchase		140,963		2	30 days		—		—		(19,045	)		(1	)
Chunghwa System Integration Co., Ltd.	Chunghwa Telecom Co., Ltd.	Parent company	Sales		186,921		61	30 days		—		—		252,394			69
Honghwa International Co., Ltd.	Chunghwa Telecom Co., Ltd.	Parent company	Sales		738,167		100	30-60 days		—		—		508,334			100

Note 1: Purchase included acquisition of services cost.

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

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

Note 4: Transaction terms with the related parties were determined in accordance with mutual agreements when there were no similar transactions with third parties. Other transactions with related parties were not significantly different from those with third parties.

Note 5: All intra-company transactions, balances, income and expenses are eliminated in full upon consolidation

72

TABLE 4

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, 2015

(Amounts in Thousands of New Taiwan Dollars)

Company Name	Related Party	Nature of Relationship	Ending Balance			Turnover Rate (Note 1)		Overdue				Amounts Received in Subsequent Period		Allowance for Bad Debts
								Amounts		Action Taken
Chunghwa Telecom Co., Ltd.	Senao International Co., Ltd.	Subsidiary	$	236,260 (Note 2	)		14.16	$	—		—	$	197,855	$	—
Senao International Co., Ltd.	Chunghwa Telecom Co., Ltd.	Parent company		1,523,818 (Note 2	)		8.84		—		—		300,366		—
Chunghwa System Integration Co., Ltd.	Chunghwa Telecom Co., Ltd.	Parent company		252,394 (Note 2	)		1.83		—		—		98,523		—
Honghwa International Co., Ltd.	Chunghwa Telecom Co., Ltd.	Parent company		524,322 (Note 2	)		1.38		—		—		231,502		—

Note 1: Payments and receipts collected in trust for others are excluded from the accounts receivable for calculating the turnover rate.

Note 2: The amount was eliminated upon consolidation.

73

TABLE 5

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, 2015

(Amounts in Thousands of New Taiwan Dollars)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount				Balance as of March 31, 2015
				March  31, 2015		December  31, 2014		Shares (Thousands)		Percentage of Ownership (%)		Carrying Value
Chunghwa Telecom Co., Ltd.	Senao International Co., Ltd.	Taiwan	Selling and maintaining mobile phones and its peripheral products	$	1,065,813	$	1,065,813		71,773		28	$	1,669,338
	Light Era Development Co., Ltd.	Taiwan	Housing, office building development, rent and sale services		3,000,000		3,000,000		300,000		100		4,352,307
	Donghwa Telecom Co., Ltd.	Hong Kong	International telecommunications IP fictitious internet and internet transfer services		1,567,453		1,567,453		402,590		100		1,542,774
	Chunghwa Telecom Singapore Pte., Ltd.	Singapore	International telecommunications IP fictitious internet and internet transfer services		574,112		574,112		26,383		100		808,466
	Chunghwa System Integration Co., Ltd.	Taiwan	Providing communication and information aggregative services		838,506		838,506		60,000		100		722,865
	CHIEF Telecom Inc.	Taiwan	Internet communication and internet data center (“IDC”) service		482,165		482,165		37,942		69		708,596
	Chunghwa Investment Co., Ltd.	Taiwan	Investment		639,559		639,559		68,085		89		615,118
	Prime Asia Investments Group Ltd. (B.V.I.)	British Virgin Islands	Investment		385,274		385,274		1		100		275,118
	Honghwa International Co., Ltd.	Taiwan	Telecommunication constructions, telecommunication service agencies and other services		180,000		180,000		18,000		100		253,466
	Chunghwa International Yellow Pages Co., Ltd.	Taiwan	Yellow pages sales and advertisement services		150,000		150,000		15,000		100		188,233
	Chunghwa Telecom Vietnam Co., Ltd.	Vietnam	Information and communications technology, international circuit, and intelligent energy network service		148,275		148,275		—		100		134,205
	Chunghwa Telecom Global, Inc.	United States	International data and internet services and long distance call wholesales to carriers		70,429		70,429		6,000		100		135,261

(Continued)

74

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount				Balance as of March 31, 2015
				March  31, 2015		December  31, 2014		Shares (Thousands)		Percentage of Ownership (%)		Carrying Value
	Spring House Entertainment Tech. Inc.	Taiwan	Network services, producing digital entertainment contents and broadband visual sound terrace development	$	62,209	$	62,209		10,277		56	$	114,173
	Smartfun Digital Co., Ltd.	Taiwan	Software retail		65,000		65,000		6,500		65		59,608
	Chunghwa Telecom Japan Co., Ltd.	Japan	International telecommunications IP fictitious internet and internet transfer services		17,291		17,291		1		100		31,854
	Chunghwa Sochamp Technology Inc.	Taiwan	License plate recognition system		20,400		20,400		2,040		51		6,177
	New Prospect Investments Holdings Ltd. (B.V.I.)	British Virgin Islands	Investment		—		—		—		100		—
	Taiwan International Standard Electronics Co., Ltd.	Taiwan	Manufacturing, selling, designing, and maintaining of telecommunications systems and equipment		164,000		164,000		1,760		40		463,178
	Viettel-CHT Co., Ltd.	Vietnam	IDC services		288,327		288,327		—		30		295,581
	International Integrated System, Inc.	Taiwan	IT solution provider, IT application consultation, system integration and package solution		283,500		283,500		22,498		33		287,560
	Skysoft Co., Ltd.	Taiwan	Providing of music on-line, software, electronic information, and advertisement services		67,025		67,025		4,438		30		146,042
	So-net Entertainment Taiwan	Taiwan	Online service and sale of computer hardware		120,008		120,008		9,429		30		98,096
	KingWay Technology Co., Ltd.	Taiwan	Publishing books, data processing and software services		69,013		71,770		3,405		26		76,713
	Taiwan International Ports Logistics Corporation	Taiwan	Import and export storage, logistic warehouse, and ocean shipping service		80,000		80,000		8,000		27		77,943
	Dian Zuan Integrating Marketing Co., Ltd.	Taiwan	Information technology service and general advertisement service		97,598		97,598		5,400		18		42,857

(Continued)

75

Investor Company	Investee Company	Location	Main Businesses and Products	Net Income (Loss) of the Investee			Recognized Gain (Loss) (Notes 1 and 2)			Note
Chunghwa Telecom Co., Ltd.	Senao International Co., Ltd.	Taiwan	Selling and maintaining mobile phones and its peripheral products	$	147,132		$	39,435		Subsidiary (Note 5)
	Light Era Development Co., Ltd.	Taiwan	Housing, office building development, rent and sale services		595			612		Subsidiary (Note 5)
	Donghwa Telecom Co., Ltd.	Hong Kong	International telecommunications IP fictitious internet and internet transfer services		(11,043	)		(11,043	)	Subsidiary (Note 5)
	Chunghwa Telecom Singapore Pte., Ltd.	Singapore	International telecommunications IP fictitious internet and internet transfer services		31,836			31,836		Subsidiary (Note 5)
	Chunghwa System Integration Co., Ltd.	Taiwan	Providing communication and information aggregative services		(3,463	)		5,524		Subsidiary (Note 5)
	CHIEF Telecom Inc.	Taiwan	Internet communication and internet data center (“IDC”) service		62,268			43,516		Subsidiary (Note 5)
	Chunghwa Investment Co., Ltd.	Taiwan	Investment		7,414			6,599		Subsidiary (Note 5)
	Prime Asia Investments Group Ltd. (B.V.I.)	British Virgin Islands	Investment		(2,322	)		(2,321	)	Subsidiary (Note 5)
	Honghwa International Co., Ltd.	Taiwan	Telecommunication constructions, telecommunication service agencies and other services		31,704			31,704		Subsidiary (Note 5)
	Chunghwa International Yellow Pages Co., Ltd.	Taiwan	Yellow pages sales and advertisement services		5,047			5,047		Subsidiary (Note 5)
	Chunghwa Telecom Vietnam Co., Ltd.	Vietnam	Information and communications technology, international circuit, and intelligent energy network service		(1,698	)		(1,698	)	Subsidiary (Note 5)
	Chunghwa Telecom Global, Inc.	United States	International data and internet services and long distance call wholesales to carriers		723			1,287		Subsidiary (Note 5)
	Spring House Entertainment Tech. Inc.	Taiwan	Network services, producing digital entertainment contents and broadband visual sound terrace development		(16,873	)		(9,351	)	Subsidiary (Note 5)
	Smartfun Digital Co., Ltd.	Taiwan	Software retail		(1,786	)		(1,161	)	Subsidiary (Note 5)
	Chunghwa Telecom Japan Co., Ltd.	Japan	International telecommunications IP fictitious internet and internet transfer services		1,690			1,690		Subsidiary (Note 5)
	Chunghwa Sochamp Technology Inc.	Taiwan	License plate recognition system		(5,696	)		(3,217	)	Subsidiary (Note 5)
	New Prospect Investments Holdings Ltd. (B.V.I.)	British Virgin Islands	Investment		—			—		Subsidiary (Notes 3 and 5)
	Taiwan International Standard Electronics Co., Ltd.	Taiwan	Manufacturing, selling, designing, and maintaining of telecommunications systems and equipment		518,223			226,080		Associate
	Viettel-CHT Co., Ltd.	Vietnam	IDC services		29,684			8,909		Associate
	International Integrated System, Inc.	Taiwan	IT solution provider, IT application consultation, system integration and package solution		(21,846	)		(6,232	)	Associate
	Skysoft Co., Ltd.	Taiwan	Providing of music on-line, software, electronic information, and advertisement services		17,138			5,529		Associate
	So-net Entertainment Taiwan	Taiwan	Online service and sale of computer hardware		(4,765	)		(1,430	)	Associate
	KingWay Technology Co., Ltd.	Taiwan	Publishing books, data processing and software services		(36,077	)		(9,375	)	Associate
	Taiwan International Ports Logistics Corporation	Taiwan	Import and export storage, logistic warehouse, and ocean shipping service		(3,925	)		(1,038	)	Associate
	Dian Zuan Integrating Marketing Co., Ltd.	Taiwan	Information technology service and general advertisement service		(11,581	)		(2,085	)	Associate

(Continued)

76

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount				Balance as of March 31, 2015
				March 31, 2015		December 31, 2014		Shares (Thousands)		Percentage of Ownership (%)		Carrying Value
	Alliance Digital Tech Co., Ltd.	Taiwan	Development of mobile payments and information processing service	$	30,000	$	30,000		3,000		13	$	19,426
	Huada Digital Corporation	Taiwan	Providing software service		250,000		250,000		25,000		50		216,257
	Chunghwa Benefit One Co., Ltd.	Taiwan	E-commerce of employee benefits		50,000		50,000		5,000		50		31,659
Senao International Co., Ltd.	Senao Networks, Inc.	Taiwan	Telecommunication facilities manufactures and sales		202,758		202,758		16,579		34		811,003
	Senao International (Samoa) Holding Ltd.	Samoa Islands	International investment		2,416,645		2,416,645		81,175		100		831,741
	Dian Zuan Integrating Marketing Co., Ltd.	Taiwan	Information technology service and general advertisement service		24,000		24,000		2,400		8		21,476
CHIEF Telecom Inc.	Unigate Telecom Inc.	Taiwan	Telecommunication and internet service.		2,000		2,000		200		100		1,399
	Chief International Corp.	Samoa Islands	Investment		6,068		6,068		200		100		28,066
Chunghwa System Integrated Co., Ltd.	Concord Technology Co., Ltd.	Brunei	Investment		47,321		47,321		1,500		100		19,839
Spring House Entertainment Tech. Inc.	Ceylon Innovation Co., Ltd.	Taiwan	International trading, general advertisement and book publishment service		10,000		10,000		—		100		10,105
Chunghwa Telecom Singapore Pte., Ltd.	ST-2 Satellite Ventures Pte., Ltd.	Singapore	Operation of ST-2 telecommunication satellite		409,061		409,061		18,102		38		584,038
Chunghwa Investment Co., Ltd.	Chunghwa Precision Test Tech Co., Ltd.	Taiwan	Semiconductor testing components and printed circuit board industry production and marketing of electronic products		203,443		212,226		12,791		46		383,846
	Chunghwa Investment Holding Co., Ltd.	Brunei	Investment		46,035		46,035		1,432		100		16,082
	Panda Monium Company Ltd.	Cayman	The production of animation		20,000		20,000		602		43		—
	CHIEF Telecom Inc.	Taiwan	Internet communication and internet data center (“IDC”) service		20,000		20,000		2,000		4		34,002
	Senao International Co., Ltd.	Taiwan	Selling and maintaining mobile phones and its peripheral products		49,731		49,731		1,001		—		45,029

(Continued)

77

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount				Balance as of March 31, 2015
				March 31, 2015		December 31, 2014		Shares (Thousands)		Percentage of Ownership (%)		Carrying Value
Chunghwa Precision Test Tech. Co., Ltd.	Chunghwa Precision Test Tech. USA Corporation	United States	Semiconductor testing components and printed circuit board industry production and marketing of electronic products	$	12,636	$	12,636		400		100	$	15,393
	CHPT Japan Co., Ltd.	Japan	Sale and maintenance of electronic parts and machinery processed products, and design of printed circuit board		2,008		2,008		1		100		1,699
	Chunghwa Precision Test Tech. International, Ltd.	Samoa Islands	Electronic materials wholesale and retail and investments		2,970		2,970		100		100		2,217
Prime Asia Investments Group, Ltd. (B.V.I.)	Chunghwa Hsingta Co., Ltd.	Hong Kong	Investment		375,274		375,274		1		100		266,242
	MeWorks LIMITED (HK)	Hong Kong	Investment		10,000		10,000		—		20		8,875
Senao International (Samoa) Holding Ltd.	Senao International HK Limited	Hong Kong	International investment		2,393,646		2,393,646		80,440		100		798,429
	HopeTech Technologies Limited	Hong Kong	Information technology and telecommunication products sales.		21,177		21,177		5,240		45		33,096
Chunghwa Investment Holding Co., Ltd.	CHI One Investment Co., Limited	Hong Kong	Investment		26,035		26,035		6,520		100		5,674
Chunghwa International Yellow Pages Co., Ltd.	Click Force Marketing Company	Taiwan	Advertising services		39,000		39,000		5,173		49		37,613

(Continued)

78

Investor Company	Investee Company	Location	Main Businesses and Products	Net Income (Loss) of the Investee			Recognized  Gain (Loss) (Notes 1 and 2)
										Note
	Alliance Digital Tech Co., Ltd.	Taiwan	Development of mobile payments and information processing service	$	(6,483	)	$	(864	)	Associate
	Huada Digital Corporation	Taiwan	Providing software service		(5,136	)		(2,568	)	Joint venture
	Chunghwa Benefit One Co., Ltd.	Taiwan	E-commerce of employee benefits		(12,363	)		(6,182	)	Joint venture
Senao International Co., Ltd.	Senao Networks, Inc.	Taiwan	Telecommunication facilities manufactures and sales		187,907			63,700		Associate
	Senao International (Samoa) Holding Ltd.	Samoa Islands	International investment		(96,187	)		(95,863	)	Subsidiary (Note 5)
	Dian Zuan Integrating Marketing Co., Ltd.	Taiwan	Information technology service and general advertisement service		(11,581	)		(934	)	Associate
CHIEF Telecom Inc.	Unigate Telecom Inc.	Taiwan	Telecommunication and internet service.		(28	)		(28	)	Subsidiary (Note 5)
	Chief International Corp.	Samoa Islands	Investment		2,211			2,211		Subsidiary (Note 5)
Chunghwa System Integrated Co., Ltd.	Concord Technology Co., Ltd.	Brunei	Investment		(9	)		(9	)	Subsidiary (Note 5)
Spring House Entertainment Tech. Inc.	Ceylon Innovation Co., Ltd.	Taiwan	International trading, general advertisement and book publishment service		62			62		Subsidiary (Note 5)
Chunghwa Telecom Singapore Pte., Ltd.	ST-2 Satellite Ventures Pte., Ltd.	Singapore	Operation of ST-2 telecommunication satellite		27,903			27,903		Associate
Chunghwa Investment Co., Ltd.	Chunghwa Precision Test Tech Co., Ltd.	Taiwan	Semiconductor testing components and printed circuit board industry production and marketing of electronic products		69,971			31,963		Subsidiary (Note 5)
	Chunghwa Investment Holding Co., Ltd.	Brunei	Investment		—			—		Subsidiary (Note 5)
	Panda Monium Company Ltd.	Cayman	The production of animation		—			—		Associate
	CHIEF Telecom Inc.	Taiwan	Internet communication and internet data center (“IDC”) service		62,268			2,260		Associate (Note 5)
	Senao International Co., Ltd.	Taiwan	Selling and maintaining mobile phones and its peripheral products		147,132			208		Associate (Note 5)
Chunghwa Precision Test Tech. Co., Ltd.	Chunghwa Precision Test Tech. USA Corporation	United States	Semiconductor testing components and printed circuit board industry production and marketing of electronic products		1,479			1,479		Subsidiary (Note 5)
	CHPT Japan Co., Ltd.	Japan	Sale and maintenance of electronic parts and machinery processed products, and design of printed circuit board		37			37		Subsidiary (Note 5)
	Chunghwa Precision Test Tech. International, Ltd.	Samoa Islands	Electronic materials wholesale and retail and investments		(54	)		(54	)	Subsidiary (Note 5)
Prime Asia Investments Group,	Chunghwa Hsingta Co., Ltd.	Hong Kong	Investment		(2,320	)		(2,320	)	Subsidiary (Note 5)
Ltd. (B.V.I.)	MeWorks LIMITED (HK)	Hong Kong	Investment		—			—		Associate

(Continued)

79

Investor Company	Investee Company	Location	Main Businesses and Products	Net Income (Loss) of the Investee			Recognized  Gain (Loss) (Notes 1 and 2)
										Note
Senao International (Samoa)	Senao International HK Limited	Hong Kong	International investment	$	(96,661	)	$	(96,661	)	Subsidiary (Note 5)
Holding Ltd.	HopeTech Technologies Limited	Hong Kong	Information technology and telecommunication products sales.		1,069			481		Associate
Chunghwa Investment Holding Co., Ltd.	CHI One Investment Co., Limited	Hong Kong	Investment		—			—		Subsidiary (Note 5)
Chunghwa International Yellow Pages Co., Ltd.	Click Force Marketing Company	Taiwan	Advertising services		(734	)		(1,415	)	Associate

Note 1: The equity in net income (loss) of investees was based on reviewed financial statements.

Note 2: The equity in net income (loss) of investees includes amortization of differences between the investment cost and net value and elimination of unrealized transactions.

Note 3: New Prospect Investments Holdings Ltd. (B.V.I.) was incorporated in March 2006, but have not yet begun operation as of March 31, 2015.

Note 4: Investment in mainland China is included in Table 6.

Note 5: The amount was eliminated upon consolidation.

(Concluded)

80

TABLE 6

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

INVESTMENT IN MAINLAND CHINA

THREE MONTHS ENDED MARCH 31, 2015

(Amounts in Thousands of New Taiwan Dollars)

Investee	Main Businesses and Products	Total Amount of Paid- in Capital		Investment Type (Note 1)	Accumulated Outflow  of Investment from Taiwan as of January  1, 2015		Investment Flows				Accumulated Outflow  of Investment from Taiwan as  of March 31, 2015		Net Income (Loss) of the Investee			% Ownership of Direct or Indirect Investment		Investment Gain (Loss) (Note 2)			Carrying Value  as of March 31, 2015		Accumulated Inward Remittance of Earnings as of March  31, 2015		Note
							Outflow		Inflow
Glory Network System Service (Shanghai) Co., Ltd.	Providing advanced business solutions to telecommunications	$	47,321	2	$	47,321	$	—	$	—	$	47,321	$	(9	)		100	$	(9	)	$	19,839	$	—	Note 6
Xiamen Sertec Business Technology Co., Ltd.	Customer services and platform rental activities		51,552	2		25,414		—		—		25,414		—			49		—			5,250		—
Senao Trading (Fujian) Co., Ltd.	Information technology services and sale of communication products		1,073,170	2		1,073,170		—		—		1,073,170		(67,017	)		100		(67,017	)		333,709		—	Note 6
Senao International Trading (Shanghai) Co., Ltd. (Note 7)	Information technology services and sale of communication products		955,838	2		955,838		—		—		955,838		(30,208	)		100		(30,208	)		294,037		—	Note 6
Senao International Trading (Shanghai) Co., Ltd. (Note 7)	Information technology services and maintenance of communication products		87,540	2		87,540		—		—		87,540		(173	)		100		(173	)		75,556		—	Note 6
Senao International Trading (Jiangsu) Co., Ltd.	Information technology services and sale of communication products		263,736	2		263,736		—		—		263,736		736			100		736			91,753		—	Note 6
Chunghwa Telecom (China) Co., Ltd.	Energy conserving and providing installation, design and maintenance services		177,176	2		177,176		—		—		177,176		45			100		45			81,474		—	Note 6
Jiangsu Zhenghua Information Technology Company, LLC	Intelligent energy serving and intelligent building services		189,410	2		142,057		—		—		142,057		(1,761	)		75		(1,318	)		134,402		—	Note 6

(Continued)

81

Investee	Main Businesses and Products	Total Amount of Paid- in Capital		Investment Type (Note 1)	Accumulated Outflow  of Investment from Taiwan as of January  1, 2015		Investment Flows				Accumulated Outflow  of Investment from Taiwan as  of March 31, 2015		Net Income (Loss) of the Investee			% Ownership of Direct or Indirect Investment		Investment Gain (Loss) (Note 2)			Carrying Value  as of March 31, 2015		Accumulated Inward Remittance of Earnings as of March  31, 2015		Note
							Outflow		Inflow
Hua-Xiong Information Technology Co., Ltd.	Intelligent system and energy saving system services in buildings	$	56,386	2	$	28,855	$	—	$	—	$	28,855	$	(2,053	)		51	$	(1,047	)	$	23,256	$	—	Note 6
Shanghai Taihua Electronic Technology Limited (“STET”)	Design of printed circuit board and related consultation service		2,970	2		2,970		—		—		2,970		(54	)		100		(54	)		2,172		—	Note 6

(Continued)

82

Investee	Accumulated Investment  in Mainland China as of March 31, 2015		Investment Amounts Authorized by Investment Commission, MOEA		Upper Limit on Investment Stipulated by Investment Commission, MOEA
Glory Network System Service (Shanghai) Co., Ltd. (Note 3)	$	47,321	$	47,321	$	409,943
Xiamen Sertec Business Technology Co., Ltd. (Note 4)		25,414		79,882		740,225
Senao International Trading Co., Ltd. (Note 5)		2,380,284		2,680,644		—
Chunghwa Telecom (China) Co., Ltd. (Note 5)		177,176		177,176		—
Jiangsu Zhenghua Information Technology Company, LLC (Note 5)		142,057		142,057		—
Hua-Xiong Information Technology Co., Ltd. (Note 5)		28,855		44,653		—
Shanghai Taihua Electronic Technology Limited (Note 4)		2,970		2,970		740,225

Note 1: Investments were through a holding company registered in a third region.

Note 2: Recognition of investment gains (losses) was calculated based on the investee’s reviewed financial statements.

Note 3: The amount was calculated based on the net assets value of Chunghwa System Integration Co., Ltd.

Note 4: The amount was calculated based on the consolidated net assets value of Chunghwa Investment Co., Ltd.

Note 5: Based on “Principle of investment or Technical Cooperation in Mainland China”, Chunghwa and Senao are not subjective to the limited amount due to the operating headquarters documents issued by Industrial Development Bureau.

Note 6: The amount was eliminated upon consolidation.

Note 7: The English name is the same as the above entity; however, the Chinese names included in the respective Articles of Incorporations are different.

(Concluded)

83

TABLE 7

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT TRANSACTIONS

THREE MONTHS ENDED MARCH 31, 2015

(Amounts in Thousands of New Taiwan Dollars)

Year	No. (Note 1)	Company Name	Related Party	Nature  of Relationship (Note 2)	Transaction Details
					Financial Statement Account	Amount (Note 5)		Payment Terms (Note 3)		% to Total Sales  or Assets (Note 4)
2015	0	Chunghwa Telecom Co., Ltd.	Senao International Co., Ltd.	a	Accounts receivable	$	39,326		—		—
					Accrued custodial receipts		196,934		—		—
					Accounts payable		1,068,561		—		—
					Amounts collected for others		401,541		—		—
					Revenues		246,483		—		—
					Operating costs and expenses		2,789,903		—		5
					Non-operating expense and losses		10		—		—
					Customer’s deposits		1,492		—		—
					Work in process		1,086		—		—
			CHIEF Telecom Inc.	a	Accounts receivable		24,259		—		—
					Accounts payable		61,323		—		—
					Amounts collected for others		771		—		—
					Revenues		56,620		—		—
					Operating costs and expenses		84,352		—		—
					Customer’s deposits		177		—		—
			Chunghwa Precision Test Tech. Co., Ltd.	a	Accounts receivable		20		—		—
					Accrued custodial receipts		92		—		—
					Accounts payable		1		—		—
					Revenues		639		—		—
					Operating costs and expenses		60		—		—
			Chunghwa International Yellow Pages Co., Ltd.	a	Accounts receivable		2,331		—		—
					Accrued custodial receipts		4,405		—		—
					Accounts payable		10,025		—		—
					Amounts collected for others		25,344		—		—
					Revenues		6,564		—		—
					Operating costs and expenses		12,421		—		—
			Chunghwa System Integration Co., Ltd.	a	Accounts receivable		28,683		—		—
					Accrued custodial receipts		3,157		—		—
					Accounts payable		252,394		—		—
					Revenues		1,567		—		—
					Non-operating income and gains		147		—		—
					Operating costs and expenses		139,401		—		—
					Refundable deposits		33		—		—
					Customer’s deposits		7,423		—		—
					Work in process		1,844		—		—
					Prepaid expenses		681		—		—
					Spare parts		848		—		—

(Continued)

84

Year	No. (Note 1)	Company Name	Related Party	Nature  of Relationship (Note 2)	Transaction Details
					Financial Statement Account	Amount (Note 5)		Payment Terms (Note 3)		% to Total Sales  or Assets (Note 4)
					Property, plant and equipment	$	19,099		—		—
					Intangible assets		26,599		—		—
			Chunghwa Telecom Global Inc.	a	Accounts receivable		11,623		—		—
					Accounts payable		56,019		—		—
					Revenues		15,664		—		—
					Operating costs and expenses		83,301		—		—
			Donghwa Telecom Co., Ltd.	a	Accounts receivable		45,564		—		—
					Accounts payable		60,072		—		—
					Revenues		36,688		—		—
					Operating costs and expenses		34,071		—		—
			Spring House Entertainment Inc.	a	Accounts receivable		154		—		—
					Accounts payable		16,935		—		—
					Amounts collected for others		4,449		—		—
					Revenues		371		—		—
					Operating costs and expenses		7,304		—		—
					Customer’s deposits		5		—		—
			Chunghwa Telecom Japan Co., Ltd.	a	Accounts receivable		2,954		—		—
					Accounts payable		5,415		—		—
					Revenues		7,993		—		—
					Operating costs and expenses		16,360		—		—
			Light Era Development Co., Ltd.	a	Accounts payable		3,391		—		—
					Revenues		818		—		—
					Operating costs and expenses		13,230		—		—
					Work in process		18,783		—		—
					Customer’s deposits		89		—		—
			Chunghwa Telecom Singapore Pte., Ltd.	a	Accounts receivable		10,877		—		—
					Accounts payable		42,619		—		—
					Revenues		29,071		—		—
					Operating costs and expenses		17,737		—		—
			Chunghwa Investment Co., Ltd.	a	Accounts payable		13		—		—
					Revenues		299		—		—
			Chunghwa Telecom (China) Co., Ltd.	a	Accounts receivable		750		—		—
					Accounts payable		1,862		—		—
					Operating costs and expenses		1,862		—		—
			Smartfun Digital Co., Ltd.	a	Amounts collected for others		1,199		—		—
					Revenues		432		—		—
			Chunghwa Telecom Vietnam Co., Ltd.	a	Accounts receivable		60		—		—
					Accounts payable		628		—		—
					Revenues		60		—		—
					Operating costs and expenses		628		—		—
			Chunghwa Sochamp Technology Inc.	a	Accounts receivable		63		—		—
					Accounts payable		29,716		—		—
					Revenues		141		—		—
					Operating costs and expenses		2,195		—		—
					Customer’s deposits		95		—		—
			Chief International Corp	a	Accounts receivable		5,729		—		—
					Accounts payable		7,995		—		—

(Continued)

85

Year	No. (Note 1)	Company Name	Related Party	Nature of Relationship (Note 2)	Transaction Details
					Financial Statement Account	Amount (Note 5)		Payment Terms (Note 3)		% to Total Sales or Assets (Note 4)
			Honghwa International Co., Ltd.	a	Accounts payable	$	508,334		—		—
					Amounts collected for others		15,988		—		—
					Revenues		3,800		—		—
					Non-operating income and gains		325		—		—
					Operating costs and expenses		738,167		—		—
					Customer’s deposits		360		—		—
	1	Senao International Co., Ltd.	Smartfun Digital Co., Ltd.	c	Accounts receivable		85		—		—
					Revenues		20		—		—
			Chunghwa International Yellow Pages Co., Ltd.	c	Revenues		104		—		—
			Chunghwa System Integration Co., Ltd.	c	Accounts receivable		170		—		—
					Revenues		191		—		—
	2	CHIEF Telecom Inc.	Chunghwa System Integration Co., Ltd.	c	Accounts receivable		1		—		—
					Revenues		5		—		—
			Chunghwa Telecom Singapore Pte., Ltd.	c	Accounts receivable		253		—		—
					Revenues		1,290		—		—
			Spring House Entertainment Inc.	c	Revenues		760		—		—
			Donghwa Telecom Co., Ltd.	c	Accounts receivable		147		—		—
					Revenues		211		—		—
			Chunghwa Telecom Japan Co., Ltd.	c	Accounts receivable		1		—		—
	3	Chunghwa System Integration Co., Ltd.	Chunghwa Precision Test Tech. Co., Ltd.	c	Accounts receivable		55		—		—
					Revenues		105		—		—
			Light Era Development Co., Ltd.	c	Accounts receivable		282		—		—
					Revenues		289		—		—
			Honghwa International Co., Ltd.	c	Accounts receivable		2,569		—		—
					Revenues		3,554		—		—
	5	Chunghwa Telecom Global, Inc.	Donghwa Telecom Co., Ltd.	c	Accounts receivable		327		—		—
					Revenues		997		—		—
			Chunghwa Telecom Singapore Pte., Ltd	c	Revenues		806		—		—
			Chunghwa Precision Test Tech. Co., Ltd.	c	Accounts receivable		230		—		—
					Revenues		69		—		—
					Non-operating income and gains		45		—		—
	8	Light Era Development Co., Ltd.	CHIEF Telecom Inc.	c	Revenues		22,305		—		—
	9	Chunghwa Telecom Singapore Pte., Ltd.	CHIEF Telecom Inc.	c	Accounts receivable		714		—		—
					Revenues		1,047		—		—
			Chunghwa Telecom Global, Inc.	c	Revenues		28		—		—
			Chunghwa Telecom Japan Co., Ltd.	c	Revenues		351		—		—
			Donghwa Telecom Co., Ltd.	c	Accounts receivable		787		—		—
					Revenues		3,420		—		—
	10	Chunghwa Telecom Japan Co., Ltd.	Chunghwa Telecom Singapore Pte., Ltd.	c	Revenues		1		—		—
			CHIEF Telecom Inc.	c	Accounts receivable		21		—		—
					Revenues		21		—		—

(Continued)

86

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

a. “0” for the Company.

b. Subsidiaries are numbered from “1”.

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

a. The Company to subsidiaries.

b. Subsidiaries to the Company.

c. Subsidiaries to subsidiaries.

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

Note 4: For assets and liabilities, amount is shown as a percentage to consolidated total assets as of March 31, 2015, while revenues, costs and expenses are shown as a percentage to consolidated total operating revenues for the three months ended March 31, 2015.

Note 5: The amount was eliminated upon consolidation.

(Concluded)

87