CHT - AGM Information 2020 | FinancialReports.eu

(This translated document is prepared in accordance with the Chinese version and is for reference only. In the event of any inconsistency between the English version and the Chinese version, the Chinese version shall prevail.)

Chunghwa Telecom Co., Ltd. 2020 Annual General Meeting Minutes

I. Time: 9:00 a.m. of May 29, 2020

II. Venue: Chunghwa Telecom Training Institute

No. 168, Minzu Road, Banchiao District, New Taipei City, Taiwan, R.O.C.

III. Number of shares represented by shareholders present:

Shares represented by the shareholders in attendance or by proxies totaled 6,230,999,428 (including the 6,220,727,091 shares represented by the shareholders exercising voting rights through e-voting), accounting for 80.32% of the total shares issued by the Company, i.e. 7,757,446,545 shares.

IV.Chairman: Chi-Mau Sheih, Chairman of the Board of Directors Recorder: Hsiu-Chuan Lee

Directors represent:

Chi-Mao Sheih

Shui-Yi Kuo

Lo-Yu Yen, Chairman of the Audit Committee, Member of the Strategy Committee and Compensation Committee, Independent Director

Shin-Yi Chang

Sin-Horng Chen

Hung-Yi Hsiao

Chin-Tsai Pan

JenRan Chen, Chairman of the Compensation Committee, Member of the Strategy Committee

and Audit Committee, Independent Director

Yu-Fen Lin, Member of the Audit Committee and Compensation Committee, Independent Director

Yi-Chin Tu, Member of the Audit Committee and the Strategy Committee, Independent Director

Attendees:

Chih-Poung Liou, Attorney of Stellex Law Firm

Chia-Chi Wang, Attorney of Stellex Law Firm

Dien-Sheng Chang, CPA of Deloitte & Touche

V. Chairman’s address: (omitted)

VI.Report Items

1. 2019 business report (Attachment 1)

2. 2019 audit committee's review report (Attachment 2)

3. 2019 compensation distribution to directors and employees (Attachment 3)

(Questions raised by the shareholders and the managements’ responses were omitted)

VII. Matters for Ratification

1. Ratification of 2019 business report and financial statements (proposed by the Board of Directors)

Explanation:

1) The Company’s 2019 financial statements (Attachment 5-8 and Attachment 10-13), including balance sheets, statements of comprehensive income, statements of changes in equity, and statements of cash flows, were audited by Mr. Dien-Sheng Chang and Mr. Ching-Pin Shih of Deloitte & Touche. The audit opinions relating to the aforementioned financial statements were issued hereby (Attachment 4 and Attachment 9). The Company’s 2019 business report (Attachment 1) and the aforementioned financial statements have been reviewed and determined to be accurate by the Audit Committee members of the Company with review report submitted hereby (Attachment 2).
2) This proposal has been approved by the 6th meeting of the 9th Board of Directors on February 26, 2020.
3) This proposal is hereby submitted to the Annual General Meeting for ratification.

(Questions raised by the shareholders and the managements’ responses were omitted)

Resolution:

Voting results: 6,001,124,801 “for” votes, representing 96.31% of the shares present at the time of voting; 686,426 “against” votes; 229,188,201 “abstain/non-vote” votes; 0 “invalid“ vote

RESOLVED, the above proposal submitted by the Board of Directors was ratified upon voting.

2. Ratification of 2019 earnings distribution proposal (proposed by the Board of Directors) Explanation:

1) The Company's 2019 financial statements have been finalized, and earnings shall be distributed as stipulated in the 2019 Earnings Distribution Proposal (Attachment 14). It is proposed that cash dividends paid to stockholders of NT$32,782,969,099. Common stockholders will receive cash dividends of NT$4.226 per share based on their number of shares held as recorded on the ex-dividend base date. The aforementioned cash dividends will be distributed to stockholders from 2019 earnings as a priority.
2) Each shareholder's cash dividend shall be issued to the rounded-down full NT dollar
2 -

(fractional amount be ignored). After which, the Chairman shall be authorized to distribute or reallocate any remaining amount, and set a record date of ex-cash dividend for distribution after ratification by the Annual General Meeting.

3) Should the Company’s capital position change in the future, requiring adjustments in the cash distribution ratio, it is proposed that the Chairman be authorized to manage the change in the cash distribution ratio.
4) This proposal has been approved by the 6th meeting of the 9th Board of Directors on February 26, 2020 and is hereby submitted to the Annual General Meeting for ratification.

(Questions raised by the shareholders and the managements’ responses were omitted)

The amended proposal by shareholders:

Amended proposal : The shareholder, Mr. Chu (account no. 41207), proposed to distribute cash dividend of NT$5 per share.

Resolution:

The Chairman determined to vote for the origin proposal first in accordance with the Ordinance of Shareholders Meetings.

Voting results: 6,004,299,274 “for” votes, representing 96.36% of the shares present at the time of voting; 4,720,826 “against” votes; 221,979,328 “abstain/non-vote” votes; 0 “invalid“ vote

RESOLVED, the above proposal submitted by the Board of Directors was ratified upon voting.

VIII. Matters for Discussion

1. Amendments to the Articles of Incorporation of the Company (proposed by the Board of Directors)

Explanation:

1) In response to the advocate of "Technology Enforcement" policy by the government, it has been proposed to add three business items – "Metrological Instruments Importing Business (F401181)", "Metrological Instruments Repairing Business (JA02051)" and "Metrological Instruments Manufacturing Business (CE01021)" so that the Company may qualify for commission by government in relation to smart transportation related cases. Article 2 of the Articles of Incorporation are proposed to be amended accordingly by adding business items from Item 54 to Item 56 and the numbering for the original Item 54 is thus pushed to Item 57 in sequence.
2) The Comparison Table for the draft amendment to Article 2 of the Articles of Incorporation of Chunghwa Telecom Co., Ltd. is attached (Attachment 15).
3) This proposal has been approved by the 6th meeting of the 9th Board of Directors on February 26, 2020 and is hereby submitted to the Annual General Meeting of Shareholders for resolution.
3 -

(Questions raised by the shareholders and the managements’ responses were omitted)

Resolution:

Voting results: 5,992,840,392 “for” votes, representing 96.17% of the shares present at the time of voting; 770,247 “against” votes; 237,388,789 “abstain/non-vote” votes; 0 “invalid“ vote

RESOLVED, the above proposal submitted by the Board of Directors was approved upon voting.

2. Release of non-competition restrictions on Directors (proposed by the Board of Directors) Explanation:

1) According to Article 209 of the Company Act and Article 12 of the Meeting Rules of Order of the Board of Directors of the Company, a director who does anything for himself or on behalf of another person that is within the scope of the company's business, shall submit to the Board of Directors for discussion and explain to the meeting of shareholders the essential contents of such an act and to obtain its approval.
2) Some of the Company’ directors concurrently acts as directors or run business for the other companies which have the same or similar lines of business with the Company. Hence it is proposed to the shareholders’ meeting to release non-competition restrictions on those directors in accordance with the laws.
3) It is proposed to release non-competition restrictions on the directors, Mr. Chi-Mau Sheih, Mr. Sin-Horng Chen, Mr. Shui-Yi Kuo, Mr. Yu-Lin Huang and Mr. Hung-Yi Hsiao, when they assume the positions at the following companies:

Director	Position at the Company with same or similar lines of business	Same or similar lines of business of the company
Chi-Mau Sheih (Chairman)	Director, Industrial Technology Research Institute	Software Design Service, Rental and Leasing Business, Management Consulting Services, Digital Information Supply Services, Data Processing Services, Sanitary and Pollution Controlling Services, Energy Technical Services, Engineering Consultancy, Cybernation Equipments Construction
Sin-Horng Chen (Director)	Managing Director, Industrial Technology Research Institute	Software Design Service, Rental and Leasing Business, Management Consulting Services, Digital Information Supply Services, Data Processing Services, Sanitary and Pollution Controlling Services, Energy Technical Services, Engineering Consultancy, Cybernation Equipments Construction

Director	Position at the Company with same or similar lines of business	Same or similar lines of business of the company
Shui-Yi Kuo (Director)	Director, Cornerstone Ventures Co., Ltd.	Management Consulting Services
Yu-Lin Huang (Director)	Director, Taiwan International Ports Corp.	Parking Garage Business, Real Estate Rental and Leasing, Software Design Services, Exhibition Services, Rental and Leasing Business
Hung-Yi Hsiao (Director)	Independent Director, China Electric Manufacturing Corp.	Real Estate Rental and Leasing, Restrained Telecom Radio Frequency Equipments and Materials Construction, Electric Appliance Construction, Illumination Equipments Construction, Energy Technical Services

4) This proposal has been approved by the 6th meeting of the 9th Board of Directors on February 26, 2020 and is hereby submitted to the Annual General Meeting of Shareholders for resolution.

(Questions raised by the shareholders and the managements’ responses were omitted)

Resolution:

Voting results: 5,029,412,201 “for” votes, representing 80.71% of the shares present at the time of voting; 3,897,845 “against” votes; 1,197,689,382 “abstain/non-vote” votes; 0 “invalid“ votes

RESOLVED, the above proposal submitted by the Board of Directors was approved upon voting.

IX.Extemporary Motions :

The inquiries and suggestions raised by shareholders totaled 87.

X. Meeting Adjourned ： 7:08 p.m. of the same day
5 -

Attachment 1

Report Items

I. 2019 business report

The telecommunications industry is experiencing ongoing change. In 2019, to lay a solid foundation for the Company’s mid- to long-term development, we initiated a customer-centric transformation that focuses on the core business, emerging businesses, cost optimization, and improving our core competencies, and we have made progress on all four fronts. At the same time, we proactively responded to market challenges in spite of the continued intense competition, and successfully solidify our leading market position. In 2019, the mobile market is less competitive, but pricing structures did not change much. On the one hand, we enhanced the subscriber number of higher-price plans through bundling mobile handsets, and on the other hand furthered our development in the student demographic and new IoT applications, which successfully stimulated an increase in mobile subscriber numbers and mitigated the decrease of ARPU. At the end of 2019, total mobile subscribers number exceeded 10.649 million, and our market share by mobile subscribers and revenue continued to increase. Our mobile network quality was also acknowledged by international institutions such as Speedtest and Frost & Sullivan, who continued to award us with top honors, helping us lay a solid foundation for the upcoming 5G era.

As artificial intelligence technology and related applications continued to evolve vigorously, we believe that home-centric digital services will lie at the core of smart living solutions in the future. Therefore, in 2019, we continued to improve fixed network broadband speed and digital application services. As part of our broadband strategy, we launched higher-speed broadband offerings, encouraged users to migrate to higher speed service and increase our revenues. As of the end of 2019, the total number of broadband users was 4.405 million, which was slightly lower than that in 2018, but the number of users signing up for connection speeds of 100Mbps or higher grow by 11% year over year to 1.582 million. Customers signing up for connection speeds of 300Mbps or higher also continue to multiply, driving ARPU growth. Given our efforts, 1Gbps broadband coverage was 66.4% nationwide.

In our smart home business, the number of MOD/IPTV subscribers reached 2.082 million, and we maintained our position as the largest audio/video platform in Taiwan. In addition, we continued to develop content and price plans based on customer demand. In the third quarter, we launched our free-to-choose channel plan to encourage users to package channels in preferences, which was well received and, together with growth in on demand content, drove MOD/IPTV revenue growth of 10.6% year over year. In the future, we will continue to leverage new technologies, including multi-view broadcasting, 4k high definition, and even VR, to broadcast major international sports events, such as the 2020 Tokyo Olympic Games, to create high-quality entertainment experiences for customers. In addition, we will continue to develop innovative applications in AIoT and FinTech, such as smart health care, cloud service of personal health record, smart speakers, and digital finance to accelerate growth in our emerging businesses.

In 2019, to further increase our capacity of revenue growth and strengthen operating efficiency in enterprise customer and ICT services business, we enhanced the synergies among our sales, product, and R&D functions, which successfully returned our ICT projects revenue

3 6 -

back to the growth trajectory and the proportion of revenue from enterprise customers also continued to increase.

In the emerging businesses segment, our IDC, cloud, big data, and IoT services continued to develop, and sales of IoT devices grew significantly as well. For example, by offering our “Smart Security” solution, we acquired multiple police intersection monitoring projects throughout Taiwan, which solidified our position as Taiwan’s largest cloud video surveillance service provider. In addition, our “IoT Platform” helped us acquire large-scale IoT bidding projects in 2019, including AMI Smart Meters Phase II, the Hsinchu 5G Smart Street Lights Project, and the Yilan Smart Parking Project. We also developed applications of air quality monitoring, street lights, and transportation infrastructure to provide IoT total solutions in various verticals to generate revenue streams for the Company. Furthermore, the IoT platform also allowed our self-developed services, including railway engineering, self-driving vehicles, smart agriculture, smart home, speech-to-text cloud and health related cloud services to further develop and expand business opportunities for the Company.

Business opportunity development was not restricted to domestic markets. In 2019, we expanded in the Southeast Asia market with a new office in Indonesia to prepare for future partnership opportunities. In addition, we formed an alliance with CAT Telecom in Thailand for smart city opportunities.

In order to accelerate our transformation, we continued to improve network construction and staff deployment by upgrading existing network of flexible expansion, agile delivery, network automation, and cloud-network integration to accomplish digital convergence. As SJC2 submarine cable system is expected to be completed in the first quarter of 2021, we will obtain additional 18 Tbps capacity entitlement for international connections. Our world-class CHT Taipei IDC has been in services since 2016, and now is in its third phase of construction due to continuously increasing demand. In addition, we have built 5G trial networks and field tests, and completed critical technology evaluation and verification, leading preparations for introducing 5G to Taiwan. We are ready to be ahead of our peers to lead Taiwan into the new era of 5G.

Financial Performances

For full year 2019, Chunghwa Telecom’s consolidated revenue was NT$207.52 billion, representing a decrease of 3.7% compared to the prior year. This was mainly due to the impacts of continued competition in voice services and VoIP substitution, which resulted in downward pressure on revenues, and a decrease in mobile handset sales, which offset revenue growth from ICT projects, internet services, and MOD/IPTV.

Consolidated costs and expenses for full year 2019 was NT$166.75 billion, which decreased by 3.0% compared to 2018, mainly due to a decrease in network interconnection expenses. In 2019, capital expenditures were NT$24.17 billion, and was mainly spent on supporting business growth and consolidating market position. For example, we expanded fiber coverage, increased mobile service speed through carrier aggregation infrastructure, and strengthened procurement efficiency. As a result of the execution of our business strategies and cost control initiatives, net income attributable to stockholders of the parent company was NT$32.79 billion, or NT$4.23 per share.

4 7 -

In 2019, overall net reinvestment income was NT$1.65 billion. We continued to focus on our broad-based alliance investment strategy, strengthen our group structure, including reinvesting in the web-only bank, the NEXT BANK, deepen our solutions for digital banking, develop financial information security, and extend our digital channel services. In addition, we built 5G accelerators to cultivate innovative 5G applications in Taiwan and to promote the creation of a 5G ecosystem.

Achievements in Research and Development

In 2019, Chunghwa Telecom’s main achievements in R&D include:

Core business: new form network, hicloud public cloud, software-defined data center, next-generation FTTH, mobile edge computing, wireless access, smart maintenance;
Emerging businesses: Intelligent Video Surveillance, technologies and applications for law enforcement, intelligent maritime port, big data traffic analysis, IoT vehicle fleet management, 3-phase smart meter, smart care, identity verification, innovative blockchain applications, enterprise information security defense, digital audio and video (MOD+OTT), AR applications, mobile payment (Hami Pay), AI semantic cloud, smart customer service for enterprise customers;
Cost optimization: software-defined network, fixed and mobile order/billing management system, enterprise customer business operations support system and online stores, smart customer service, and big data applications;
Improving fundamental capabilities: 5G connection standards, 5G-related issues testing, high-speed optical transmission system disaggregation technology, IPv6 Ready Logo Gold Badge inspection service, virtual and physical resource management;
Overall core competencies: in 2019, we applied for 178 patents and received 176 approvals. In addition, we obtained 14 major international and domestic awards.

Fulfilling Corporate Social Responsibility

Chunghwa Telecom upholds our brand’s spirit, “Always Ahead,” and longstanding principles of “Sustainable Corporate Development,” “Compliance with Global Environmental Trends,” and “Supporting Minorities” to give back to society.

In 2019, our pioneering “I Love SDGs” (5I SDGs) initiative to align with the United Nations’ 17 sustainable development goals focuses on channeling resources to remote rural areas and vulnerable ethnic groups. We established 89 "Good Digital Neighbor" programs throughout Taiwan to help community residents use technology. We have invested in the "Outpost Taiwan" project for the past 11 consecutive years, helping a total of over 500 youths record local stories with digital technology. We have also promoted the “Reading Partner” community online tutoring service for more than 11 years, allowing 4,035 college students to provide online after school tutoring to 2,577 primary school students. Moreover, our “EYE Social Innovation Customer Service Center” has helped the visually impaired with education and employment opportunities for nearly 10 years.

We took the lead in being introduced to and completing two major international environmental standards, “ISO 14046 Water Footprint Standard” and “ISO 14067 Carbon Footprint Standard,” becoming the first telecom provider to simultaneously attain both international environmental standards. We are also the first company in Taiwan to promote,

5 8 -

initiate, and act upon the “Low Carbon Economy - Sustainable Supply Chain” initiative, following ISO 20400 sustainable procurement guidelines, and joining the CDP supply chain project, through which we promoted a sustainable hierarchical management system for hundreds of suppliers and implemented sustainable procurement.

In addition, to confront the social security risks caused by the current coronavirus outbreak (COVID-19), we are proactively leveraging our technology capabilities to assist the government with epidemic prevention and enacted our corporate epidemic prevention plan. Besides, we designed a variety of web conference offerings to assist enterprises and campuses with online conferences and remote tutoring. We also help those who were in quarantine spend time well by providing them free mobile content for entertainment, aiming to help the society successfully operate under goodwill.

Honors and Awards

Chunghwa Telecom maintains a nationwide infrastructure and service presence, and our household brand and service value is well-known in Taiwan. We require ourselves to operate in accordance with the highest standards of corporate governance. Our focus on fulfilling customer demand, to customers’ satisfaction, helps us create enterprise value. Our efforts have been recognized through major international and domestic awards.

In 2019, Chunghwa Telecom received Frost & Sullivan’s “Best Telecom Operator” award for Asia Pacific emerging markets, defeating all other telecom operators in the region. At the same time, we received the Taiwan country awards for Best Mobile Service and Best IDC Service Provider. We were also honored to receive the "World Brand Award" from the World Brand forum for the fifth year in a row. Our outstanding brand value and national recognition won us the “Country Brand Award” as well. In globally-renowned brand evaluation institution BrandFinance’s Global 500 list of 2019, Chunghwa Telecom ranked 366 and was one of the few brands from Taiwan to be recognized. We received the "Trusted Brands" Platinum Award in the telecommunication category from Reader's Digest for the 15th year in a row, and again received first place in Business Today’s “Ideal Business Brand” for the telecommunication sector. Our services were recognized when we regained the “5 Star Service Award” from Global Views Monthly. For the eighth year in a row, we were included in the Dow Jones Sustainability Index’s Emerging Markets Index, illustrating international investors’ continued recognition of Chunghwa Telecom’s sustainable operations. Furthermore, we received finance magazine The Asset’s Platinum Corporate Award for the seventh consecutive year, commending our achievement in areas related to financial performance, operational management, corporate governance, social responsibility, environmental responsibility, and investor relations.

Future Outlook

In the coming year, our two-pillar “5G + Transformation” strategy will drive the Company into the 5G era. Leveraging our existing 4G advantages as a foundation, we will proactively launch 5G network construction to build a 4G/5G mobile broadband network with the largest bandwidth and widest coverage, and deploy 5G, SDN, and other new-generation networks, to provide various convergent services to the personal, household, and enterprise markets. In addition, we will continue to invest in technology research and development, recruit and cultivate outstanding talents, and cooperate with strategic partners to build an industrial

6 9 -

ecosystem. We aim to lead and drive the development of various emerging ICT services, expand in domestic and international markets, achieve “customer-centric value creation,” realize the vision of becoming a “smart life leader and digital economy enabler,” and become the most valuable and trustworthy information and communications technology company.

In 2020, we successfully obtained the most favorable frequency bands during 5G spectrum bidding, including 3.42-3.51GHz in the 3.5GHz band and 27.9-28.5GHz in the 28GHz band, establishing a competitive advantage for our long-term development for the next 20 years. In addition, we successfully obtained broadcasting rights as Taiwan’s new media platform for the 2020 Tokyo Olympic Games. This will be the first time that Taiwan combines 4K and VR technology with 5G services to broadcast the Summer Olympics, once again innovating the video viewing experience and driving the industry to develop forward.

In addition, with the advent of the 5G era, we expect the B2B2X model, in which telecom operators would team up with enterprise customers or government entities to provide services to end users together, would become the regular service. Therefore, we will continue our strategy of “alliance expansion” to develop strategic reinvestment activities. Through M&A, R&D, and alliance, we aim to develop new services and invest in digital-focused startups to build medium- and long-term growth momentum for Chunghwa Telecom Group.

We will also support the company’s future growth and direction from the avenues of corporate governance and the composition of the Board of Directors. We will balance diverse education backgrounds and experiences with gender when selecting appropriate directors and independent directors. In addition, we will strengthen the operations of each committee, communications with investors, and the Company’s operations in order to create value for customers, shareholders, employees, and society.

Chi-Mau Sheih, Chairman Shui-Yi Kuo, President Shu-Ling Chen, Accounting Officer

February 26, 2020

-- 10 - 7 -

Attachment 2

II. 2019 audit committee's review report

==> picture [455 x 379] intentionally omitted <==

11 -- 8 -

Attachment 3

III. 2019 compensation distribution to directors and employees

The 2019 compensation distribution to directors and employees was approved by the 6th meeting of the 9th Board of Directors on February 26, 2020.
The 2019 compensation distribution to directors and employees：

2019 compensation distribution to directors and employees：	2019 compensation distribution to directors and employees：

Item		NT$
Net income		32,788,545,870
Profit	(A)	41,423,996,400
Ratio of Directors’ compensation to profit	(B)	0.085%
Directors’ compensation	(C)=(A)*(B)	35,210,397
Ratio of Employees’ compensation to profit	(D)	2.7187%
Employees’ compensation	(E)=(A)*(D)	1,126,194,190

12 -- 9 -

Attachment 4

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders Chunghwa Telecom Co., Ltd.

Opinion

We have audited the accompanying consolidated financial statements of Chunghwa Telecom Co., Ltd. and its subsidiaries (the Company), which comprise the consolidated balance sheets as of December 31, 2019 and 2018, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the related notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2019 and 2018, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2019. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

2 -- 13 -11

The descriptions of the key audit matters of the consolidated financial statements for the year ended December 31, 2019 are as follows:

Revenue Recognition on Mobile Service

Key audit matter:

Refer to Notes 3 and 28 to the consolidated financial statements.

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

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

Corresponding audit procedures:

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

With the assistance of our IT specialists, we:
Identified the significant systems used to process revenue transactions and tested the general IT controls over each of these systems, including testing of user access controls and change management controls.
Performed testing of system interface controls and automated controls within the relevant revenue streams, as well as the controls designed to ensure the accuracy and completeness of revenue.
We tested internal controls within the relevant revenue business processes, including those in place to reconcile the various systems to the Company’s accounting system.
We selected samples from mobile service revenue and agreed to customer contracts and records of cash receipts.

Revenue Recognition on Project Business

Key audit matter:

Refer to Notes 3 and 4 to the consolidated financial statements.

The Company’s project business is highly customized and mainly provides customers with combinations of various equipment and/or services. Project business contracts may likely outsource partial or substantial part of the obligations or services to third parties. The accounting for these contracts requires judgement, particularly as it relates to the determination of the Company acting as a principal or an agent.

Given the judgments on whether the Company is acting as a principal or an agent is required in order to determine if revenue should be recognized gross as principal versus net as agent, auditing such revenue required extensive audit effort due to the volume of contracts and involved a high degree of judgment when performing audit procedures and evaluating the result of these procedures.

4 -- 3 - 1 2

Corresponding audit procedures:

Our audit procedures related to management’s revenue recognition on project business included the following, among others:

We tested the effectiveness of controls over project business revenue, including those over principalversus-agent considerations and revenue recognition.
We performed the following audit procedures on a sample basis:
Obtained project business contracts and the evaluation documentation prepared by management and determined the reasonableness of management’s judgement on whether the Company is acting as a principal or an agent after considering whether the Company is the primary obligation provider, its exposures to inventory risks and the discretion in establishing the prices by reviewing the contractual terms, comparing to the business substance and evaluating if it is consistent with relevant accounting standards.
Performed detail transaction testing by agreeing the amounts recognized to source documents and testing the mathematical accuracy of the recorded revenue.
Confirmed project business contract terms with customers.

Emphasis of Matter

As disclosed in Note 5 to the consolidated financial statements, the Company initially applied IFRS 16 “Leases” in 2019. Our audit opinion is not modified in respect of this matter.

Other Matter

We have also audited the parent company only financial statements of Chunghwa Telecom Co., Ltd. as of and for the years ended December 31, 2019 and 2018 on which we have issued an unmodified opinion with emphasis of matter.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRS, IAS, IFRIC, and SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of the consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

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

15 -- 4 -13

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

As part of an audit in accordance with the auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

16 -- 5 -14

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2019 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

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

Deloitte & Touche Taipei, Taiwan Republic of China

February 26, 2020

Notice to Readers

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

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

17 -- 6 -15

Attachment 5

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents Financial assets at fair value through profit or loss Hedging financial assets Contract assets Trade notes and accounts receivable, net Receivables from related parties Inventories Prepayments Other current monetary assets Other current assets Total current assets NONCURRENT ASSETS Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income Investments accounted for using equity method Contract assets Property, plant and equipment Right-of-use assets Investment properties Intangible assets Deferred income tax assets Incremental costs of obtaining contracts Net defined benefit assets Prepayments Other noncurrent assets Total noncurrent assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term loans Financial liabilities at fair value through profit or loss Contract liabilities Trade notes and accounts payable Payables to related parties Current tax liabilities Lease liabilities Other payables Provisions Other current liabilities Total current liabilities NONCURRENT LIABILITIES Contract liabilities Long-term loans Deferred income tax liabilities Provisions Lease liabilities Customers’ deposits Net defined benefit liabilities Other noncurrent liabilities Total noncurrent liabilities Total liabilities EQUITY ATTRIBUTABLE TO STOCKHOLDERS OF THE PARENT Common stocks Additional paid-in capital Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other adjustments Total equity attributable to stockholders of the parent NONCONTROLLING INTERESTS Total equity TOTAL		2019 Amount % $ 34,049,643 7 516 - 327 - 4,441,196 1 26,407,783 6 16,834 - 17,344,276 4 1,883,259 - 7,498,564 2 2,429,664 - 94,072,062 20 778,105 - 7,268,917 2 7,354,226 2 2,600,913 - 283,694,215 59 11,364,249 2 8,169,393 2 47,046,525 10 3,258,607 1 942,652 - 2,127,335 - 2,679,335 1 6,101,704 1 383,386,176 80 $ 477,458,238 100 $ 90,000 - 239 - 16,839,830 4 15,312,274 3 653,983 - 4,020,670 1 3,291,330 1 22,952,488 5 206,942 - 983,789 - 64,351,545 14 6,841,485 2 1,600,000 - 1,912,305 - 97,382 - 6,466,808 1 4,747,644 1 3,504,617 1 1,542,687 - 26,712,928 5 91,064,473 19 77,574,465 16 171,255,985 36 77,574,465 16 2,675,419 1 46,341,361 10 126,591,245 27 688,548 - 376,110,243 79 10,283,522 2 386,393,765 81 $ 477,458,238 100		2018
				Amount % $ 27,644,780 6 - - 1,069 - 4,868,728 1 30,075,503 7 24,270 - 15,120,715 3 1,872,984 - 9,504,203 2 2,576,084 1 91,688,336 20 517,362 - 6,932,503 2 2,944,890 1 2,343,958 - 288,914,228 61 - - 8,287,212 2 50,943,682 11 3,553,856 1 1,335,030 - 1,164,088 - 3,463,337 1 5,180,222 1 375,580,368 80 $ 467,268,704 100 $ 100,000 - 1,114 - 10,687,772 2 20,464,792 5 917,951 - 4,390,203 1 - - 23,315,383 5 128,200 - 1,381,606 - 61,387,021 13 2,595,149 1 1,600,000 - 1,991,843 - 78,627 - - - 4,716,571 1 3,533,936 1 4,793,237 1 19,309,363 4 80,696,384 17 77,574,465 17 171,136,764 36 77,574,465 17 2,675,419 1 47,141,345 10 127,391,229 28 459,914 - 376,562,372 81 10,009,948 2 386,572,320 83 $ 467,268,704 100

18 -- 7 - 16

Attachment 6

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

REVENUES OPERATING COSTS GROSS PROFIT OPERATING EXPENSES Marketing General and administrative Research and development Expected credit loss (reversal of credit loss) Total operating expenses OTHER INCOME AND EXPENSES INCOME FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Interest income Other income Other gains and losses Interest expenses Share of profits of associates accounted for using equity method Total non-operating income and expenses INCOME BEFORE INCOME TAX INCOME TAX EXPENSE NET INCOME TOTAL OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified to profit or loss: Remeasurements of defined benefit pension plans		2019 Amount % $ 207,520,061 100 135,952,540 65 71,567,521 35 22,219,688 11 4,758,340 2 3,941,446 2 (125,111) - 30,794,363 15 (127,304) - 40,645,854 20 250,787 - 531,624 - (36,471) - (104,142) - 462,140 - 1,103,938 - 41,749,792 20 7,985,849 4 33,763,943 16 1,526,353 1		2018
				Amount % $ 215,483,158 100 139,545,457 65 75,937,701 35 23,170,024 11 4,589,488 2 3,725,249 2 919,732 - 32,404,493 15 110,451 - 43,643,659 20 196,889 - 699,823 - (45,671) - (17,596) - 501,600 - 1,335,045 - 44,978,704 20 8,522,533 4 36,456,171 16 (1,214,552) - (Continued)

19 -- 8 - 17

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Unrealized gain or loss on investments in equity instruments at fair value through other comprehensive income Gain or loss on hedging instruments subject to basis adjustment Share of remeasurements of defined benefit pension plans of associates Income tax relating to items that will not be reclassified to profit or loss Items that may be reclassified subsequently to profit or loss: Exchange differences arising from the translation of the foreign operations Share of exchange differences arising from the translation of the foreign operations of associates Total other comprehensive income (loss), net of income tax TOTAL COMPREHENSIVE INCOME NET INCOME ATTRIBUTABLE TO Stockholders of the parent Noncontrolling interests COMPREHENSIVE INCOME ATTRIBUTABLE TO Stockholders of the parent Noncontrolling interests EARNINGS PER SHARE Basic Diluted		2019 Amount % $ 286,408 - (742) - (2,335) - (305,271) - 1,504,413 1 (61,207) - (700) - (61,907) - 1,442,506 1 $ 35,206,449 17 $ 32,788,546 16 975,397 - $ 33,763,943 16 $ 34,225,076 17 981,373 - $ 35,206,449 17 $ 4.23 $ 4.22		2018
				Amount % $ (346,330) - 1,919 - 1,707 - 450,166 - (1,107,090) - 89,319 - 3,318 - 92,637 - (1,014,453) - $ 35,441,718 16 $ 35,501,622 16 954,549 - $ 36,456,171 16 $ 34,496,742 16 944,976 - $ 35,441,718 16 $ 4.58 $ 4.57

(Concluded)

20 -- 9 - 18

Attachment 7

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

			Equity Attributable to Stockholders of the Parent	Equity Attributable to Stockholders of the Parent	Equity Attributable to Stockholders of the Parent	Equity Attributable to Stockholders of the Parent
Common Stocks $ 77,574,465 - - - - - - - - - - - - 77,574,465 - 77,574,465 - - - - - - - - - $ 77,574,465	Additional Paid-in Capital $ 169,466,883 - - - 2,455 (1,044) 826,047 776,713 - - - 10,776 54,934 171,136,764 - 171,136,764 - - 1,266 118,853 - - - (898) - $ 171,255,985		Retained Earnings	Unappropriated Earnings $ 49,595,850 5,404 (37,204,714) - - - - - 35,501,622 (756,817) 34,744,805 - - 47,141,345 (50,823) 47,090,522 (34,745,603) - - - 32,788,546 1,207,896 33,996,442 - - $ 46,341,361	Other Adjustments		Gain or Loss on Hedging Instruments $ (850) - - - - - - - - 1,919 1,919 - - 1,069 - 1,069 - - - - - (742) (742) - - $ 327
					Exchange Differences Arising from the Translation of the Foreign Operations $ (174,593) - - - - - - - - 95,166 95,166 - - (79,427) - (79,427) - - - - - (68,950) (68,950) - - $ (148,377)	Unrealized Gain or Loss on Financial Assets at Fair Value Through Other Comprehensive Income $ 883,420 - - - - - - - - (345,148) (345,148) - - 538,272 - 538,272 - - - - - 298,326 298,326 - - $ 836,598
		Legal Reserve $ 77,574,465 - - - - - - - - - - - - 77,574,465 - 77,574,465 - - - - - - - - - $ 77,574,465	Special Reserve $ 2,680,823 (5,404) - - - - - - - - - - - 2,675,419 - 2,675,419 - - - - - - - - - $ 2,675,419

10 - - 21 -19

Attachment 8

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

	2019	2018
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax	$ 41,749,792	$ 44,978,704
Adjustments to reconcile income before income tax to net cash
provided by operating activities:
Depreciation	30,922,991	27,481,956
Amortization	4,252,602	4,386,798
Amortization of incremental costs of obtaining contracts	1,173,492	1,941,124
Expected credit loss (reversal of credit loss)	(125,111)	919,732
Interest expenses	104,142	17,596
Interest income	(250,787)	(196,889)
Dividend income	(296,360)	(395,593)
Compensation cost of share-based payment transactions	1,597	17,302
Share of profits of associates accounted for using equity method	(462,140)	(501,600)
Loss (gain) on disposal of property, plant and equipment	37,785	(142,068)
Loss on disposal of intangible assets	146	-
Gain on disposal of financial instruments	(3,944)	(5,763)
Loss (gain) on disposal of investments accounted for using equity
method	(30,152)	125
Provision for inventory and obsolescence	474,709	365,123
Impairment loss on property, plant and equipment	93,073	-
Reversal of impairment loss on investment properties	(56,617)	(19,133)
Impairment loss on intangible assets	8,946	50,750
Impairment loss on other assets	43,971	-
Valuation loss on financial assets and liabilities at fair value
through profit or loss, net	38,314	20,763
Others	(26,524)	(17,223)
Changes in operating assets and liabilities:
Decrease (increase) in:
Financial assets mandatorily measured at fair value through
profit or loss	-	63,117
Contract assets	172,489	2,750,594
Trade notes and accounts receivable	4,038,731	1,353,807
Receivables from related parties	7,436	25,097
Inventories	(2,698,270)	(6,778,309)
Prepayments	114,991	417,569
Other current monetary assets	(154,780)	(172,597)
Other current assets	146,420	(261,240)
Incremental cost of obtaining contracts	(781,114)	(802,011)
Increase (decrease) in:
Contract liabilities	6,701,313	2,652,747
Trade notes and accounts payable	(5,151,740)	1,065,054
Payables to related parties	(263,968)	233,766
Other payables	697,351	(1,088,406)
		(Continued)

22 -- 11 - 20

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

Provisions Other operating liabilities Net defined benefit plans Cash generated from operations Interest paid Income tax paid Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at fair value through other comprehensive income Proceeds from return of financial assets at fair value through other comprehensive income Purchase of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or loss Acquisition of time deposits and negotiable certificates of deposit with maturities of more than three months Acquisition of repurchase agreements collateralized by bonds with maturities of more than three months Proceeds from disposal of time deposits and negotiable certificates of deposit with maturities of more than three months Acquisition of investments accounted for using equity method Proceeds from disposal of investments accounted for using equity method Proceeds from capital reduction of investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Acquisition of investment properties Increase in other noncurrent assets Interest received Cash dividends received Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term loans Repayment of short-term loans Increase in customers’ deposits Payment for the principal of lease liabilities Increase in other noncurrent liabilities	2019 $ 97,497 (159,881) 533,787 80,950,187 (104,142) (8,419,360) 72,426,685 (60,000) 9,167 (443,064) 146,560 (14,381,653) (14,990) 16,519,781 (4,190,000) 32,470 - (24,165,857) 48,157 (362,718) (523) (1,122,142) 256,432 602,086 (27,126,294) 575,000 (585,000) 7,311 (3,727,792) 232,357	2018 $ 27,142 422,413 (1,535,294) 77,275,153 (17,524) (10,891,279) 66,366,350 (289,580) 6,690 - - (9,719,951) - 5,654,941 (204,900) 3,379 19,184 (28,549,929) 264,446 (498,005) (5,627) (80,640) 186,617 599,621 (32,613,754) 360,000 (330,000) 30,997 - 83,613 (Continued)

12 - - 23 -21

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

Cash dividends Partial disposal of interests in subsidiaries without losing control Cash dividends distributed to noncontrolling interests Change in other noncontrolling interests Unclaimed dividend Net cash used in financing activities EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS, END OF THE YEAR	2019 $ (34,745,603) - (709,817) 18,062 1,266 (38,934,216) 38,688 6,404,863 27,644,780 $ 34,049,643	2018 $ (37,204,714) 1,174,400 (958,446) 1,806,345 2,455 (35,035,350) 102,599 (1,180,155) 28,824,935 $ 27,644,780

(Concluded)

13 - - 4 - 2 2

Attachment 9

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders Chunghwa Telecom Co., Ltd.

Opinion

We have audited the accompanying financial statements of Chunghwa Telecom Co., Ltd. (the Company), which comprise the balance sheets as of December 31, 2019 and 2018, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and the related notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the year ended December 31, 2019. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The descriptions of the key audit matters of the financial statements for the year ended December 31, 2019 are as follows:

Revenue Recognition on Mobile Service

Key audit matter:

Refer to Notes 3 and 25 to the financial statements.

5 -- 2 13 -

well as a large number of transactions, the Company uses highly automated systems to process and record its revenue transactions.

Corresponding audit procedures:

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

With the assistance of our IT specialists, we:
Identified the significant systems used to process revenue transactions and tested the general IT controls over each of these systems, including testing of user access controls and change management controls.
Performed testing of system interface controls and automated controls within the relevant revenue streams, as well as the controls designed to ensure the accuracy and completeness of revenue.
We tested internal controls within the relevant revenue business processes, including those in place to reconcile the various systems to the Company’s accounting system.
We selected samples from mobile service revenue and agreed to customer contracts and records of cash receipts.

Revenue Recognition on Project Business

Key audit matter:

Refer to Notes 3 and 4 to the financial statements.

Corresponding audit procedures:

Our audit procedures related to management’s revenue recognition on project business included the following, among others:

We tested the effectiveness of controls over project business revenue, including those over principal-versus-agent considerations and revenue recognition.
We performed the following audit procedures on a sample basis:
Obtained project business contracts and the evaluation documentation prepared by management and determined the reasonableness of management’s judgement on whether the Company is acting as a principal or an agent after considering whether the Company is the primary obligation provider, its exposures to inventory risks and the discretion in establishing the prices by reviewing the contractual
26 -- 2 -24

terms, comparing to the business substance and evaluating if it is consistent with relevant accounting standards.

Performed detail transaction testing by agreeing the amounts recognized to source documents and testing the mathematical accuracy of the recorded revenue.
Confirmed project business contract terms with customers.

Emphasis of Matter

As disclosed in Note 5 to the financial statements, the Company initially applied IFRS 16 “Leases” in 2019. Our audit opinion is not modified in respect of this matter.

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

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

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

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

Auditors’ Responsibilities for the Audit of the Financial Statements

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

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
7 -- 3 - 2 5
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the financial statements. We are responsible for the direction, supervision, and performance of the audit. We remain solely responsible for our audit opinion.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements for the year ended December 31, 2019 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

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

Deloitte & Touche Taipei, Taiwan Republic of China

February 26, 2020

Notice to Readers

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

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

8 -- 4 - 2 6

Attachment 10

CHUNGHWA TELECOM CO., LTD.

BALANCE SHEETS DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents Hedging financial assets Contract assets Trade notes and accounts receivable, net Receivables from related parties Inventories Prepayments Other current monetary assets Other current assets Total current assets NONCURRENT ASSETS Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income Investments accounted for using equity method Contract assets Property, plant and equipment Right-of-use assets Investment properties Intangible assets Deferred income tax assets Incremental costs of obtaining contracts Net defined benefit assets Prepayments Other noncurrent assets Total noncurrent assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Financial liabilities at fair value through profit or loss Contract liabilities Trade notes and accounts payable Payables to related parties Current tax liabilities Lease liabilities Other payables Provisions Other current liabilities Total current liabilities NONCURRENT LIABILITIES Contract liabilities Deferred income tax liabilities Provisions Lease liabilities Customers’ deposits Net defined benefit liabilities Other noncurrent liabilities Total noncurrent liabilities Total liabilities EQUITY Common stocks Additional paid-in capital Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other adjustments Total equity TOTAL		2019 Amount % $ 25,081,712 5 327 - 1,470,985 - 23,478,061 5 785,570 - 12,491,728 3 1,436,346 - 2,866,059 1 2,354,215 1 69,965,003 15 778,105 - 6,923,315 2 20,320,122 4 804,698 - 274,744,872 60 10,292,025 2 8,094,618 2 46,519,457 10 2,719,035 1 6,976,421 2 2,108,176 1 1,381,618 - 5,687,816 1 387,350,278 85 $ 457,315,281 100 $ 228 - 16,684,939 3 12,052,523 3 3,663,713 1 3,739,435 1 2,939,410 1 19,270,583 4 107,902 - 923,457 - 59,382,190 13 4,414,979 1 1,880,925 - 97,382 - 5,755,804 2 4,653,517 1 3,412,740 1 1,607,501 - 21,822,848 5 81,205,038 18 77,574,465 17 171,255,985 37 77,574,465 17 2,675,419 1 46,341,361 10 126,591,245 28 688,548 - 376,110,243 82 $ 457,315,281 100		2018
				Amount % $ 16,922,851 4 1,069 - 1,653,886 - 27,851,879 6 817,874 - 10,471,759 2 1,438,962 - 5,671,132 1 2,509,572 1 67,338,984 14 517,362 - 6,533,053 1 15,696,310 4 667,259 - 281,056,057 64 - - 8,212,437 2 50,404,295 11 3,041,999 1 7,620,704 2 1,149,402 - 1,852,675 - 4,726,124 1 381,477,677 86 $ 448,816,661 100 $ 897 - 10,686,892 2 16,773,477 4 4,443,212 1 4,070,910 1 - - 20,148,990 4 50,844 - 1,159,732 - 57,334,954 12 2,456,191 1 1,957,503 - 78,627 - - - 4,635,193 1 3,419,867 1 2,371,954 1 14,919,335 4 72,254,289 16 77,574,465 18 171,136,764 39 77,574,465 17 2,675,419 - 47,141,345 10 127,391,229 27 459,914 - 376,562,372 84 $ 448,816,661 100

9 -- 5 - 2 7

Attachment 11

CHUNGHWA TELECOM CO., LTD.

STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

REVENUES OPERATING COSTS GROSS PROFIT OPERATING EXPENSES Marketing General and administrative Research and development Expected credit loss (reversal of credit loss) Total operating expenses OTHER INCOME AND EXPENSES INCOME FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Interest income Other income Other gains and losses Interest expenses Share of profits of subsidiaries and associates accounted for using equity method Total non-operating income and expenses INCOME BEFORE INCOME TAX INCOME TAX EXPENSE NET INCOME		2019 Amount % $ 179,321,838 100 116,056,276 65 63,265,562 35 18,130,247 10 3,558,580 2 3,341,306 2 (127,019) - 24,903,114 14 (16,583) - 38,345,865 21 157,099 - 386,747 - (5,572) - (61,873) - 1,440,326 1 1,916,727 1 40,262,592 22 7,474,046 4 32,788,546 18		2018
				Amount % $ 185,331,699 100 118,829,935 64 66,501,764 36 18,807,803 10 3,427,037 2 3,182,608 2 888,844 - 26,306,292 14 170,442 - 40,365,914 22 114,887 - 521,177 - (64,694) - (267) - 2,579,961 1 3,151,064 1 43,516,978 23 8,015,356 4 35,501,622 19 (Continued)

30 -- 6 - 28

CHUNGHWA TELECOM CO., LTD.

STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

TOTAL OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified to profit or loss: Remeasurements of defined benefit pension plans Unrealized gain or loss on investments in equity instruments at fair value through other comprehensive income Gain or loss on hedging instruments subject to basis adjustment Share of unrealized gain or loss on investments in equity instruments at fair value through other comprehensive income of subsidiaries and associates Share of remeasurements of defined benefit pension plans of subsidiaries and associates Income tax relating to items that will not be reclassified to profit or loss Items that may be reclassified subsequently to profit or loss: Exchange differences arising from the translation of the foreign operations Share of exchange differences arising from the translation of the foreign operations of subsidiaries and associates Total other comprehensive loss, net of income tax TOTAL COMPREHENSIVE INCOME EARNINGS PER SHARE Basic Diluted		2019 Amount % $ 1,506,290 1 399,429 - (742) - (101,103) - 2,864 - (301,258) - 1,505,480 1 (71,056) - 2,106 - (68,950) - 1,436,530 1 $ 34,225,076 19 $ 4.23 $ 4.22		2018
				Amount % $ (1,201,469) (1) (346,223) - 1,919 - 1,075 - (659) - 445,311 - (1,100,046) (1) 91,956 - 3,210 - 95,166 - (1,004,880) (1) $ 34,496,742 18 $ 4.58 $ 4.57

(Concluded)

7 - - 31 -29

Attachment 12

CHUNGHWA TELECOM CO., LTD.

STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

Common Stocks BALANCE, JANUARY 1, 2018 $ 77,574,465 Appropriation of 2017 earnings Reversal of special reserve - Cash dividends - Unclaimed dividend - Change in additional paid-in capital from investments in subsidiaries and associates accounted for using equity method - Partial disposal of interests in subsidiaries - Net income for the year ended December 31, 2018 - Other comprehensive income (loss) for the year ended December 31, 2018 - Total comprehensive income (loss) for the year ended December 31, 2018 - BALANCE, DECEMBER 31, 2018 77,574,465 Effect of retrospective application - BALANCE, JANUARY 1, 2019 AS ADJUSTED 77,574,465 Appropriation of 2018 earnings Cash dividends - Unclaimed dividend - Change in additional paid-in capital from investments in subsidiaries and associates accounted for using equity method - Net income for the year ended December 31, 2019 - Other comprehensive income (loss) for the year ended December 31, 2019 - Total comprehensive income (loss) for the year ended December 31, 2019 - BALANCE, DECEMBER 31, 2019 $ 77,574,465	Additional Paid-in Capital $ 169,466,883 - - 2,455 950,689 716,737 - - - 171,136,764 - 171,136,764 - 1,266 117,955 - - - $ 171,255,985		Retained Earnings Legal Reserve Special Reserve Unappropriated Earnings $ 77,574,465 $ 2,680,823 $ 49,595,850 - (5,404) 5,404 - - (37,204,714) - - - - - - - - - - - 35,501,622 - - (756,817) - - 34,744,805 77,574,465 2,675,419 47,141,345 - - (50,823) 77,574,465 2,675,419 47,090,522 - - (34,745,603) - - - - - - - - 32,788,546 - - 1,207,896 - - 33,996,442 $ 77,574,465 $ 2,675,419 $ 46,341,361		Other Adjustments	Other Adjustments
					Exchange Differences Arising from the Translation Unrealized Gain or Loss on Financial Assets at Fair Value through Other of the Foreign Operations Comprehensive Income $ (174,593) $ 883,420 - - - - - - - - - - - - 95,166 (345,148) 95,166 (345,148) (79,427) 538,272 - - (79,427) 538,272 - - - - - - - - (68,950) 298,326 (68,950) 298,326 $ (148,377) $ 836,598	Gain or Loss on Hedging Instruments $ (850) - - - - - - 1,919 1,919 1,069 - 1,069 - - - - (742) (742) $ 327	Total Equity $ 377,600,463 - (37,204,714) 2,455 950,689 716,737 35,501,622 (1,004,880) 34,496,742 376,562,372 (50,823) 376,511,549 (34,745,603) 1,266 117,955 32,788,546 1,436,530 34,225,076 $ 376,110,243

8 - - 32 -30

Attachment 13

CHUNGHWA TELECOM CO., LTD.

STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments to reconcile income before income tax to net cash provided by operating activities: Depreciation Amortization Amortization of incremental costs of obtaining contracts Expected credit loss (reversal of loss) Interest expenses Interest income Dividend income Share of profits of subsidiaries and associates accounted for using equity method Loss (gain) on disposal of property, plant and equipment Gain on disposal of investments accounted for using equity method Provision for inventory and obsolescence Reversal of impairment loss on investment properties Impairment loss on other assets Valuation loss on financial assets and liabilities at fair value through profit or loss, net Others Changes in operating assets and liabilities: Decrease (increase) in: Contract assets Trade notes and accounts receivable Receivables from related parties Inventories Prepayments Other current monetary assets Other current assets Incremental cost of obtaining contracts Increase (decrease) in: Contract liabilities Trade notes and accounts payable Payables to related parties Other payables Provisions Other operating liabilities Net defined benefit plans Cash generated from operations Interest paid Income tax paid Net cash provided by operating activities	2019 $ 40,262,592 29,852,819 4,168,630 6,269,916 (127,019) 61,873 (157,099) (292,450) (1,440,326) 29,229 (30,152) 475,024 (56,617) 43,971 38,588 (23,322) 46,157 4,747,965 32,304 (2,494,993) (60,009) 26,462 155,357 (5,625,633) 6,785,691 (4,720,176) (779,499) 297,078 75,813 (49,362) 540,389 78,053,201 (61,873) (7,846,879) 70,144,449	2018 $ 43,516,978 26,867,479 4,312,043 9,958,119 888,844 267 (114,887) (389,651) (2,579,961) (151,309) - 352,833 (19,133) - 25,961 (3,105) 359,155 1,201,810 188,568 (7,122,670) 350,427 (100,041) (270,216) (5,575,998) 3,196,632 1,124,526 220,147 (1,195,293) 23,225 394,170 (1,530,400) 73,928,520 (267) (10,358,286) 63,569,967

(Continued)

9 - - 3 - 3 1

CHUNGHWA TELECOM CO., LTD.

STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at fair value through other comprehensive income Acquisition of financial assets at fair value through profit or loss Proceeds from return of financial assets at fair value through other comprehensive income Acquisition of negotiable certificates of deposit with maturities of more than three months Proceeds from disposal of negotiable certificates of deposit with maturities of more than three months Acquisition of investments accounted for using equity method Proceeds from disposal of investments accounted for using equity method Proceeds from capital reduction of investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Acquisition of investment properties Increase in other noncurrent assets Interest received Cash dividends received from others Cash dividends received from subsidiaries and associates accounted for using equity method Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in customers’ deposits Payments for the principal of lease liabilities Increase in other noncurrent liabilities Cash dividends paid Partial disposal of interests in subsidiaries without losing control Unclaimed dividend Net cash used in financing activities NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS, END OF THE YEAR	2019 $ - (300,000) 9,167 (9,700,000) 12,500,000 (4,221,032) 32,470 12,932 (22,427,073) 50,991 (283,792) (523) (1,240,253) 162,411 292,450 939,221 (24,173,031) (8,028) (3,306,322) 246,130 (34,745,603) - 1,266 (37,812,557) 8,158,861 16,922,851 $ 25,081,712	2018 $ (89,580) - 6,690 (6,502,000) 3,700,000 (204,900) - - (27,490,579) 264,290 (433,085) (5,627) (64,036) 108,389 389,651 897,743 (29,423,044) 12,597 - 95,074 (37,204,714) 126,100 2,455 (36,968,488) (2,821,565) 19,744,416 $ 16,922,851

(Concluded)

10 - - 34 -32

Attachment 14

Chunghwa Telecom Co., Ltd. 2019 Earnings Distribution Proposal

Units: NT$


Source items: Unappropriated retained earnings, beginning balance Adjustments of the first applications of TIFRS 16 Adjusted unappropriated retained earnings, beginning balance Remeasurements of defined benefit pension plans recognized in retained earnings 1,207,896,022 Net income of 2019 32,788,545,870 Appropriation of Legal reserve (amounted to the authorized capital) Reversal of special reserve according to Securities and Exchange Act Distributable retained earnings for 2019 Distribution items: Cash dividends to stockholders (total of 7,757,446,545 shares x NT$4.226 per share) Unappropriated retained, ending balance	12,395,741,755 (50,823,489)
	12,344,918,266 33,996,441,892
	0 0
	46,341,360,158
	(32,782,969,099)
	13,558,391,059
Notes: The amount of "Unappropriated retained earnings, beginning balance" is the same as the amount of "Unappropriated retained, ending balance" on the Earnings Distribution Proposal approved at the 2019 annual general meeting.

Chi-Mau Sheih, Chairman

Shui-Yi Kuo, President

Shu-Ling Chen, Accounting Officer

- 35 -34 -

Attachment 15

The comparison table of the proposed amendments to Article 2 of the Articles of Incorporation of Chunghwa Telecom Co., Ltd.

All of 26 articles adopted by Promoters Meeting on June 11, 1996.
Article 15 amended by the Annual General Meeting on December 26, 1997.
Articles 2 and 22 amended by the Annual General Meeting on November 25, 1998.
Paragraph 1 of Article 21 amended by the Extraordinary General Meeting on July 13, 1999.
Articles 2, 3, 6, 7, 10, 12, 13, 19, 21, and 22 amended, and Articles 6-1 and 7-1 added by the Annual General Meeting on June 4, 2001.
Articles 2, 7, 8, 9, 10, 19, 21, and 22 amended and Article 5 deleted by the Annual General Meeting on June 21, 2002.
Article 2 amended by the Annual General Meeting on June 17, 2003.
Articles 2 and 22 amended by the Annual General Meeting on June 25, 2004.
Articles 2, 3, 6, 10, 11, 12, 14, 17, 19, 20, 22, 23, and 25 amended, and Articles 12-1, 181, and 18-2 added by the Annual General Meeting on May 30, 2006.
Articles 2, 12-1, 14, 22, and 23 amended, and Article 18-1 deleted by the Annual General Meeting on June 15, 2007.
Articles 2, 6, and 14 amended by the Annual General Meeting on June 19, 2008.
Articles 2, 6, 12 and 13 amended, and Article 6-1 deleted by the Annual General Meeting on June 19, 2009.
Article 2 amended by the Annual General Meeting on June 18, 2010.
The title of Chapter IV and Articles 12, 12-1, 14, 19, 20, and 22 amended by the Annual General Meeting on June 22, 2012.
The title of Chapter IV, Articles 2, 12, 13, 18-2, 21 and 22 amended; Articles 17 and 18 deleted, and Article 13-1 added by the Annual General Meeting on June 25, 2013.
Articles 2 and 15 amended by the Annual General Meeting on June 24, 2014.
Articles 1, 2 and 7-1 amended by the Annual General Meeting on June 26, 2015.
Articles 2 and 22 amended, and Article 22-1 added by the Annual General Meeting on June 24, 2016.
Article 2 amended by the Annual General Meeting on June 15, 2018.
Article 2 amended by the Annual General Meeting on June 21, 2019.
Article 2 amended by the Annual General Meeting on May 29, 2020.

Draft Amendment	Current Articles	Explanatory Notes
Article 2 The scope of business of the Company shall be as follows: 1) Telecommunications Enterprise of Type 1 (G901011);	Article 2 The scope of business of the Company shall be as follows: 1) Telecommunications Enterprise of Type 1 (G901011);	To expand the business in relation to technology enforcement for smart transportation and to add business items for transportation applied service for technology

36 -

Draft Amendment	Current Articles	Explanatory Notes
2) Telecommunications Enterprise of Type 2 (G902011); 3) Installation of the Computer Equipment Business (E605010); 4) Telecommunication Equipment Wholesale Business (F113070); 5) Telecommunication Equipment Retail Business (F213060); 6) Telecommunication Engineering Business (E701010); 7) Installation of the Radio- Frequency Equipment whose operation is controlled by the Telecommunication Business (E701030); 8) Information Software Service Business (I301010); 9) Rental Business (JE01010); 10) Other Wholesale Businesses (F199990); 11) Management and Consulting Service Business (I103060); 12) Other Corporation Service Businesses (IZ99990); 13) Other Retail Businesses (F299990); 14) Online Certification Service Businesses (IZ13010); 15) Supply of Electronic Information Service Businesses (I301030); 16) Information Process Service Business (I301020); 17) Telecommunication Account Application Agency Businesses (IE01010); 18) Residential and Commercial Building Development,Rental and	2) Telecommunications Enterprise of Type 2 (G902011); 3) Installation of the Computer Equipment Business (E605010); 4) Telecommunication Equipment Wholesale Business (F113070); 5) Telecommunication Equipment Retail Business (F213060); 6) Telecommunication Engineering Business (E701010); 7) Installation of the Radio- Frequency Equipment whose operation is controlled by the Telecommunication Business (E701030); 8) Information Software Service Business (I301010); 9) Rental Business (JE01010); 10) Other Wholesale Businesses(F199990); 11) Management and Consulting Service Business (I103060); 12) Other Corporation Service Businesses (IZ99990); 13) Other Retail Businesses (F299990); 14) Online Certification Service Businesses (IZ13010); 15) Supply of Electronic Information Service Businesses (I301030); 16) Information Process Service Business (I301020); 17) Telecommunication Account Application Agency Businesses (IE01010); 18) Residential and Commercial Building Development,Rental and	enforcement, it has been proposed to add new business items for the company in order to meet qualification requirements to bid for commissions from the government. Article 2 of the Articles of Incorporation are proposed to be amended accordingly by adding business items from Item 54 to Item 56 and the numbering for the original Item 54 is thus pushed to Item 57 in sequence.

37 -

Draft Amendment	Current Articles	Explanatory Notes
Sales Businesses (H701010); 19) Development of Special District/Zone Businesses (H701040); 20) Real Estate Rental Businesses (H703100); 21) Community Common Cable Television Equipment Businesses (J502020); 22) Exhibition Service Businesses (JB01010); 23) Parking Lot Operation Businesses (G202010); 24) Environmental Assessment Service Businesses (J101050); 25) Computer and Accessories Manufacturing Service (CC01110); 26) Information Storage and Process Equipment Manufacturing Businesses (CC01120); 27) Other Electrical and Electronic Machinery & Equipment Manufacturing Businesses (CC01990); 28) Radio-Frequency Equipment Import Business (F401021); 29) General Hotel Business (J901020); 30) Computer and Administrative Device Wholesale Businesses (F113050); 31) Information Software Wholesale Businesses (F118010); 32) Computer and Administrative Device Retail Businesses (F213030); 33) Information Software Rental Businesses (F218010); 34) Energy Service Business (IG03010);	Sales Businesses (H701010); 19) Development of Special District/Zone Businesses (H701040); 20) Real Estate Rental Businesses (H703100); 21) Community Common Cable Television Equipment Businesses (J502020); 22) Exhibition Service Businesses (JB01010); 23) Parking Lot Operation Businesses (G202010); 24) Environmental Assessment Service Businesses (J101050); 25) Computer and Accessories Manufacturing Service (CC01110); 26) Information Storage and Process Equipment Manufacturing Businesses (CC01120); 27) Other Electrical and Electronic Machinery & Equipment Manufacturing Businesses (CC01990); 28) Radio-Frequency Equipment Import Business (F401021); 29) General Hotel Business (J901020); 30) Computer and Administrative Device Wholesale Businesses (F113050); 31) Information Software Wholesale Businesses (F118010); 32) Computer and Administrative Device Retail Businesses (F213030); 33) Information Software Rental Businesses (F218010); 34) Energy Service Business (IG03010);

38 -

Draft Amendment	Current Articles	Explanatory Notes
35) Engineering Consulting Business (I101061); 36) Refrigeration and Air- Conditioning Consulting Business (E602011); 37) Automatic Control Equipment Engineering Business (E603050); 38) Lighting Equipment Installation Business (E603090); 39) Non-store Retailer Business (F399040); 40) Power Equipment Installation and Maintenance Business (E601010) ; 41) Electrical Appliance Installation Business (E601020) ; 42) Instrument Installation Engineering Business (EZ05010) ; 43) Television Program Production Business (J503020) ; 44) Broadcasting and Television Program Launch Business (J503030) ; 45) Broadcasting and Television Advertising Business (J503040) ; 46) Production, Licensed Recording and Supply of Videotape Program Business (J503050) ; 47) The Third Party Payment Business (I301040); 48) Water Pipe Construction Business (E501011); 49) Machinery and Equipment Manufacturing Business (CB01010); 50) Traffic Signals Installation and Construction Business (E603080); 51) Traffic Labels Construction Business (EZ06010);	35) Engineering Consulting Business (I101061); 36) Refrigeration and Air- Conditioning Consulting Business (E602011); 37) Automatic Control Equipment Engineering Business (E603050); 38) Lighting Equipment Installation Business (E603090); 39) Non-store Retailer Business (F399040); 40) Power Equipment Installation and Maintenance Business (E601010) ; 41) Electrical Appliance Installation Business (E601020) ; 42) Instrument Installation Engineering Business (EZ05010) ; 43) Television Program Production Business (J503020) ; 44) Broadcasting and Television Program Launch Business (J503030) ; 45) Broadcasting and Television Advertising Business (J503040) ; 46) Production, Licensed Recording and Supply of Videotape Program Business (J503050) ; 47) The Third Party Payment Business (I301040); 48) Water Pipe Construction Business (E501011); 49) Machinery and Equipment Manufacturing Business (CB01010); 50) Traffic Signals Installation and Construction Business (E603080); 51) Traffic Labels Construction Business (EZ06010);

39 -

	Draft Amendment	Current Articles	Explanatory Notes
52) Medical Device Wholesale Business (F108031); 53) Medical Device Retail Business (F208031); 54) Metrological Instruments Importing Business (F401181); 55) Metrological Instruments Repairing Business (JA02051); 56) Metrological Instruments Manufacturing Business (CE01021); 57) Except the permitted business, the Company may engage in other businesses not prohibited or restricted by laws and regulations (ZZ99999). The Company may handle endorsement and guaranty affairs in accordance with the Operation Procedures for the Endorsement and Guaranty of the Company if there is any business needs.		52) Medical Device Wholesale Business (F108031); 53) Medical Device Retail Business (F208031); 54) Except the permitted business, the Company may engage in other businesses not prohibited or restricted by laws and regulations (ZZ99999). The Company may handle endorsement and guaranty affairs in accordance with the Operation Procedures for the Endorsement and Guaranty of the Company if there is any business needs.

Resolution:

40 -

AI assistant

CHT — AGM Information 2020

52063_rns_2020-09-24_433f5e40-0a8f-43b6-ac9d-8220f57c6cb5.pdf

Chunghwa Telecom Co., Ltd. 2020 Annual General Meeting Minutes

II. Venue: Chunghwa Telecom Training Institute

No. 168, Minzu Road, Banchiao District, New Taipei City, Taiwan, R.O.C.

III. Number of shares represented by shareholders present:

Directors represent:

Attendees:

V. Chairman’s address: (omitted)

VI.Report Items

VII. Matters for Ratification

Explanation:

Resolution:

The amended proposal by shareholders:

Resolution:

VIII. Matters for Discussion

Explanation:

Resolution:

2. Release of non-competition restrictions on Directors (proposed by the Board of Directors) Explanation:

Resolution:

IX.Extemporary Motions :

Report Items

I. 2019 business report

Financial Performances

Achievements in Research and Development

Fulfilling Corporate Social Responsibility

Honors and Awards

Future Outlook

II. 2019 audit committee's review report

III. 2019 compensation distribution to directors and employees

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Revenue Recognition on Mobile Service

Corresponding audit procedures:

Revenue Recognition on Project Business

Corresponding audit procedures:

Emphasis of Matter

Other Matter

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Notice to Readers

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Revenue Recognition on Mobile Service

Corresponding audit procedures:

Revenue Recognition on Project Business

Corresponding audit procedures:

Emphasis of Matter

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

Auditors’ Responsibilities for the Audit of the Financial Statements

Notice to Readers

CHUNGHWA TELECOM CO., LTD.

BALANCE SHEETS DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

CHUNGHWA TELECOM CO., LTD.

STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

CHUNGHWA TELECOM CO., LTD.

STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

CHUNGHWA TELECOM CO., LTD.

STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

CHUNGHWA TELECOM CO., LTD.

STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

CHT AGM Information 2020