CHUNGHWA TELECOM CO LTD

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

(Mark One)

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31 , 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report For the transition period from to Commission file number 001-31731

Chunghwa Telecom Co., Ltd.

(Exact name of Registrant as specified in its charter) Chunghwa Telecom Co., Ltd. (Translation of Registrant’s name into English) Taiwan , Republic of China (Jurisdiction of incorporation or organization) 21-3 Xinyi Road , Section 1 , Taipei , Taiwan 10048 , Republic of China (Address of principal executive offices) Cho-Fen (Angela) Tsai 21-3 Xinyi Road , Section 1 , Taipei 10048 , Taiwan , Republic of China Tel: +886 2 2344-5488 E-mail: [email protected] (Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares, par value NT$10 per share	N/A	New York Stock Exchange *
American Depositary Shares, as evidenced by American Depositary Receipts, each representing 10 Common Shares	CHT	New York Stock Exchange

Securities registered or to be registered pursuant to Section 12(g) of the Act: None Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

7,757,446,545 Common Shares

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☒ Yes ☐ No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.  Yes ☒ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this Chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Emerging growth company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.) 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☐ International Financial Reporting Standards as issued by the International Accounting Standards Board ☒ Other ☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. ☐ Item 17 ☐ Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ☐ Yes ☐ No

Not for trading, but only in connection with the listing on the New York Stock Exchange of the American Depositary Shares

CHUNGHWA TELECOM CO., LTD.

FORM 20-F ANNUAL REPORT

FISCAL YEAR ENDED DECEMBER 31, 2024

TABLE OF CONTENTS

SUPPLEMENTAL INFORMATION		Page — 1
FORWARD-LOOKING STATEMENTS IN THIS ANNUAL REPORT MAY NOT BE REALIZED		2
Part I		3
ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	3
ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE	3
ITEM 3.	KEY INFORMATION	3
ITEM 4.	INFORMATION ON THE COMPANY	15
ITEM 4A.	UNRESOLVED STAFF COMMENTS	43
ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	44
ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	58
ITEM 7.	MAJOR STOCKHOLDERS AND RELATED PARTY TRANSACTIONS	69
ITEM 8.	FINANCIAL INFORMATION	70
ITEM 9.	THE OFFER AND LISTING	71
ITEM 10.	ADDITIONAL INFORMATION	71
ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	86
ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	87
Part II		90
ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	90
ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	90
ITEM 15.	CONTROLS AND PROCEDURES	90
ITEM 16A.	AUDIT COMMITTEE FINANCIAL EXPERT	92
ITEM 16B.	CODE OF ETHICS	92
ITEM 16C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	92
ITEM 16D.	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES	92
ITEM 16E.	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	93
ITEM 16F.	CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT	93
ITEM 16G.	CORPORATE GOVERNANCE	93
ITEM 16H.	MINE SAFETY DISCLOSURE	96
ITEM 16I.	DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTION	96
ITEM 16J.	INSIDER TRADING POLICIES	96
ITEM 16K.	CYBERSECURITY	96
Part III		100
ITEM 17.	FINANCIAL STATEMENTS	100
ITEM 18.	FINANCIAL STATEMENTS	100
ITEM 19.	EXHIBITS	101

SUPPLEMEN TAL INFORMATION

All references to “we,” “us,” “our,” “Chunghwa Telecom” and “our company” in this annual report are to Chunghwa Telecom Co., Ltd. and our consolidated subsidiaries, unless the context otherwise requires. All references to “shares” and “common shares” are to our common shares, par value NT$10 per share, and to “ADSs” are to our American depositary shares, each of which represents ten of our common shares. The ADSs are issued under the deposit agreement, as amended, supplemented or modified from time to time, originally dated as of July 17, 2003, among Chunghwa Telecom Co., Ltd. and the Bank of New York, amended and restated on November 14, 2007, among Chunghwa Telecom Co., Ltd. and JP Morgan Chase Bank, as depository, and the holders and beneficial owners of American Depositary Receipts issued thereunder, and further amended and restated on December 27, 2023, among Chunghwa Telecom Co., Ltd. and JPMorgan Chase Bank, N.A., as depository, and the holders of American Depositary Receipts issued thereunder. All references to “Taiwan” are to the island of Taiwan and other areas under the effective control of the Republic of China. All references to “the government” or “the ROC government” are to the government of the Republic of China. All references to “the Ministry of Transportation and Communications” or “the MOTC” are to the Ministry of Transportation and Communications of the Republic of China. All references to “the National Communications Commission” or “the NCC” are to the National Communications Commission of the Republic of China. All references to the “Securities and Futures Bureau” are to the Securities and Futures Bureau of the Republic of China or its predecessors, as applicable. “ROC GAAP” means the generally accepted accounting principles of the Republic of China, “U.S. GAAP” means the generally accepted accounting principles of the United States, “IFRSs” means International Financial Reporting Standards as issued by the International Accounting Standards Board, and “Taiwan IFRSs” means the International Financial Reporting Standards as issued by the International Accounting Standards Board and endorsed by the Financial Supervisory Commission, or the FSC, which are required to be adopted by applicable companies in the ROC pursuant to the “Framework for Adoption of International Financial Reporting Standards by Companies in the ROC” promulgated by the FSC on May 14, 2009. Any discrepancies in any table between totals and sums of the amounts listed are due to rounding. Unless otherwise indicated, or the context otherwise requires, references in this annual report to financial and operational data for a particular year refer to the fiscal year of our company ending December 31 of that year. When we refer to our “privatization” or our being “privatized” in this annual report, we mean our status as a non-state-owned entity after the government reduced its ownership of our outstanding common shares, including our common shares owned by entities majority-owned by the government, to less than 50%. We were privatized on August 12, 2005.

We publish our consolidated financial statements in New Taiwan dollars, the lawful currency of the Republic of China. In this annual report, “NT$” and “NT dollars” mean New Taiwan dollars, “$,” “US$” and “U.S. dollars” mean United States dollars. For the convenience of readers, NT dollar amounts used in this annual report for, and as of, the year ended December 31, 2024 have been translated into U.S. dollar amounts using US$1.00=NT$32.79, set forth in the statistical release of the Federal Reserve Board of the United States on December 31, 2024. The U.S. dollar translation appears in parentheses next to the relevant NT dollar amount. We make no representation that any New Taiwan dollar amounts or U.S. dollar amounts referred to in this annual report could have been or could be converted into U.S. dollars or NT dollars, as the case may be, at any particular rate or at all. On April 2, 2025, the exchange rate was NT$33.13 to US$1.00.

FORWARD-LOOKING STATEMENTS IN THIS ANNUAL REPORT MAY NOT BE REALIZED

This annual report contains forward-looking statements, including statements regarding:

• general local and global economic conditions and regulations;

• the political stability of our local region;

• our business and operating strategies;

• our network expansion plans;

• our business, operations and prospects;

• our financial condition and results of operations;

• our dividend policy;

• the telecommunications industry regulatory environment in Taiwan;

• future developments in the telecommunications industry in Taiwan; and

• possible disruptions in commercial activities caused by natural and human-induced disasters, including the effects of climate changes, outbreaks of contagious diseases and cybersecurity incidents.

These forward-looking statements are generally indicated by the use of forward-looking terminology such as “believe,” “expect,” “anticipate,” “estimate,” “plan,” “aim,” “seek,” “project,” “may,” “will” or other similar words that express an indication of actions or results of actions that may or are expected to occur in the future. These statements reflect our current views with respect to future events and are subject to risks, uncertainties and assumptions, many of which are beyond our control. The forward-looking statements are contained principally in the sections entitled “Item 3. Key Information—D. Risk Factors,” “Item 4. Information on the Company” and “Item 5. Operating and Financial Review and Prospects.” These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. You should not place undue reliance on these statements, which apply only as of the date of this annual report. These forward-looking statements are based on our own information and on information from other sources we believe to be reliable. Actual results may differ materially from those expressed or implied by these forward-looking statements. Factors that could cause differences include, but are not limited to, those discussed under “Item 3. Key Information—D. Risk Factors.” In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this annual report might not occur and our actual results could differ materially from those anticipated in these forward-looking statements. The forward-looking statements made in this annual report relate only to events or information as of the date on which the statements are made in this annual report. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this annual report completely and with the understanding that our actual future results may be materially different from what we expect.

PA RT I

ITEM 1. IDENTITY OF DIR ECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2. OFFER STATISTIC S AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY I NFORMATION

A. [Reserved]

B. Capitalization and Indebtedness

Not applicable.

C. Reasons for the Offer and Use of Proceeds

Not applicable.

D. Risk Factors

Our business and operations are subject to various risks, many of which are beyond our control. If any of the risks described below actually occurs, our business, financial condition or results of operations could be seriously harmed.

Risks Relating to Our Company and the Taiwan Telecommunications Industry

Extensive regulation of our industry may limit our flexibility to respond to market conditions and landscape, and our business and revenues may suffer.

As a telecommunications service provider in Taiwan, we are subject to extensive regulation. According to the ROC Telecommunications Management Act, or the TMA, telecommunications enterprises shall register themselves with the NCC and become subject to the TMA. We applied for registration on July 31, 2020, and received approval from the NCC on September 30, 2020. Since then, we have become subject to the TMA. On April 15, 2022, the NCC announced that two retail service markets (i.e., the fixed-line voice market and the fixed-line broadband market) and three wholesale service markets (i.e., the fixed-line wholesale market, fixed-line voice access market and the mobile voice access market) are designated as specific telecommunications service markets; on June 5, 2023, we were officially determined to be the telecommunications enterprise with significant market power in the aforementioned five specific telecommunications service markets subject to special control measures, including fee control, accounting separation, information transparency and non-discrimination treatment. See “Item 4. Information on the Company—B. Business Overview—Regulation” for more information on the regulatory environment.

With respect to the special control measures relating to fee control, the NCC announced the promulgation of the “Primary Fees, Adjustment Coefficients and Years of Implementation for Price Cap Control Enforced on Significant Market Power in the Fixed Communication Network Voice Retail Service Market, Fixed Communication Network Broadband Retail Service Market and Fixed Communication Network Wholesale Service Market” on June 2, 2023, and the promulgation of the “Upper Limits on the Termination Rates for Voice Service over Fixed Network Provided by Significant Market Powers” on June 5, 2023, which constrain our ability to raise prices. On March 15, 2024, the NCC announced that, effective from April 1, 2024, the “monthly rental fee of broadband network circuit” were enforced to be reduced by “3.32% minus annual growth rate of the Consumer Price Index (CPI),” excluding the circuits of ADSL, that with download speed at and below 12 Mbps and that with download speed at 300 Mbps and above. For the fixed-line wholesale services, including the private circuits, broadband network wholesale circuits and internet interconnection bandwidth, the fees were enforced to be reduced by “5.09% minus annual growth rate of CPI,” excluding the circuits with download speed at and under 2 Mbps. The

NCC announced on July 17, 2024 that from 2025 to 2028, the “Upper Limits on the Termination Rate for Voice Service over Mobile Network Provided by Significant Market Powers” will be lowered, year by year, from the current NT$0.407 to NT$0.330 per minute, with an aggregate decrease of about 19%. See “Item 4. Information on the Company—B. Business Overview—Regulation” and “Item 5. Operating and Financial Review and Prospects—Overview—Tariff adjustments.” We cannot assure you that we will not be required to further reduce our tariffs again in the future. Any mandatory tariff reductions could have a material adverse effect on our revenues.

If we fail to comply with the regulations of the ROC Fair Trade Act, we may be investigated and fined.

As a provider of telecommunication products and services, our business operations are subject to the regulations of the ROC Fair Trade Act, or the FTA, which is administered and enforced by the ROC Fair Trade Commission, or the FTC. The FTA requires, among other things, that the marketing and promotional materials of a business to be true and not misleading. The FTA also prohibits a business from participating or engaging in a cartel or other anti-competitive conduct. The FTC has the authority under the FTA to investigate and, where appropriate, impose fines and penalties on a business that violates any regulations promulgated by the FTA. The consequences of any such violations could have a material adverse effect on our business and results of operations. See “Item 4. Information on the Company—B. Business Overview—Regulation” for a discussion of the FTA applicable to us. We have been investigated and penalized by the FTC in the past and may continue to be investigated or penalized by the FTC if we fail to comply with the relevant regulations . As the FTA provides the FTC broad discretion to interpret cartel or other anti-competition actions and enforce the relevant clauses under the FTA and FTC might take a different view of our existing business operation in the wake of advancement of global regulatory trend, we are unable to predict whether or when the FTC would initiate investigations on any of our daily business activities or find us liable for violating the FTA in the future. The investigations of any penalties imposed by the FTC could interrupt our provision of products or services and have a negative impact on our reputation, business operations and results of operations.

If we do not or are unable to obtain and maintain necessary approvals to operate our business, our business prospects and future results of operations would be adversely affected.

We operate our businesses with approvals (including licenses) granted by the government and we have obtained necessary approvals to provide our services. If these approvals are revoked or suspended or are not renewed, or if we are unable to obtain any necessary approvals that we may need to operate or expand our business in the manner we desire, our financial condition and results of operations, as well as our prospects, will suffer and we may lose our customers and market share and become less profitable.

If we are unable to successfully acquire and maintain the rights to use the frequency spectrums or other approvals that we may need for our future business operations, our business prospects and future results of operations may be materially and adversely affected.

Market landscape may adversely affect our growth and profitability by causing us to lose customers, charge lower tariffs, spend more on marketing or lose market share.

The market landscape of the telecommunications industry in Taiwan is constantly changing. After two operators were merged in December 2023, the number of mobile network operators in Taiwan decreased from five to three, including us, and the degree of concentration of the telecommunication industry in Taiwan has been increasing. In 2024, our competitors have placed greater emphasis on integrating their network and customer service capabilities, among other areas. We anticipate that this integration may boost their competitiveness. We will be dedicated to meeting customer demands, driving revenue growth, and increasing 5G penetration, among other priorities. However, we cannot assure you that we can successfully manage these risks or develop effectively to maintain our market share and customer base, achieve economies of scale or sustain our profit margin under the increased market concentration. If we fail to do so, our business, results of operation and financial conditions may be adversely affected.

Our primary advantages lie in our leading 5G service and the design of effective tariffs. In 2024, the strategy of our mobile business was to focus on promoting the highest quality of 5G service to our customers. More customers upgrading to 5G plans will increase the possibility of raising our mobile services revenues. However, mobile network operators might offer aggressive programs to attract consumers, such as unlimited low-priced data plans. We cannot assure you that we will be able to constantly raise our revenues from mobile broadband services in light of the current market landscape, which could have a material adverse effect on our business prospects and our future results of operations.

Cable operators mainly promote high-speed internet access and TV converging solutions, and the bundled price is about 10% to 20% off ours. Furthermore, they offer low-price promotions of about 40% to 60% off ours for competitors’ users and expand sales channels through cross-industry alliances. Competitors may also roll out aggressive marketing plans such as bundling broadband internet and 4G/5G mobile services to stir the market. Although we have rolled out Multiple-Play Package of mobile service, broadband service and Wi-Fi bundled plans, we still face intensified low-price strategies from other cable operators for our broadband access and IPTV services. If we are unable to achieve a favorable position compared with the cable operators for broadband access and multimedia-on-demand, or MOD, services, our results of operations could be impacted.

As mobile data access speeds have increased with the advancement of technologies, many of our customers have replaced fixed broadband services with high-speed mobile broadband services, especially those who used lower-speed fixed broadband services. Any of these developments could adversely affect our business, financial condition and results of operations.

As an internet service provider, we may not be able to protect our customers and their information from cyberattacks, nor protect our services or those of our partners with whom we share our confidential information from disruptions due to cybersecurity breaches.

Driven by emerging technologies such as artificial intelligence, or AI, Internet of things, or IoT, and cloud services, cybersecurity threats have evolved into multi-faceted mixed attacks. To improve and expand our services, we utilize third-party AI algorithms and models to power our intelligent customer and counter services. However, we do not have control over the stability of these external AI solutions. Any technical issues, service interruptions, or performance declines could adversely impact our business continuity and customer satisfaction. In addition, AI solutions are subject to hacking, spamming, viruses, software malfunction, and other computer vulnerabilities and technical glitches or maintenance failures, and we depend on the security protocols of these third-party partners to safeguard our systems as well as our customers’ and our data.

We establish the AI 2.0 Corporate Strategy Committee to build AI governance principles, such as transparency, protection of personal data, non-infringement, and traceability. Also, we diligently assess and partner with reputable third-party AI solution providers that have stringent security practices and pass certain required security certificates or standards. However, we cannot assure the sufficiency of these measures against cyber threats or operational failure. Should third-party AI solutions fall victim to cyber-attacks, our operations might be hindered, and our customers’ and our data could be exposed, tampered with, or lost, severely damaging customers’ rights, undermining our business and cause us penalties and financial losses. In addition, malware attacks, which are often imbedded into supply chain software, have become more frequent and diverse, and would adversely impact business services or privacy leakage.

The Cyber Security Management Act came into force on January 1, 2019. According to the Act, a critical infrastructure provider shall satisfy the requirements of the cybersecurity responsibility level, to amend and implement the cybersecurity maintenance plan. The “Administration Regulations of Cyber Security on Telecommunications Business,” promulgated pursuant to the “Telecommunications Management Act,” was enforced on July 1, 2020. According to the Regulations, telecommunications enterprises shall establish a cybersecurity maintenance plan and implement it accordingly. If we fail to comply with such requirements, we may be subject to administrative penalties. We may suffer negative consequences, such as remedial costs, increased cybersecurity protection costs, lost revenues, litigation and reputational damage due to cyberattacks. See “Item 16K. Cybersecurity.”

If new technologies adopted by us do not perform as expected, or if we are unable to effectively deliver new services based on these technologies in a commercially viable manner, our revenue growth and profitability will decline.

We are constantly evaluating new growth opportunities. Some of these opportunities involve new services for which there are no proven markets, and may not develop as expected. Our ability to deploy and deliver these services will depend, in many instances, on new but unproven technologies. These new technologies may not perform as expected or generate an acceptable return. In addition, we may not be able to develop new technologies to effectively, competitively and economically deliver these services. In the era of 5G, AI and the information and communication technology, or ICT, realm, there could be more services beyond that of standard operators by delivering services via a B2B2X model, which is substantially dependent on the availability of applications and devices developed by third parties. If we fail to deliver commercially viable services based on the new technologies that we adopt, our financial condition and results of operations may be materially and adversely affected. In addition, we may need to cooperate with certain third parties to deliver these new services. To the extent that these third parties fail to perform their obligations, our services, financial condition and results of operations may be materially and adversely affected.

Our ability to deliver services may be disrupted due to systems failures, network shutdowns, earthquakes or other natural disasters.

Our ability to deliver services could be disrupted by systems failures, network shutdowns or other unanticipated problems at our facilities. For example, our submarine cables might be broken due to removals of sand and gravel by certain sand pumper dredgers, which would cause suspensions of our fixed line services, MOD, broadband access and mobile services.

Taiwan is also susceptible to earthquakes and typhoons. However, we do not carry insurance to cover damage caused by earthquakes, typhoons or other natural disasters, including the effects of climate changes (such as drought, floods and increased storm severity), or any resulting business interruption. Our services are currently carried through our fixed and mobile communications networks, as well as through our transmission networks consisting of optical fiber cable, microwave, submarine cable and satellite transmission links, which could be vulnerable to damage or interruptions in operations due to natural disasters. The occurrence of natural disasters could impact our ability to deliver services and have a negative effect on our results of operations. In 2024, we recorded losses on property, plant and equipment arising from natural disasters such as earthquakes and typhoons in the amount of approximately NT$17.44 million (US$0.53 million). Furthermore, we might also be liable for losses claimed from our customers that were incurred from our failure to deliver our services. These potential liabilities could also have a material adverse effect on our results of operations.

Effects of climate change may result in potential adverse impacts on our business, financial conditions and results of operations.

Climate change presents a multifaceted risk landscape for our company. The escalating frequency and severity of extreme weather events, such as typhoons, floods, high temperatures and wildfires, pose a direct threat to our physical infrastructures, such as Internet Data Centers, or IDCs, and base stations, potentially leading to service disruptions and heightened operational costs associated with maintenance, repairs and replacements. Moreover, the global shift towards stringent climate change-related policies amplifies regulatory risks. Compliance with evolving international and industry standards as well as additional disclosure requirements incur costs and potentially strain financial resources. For example, the imposition of carbon fees or other regulatory fees in a jurisdiction where we operate could result in substantially higher compliance costs. In particular, in response to global climate change, Taiwan adopted the Climate Change Response Act (formerly known as the Greenhouse Gas Reduction and Management Act) in February 2023, which establishes the goal of achieving net-zero emissions by 2050 and introduced the carbon pricing system. Starting in 2025, Taiwan has imposed a carbon fee on specific industries with annual carbon emissions exceeding 25,000 tonne of CO2e. Although the telecommunications industry is not among the sectors subject to carbon fees, the imposition of any other regulatory fees and further legislative developments may increase our compliance costs or subject us to additional restrictions in our operations, which may adversely affect our financial condition. In addition, the requirements for climate-related disclosures continue to expand. Taiwan’s Financial Supervisory Commission (FSC) has announced that listed companies will be required to include

climate-related information in their annual reports, aligning with the IFRS Sustainability Disclosure Standards in the coming future. We may need to take proactive steps to comply with regulations, which could result in additional costs and efforts. Furthermore, beyond immediate operational and financial impacts, there also exists higher market expectation for large enterprises like us to take more initiatives and responsibility. Failure to meet these expectations may result in reputational damage and a potential loss of customer trust.

We always commit to the adaptation and mitigation of climate change and reducing operational risks of our business. For example, we adopted the Task Force on Climate-related Financial Disclosure, or TCFD, in 2020. Since then, we have continuously disclosed information on governance, strategy, risk management as well as metrics and goals regarding climate-related risks and opportunities in our sustainability report and on our official website. We also set detailed carbon emission management targets to achieve the goal of 2045 net-zero emissions. Our carbon emission management targets include achieving a 50% reduction of scope 1 and 2 carbon emissions by 2030 compared with the level in 2020, and using 100% renewable energy for IDCs by 2030 and for the Company by 2040. For further initiatives and measures we adopt in response to climate-related challenges, please refer to “Item 4. Information on the Company — B. Business Overview — Corporate Responsibilities: Environmental, Social and Governance (ESG) Initiatives.” However, we cannot assure you that we will be successful in achieving these goals or transitioning to low-carbon operations as we have committed. If we fail to do so, our business, financial conditions, results of operations and reputation may be adversely affected.

Our long-term international bandwidth supply may be disrupted by unexpected delays for new international submarine cables.

The complicated permitting processes have caused unexpected delays on operation and construction. In particular, the construction of our new submarine cable, Southeast Asia-Japan 2 Submarine Cable, or SJC2, which connects various countries in the Asia Pacific region, has been delayed unexpectedly. The target service commencement date was pushed back to the second quarter of 2025, which is almost three and a half years later than the original plan.

In the foreseeable future, submarine cables remain an indispensable international bandwidth solution, especially for Taiwan, and cannot be replaced by alternatives like satellite and microwave transmissions. Disruptions on new submarine cable projects will not only affect our services to individual customers but will also endanger our IDC, terrestrial links and international bandwidth sales, and eventually may have a material adverse effect on our business.

Changes in technology may render our current technologies obsolete or require us to obtain approvals for introducing new services or make substantial capital investments, financing or successfully manage our liquidity and cash flows.

The telecommunications industry in Taiwan has been characterized by rapid increases in the diversity and sophistication of the technologies and services offered. As a result, we need to constantly upgrade our telecommunications technologies and services to respond to evolving industry conditions and customer requirements, rendering some less advanced technologies obsolete. The cost of implementing new technologies, such as the use of AI and machine learning, upgrading our networks or expanding capacity could be significant. In particular, we have made and will continue to make substantial capital expenditures in the near future to effectively respond to technological changes to meet the increasingly robust high-bandwidth requirements of digital convergence services. After obtaining 5G mobile broadband services spectrum, we started our 5G network construction. Our ability to obtain additional financing will also depend on a number of factors. These factors include, but are not limited to, our financial condition, results of operations, financing cost, telecommunications industry conditions, financial market conditions, and relevant government and other regulatory approvals. Furthermore, failure to comply with covenants in our debt documents or repay debts when due may negatively affect our credit ratings, which will cause our financing costs to increase and weaken our fundraising capabilities, further affecting our liquidity position and financial condition.

Any inability to obtain the funding for our capital expenditures on commercially acceptable terms could jeopardize our expansion plans and materially and adversely affect our business prospects and future results of operations.

We may not realize the benefits we expect from our investments, which may materially and adversely affect our business, financial condition, results of operations and prospects.

We have made significant capital investments in our network infrastructure and information technology systems. To continue developing our business and offer more attractive and innovative services/solutions, we intend to continue making substantial capital expenditures in different areas and new technologies. However, customer acceptance of those new services/solutions may not be at the expected rate or level, or it may be unable to satisfy our customers’ demands in time, thus impairing the expected return from our investments.

We cannot assure you that services enabled by the new technologies we are implementing, such as Artificial Intelligence, or AI, Multi-access Edge Computing, or MEC, Open Radio Access Network, and Innovative Optical and Wireless Network, or IOWN, will be accepted by customers as expected. In addition, there might be risks of unforeseen complications in deploying these new services and technologies, and we cannot assure whether anticipated capital expenditures for providing such services will exceed our estimate. These new services and technologies may not be developed/deployed on schedules or may not be accepted by customers or reach expected commercial benefits.

The failure of any of our services to achieve commercial acceptance could result in additional capital expenditures or a reduction in profitability to the extent that we are required under applicable accounting standards to recognize a charge for impairment of assets. Any such charge could materially and adversely affect our financial condition and results of operations. We recognized an impairment loss for investment properties, property, plant and equipment, as well as intangible assets in the past. In 2024, we concluded that the recoverable amount representing the fair value less costs of disposal of investment properties was higher than the carrying amount. Therefore, we recognized a reversal of impairment loss of NT$139.2 million (US$4.2 million) for investment properties.

Furthermore, we cannot assure you that we will be able to maintain control of and consolidate the results of operations of our minority-owned subsidiaries. For example, we consolidated the results of operations of SENAO because we have remained in control over SENAO’s relevant activities and the governance of the entity. Please refer to Note 3 and Note 15 to our consolidated financial statements included in this annual report for details. We might be unable to maintain control over SENAO’s relevant activities, which could adversely affect our consolidated results of operations and ability to meet the operating results guidance that we have projected.

We may also make equity investments in companies from time to time, but we cannot assure you of their profitability and whether any losses related to our equity investments will not have a material adverse effect on our financial condition or results of operations. For example, we invested in Next Commercial Bank Co., Ltd., or NCB, in 2020. Although NCB launched its services on March 29, 2022 and serves as a pivotal strategic investment for our company’s fintech strategy, it has yet to generate profits.

Our largest stockholder may take actions that conflict with our public stockholders’ best interests.

As of December 31, 2024, our largest shareholder, the government of the ROC, through the MOTC, owned approximately 35.29% of our outstanding common shares. Accordingly, the government, through its control over our board, as all non-independent board members were appointed by the MOTC, may continue to have the ability to control our business, including matters relating to:

• any sale of all or substantially all of our assets;

• the approval of our annual operation and projects budget;

• the composition of our senior management;

• the timing and distribution of dividends;

• the election of a majority of our directors; and

• our business activities and direction.

We cannot assure you that our largest shareholder will not take actions that impair our ability to conduct our business competitively or conflict with the best interests of our public stockholders.

Any outbreak of contagious diseases may materially and adversely affect our business and operations, as well as our financial condition and results of operations.

Any outbreak of contagious diseases, such as COVID-19, influenza, Zika virus, dengue fever or Ebola virus, may disrupt our ability to adequately staff our business and disrupt our operations. If any of our employees is suspected of having contracted any contagious disease, we may, under certain circumstances, be required to implement a work-from-home or quarantine policies. Any such outbreak may also restrict the extent of economic activity in affected regions as governments may adopt measures such as travel restrictions and quarantine policies to combat the diseases, and the relevant effects may last for a long time. The resurgence or occurrence of any contagious diseases and the adoption of similar measures may have a material adverse effect on our business, financial condition and results of operations.

Actual or perceived health risks related to mobile handsets and base stations could lead to decreased mobile service usage and difficulties in increasing network coverage and could expose us to potential liability.

According to some published reports, the electromagnetic signals from mobile handsets and cellular base stations may pose health risks or interfere with the operation of electronic equipment. Although the findings of those reports are disputed, actual or perceived risks of using mobile communications devices or of cellular base stations could have a material adverse effect on mobile service providers, including us. For example, our customer base could be reduced, our customers may reduce their usage of our mobile services, we could encounter difficulties in obtaining sites for additional cellular base stations required to expand our network coverage or we may be requested to reduce the number of existing cellular base stations. As a result, our mobile services business may generate less revenues and our financial condition and results of operations may be materially and adversely affected. In addition, we could be exposed to potential liability for any health problems caused by mobile handsets and base stations.

If we fail to maintain a good relationship with our labor unions, work stoppages or labor unrest could occur and the quality of our services as well as our reputation could suffer.

In accordance with the articles of association of Chunghwa Telecom Workers’ Union, except for the chief manager of each department, most of our employees are members of our principal labor union, the Chunghwa Telecom Workers’ Union. Since our incorporation in 1996, we have experienced disputes with our labor unions on issues such as employee benefits and retirement benefits in connection with our privatization as well as the right to protest. In spite of having taken measures to improve relations, increase cooperation and ensure mutual benefit with our labor unions, such as increasing channels of communications by holding periodic labor resource review meetings and guaranteeing our labor unions a seat on our board of directors, we cannot assure you that we will be able to maintain a good relationship with our labor unions. Any deterioration in our relationship with our labor unions could result in work stoppages, strikes or threats to take such an action, which could disrupt our business and operations, materially and adversely affect the quality of our services and harm our reputation.

Our business and operation may be adversely impacted if we fail to achieve and maintain effective internal control or if our independent registered public accountants are unable to attest to or express an unqualified opinion on the effectiveness of our internal controls over financial reporting.

We are subject to the reporting requirements of the SEC. The SEC, as directed by Section 404 of the U.S. Sarbanes-Oxley Act of 2002, adopted rules requiring U.S. public companies to include a report of management on our internal control over financial reporting in their annual reports that contain an assessment by management of the effectiveness of our internal control over financial reporting. The effectiveness of our internal control over financial reporting has been audited by PricewaterhouseCoopers, Taiwan, an independent registered public accounting firm, which has also audited our consolidated financial statements for the year ended December 31, 2024. PricewaterhouseCoopers, Taiwan has issued an attestation report on the effectiveness of our internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States).

We are also required to and have policies in place to comply with various ROC and U.S. laws and regulations on internal controls. However, our internal controls, including policies and procedures, may not prevent or detect

misstatements or misconduct because of their inherent limitations, including the possibility of human error, the circumvention or overriding of controls, fraud or corruption.

While the management report included in this annual report concluded that our internal control over financial reporting was effective, we cannot assure you that our management will be able to conclude that our internal control over financial reporting will be effective in future years, and that our internal controls can prevent fraud and corruption. If in future years we fail to maintain effective internal controls in accordance with the Sarbanes-Oxley Act or other applicable laws, or if we are found not to be in compliance with applicable laws, we could face investigations or other enforcement actions, be subject to criminal, administrative, and civil penalties and other remedial measures, suffer a loss of investor confidence in the reliability of our consolidated financial statements, which in turn could negatively impact the trading price of our ADSs, and could result in lawsuits being filed against us by our stockholders, lead to adverse impact on our business, or otherwise harm our reputation.

Any decline in the Taiwan economy, downturn in the global ICT and technology industry, geopolitical uncertainty or slowdown in global economic growth may materially and adversely affect our financial condition, results of operations and prospects.

Our business depends on economic growth, and we conduct our major operations and businesses in Taiwan. We cannot assure you that the economic conditions in Taiwan will continue to improve in the future, and any uncertainty or further deterioration in Taiwan’s economic conditions could have a material adverse effect on our financial condition and results of operations. In addition, Taiwan’s economy is highly dependent on the global technology industry. Although we have adopted a variety of measures to mitigate risks associated with the global ICT and technology industry, any downturn in the global ICT and technology industry, including but not limited to, global supply chain disruption, tariff increases and trade barriers, interest rate fluctuation, inflation or deflation and changes in economic, fiscal and monetary policies in major economies, exchange rate fluctuation and risk of recession may have a material adverse effect on Taiwan’s economy, which in turn could adversely affect the demand for our products and services.

There are also concerns over tensions, armed conflicts, wars, civil unrest, political instability and geopolitical uncertainty in various regions, such as Russia-Ukraine War, Israel-Palestine Conflict, the Middle East, and Asia Pacific, which have resulted or could result in increased economic volatility and in increased costs of cybersecurity and network maintenance. The economic slowdown in Mainland China and the uncertainties in U.S. policies could also have a material adverse effect on economies around the world. In particular, there have been increasing concerns over the global economic slowdown, disputes between the U.S. and Mainland China and global climate change issues, all of which could cause turbulence in the international and Taiwan’s financial markets and the global technology industries. Although we conduct the majority of our operations and generate the majority of our revenues in Taiwan, any slowdown in global economic growth may materially and adversely affect our financial condition, results of operations and prospects.

We are subject to litigation or other legal proceedings that could expose us to substantial liabilities.

We are from time to time involved in various litigation, arbitration or administrative proceedings in the ordinary course of our business. Any such claims, whether with or without merit, asserted or threatened, could be time-consuming and expensive to defend and could divert our management’s attention and resources. See “Item 4. Information on the Company—B. Business Overview—Legal Proceedings.” We cannot predict the outcome of these proceedings, and we cannot assure you that if a judgment is rendered against us in any or all of these proceedings, our financial condition and results of operations would not be materially and adversely affected.

Our operation may be interrupted, and our expansion may be limited, by power or utility shortage.

Our operation requires a continuous supply of utilities such as electricity and water. Interruptions of electricity or water supply could result in temporary shutdowns of our operation. We may from time to time suffer power outages or surges in Taiwan caused by difficulties encountered by the public utility or other power consumers on the same power grid. Some of these have resulted in interruptions to our operations. Any major suspension, shortage or termination of electricity supply could significantly harm our business, results of operations and financial condition. If we are unable to secure reliable and uninterrupted supply of electricity in Taiwan, our services may be interrupted.

Furthermore, we may suffer from a shortage of water in Taiwan, and we may need to incur additional costs and expenses to respond to such shortages in order to maintain our operations and services. Such incremental costs may affect our profitability and results of operations.

Our success depends on our ability to attract and retain quality personnel.

In response to the rapidly evolving industry in which we operate, we need to continuously attract and retain skilled technical personnel, and we also depend on the continued service of our executive officers. Our business could suffer if we fail to attract qualified personnel or adequately replace them, and thus lose the services of any of these personnel. In particular, we could not afford the loss of any of our talents since attracting qualified talents is increasingly difficult. Moreover, any expansion by industry players may intensify the demands for qualified and experienced personnel in the Taiwan telecommunications industry. All the major three telecom operators in Taiwan, including us, are expanding the ICT business in areas such as cybersecurity, cloud, AIoT, IDC, AI, and big data analysis and may increase the number of their employees as part of this expansion. In addition to telecom operators, some computer design companies and manufacturers are also expanding their business into these areas and have been recruiting information technology-related employees as well. We may also need to increase employee compensation levels to attract and retain personnel, which in turn could result in an increase in our operating costs. We cannot assure you that the loss of the services of any of these personnel would not disrupt our business and operations and materially and adversely affect the quality of our services and harm our reputation.

We face substantial political risks associated with doing business in Taiwan, particularly due to domestic political events and the tense relationship between the ROC and the People’s Republic of China, which could adversely affect our financial condition and results of operations.

Our principal executive offices and substantially all of our assets are located in Taiwan, and substantially all of our revenues are derived from our operations in Taiwan. Accordingly, our business, financial condition and results of operations and the market price of our common shares and the ADSs may be affected by changes in ROC governmental policies, taxation, inflation or interest rates and by social instability and diplomatic and social developments in or affecting Taiwan, which are outside the control of us.

Taiwan has a unique international political status. Since 1949, Taiwan and Mainland China have been separately governed. The People’s Republic of China, or PRC, claims that PRC is the sole legitimate government in China, and Taiwan is a part of China. In addition, the PRC government has refused to renounce the use of military force to gain control over Taiwan. Past developments in relations between the ROC and the PRC have on occasion depressed the market prices of the securities of companies in the ROC. Relations between the ROC and the PRC and other factors affecting military, political or economic conditions in Taiwan could materially and adversely affect our financial condition and results of operations, as well as the market price and the liquidity of our securities. In addition, the complexities of the relationship between the ROC and PRC require companies involved in cross-strait business operations to carefully monitor their actions and manage their relationships with both ROC and PRC governments. We cannot assure you that we will be able to successfully manage our relationships with the ROC and PRC governments for our cross-strait business operations, which could have an adverse effect on our ability to expand our business and conduct cross-strait business operations.

Stockholders may have more difficulty protecting their interests under the laws of the ROC than they would under the laws of the U.S.

Our corporate affairs are governed by our Articles of Incorporation, the TMA, and by the laws governing corporations incorporated in the ROC. See “—Extensive regulation of our industry may limit our flexibility to respond to market conditions and landscape, and our business and revenues may suffer.” The rights of stockholders and the responsibilities of management and the members of the board of directors of Taiwan companies are different from those applicable to a corporation incorporated in the U.S. For example, controlling or major stockholders of Taiwan companies do not owe fiduciary duties to minority stockholders. As a result, holders of our common shares and ADSs may have more difficulties protecting their interests in connection with actions taken by our management or members of our board of directors than they would as public stockholders of a United States corporation.

Our actual financial results may differ materially from our published guidance.

Starting in 2013, we continued to voluntarily publish our operating results guidance on an annual basis in accordance with the Taiwan IFRSs. We may from time to time update our operating results guidance after evaluating the effects of any changes to the estimates and assumptions that we used to calculate the projections of our operating results. Our projections are based on a number of estimates and assumptions that are inherently subject to significant uncertainties and contingencies, including the risk factors described in this annual report. In particular, our projections are forward-looking statements that are necessarily speculative in nature, and it can be expected that one or more of the estimates on which the projections were based will not materialize or will vary significantly from actual results, and such variances will likely increase overtime. Although our operating income, net income and EPS exceeded our expectations in 2024, our financial results will depend on future developments, which are highly uncertain and cannot be predicted.

Our results of operations and financial condition under Taiwan IFRSs may differ materially from our reported results of operations and financial condition under IFRSs.

While we have adopted Taiwan IFRSs for ROC reporting purposes, we adopt IFRSs for certain filings with the SEC, including our annual reports on Form 20-F. Taiwan IFRSs differs from IFRSs in certain significant respects, including to the extent that any new or amended standards or interpretations applicable under IFRSs may not be timely endorsed by the FSC. Furthermore, the dividends for 2024 that are expected to be declared at our 2025 annual general stockholders’ meeting are calculated based on Taiwan IFRSs.

Risks Relating to Ownership of Our ADSs and Common Shares

The value of your investment may be reduced by future sales of our ADSs or common shares by us, by the government of the ROC or by other stockholders.

The government may continue to sell our common shares. Sales of substantial amounts of ADSs or common shares by the government or any other stockholder in the public market, or the perception that future sales may occur, could depress the prevailing market price of our ADSs and common shares.

The market value of your investment may fluctuate due to the volatility of, and government intervention in, the Taiwan securities market.

Our common shares are traded on the Taiwan Stock Exchange, or the TWSE, which has a smaller market capitalization and is more volatile than the securities markets in the U.S. and many European countries. The market value of our ADSs may fluctuate in response to the fluctuation of the trading price of our common shares on the TWSE. The TWSE has experienced substantial fluctuations in the prices and trading volumes of listed securities, and there are currently limits on the range of daily price movements. In 2024, the TWSE Index reached a low of 17,161.79 on January 17, 2024, and peaked at 24,390.03 on July 11, 2024. On April 2, 2025, the TWSE Index closed at 21,298.22. The TWSE has experienced certain problems, including market manipulation, insider trading and payment defaults. The recurrence of these or similar problems could have a material adverse effect on the market price and liquidity of the securities of Taiwan companies, including our ADSs and common shares, in both the domestic and the international markets.

In response to declines and volatility in the securities markets in Taiwan, the government of the ROC formed the National Financial Stabilization Fund to support these markets through open market purchases of shares in Taiwan companies from time to time. The details of the transactions of the National Financial Stabilization Fund have not been made public. In addition, the government’s Labor Insurance Fund and other funds associated with the government have in the past purchased, and may from time to time purchase, shares of Taiwan companies listed on the TWSE or other markets. As a result of these activities, the market price of common shares of Taiwan companies may have been and may currently be higher than the prices that would otherwise prevail in the open market. Market intervention by government entities, or the perception that such activity is taking place, may take place or has ceased, may cause sudden movements in the market prices of the securities of Taiwan companies, which may affect the market price and liquidity of our common shares and ADSs.

We may be sanctioned or the network establishment approval granted to us may be abolished for violations of limits on foreign ownership of our common shares, and these limits may materially and adversely affect our ability to obtain financing.

According to the TMA, which was effective from July 1, 2020 (excluding certain articles regarding frequency allocation that was set effective from November 1, 2020), the total amount of our shares directly held by foreigners shall not exceed 49%, and the total amount of our shares directly and indirectly held by foreigners shall not exceed 60%. As of April 2, 2025, foreign direct holdings of our outstanding share capital was at approximately 15.67%. If we fail to comply with the applicable foreign ownership limitations, the network establishment approval granted to us may be abolished. We cannot predict the manner in which the NCC will exercise its authority over us in the case of a violation, or whether the NCC will lower the foreign ownership cap at any time.

If we are deemed to be in violation of our foreign ownership limitations, any consequences arising from such violation may materially and adversely affect us. Moreover, since we are unable to control ownership of our common shares or ADSs representing our common shares, and we have no ability to stop transfers among stockholders, or force particular stockholders to sell their shares, we may be subject to monetary fines, or the network establishment approval granted to us may be abolished, even if there is no fault of our own. In that event, our business could be disrupted, our reputation could be damaged and the market price of our ADSs and common shares could decline. These limitations may also materially and adversely affect our ability to obtain adequate financing to fund our future capital requirements or to obtain strategic partners, and alternate forms of financing may not be available on terms favorable to us, or at all.

Restrictions on the ability to deposit our common shares into our ADS program may adversely affect the liquidity and price of the ADSs.

The ability to deposit our common shares into our ADS program is restricted by ROC law, under which no person or entity, including you and us, may deposit our common shares into our ADS program unless the Securities and Futures Bureau has not objected within a prescribed period following the filing with it of an application to do so, except for the deposit of the common shares into our ADS program and for the issuance of additional ADSs in connection with:

• distribution of share dividends or free distribution of our common shares;

• exercise of preemptive rights of ADS holders applicable to the common shares evidenced by our ADSs in the event of capital increases for cash; or

• purchases of our common shares in the TWSE by the investor directly or through the depositary and delivery of such common shares or delivery of our common shares held by such investors to the custodian for deposit into our ADS program, subject to the following conditions: (a) the depositary may accept deposit of those shares and issue the corresponding number of ADSs with regard to such deposits only if the total number of ADSs outstanding after the deposit does not exceed the number of ADSs previously approved by the Securities and Futures Bureau, plus any ADSs issued pursuant to the events described above; and (b) this deposit may only be made to the extent previously issued ADSs have been cancelled.

As a result of the limited ability to deposit common shares into our ADS program, the prevailing market price of our ADSs on the New York Stock Exchange, or NYSE, may differ from the prevailing market price of the equivalent number of our common shares on the TWSE.

You will be more restricted in your ability to exercise voting rights than the holders of our common shares, which may diminish your influence over our corporate affairs and may reduce the value of your ADSs.

Holders of American depositary receipts evidencing our ADSs may exercise voting rights with respect to the common shares represented by these ADSs only in accordance with the provisions of our deposit agreement. The deposit agreement provides that, upon receipt of notice of any meeting of holders of our common shares, the depositary bank will, as soon as practicable thereafter if requested by us in writing, mail to ADS holders the notice of the meeting sent by us, voting instruction forms and a statement as to the manner in which instructions may be given by the holders.

Generally, ADS holders will not be able to exercise voting rights attached to the underlying securities on an individual basis. Under the deposit agreement, the voting rights attached to the underlying securities must be exercised as to all matters subject to a vote of stockholders collectively in the same manner, except in the case of an election of directors. The election of our directors is by means of cumulative voting. In the event the depositary does not receive voting instructions from ADS holders in accordance with the deposit agreement, our chairman or his or her designee will be entitled to vote the common shares represented by the ADSs in the manner he or she deems appropriate at his or her discretion, which may not be in your interest.

Your right to participate in any future rights offerings may be limited, which may cause dilution to your holdings.

We may from time to time distribute rights to our stockholders, including rights to acquire our securities. Under the deposit agreement, the depositary will not offer you those rights unless the distribution to ADS holders of both the rights and any related securities are either registered under the U.S. Securities Act of 1933, as amended, or the Securities Act, or exempt from registration under the Securities Act. We are under no obligation to file a registration statement with respect to any such rights or securities or to endeavor to cause such a registration statement to be declared effective. Moreover, we may not be able to establish an exemption from registration under the Securities Act. Accordingly, you may be unable to participate in our rights offerings and may experience dilution in your holdings.

If the depositary is unable to sell rights that are not exercised or not distributed or if the sale is not lawful or reasonably practicable, it will allow the rights to lapse, in which case you will receive no value for these rights.

Changes in exchange controls that restrict your ability to convert proceeds received from your ownership of ADSs may have an adverse effect on the value of your investment.

Your ability to convert proceeds received from your ownership of ADSs depends on existing and future exchange control regulations of the ROC. Under the current laws and regulations of the ROC, an ADS holder or the depositary, without obtaining further approvals from the Central Bank of the ROC (Taiwan) or any other governmental authority or agency of the ROC, may convert NT dollars into other currencies, including U.S. dollars, in respect of:

• the proceeds of the sale of common shares represented by ADSs or received as share dividends with respect to the common shares and deposited into the depositary receipt facility; and

• any cash dividends or distributions received from the common shares represented by ADSs.

In addition, the depositary may also convert into NT dollars incoming payments for purchases of common shares for deposit in the depositary receipt facility against the creation of additional ADSs. If you withdraw the common shares underlying your ADSs and become a holder of our common shares, you may convert them into NT dollars subscription payments for rights offerings. The depositary may be required to obtain foreign exchange approval from the Central Bank of the ROC (Taiwan) on a payment-by-payment basis for conversion from NT dollars into foreign currencies of the proceeds from the sale of subscription rights of new common shares. Although it is expected that the Central Bank of the ROC (Taiwan) will grant approval as a routine matter, required approvals may not be obtained in a timely manner, or at all.

Under the ROC Foreign Exchange Control Law, the Executive Yuan of the ROC may, without prior notice but subject to subsequent legislative approval rendered within ten days from such imposition, impose foreign exchange controls or other restrictions in the event of, among other things, a material change in domestic or international economic conditions which might threaten the stability of the domestic economy in Taiwan.

You are required to register with the TWSE and appoint several local agents in Taiwan if you withdraw common shares from our ADS facility and become our stockholder, which may make your ownership burdensome.

If you are a non-ROC person and wish to withdraw common shares represented by your ADSs from our ADS facility and hold those common shares, you are required under the current laws and regulations of the ROC to appoint an agent, also referred to as a tax guarantor, in the ROC for filing tax returns and making tax payments. A tax guarantor must meet certain qualifications set by the Ministry of Finance of the ROC and, upon appointment, becomes a guarantor of your ROC tax obligations. If you wish to repatriate profits derived from the sale of withdrawn common shares or cash dividends or interest on funds derived from the withdrawn common shares, you will be required to submit evidence of your appointment of a tax guarantor and the approval of the appointment by the ROC tax authorities. You may not be able to appoint and obtain approval for a tax guarantor in a timely manner.

In addition, under the current laws of the ROC, you will be required to be registered as a foreign investor with the TWSE for making investments in the ROC securities market prior to your withdrawal and holding of common shares represented by the ADSs. You will be required to appoint a local agent in Taiwan to, among other things, open a securities trading account with a local securities brokerage firm and a bank account to remit funds, exercise stockholders’ rights and perform other functions as holders of ADSs may designate. You must also appoint a local bank to act as custodian for handling confirmation and settlement of trades, safekeeping of securities and cash proceeds and reporting and declaration of information. Without the relevant registration and appointment of the local agent and custodian and the opening of a securities trading account and bank account, you will not be able to hold, subsequently sell or otherwise transfer our common shares withdrawn from the ADS facilities on the TWSE.

ITEM 4. INFORMAT ION ON THE COMPANY

A. History and Development of the Company

Our legal and commercial name is Chunghwa Telecom Co., Ltd. We were officially established on July 1, 1996 as part of the privatization efforts by the government of the ROC and operate under the Statute of Chunghwa Telecom Co., Ltd. Prior to our formation, we were operating as a business unit of the Directorate General of Telecommunications, which was the predecessor of the NCC. The common shares of the Company have been listed on the TWSE under the trading code “2412” since October 2000 and its ADSs have been listed on the NYSE under the symbol “CHT” since July 2003. We were privatized as a result of a secondary ADS offering and concurrent domestic auction of our common shares on August 12, 2005, as the ownership by the government of the ROC was reduced to less than 50%. The privatization has enabled us to develop our business and respond to changing market conditions more rapidly and efficiently. Today, we are the largest full telecommunication service provider in Taiwan. Our principal executive offices are located at 21-3 Xinyi Road, Section 1, Taipei 10048, Taiwan, ROC, and our telephone number is (886) 2-2344-5488. Our website address is at: https://www.cht.com.tw . The information contained on our website is not incorporated herein by reference and does not constitute part of this annual report. Our agent for service of process in any suit or proceeding arising out of or relating to our shares, ADSs, American depositary receipt, or ADR, and deposit agreement in the U.S. is Cogency Global Inc., located at 122 East 42 nd Street, 18 th Floor, New York, NY 10168.

We are the largest telecommunications service provider in Taiwan and one of the largest in Asia in terms of revenues. As an integrated telecommunications service provider, our principal services include: mobile services, fixed-line services, ICT business, sales and other services.

We accomplished our strategic transformation in 2022 and started to operate under the new customer-centric structure to enhance our performance. In particular, our Consumer Business Group strategically focuses on individual, home-centric and family services to provide better customer experiences. Our Enterprise Business Group consolidates and streamlines our enterprise business-related services to create synergy and enhance our integrated ICT services. Our International Business Group focuses on serving our international customers and expanding our overseas business.

We enjoy leading positions across a number of areas in terms of both revenues and customers. We are Taiwan’s largest service provider in fixed communications and mobile communications. As for the IPTV service, our MOD service is the largest video platform in Taiwan in terms of the number of customers. In 2024, our revenues were NT$230.0 billion (US$7.0 billion), our consolidated net income was NT$38.5 billion (US$1.2 billion) and our basic earnings per share was NT$4.79 (US$0.15).

In 2024, we made capital expenditures totaling NT$28.8 billion (US$0.9 billion). See “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Capital Expenditures” for a detailed discussion of our capital expenditures.

Competitive Strengths

We believe that our primary competitive strengths are:

• our position as an integrated, full-service telecommunications provider as well as ICT service provider and our premium brand and broad customer base in Taiwan; and

• our capital resources and leading technology capabilities.

We are an integrated full-service telecommunications provider as well as ICT service provider and have premium brand and broad customer base in Taiwan.

We are the largest telecommunications service provider in Taiwan with a leading position in fixed communications services, mobile communications services, internet services, and video services. We are also a major ICT service provider in areas such as cybersecurity, cloud, AIoT, IDC and big data analysis.

Broad range of communications products and services . We are confident with our ability to provide an attractive and comprehensive range of both telecommunications services and ICT total solutions to our business customers. In addition, we are able to offer innovative and customized ICT services and attractive tariff packages to deliver customer-centric services.

Broad network coverage . In order to provide higher bandwidth services for our customers, we have been constructing our fiber to the x, or FTTx, network since 2003. We have successfully migrated many of our customers to higher-speed FTTx service. As of December 31, 2024, network coverage of FTTx with speeds of 1 Gbps and higher was approximately 94.5%. In addition, our 4G/5G mobile communications networks provide nationwide coverage. Our large mobile spectrum allocation, together with our extensive network coverage, positions us well for the continued expansion of our mobile services in Taiwan. We are also continuing to build our Wi-Fi network to offload mobile network capacity in residential and public areas with high subscriber density and usage, such as business districts, transportation hubs, airports and convenience stores. We aim to provide seamless broadband connections to better serve our customers.

Brand awareness, distribution channels and customer service . Our brand, “Chunghwa Telecom,” has a reputation for quality, reliability and sustainability. We serve our large customer base through our extensive customer service network in Taiwan. See “—B. Business Overview—Marketing, Sales and Distribution—Sales and Distribution.” Our extensive sales and distribution channels help us attract additional customers and develop new business opportunities. We eagerly enhance user experience at different channels. We integrate our online store and offline channels, with our big data capability, to accelerate the development of our Online-to-Offline business. To enhance customers’ online experience, we provide customized online purchase processes by leveraging our capability to analyze big data, and accurately analyze customer preferences and behaviors, and target different customer groups for implementing accurate marketing initiatives to improve sales success rates and reduce marketing costs. Customers can apply for various services online through websites or apps, and make queries with us in real time. We also provide an online shopping platform, where consumers can purchase telecom tariff plans, smartphones and smart home appliances at the same time. In addition, customers can also order online and enjoy quality services at designated offline stores to save waiting time.

In 2024, we obtained several international awards which recognized our strong operational capabilities, service quality and ESG practices. We were ranked in the top 2% of the “World’s Most Sustainable Companies of 2024” by TIME Magazine, attaining the first position in the Asia-Pacific telecom industry. We stood out as the only Taiwanese telecom operator in Newsweek’s “World’s Most Trustworthy Companies 2024” list. We were once again included in the Dow Jones Sustainability World Index and ranked as one of the top-rated companies in the global telecom industry. We were also the only telecom company reaffirmed by S&P Global Ratings with the highest long-term issuer credit rating (AA). Furthermore, we not only once again received MSCI ESG “AA” rating but also secured The Asset ESG Corporate Jade Award from The Asset for four consecutive years and won “Sustainable Asia Award” and “Best Investor Relations” from Corporate Governance Asia magazine. In addition, we were recognized by Speedtest as Best Mobile Coverage in Taiwan for seven consecutive years and Fastest 5G network for four consecutive years. Moreover, we were recognized with fourteen championships in Taiwan by Opensignal.

Professional management and outstanding talents . Our management and employees have extensive operating experience and technical knowledge for the future growth of emerging businesses. We also believe we will continue to attract and retain high-quality information technology and marketing talents.

We have the capital resources and technology to retain our leading position.

Strong capital structure . We have great financial resources in Taiwan. Our low debt-to-equity capital structure, together with our strong operating cash flows, provides us with the flexibility and resources to invest in capital-intensive and growing businesses. We started to construct our 5G base stations in the first half of 2020 and continue to enhance our existing 4G/5G mobile broadband networks, our expansion of FTTx broadband access services, IP-based MOD/Hami Video services, fixed-line/mobile value-added services, or VAS, ICT-related services and service platforms. We also deploy Narrowband-IoT and LTE Cat-M1 networks for IoT applications.

Furthermore, we signed an exclusive distribution agreement for OneWeb Low Earth Orbit, or LEO, and SES Medium Earth Orbit, or MEO, satellite services in November 2023 and August 2024, respectively, which will enhance the resilience of our communication network. Our strategy is to invest in or acquire emerging growth companies to further expand our business to retain our leading position in the future, such as cybersecurity, IDC/cloud and AIoT strategic businesses. We will continue to construct facilities of data center and cloud services and will cooperate with international public cloud service providers, including Google Cloud Platform, or GCP, Amazon Web Service, or AWS, and Microsoft Azure, to deliver hybrid cloud solutions to enterprise customers in order to be a leading IDC and multi-cloud service provider in Taiwan. In addition, we will continue to construct new submarine cables linking the U.S. and Asia-Pacific region, as well as expand the bandwidth of outbound connections and enhance network strength to attract more OTT services providers to increase their investments in Taiwan.

Advanced network technology . By the end of 2024, more than 94.5% of households in Taiwan can enjoy ultra-fast connectivity with our FTTH network. We will still expand FTTH network coverage of households in 2025, based on the requirement of ultra-fast connectivity service in Taiwan. In 2024, we also continued to enhance our 4G/5G mobile broadband networks. Our investment in network infrastructure places us in a position to capture a significant share of the internet and high-speed data transmission market. We have developed Multi-access Edge Computing, or MEC, technology and successfully launched it to the market, enabling us to maintain a market-leading position in the 5G private network.

Research and development expertise . In 2024, our research and development expenses accounted for 1.8% of our revenues. See “Item 5. Operating and Financial Review and Prospects—C. Research and Development, Patents and Licenses” for descriptions about areas of our research and development. We believe our focus on research and development will allow us to efficiently develop and deploy new technologies and services ahead of our competitors.

Business Strategies

We will adopt a management approach focused on being streamlined (refining product value and simplifying processes), pragmatic (optimizing resource allocation and enhancing efficiency), and intelligent (deepening AI applications and boosting synergy). Our primary goal is stable revenue and profit growth, with a strong emphasis on expanding into emerging markets and adopting new technologies. We are committed to steadily progressing towards

our vision, delivering exceptional operational results, and continuously creating greater value for our customers, strategic partners, shareholders and employees.

Consistent with our strategic objectives, we have developed the following business strategies:

Drive expansion and growth based on our core strengths

We endeavor to maintain our strong market position in telecommunication business and seek to expand the scope of our business beyond network services by offering service platforms and VAS to capture new opportunities and generate revenue growth, such as IoT platforms and cloud platforms. We also continue to enhance our MOD/OTT service video platform, which offers digital contents, live broadcasting and subscription video on demand, or SVoD, services.

Broadband services : We strive to maintain our broadband market share and enjoy the increase of ARPU for our FTTx internet services. We believe customer demands owing to digital transformation will continue and we will grasp those opportunities from the trend. Over the years, we are continuously encouraging more migration of our FTTx subscribers to higher-speed FTTx service to further enhance our ARPU. We continue to build our FTTH infrastructure, and we believe these efforts will help us maintain our advantages in broadband services. A high-quality fixed broadband network is also essential for our high-definition MOD services.

Video services : We provide attractive and user-centric entertainment experience for our customers by offering 4K high-quality videos, self-selected channel mechanisms and multi-screen options on MOD and 5G service on Hami Video. We also expect to further expand our contents and applications to serve more customers by enhancing the partnerships with our key content providers. In 2024, we secured the broadcasting rights for the Paris Olympics and the 2024 WBSC Premier12, resulting in record-breaking viewership and subscription growth. Additionally, we made further investments in localized content and co-productions with international partners to strengthen our content portfolio. Moving forward, we will continue the successful strategies to further expand our video business.

Mobile Communications: We successfully launched 5G services in Taiwan in 2020. Our strategy for mobile services includes the following initiatives:

• with a high quality 5G network, integrating digital life value-added services and innovative offerings to boost 5G penetration rate and ARPU;

• reallocating resources to drive mobile subscriptions toward premium plans;

• achieving the highest 5G penetration rate by encouraging customers to upgrade to 5G plans with incentives like Hami Points, phone discounts and bonus data;

• leveraging big data analytics to identify and target high-potential customers;

• offering a variety of plans to cater to different needs; and

• strengthening our technology capabilities such as 5G, AI, LTE Cat-M1, Narrowband IoT, MEC while collaborating with potential business partners to develop advanced 5G solutions and AIoT service.

ICT business: Leveraging our core telecommunication infrastructure and services to expand ICT services, we aim to become a leading provider of smart life and an enabler of digital economy, and to expand international business. In order to drive the development of multiple emerging ICT services (e.g., smart city, smart manufacturing, smart health, smart environment and smart transportation), we focus on high-quality platforms, building customer-centric ecosystems with key partners, and making strategic investments, mergers and acquisitions. With the strength and reliability of our technologies and services, we will gain a competitive edge to continue expanding our ICT business in the future.

Emphasize quality of service and customer satisfaction

Quality of service is critical in attracting and retaining customers and enhancing our long-term profitability. In order to continuously enhance and improve the quality of our services, we have, in addition to the quality assurance

function of our regular operating units, established a number of dedicated task forces to monitor our network performance. Our senior management sets our quality evaluation criteria and regularly reviews the quality of our performance.

To ensure customer loyalty and achieve customer-centric spirit with high-quality services, we consistently focus on and invest in the optimization of the entire customer journey. In terms of network quality, we constantly strive for precise expansion and create seamless coverage of the three networks, including fixed networks, mobile networks and Wi-Fi, to cater to high-speed Internet access demand. We develop new data-driven approaches to strengthen customer engagement and retention to enhance customer stickiness. Through accurate labeling and big data analytics of customer intentions, we push forward data-driven service process optimization and target customer segment marketing and caring. We also establish online and offline multiple service networks for customer service touchpoints and provide 7x24 all-around professional services and feedback channels to enhance customer experience and satisfaction.

Improve operational and cost efficiency

We continue to focus on cost control and improve our operational and cost efficiency by leveraging our IT capabilities and cloud resources to enable more advanced networks:

• strengthening digital capabilities: leveraging AI and big data technologies to build smart and automated services, optimize customer experience and speed up processes;

• optimizing business operations support system service efficiency: migrating information systems into the cloud, sharing information technology resources; and

• expanding usage of information resources: building up a centralized, digitalized and specialized procurement process to enhance cost efficiency.

In particular, we primarily use and integrate AI technology in our operation to optimize our cost efficiency in the following ways:

• smart customer support: we have adopted AI-powered contextual Q&A chatbots that quickly respond to customer inquiries. These systems efficiently handle repetitive questions, reduce the workload of customer service agents, and enhance overall service efficiency and customer satisfaction.

• network operations and maintenance: the AI decision tree learning mechanism predicts potential optical interface degradation trends, proactively diagnoses the root causes of end-to-end network data service problems, detects potential issues and intervenes at an early stage, which together enhance our overall operational performance.

• software engineering: AI is utilized to produce essential software engineering documentation and code, thereby accelerating development cycles and enhancing productivity.

• smart energy management system: we have independently developed an AI-powered smart energy management system to predict air conditioning energy consumption and adjust temperature control strategies to optimize energy savings in multiple data centers.

• incorporate AI and machine learning into our operations through partnerships with mobile network equipment providers: We use AI to predict network load and automatically switch the network to deep sleep mode without affecting user experience.

By leveraging AI technologies, we have achieved significant cost savings while enhancing operational efficiency across various domains. Our long-term goal is to optimize our capital expenditures by focusing on investing in innovative products and services with attractive return profiles. We continue the construction of our fiber-based fixed-line and mobile network to increase the network bandwidth and enhance operational efficiencies. We will continue to leverage our core telecommunication infrastructure and services to expand the ICT business, including 5G services, IDC services, PSTN migration, international submarine cable services, cloud services, total enterprise solutions and government projects.

Expand our business through alliances, acquisitions and investments

We continuously expand our business in growth areas and proactively deploy new technologies and services through alliances, acquisitions and investments. We believe that our experience, operational scale and large customer base make us an attractive ally for other service providers.

Alliances . In 2024, we continuously engage in strategic collaboration with leading domestic and foreign companies and organizations to diversify our business operations and enhance our service offerings. In 2024, we concluded a memorandum of understanding, or MOU, with Fujitsu in January 2024 for a two-year strategic partnership, with the aim of jointly studying the establishment of a network utilizing the All-Photonics Network (APN) technology based on the IOWN initiative in Taiwan. Furthermore, in August 2024, we cooperated with NTT Corporation to activate the world’s first International IOWN APN between Taiwan and Japan based on the MOU signed in October 2023 to accelerate the IOWN evolution. In June 2024, we joined the Groupe Speciale Mobile Association (GSMA) Open Gateway, a framework of common network Application Programming Interface (APIs) designed to provide universal access to operator networks for developers. Furthermore, we independently developed two communication fraud prevention APIs and became the first telecommunications operator in Taiwan obtaining the GSMA Open Gateway certification in December 2024.

Acquisition and Investments . We have focused our acquisition strategy on making strategic acquisitions of companies that we believe to be fulfilled our long-term strategic goals. We have focused our investment strategy on the development of new businesses and the enhancement of our operational efficiency, especially the aspects of AI, 5G and ICT services. Recently we have entered into the following notable transactions:

We strengthen our advantages in the public cloud business and generative AI technology through investing in iKala Global Online Corp., or iKala, in February 2024, from which we can further leverage its leading GCP cloud business, cloud SaaS services, such as MarTech, and generative AI technology.

We, in February 2024, established a wholly-owned investment subsidiary dedicated to handling fundraising and providing investment management and management operations consulting services for cultural content industry funds. With the establishment of such subsidiary, we expect to enrich our IPTV Streaming Service business, explore Taiwan's high-quality film and television audio, cultural creativity and cultural technology, and build a cultural content IP ecosystem.

The Board of Directors also approved an investment of US$30 million in Taiwania Hive Technology Fund L.P. (TWTF) in February 2024. This investment is aimed at capitalizing on the digital transformation trend in Southeast Asia, connecting Taiwan's technologies and talents to the region, and exploring potential businesses opportunities.

Moreover, to expand our business into European market, we established a wholly-owned subsidiary, Chunghwa Telecom Europe GmbH, in Germany in July 2024. Through this subsidiary, we plan to provide ICT services and explore business opportunities in Europe.

Going forward, we will focus on driving the growth of the digital economy and foster innovation across key businesses sectors. We will continue to explore opportunities in equity investments and strategic acquisitions that enhance our core competitiveness and align with our long-term strategic goals. By cooperating with other companies and leveraging our advantages, we strive to gain market share in the AI, 5G, AIoT, cybersecurity, IDC/Cloud Computing and cultural media industry. Furthermore, we will continue to explore opportunities to strengthen our cooperation with companies in the ASEAN countries, including in telecommunication business and smart city ICT businesses.

Maintain focus on maximizing stockholder value

We commit to maximizing stockholder value and intend to maintain a sustainable dividend policy. Under the ROC Company Act, companies are allowed to distribute special cash dividends from capital surplus. In addition, the accumulated legal reserve that we had set aside in previous years has amounted to the aggregate par value of our outstanding share capital. Therefore, according to relevant regulations, we are not required to appropriate profits to

our legal reserve starting from 2015. With the approval of our board of directors in February 2025, our payout ratio was 104.21% in 2024 earnings. See “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information.”

B. Business Overview

Our Principal Lines of Business

We have three segments that we operate and manage as strategic business units: consumer business, enterprise business and international business, which provide mobile services, fixed-line services, ICT business, sales and other services.

Consumer Business

Our consumer business strategically focuses on individual- and home-centric businesses, such as mobile, fixed broadband, Wi-Fi, IPTV (MOD) and OTT services. To create value for our customers and provide better customer experiences, we offer FTTx and ADSL services and enhance customer internet surfing experiences through our value-added services that leverage our Wi-Fi advantage as well as IPTV (MOD) and OTT (Hami Video) offerings. We have the largest mobile subscriber base in Taiwan with solid network performance. We are the largest internet service provider, or ISP, and also own the largest video platform in Taiwan.

Enterprise Business

Our enterprise business focuses on creating synergy and enhancing our integrated ICT services. It also promotes the development of emerging businesses, which focus on IDC, cloud, cybersecurity, 5G+AIoT, big data, AI, enterprises’ digital transformation and system integration. We have a large customer base of high-quality enterprises, including those who do both business-to-business and business-to-consumer business. Our enterprise business team identifies market insights to provide a variety of enterprise business-related services to satisfy our customers. We are the largest IDC services provider in Taiwan, with an IDC market share of more than 70%, as well as the leading cybersecurity service provider in the market.

International Business

Our international business focuses on serving our international customers. Our international customers include Taiwanese companies seeking global expansion, large Taiwanese enterprises located in foreign countries, foreign companies and multinational enterprises. As the largest submarine cable service provider in Taiwan, together with our international submarine cable stations, overseas subsidiaries, strategic partners and alliances, we are well positioned to help our customers to capture global market opportunities by providing our diversified product portfolio and service offerings, including communication service, leased circuits, IDC, cloud, cross-border IoT, roaming, broadband, 5G and smart solutions.

Service and Product Offerings

As an integrated telecommunications service provider, our principal services include: mobile services, fixed-line services, ICT business, sales and other services.

Mobile Services

We are Taiwan’s largest provider of mobile services in terms of both revenues and subscribers. In 2022, we generated revenues of NT$61.1 billion, or 28.2% of our total revenues, from mobile services. In 2023, we generated revenues of NT$65.0 billion, or 29.1% of our total revenues, from mobile services. In 2024, we generated revenues of NT$67.0 billion (US$2.0 billion), or 29.1% of our total revenues, from mobile services. The growth in mobile service revenues was primarily driven by an increase in subscriber numbers and upsell resulting from a steady 5G migration in 2024, as well as the recovery of roaming services since the second half of 2023.

We drove 5G migration in a steady manner. In addition, as we focus on creating value for customers, our postpaid ARPU (excluding IoT) per month increased from NT$547 in 2023 to NT$553 in 2024.

2022	2023	2024
NT$	NT$	NT$
Postpaid ARPU (1) for mobile service	525	547	553

(1) Postpaid ARPU is calculated by dividing the consolidated mobile service revenues (excluding IoT and prepaid revenues) by the average number of postpaid subscribers during the month (excluding IoT).

We remain the largest mobile operator in Taiwan in terms of revenues and number of subscribers. We had approximately 1.1 million mobile customers, excluding IoT SIMs, and a market share of approximately 38.0% in terms of total mobile customers (excluding IoT) and approximately 40.4% in terms of total mobile services revenues in Taiwan as of December 31, 2024.

In October 2013, we obtained a 4G mobile broadband services spectrum of 10MHz paired spectrum in the 900MHz frequency band and 25MHz paired spectrum in the 1800MHz frequency band. We paid NT$39.1 billion to the government for the spectrum. The license is valid until December 31, 2030. We launched 4G mobile broadband services in May 2014.

In December 2015, we obtained an additional spectrum for 4G mobile broadband services of 30MHz paired spectrum in the 2500MHz and 2600MHz frequency bands, and we paid NT$10.0 billion to the government. The license is valid until December 31, 2033. We put these 2500MHz and 2600MHz frequency bands into use on March 24, 2016.

In November 2017, we further obtained a spectrum for 4G mobile broadband services of 5MHz paired spectrum in the 1800MHz frequency band and 20MHz paired spectrum in the 2100MHz frequency band, and we paid NT$10.9 billion to the government. The licenses are valid until December 31, 2030 and 2033, respectively.

In February 2020, we obtained a spectrum for 5G mobile broadband services of 90MHz spectrum over 3.5GHz frequency bands and 600MHz spectrum over 28GHz frequency bands, and we paid NT$48.4 billion to the government. The license is valid until December 31, 2040. We launched 5G services on June 30, 2020.

In May 2022, we obtained 900MHz band 2x10MHz bandwidth spectrum and equipment from Asia Pacific Telecom Co. Ltd. (merged with Far EasTone Telecommunications Co., Ltd., or Far EasTone) in consideration of approximately NT$1.9 billion to enhance network performance. The license is valid until December 31, 2030.

The following table sets forth information regarding the mobile subscribers and mobile revenues of Taiwan, as well as the churn rate of our Company for the periods indicated.

	As of or for the Year Ended December 31 — 2022	2023	2024
Taiwan population (in thousands) (1)	23,265	23,420	23,400
Total mobile revenues in Taiwan (in billions) (2)	NT$160.9	NT$167.3	NT$170.4
Churn rate (3)	0.90 %	1.39 %	1.36 %

(1) Data from the Department of Population, Ministry of the Interior, ROC.

(2) Data from the monthly statistical release by the NCC, which include mobile revenues from 4G and 5G mobile broadband services.

(3) Measuring the rate of subscribers (excluding IoT) disconnections from mobile service, determined by averaging the monthly churn rate, which is determined by dividing a) our aggregate voluntary and involuntary deactivations during the month by b) the average number of customers during the month. The calculation includes both prepaid and postpaid subscribers (excluding IoT).

The total mobile customers (excluding IoT) in Taiwan had reached approximately 29.7 million as of December 31, 2024. The overall mobile services market experienced an increase of 1.9% in revenues in 2024, mainly driven by the steady 5G migration and the recovery of roaming services since the second half of 2023.

We offer incentives, such as mobile handset subsidies and rewards points for immediate purchase, when new customers agree to sign a service contract with us or when existing customers renew their contracts with us, ranging from 12 months to 60 months.

Our tariffs for postpaid mobile customers primarily consist of usage fees and monthly fees. We also offer loyalty programs, which are our membership projects to offer a number of benefits, including gift redemptions and other rewards, to encourage subscription to our 5G mobile service.

As of December 31, 2024, we had approximately 1.4 million prepaid subscribers, representing approximately 12.0% of our total mobile customers. Prepaid subscribers do not pay monthly fees. Instead, they pay higher usage charges per second. Once the prepaid balance is fully utilized, subscribers can top up their accounts to continue using the service. Alternatively, they have the option to switch to a postpaid plan while retaining their existing telephone number.

Fixed-line Services

In 2022, we generated revenues of NT$82.4 billion, or 38.0% of our total revenues, from fixed-line services. In 2023, we generated revenues of NT$81.9 billion, or 36.7% of our total revenues, from fixed-line services. In 2024, we generated revenues of NT$81.7 billion (US$2.5 billion), or 35.5% of our total revenues, from fixed-line services. The decline in fixed-line services revenues was mainly due to the decreased voice revenues, partially offset by the increase of data communication and broadband access revenues.

Fixed-line services are one of our principal businesses. Our fixed-line services include fixed broadband services, fixed voice services, leased line services, video services and satellite services.

Fixed broadband services: our fixed broadband services mainly consist of broadband access, data communication services and Wi-Fi services.

We provide broadband access through connections based on our FTTx and ADSL technologies. Our revenues from our broadband access services in 2022, 2023 and 2024 were NT$19.2 billion, NT$19.6 billion and NT$21.2 billion (US$0.7 billion), respectively. Over the years, we are continuously expanding our high-speed FTTx household coverage and encouraging more migration of our FTTx subscribers to higher-speed FTTx service. The following table sets forth our ARPU for each of the periods indicated.

2022	2023	2024
NT$	NT$	NT$
ARPU for broadband services per month (1)	766	774	788
ARPU for FTTx services per month (2)	831	836	846

(1) ARPU for our broadband services per month is calculated as the sum of (a) broadband access revenues for the relevant period divided by the average of the number of our broadband access customers on the first and last days of the period divided by the number of months in the relevant period and (b) HiNet ISP service revenues divided by the average of the number of HiNet ISP service subscribers on the first and last days of the period divided by the number of months in the relevant period.

(2) ARPU for FTTx services per month is calculated as the sum of (a) FTTx access revenues for the relevant period divided by the average of the number of our FTTx access customers on the first and last days of the period divided by the number of months in the relevant period and (b) HiNet FTTx ISP service revenues divided by the average of the number of HiNet FTTx ISP service subscribers on the first and last days of the period divided by the number of months in the relevant period.

Our overall broadband ARPU increased in 2022, 2023 and 2024, mainly due to the demand for broadband speed upgrades, which further propelled the growth of higher-speed service adopters.

Our data communication service includes HiNet, our brand name as an ISP, and HiLink, a VPN service for enterprises. We are the largest ISP in Taiwan, with a subscriber market share of 55.1% in Taiwan as of December 31, 2024. As of the same date, approximately 83.1% of our broadband customers were also HiNet subscribers, using HiNet as their ISP, and 92.0% of our FTTx service customers subscribed HiNet ISP service. The following table sets forth HiNet’s subscribers as of each of the dates indicated.

2022	2023	2024
(in thousands)
Total internet subscribers in Taiwan	6,897	7,097	7,398
HiNet subscribers:
HiNet FTTx subscribers	3,479	3,526	3,591
HiNet non-FTTX subscribers	533	506	483
Total HiNet subscribers	4,012	4,032	4,074

We also provide Wi-Fi services. As of December 31, 2022, 2023 and 2024, we had a total of approximately 3.0 million, 3.0 million and 2.8 million residential and enterprise customers that leased our access points, respectively. We also provide home Wi-Fi devices rental services, and the number of home Wi-Fi devices continued to increase by 36.8% year-over-year.

Fixed voice services: our fixed voice services mainly consist of local telephone, domestic long distance telephone and ILD telephone services.

We are the leader of the local telephone service market, with an average subscriber market share of approximately 91.4%, 91.4% and 91.4% in 2022, 2023 and 2024, respectively. Total revenues from local telephone services comprised 10.5%, 9.5% and 8.7% of our total revenues in 2022, 2023 and 2024, respectively. As for the domestic long distance telephone services in Taiwan, total revenues from domestic long distance telephone services comprised 0.8%, 0.7% and 0.6% of our total revenues in 2022, 2023 and 2024, respectively. The decreasing trend of local telephone service and long distance telephone service was mainly due to the migration to mobile services and increased use of VoIP applications.

We also provide ILD telephone services in Taiwan, primarily international direct dial services and wholesale of ILD traffic. Total revenues from ILD telephone services comprised 0.8%, 0.8% and 0.7% of our revenues in 2022, 2023 and 2024, respectively. This decreasing trend was mainly due to our strategy to reduce low-margin contracts.

Leased Line Services: We are the leading domestic leased line services provider and the leading international leased line services provider in Taiwan, primarily offering exclusive lines that allow point-to-point connection for voice and data traffic.

Our local and domestic long distance leased line services revenues were NT$4.2 billion, NT$4.3 billion and NT$4.2 billion (US$0.1 billion) in 2022, 2023 and 2024, respectively. Revenues remain relatively stable year-over-year and we continue to migrate customers to higher-speed services.

Our international leased line services revenues were NT$2.4 billion, NT$2.7 billion and NT$2.6 billion (US$80.1 million) in 2022, 2023 and 2024, respectively. The slight decrease in revenues in 2024 was mainly due to the change in international customers’ demands.

Video Services

By leveraging video streaming technology via set-top boxes connected to our FTTx data networks, our MOD customers can enjoy TV channels, video-on-demand (VOD), OTT services, and other offerings. As of December 31, 2024, we provided 192 channels, including 190 HD channels and two 4K channels, along with more than 48,000 hours of on-demand video streaming. In addition to our standard packages, we also offer SVOD services for films, dramas, anime series, kids’ content and variety shows. Since 2017, our MOD platform has effectively delivered OTT services, including KKTV and Netflix. Our own OTT platform, Hami Video, offers Pay-Per-View, SVOD,

channels, and other services to end users. As of December 31, 2024, subscriptions to our video services, including MOD (IPTV service) and Hami Video (OTT service), surpassed 3 million. We continue to see growth in our tiered pricing channel packages and digital convergence offerings.

Our MOD revenues were NT$3.7 billion, NT$3.7 billion and NT$3.7 billion (US$0.1 billion) in 2022, 2023 and 2024, respectively. The stable revenue trend from 2022 to 2024 was primarily driven by a consistent customer base and ARPU. We have introduced optional service packages with customized subscriptions to better meet our customers’ preferences. In light of a highly competitive market, we will continue to strengthen our customer stickiness by investing in high-quality content across our various platforms. This strategy will help us maintain our position as the largest video platform in Taiwan.

Satellite Services

We entered into a contract with ST-2 Satellite Ventures Pte., Ltd. on March 12, 2010 to lease capacity on the ST-2 satellite for 15 years. As our ST-2 satellite is in good operating condition, the expected lifespan is extended for another three years and three months after evaluation in 2021. Please refer to Note 40 to our consolidated financial statements included elsewhere in this annual report for further details.

In addition, we have two satellite communication centers with geographical redundancy to ensure uninterrupted TV broadcasts, satellite VAS and backup systems in responding to major emergencies. We also provide satellite services in Southeast Asia.

In March 2023, we entered into a new agreement with Singapore Telecommunications Limited to jointly invest in a new satellite project to upgrade and replace our aging ST-2 satellite. This collaboration enables us to provide all the services and capabilities of the current generation and significantly improve service quality and capabilities. Furthermore, in April 2025, we entered into an agreement with Astranis Space Technologies Corp. to introduce a dedicated micro-geostationary orbit, or micro-GEO, service to Taiwan. These collaborations have enhanced our network resilience and enable us to provide comprehensive network services.

In November 2023, we signed an exclusive distribution partner agreement for OneWeb LEO satellite services with Eutelsat Group, ushering in a new era of satellite connectivity in Taiwan. Integrating OneWeb services to our solutions will enhance resiliency and complement terrestrial fixed, mobile networks, submarine cables and microwave communication services for government and enterprise clients. In December 2023, we obtained the frequency allocation qualification for fixed-satellite services from the Ministry of Digital Affairs, or MODA, for OneWeb services. In August and November 2024, the NCC approved our operating plan and network establishment plan, respectively. In November 2024, MODA issued the OneWeb fixed-satellite frequency use certificate. It is expected to complete audit of lawful interception and network systems in the first half of 2025, and then start the OneWeb commercial services in Taiwan.

In August 2024, we signed an exclusive partnership contract with SES for Medium Earth Orbit (MEO) satellite services in Taiwan. The introduction of SES’s MEO services also marks an important milestone in achieving multi-orbit constellation communication services. In December 2024, we acquired the frequency allocation qualification for fixed-satellite services for the MEO services.

ICT Business

In 2022, we generated revenues of NT$26.1 billion, or 12.1% of our total revenues, from ICT services. In 2023, we generated revenues of NT$28.6 billion, or 12.8% of our total revenues, from ICT services. In 2024, we generated revenues of NT$32.9 billion (US$1.0 billion), or 14.3% of our total revenues, from ICT services. The growth in ICT services revenues was mainly due to the rising demand for IDC, cloud, cybersecurity, big data and integrated ICT solutions from our clients.

By integrating various technologies, such as cloud computing, cybersecurity, big data analysis, IoT, generative AI, and accelerating emerging services, we provide customized ICT total solutions to enable our enterprise customers to improve efficiency and enjoy smart life.

We saw increasing occupancy in our highest-rated IDCs, driven by strong potential demand. In response to the growing demands for AI applications, we continue to expand our IDC business by building AIDCs to deliver AI computing power.

We are also a cloud service provider. Our CHT cloud service is a multi-cloud network convergence service. With a high-quality global network as the basis for all cloud services, it integrates our self-developed cloud service, hicloud, and other public cloud services, including Amazon Web Services, Microsoft Azure, and Google Cloud Platform.

In addition, we cooperate with our subsidiary, CHT Security Co., Ltd., to provide HiNet Advanced Networks Defense System, or ANDs, and Web Application Firewall, or WAF. ANDs can combine with HiNet Security Fleet solution to upgrade users’ information systems security.

We also provide Content Delivery Network, or CDN, service. This service effectively speeds up content delivery on websites with high traffic. The closer the CDN server is to the user geographically, the faster the content will be delivered. We provide CDN service to internet content providers to ensure stable quality when programs are broadcasted. We will expedite CDN construction to enhance digital convergence product strength. Besides, our CDN is effectively integrated with IDC. With the combined solution, our customers can place the server in IDC as the origin site, and CDN can distribute the site traffic to the internet with high efficiency and stable quality.

Taking advantage of the speed, low latency and high connection capacity of 5G technology, we also offer our enterprise customers 5G private network services. This dedicated network provides a secure and reliable connectivity solution for various industrial applications, including enterprise intranet transmission, ensuring data security and improving scalability and efficiency.

In terms of “5G AIoT” application services, we are actively launching many vertical application products and services in the fields of smart transportation services, energy management services, video surveillance, smart healthcare, and smart buildings. Our 5G service can accommodate a large number of IoT devices for data transmission with excellent efficiency and stability, and provides Cellular-based Vehicle Probe, or CVP, traffic sign optimization, solar system management and rural area telemedicine with low latency characteristics.

Leveraging our expertise in big data analytics and AI technology, we build big data analysis platforms to assist our customers in AI model development and management. These AI models are used in cloud services and intelligent customer support, as well as across industries such as government, manufacturing, healthcare and finance.

Sales

We engage in the distribution and sales of mobile handsets and wearable devices on our mobile network to customers through our directly-owned stores, our online store, SENAO, and also through third-party retailers. See “Marketing Strategy” and “Sales and Distribution” in “—Marketing, Sales and Distribution.”

Interconnection

We provide interconnection of our fixed line network and mobile network with other operators.

The following table sets forth our interconnection fee revenues and costs for the periods indicated. These revenues and costs are included, depending on the nature of the call made, in domestic fixed communications or mobile communications revenues and expenses, respectively.

2022	2023	2024
NT$	NT$	NT$	US$
(in billions)			(in millions)
Interconnection fee revenues:
Fixed line	0.6	0.5	0.4	12.2
Mobile	0.5	0.4	0.3	9.6
Interconnection costs:
Fixed line	0.4	0.3	0.3	7.8
Mobile	0.9	0.7	0.7	20.6

The interconnection rate between fixed-line customers and other fixed-line customers is NT$0.28 per minute during peak times and NT$0.08 per minute during off-peak times. The interconnection rate for calls initiated by mobile customers to fixed-line customers has been NT$0.3575 per minute during peak times and NT$0.1722 per minute during off-peak times since January 2024. However, pursuant to the notice issued by NCC, the interconnection fees of local telephones, domestic long-distance or international calls, and mobile-to-fixed-line calls should be decreased gradually from June 5, 2023 to December 31, 2026. See “Item 5. Operating and Financial Review and Prospects—Overview—Tariff adjustments.”

Our mobile interconnection revenues and costs decreased from 2022 to 2024, mainly due to (i) a year-over-year decrease of our mobile interconnection rate, as required by the tariff adjustment rules promulgated by NCC and (ii) the decreasing traffic volume attributable to VoIP substitution. Under the tariff adjustment rules, our mobile interconnection rate decreased from NT$0.525 per minute in 2021 to NT$0.407 per minute in 2024.

Fixed interconnection costs decreased from 2022 to 2024, mainly due to the reduction of mobile interconnection rate for fixed-line-to-mobile calls and the decreasing traffic volume attributable to VoIP substitution.

In addition, cost increases are subject to approval by the regulatory authorities. We expect that our interconnection contracts will generally be reviewed annually, although we may also enter into long-term contracts.

Marketing, Sales and Distribution

Marketing Strategy

In order to retain and expand our large customer base and to encourage our customers to increase their use of our services and products, we continue to focus our marketing strategy on the following areas.

• services and products: we continuously develop new VAS and products based on different market segments, with the aim of increasing our high-usage customers and enhancing customer loyalty.

• pricing and promotions: we design flexible pricing packages that allow customers to select and design special promotional packages to encourage usage.

• distribution channels: we seek to broaden our distribution reach by strengthening our cross-industry alliances and marketing relationships. Furthermore, to expand our sales channels more effectively, we also implement an external sales agent system by collaborating with SENAO, Synnex Technology and International Corporation, enabling us to get closer to every customer. In addition, we have set up an online store for years to improve our operational efficiency and to reach more young people.

• branding: Chunghwa Telecom has been a well-known household brand with nationwide infrastructure and service centers. In order to fulfill our brand commitment, “Always Ahead,” we have always acted in accordance with the highest corporate governance standards. Our focus on meeting customer demand and satisfaction has generated additional value for shareholders. Our long-term primary focuses are “Supporting Disadvantaged Social Groups,” “Corporate Sustainability Development” and “Global Environmental Compliance.”

Sales and Distribution

As of December 31, 2024, we had 17 operations offices for operations, 442 service centers and 14 customer service call centers for sales and customer service. In addition, we have simplified transaction process on our online store to improve customers’ experience, and we enhanced our service efficiency by increasing digital channel access of contactless transactions.

We also had 240 SENAO exclusive service stores as of December 31, 2024. Our investment in SENAO continues to enhance our mobile handset distribution and sales capabilities in which customers can subscribe to our broadband service, MOD service and other services at SENAO retail stores. See “Item 7. Major Stockholders and Related Party Transactions—B. Related Party Transactions” for a discussion of the agreement between the parent company and SENAO about our business cooperation.

Competition

We face competition in virtually all aspects of our business.

Mobile Services

In December 2023, two mergers were completed. As a result, the number of mobile network operators in Taiwan decreased from five to three, including us. All of these three operators have 4G and 5G mobile broadband licenses. Additionally, nowadays mobile operators are expanding their business beyond basic mobile services to encompass other value-added services such as media, cloud, cybersecurity, and IoT solutions, with a goal to provide subscriber with a holistic digital experience to increase customers' stickiness.

In 2023, under this new market landscape, we continue to maintain our growth momentum and leadership in the market. In spite of the decrease in the total number of mobile subscribers in Taiwan throughout 2023, our postpaid mobile subscribers continued to increase, benefiting from our successful strategy in terms of 4G subscriber retention and 5G migration. Our mobile service revenues also increased due to the growth in subscribers and the upsell resulting from 5G migration and roaming recovering from post-pandemic era.

In addition to the mobile network operators, there are also mobile virtual network operators, or MVNOs, which could provide mobile services by leasing the capacity and facilities of a mobile service network from a licensed mobile service provider without a spectrum allocation. However, with the implementation of the Telecommunications Management Act in 2020, the NCC’s MVNO registration is no longer mandatory.

Our strengths in the mobile services market are primarily based on our premium brand, quality of service, network reliability and attractiveness of service packages. See “Network Infrastructure—Mobile Services Network” for a discussion on our advantage of mobile broadband services spectrum.

Fixed-line Services

• fixed broadband services: in the fixed broadband market, we have encountered challenges from other cable operators seeking to increase their market share with lower pricing strategies. They have also offered fixed and mobile broadband bundled services through strategic alliances with other mobile operators, extending their footprint in fixed broadband.

• fixed voice services: revenues from local and domestic long distance telephone service of telecommunication services providers has continuously decreased in the past years primarily due to

mobile and VoIP substitution. Challenges faced by mobile data service providers have increased significantly due to the popularity of smart mobile devices and mobile applications such as LINE and WeChat.

• leased line services: major competitors in this field are three fixed line operators, namely Taiwan Fixed Network Co., Ltd, New Century Infocomm Tech. Co., Ltd. and Far EasTone Telecommunications Co., Ltd. The leased line services providers primarily focus on the basis of price and the bandwidth speed of services.

• video services: major competitors in this field include six cable TV MSOs, 21 independent cable TV operators as well as OTT service providers. These service providers focus on price and multimedia content.

ICT Business

We leverage our technology capability to provide comprehensive ICT services. In terms of IDC business, we are the leading IDC service provider in Taiwan with more than 70% market share. We offer the best IDC service quality, and our major competitors include Far EasTone, Taiwan Fixed Network and Acer Cyber Security.

Our major competitors in cybersecurity include Acer Cyber Security Inc. and ISSDU Inc. in terms of cybersecurity professional services and TAIWAN-CA Inc. in terms of identification business.

Our major competitors in cloud services are cloud services resellers and system integration service providers, including eCloudvalley Digital Technology Co. Ltd, CKmates International Co. Ltd, CloudMile Inc., Nextlink Technology Inc., Acer E-Enabling Service Business Inc. and SYSTEX Corporation.

Our major competitors in AIoT application services are telcos and system integration service providers.

Network Infrastructure

Our network infrastructure consists of transmission networks that convey voice and data traffic, switching networks that route traffic between networks, and mobile, internet, leased line and data switching networks.

We purchase most of our network equipment from well-known international suppliers. As part of the purchase contract, these suppliers deliver and install the equipment for us. We also purchase from local suppliers a variety of components such as transmission lines, switches, telephone sets, MOD set-top boxes and radio transmitters.

Approximately 11,883 of our employees were engaged in network infrastructure development, maintenance, operations and planning as of December 31, 2024.

Transmission Networks

As of December 31, 2024, our transmission networks consisted of approximately 2.96 million fiber kilometers of fiber optic cable for trunking and approximately 12.43 million fiber kilometers of fiber optic cable for local loop.

Due to the emergence of Packet Transport Network, or PTN, technology, a cost-effective method for transmitting data services, we began the deployment of PTN in 2013. Due to the high utilization of our existing Re-configurable Optical Add-Drop Multiplexer, or ROADM, network, we began to introduce Optical Transport Network, or OTN, to meet the demand of 100 Gbps per wavelength services in 2014. After completing a trial of per-wavelength transmission rates of 200 Gbps, we began to introduce the technology of 200 Gbps per wavelength in our OTN network in 2018 and 400 Gbps per wavelength in 2024. We had deployed 1,200 wavelength for 100 Gbps, 351 wavelength for 200 Gbps and two wavelength for 400 Gbps in the OTN network and 29,900 GbE in the PTN network by the end of 2024.

As part of our strategic focus on the internet and data markets, our local loop connections mainly adopt FTTx technology. This enables us to provide broadband services, such as MOD, high-speed internet access and VPN. As

of December 31, 2024, we have constructed approximately 12.03 million FTTx ports. Our FTTx service can offer high-speed broadband access rates up to 2 Gbps. For low bandwidth demand, we use ADSL technology to provide the internet connection services to our customers.

Switching Networks

Domestic telecommunications network. Our domestic public switched telephone network currently consists of 19 message areas connected by a long distance network. As of December 31, 2024, we had 38 long distance exchanges, which were interconnection points between our telecommunications network and approximately 9.6 million telephone lines, which reached virtually all homes and businesses in Taiwan.

We currently have intelligent networks installed over our public switched telephone networks for our domestic long distance and international networks, as well as a local intelligent network mainly in the Taipei, Taichung and Kaohsiung metropolitan areas. Our intelligent network is designed to facilitate the use of VAS by providing more information about calls and allowing greater management of those calls.

As of December 31, 2024, our Next Generation Network, or NGN, core network capacity consisted of 7,700,000 local telephone subscribers, comprising 7,287,000 Session Initiation Protocol-based, or SIP-based, and 413,000 Access Gateway-based, or AG-based, subscribers.

Our NGN Managed IP backbone network consists of an inner core network and an outer core network. By the end of 2024, we owned 12 sets of switch routers for the inner core network and more than 34 sets of switch routers for the outer core network, and the bandwidth of the network was approximately 2,765 Gbps. We believe this network will enable us to meet the increasing demand for NGN services, such as VoIP, and all managed services, including MOD and VPN.

International network. Our international infrastructure consists of multiple submarine cables, transmission networks, voice GWs and IP networks, which provide IPLC, IPVPN, Voice and Internet transit service to connect Taiwan and worldwide.

In 2018, we started to build SJC2 with several Asian telecom companies. The cable features up to seven pairs of high-capacity optical fiber with a total capacity of 126 Terabits per second. Its high capacity allows it to support high bandwidth intensive requirements, such as IoT, robotics, analytics and AR or VR applications. In 2021, we joined another consortium cable called APRICOT to further lay a solid cornerstone for Chunghwa Telecom’s international business plan in the Asia-Pacific region. As of December 31, 2024, we had invested in 31 submarine cables, 12 of which landed in Taiwan. The total invested capacity has reached more than 29 Tbps.

Mobile Services Network

Our mobile services network consists of:

• cell sites, which are physical locations equipped with a base station consisting of transmitters, receivers and other equipment used to communicate through radio channels with customers’ mobile handsets within the range of a cell;

• Centralized Radio Access Network, or C-RAN, which splits base stations into two parts, the Radio Remote Unit, or RRU, and the Base Band Unit, or BBU. The RRUs stay at the cell site, while the BBUs are aggregated into a centralized office;

• Radio Network Controller, or RNC, for 3G, which connects to, and control, the base station within each cell site;

• Mobile Switching Server, or MSS, for 3G, which control the base station controllers and the processing and routing of telephone calls;

• Serving GPRS Support Nodes, or SGSN, which connects the GPRS network to the base station controllers;

• Mobility Management Entity, or MME, which connects the base station to our 4G/5G core network that is responsible for control side;

• Serving Gateway, or S GW, which connects the base stations to our 4G/5G core network that is responsible for data side;

• Packet Data Network Gateway, or PDN GW, which connects our 4G/5G core network to the internet; and

• transmission lines, which link to the mobile switching service centers, MME, S GW, base station controllers, base stations and the public switched telephone network in connection with the 3G/4G/5G network, and the base station controllers, the support nodes, PDN GW and the internet in connection with the GPRS/4G/5G core network.

In May 2014, we launched our 4G mobile broadband services with 10MHz paired spectrum in the 900MHz frequency band and 25MHz paired spectrum in the 1800MHz frequency band. In December 2015, we obtained an additional spectrum for 4G mobile broadband services of 30MHz paired spectrum in the 2500MHz and 2600MHz frequency bands. In November 2017, we further obtained a spectrum for 4G mobile broadband services of 5MHz paired spectrum in the 1800MHz frequency band and 20MHz paired spectrum in the 2100MHz frequency band.

In February 2020, we acquired 5G spectrums allocated 90MHz bandwidth in the 3.5GHz frequency band and 600MHz bandwidth in the 28GHz frequency band. In June 2020, we launched 5G mobile broadband services. We use C-RAN architecture to enhance 5G RAN performance and reduce network maintenance costs. In May 2022, we acquired 10MHz paired spectrum in the 900MHz frequency band from Asia Pacific Telecom Co., Ltd. We currently own 40MHz spectrum in the 900MHz frequency band, 60MHz spectrum in the 1800MHz frequency band, 40MHz spectrum in the 2100MHz frequency band, 60MHz spectrum in the 2600MHz frequency band, 90MHz spectrum in the 3500MHz frequency band, and 600MHz spectrum in the 28GHz frequency band, which may provide higher data transmission rates.

We have also installed an intelligent network on our existing mobile services network infrastructure, which enables us to provide additional functions, such as prepaid and VPN services as well as a wide range of VAS.

Internet Network

HiNet, our internet service provider, has the largest internet access network in Taiwan, with 26 points of presence, approximately 3.62 million broadband subscribers and a backbone bandwidth of approximately 26,334 Gbps as of December 31, 2024. We aim to increase HiNet’s points of presence and backbone bandwidth to approximately 29,534 Gbps by the end of 2025.

HiNet’s broadband backbone network consists of an inner core network and an outer core network. We had a high-speed internet protocol backbone network by the end of 2024 with 16 sets of switch routers for the inner core network and more than 38 sets of switch routers for the outer core network. We also built CDN to meet the needs of Internet/OTT services. Our CDN consists of 20 domestic and 3 overseas point-of-presences and the total capacity is approximately 4,310 Gbps as of December 31, 2024. We believe these networks will enable us to meet the increasing demand for our internet services.

HiNet’s total international connection bandwidth is 5,003 Gbps as of December 31, 2024. As we expect that internet traffic flows to and from the U.S. will continue to increase, we have been continuously expanding our bandwidth to the U.S. We also endeavor to increase our links to other countries, including Japan, Korea, Hong Kong, Singapore, Mainland China, Malaysia, the United Kingdom, Germany and the Netherlands.

Leased Line and Data Switching Networks

We operate leased line networks on both a managed and unmanaged basis. In addition, we operate a number of switched digital networks used principally for the provision of packet-switched, frame relay, asynchronous transfer mode technology and a multi-protocol label switching internet protocol VPN. As of December 31, 2024, we

had 68 frame relay ports and approximately 160,309 multi-protocol label switching internet protocol VPN virtual ports.

Our data networks support a variety of transmission technologies, including frame relay, asynchronous transfer mode and Ethernet technology. We have also built up our HiLink VPN that combines internet protocol and asynchronous transfer mode technologies. The advantage of HiLink VPN based on multi-protocol label switching technology is that it can carry different classes of services, such as video, voice and data, together to provide services with various qualities of service, high-performance transmission and fast-forward solution in an enhanced security network. HiLink VPN can be accessed by xDSL/FTTx/NG-SDH and can include built-in mechanisms that can deal with overlapping internet protocol addresses. Therefore, the network is potentially less costly and requires less management for business applications.

Property, Plant and Equipment

Our property, plant and equipment consist mainly of telecommunications equipment, land and buildings located throughout Taiwan. Although we have a significant amount of land and buildings throughout Taiwan, most of our properties are for operational use and only a small part of them are for investment purposes, which were classified as “investment properties” in our consolidated financial statements included in this annual report. Notes 17 and 19 to our consolidated financial statements, included elsewhere in this annual report, provide additional details as to our “Property, plant and equipment” and “Investment properties,” respectively. See “Item 3. Key Information—D. Risk Factors— Risks Relating to Our Company and the Taiwan Telecommunications Industry—Our ability to deliver services may be disrupted due to systems failures, network shutdowns, earthquakes or other natural disasters” for a discussion of environmental issues that may affect utilization of our assets.

We continue to revitalize our own assets through rental income focused strategies and explore development opportunities to increase the value of our land and buildings. We are developing a commercial building in Nangang, Taipei City. We received approximately NT$1.2 billion (US$36.47 million) in rental income from properties in 2024.

Insurance

We do not carry comprehensive insurance for our properties or any insurance for business disruptions. We do, however, maintain in-transit insurance for key materials, such as cables, equipment and equipment components.

Employees

Please refer to “Item 6. Directors, Senior Management and Employees—D. Employees” for a discussion of our employees.

Our Pension Plans

Currently, we offer two types of employee retirement plans—our defined contributions plan and defined benefits plan—which are administered in accordance with the Republic of China Labor Standards Act and the Republic of China Labor Pension Act.

Legal Proceedings

From time to time, we are involved in various legal and arbitration proceedings of a nature considered to be in the ordinary course of our business. It is our policy to provide for reserves related to these legal matters when it is probable that a liability has been incurred and the amount is reasonably estimable. From time to time, we have also been assessed fines by various government agencies, such as the NCC and FTC, but none of these fines has had a significant effect on our financial condition or results of operations.

We believe that we had not been involved in any legal or arbitration proceedings during 2022, 2023 and 2024 that would have a significant effect on our financial condition or results of operations; however, we cannot give you

any assurance with respect to the ultimate outcome of any asserted claims against us or legal or arbitration proceedings involving us.

Capital Expenditures

See “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Capital Expenditures” for a discussion of our capital expenditures.

Enforceability of Judgments in Taiwan

We are a company limited by shares and incorporated under the ROC Company Act. All of our directors, executive officers and some of the experts named in this annual report are residents of Taiwan and a substantial portion of our assets and the assets of those persons are located in Taiwan. As a result, it may not be possible for investors to effect service of process upon us or those persons outside of Taiwan, or to enforce against them judgments obtained in courts outside of Taiwan. We have been advised by our ROC counsel that in their opinion any final judgment obtained against us in any court other than the courts of the ROC in connection with any legal suit or proceeding arising out of or relating to the ADSs will be enforced by the courts of the ROC without further review of the merits only if the court of the ROC in which enforcement is sought is satisfied that:

• the court rendering the judgment has jurisdiction over the subject matter according to the laws of the ROC;

• the judgment and the court procedure resulting in the judgment are not contrary to the public order or good morals of the ROC;

• the judgment is a final judgment for which the period of appeal has expired or from which no appeal can be taken;

• if the judgment was rendered by default by the court rendering the judgment, we, or the above-mentioned persons, were duly served within a reasonable period of time in accordance with the laws and regulations of the jurisdiction of the court or process was served on us with judicial assistance of the ROC; and

• judgments at the courts of the ROC are recognized and enforceable in the court rendering the judgment on a reciprocal basis.

A party seeking to enforce a foreign judgment in the ROC would, except under limited circumstances, be required to obtain foreign exchange approval from the Central Bank of the Republic of China (Taiwan) for the remittance out of the ROC of any amounts exceeding US$100,000 or its equivalent recovered in respect of such judgment denominated in a currency other than NT dollars.

Regulation

Regulatory Authorities

Prior to March 1, 2006, we were under the supervision of the MOTC and the Directorate General of Telecommunications. On March 1, 2006, the NCC was formed in accordance with the National Communications Commission Organization Act, which was intended to transfer regulatory authority over the Taiwan telecommunications industry from the MOTC and the Directorate General of Telecommunications to the NCC.

Under the National Communications Commission Organization Act, the NCC was comprised of seven commissioners, which are full-time positions. The premier of the Executive Yuan shall nominate the commissioners and appoint one of them to serve as chairperson, and one as vice chairperson. The nomination shall be approved and appointed by the Legislative Yuan. The tenure of the commissioners is four years, and the commissioners may be re-appointed to serve a consecutive term once.

On August 27, 2022, the Ministry of Digital Affairs was launched to partly take over the administrative authorities formerly held by the NCC, the MOTC and the Executive Yuan, and the Organizational Act of the Ministry of Digital Affairs was enforced on the same day.

Telecommunications Management Act

The TMA was passed by the Legislative Yuan on May 31, 2019 and promulgated by the President on June 26, 2019. The Executive Yuan issued an ordinance on June 29, 2020 to set the effective date of the TMA (excluding certain articles regarding frequency allocation) on July 1, 2020, and issued an ordinance on October 22, 2020 to set the effective date of the remaining articles of the TMA regarding frequency allocation on November 1, 2020. According to the TMA, within three years upon the enforcement thereof, the existing telecommunications enterprises shall register themselves with the NCC for the transition into being governed by the TMA. We filed an application for the aforementioned transition registration on July 31, 2020, and the application was approved by the NCC on September 30, 2020.

The impacts caused by the enforcement of the TMA on us and the telecommunications industry include: (i) reducing the entry barrier to the telecommunications markets by changing the original concession/approval system to the registration system, which spurs the competition of the market; (ii) loosening unnecessary restrictions. General enterprises shall have only ordinary obligations to the minimum necessary extent, provided that certain enterprises with significance in the specific telecommunications service markets will be subject to more stringent control measures. Since we may be regarded as an enterprise with significance in the specific telecommunications service markets, we will be required to bear more stringent obligations; (iii) restricting the right of telecommunications enterprises to use private lands and buildings. Only where the telecommunications infrastructure of a public switched telecommunications network cannot be established without passing through private lands or buildings or can be established with an enormous amount of money, the establishment may be made by passing through private lands or buildings on the premise of selecting the least harmful location and manner; and (iv) opening up domestic roaming, frequency transferring, frequency leasing, frequency lending or frequency sharing mechanisms, which allows the telecommunication enterprises to use spectrums and conduct network constructions more flexibly and changes the competition status of the telecommunications market. The main provisions of the Telecommunications Management Act are summarized as follows:

Reducing the entry barrier to the telecommunications market:

The Telecommunications Management Act reduces the entry barrier to the telecommunications market by changing the concession approval system to the registration system. According to the Telecommunications Management Act, telecommunications service providers with any of the following activities shall register as a telecommunications enterprise with the competent authority:

(1) negotiating interconnection with other telecommunications enterprises or applying for a ruling therewith;

(2) applying for the assignment of a radio frequency, except the radio frequency with any of the following purposes:

• for emergency subsidy, experimental research and development, dedicated telecommunications network, public use or other public welfare-related uses;

• for the use of terrestrial radio business or terrestrial television business;

• for the use of wireless local loop, satellite link or microwave link at different times or different locations;

• for the use of testing a station established under telecommunications networks;

• military radio frequencies.

(3) applying for the assignment of identification code or signal point code for establishing a Public Switched Telecommunications Network, or PSTN;

(4) applying for the assignment of subscriber numbers.

However, if any telecommunications service provider fails to make the aforementioned registration, the only consequence is that it will not be granted the rights provided under the Telecommunications Management Act.

Specifying the obligations of telecommunications enterprises:

The TMA categorizes the obligations of telecommunications enterprises into three levels: general obligations, special obligations and designated obligations:

(1) General Obligations:

The obligations borne by all the telecommunications enterprises that have filed the registration with the NCC include:

• disclosing the information regarding service conditions, telecommunications network’s quality and data transmission management methods/conditions, in an obvious, public and reachable method;

• separating the accounting items of telecommunications service and non-telecommunications service;

• adopting appropriate and necessary measures to protect the confidentiality of communications;

• providing consumer complaint handling channels;

• preserving communications and accounting records within a specific period of time;

• notifying the NCC when service is suspended;

• sharing the expenses incurred by the telecommunications universal service, if the annual revenue of the telecommunications enterprise generated from telecommunications services reaches a certain amount.

(2) Special Obligations:

The obligations borne by the telecommunications enterprises that are granted specific resources or determined by the NCC include:

• the telecommunications enterprises that use subscriber numbers allocated by the competent authority to provide voice services shall provide free emergency communications services, number portability services and equal access services;

• the telecommunications enterprises that have established a PSTN using telecommunications resources or other telecommunications enterprises announced by the NCC shall draw up an info-communications security maintenance plan;

• the telecommunications enterprises of which the types of services are special or the ones that receive consumer complaints frequently, as designated by the NCC, shall set forth standard service contracts, conduct regular self-evaluation for the quality of telecommunications services, and co-establish complaint handling channels for telecommunications consumers.

(3) Designated Obligations:

In order to fulfill the need of policy or competent laws and regulations, relevant competent authorities may designate the telecommunications enterprises which meet certain conditions to take relevant necessary measures, including disaster prevention and assistance, communication security and surveillance, protection of the rights and interests of the people with disabilities and the telecommunications universal services.

To meet the need of the rapid-changing market and ensure effective competition in the telecommunications service market, the enterprises under control are changed from dominant market players to the enterprises with significance in the specific telecommunications service market, which are subject to different levels of corrective actions according to the Telecommunications Management Act.

The NCC is entitled to adopt control measures for those with market significance in the specific telecommunications service market if necessary, including:

• the NCC may order enterprises with significance in the specific telecommunications service market to disclose necessary information, conditions, procedures and expenses in terms of interconnection, network access components or use of telecommunications infrastructure;

• the NCC may prohibit enterprises with significance in the specific telecommunications service market from making discrimination, setting the service fee that may cause a cross-subsidy, price squeeze or any other abuse of power and hence impede fair competition (including doing so for the subsidiaries, affiliates or partners thereof);

• the NCC may request enterprises with significance in the specific telecommunications service market to provide interconnection, network access components or relevant telecommunications infrastructure;

• the NCC may order enterprises with significance in the specific telecommunications service market to draw up and publish a template agreement related to the provision of interconnection or network access.

We may be regarded as the enterprise with significance in the specific telecommunications service market. If so, the aforementioned control measures may be levied on us.

The opportunity of accessing to and using information may be different due to gender, race, class, geographic area of residence or other factors, which is called the digital divide.

The Telecommunications Management Act tries to resolve the problem caused by the digital divide from the following aspects by opening the market, introducing competition and new technology and continuing the promotion of telecommunications universal service:

• narrowing the urban-rural gap;

• ensuring the right of access and use of the minority and disadvantaged groups;

• facilitating the establishment of updated telecommunications infrastructures.

The Telecommunications Management Act removes the restriction on telecommunications network construction imposed by the Telecommunications Act and allows enterprises to establish the telecommunications networks that meet their business needs and develop new technology and equipment.

To ensure the security of network and information, in addition to the PSTN where telecommunications resources including frequency and telecommunications number is used, the telecommunications network where no telecommunications resource is used while telecommunications services are actually provided based on the network-to-network characteristic of the internet, such as iTaiwan, is also regarded as the PSTN, and are both subject to a unified cybersecurity standard. Besides, there are some protection obligations relating to the establishment of PSTN and the provision of telecommunications services specified in the Telecommunications Management Act, including using the telecommunications equipment that complies with national security concerns and cybersecurity standards, establishing the equipment for the performance of communication surveillance, adopting cybersecurity protection plan and ensuring the security of critical telecommunications infrastructure, to ensure and maintain national security, cyber security and public security.

The Telecommunications Management Act changes the method of frequency allocation specified in the Telecommunications Act, allowing the competent authority to allocate frequency by auction, open tender or other appropriate methods according to the characteristic and purpose of use of the frequency.

As a result, the efficiency of the use of frequency can be improved, the development of radio technology can be ensured, and the development of new technology and services of communications can be encouraged.

Fair Trade Act

According to the TMA, to ensure effective competition in the telecommunications service market, the competent authority is entitled to adopt control measures for those with market significance in the specific telecommunications service market if necessary, including ordering those enterprises to disclose necessary information, conditions, procedures and expenses in terms of interconnection, network access components or use of telecommunications infrastructure; prohibiting those enterprises from making discrimination, setting the service fee that may cause a cross-subsidy, price squeeze or any other abuse of power and hence impede fair competition (including doing so for the subsidiaries, affiliates or partners thereof ); requesting those enterprises to provide interconnection, network access components or relevant telecommunications infrastructure; ordering those enterprises to draw up and publish a template agreement related to the provision of interconnection or network access.

By comparison to the TMA, the Fair Trade Act, or the FTA, plays a more comprehensive role in regulating all matters relating to competition between enterprises. The FTA seeks to deter and prevent anti-competitive conduct by granting the powers of the FTC to investigate and to impose penalties.

The FTA is administered and enforced by the FTC, which has independent administration rights granted to it under the FTA and is empowered to impose disciplinary actions for fair trade matters. The FTC may initiate an investigation either on its own account in accordance with its discretion granted by the FTA or upon receipt of a complaint.

Regulation on Telecommunications Enterprise with Monopoly Status

The term “monopoly” used in the FTA refers to the circumstance where an enterprise conducts its business operation in a relevant market without facing any competition or where an enterprise is able to dominate the relevant market and block competition in the market. If there are two or more enterprises within the same market that do not engage in any price competition with each other, the whole group of non-competing enterprises should be deemed as a single monopoly enterprise in the market.

The FTC has the ultimate discretion to consider an enterprise as a monopolistic enterprise upon any other events evidencing such enterprise’s capability to affect the supply and demand in relevant markets or eliminate competition.

Under the FTA, any enterprise with monopoly status is prohibited from engaging in any of the following activities:

• directly or indirectly, by using any unfair method to prevent any other enterprises from competing;

• improperly set, maintain or change the price for goods or the remuneration for services;

• forcing the enterprise’s trading counterpart to give preferential treatment without justification; or

• abusing its market power.

If the FTC finds an enterprise liable for violation of regulations governing monopoly, the FTC could impose a monetary fine of not more than NT$100,000,000 each time and order such enterprise to cease such wrongdoing, rectify the conduct or take any necessary corrective action. If the FTC finds such violation serious, it may further impose a monetary fine exceeding NT$100,000,000 but up to 10% of the total sales of the enterprise in the preceding fiscal year. Furthermore, the responsible person of such enterprise who engaged in such wrongdoing may be sentenced to imprisonment of not more than three years if the enterprise fails to follow FTC’s order to cease the wrongdoing, rectify the conduct or take any necessary corrective action.

Regulations on Concerted Action (Cartel) in Telecommunication Industry

The term “concerted action (cartel),” as used in the FTA, means the competing enterprises at the same production and/or marketing stage, by means of contract, agreement or any other form of mutual understanding, jointly determine the price of goods or services, quantity, technology, products, facilities, trading counterparts, or trading territory with respect to such goods and services, or any other behavior that restrict each other’s business activities, resulting in an impact on the market function with respect to production, trade in goods, or supply and demand of services. The FTC may assume a concerted action exists based on the market condition, the feature of goods or services, cost and profit, and the economic feasibility for enterprises to conduct concerted action.

Under the FTA, enterprises are prohibited from engaging in any concerted actions unless the FTC holds the concerted action may be beneficial to the overall economy and public interest.

If the FTC finds an enterprise liable for violation of regulations governing concerted action (cartel), the FTC could impose a monetary fine of not more than NT$100,000,000 each time and order such enterprise to cease such wrongdoing, rectify the conduct or take any necessary corrective action. If the FTC finds such violation is serious, it may further impose a monetary fine exceeding NT$100,000,000 but up to 10% of the total sales of the enterprise in the preceding fiscal year. Furthermore, the responsible person of such enterprise who engaged in such wrongdoing may be sentenced to imprisonment of not more than three years if the enterprise fails to follow FTC's order to cease the wrongdoing, rectify the conduct or take any necessary corrective action.

Regulations on Restrict Competition in Telecommunication Industry

The FTA prohibits any enterprise from conducting any of the following activities that may restrict competition:

• forcing another enterprise to discontinue supply, purchase or other business transactions with a particular enterprise for the purpose of injuring such particular enterprise;

• treating another enterprise discriminatively without justification;

• preventing competitors from participating or engaging in competition by inducing customers with low price or other illegal inducements;

• forcing another enterprise to refrain from competing in price, or to take part in a merger, or a concerted action, or to perform vertical restrictions by coercion, inducement with interest, or other improper methods; or

• setting improper restrictions on its trading counterparts’ business activity as the condition to reach business engagement.

If any enterprise violates the regulations governing unfair competition, the FTC may order it to cease therefrom, rectify its conduct or take necessary corrective action within the time prescribed in the order; in addition, the FTC may assess upon such enterprise an administrative fine of not less than NT$100,000 nor more than NT$50,000,000. Should such enterprise fail to cease therefrom, rectify the conduct or take any necessary corrective action after the lapse of the prescribed period, the FTC may continue to order such enterprise to cease therefrom, rectify the conduct or take any necessary corrective action within the time prescribed in the order, and each time may successively assess thereupon an administrative fine of not less than NT$200,000 nor more than NT$100,000,000 until its ceasing therefrom, rectifying its conduct or taking the necessary corrective action.

Regulations on the Representations or Symbols Used by Telecommunications Enterprises on Goods or in Advertisement

The FTA prohibits any enterprise from making or using false or misleading representations or symbols as to price, quantity, quality, content, production process, production date, valid period, method of use, purpose of use, place of origin, manufacturer, place of manufacturing, processor, place of processing on goods, or any items which attract customers or in advertisements, or in any other way making known to the public.

If an enterprise violates the applicable provisions under the FTA that prohibit false or misleading representations, the FTC may order it to cease therefrom, rectify its conduct or take necessary corrective action within the time prescribed in the order; in addition, the FTC may assess upon such enterprise an administrative fine of not less than NT$50,000 nor more than NT$25,000,000. Should such enterprise fail to cease therefrom, rectify the conduct or take any necessary corrective action after the lapse of the prescribed period, the FTC may continue to order such enterprise to cease therefrom, rectify the conduct or take any necessary corrective action within the time prescribed in the order, and each time may successively assess thereupon an administrative fine of not less than NT$100,000 nor more than NT$50,000,000 until its ceasing therefrom, rectifying its conduct or taking the necessary corrective action.

Personal Data Protection Act

Under the Personal Data Protection Act, or PDPA, every individual or governmental or non-governmental agencies, including us, should be subject to certain requirements and restrictions for collecting, processing or using personal data. The definition of “personal data” is extended to cover a broad scope, including the name, date of birth, ID number, special features, fingerprints, marital status, family, education, occupation, medical records, medical history, genetic information, sex life, health examination report, criminal records, contact information, financial status, social activities, and any other data which is sufficient to directly or indirectly identify a specific person. If we fail to comply with the PDPA, we may be subject to serious punishment for civil claims, criminal offenses and administrative liabilities: the ceiling of the aggregate compensation amount for damages payable in a single case will be up to NT$200 million or the actual value of loss arising from our violation provided the amount of actual value of such loss is higher than NT$200 million; the defendant may be subject to imprisonment of up to five years; and the penalty for administrative liabilities will be up to NT$500,000 for each violation, and may be imposed consecutively if such violation continues.

In May 2023, the PDPA was amended for the establishment of the “Personal Data Protection Commission” as the independent competent authority of the PDPA. For the preparation of the Personal Data Protection Commission, the Executive Yuan established the “Preparatory Office of Personal Data Protection Commission” on December 5, 2023. The power for supervision and enforcement of PDPA will be transferred to the Preparatory Office of Personal Data Protection Commission since January 1, 2024. The Preparatory Office of Personal Data Protection Commission will be dissolved when the Personal Data Protection Commission is formally established. As of December 31, 2024, the Personal Data Protection Commission was not formally established.

Corporate Responsibilities: Environmental, Social and Governance (ESG) Initiatives

We are dedicated to sustainable environmental, social, and governance practices. To oversee our sustainability efforts and meet stakeholders’ expectations, we established the Sustainable Development and Strategy Committee, a board-level functional committee, in 2023. This committee guides the company in setting sustainable development vision, long-term strategies, and medium- to long-term goals in line with global trends. We also formed the Sustainable Development Promotion Committee, led by the management, which includes four working groups: Environmental Group, Social Group 1, Social Group 2, and Governance Group. Both of the committee and its groups have regular meetings to develop and implement ESG plans and initiatives in alignment with the vision and mission set by the Sustainable Development and Strategy Committee.

Environmental Sustainability

While the telecommunications service is a low-pollution industry, as a member of the global community and a telecommunications industry leader in Taiwan, we have come to recognize that energy and resources, wastes, maintenance, and procurement in the operation will lead to certain level of impacts on the environment. To deal with environmental issues and mitigate the influence of climate change, we monitor and seek to incorporate environmental sustainability practices and principles in our operations, products and supply chain. Our environmental sustainability initiatives mainly include:

• climate change adaptation strategies: we established the Environmental (E) group, supervised by the Executive Vice President of Technology, to oversee the company’s climate change mitigation and adaptation issues. We focus on environmental sustainability issues and regulatory progress domestically

and globally, and actively align ourselves with international management systems and environmental sustainability initiatives. We continuously enhance our climate resilience of telecommunications infrastructure and communication equipment to ensure business continuity, such as planning the emergency backup capacity and adopting dual power supply to achieve uninterrupted operation for critical IDCs. Moreover, we encourage and motivate partners in the upstream and downstream to jointly attain the 1.5°C goal laid out in the Paris Agreement. We are the first telecommunications service provider in Taiwan to join the CDP Supply Chain Program and encourage supplier partners to disclose complete GHG information and plan for carbon reduction actions.

• carbon emission investigation: we had completed a group-wide Scope 1 to Scope 3 greenhouse gas (GHG) investigations for the year of 2024, which is currently under review. Over the past few years, we have successfully obtained ISO 14064-1:2018 verification for the respective GHG investigations. In addition, we purchased carbon credits in December 2023 and will utilize these carbon credits to achieve carbon neutrality in our office operations, product carbon offsetting and other measures, aiming to reach the net-zero target by 2045.

• carbon emission reduction: we have committed to reaching net-zero GHG emissions across the value chain by 2045 and have taken actions to reduce GHG emissions. Both of our near-term and long-term targets to reduce GHG emissions had been validated by the Science Based Targets initiative, or SBTi. In addition, we have taken a series of actions, such as replacing old equipment and infrastructure, using C-RAN architecture and introducing energy management on a larger scale in operation and maintenance management, to achieve carbon reduction. Moreover, in 2024, we participated in the EV100 initiative and have committed to achieving 100% electrification of our directly controlled car fleet by 2030.

• internal carbon pricing: we have adopted internal carbon pricing, or ICP, in our company since 2023 with a price of NT$1,600 per tonne of CO2e by considering factors, such as investments in carbon reduction projects, future renewable energy demand, potential implementation of carbon fees in Taiwan and international peers comparison. The internal carbon fees collected will be used as a fund to implement our innovative projects and support our carbon reduction initiatives.

• renewable energy: in May 2023, we officially joined RE100. RE100 is a global corporate renewable energy initiative led by the Climate Group in partnership with CDP. By taking such initiative, we commit to using 100% renewable energy for IDCs by 2030 and for the Company by 2040. To achieve our commitments, we signed the power purchase agreements of solar and wind power, which could provide more than 62 million kWh yearly, and the agreements supplied us with approximately 73 million kWh in 2024. Moreover, our board of directors approved us to enter into long-term corporate renewable power purchase agreements to obtain more renewable energy.

• sustainable procurement: we adhered to the ISO 20400 Sustainable Procurement Guidelines to incorporate our sustainability principles into procurement practices. By introducing the “Sustainable Supply Chain Initiative” and establishing the “Supplier Sustainability Grading System,” we leveraged our influence in procurement to encourage suppliers to prioritize sustainability issues, including environmental protection, labor rights, and occupational health and safety.

• member and board director of IOWN global forum: as a member and board director of IOWN, we are working with global companies to explore multi-domain cutting-edge technologies to achieve better energy efficiency and reduce carbon emissions such as end-to-end all photonic networks and innovative applications.

• biodiversity: we commit to maintaining and fostering biodiversity, avoiding all kinds of deforestation activities and promoting reforestation throughout our operations. In May 2023, we announced our plan to expand the nationwide afforestation and tree planting project with an aim of 150,000 trees in eight years. In addition, since June 2023, we have committed to achieving Net Positive Impact on biodiversity and No Net Deforestation by 2030 to abstain from all deforestation practices and actively advocate for reforestation projects to restore ecological balance. In 2024, our ongoing advocacy includes initiatives such as the Hundred-Species Restoration Project, the installation of an AI Ecological Observation System for Black-faced Spoonbill habitats, cultivation of 127 certified citizen scientists for tree carbon storage measurement, and hosting the “No Net Loss and Zero Net Deforestation Forum.” We also published the 2023 TNFD report in both Chinese and English to further our commitment to transparency and environmental stewardship.

Social Responsibility

We have committed to leveraging our technologies and capabilities to practice digital empowerments and providing a safe and healthy work environment to our employees and further contributing to our society. It mainly includes:

• employee compensation: we regularly review the salary structure and comprehensively consider factors such as (i) inflation, price indices, and industry salary benchmarks and (ii) our operational condition, financial performance, and employment costs to establish a reasonable and competitive remuneration mechanism. Additionally, we offer incentives and bonus for all employees, which demonstrates our commitment to recognizing employees’ hard work and contributions.

• employee happiness: we care for our employees and constantly provide a better working environment to our employees. Our employees who have children aged six or under can enjoy a childcare allowance and can apply for one hour of paid leave per working day. We also offer our employees who take nursing care leave 50% of their labor insurance salary as a subsidy for 18 months after six months government subsidy. Besides, we established care centers for our employees’ children to balance work and family. In addition, we implement an employee stock ownership plan through a trust. When our employees deposit a certain amount of their salary to us, we will offer 30% of the deposit amount as their subsidies.

• workplace flexibility: to enhance work flexibility and support talent retention, we introduced “shared offices” across Taiwan and established the Kaohsiung R&D Center of Telecommunication Laboratories and the Kaohsiung Technology Center of Information Technology Group in 2023, and offered employees who wish to return to, or be closer to, their hometowns the option of working in these locations.

• equality in our workplace: we commit to creating a workplace with equality and non-discrimination. We launched a series of activities to advocate gender equality and adhered to the increase of female employees. In addition, we have well-established and unimpeded grievance mechanisms for internal employees or external personnel to submit complaint for any discrimination or harassment issues encountered.

• occupational safety and health: we commit to complying with laws and other regulations of the health and safety, and encourage our employees to take necessary precautions and immediately report accidents, injuries and unsafe practices or conditions. In addition, we are the first telecommunications service provider in Taiwan to achieve compliance with ISO 45001:2018.

• society giveback: we employ our capability of information and communication technology to bridge the digital gap for underserved groups and create digital opportunities. We focus on caring for the underprivileged to benefit from our services and Internet access and further empower the community. We tailor-made the computer-aided system for the visual-impaired to work in call centers, established the “Tech4Good Digital Empowerment Ecosystem” to provide life-changing opportunities to students in remote areas, and we leveraged our 5G private network to deliver emergency medical care services for elders in remote areas. We also organize company volunteers to participate in local community services and proactively contribute to the communities. In addition, we constantly contribute to our society with our innovation and technology.

• anti-fraud achievements: our anti-fraud measures have been at the forefront of the telecommunications industry. For example, we have AI+ICT information and communication technology capabilities to support fraud identification and prevention. In addition, we launched the international fraud calls alerting service to fight against international scam phone calls. We are also in the process of launching anti-fraud voice messages as well as domestic and overseas anti-fraud SMS. From interception to alters and from fixed network to mobile network, we continue to expand protection coverage for telecommunications with an aim to benefit the society.

Corporate Governance

Our governance practices serve as an essential role in our ability to conduct our operations responsibly and ethically. Our governance practices mainly include:

• strategy alignment: we have committed to strong corporate governance that directly aligns with our long-term strategies and financial and operating plans. In the environment of evolving market, we also timely adjust our strategies to optimize our business and enhance our management control.

• board diversity: our board of directors is diversified to cover our business operations, operating dynamics and business development, with considerations of diversity in gender, age, culture and ethnic diversity. Our board possesses relevant competencies, including operating judgment, accounting and finance experience, operating and crisis management skills, industry knowledge, global market knowledge, leadership skills and decision-making ability. We have set concrete objectives to improve board diversity, including adding female members and members from various backgrounds.

• governance with diversity and inclusion: we have worked to create diversity so that we are more reflective of our society with a range of perspectives to support our business decision-making. Our directors also prioritize inclusion and ensure equal access of all genders and groups of employees to training, career development, nominations for promotions and professional opportunities.

• incorporate ESG targets into senior executives’ compensation: since 2022, we have linked part of our senior executives’ performance-based compensation to the Company's ESG goals to ensure their decisions align with investors’ long-term interests. Each year, the proportion of compensation tied to our ESG targets has increased, along with the number of employees covered. By 2024, 25% of performance-based compensation was tied to ESG targets, impacting nearly 100 senior executives.

• incentive compensation clawback policy: this policy states that the Company should recover erroneously awarded compensation which any portion of such incentive compensation is received by the covered executives during the last three full fiscal years or any applicable transition period preceding the date that the Company is required to restate its financial statements which resulting from the issuer’s material noncompliance with any financial reporting requirement under securities laws.

• anti-corruption practices: In 2024, we have introduced ISO 37001 Anti-Bribery Management System to ensure compliance with relevant legal requirements in our daily operations. By establishing preventive and monitoring mechanisms, we aim to mitigate legal risks and penalties associated with corruptive conducts. In November 2024, we entrusted a third-party agency to perform the audit and successfully passed it.

• sustainable finance: we consider ESG factors in our investment decisions to ensure our targets align with specific ESG objectives. In 2023, we invested in a green and sustainable time deposit which is exclusively channeled into eco-friendly projects. Through this sustainable finance instrument, we are playing an important role in sustainability efforts and fulfilling our green commitments.

For further information on our ESG initiatives, please visit our annual Sustainability ESG Report, publicly available on our ESG website at: https://www.cht.com.tw/en/home/cht/esg/esg-report/sustainability-esg-report . The information contained on our website is not incorporated herein by reference and does not constitute part of this annual report.

C. Organizational Structure

Set forth below is a diagram indicating our organizational structure as of March 31, 2025. Please refer to Exhibit 8.1 for the subsidiaries’ jurisdiction of incorporation.

D. Property, Plant and Equipment

Please refer to “—B. Business Overview” for a discussion of our property, plant and equipment.

ITEM 4A. UNRESOLVED ST AFF COMMENTS

None.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

You should read the following discussion of our financial condition and results of operations together with the consolidated financial statements and the notes to such statements included in this annual report.

For the convenience of readers, NT dollar amounts used in this section for, and as of, the year ended December 31, 2024 have been translated into U.S. dollar amounts using US$1.00=NT$32.79, set forth in the statistical release of the Federal Reserve Board of the United States on December 31, 2024. The U.S. dollar translation appears in parentheses next to the relevant NT dollar amount.

Overview

A number of recent and expected future developments have had, and in the future may have, a material impact on our financial condition and results of operations. These developments include:

• changes in our revenue composition and sources of revenue growth;

• tariff adjustments;

• capital expenditures as a result of technological advancements and changes in our business;

• personnel expenses; and

• taxation.

Each of these developments is discussed below.

Changes in our revenue composition and sources of revenue growth

Our operating segments are (i) consumer business, (ii) enterprise business, (iii) international business and (iv) others. Operating segments are defined as components of an entity regarding which discrete financial information is available for regular evaluation of the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. Our measure of operating segment performance is mainly based on revenues and income before income tax.

The table below sets forth the revenues from our principal lines of business as a percentage of total revenues for the periods indicated.

2022	2023	2024
Revenues:
Consumer Business	60.9	61.4	60.9
Enterprise Business	33.3	32.7	32.8
International Business	3.3	4.1	4.3
Others	2.5	1.8	2.0
Total	100.0	100.0	100.0

Our consumer business has been an important source of revenues over the last three years. We derive our consumer business revenues from mobile service, fixed-line service, sales and other services. Revenues from our consumer business increased as a percentage of our total revenues in 2023, mainly attributable to the growth of mobile services, sales revenues, and fixed broadband services. Revenues from our consumer business slightly decreased as a percentage of our total revenues in 2024, mainly due to the revenue decreases in local and long distance voice services, partially offset by the increases in mobile and fixed broadband services.

Our enterprise business has also significantly contributed to our revenues over the last three years. We derived our enterprise business revenues from mobile service, fixed-line service, ICT business and other services. Revenues from our enterprise business decreased as a percentage of our total revenues in 2023, mainly attributable to the higher basis of ICT business revenues recognized from large one-time IDC projects in 2022, partially offset by the increase in fixed broadband revenues and mobile service revenues. Revenues from our enterprise business increased

as a percentage of our total revenues in 2024, mainly attributable to the increase in ICT business revenue, such as IDC, cloud, cybersecurity, and big data services, fueled by both their projects and recurring revenues.

Our international business has been another important source of revenues over the last three years. We derived our international business from fixed-line service, ICT business and other services. Our international business gradually increased as a percentage of our total revenues from 3.3% to 4.3% from 2022 to 2024, mainly attributable to the rising demand for ICT services, especially for services such as leased circuit, IDC, cloud, integrated ICT solutions and roaming service from global clients .

Our other revenues as a percentage of our total revenues decreased from 2022 to 2023, and later increased in 2024. Such trend was mainly affected by the changes in contribution from one of our subsidiaries, CHPT, a semiconductor testing company.

Tariff adjustments

We adjust our tariffs and offer promotional packages from time to time primarily in response to market conditions. We also from time to time are required to adjust our pricing in line with domestic regulations.

According to the announcement by the NCC on March 5, 2020, this round of adjustments applied to the wholesale tariffs for IP peering and domestic leased line services, which was subject to an adjustment by ∆CPI-7.48%. This round of adjustments also applied to the retail fees for xDSL and FTTx services (excluding ADSL, the services with downlink speed of 12 Mbps and below, and the services with downlink speeds of 300 Mbps and over), which was subject to an adjustment by ∆CPI-2.15%. The ∆CPI for 2023 was 2.49%, and the NCC announced for a freeze on tariff adjustment starting from April 1, 2023 to March 31, 2024. In addition, on March 15, 2024, the NCC announced that, effective from April 1, 2024, next round of adjustments applied to the wholesale tariffs for IP peering and domestic leased line services, which was subject to an adjustment by ∆CPI-5.09%. This round of adjustments also applied to the retail fees for xDSL and FTTx services (excluding ADSL, the services with downlink speed of 12 Mbps and below, and the services with downlink speeds of 300 Mbps and over), which was subject to an adjustment by ∆CPI-3.32%. The ∆CPI for 2024 that was used for the tariff reduction starting from April 1, 2025 was 2.18%. We do not expect such tariff reduction to have a material adverse impact on our results of operations.

The NCC issued a notice for the promulgation of the “Upper Limits on the Termination Rates for Voice Service over Fixed Network Provided by Significant Market Powers” on June 5, 2023. The interconnection fees of local telephones, domestic long-distance or international calls, and mobile-to-fixed-line calls should be decreased gradually from June 5, 2023 to December 31, 2026 in four years. The interconnection rate between fixed-line customers and other fixed-line customers is reduced from NT$0.30 to NT$0.24 per minute during peak times and from NT$0.09 to NT$0.08 per minute during off-peak times. The interconnection rate for fixed line customers to domestic long distance or international is reduced from NT$0.31 to NT$0.27 per minute. The interconnection rate for calls initiated by mobile customers to fixed-line customers is reduced from NT$0.3943 to NT$0.2939 per minute during peak times and from NT$0.1883 to NT$0.1440 per minute during off-peak times.

Besides the mandatory tariff reduction mentioned above, we, from time to time, voluntarily implemented tariff adjustments in our broadband and mobile businesses in the past few years to consolidate our market share.

Capital expenditures as a result of technological advancements and changes in our business

In recent years, we have focused on modernizing and upgrading our mobile services network and on developing our FTTx network, which enables high-speed information transmission over optical fiber. Constructing the fiber network in new buildings and areas with 300 Mbps (or above, up to 2 Gbps) for households and 10 Gbps for enterprises is our immediate task. Our ultimate goal is to optimize our capital expenditures by investing in infrastructures as well as supporting innovative and well-returned services/products. We evaluate our investment opportunities by benchmarking them against internal return requirements.

Personnel expenses

Personnel expenses constitute a significant portion of our operating costs and expenses. In 2022, 2023 and 2024, personnel expenses represented 26.9%, 26.2% and 26.7% of our total operating costs and expenses, respectively. The table below sets forth information regarding our personnel expenses and as a percentage of our total operating costs and expenses for the periods indicated.

2022		2023		2024
(in billions of NT$, except percentages)
Total personnel expenses	45.7	26.9 %	46.2	26.2 %	48.9	26.7 %
Total operating costs and expenses	170.0	100.0 %	176.2	100.0 %	183.2	100.0 %

At the time of our privatization, we settled all of our then existing defined benefit pension obligations in full. After completing our privatization on August 12, 2005, all of our continuing employees were deemed to have commenced employment as of August 12, 2005 for seniority purposes under our pension plans in effect after privatization. Under applicable ROC regulations, upon our privatization, the MOTC assumed the obligation to make annuity payments to all of our employees that retired before our privatization.

Taxation

The income tax rate for profit-seeking enterprises is 20% in the ROC. We benefit from tax incentives, including tax credits of up to 15% of some of our research and development expenses in accordance with the Statute for Innovating Industries. In addition, after-tax earnings not distributed to stockholders as dividends in the following year were assessed with a 5% unappropriated earnings tax. Under IFRSs, the 5% tax on unappropriated earnings is accrued during the year the earnings arise and adjusted to the extent that distributions are approved by the stockholders in the following year. As a result, our effective tax rates were 19.0% and 19.5% in 2023 and 2024, respectively.

A. Operating Results

The following table sets forth our revenues, operating costs and expenses, income from operations and other financial data for the periods indicated.

2022	2023		2024
NT$	NT$		NT$	US$
	(in billions)
Revenues:
Consumer Business	132.1	137.1		140.0	4.3
Enterprise Business	72.1	73.0		75.4	2.3
International Business	7.2	9.2		9.9	0.3
Others	5.3	3.9		4.7	0.1
Total revenues	216.7	223.2		230.0	7.0
Operating costs	136.7	141.8		146.6	4.5
Operating expenses:
Marketing	22.8	23.5		25.1	0.8
General and administrative	6.6	6.8		7.2	0.2
Research and development	3.8	3.9		4.1	0.1
Expected credit loss	0.1	0.2		0.2	—
Total operating expenses	33.3	34.4		36.6	1.1
Other income and expenses	0.1	(0.6	)	0.1	—
Income from operations	46.8	46.4		46.9	1.4
Non-operating income and expenses	0.4	0.6		0.9	—
Income before income tax	47.2	47.0		47.8	1.4
Income tax expense	9.3	8.9		9.3	0.3
Consolidated net income	37.9	38.1		38.5	1.1
Attributable to:
Stockholders of the parent	36.4	37.0		37.2	1.1
Noncontrolling interests	1.5	1.1		1.3	—

The following table sets forth our revenues, operating costs and expenses, income from operations and other financial data as a percentage of our total revenues for the periods indicated.

2022	2023		2024
(as percentages of total revenues)
Revenues:
Consumer Business	60.9	61.4		60.9
Enterprise Business	33.3	32.7		32.8
International Business	3.3	4.1		4.3
Others	2.5	1.8		2.0
Total revenues	100.0	100.0		100.0
Operating costs	63.1	63.5		63.7
Operating expenses:
Marketing	10.5	10.6		10.9
General and administrative	3.0	3.0		3.1
Research and development	1.7	1.7		1.8
Expected credit loss	0.1	0.1		0.1
Total operating expenses	15.3	15.4		15.9
Other income and expenses	—	(0.3	)	—
Income from operations	21.6	20.8		20.4
Non-operating income and expenses	0.2	0.3		0.4
Income before income tax	21.8	21.1		20.8
Income tax expense	4.3	4.0		4.1
Consolidated net income	17.5	17.1		16.7
Attributable to:
Stockholders of the parent	16.8	16.6		16.1
Noncontrolling interests	0.7	0.5		0.6

Each of our operating segments is managed separately due to the fact that each represents a strategic business unit that serves different types of customers. We measure our segment performances mainly based on revenues and income before income tax.

The year ended December 31, 2024 compared with the year ended December 31, 2023

Revenues

Our revenues increased to NT$230.0 billion (US$7.0 billion) in 2024 as compared to NT$223.2 billion in 2023, mainly due to an increase in revenues generated from consumer business, enterprise business and international business. The details of which are as follows:

Consumer Business

Our consumer business revenues include mobile service revenues, fixed-line service revenues, sales revenues and other revenues. Consumer business revenues accounted for 61.4% and 60.9% of our revenues in 2023 and 2024, respectively. Our consumer business revenues increased by 2.1% from NT$137.1 billion in 2023 to NT$140.0 billion (US$4.3 billion) in 2024, mainly due to increases of mobile service revenues attributed to 5G mobile migration, sales revenues, and fixed broadband revenues, partially offset by a decrease of fixed voice revenues.

Mobile services. Our mobile service revenues increased by 3.5% from NT$55.1 billion in 2023 to NT$57.1 billion (US$1.7 billion) in 2024 due to an increase of postpaid subscriber numbers, steady 5G migration and roaming service recovery.

Fixed-line services. Our fixed-line service revenues slightly increased by 0.7% from NT$42.6 billion in 2023 to NT$42.9 billion (US$1.3 billion) in 2024. This increase was due to the increase of data communication and broadband access revenues driven by the successful upsell propelled by the HiNet Higher-Speed promotion plan, partially offset by the decreased voice revenues.

Sales. Revenues generated from sales increased by 1.1% from NT$36.8 billion in 2023 to NT$37.2 billion (US$1.1 billion) in 2024, due to the stabilized smartphones supply and increased terminal sales.

Others . Our other revenues increased by 9.7% from NT$2.6 billion in 2023 to NT$2.8 billion (US$0.1 billion) in 2024. This was due to an increase in ICT business revenues.

Enterprise Business

Our enterprise business revenues include mobile service revenues, fixed-line service revenues, ICT revenues and other revenues. Revenues from our enterprise business accounted for 32.7% and 32.8% of our revenues in 2023 and 2024, respectively. Revenues from our enterprise business increased by 3.3% from NT$73.0 billion in 2023 to NT$75.4 billion (US$2.3 billion) in 2024 due to the strong growth of ICT business revenue.

Mobile services . Our mobile service revenues increased by 0.4% from NT$9.1 billion in 2023 to NT$9.2 billion (US$0.3 billion) in 2024 due to 5G mobile migration.

Fixed-line services. Our fixed-line service revenues slightly decreased by 0.6% from NT$34.0 billion in 2023 to NT$33.8 billion (US$1.0 billion) in 2024 due to the decreased voice revenues, partially offset by the increase of data communication and broadband access revenues driven by the speed upgrade.

ICT Business . Revenues from our ICT business increased by 12.5% from NT$24.7 billion in 2023 to NT$27.8 billion (US$0.8 billion) in 2024, due to the growth of projects and recurring revenues for IDC, cloud, cybersecurity, 5G+AIoT and big data related services.

Others. Our other revenues decreased by 11.2% from NT$5.2 billion in 2023 to NT$4.6 billion (US$0.1 billion) in 2024. This decrease was due to a decrease in the satellite government subsidies.

International Business

Revenues from international business accounted for 4.1% and 4.3% of our revenues in 2023 and 2024, respectively. Revenues from our international business increased by 7.9% from NT$9.2 billion in 2023 to NT$9.9 billion (US$0.3 billion) in 2024, due to the rising demand for leased circuit, IDC, cloud, and integrated ICT solutions.

Fixed-line Services. Revenues from our fixed-line services decreased by 5.6% from NT$5.4 billion in 2023 to NT$5.1 billion (US$0.2 billion) in 2024, due to the strategic withdraw of international voice services.

ICT Business. Revenues from our ICT business increased by 41.4% from NT$2.8 billion in 2023 to NT$4.0 billion (US$0.1 billion) in 2024, due to the rising demand for IDC, cloud, and integrated ICT solutions from global clients.

Others. Our other revenues decreased by 14.8% from NT$1.0 billion in 2023 to NT$0.8 billion (US$24.9 million) in 2024, due to a decrease from government subsidies for satellites construction.

Others

Other revenues accounted for 1.8% and 2.0% of our revenues in 2023 and 2024, respectively. Our other revenues increased from NT$3.9 billion in 2023 to NT$4.7 billion (US$0.1 billion) in 2024. The increase was due to higher revenues derived from CHPT.

Operating Costs and Expenses

Our operating costs and expenses include depreciation and amortization expenses, personnel expenses, cost of goods sold, interconnection and service costs, marketing expenses, costs of materials and maintenance, as well as spectrum usage fees.

Operating costs and expenses increased by 4.0% from NT$176.2 billion in 2023 to NT$183.2 billion (US$5.6 billion) in 2024. This increase was due to increases in personnel expenses, ICT project costs, and utilities expenses.

Personnel expenses increased due to adjustments of employee benefit policies, leading to higher salaries, bonuses, and welfare costs. ICT project costs were mainly driven by the growth of ICT business. The increase in utilities expenses was primarily due to the adjustment in electricity prices.

Operating Costs and Expenses by Business Segment

Consumer Business

Our consumer business costs and expenses increased by 2.1% from NT$110.3 billion in 2023 to NT$112.7 billion (US$3.5 billion) in 2024, primarily due to (i) adjustments in employee benefit policies, and (ii) increases in maintenance costs, mainly driven by the growth of our core business.

Enterprise Business

Our enterprise business operating costs and expenses increased by 6.6% from NT$59.7 billion in 2023 to NT$63.6 billion (US$1.9 billion) in 2024. This increase was due to an increase in ICT project costs, primarily driven by the robust growth of our ICT business.

International Business

Our international business operating costs and expenses increased by 7.3% from NT$8.4 billion in 2023 to NT$9.0 billion (US$0.3 billion) in 2024, due to the increase in ICT-related costs, which is in turn driven by the growth of our public cloud and ICT business.

Others

The costs and expenses from our other business increased by 5.9% from NT$2.8 billion in 2023 to NT$3.0 billion (US$0.1 billion) in 2024, due to operating growth derived from CHPT.

Other Income and Expenses

We recorded net other expenses of NT$0.6 billion in 2023 and net other income of NT$0.1 billion (US$3.7 million) in 2024, respectively. The differences between 2023 and 2024 were due to the impairment loss on investment properties and property, plant and equipment in 2023.

Income from Operations and Operating Margin

As a result of the foregoing, our income from operations increased by 1.1% from NT$46.4 billion in 2023 to NT$46.9 billion (US$1.4 billion) in 2024. Our operating margin slightly decreased from 20.8% in 2023 to 20.4% in 2024.

Non-operating Income and Expenses

Our non-operating income increased from NT$0.6 billion in 2023 to NT$0.9 billion (US$29.5 million) in 2024. The increase was due to an increase in interest income, driven by the increase in acquisition of time deposits and negotiable certificates of deposit.

Income before Income Tax

As a result of the foregoing, segment income before tax for our consumer business increased by 3.0% from NT$28.9 billion in 2023 to NT$29.7 billion (US$0.9 billion) in 2024; segment income before tax for our enterprise business decreased by 10.3% from NT$14.4 billion in 2023 to NT$12.9 billion (US$0.4 billion) in 2024; segment income before tax for our international business increased by 11.3% from NT$2.1 billion in 2023 to NT$2.4 billion (US$0.1 billion) in 2024; and segment income before tax for our other business increased by 75.7% from NT$1.6 billion in 2023 to NT$2.8 billion (US$85.6 million) in 2024.

Income Tax

Our income tax was NT$8.9 billion and NT$9.3 billion (US$0.3 billion) in 2023 and 2024, respectively. Our effective tax rate increased slightly from 19.0% in 2023 to 19.5% in 2024.

Net Income

As a result of the foregoing, our net income attributable to stockholders of the parent was NT$37.0 billion and NT$37.2 billion (US$1.1 billion) in 2023 and 2024, respectively. Our net margin decreased from 16.6% in 2023 to 16.1% in 2024.

The year ended December 31, 2023 compared with the year ended December 31, 2022

Revenues

Our revenues increased to NT$223.2 billion (US$7.3 billion) in 2023 as compared to NT$216.7 billion in 2022, due to an increase in revenues generated from consumer business, enterprise business, and international business. The details of which are as follows:

Consumer Business

Our consumer business revenues include mobile service revenues, fixed-line service revenues, sales revenues and other revenues. Consumer business revenues accounted for 60.9% and 61.4% of our revenues in 2022 and 2023, respectively. Our consumer business revenues increased by 3.8% from NT$132.1 billion in 2022 to NT$137.1 billion (US$4.5 billion) in 2023, due to increases of mobile service revenues attributed to 5G mobile migration, sales revenues, and fixed broadband revenues, partially offset by a decrease of fixed voice revenues.

Mobile services. Our mobile service revenues increased by 6.4% from NT$51.8 billion in 2022 to NT$55.1 billion (US$1.8 billion) in 2023 due to an increase of postpaid subscriber numbers, steady 5G migration and roaming service recovery.

Fixed-line services. Our fixed-line service revenues slightly decreased by 0.4% from NT$42.8 billion in 2022 to NT$42.6 billion (US$1.4 billion) in 2023. This decrease was due to the decreased voice revenues, partially offset by the increase of data communication and broadband access revenues driven by the successful upsell propelled by the HiNet Higher-Speed promotion plan.

Sales. Revenues generated from sales increased by 4.7% from NT$35.2 billion in 2022 to NT$36.8 billion (US$1.2 billion) in 2023, due to the stabilized smartphones supply and increased terminal sales.

Others . Our other revenues increased by 11.3% from NT$2.3 billion in 2022 to NT$2.6 billion (US$0.1 billion) in 2023. This was due to an increase in ICT business and home security revenues.

Enterprise Business

Our enterprise business revenues include mobile service revenues, fixed-line service revenues, ICT revenues and other revenues. Revenues from our enterprise business accounted for 33.3% and 32.7% of our revenues in 2022 and 2023, respectively. Revenues from our enterprise business increased by 1.2% from NT$72.1 billion in 2022 to NT$73.0 billion (US$2.4 billion) in 2023 due to 5G mobile migration, recovered roaming revenues, and the increasing need from cybersecurity and big data services.

Mobile services . Our mobile service revenues increased by 2.0% from NT$8.9 billion in 2022 to NT$9.1 billion (US$0.3 billion) in 2023 due to 5G mobile migration and the recovered roaming revenues.

Fixed-line services. Our fixed-line service revenues slightly decreased by 1.6% from NT$34.5 billion in 2022 to NT$34.0 billion (US$1.1 billion) in 2023 due to the decreased voice revenues, partially offset by the increase of data communication and broadband access revenues driven by the digital transformation trend and opportunities.

ICT Business . Revenues from our ICT business increased by 1.9% from NT$24.3 billion in 2022 to NT$24.7 billion (US$0.8 billion) in 2023, due to the growth of cybersecurity and big data related projects.

Others. Our other revenues increased by 18.0% from NT$4.4 billion in 2022 to NT$5.2 billion (US$0.2 billion) in 2023. This increase was due to the grants of 5G government subsidies and equipment sales revenues from our subsidiaries.

International Business

Revenues from international business accounted for 3.3% and 4.1% of our revenues in 2022 and 2023, respectively. Revenues from our international business increased by 27.8% from NT$7.2 billion in 2022 to NT$9.2 billion (US$0.3 billion) in 2023, due to the rising demand for leased circuit, IDC, cloud, integrated ICT solutions and roaming service from global clients.

Fixed-line Services. Revenues from our fixed-line services increased by 6.4% from NT$5.1 billion in 2022 to NT$5.4 billion (US$0.2 billion) in 2023, due to the growth in international network, and international private leased circuit service revenues.

ICT Business. Revenues from our ICT business increased by 88.6% from NT$1.5 billion in 2022 to NT$2.8 billion (US$0.1 billion) in 2023, due to the rising demand for IDC, cloud, and integrated ICT solutions from global clients.

Others. Our other revenues increased by 54.8% from NT$0.6 billion in 2022 to NT$1.0 billion (US$31.3 million) in 2023, due to an increase in mobile service revenues.

Others

Other revenues accounted for 2.5% and 1.8% of our revenues in 2022 and 2023, respectively. Our other revenues decreased from NT$5.3 billion in 2022 to NT$3.9 billion (US$0.1 billion) in 2023. The decrease was due to lower revenues derived from CHPT.

Operating Costs and Expenses

Operating costs and expenses increased by 3.6% from NT$170.0 billion in 2022 to NT$176.2 billion (US$5.8 billion) in 2023. This increase was due to increases in personnel expenses and maintenance and service costs. The increase in personnel expenses was mainly due to the increased headcount driven by the growth of our business. The increase in maintenance and service costs was mainly driven by the growth of our international roaming and fixed broadband services.

Operating Costs and Expenses by Business Segment

Consumer Business

Our consumer business costs and expenses increased by 4.5% from NT$105.6 billion in 2022 to NT$110.3 billion (US$3.7 billion) in 2023, primarily due to (i) the increased headcount driven by the growth of our business, and (ii) maintenance and service costs, mainly due to the growth of our international roaming and fixed broadband services.

Enterprise Business

Our enterprise business operating costs and expenses increased by 3.8% from NT$57.5 billion in 2022 to NT$59.7 billion (US$1.9 billion) in 2023. This increase was due to an increase in ICT projects costs, mainly driven by the growth of our cybersecurity and big data related projects.

International Business

Our international business operating costs and expenses increased by 25.0% from NT$6.7 billion in 2022 to NT$8.4 billion (US$0.3 billion) in 2023, due to an increase in telecommunication equipment usage fees and service costs, driven by the growth of our international network and international private leased circuit service.

Others

The costs and expenses from our other business decreased by 36.7% from NT$4.5 billion in 2022 to NT$2.8 billion (US$0.1 billion) in 2023, due to operating downturn for CHPT.

Other Income and Expenses

We recorded net other income of NT$0.1 billion in 2022 and net other expenses of NT$0.6 billion (US$20.7 million) in 2023, respectively. The differences between 2022 and 2023 were due to the impairment loss on investment properties and property, plant and equipment in 2023.

Income from Operations and Operating Margin

As a result of the foregoing, our income from operations decreased by 1.0% from NT$46.8 billion in 2022 to NT$46.4 billion (US$1.5 billion) in 2023. Our operating margin slightly decreased from 21.6% in 2022 to 20.8% in 2023.

Non-operating Income and Expenses

Our non-operating income increased from NT$0.4 billion in 2022 to NT$0.6 billion (US$21.4 million) in 2023. The increase was due to an increase in interest income, driven by the rise of interest rate and increase in acquisition of time deposits and negotiable certificates of deposit.

Income before Income Tax

As a result of the foregoing, segment income before tax for our consumer business increased by 1.4% from NT$28.5 billion in 2022 to NT$28.9 billion (US$0.9 billion) in 2023; segment income before tax for our enterprise business decreased by 8.0% from NT$15.6 billion in 2022 to NT$14.4 billion (US$0.5 billion) in 2023; segment income before tax for our international business increased by 26.4% from NT$1.7 billion in 2022 to NT$2.1 billion (US$0.1 billion) in 2023; and segment income before tax for our other business increased by 14.2% from NT$1.4 billion in 2022 to NT$1.6 billion (US$52.0 million) in 2023.

Income Tax

Our income tax was NT$9.3 billion and NT$8.9 billion (US$0.3 billion) in 2022 and 2023, respectively. Our effective tax rate decreased slightly from 19.8% in 2022 to 19.0% in 2023.

Net Income

As a result of the foregoing, our net income attributable to stockholders of the parent was NT$36.4 billion and NT$37.0 billion (US$1.2 billion) in 2022 and 2023, respectively. Our net margin decreased from 16.8% in 2022 to 16.6% in 2023.

B. Liquidity and Capital Resources

Liquidity

The following table sets forth the summary of our cash flows for the periods indicated:


2022		2023		2024
NT$		NT$		NT$		US$
		(in billions)
Net cash provided by operating activities	76.0		74.6		79.2		2.4
Net cash used in investing activities	(30.8	)	(50.2	)	(35.3	)	(1.1	)
Net cash used in financing activities	(34.8	)	(40.7	)	(41.5	)	(1.3	)
Effect of exchange rate changes	0.0		0.0		0.0		0.0
Net increase (decrease) in cash and cash equivalents	10.4		(16.4)		2.4		0.0
Cash and cash equivalents at end of year	50.2		33.8		36.2		1.1

Our primary source of liquidity is cash flow from operations, which represents operating profit adjusted for non-cash items, primarily depreciation and amortization and changes in current assets and liabilities. Notes 23, 24 and 25 to our consolidated financial statements, included elsewhere in this annual report, provide additional details as to our bank loans and bonds payable. We believe that our working capital is sufficient to meet our present cash flow requirements.

In 2024, we generated NT$79.2 billion (US$2.4 billion) in net cash from operating activities as compared to NT$74.6 billion in 2023. The increase was primarily due to an increase in income before income tax arising from our operating performance, an increase in contract liabilities from advance receipts of project business, and an increase in trade notes and accounts payable.

In 2023, we generated NT$74.6 billion in net cash from operating activities as compared to NT$76.0 billion in 2022. The decrease was primarily due to a decrease in income before income tax arising from our operating performance, an increase in income tax payment and a decrease in trade notes and accounts payable.

In 2022, we generated NT$76.0 billion in net cash from operating activities as compared to NT$74.9 billion in 2021. The increase was primarily due to an increase in income before income tax arising from our operating performance.

Historically, our net cash from operating activities has been sufficient to cover our capital expenditures, including ongoing expansion and modernization of our networks.

In 2024, our net cash used in investing activities was NT$35.3 billion (US$1.1 billion), a decrease from NT$50.2 billion in 2023. The decrease was primarily due to an increase in proceeds from time deposits and negotiable certificates of deposit with maturities of more than three months.

In 2023, our net cash used in investing activities was NT$50.2 billion, an increase from NT$30.8 billion in 2022. The increase was primarily due to an increase in acquisition and disposal of time deposits and negotiable certificates of deposit with maturities of more than three months.

In 2022, our net cash used in investing activities was NT$30.8 billion, a decrease from NT$31.2 billion in 2021. The decrease was primarily due to a decrease in acquisition of property, plant and equipment in 2022, offset by proceeds of NT$2.9 billion from disposal of investment in China Airlines, Ltd. in 2021.

In 2024, our net cash used in financing activities totaled NT$41.5 billion (US$1.3 billion), which mainly reflected NT$36.9 billion in dividends being paid.

In 2023, our net cash used in financing activities totaled NT$40.7 billion, which mainly reflected NT$36.5 billion in dividends being paid.

In 2022, our net cash used in financing activities totaled NT$34.8 billion, which mainly reflected NT$35.7 billion in dividends being paid.

Capital Resources

We have historically financed our capital expenditure requirements through operating cash flows and corporate bonds. In future years, the expansion and upgrade of our infrastructures, such as 5G mobile broadband, FTTx, international submarine cables, and IDC, introducing AI/automation technology to BSS/OSS, developing innovative solutions, and implementing ESG will be the focus of our capital expenditures. In the meantime, we also expect to make dividend payments on an ongoing basis. See “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information.” Furthermore, we may require working capital from time to time to finance purchases of materials for our maintenance and other overhead expenses. Over the next twelve months, we expect to implement our strategies about capital expenditures, dividend payments, debt repayments and other commitments by primarily relying on cash generated from operations, corporate bonds and loans from commercial banks.

As of December 31, 2024, our primary source of liquidity was NT$36.2 billion (US$1.1 billion) in cash and cash equivalents. In addition, the unused line of credit for unsecured bank loans and secured bank loans amounted to NT$56.4 billion (US$1.7 billion) and NT$15 million (US$0.5 million), respectively, as of December 31, 2024.

As of December 31, 2024, we had bonds payable in the amount of NT$30.5 billion (US$0.9 billion) at interest rates ranging from 0.42% to 0.69%.

As of December 31, 2024, our subsidiary, CHIEF Telecom Inc. had short-term unsecured loans of NT$0.1 billion (US$3.0 million) at interest rates 1.82%.

As of December 31, 2024, our subsidiary, Chunghwa Sochamp Technology Inc., had short-term unsecured loans of NT$65.0 million (US$2.0 million) at interest rates ranging from 3.15% to 3.49%.

As of December 31, 2024, our subsidiary, Light Era Development Co., Ltd. had long-term secured loans of NT$1.6 billion (US$48.8 million) at interest rates of 2.09%.

As of December 31, 2024, our subsidiary, International Integrated Systems, Inc., had short-term unsecured loans of NT$50.0 million (US$1.5 million) at interest rates of 2.31%.

As of December 31, 2024, our subsidiary, Chunghwa Leading Photonics Tech Co., Ltd. had long-term unsecured loans of NT$35.0 million (US$1.1 million) at interest rates of 2.22%.

As part of the government’s effort to upgrade the existing telecommunications infrastructure, we and other public utility companies were required by the ROC government to contribute a certain amount of money to a Piping Fund, administered by the Taipei City Government. A total of NT$1.0 billion was contributed by us on August 15, 1996. This fund is used to finance various telecommunications infrastructure projects. We accounted for the contribution as other financial assets on our consolidated balance sheets.

Note 41 to our consolidated financial statements included elsewhere in this annual report provides a description of the assets that are pledged as collaterals for bank loans, custom duties of the imported materials and warranties of contract performance, the trust account the Company entrusts to Land Bank of Taiwan for fund control and property rights management, or the bank deposits for the restricted purpose in accordance with The Management, Utilization and Taxation of Repatriated Offshore Funds Act in the ROC.

Capital Expenditures

Our capital expenditures in 2022, 2023 and 2024 were mainly to support operations. We have financed our capital expenditures using cash flows operations and corporate bonds. The following table sets forth a summary of our capital expenditures for the periods indicated.

2022		2023		2024
(in billions of NT$, except percentages)
Capital Expenditures:
Mobile communications business	13.8	44 %	11.1	36 %	9.7	34 %
Others	17.7	56 %	19.6	64 %	19.1	66 %
Total capital expenditures	31.5	100 %	30.7	100 %	28.8	100 %

The following table sets forth a summary of our planned capital expenditures for the year ending December 31, 2025.


(in billions of NT$, except percentages)
Capital Expenditures:
Mobile communications business	8.4	26 %
Others	24.0	74 %
Total capital expenditures	32.4	100 %

We expect our total capital expenditures to be approximately NT$32.4 billion in 2025. Our capital expenditures for 2025 are planned to be allocated to our 5G network deployment, IDC construction, FTTx network expansion, international submarine cables, public switching telephone network transforming to internet protocol network, service platforms, cloud computing, IoT, ESG, and asset activation. We expect to finance these capital expenditures with our cash flows from operations.

Contractual Obligations

Set forth below are our total contractual obligations as of December 31, 2024.

Total	Less than 1 Year	1-3 years	3-5 years	More than 5 years
(in billions of NT$)
Contractual Obligations (1)
Short-term loans	0.2	0.2	—	—	—
Long-term loans	1.7	—	1.7	—	—
Bonds payable	31.0	9.0	13.1	4.2	4.7
Lease liabilities (2)	11.2	3.6	5.3	2.1	0.2
Total	44.1	12.8	20.1	6.3	4.9

(1) Unfunded defined benefit obligation is not included as the schedule of payments is difficult to determine. We made pension contributions of approximately NT$1.2 billion (US$38.0 million) in 2024 and expected to make pension contributions of approximately NT$1.2 billion (US$37.3 million) in 2025. See Note 29 to our consolidated financial statements for additional details regarding our pension plan.

(2) Operating lease obligations are described in Note 38 to our consolidated financial statements included elsewhere in the annual report.

As of December 31, 2024, we had remaining commitments under non-cancelable contracts with various parties, including the acquisition of property, plant and equipment of NT$14.4 billion (US$0.4 billion) and acquisition of telecommunications-related inventory of NT$12.4 billion (US$0.4 billion).

We committed that when our ownership interest in NCB is greater than 25% and NCB encounters financial difficulty or capital adequacy ratio of NCB cannot meet the related regulation requirements, we will provide financial support to assist NCB to maintain in healthy financial condition.

Inflation

We do not believe that inflation in Taiwan has had a material impact on our results of operations in 2022, 2023 and 2024.

Recent Accounting Pronouncements

Major differences between IFRSs and Taiwan IFRSs

While we have adopted Taiwan IFRSs for ROC reporting purposes, we adopt IFRSs for certain filings with the SEC, including our annual reports on Form 20-F for the year ended December 31, 2013 and thereafter.

Taiwan IFRSs differs from IFRSs in certain significant respects, including to the extent that any new or amended standards or interpretations applicable under IFRSs may not be timely endorsed by the FSC. Therefore, these pronouncements will not be applicable to Taiwan IFRSs until endorsed by the FSC. Some of the major differences between IFRSs and Taiwan IFRSs that are relevant to us as of the date of this annual report are set forth below.

• the “income taxes on unappropriated earnings” should be recognized at the year of earnings under IFRSs, while it should be recognized at the year of distribution under Taiwan IFRSs.

• prior to incorporation, according to the laws and regulations applicable to state-owned enterprises in Taiwan, we recorded revenues from fixed-line service at the time the connection service was performed or the prepaid card was sold. Upon incorporation, net assets greater than capital stock was credited as additional paid-in capital. Part of our additional paid-in capital was from unearned revenues from fixed-line services as of that date. Under IFRSs, following the revenues recognition guidance, the above service revenues should be treated as deferred income and recognized over the time when the service is continuously provided or as consumed. Therefore, upon our first adoption of IFRSs, we should retrospectively decrease additional paid-in capital while increasing unappropriated earnings on the transition date of January 1, 2012. There is no difference in recognition of unearned revenues or deferred income between IFRSs and Taiwan IFRSs. However, according to the guidance released by the TWSE in March 2012, which is a part of Taiwan IFRSs, the additional paid-in capital under ROC

GAAP that is not specifically promulgated under Taiwan IFRSs should not be adjusted on the transition date of January 1, 2012. Therefore, we retain such additional paid-in capital under Taiwan IFRSs.

It is difficult for us to determine the differences between Taiwan IFRSs and IFRSs on our financial statements as any new or amended standards or interpretations applicable under IFRSs may not be timely endorsed by the FSC.

Other recent accounting pronouncements under IFRSs

For a summary of new standards, amendments and interpretations issued under IFRSs but not effective for 2024 and which have not been adopted early by us, see Note 5 to our consolidated financial statements included elsewhere in this annual report.

C. Research and Development, Patents and Licenses

Our priorities for research and development in 2024 included “intelligent Information and Communication Technology (ICT) applications,” “cloud-network integration and management,” and “ESG green energy and energy-saving” technologies. We aim to develop diversified AI-powered solutions that drive the growth of emerging business initiatives and ensure our sustainable development. Key research and development achievements are described as follows:

Intelligent Information and Communication Technology (ICT) applications

• Artificial intelligence: speech recognition and generation, text analysis and generation, fake speech detection, human activity recognition, facial recognition, image analysis, customer sentiment analysis, AI voice assistants for corporations, customer service chatbots, etc.

• AIoT: vehicle-to-everything (V2X), traffic simulation and digital twins, traffic enforcement systems, smart inspection of unmanned vehicles, automated port clearance, train safety monitoring, etc.

• Smart life: Metaverse platform, low-latency audio and video cloud rendering service, hologram performances, video chat recommendation robots, AI-powered fraud call prevention, end-to-end encrypted communication, home security, telemedicine and smart care, etc.

• Cybersecurity: fast identity online (FIDO), mobile authentication, blockchain and smart contracts, zero trust architecture, 5G network security, cybersecurity for vehicle-to-everything (V2X), post-quantum cryptography (PQC), etc.

Cloud-network integration and management technologies

• Network communication: open all-photonic network (Open APN), quantum key distribution (QKD) for secure communication, Wi-Fi 6/7 wireless network, 5G/B5G SA network, 5G edge computing, 5G private network, low-earth orbit (LEO) satellite network, fixed voice with satellite backup, network APIs, ultra-high-speed access network, etc.

• Network operation and management: autonomous management for mobile and fixed networks, network digital twins, intelligent network operation and maintenance assistants, telecom cloud management, and home network management, etc.

• Cloud computing: multi-cloud management platforms, hybrid cloud services and management, cloud-native management, edge computing platforms, cross-cloud container management, cross-cloud virtual machine migration, cross-border cloud encrypted data splitting and backup mechanism, etc.

ESG green energy and energy-saving technologies

• Technology-Driven Carbon Reduction: Dynamic energy saving for base stations, consolidation and renewal of fixed network equipment, energy consumption and carbon emission analysis for cloud data centers, energy-saving management for immersion cooling cabinets, centralized energy monitoring and anomaly detection, multi-mode air conditioning for environmental energy efficiency, etc.

• Green Energy Applications: Management of charging station services, drone-based precision inspection of solar photovoltaic modules, carbon footprint analysis through cellular vehicle probe (CVP), verification and auditing of transportation carbon footprint, and power management of integrated green energy storage systems, etc.

In 2024, we applied for a total of 172 patents and obtained 170 patents. We also received 30 major awards in Taiwan and internationally.

D. Trend Information

See “—Overview” for a discussion of the most significant recent trends that have had, and in the future may have, a material impact on our results of operations, financial condition and capital expenditures. In addition, see discussions included in this Item for a discussion of known trends, uncertainties, demands, commitments or events that we believe are reasonably likely to have a material effect on our net operating revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition.

E. Critical Accounting Estimates

Information about critical accounting judgments and key sources of estimation uncertainty and assumption, please refer to Note 4 to our consolidated financial statements included in this annual report for details.

ITEM 6. DIRE CTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Senior Management

Our Articles of Incorporation provide for a board of directors consisting of seven to fifteen directors bestowed with a three-year tenure. The following table sets forth the name, age and position of each of our directors and such person’s position as of February 28, 2025. There is no family relationship among any of these persons. These directors have terms until May 26, 2025. Pursuant to the ROC Company Act, a person may serve as our director in his or her personal capacity or as the representative of another legal entity. A director who serves as the representative of a legal entity may be removed or replaced at any time at the discretion of that legal entity, and the replacement director may serve the remainder of the term of office of the replaced director. All of our non-independent directors are representatives of the MOTC.

Name	Age	Position
Chih-Cheng Chien	65	Chairman, Chief Executive Officer and Director
Rong-Shy Lin	60	President and Director
Sheng-Yuan Wu	64	Director
Ching-Hwi Lee	61	Director
Shin-Yi Chang	65	Director
Sin-Horng Chen	71	Director
Lee-Feng Chien	62	Director
Shih-Hung Tseng	64	Director
Su-ming Lin	69	Independent Director
Chia-Chung Chen	66	Independent Director
Yu-Fen Lin	54	Independent Director
Chung-Chin Lu	66	Independent Director
Yi-Chin Tu	49	Independent Director

Chih-Cheng Chien is the Chairman, Chief Executive Officer and director of our company. Dr. Chien assumed the role of our Chairman and Chief Executive Officer on September 30, 2024. He served as our Senior Executive Vice President since July 2023 and the President of our Network Technology Group since January 2022. He was a director of SENAO International Co., Ltd. from 2021 to 2023 and a director of Senao Networks Inc. from 2022 to 2024. Dr. Chien was the President of our Mobile Business Group from January 2021 to January 2022. Prior to that, Dr. Chien served as the President of our Telecommunication Training Institute from June 2020 to December 2020 and the Executive Advisor of our Chairman Office Overseas New Business from November 2018 to June 2020. Dr. Chien holds a Ph.D. degree in Electronic Engineering from National Taiwan Institute of Industrial Technology.

Rong-Shy Lin is the President and director of our company. Before assuming the role of President in September 2024, Dr. Lin was our Senior Executive Vice President, Chief Business Officer, or CBO, and Chief Information Security Officer, or CISO, from January 2024 to September 2024 and our Senior Executive Vice President, Chief Technology Officer, or CTO, and President of Chunghwa Telecommunication Laboratories from June 2020 to December 2023. He served as the Chairman of SENAO International Co., Ltd. from June 2022 to May 2023 and from August 2023 to October 2024. He also served as a director of CHT Security Co., Ltd. from June 2022 to October 2024. Prior to that, Dr. Lin was the President of our Data Communications Business Group from November 2018 to June 2020 and was the President of Telecommunication Laboratories from November 2017 to December 2023. Dr. Lin holds a Ph.D. degree in Computer Science from National Chiao Tung University.

Sheng-Yuan Wu is a director of our company. Mr. Wu is currently the Political Deputy Minister of the MOTC. Prior to that, Mr. Wu had been the Director-General of the Railway Bureau of the MOTC from August 2021 to September 2023. Mr. Wu specializes in ESG, risk management, transportation planning and management, as well as railway, civil and hydraulic engineering, and he holds a master’s degree in Hydraulic and Ocean Engineering from National Cheng Kung University.

Ching-Hwi Lee is a director of our company. Ms. Lee is currently the Deputy Minister of the Ministry of Culture, or MOC. Prior to that, Ms. Lee had been the Deputy Director of the National Palace Museum in Taiwan from May 2016 to March 2019. Ms. Lee specializes in cultural administration, cross-boundary governance, performing arts, as well as audiovisual and music-related creative content industry, and she holds a bachelor’s degree in History from National Taiwan Normal University.

Shin-Yi Chang is a director of our company. Mr. Chang is currently the director of the Accounting Department of the MOTC. Mr. Chang had been a lecturer on risk and crisis management at the National Academy of Civil Service of the Examination Yuan from August 2014 to November 2019 and the Executive Secretary of the Internal Control Project Promotion Team of the Ministry of Economic Affairs from February 2011 to January 2017. Mr. Chang specializes in accounting as well as risk and crisis management, and he holds a master’s degree in Business Administration from National Taiwan University.

Sin-Horng Chen is a director of our company. Dr. Chen is currently a lifetime chair professor in the Institute of Electrical and Computer Engineering, National Yang Ming Chiao Tung University. Prior to that, Dr. Chen had been the acting President and Vice President of National Chiao Tung University from August 2019 to January 2021 and from February 2015 to July 2019, respectively. Dr. Chen also serves as an independent director of Chinesegamer International Corporation since July 2021. Dr. Chen specializes in advanced technology development and application system development in the areas of information and communication technology, as well as speech signal processing. He holds a Ph.D. degree in Electrical Engineering from Texas Tech University.

Lee-Feng Chien is a director of our company. Dr. Chien is currently the independent director of Appier Group Inc., Airoha Technology Corp., Uni-President Enterprises Corp., and KKDay Holdings Co., Ltd. Japan. Prior to that, Dr. Chien had been the Managing Director of Google Taiwan from March 2006 to January 2010 and professor in the Department of Information Management at National Taiwan University from March 2006 to January 2020. Dr. Chien specializes in software and artificial intelligence technology, Chinese search technology and internet services, and he holds a Ph.D. degree in Computer Science and Information Engineering from National Taiwan University.

Shih-Hung Tseng is the labor director of our company. Mr. Tseng is currently the Vice President of the Enterprise Union at Chunghwa Telecom’s Tainan Branch and he also serves as an engineer of the Tainan Branch. Mr. Tseng has worked for the Company since June 1979. Mr. Tseng specializes in ICT, and he received an associate degree in Electronic Engineering from Kun Shan Institute of Technology.

Su-ming Lin is an independent director of our company. Dr. Lin is currently an adjunct professor in the Department of Accounting of National Taiwan University. He also serves as the independent director of Taiwan Fertilizer Co., Ltd. since July 2021 and the independent director of AP Biosciences Inc., and Sunny Friend Environmental Technology Co., Ltd. since 2023. Dr. Lin is a Certified Public Accountant of the ROC. and specializes in accounting, finance, tax laws, as well as international taxation. He has participated in Taiwan’s tax reforms and served as the board member and member of the Risk Management Committee and Audit Committee in the airlines and insurance sectors for many years. Dr. Lin holds a Ph.D. degree in Accounting from Arizona State University.

Chia-Chung Chen is an independent director of our company. Mr. Chen is currently an independent director of MOSPEC Semiconductor Corp. He also serves as an independent director of Dimerco Data System Corporation since June 2020 and a director of SysJust Co., Ltd. since 2023. Prior to that, Mr. Chen served as the chief executive officer in E.SUN Bank (China) Co., Ltd. from March 2015 to April 2019 and as the Chairman in E.SUN Securities Co., Ltd. from June 2009 to January 2012. During his capacity working as the Deputy President of E. Sun Securities, Mr. Chen was responsible for overseeing corporate risk management. Mr. Chen is also our risk management expert with almost 30 years of experience in the banking and financial industry. Mr. Chen specializes in digital finance, strategic planning, operational management, risk management and corporate governance, and he holds a master’s degree in Agricultural Economics from National Taiwan University.

Yu-Fen Lin is an independent director of our company. Ms. Lin is the co-founder and managing partner of Lex & Honor Law offices. She is a transactional attorney with a board practice in business planning, corporate compliance and finance transactions. Ms. Lin also serves as an independent director of Bank SinoPac Co., Ltd. since August 2017, China Airlines Ltd. since May 2024 and Chief Telecom Co. since August 2024, and a supervisor of Infinity Communication Tech. Inc. since 2023. Ms. Lin specializes in particular legal areas, including international investment, corporate investment, financial, banking and electronic payment, risk management, as well as public law, and she holds a double degree of L.L.B. and B.A. from National Taiwan University.

Chung-Chin Lu is an independent director of our company. Dr. Lu has been a professor in the Department of Electrical Engineering, National Tsing Hua University since August 2000. Dr. Lu is currently a director of National Science and Technology Center for Disaster Reduction since July 2020. Dr. Lu has been teaching and researching in the areas of communication systems, networks, and information theory for more than 35 years and specializes in digital communications, error-correcting codes, systems bioinformatics, quantum computation, as well as machine learning. Dr. Lu holds a Ph.D. degree in Electrical Engineering from the University of Southern California.

Yi-Chin Tu is an independent director of our company. Mr. Tu is the founder of Taiwan AI Labs and PTT, a non-profit open-source organization of the BBS club, as well as the Chairman of the Artificial Intelligence Foundation. Mr. Tu also serves as an independent director of PChome Online Inc. since 2023. Prior to that, Mr. Tu joined Microsoft in 2006 and served as the Principal Development Manager in the Microsoft AI and Research Group. He had also been the Chief R&D Officer, leading the AI services development in the Asia Pacific region. Mr. Tu specializes in AI data governance, software platform R&D and digital talent incubation, and he holds a master’s degree in Computer Science and Information Engineering from National Taiwan University.

The following person served as director on our board during 2024 but was no longer serving with us due to either replacement or resignation.

Shui-Yi Kuo was the Chairman, Chief Executive Officer and director of our company. Mr. Kuo assumed the role of our Chairman and Chief Executive Officer on May 5, 2023. Prior to that, Mr. Kuo served as the President and director of our company since May 2019 and served as our Senior Executive Vice President and Chief Financial Officer from August 2017 to September 2020 and the Senior Executive Vice President of our Investment Department from March 2017 to August 2017. From November 2013 to November 2014, Mr. Kuo served as the President of Light Era Development Co., Ltd., our subsidiary. From March 2008 to November 2013, Mr. Kuo

served as the Vice President of our Accounting Department. Mr. Kuo is a Certified Public Accountant of the ROC and specializes in accounting and finance, and he holds a master’s degree in Accounting from National Chengchi University.

Chau-Young Lin was the President and director of our company. Before assuming the role of President in July 2023, Dr. Lin held the position of President of our Information Technology Group since April 2022. Prior to that, Dr. Lin had been the President of our Data Communications Business Group from June 2020 to April 2022 and the Senior Executive Vice President of our company from August 2019 to June 2020. He was also the President of our Southern Taiwan Business Group from March 2018 to August 2019. Dr. Lin specializes in cloud services, cybersecurity, AI, data governance, large scale information system, project management, system engineering, and he holds a Ph.D. degree in Electronic Engineering from National Taiwan University of Science and Technology.

Hsiang-Ling Hu was a director of our company. Mr. Hu was the Political Deputy Minister of the MOTC. Prior to that, Mr. Hu had been the Director General of the Railway Bureau of the MOTC from June 2018 to April 2021 and the Director General of the Bureau of High Speed Rail of MOTC from September 2014 to June 2018. Mr. Hu specializes in transportation planning and management, transportation systems analysis, Railway Act, as well as the operations, administration and supervision of railway tracks, and he holds a bachelor’s degree in Transportation and Management from National Chiao Tung University.

Hsiu-Chuan Tsai was a director of our company. Dr. Tsai was the Professor and Chairperson of the Department of Political Science, Soochow University from August 2021 to July 2024 and the Political Deputy Minister and Spokesman of the Ministry of Civil Service from February 2018 to March 2019. Dr. Tsai specializes in government governance, performance management, public human resources management, government and policy marketing, risk management, anti-corruption and transparency governance, and she holds a Ph.D. degree in Public Administration from National Chengchi University.

The following table sets forth the name, age and position of each of our executive officers and such person’s position as of February 28, 2025. There is no family relationship among any of these persons.

Name	Age	Position
Wen-Hsin Hsu	48	Senior Executive Vice President and Chief Financial Officer
Chih-Hsiung Huang	63	Senior Executive Vice President
Wei-Kuo Hong	64	Senior Executive Vice President and President of Telecommunication Training Institute
Wen-Chiyh Lin	58	Senior Executive Vice President
Hsueh-Hai Hu	63	President of Consumer Business Group
Pen-Yuang Chang	63	President of Enterprise Business Group
Chin-Chou Chen	61	President of International Business Group
Hey-Chyi Young	59	President of Information Technology Group
Tian-Tsair Su	62	President of Telecommunication Laboratories
Chung-Yung Chia	61	President of Network Technology Group

Wen-Hsin Hsu has served as our Senior Executive Vice President and Chief Financial Officer since September 2024. She has been a professor at the Department of Accounting at National Taiwan University since 2006. She has held independent directorship at Unitech Printed Circuit Board Corp., Ltd. since June 2018, United Microelectronics Co., Ltd. since June 2021 and ANT Precision Industry Co., Ltd. since August 2021. Dr. Hsu holds a Ph.D. degree in Accounting & Financial Management from Lancaster University.

Chih-Hsiung Huang has been our Senior Executive Vice President and Chief Technology Officer since January 2024. He served as the President of our Network Technology Group from September 2024 to November 2024 and Vice President of our Telecommunication Laboratories from July 2023 to January 2024. Prior to that, Dr. Huang served as the Vice President of our Corporate Planning Department from November 2020 to July 2023 and the Assistant Vice President from June 2017 to November 2020. Dr. Huang holds a Ph.D. degree in Electrical Engineering from National Central University.

Wei-Kuo Hong has been our Senior Executive Vice President since November 2024, and the President of Telecommunication Training Institute since November 2018. He served as the Senior Executive Vice President from June 2020 to July 2023. Prior to that, Dr. Hong served as the Vice President of our Telecommunication Training Institute from May 2017 to November 2018 and the Assistant Vice President of our Investment Department from May 2012 to May 2017. Dr. Hong holds a Ph.D. degree in Industrial Administration from National Tsing Hua University.

Wen-Chiyh Lin has been our Senior Executive Vice President since November 2024 and the Vice President of our Business Management Department since December 2020. He is also a director of SENAO International Co., Ltd. since 2023. He served as the Vice President of our Northern Taiwan Business Group from January 2019 to December 2020. Prior to that, he served as the Vice President of our Marketing Department from March 2018 to January 2019. Mr. Lin holds a master’s degree in Automatic Control Engineering from Feng Chia University.

Hsueh-Hai Hu has been the President of our Consumer Business Group since July 2023. He is also a director of SENAO International Co., Ltd. since 2023. He was the Vice President of our Consumer Business Group from January 2022 to July 2023. Prior to that, he served as the Vice President of our Mobile Business Group from February 2017 to January 2022 and the President of New Taipei Branch from April 2015 to February 2017. Mr. Hu holds a master’s degree in Transportation and Communication Management from National Cheng Kung University.

Pen-Yuang Chang has been the President of our Enterprise Business Group since July 2023. He is also a director of Chief Telecom Inc. and Kingwaytek Technology Corporation Limited since 2024, and a director of International Integrated Systems, Inc. since 2023. Dr. Chang was the President of Taipei Branch from January 2023 to July 2023. Prior to that, Dr. Chang served as the President of New Taipei Branch from May 2020 to January 2023. Dr. Chang holds Ph.D. degree in Computer Science from National Chiao Tung University.

Chin-Chou Chen has been the President of International Business Group since June 2023. Dr. Chen served as the Vice President of International Business Group from December 2020 to June 2023 and the Deputy Principal Engineer of International Business Group from December 2017 to December 2020. Dr. Chen holds Ph.D. degree in Electrical Engineering from National Taiwan University.

Hey-Chyi Young has been the President of our Information Technology Group since August 2023. Ms. Young is also a director of International Integrated Systems, Inc. since 2023. She was the Vice President of our Telecommunication Laboratories from November 2017 to August 2023. Prior to that, Ms. Young served as the Managing Director of our Network Management Laboratory from January 2013 to November 2017. Ms. Young holds a master’s degree in Electrical and Computer Engineering from The University of Texas at Austin.

Tian-Tsair Su has been the President of our Telecommunication Laboratories since July 2023. Mr. Su is also a director of Senao Networks Inc. since 2022. He served as the President of Consumer Business Group from January 2022 to July 2023. Mr. Su was the Chairman of Honghwa International Co., Ltd. from August 2019 to January 2022. Prior to that, Mr. Su served as the Senior Executive Vice President of our Administration Department from November 2017 to August 2019. Mr. Su holds a master’s degree in Electrical Engineering from National Cheng Kung University.

Chung-Yung Chia has been the President of our Network Technology Group since November 2024. He is also a director of Senao Networks Inc. since 2024. He served as the Vice President of our Network Technology Group from January 2022 to November 2024. Prior to that, Dr. Chia served as the Vice President of our Mobile Business Group from July 2021 to January 2022 and the Assistant Vice President from August 2019 to July 2021. Dr. Chia holds a Ph.D. degree in Institute of Computer Science and Engineering from National Chiao Tung University.

The following person served as our executive officer in 2024 before the conclusion of secondment or retirement.

Yu-Shen Chen was the Senior Executive Vice President and Chief Financial Officer from September 2020 to September, 2024. He has been a professor of Accounting at National Chengchi University since August 2015. He is also a director of Taiwania Capital Buffalo Fund Co., Ltd. since 2018, and he has been the supervisor of Taiwan Corporate Governance Association since 2020. Dr. Chen holds a Ph.D. degree in Accounting from the State University of New York at Buffalo.

B. Compensation

The board of directors has set up a compensation committee to be responsible for drafting, approving and periodically reviewing the compensation proposals for the directors and managers. See “C. Board Practices” for a discussion of our compensation committee.

• the chairman of our board of directors may receive a fixed monthly income of NT$367,776 and a non-fixed income, including but not limited to performance-related bonuses or other rewards, which may not exceed his fixed income. The chairman will not receive any additional compensation for his role as a director;

• our president may receive a fixed monthly income of NT$359,603 and a non-fixed income, including but not limited to performance-related bonuses or other rewards, which may not exceed his fixed income. The president will not receive any additional compensation for his role as a director;

• independent directors who concurrently serve in military, public office or hold teaching or administrative post may receive a fixed monthly compensation of NT$8,000, and those who do not concurrently serve in military or public office or hold teaching or administrative post may receive a monthly compensation of NT$60,000; and

• directors who serve in military, public office or hold teaching or administrative post may receive a monthly compensation of NT$8,500, and those directors who do not serve in military and public office or hold teaching or administrative post may receive a monthly compensation of NT$30,000.

Our Chairman and Chief Executive Officer, Dr. Chih-Cheng Chien, and our President, Dr. Rong-Shy Lin, and our labor director Mr. Shih-Hung Tseng, to our board of directors, respectively, do not receive monthly compensation for acting as our directors because they receive salaries as employees.

The aggregate amount of compensation to our directors and executive officers in 2022, 2023 and 2024 was NT$125,252,613, NT$155,144,230 and NT$163,757,680 (US$4,994,134.8), respectively. The aggregate amount of compensation in 2024 includes a NT$84,204,004 (US$2,567,978.2) salary payment for directors and executive officers, a NT$32,329,882 (US$985,967.7) pension payment for executive officers, a NT$40,440,113 (US$1,233,306.3) bonus accrued for directors and a NT$6,783,681 (US$206,882.6) bonus accrued for executive officers. See “Item 10. Additional Information—B. Memorandum and Articles of Association—Dividends and Distributions” for a discussion of the distribution of bonuses and earnings.

All of our non-independent directors are legal representatives of the MOTC. The bonus in the amount of NT$39,796,708 (US$1,213,684.3) was paid directly to the MOTC in 2024 because such earnings distributions are not the individual income of these directors. Independent directors will not receive any earnings distributions.

Compensation Paid to Directors

Pursuant to ROC disclosure rules, we have disclosed the compensation of our directors for the fiscal year ended December 31, 2024 as follows, excluding bonus accrued for legal entity the MOTC:

Directors	Total Compensation (in millions)
	NT$	US$
Chih-Cheng Chien (1)	6.2	0.2
Shui-Yi Kuo (2)	23.0	0.7
Rong-Shy Lin (3)	7.1	0.2
Chau-Young Lin (4)	22.2	0.7
Shin-Yi Chang	0.1	—
Sin-Horng Chen	0.3	—
Sheng-Yuan Wu (5)	0.0	—
Hsiang-Ling Hu (6)	0.0	—
Ching-Hwi Lee	0.1	—
Lee-Feng Chien (5)	0.1	—
Hsiu-Chuan Tsai (7)	0.3	—
Shih-Hung Tseng (8)	1.9	0.1
Yu-Fen Lin	1.0	—
Chung-Chin Lu	0.9	—
Yi-Chin Tu	0.9	—
Chia-Chung Chen	1.0	—
Su-ming Lin	0.9	—
Total	65.9	2.0

(1) Including salary for serving as our Senior Executive Vice President and President of the Network Technology Group prior to September 30, 2024, and salary for serving as our Chief Executive Officer after that date.

(2) Mr. Kuo was replaced on September 30, 2024, and his salary included salary for serving as our Chief Executive Officer before that date.

(3) As salary for serving as our Senior Executive Vice President from January 1, 2024 to September 29, 2024 and as our President from September 30, 2024 to December 31, 2024.

(4) Mr. Lin was replaced on September 30, 2024, and his salary included salary for serving as our President before that date.

(5) Both Mr. Wu and Mr. Chien succeeded on September 24, 2024, and their salaries included serving as our directors after that date.

(6) Mr. Hu was no longer serving with us after May 20, 2024, and his salary included serving as our director before that date.

(7) Dr. Tsai was no longer serving with us after September 1, 2024, and her salary included serving as our director before that date.

(8) As salary for serving as our employee.

Compensation Paid to Senior Management

Pursuant to ROC disclosure rules, we have disclosed the compensation range of our senior management for the fiscal year ended December 31, 2024 as follows, excluding bonus accrued for legal entity the MOTC:

Total Compensation	Senior Management
Below NT$1,000,000	None
NT$1,000,000 (inclusive) to NT$2,000,000 (exclusive)	Wen-Hsin Hsu
NT$2,000,000 (inclusive) to NT$3,500,000 (exclusive)	None
NT$3,500,000 (inclusive) to NT$4,999,999 (exclusive)	Wen-Chiyh Lin, Chih-Hsiung Huang, Chung-Yung Chia
NT$5,000,000 (inclusive) to NT$9,999,999 (exclusive)	Rong-Shy Lin, Wei-Kuo Hong, Yu-Shen Chen, Hsueh-Hai Hu, Pen-Yuang Chang, Chin-Chou Chen, Hey-Chyi Young, Tian-Tsair Su
NT$10,000,000 (inclusive) to NT$14,999,999 (exclusive)	None
NT$15,000,000 (inclusive) to NT$30,000,000 (exclusive)	Chau-Young Lin
NT$30,000,000 (inclusive) to NT$50,000,000 (exclusive)	None
NT$50,000,000 (inclusive) to NT$100,000,000 (exclusive)	None
Above NT$100,000,000	None
Total	13 people

The compensation committee shall periodically review and assess compensation packages for the board of directors and executive management, which are then approved by the board of directors.

The compensation of the senior executives is linked to various KPI assessments, such as corporate performance, subordinate unit performance and personal performance, along with ESG outputs as an additional reference point for variable compensation.

We accrued NT$4,300,185 (US$131,143) pension expense for executive officers mentioned above in 2024. See “Item 5. Operating and Financial Review and Prospects—Overview—Personnel expenses” and Note 29 to our consolidated financial statements included elsewhere in this annual report for descriptions about our pension plans. We do not have any service contracts with any directors providing for any benefits upon termination of employment.

C. Board Practices

We currently have 13 directors, including five independent directors. With the exceptions of Mr. Sheng-Yuan Wu and Dr. Lee-Feng Chien, who assumed the directorship on September 24, 2024 as well as Dr. Chih-Cheng Chien and Dr. Rong-Shy Lin, who assumed the directorship on September 30, 2024, all other directors were elected on May 27, 2022. The term of all our directors is until May 26, 2025. Pursuant to the ROC Company Act, the directors may be removed from office at any time by a resolution adopted at a stockholders’ meeting. The chairman of our board of directors is elected by our directors. Our chairman presides at all meetings of our board of directors and also has the authority to act as our representative. We have not entered into any contract with any of our directors by which our directors are expected to receive benefits upon termination of their employment.

Our Articles of Incorporation provide for a board of directors consisting of seven to fifteen directors, one-fifth of whom shall be expert representatives. Pursuant to the ROC Company Act, the ROC Securities and Exchange Act and Article 12-1 of our Articles of Incorporation provide for the election of, starting from the fifth commencement of the board of directors, at least three independent directors out of the 7-to-15-member board. The term “independent director” may have a different meaning when used in Taiwan than in other jurisdictions. We have used a nominating process, with the stockholders choosing the directors, including independent directors from the list of nominees. With respect to certain material decisions to be made by our board of directors as specified in the ROC Securities and Exchange Act, the Business Mergers and Acquisitions Act and other relevant laws and regulations, including the adoption or amendment to our internal control system, material loans or guarantees, the issuance of equity-type securities, matters in which directors have personal interests, the appointment and discharge of auditors, approval of financial reports, the appointment and discharge of financial, accounting or internal auditing officers and other matters prescribed by the ROC FSC or other relevant competent authorities, the dissenting opinion or qualified opinion of an independent director is required to be noted in the minutes of the board of directors’ meeting and disclosed on the website maintained by the TWSE.

Our audit committee was established in September 2004 in accordance with the rules set forth in the NYSE Listed Company Manual, and was comprised of three independent directors. See “Item 16G. Corporate Governance—Audit Committee.” Starting from the date of the annual general meeting in June 2013, we have established a new audit committee that replaces our supervisors and our old audit committee in accordance with Paragraph 1, Article 14-4 of the ROC Securities and Exchange Act and our Articles of Incorporation, and as a result, we simultaneously comply with the relevant rules of the NYSE Listed Company Manual and the relevant rules and regulations in the ROC. Accordingly, our audit committee is currently composed of all independent directors, namely Su-ming Lin, Chia-Chung Chen, Yu-Fen Lin, Chung-Chin Lu and Yi-Chin Tu, to be the members of the audit committee.

Under the ROC Company Act, a person may serve as our director in his personal capacity or as the representative of another legal entity. A director who serves as the representative of a legal entity may be removed or replaced at any time at the discretion of that legal entity, and the replacement director may serve the remainder of the term of office of the replaced director. Except for our five independent directors, all of our directors are representatives of the MOTC.

The business address of our directors and executive officers is the same as our registered address.

Our audit committee approves and handles following items: (i) adoption or amendment of internal control system in accordance to Article 14-1 of the Securities and Exchange Act; (ii) assessment of the effectiveness of the internal control system; (iii) adoption or amendment of procedures for handling financial or business activities of a material nature, such as acquisition or disposal of assets, derivatives trading, loaning of funds to others, and endorsements or guarantees of others, pursuant to Article 36-1 of the Securities and Exchange Act; (iv) conflicts of interest on behalf of the directors; (v) material asset or derivatives transactions; (vi) material monetary loans, endorsements, or provisions of guarantee; (vii) the offering, issuance, or private placement of any equity-type securities; (viii) the hiring or dismissal of a CPA, or the compensation given thereto; (ix) the appointment or discharge of a financial, accounting, or internal auditing supervisor; (x) annual financial reports; (xi) the matters regulated by the Business Mergers and Acquisitions Act; (xii) the first to the third quarter financial reports; (xiii) communications and discussions with CPAs; (xiv) resolutions of potential differences of opinions between Company management and CPAs; (xv) discussing and reporting other financial information and required disclosures under the U.S. Securities Exchange Act between Company management and CPAs; (xvi) approving the CPA firm's annual audit and non-audit services; and (xvii) any other material matter so required by the Company or relevant authorities. Our board of directors has concluded that Su-ming Lin and Chia-Chung Chen are our audit committee financial experts.

Additionally, we have the sustainable development and strategy committee (renamed from the corporate strategy committee on August 9, 2023). Our sustainable development and strategy committee may comprise five to nine directors. Currently, there are nine directors on the committee. It is responsible for reviewing and advising on our: (i) mid- to long-term goals and strategies (including sustainable development); (ii) sustainable development policies and management approach establishment; (iii) major investments and mergers and acquisitions; (iv) a major reorganization of our company; (v) application or return of business license; (vi) annual operating plan and budget compilation and revision; (vii) capital increase or decrease; and (viii) other major strategic issues that may affect our development. Conclusions made by the sustainable development and strategy committee are considered at a subsequent board of directors meeting.

Article 14-6 of the ROC Securities and Exchange Act requires all listed companies to establish a compensation committee for directors, supervisors, and managers’ compensation, which includes salary, stock options and other rewards, as well as authorizes the FSC to enact a regulation on the authorities of the compensation committee and the qualifications of its members. Accordingly, our compensation committee is composed of three independent directors (Su-ming Lin, Chia-Chung Chen and Yu-Fen Lin) and is responsible for (i) stipulating and periodically reviewing the performance of the directors and managers, as well as the policy, system, standard, and structure of salary and compensation; and (ii) periodically reviewing and stipulating the salary and compensation of the directors and managers. The proposals of the compensation committee should be presented to the board of directors for discussion. See “Item 10. Additional Information—B. Memorandum and Articles of Association—Directors and Audit Committee.”

On August 9, 2023, our board of directors approved the establishment of the risk management committee to strengthen the functions of the board and the risk management mechanism. The committee is composed of three to seven directors. Currently, there are seven directors on the committee, with the majority being independent directors of the company. The responsibilities of the committee are as follows: (i) to review risk management policies, procedures and frameworks, and periodically review their applicability and effectiveness; (ii) to approve risk appetite (risk tolerance) and guide the resource allocation; (iii) to ensure that the risk management mechanism can adequately address the risks faced by the company and integrate them into routine operational processes; (iv) to determine the priority and levels of risk control and management; (v) to review the implementation of risk management, propose improvements recommendations, and report to the board of directors regularly (at least once a year); and (vi) to implement the board of directors’ risk management decisions. Conclusions made by the risk management committee will be considered at a subsequent board of directors meeting. Our risk management committee also engages with governance on information security and cybersecurity issues. See “Item 16K. Cybersecurity.”

In November 2003, the SEC approved changes to the NYSE’s listing standards related to the corporate governance practices of listed companies. Under these rules, listed foreign private issuers, like us, must disclose any significant ways in which their corporate governance practices differ from those followed by NYSE-listed non-foreign private issuers under the NYSE’s listing standards. See “Item 16G. Corporate Governance.” A copy of the

significant differences between our corporate governance practices and NYSE corporate governance rules applicable to non-foreign private issuers is also available on our website at http://www.cht.com.tw . The information contained on our website is not a part of this annual report.

D. Employees

As of December 31, 2024, we had 32,452 employees on a consolidated basis. Approximately 99% of our employees were based in the ROC. The following table is a breakdown of our employees from 2022 to 2024 on a consolidated basis.


Employees
Technical	16,534	16,756	16,778
Operations	13,630	13,665	13,695
Administrative	1,865	1,962	1,979
Total	32,029	32,383	32,452

The following table is a breakdown of our employees of Chunghwa Telecom Co., Ltd. from 2022 to 2024.


Employees
Technical	11,664	11,725	11,873
Operations	7,020	6,963	6,966
Administrative (1)	1,198	1,234	1,257
Total	19,882	19,922	20,096

(1) Included directors of Chunghwa Telecom Co., Ltd. in accordance with the ROC requirements.

As of December 31, 2024, 82.6% of our employees of Chunghwa Telecom Co., Ltd. had bachelor, master or doctoral degrees.

As of December 31, 2024, approximately 98.7% of our employees on a non-consolidated basis were members of our principal labor union. Our collective agreement sets forth work rules, grievance procedures and provides for union participation in performance evaluations and promotion decisions. Our union members also occupy a majority of the seats on our employee welfare and pension fund committees. We will continue to maintain a good relationship with our labor unions. We strive to have good communication with our employees and the labor unions by inviting representatives of our labor unions to attend various meetings related to the performance of our employees.

Pursuant to our Articles of Incorporation, our employees are entitled to 2% to 5% of the distributable earnings as employee compensation. Our practice in the past to determine the amount of the compensation has been based on the operating results. In the third quarter of 2024, we distributed compensation to our employees of NT$1.5 billion (US$46.4 million).

E. Share Ownership

As of February 28, 2025, our directors and executive officers personally held an aggregate of 193,990 shares of our common shares, representing around 0.003% of our outstanding common shares. The following table sets forth information with respect to the beneficial ownership of our common shares as of February 28, 2025 by each of our directors and executive officers.

Name		%
Chih-Cheng Chien	19,600	*
Rong-Shy Lin	40,361	*
Sheng-Yuan Wu	—	—
Ching-Hwi Lee	—	—
Shin-Yi Chang	—	—
Sin-Horng Chen	15,729	*
Lee-Feng Chien	—	—
Shih-Hung Tseng	2,245	*
Su-ming Lin	—	—
Chia-Chung Chen	—	—
Yu-Fen Lin	—	—
Chung-Chin Lu	—	—
Yi-Chin Tu	—	—
Wen-Hsin Hsu	—	—
Chih-Hsiung Huang	3,612	*
Wei-Kuo Hong	—	—
Wen-Chiyh Lin	—	—
Hsueh-Hai Hu	24,120	*
Pen-Yuang Chang	—	—
Chin-Chou Chen	6,304	*
Hey-Chyi Young	49,678	*
Tian-Tsair Su	32,341	*
Chung-Yung Chia	—	—

Stockholder beneficially owns less than 1.0% of our outstanding common shares.

Employee Stock Subscription Program

Under our Articles of Incorporation, we must reserve up to 10% to 15% of any new shares for subscription by our employees whenever we issue new shares for cash, unless otherwise approved by the central competent authority.

In 2017, 2018 and 2020, our consolidated subsidiary, CHIEF, which has been a public company since November 17, 2015, granted stock options to its employees entitling them to purchase common stock of CHIEF. As of December 31, 2022, 2023 and 2024, participants in CHIEF’s stock incentive plan had outstanding stock options to purchase 0.1 million, 0.1 million and 7 thousand common shares of CHIEF, respectively.

In 2019 and 2021, CHTSC, another consolidated subsidiary of ours, granted stock options to its employees to purchase common stock of CHTSC. As of December 31, 2022, 2023 and 2024, participants in CHTSC’s incentive plan had outstanding stock options to purchase 3.4 million, 1.6 million and 0.7 million common shares of CHTSC, respectively.

In 2021, 2022 and 2023, our consolidated subsidiary, CLPT, granted stock options to its employees entitling them to purchase common stock of CLPT. As of December 31, 2022, 2023 and 2024, participants in CLPT’s stock incentive plan had outstanding stock options to purchase 1.0 million, 1.6 million and 1.0 million common shares of CLPT, respectively.

See Note 35 to our consolidated financial statements, included elsewhere in this annual report, for additional details regarding share-based payment arrangements of CHIEF, CHTSC and CLPT.

F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation

Not applicable.

ITEM 7. MAJOR STOCKHO LDERS AND RELATED PARTY TRANSACTIONS

A. Major Stockholders

The following table sets forth information known to us with respect to the beneficial ownership of our shares (i) as of February 28, 2025, the most recent practicable date and (ii) as of certain book closure dates in each of the preceding three years, for the stockholders known by us to own at least 5.0% of our outstanding common shares. Beneficial ownership is determined in accordance with the SEC’s rules.

Name	As of March 31, 2022 — number %	number	%	number	%		As of February 28, 2025 — number %
The ROC government (1)(2)	3,301,701,984	42.56	3,320,526,730	42.80	3,321,563,943	42.82	3,147,298,365	40.57
The MOTC	2,737,718,976	35.29	2,737,718,976	35.29	2,737,718,976	35.29	2,737,718,976	35.29
Shin Kong Life Insurance Co., Ltd (2)	493,359,184	6.36	428,647,184	5.53	383,811,184	4.95	358,083,184	4.62

(1) Includes shares held through the MOTC and other government-controlled entities.

(2) Information as of August 27, 2021, July 3, 2022, July 2, 2023 and July 8, 2024, the latest book closure date, which were the most recent practicable dates for us to obtain complete ownership information.

As of February 28, 2025, 28 record holders held 17,680,173 ADSs (each representing ten common shares), which represents approximately 2.3% of our total outstanding common shares. Because many of these ADSs were held by brokers or other nominees, we cannot ascertain the exact number of beneficial shareholders with addresses in the U.S.

None of our shareholders has different voting rights from other shareholders. See “Item 10. Additional Information—B. Memorandum and Articles of Association—Voting Rights.” We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.

B. Related Party Transactions

We have not extended any loans or credit to any of our directors or executive officers, and we have not provided guarantees for borrowings by any of these persons. We have not entered into any fee-paying contracts with any of these persons for them to provide services not within his or her capacity as a director or executive officer of our company, except that three of our directors who are also our employees receive salaries from our company in their capacity as our employees.

Please refer to “Item 4. Information on the Company—A. History and Development of the Company” for a discussion of our alliances, acquisitions and investments. Please refer to Notes 3, 15, 16 and 40 to our consolidated financial statements included elsewhere in this annual report for descriptions of Chunghwa’s subsidiaries, investments accounted for using equity method, and related party transactions.

On April 1, 2007, Chunghwa entered into an agreement with SENAO making SENAO the exclusive distributor of mobile handsets to Chunghwa’s retail outlets. Under the terms of the agreement, SENAO also provides mobile handset sales services in Chunghwa’s retail outlets, exclusively sells Chunghwa’s SIM cards in SENAO’s own retail stores, and gets commission, subsidies of handset sold and warranties from Chunghwa. For the year ended December 31, 2024, SENAO received NT$8.7 billion (US$0.3 billion) from Chunghwa. Chunghwa also sells mobile handsets to SENAO. For the year ended December 31, 2024, Chunghwa sold mobile handsets to SENAO, which amounted to NT$4.6 billion (US$0.1 billion).

Honghwa contracted with Chunghwa to provide on-site sales services in Chunghwa’s retail stores and on-site equipment installation services to Chunghwa’s customers. Chunghwa paid Honghwa approximately NT$7.5 billion (US$0.2 billion) in 2024 for these services.

Chunghwa acquired network equipment and related supplies from Chunghwa System Integration for approximately NT$1.5 billion (US$0.1 billion) in 2024.

Chunghwa paid Taiwan International Standard Electronics approximately NT$0.8 billion (US$25.1 million) in 2024 for the purchase of telecommunications exchange facilities and related supplies as well as the maintenance expenses.

Terms and conditions 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 and conditions were determined in accordance with mutual agreements.

C. Interests of Experts and Counsel

Not applicable.

ITEM 8. FINANCI AL INFORMATION

A. Consolidated Statements and Other Financial Information

See Item 18 for a list of all consolidated financial statements filed as part of this annual report on Form 20-F.

We are not currently involved in material litigation or other proceedings that may have or have had in the recent past, significant effects on our financial position or profitability. See “Item 4. Information on the Company—B. Business Overview—Legal Proceedings.”

For our policy on dividend distributions, see “Item 10. Additional Information—B. Memorandum and Articles of Association—Dividends and Distributions.” The following table sets forth the dividends declared on each of our common shares and in the aggregate for each of the years from 2020 to 2024. All of these dividends were paid, in the fiscal year following the period with respect to which the dividends relate.

NT$	NT$ in billions
Year ended December 31, 2020	4.3060	33.4
Year ended December 31, 2021	4.6080	35.7
Year ended December 31, 2022	4.7020	36.5
Year ended December 31, 2023	4.7580	36.9
Year ended December 31, 2024 (2)	5.0000	38.8

(1) Cash dividend unless otherwise indicated.

(2) Dividends for 2024, which are calculated based on Taiwan IFRSs, were approved by the board of directors in February 2025 and to be declared at our annual general stockholders’ meeting scheduled on May 29, 2025. Our payout ratio was 104.21% in 2024.

We commit to maximizing stockholder value and intend to maintain a sustainable dividend policy, subject to a number of commercial factors, including the interests of our stockholders, cash requirements for future capital expenditures and investments, as well as relevant industry and market practice. The amount of our net income determined for purposes of calculating our annual dividend payout will be calculated based on Taiwan IFRSs, which may differ from the amount of our net income determined in accordance with IFRSs.

B. Significant Changes

Other than as disclosed elsewhere in this annual report, we have not experienced any significant changes since the date of the annual consolidated financial statements included in this annual report.

ITEM 9. THE OFF ER AND LISTING

A. Offer and Listing Details

Market Price Information for Our Common Shares

Our common shares have been listed on the TWSE under the number “2412” since October 27, 2000. There is no public market outside Taiwan for our common shares. The closing price for our common shares on the TWSE on April 2, 2025 was NT$130.0 per share.

Market Price Information for Our American Depositary Shares

Our ADSs have been listed on the NYSE under the symbol “CHT” since July 17, 2003. The outstanding ADSs are identified by the CUSIP number 17133Q502. The closing price for our ADSs on the NYSE on April 2, 2025 was US$39.27 per ADS. Each of our ADSs represents the right to receive ten shares.

As of April 2, 2025, a total of 17,755,233 ADSs and 7,757,446,545 common shares (including those represented by ADSs) were outstanding. With certain limited exceptions, holders of shares that are not ROC persons are required to hold these shares through a brokerage or custodial account in the ROC.

B. Plan of Distribution

Not applicable.

C. Markets

The principal trading market for our common shares is the TWSE and the principal trading market for our ADSs is the NYSE.

D. Selling Shareholders

Not applicable.

E. Dilution

Not applicable.

F. Expenses of the Issue

Not applicable.

ITEM 10. ADDITIO NAL INFORMATION

A. Share Capital

Not applicable.

B. Memorandum and Articles of Association

Set forth below is information relating to our capital structure, including brief summaries of material provisions of our Articles of Incorporation, the ROC Securities and Exchange Law, the ROC Company Act, and the Telecommunications Management Act, all as currently in effect. The following summaries are qualified in their entirety by reference to our Articles of Incorporation, the ROC Securities and Exchange Law, the ROC Company Act, and the Telecommunications Management Act.

Objects and Purpose

The scope of business of Chunghwa Telecom Co., Ltd. as set forth in Article 2 of our Articles of Incorporation, includes (i) telecommunications enterprises, (ii) installation of the computer equipment and

radio-frequency equipment whose operation is controlled by the telecommunication business, (iii) telecommunications equipment wholesale, retail and engineering businesses, (iv) engineering and operation of information software and information process service businesses, (v) apparatus and electric appliance installation and construction business, (vi) television program production, distribution and commercial business, (vii) broadcasting program distribution and commercial business, (viii) the third party payment business, (ix) water pipe construction business, (x) machinery and equipment manufacturing business, (xi) traffic signal installation and construction, and traffic labels construction business, (xii) medical device wholesale and retail business, and (xiii) other businesses, except any business requiring a special permit or otherwise restricted by law or regulation.

General

Under our Articles of Incorporation, our authorized capital was NT$120,000,000,000 divided into 12,000,000,000 common shares, with a par value of NT$10 per share. We have set aside 200,000,000 common shares from the aforementioned common shares for the exercise of any future issuances of stock warrants, preferred shares with warrants, and bonds with warrants. Our paid-in capital is NT$77,574,465,450 divided into 7,757,446,545 common shares. We currently do not have any other equity in the form of preferred shares, bonds or otherwise outstanding as of the date of this annual report.

The MOTC, on behalf of the government of the ROC, owned approximately 35.29% of our outstanding common shares as of December 31, 2024.

Directors and Audit Committee

Our Articles of Incorporation provide for a board of directors consisting of seven to fifteen directors, and one-fifth of these directors shall be professionals of domain knowledge. See “Item 6. Directors, Senior Management and Employees—C. Board Practices.” Pursuant to the ROC Securities and Exchange Act, for a company that has established an audit committee, unless otherwise provided for by law, the provisions regarding supervisors in the ROC Securities and Exchange Act, the ROC Company Act, and other laws and regulations shall apply mutatis mutandis to the audit committee.

Under the ROC Company Act, our board of directors, in conducting our business, shall act in accordance with laws and regulations, our Articles of Incorporation and the resolutions adopted at the meetings of our stockholders. Where any resolution adopted by our board of directors contravenes laws, our Articles of Incorporation and the resolutions adopted at the meetings of our stockholders, thereby causing loss or damage to us, all directors taking part in the adoption of such resolution shall be liable to compensate us for such loss or damage; however, those directors whose disagreement appears on record or is expressed in writing shall be exempted from liability.

If our board of directors decides, by resolution, to commit any act in violation of any law or our Articles of Incorporation, any of our independent directors or any stockholder who has continuously held our shares for a period of one year or longer may request our board of directors to discontinue such act. One or more stockholders who have held 1% or more of the total number of our outstanding shares for six months or a longer time may send a written request to require an independent director to bring an action on our behalf against a director for losses suffered by us as a result of unlawful actions. In addition, if our stockholders’ meeting resolves to institute an action against a director, we shall, within 30 days from the date of such resolution, institute the action. In case of a lawsuit between us and a director, an independent director shall act on our behalf, unless otherwise provided by law; and our stockholders meeting may also appoint some other person to act on our behalf in a lawsuit.

According to the ROC Company Act, our board of directors owes fiduciary duty to us. Our directors are liable for the damages to be sustained by us if they breach their fiduciary duty. In addition, if a director, his or her spouse, his or her blood relative within second degree of kinship, or any company which has a controlling or subordinate relation with him or her, have a personal interest in a matter to be discussed at the meeting of the board of directors, the director shall specify such conflict; if the conflict may cause damages to our company, the director shall abstain from voting on the matter, and shall not serve as a proxy and vote on behalf of another director.

According to our Articles of Incorporation, the remuneration and compensation of the directors shall be determined by the board of directors based on the participation and the contribution of each director in the business operation of our company and referencing the regular standards of other corporations in the similar industry. Our Articles of Incorporation do not impose a mandatory retirement age for our directors. Furthermore, our Articles of Incorporation do not impose a shareholding qualification for each director. According to our Code of Ethics, we may not extend any loans to our directors.

Dividends and Distributions

At each annual general stockholders’ meeting, our board of directors submits to the stockholders for their approval any proposal for the distribution of dividends or the making of any other distribution to stockholders from our net income for the preceding fiscal year. All common shares outstanding and fully paid as of the relevant record date are entitled to share equally in any dividend or other distribution so approved. Dividends may be distributed in cash, in the form of common shares or a combination of the two, as determined by the stockholders at the meeting.

We are not permitted to distribute dividends or make other distributions to stockholders in any year in which we do not have any net income or unappropriated earnings (excluding reserves). The ROC Company Act also requires that 10% of our annual net income, less prior years’ losses and outstanding tax, if any, be set aside as a legal reserve until the accumulated legal reserve equals our paid-in capital. We may also set aside special reserve by the resolution of our stockholders’ meeting. In addition, our Articles of Incorporation provide that at least 50% of the remaining portion of the net income, less accumulated losses, outstanding taxes, the legal reserve and any special reserve, plus accumulated retained earnings from prior years will be distributed as dividends to stockholders. Under our Articles of Incorporation, not less than 50% of the total amount of the distributed dividends must be in cash, but if the cash dividends to be distributed are less than NT$0.10 per share, the dividends may be distributed in the form of shares. The actual percentage of distribution would take actual profitability of the year, capital budgeting, and status of finance into consideration, and would be executed following a resolution of shareholders’ meeting.

Pursuant to our current Articles of Incorporation, in annual profit-making year, we should distribute 2% to 5% of profit as employees’ compensation, and not more than 0.17% of profit should be distributed as directors’ compensation; however, if we have any accumulated losses, an amount to offset losses should be reserved in advance.

Under the ROC Company Act, if we do not incur a loss, we are permitted to make distributions on a pro rata basis to our stockholders of additional common shares or cash by the legal reserve, the premium derived from the issuance of new shares and the income from endowments received by us. We are allowed to make the above distributions to our stockholders by legal reserve only if the legal reserve exceeds 25% of our paid-in capital. Furthermore, subject to the provision under our Articles of Incorporation, such distribution should firstly be made by the premium derived from the issuance of new shares.

Changes in Share Capital

Under the ROC Company Act, any change in our authorized share capital requires an amendment to our Articles of Incorporation, which in turn requires approval at our stockholders’ meeting. Authorized but unissued common shares may be issued, subject to applicable ROC law, upon terms as our board of directors may determine.

Preemptive Rights

Under the ROC Company Act and our Articles of Incorporation, when we issue new shares for cash, unless otherwise approved by the central competent authority, our employees have rights to subscribe for between 10% and 15% of the new issue, and we have rights to restrain the shares subscribed by employees from being transferred within a specific period of time, which should not be longer than two years. Except for the shares reserved in accordance with the ROC Company Act, we are required to inform our existing shareholders of their rights to subscribe for additional shares pro rata to their respective shareholding and to note that the shareholders will lose their pre-emptive right if they fail to subscribe for the new shares within the prescribed period. In the event that there is any new share that has not been subscribed for by the existing shareholders or our employees pursuant to their

respective pre-emptive rights, we may offer such shares to other investors through public offering or private negotiation with any person designated by us.

In addition, in accordance with the ROC Securities and Exchange Act, a public company such as us that intends to offer new shares for cash must offer to the public at least 10% of the shares to be sold except in certain limited circumstances. This percentage can be increased by a resolution passed at a stockholders’ meeting, held in accordance with the Company Act and our Articles of Incorporation, which would diminish the number of new shares subject to the preemptive rights of existing stockholders.

Meetings of Stockholders

Pursuant to the ROC Securities and Exchange Act, as a listed company, we must hold a general shareholders’ meeting within six months after the end of each fiscal year and may not seek any extension for such meeting unless there are legitimate reasons and approval has been obtained from the competent authority. These meetings are generally held in New Taipei City, Taiwan. Special stockholders’ meetings may be convened by resolution of the board of directors, or by the board of directors upon the written request of any stockholder or stockholders who have held 3% or more of the issued shares continuously for one year or longer, or by the stockholders who have held over 50% of the issued shares continuously for three months or longer. Stockholders’ meetings may also be convened by an independent director. Notice in writing of general meetings of stockholders, stating the place, time and agenda must be dispatched to each stockholder at least 30 days, in the case of general meetings, and 15 days, in the case of special meetings, before the date set for each meeting. Except in certain circumstances described below, a majority of the holders of all issued and outstanding common shares present at a stockholders’ meeting constitutes a quorum for meetings of stockholders. Stockholders of 1% or more of the total number of our outstanding shares are entitled to submit, during the period of time prescribed by us no less than ten days, one proposal each year for consideration at our annual general stockholders’ meeting in accordance with the ROC Company Act.

Voting Rights

As previously required by the ROC Company Act, our Articles of Incorporation provide that a holder of common shares has one vote for each common share. Cumulative voting applies to the election of our directors. The election of independent and non-independent directors should be held simultaneously while the ballots for the election of directors and independent directors are cast separately. According to Article 146-1 of the Insurance Act of the ROC, insurance companies that hold our shares may not be our directors or vote for the election of our directors.

In general, a resolution can be adopted by the holders of more than one-half of the common shares represented at a stockholders’ meeting at which the holders of more than half of all issued and outstanding common shares are present. Under the ROC Company Act, the approval by more than one-half of the common shares represented at a stockholders’ meeting in which a quorum of at least two-thirds of all issued and outstanding common shares are represented is required for major corporate actions, including:

• amendment to our Articles of Incorporation;

• entering into, modification or termination of any contracts regarding leasing of all business, outsourcing of operations or joint operations;

• transfer of the whole or substantial part of our business or assets;

• taking over of the whole of the business or assets of any other company which would have significant impact on our operations;

• distribution of any share dividend;

• dissolution;

• excusing a director from his or her non-competition obligation, which may allow such director to do anything for himself or on behalf of another person that is within the scope of our business;

• merger or spin-off; and

• dismissing of directors.

Alternatively, the ROC Company Act provides that in the case of a public company, such as us, a resolution may be adopted by the holders of at least two-thirds of the common shares represented at a meeting of stockholders at which holders of more than one-half of issued and outstanding common shares are present.

A stockholder may be represented at a general or special meeting by proxy if a valid proxy form, which is printed by the company, is delivered to us at least five days before the commencement of the general or special stockholders’ meeting. Except for trust enterprises or share registrar approved by the Securities and Futures Bureau of the FSC, where one person is appointed as proxy by two or more stockholders who together hold more than 3% of the total issued common shares, the votes of those stockholders in excess of 3% of the outstanding common shares shall not be counted. Alternatively, if the stockholder would like to exercise its voting right at a general or special meeting but cannot be present at the meeting in person, we have set up an electronic voting mechanism for such stockholder to exercise voting right. The stockholder is not allowed to exercise voting right through an electronic voting mechanism if such stockholder fails to revoke the granted proxy (if any) at least two days prior to the general or special meeting.

At the time of any vote, if a director of a public company has pledged more than half of the holding at the time the director was elected, such director will not be allowed to exercise the voting rights with respect to the number of shares pledged in excess of the half of the number of shares that such director held in such public company at the time the director was elected. The maximum number of shares ineligible for voting pursuant to the provision above cannot exceed half of the number of shares that such director held in such public company at the time the director was elected. In addition, any shares that were ineligible for voting pursuant to the above provision would not count as being present for such vote, but may be counted as present for calculation of attendance quorum.

Any stockholder who has a personal interest in the matter under discussion at a stockholders’ meeting, the outcome of which may impair our interests, shall not vote or exercise voting rights on behalf of another stockholder; the shares held by such stockholder will not be counted as present for such vote but, may be counted as present for calculation of attendance quorum.

Holders of our ADSs generally will not be able to exercise voting rights on the common shares underlying ADSs on an individual basis.

Other Rights of Stockholders

Under the ROC Company Act and the Business Mergers and Acquisitions Act, dissenting stockholders who also made negative votes or waived their voting rights are entitled to appraisal rights in certain major corporate actions, such as a planned transfer of the whole or part of the business or a proposed merger by us. A dissenting stockholder who voted against the proposed transaction or otherwise abstained from voting may request us to purchase back all of the shares owned by the stockholder at a fair price determined by mutual agreement or determined by the court if a mutual agreement cannot be reached. For example, if we propose to split up or to consolidate or merge with another company, stockholders may exercise their appraisal rights by serving a written notice or raising his objection verbally with a record prior to or during the related stockholders’ meeting. Moreover, a stockholder has the right to file a petition in the court for annulment of any resolution adopted at a stockholders’ meeting where the procedures for convening the stockholders’ meeting or the method of adopting the resolutions at the meeting is contrary to law or our Articles of Incorporation.

We have adopted a nomination procedure for election of directors as stipulated in the ROC Company Act, which provides that stockholders holding 1% or more of our total issued shares may submit to us a list of candidates for directors, including independent directors.

Register of Stockholders and Record Dates

Our share registrar, Yuanta Securities Co., Ltd., maintains our register of stockholders at its offices in Taipei City, Taiwan. Under the ROC Company Act, we may, by giving advance public notice, set a record date and close the register of stockholders for a specified period in order for us to determine the stockholders or pledgees that are

entitled to rights pertaining to the common shares. The specified period starting from such record date (to determine the entitled stockholders or pledgees) required is as follows:

• general stockholders’ meeting—60 days;

• special stockholders’ meeting—30 days; and

• relevant record date for distribution of dividends or other entitlements—5 days.

Annual Consolidated Financial Statements

At least ten days before the annual general stockholders’ meeting, our annual consolidated financial statements prepared in accordance with Taiwan IFRSs, the business report, and the earnings distribution or losses offsetting proposal, must be available at our principal office in Taipei City, Taiwan for inspection by the stockholders.

Transfer of Common Shares

In accordance with our Articles of Incorporation, all of our shares are currently issued and transferred in book-entry form instead of issuing physical share certificates. After the book closure date, the Taiwan Depository & Clearing Corporation, or the TDCC, will deliver the names and addresses of the shareholders as of the book closure date to our registrar, Yuanta Securities Co., Ltd. Only shareholders as of the book closure date can assert shareholder rights against us.

Acquisition of Our Own Common Shares

Under the ROC Company Act, with minor exceptions, we cannot acquire our own common shares. Any common shares acquired by us, under certain of such minor exceptions, must be sold at the market price within six months after their acquisition.

In addition, under the ROC Securities and Exchange Act, a company whose shares are listed on the TWSE or traded on the Taipei Exchange (formerly known as Gre Tai Securities Market) may, pursuant to a board resolution adopted by a majority consent at a meeting attended by more than two-thirds of the directors and pursuant to the procedures prescribed by the Securities and Futures Bureau of the FSC, purchase its shares for the following purposes on the TWSE, the Taipei Exchange or by a tender offer:

(1) for transfers of shares to its employees;

(2) for conversion into shares from bonds with warrants, preferred shares with warrants, convertible bonds, convertible preferred shares or certificates of warrants issued by us; and

(3) for maintaining its credit and its stockholders’ equity, provided that the shares so purchased shall be cancelled thereafter.

The total shares purchased by us shall not exceed 10% of our total issued and outstanding shares. In addition, the total amount for purchase of the shares shall not exceed the aggregate amount of our retained earnings, the premium from our shares issues and the realized portion of our capital surplus.

The shares purchased by us pursuant to items (1) and (2) above shall be transferred to the intended transferees within five years after the purchase; otherwise the same shall be cancelled. For the shares to be cancelled pursuant to item (3) above, we shall complete amendment registration for such cancellation within six months after the purchase.

The shares purchased by us shall not be pledged or hypothecated. In addition, we may not exercise any stockholders’ rights attaching to these shares. Under the ROC Company Act, we may transfer the treasury stock to our employees and impose transfer restrictions on the shares up to two years.

Liquidation Rights

In the event of our liquidation, the assets remaining after payment of all debts, liquidation expenses and taxes will be distributed pro rata to the stockholders in accordance with the relevant provisions of the ROC Company Act.

Substantial Stockholders and Transfer Restrictions

The ROC Securities and Exchange Act currently requires for public companies that (i) each director, supervisor, manager, as well as their respective spouses, minor children and nominees, and substantial stockholder (i.e., a stockholder who, together with his or her spouse, minor children or nominees, holds more than 5% of the shares of a public company) to report any change in that person’s shareholding to the issuer of the shares on a monthly basis and (ii) each director, supervisor, manager or substantial stockholder holding such common shares for more than a six month period to report his or her intent to transfer any shares listed on the TWSE or traded on the Taipei Exchange to the Securities and Futures Bureau of the FSC at least three days before the intended transfer, unless the number of shares to be transferred each day is no more than 10,000 shares. ADS holders holding more than 5% of our common shares, including common shares represented by ADSs, may be subject to the above-mentioned obligations. Such shareholding threshold was changed from 10% to 5%, effective from May 10, 2024, pursuant to the amendment to Article 43-1 of ROC Securities and Exchange Act passed by the Legislative Yuan and promulgated by the President on May 10, 2023.

In addition, the number of shares that can be sold or transferred on the TWSE or the Taipei Exchange by any person subject to the restrictions described above on any given day may not exceed:

• 0.2% of the outstanding shares of the company in the case of a company with no more than 30 million outstanding shares;

• 0.2% of 30 million shares plus 0.1% of the outstanding shares exceeding 30 million shares in the case of a company with more than 30 million outstanding shares; or

• in any case, 5% of the average daily trading volume (number of shares) on the TWSE or the Taipei Exchange for the ten consecutive trading days preceding the reporting day on which day the director, supervisor, manager or substantial stockholder or their respective spouse, minor child or nominee reports the intended share transfer to the Securities and Futures Bureau.

Block trading, auction sale, purchase by auction, after-hours trading and sales or transfers of our ADSs are not subject to these restrictions; however, these restrictions will still apply to sales of common shares upon withdrawal of ADSs.

C. Material Contracts

We have not entered into any material contracts other than in the ordinary course of business and other than those described elsewhere in this annual report.

D. Exchange Controls

Foreign Investment and Exchange Controls in Taiwan

We have extracted from publicly available documents the information presented in this section. Please note that citizens of the PRC and entities organized in the PRC are subject to special ROC laws, rules and regulations, which are not discussed in this section.

General

Historically, foreign investments in the securities market of Taiwan were restricted. However, commencing in 1983, the Taiwan government has from time to time enacted legislation and adopted regulations to make foreign investment in the Taiwan securities market possible. Initially, only overseas investment trust funds of authorized securities investment trust enterprises established in Taiwan were permitted to invest in the Taiwan securities market. Since January 1, 1991, qualified foreign institutional investors are allowed to make investments in the Taiwan listed securities market. Since March 1, 1996, overseas Chinese, non-resident foreign institutional and individual investors (other than qualified foreign institutional investors), called “general foreign investors,” are permitted to make direct investments in the Taiwan securities market.

Foreign Investment in Taiwan Securities Market

On December 28, 1990, the Executive Yuan, the cabinet of the ROC government, approved guidelines drafted by the Securities and Futures Commission (the predecessor of the Securities and Futures Bureau), which, since January 1, 1991, has allowed direct foreign investment in Taiwan’s securities that are listed on the TWSE or other Taiwan securities approved by the Securities and Futures Bureau by certain eligible qualified foreign institutional investors.

In addition to qualified foreign institutional investors, certain individual and foreign institutional investors which meet certain qualifications set by the Securities and Futures Bureau may invest in the shares of TWSE-listed companies, the Taipei Exchange (formerly known as Gre Tai Securities Market) traded companies, emerging market companies or other Taiwan securities approved by the Securities and Futures Bureau up to a limit of US$50 million (in the case of institutional investors) and US$5 million (in the case of individual investors) after obtaining permission from the TWSE.

On September 30, 2003 and June 15, 2004, the Securities and Futures Bureau issued amendments to the “Guideline Governing Investment in Securities by Overseas Chinese and Foreign Nationals” and relevant regulations, in which the Securities and Futures Bureau lifted certain restrictions and simplified the procedures required for foreign investments in Taiwan’s securities market. The amendment focuses mainly on the following aspects:

• the concept of “qualified foreign institutional investors” no longer exists. Foreign investors are reclassified as “off-shore foreign institutional investors,” “on-shore foreign institutional investors,” “off-shore general foreign investors,” and “on-shore general foreign investors” based on whether they are institutions or natural persons, and whether they have presences in Taiwan.

• for foreign investors to invest in Taiwan’s securities market, registration with the TWSE, instead of the approval of the Securities and Futures Bureau, is required. The TWSE may withdraw or rescind the registration if the application documents submitted by foreign investors are untrue or incomplete, or if any material violation of the relevant regulations exists.

• off-shore foreign investors may provide the securities they hold as the underlying shares of depositary receipts and act as selling stockholders in depositary receipts offerings.

• off-shore foreign institutional investors are required to appoint their agent or nominee to attend the stockholders’ meeting of the invested company.

Currently, subject to the specific restriction imposed by relevant regulations, the off-shore foreign institutional investors may invest in the Taiwan securities market without any amount of restriction. However, a ceiling may be separately determined by the Securities and Futures Bureau after consultation with the Central Bank of the ROC (Taiwan) for investment by offshore overseas Chinese and foreign individual investors.

Foreign Investment Approval

Other than investments permitted under Guideline Governing Investment in Securities by Overseas Chinese and Foreign Nationals, foreign investors (other than PRC persons) who wish to make (i) direct investments in the shares of Taiwan private companies or (ii) investment in 10% or more of the equity shares of a Taiwan company listed on TWSE or Taipei Exchange in any single transaction are required to submit a “foreign investment approval” application to the Department of Investment Review of the Ministry of Economic Affairs of Taiwan, or the DIR, or other government authority to qualify for benefits granted under the Statute for Investment by Foreign Nationals. DIR or other government authority reviews each foreign investment approval application and approves or disapproves the application after consultation with other governmental agencies. Any non-Taiwan person possessing a foreign investment approval may remit capital for the approved investment and repatriate annual net profits and interests and cash dividends attributable to an approved investment. Stock dividends, investment capital and capital gains attributable to the investment may be repatriated with approval of the DIR or other government authority.

In addition to the general restrictions against direct investment by non-Taiwan persons in Taiwan companies, non-Taiwan persons are currently prohibited from investing in prohibited industries in Taiwan under the Negative List promulgated by the Executive Yuan from time to time. The prohibition on direct foreign investment in the prohibited industries in the Negative List is absolute with the consequence of certain specific exemptions from the application of the Negative List. Under the Negative List, some other industries are restricted so that non-Taiwan persons may directly invest only up to a specified level and with the specific approval of the relevant authority which is responsible for enforcing the legislation which the negative list is intended to implement. The telecommunication industry is a restricted industry under the Negative List.

Depositary Receipts

In April 1992, the Securities and Futures Bureau began allowing Taiwan companies listed on the TWSE, with the prior approval of the Securities and Futures Bureau, to sponsor the issuance and sale of depositary receipts evidencing depositary shares. In December 1994, the ROC Ministry of Finance began allowing companies whose shares are traded on the Taipei Exchange (formerly known as Gre Tai Securities Market) also to sponsor the issuance and sale of depositary receipts evidencing depositary shares representing shares of its capital stock. Approvals for these issuances are still required.

After the issuance of a depositary share, a holder of the depositary receipt evidencing the depositary shares may request the depositary issuing the depositary share to cause the underlying shares to be sold in Taiwan and to distribute the proceeds of the sale to or to withdraw the shares and deliver the shares to the depositary receipt holder. A citizen of the PRC is not permitted to withdraw and hold our shares.

If you are an offshore foreign institutional investor holding the depositary receipts, you must register with the TWSE as a foreign investor before you will be permitted to withdraw the shares represented by the depositary receipts. In addition to obtaining registration with the TWSE, you must also (i) appoint a qualified local agent to, among other things, open a securities trading account with a local securities brokerage firm and a bank account to remit funds, exercise stockholders’ rights and perform other functions as holders of ADSs may designate, (ii) appoint a custodian bank to hold the securities and cash proceeds, confirm transactions, settle trades and report and declare other relevant information; and (iii) appoint a tax guarantor as guarantor for the full compliance of the withdrawing depositary receipt holder’s tax filing and payment obligations in the ROC. A depositary receipt holder not registered as a foreign investor with the TWSE, or not has made the necessary appointments as outlined above, will be unable to hold or subsequently transfer the shares withdrawn from the depositary receipt facility.

No deposits of shares may be made in a depositary receipt facility and no depositary shares may be issued against deposits without specific Securities and Futures Bureau approval, unless they are:

(i) stock dividends;

(ii) free distributions of shares;

(iii) due to the exercise by the depositary receipt holder preemptive rights in the event of capital increases for cash; or

(iv) if permitted under the deposit agreement and custody agreement and within the amount of depositary receipts which have been withdrawn, due to the direct purchase by investors or purchase through the depositary on the TWSE or the Taipei Exchange (formerly known as Gre Tai Securities Market) or delivery by investors of the shares for deposit in the depositary receipt facility. In this event, the total number of depositary receipts outstanding after an issuance cannot exceed the number of issued depositary receipts previously approved by the Securities and Futures Bureau of the FSC in connection with the offering plus any ADSs issued pursuant to the events described in (i), (ii) and (iii) above.

An ADS holder or the depositary, without obtaining further approvals from the Central Bank of the ROC (Taiwan) or any other governmental authority or agency of the ROC, may convert NT dollars into other currencies, including U.S. dollars, in respect of:

• the proceeds of the sale of common shares represented by ADSs or received as share dividends with respect to the common shares and deposited into the depositary receipt facility; and

• any cash dividends or distributions received from the common shares.

In addition, the depositary may also convert into NT dollars incoming payments for purchases of common shares for deposit in the depositary receipt facility against the creation of additional ADSs. If you withdraw the common shares underlying your ADSs and become a holder of our common shares, you may convert into NT dollars subscription payment for rights offerings. The depositary may be required to obtain foreign exchange payment approval from the Central Bank of the ROC (Taiwan) on a payment-by-payment basis for conversion from NT dollars into foreign currencies of the proceeds from the sale of subscription rights of new common shares. Although it is expected that the Central Bank of the ROC (Taiwan) will grant approval as a routine matter, required approvals may not be obtained in a timely manner, or at all.

Exchange Controls

Taiwan’s Foreign Exchange Control Statute and regulations provide that all foreign exchange transactions must be executed by banks designated to handle foreign exchange transactions by the FSC and by the Central Bank of the ROC (Taiwan). Current regulations favor trade-related foreign exchange transactions. Consequently, foreign currency earned from exports of merchandise and services may now be retained and used freely by exporters. All foreign currency needed for the importation of merchandise and services may be purchased freely from the designated foreign exchange banks.

Aside from trade-related foreign exchange transactions, Taiwan companies and residents may remit to and from Taiwan foreign currencies of up to US$50 million (or its equivalent) and US$5 million, (or its equivalent), respectively, in each calendar year. These limits apply to remittances involving conversion between New Taiwan dollars and U.S. dollars or other foreign currencies. A requirement is also imposed on all private enterprises to register all medium and long-term foreign debt with the Central Bank of the ROC (Taiwan).

In addition, a foreign person without an alien resident card or an unrecognized foreign entity may remit to and from Taiwan foreign currencies of up to US$100,000 per remittance if required documentation is provided to Taiwan authorities. This limit applies only to remittances involving conversion between New Taiwan dollars and U.S. dollars or other foreign currencies.

E. Taxation

ROC Taxation

The discussion below describes the principal ROC tax consequences of the ownership and disposition of ADSs representing common shares and of common shares. It applies to you only if you are:

• an individual who is not a citizen of the ROC, who owns ADSs or common shares and who is not physically present in Taiwan for 183 days or more during any calendar year; or

• a corporation or a non-corporate body that is organized under the laws of a jurisdiction other than the ROC for profit-making purposes and has no fixed place of business or other permanent establishments in Taiwan.

You should also consult your tax advisors concerning the tax consequences of owning ADSs and common shares in the ROC and any other relevant taxing jurisdiction to which they are subject.

Dividends

Dividends declared by us out of our retained earnings and distributed to you are subject to ROC withholding tax, currently at the rate of 21%, pursuant to the amendment to the Standards of Withholding Rates for Various Incomes promulgated by the Ministry of Finance of the ROC effective from January 1, 2018, on the amount of the distribution in the case of cash dividends or on the par value of the common shares in the case of stock dividends.

Share or cash dividends paid by us out of our capital surplus which are derived from the issuance of shares at a premium are not subject to ROC withholding tax. According to the rulings of Ref. Tai-Tsai-Hsuei-Tzi-09504509440 issued by the Ministry of Finance of the ROC, if a company reduces its share capital and redeems for cash its outstanding common shares issued to the company’s stockholders by capitalization of capital surplus, those premiums under the capitalized capital surplus derived from re-evaluation of assets, sale of lands and/or merger with other enterprises shall be deemed as the gain in the stockholders’ capital investment, and shall be deemed as stockholders’ dividend income (or investment revenue) and be subject to ROC income tax.

As the legal reserve is set-aside from company’s profit earnings (after tax) in accordance with Article 237 of the ROC Company Act, receipt of distribution of legal reserve shall be deemed as stockholders’ dividend income (or investment revenue) and be subject to ROC income tax collected by way of withholding at the time of distribution, currently at the rate of 21%, unless a lower withholding rate is provided under a tax treaty between the ROC and the jurisdiction where the non-ROC stockholder is a resident.

Capital Gains

Gains from the sale of property in the ROC are generally subject to ROC income tax. Effective January 1, 2016, capital gain on the sale of common shares, including common shares withdrawn from the ADS facility, realized by a non-resident individual or non-resident entity is no longer subject to the capital gain tax and is further exempted from alternative minimum tax, or the AMT.

Sales of ADSs by you are regarded as transactions relating to property located outside the ROC and thus any gains derived therefrom are currently not subject to ROC income tax.

Preemptive Rights

Distributions of statutory preemptive rights for common shares in compliance with ROC law are not subject to any ROC tax. Proceeds derived from sales of statutory preemptive rights evidenced by securities are subject to securities transaction tax at the rate of 0.3% of the gross amount received. Proceeds derived from sales of statutory preemptive rights which are not evidenced by securities are subject to capital gains tax at the rate of 20% of the gains realized if the seller is a non-ROC resident regardless of whether the non-ROC resident is an individual or entity.

Subject to compliance with ROC law, we, at our sole discretion, can determine whether statutory preemptive rights shall be evidenced by issuance of securities.

Securities Transaction Tax

A securities transaction tax, at the rate of 0.3% of the gross amount received, payable by the seller will be withheld upon a sale of common shares in Taiwan. Transfers of ADSs are not subject to ROC securities transaction tax. According to a letter issued by the Ministry of Finance of the ROC in 1996, withdrawal of common shares from the deposit facility will not be subject to ROC securities transaction tax.

Estate Taxation and Gift Tax

ROC estate tax is payable on any property within Taiwan of a deceased person who is a non-resident individual, and ROC gift tax is payable on any property within Taiwan donated by any such person. Under ROC estate and gift tax laws, common shares issued by Taiwan companies are deemed located in Taiwan regardless of the location of the owner. It is not clear whether a holder of ADSs will be considered to own common shares for this purpose. Estate tax is payable at rates ranging from 10% of the first NT$50,000,000 to 20% of amounts over NT$100,000,000, and gift tax is payable at rates ranging from 10% of the first NT$25,000,000 to 20% of amounts over NT$50,000,000.

Tax Treaty

The ROC does not have an income tax treaty with the U.S. On the other hand, the ROC has income tax treaties with Indonesia, Israel, Singapore, South Africa, Australia, Vietnam, New Zealand, Malaysia, North Macedonia, Switzerland, the Netherlands, United Kingdom, Gambia, Senegal, Sweden, Belgium, Denmark, Paraguay, Hungary, France, India, Slovakia, Germany, Thailand, Eswatini, Luxembourg, Kiribati, Austria, Italy, Japan, Canada, Poland, Czech Republic, Saudi Arabia, and South Korea, which may limit the rate of ROC withholding tax on dividends paid with respect to common shares in Taiwan companies. It is unclear whether if you hold ADSs, you will be considered to hold common shares for the purposes of these treaties. Accordingly, if you may otherwise be entitled to the benefits of the relevant income tax treaty, you should consult your tax advisors concerning your eligibility for the benefits with respect to the ADSs.

U.S. Federal Income Tax Considerations for U.S. Holders

The following is a summary of certain U.S. federal income tax consequences, as of the date hereof, of the ownership and disposition of our shares and ADSs. The discussion set forth below is applicable only to beneficial owners of our shares or ADSs that hold the shares or ADSs as capital assets and that are U.S. holders (defined below) and non-residents of the ROC. You are a U.S. holder if you are:

• an individual who is a citizen or resident of the U.S.;

• a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the U.S., any state thereof or the District of Columbia;

• an estate the income of which is subject to U.S. federal income taxation regardless of its source;

• a trust if it is subject to the primary supervision of a court within the U.S. and one or more U.S. persons have the authority to control all substantial decisions of the trust; or

• a trust that has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

This summary is based on the provisions of the Internal Revenue Code of 1986, as amended, or the Code, and regulations, rulings and judicial decisions thereunder as of the date hereof, and such authorities may be replaced, revoked or modified so as to result in U.S. federal income tax consequences different from those discussed below. We cannot assure you that a later change in law will not alter significantly the tax considerations that we describe in this summary. This summary is for general purposes only and you should not consider it to be tax advice. In addition, it assumes that the deposit agreement and any related agreement will be performed in accordance with their

terms. This summary does not represent a detailed description of all the U.S. federal income tax consequences to you in light of your particular circumstances and does not address the effects of any state, local or non-U.S. tax laws (or other U.S. federal tax consequences, such as U.S. federal estate or gift tax consequences or the Medicare tax on net investment income). In addition, it does not represent a detailed description of the U.S. federal income tax consequences applicable to you if you are subject to special treatment under the U.S. federal income tax laws, including if you are:

• a dealer or broker in securities or currencies;

• a trader in securities if you elect to use a mark-to-market method of accounting for your securities holdings;

• a financial institution or an insurance company;

• a regulated investment company;

• a real estate investment trust;

• a tax-exempt organization;

• a person liable for alternative minimum tax;

• a person holding shares or ADSs as part of a hedging, integrated or conversion transaction, constructive sale or straddle;

• a person required to accelerate the recognition of any item of gross income with respect to our shares or ADSs as a result of such income being recognized on an applicable financial statement;

• a person owning, actually or constructively, 10% or more of our stock (by vote or value);

• a partnership or other pass-through entity for U.S. federal income tax purposes; or

• a person whose “functional currency” is not the U.S. dollar.

If a partnership (or other entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds our shares or ADSs, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. If you are a partnership or a partner of a partnership holding our shares or ADSs, you should consult your tax advisor.

You should consult your own tax advisor concerning the particular U.S. federal income tax consequences to you of the ownership and disposition of the shares or ADSs, as well as the consequences to you arising under other U.S. federal tax laws and the laws of any other taxing jurisdiction.

In general, for U.S. federal income tax purposes, a U.S. holder who is the beneficial owner of an ADS will be treated as the owner of the shares underlying such ADS. Deposits or withdrawals of shares, actually or constructively, by U.S. holders for ADSs will not be subject to U.S. federal income tax.

Taxation of Dividends

The gross amount of distributions (other than certain pro rata distributions of shares to all stockholders) you receive on your shares or ADSs, including amounts withheld in respect of ROC withholding taxes, will generally be treated as dividend income to you to the extent the distributions are made from our current or accumulated earnings and profits as calculated according to U.S. federal income tax principles. These amounts (including withheld taxes) will be includible in your gross income as ordinary income on the day you actually or constructively receive the distributions, which in the case of an ADS will be the date actually or constructively received by the depositary. You will not be entitled to claim a dividends-received deduction generally allowed to corporations under the Code for any distributions that you receive from us.

Subject to applicable limitations (including a minimum holding period requirement), dividends received by non-corporate U.S. holders from a qualified foreign corporation may be treated as “qualified dividend income” that is subject to reduced rates of taxation. Subject to the discussion below under “—Passive Foreign Investment

Company,” a foreign corporation is generally treated as a qualified foreign corporation with respect to dividends paid by that corporation on shares (or ADSs backed by such shares) that are readily tradable on an established securities market in the U.S. Under current U.S. Treasury Department guidance, our ADSs, which are listed on the NYSE, but not our shares, are treated as readily tradable on an established securities market in the U.S. Thus, we do not believe that dividends that we pay on our shares that are not represented by ADSs currently meet the conditions required for these reduced tax rates. There also can be no assurance that our ADSs will continue to be readily tradable on an established securities market in the U.S. in later years, or that our shares will be readily tradable on an established securities market in the U.S. in any given year. You should consult your own tax advisor regarding the application of these rules given your particular circumstances.

The amount of any dividend paid in NT dollars will equal the U.S. dollar value of the NT dollars you receive, calculated by reference to the exchange rate in effect on the date you actually or constructively receive the dividend, which in the case of an ADS will be the date actually or constructively received by the depositary, regardless of whether the NT dollars are actually converted into U.S. dollars. If the NT dollars received as a dividend are converted into U.S. dollars on the date they are actually or constructively received, you generally will not be required to recognize foreign currency gain or loss in respect of the dividend income. If the NT dollars received as a dividend are not converted into U.S. dollars on the date of receipt, you will have a basis in the NT dollars equal to their U.S. dollar value on the date of receipt. Any gain or loss you realize if you subsequently sell or otherwise dispose of the NT dollars will be treated as ordinary income or loss from sources within the U.S. for foreign tax credit limitation purposes.

Subject to certain conditions and limitations under the Code, you may be entitled to a credit against your U.S. federal income taxes or a deduction for any ROC taxes that are withheld from dividend distributions made to you. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For purposes of calculating the foreign tax credit, dividends we pay with respect to shares or ADSs will generally be considered passive category income from sources outside the U.S. However, a U.S. holder that has held shares or ADSs for less than a specified minimum period during which it is not protected from risk of loss, or is obligated to make payments related to the dividends, may not be allowed a foreign tax credit for foreign taxes imposed on dividends paid on shares or ADSs. Furthermore, Treasury regulations addressing foreign tax credits, or the Foreign Tax Credit Regulations, impose additional requirements for foreign taxes to be eligible for a foreign tax credit, and there can be no assurance that those requirements will be satisfied. The Treasury and the Internal Revenue Service, or the IRS, are considering proposing amendments to the Foreign Tax Credit Regulations. In addition, recent notices from the IRS provide temporary relief by allowing taxpayers that comply with applicable requirements to apply many aspects of the foreign tax credit regulations as they previously existed (before the release of the current Foreign Tax Credit Regulations) for taxable years ending before the date that a notice or other guidance withdrawing or modifying the temporary relief is issued (or any later date specified in such notice or other guidance). Instead of claiming a foreign tax credit, you may be able to deduct ROC withholding taxes on dividends in computing your taxable income, subject to generally applicable limitations under U.S. law (including that a U.S. holder is not eligible for a deduction for otherwise creditable foreign income taxes paid or accrued in a taxable year if such U.S. holder claims a foreign tax credit for any foreign income taxes paid or accrued in the same taxable year).The rules governing the foreign tax credit and deductions for foreign taxes are complex. We therefore urge you to consult your tax advisor regarding the availability of the foreign tax credit or a deduction under your particular circumstances.

To the extent that the amount of any distribution you receive exceeds our current and accumulated earnings and profits for a taxable year, as determined under U.S. federal income tax principles, the distribution will first be treated as a tax-free return of capital, causing a reduction in your adjusted basis in the shares or ADSs and thereby increasing the amount of gain, or decreasing the amount of loss, you will recognize on a subsequent disposition of the shares or ADSs. The balance in excess of adjusted basis, if any, will be taxable to you as capital gain recognized on a sale or exchange. However, we do not expect to keep earnings and profits in accordance with U.S. federal income tax principles. Therefore, you should expect that a distribution will generally be reported as a dividend.

It is possible that pro rata distributions of shares or ADSs to all stockholders may be made in a manner that is not subject to U.S. federal income tax. In such case, the basis of any new shares or ADSs so received will generally be determined by allocating your basis in the old shares or ADSs between the old shares or ADSs and the new shares or ADSs, based on their relative fair market values on the date of distribution. For U.S. tax purposes, any such tax-free share distribution would not result in foreign source income to you. Consequently, you may not be able to use a foreign tax credit for any ROC withholding tax imposed on such distributions unless you can use the credit (subject to applicable limitations) against U.S. federal income tax due on other foreign source income in the appropriate category for foreign tax credit purposes.

Taxation of Capital Gains

When you sell or otherwise dispose of your shares or ADSs, you will generally recognize capital gain or loss in an amount equal to the difference between the U.S. dollar value of the amount realized for the shares or ADSs and your basis in the shares or ADSs, determined in U.S. dollars. Such gain or loss will generally be long-term capital gain or loss if you have held the shares or ADSs for more than one year. If you are an individual or other non-corporate holder, long-term capital gains will be eligible for reduced rates of taxation. Your ability to deduct capital losses is subject to limitations. For foreign tax credit limitation purposes, such gain or loss will generally be treated as U.S. source gain or loss.

Any ROC securities transaction taxes that you pay upon the disposition of shares generally will not be creditable foreign taxes for U.S. federal income tax purposes. You are urged to consult your tax advisors regarding the U.S. federal income tax consequences of these taxes.

Passive Foreign Investment Company

We believe that we were not a “passive foreign investment company,” or PFIC, for U.S. federal income tax purposes for our taxable year ending on December 31, 2024, and we do not expect to become a PFIC for our current taxable year or in the future, although there can be no assurance in this regard. If we were treated as a PFIC for any taxable year during which you held our shares or ADSs, you could be subject to additional U.S. federal income taxes on gain recognized with respect to the shares or ADSs and on certain distributions, plus an interest charge on certain taxes treated as having been deferred under the PFIC rules.

Non-corporate U.S. holders will not be eligible for reduced rates of taxation on any dividends received from us if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.

Information Reporting and Backup Withholding

In general, information reporting will apply to dividends in respect of our shares or ADSs and the proceeds from the sale, exchange or other disposition of our shares or ADSs that are paid to you within the U.S. (and in certain cases, outside the U.S.), unless you establish that you are an exempt recipient such as a corporation. A backup withholding tax may apply to such payments if you fail to provide a taxpayer identification number and a certification that you are not subject to backup withholding or if you fail to report in full dividend and interest income.

Backup withholding is not an additional tax and any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against your U.S. federal income tax liability provided the required information is timely furnished to the IRS.

F. Dividends and Paying Agents

Not applicable.

G. Statement by Experts

Not applicable.

H. Documents on Display

We have filed this annual report on Form 20-F, including exhibits, with the SEC. As allowed by the SEC, in Item 19 of this annual report, we incorporate by reference certain information we have already filed with the SEC. This means that we can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is considered to be part of this annual report.

You may read and copy this annual report, including the exhibits incorporated by reference in this annual report, at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549 and at the SEC’s regional offices in New York, New York and Chicago, Illinois. You also can obtain copies of this annual report, including the exhibits incorporated by reference in this annual report, from the SEC’s Public Reference Room and regional offices upon payment of a duplicating fee.

The SEC also maintains a website at www.sec.gov that contains reports, proxy statements and other information regarding registrants that file electronically with the SEC. Our annual report and some of the other information submitted by us to the SEC may be accessed through this website.

I. Subsidiary Information

Not applicable.

J. Annual Report to Security Holders

Not applicable.

ITEM 11. QUANTITATIVE AND QUALITA TIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of loss related to adverse changes in market prices, including interest rates and foreign exchange rates, of financial instruments. In the normal course of business, we are routinely subject to a variety of risks, including market risk associated with interest rate movements, currency rate movements on non-NT dollar-denominated assets and liabilities and equity price movements on our portfolio of equity securities.

We regularly assess these financial instruments and their ability to address market risk and have established policies and business practices to protect against the adverse effects of these and other potential exposures.

Interest Rate Risk

We do not expect interest rate risk to have a material impact on our financial condition and results of operations. Please refer to “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources” for a discussion of our loans.

For our non-fixed interest rate loans, the interest rates will change in accordance with the benchmark rates of the banks we borrowed from. For the financial assets, the risk associated with fluctuating interest rates is principally confined to our cash deposits in banks, which is one of the many ways we manage our capital. Assuming an increase or decrease of 0.25% in the interest rates of our non-fixed interest rate financial assets and loans, our profit before tax for the year ended December 31, 2024 would have increased or decreased by NT$27.9 million (US$0.9 million). We have not used any derivative financial instruments to hedge interest rate risk. We have not been exposed, nor do we anticipate being exposed to material risks due to changes in interest rates. As of December 31, 2024, our cash and cash equivalents amounted to NT$36.2 billion (US$1.1 billion). Interest income from our cash deposits in banks accounts for only a very small percentage of our total revenues. Therefore, we believe our exposure to interest rate risk is immaterial.

Foreign Currency Risk

We are exposed to foreign currency risk as a result of (i) our foreign currency and derivative trading activities; (ii) our telecommunications equipment being sourced from overseas suppliers; (iii) our international settlement payments associated with our services for international calls and roaming traffic; and (iv) investment denominated in foreign currencies.

We entered into forward exchange contracts to reduce our exposure to foreign currency risk due to fluctuations in exchange rates. Outstanding forward exchange contracts on December 31, 2024 were as follows:

FX Instrument	Currencies Involved	Maturity Period	Contract Amount
Forward exchange contracts-Buy	NT$/USD	January 2025	NT$46 million/USD1 million
Forward exchange contracts-Buy	NT$/EUR	March 2025	NT$10 million/EUR0.3 million
Forward exchange contracts-Buy	NT$/EUR	March 2025	NT$341 million/EUR10 million

Note 38 to our consolidated financial statements included elsewhere in this annual report provides a sensitivity analysis for foreign currency risk.

Equity Price Risk

We are exposed to equity price risk as a result of holding other company’s equity and we manage our investment portfolio in accordance with our internal policies and procedures.

The table below presents the carrying amount and accumulated unrealized gain or loss for our financial assets at fair value through profit or loss, or FVTPL, and financial assets at fair value through other comprehensive income, or FVOCI, as of December 31, 2024.

NT$	NT$	NT$
	(in millions)
Financial assets at FVTPL
Non-listed stocks and limited partnership	968	1	320
Financial assets at FVOCI
Listed stocks	126	1	152
Non-listed stocks	4,541	1,281	615

The value of our equity holdings fluctuates depending on the market conditions. Assuming an increase or decrease of 5% in the equity prices, our profit before tax and other comprehensive income before tax for the year ended December 31, 2024 would have increased or decreased by NT$48 million (US$1.5 million) and NT$233 million (US$7.1 million) as a result of the changes in fair value of financial assets at FVTPL and financial assets at FVOCI, respectively. However, we do not expect the gains and losses in the values of the equities that we hold to have a material impact on our financial condition and results of operations.

ITEM 12. DESCRIPTION OF SECU RITIES OTHER THAN EQUITY SECURITIES

A. Debt Securities

Not applicable.

B. Warrants and Rights

Not applicable.

C. Other Securities

Not applicable.

D. American Depositary Shares

Depositary Fees

Under the terms of the deposit agreement for our ADSs, an ADS holder may have to pay the following service fees to the depositary:

Service	Fees
Issuance of ADSs	Up to US$5.00 per 100 ADS issued
Cancellation of ADSs	Up to US$5.00 per 100 ADS cancelled
Distribution of cash dividends or other cash distributions	Up to US$0.02 per ADS held
Distribution of ADSs pursuant to stock dividends, free stock distributions or exercises of rights	Up to US$5.00 per 100 ADS held
Distribution of securities other than ADSs or rights to purchase additional ADSs	Up to US$5.00 per 100 ADS held

Depositary Charges

In addition, an ADS holder shall be responsible for the following charges:

• taxes and other governmental charges;

• such registration fees as may from time to time be in effect for the registration of common shares or other deposited securities on the share register and applicable to transfers of common shares or other deposited securities to or from the name of the custodian, the depositary or any nominees upon the making of deposits and withdrawals, respectively;

• such SWIFT, facsimile transmission and other communication expenses as are expressly provided in the deposit agreement;

• the expenses and charges incurred by the depositary in the conversion of foreign currency; and

• any other charge payable by the depositary in connection with the servicing of common shares or other deposited securities.

Depositary fees payable upon the issuance and cancellation of ADSs are typically paid to the depositary by the brokers (on behalf of their clients) receiving the newly-issued ADSs from the depositary and by the brokers (on behalf of their clients) delivering the ADSs to the depositary for cancellation. The brokers in turn charge these transaction fees to their clients.

Depositary fees payable in connection with distributions of cash or securities to ADS holders and the depositary services fee are charged by the depositary to the holders of record of ADSs as of the applicable ADS record date. The depositary fees payable for cash distributions are generally deducted from the cash being distributed. In the case of distributions other than cash (i.e., stock dividends, rights offerings), the depositary charges the applicable fee to the ADS record date holders concurrent with the distribution. In the case of ADSs registered in the name of the investor (whether certificated or un-certificated in direct registration), the depositary sends invoices to the applicable record date ADS holders. In the case of ADSs held in brokerage and custodian accounts via the central clearing and settlement system, The Depository Trust Company, or DTC, the depositary generally collects its fees through the systems provided by DTC (whose nominee is the registered holder of the ADSs held in DTC) from the brokers and custodians holding ADSs in their DTC accounts. The brokers and custodians who hold their clients’ ADSs in DTC accounts in turn charge their clients’ accounts the amount of the fees paid to the depositary.

In the event of refusal to pay the depositary fees and charges, the depositary may, under the terms of the deposit agreement, refuse the requested service until payment is received or may set off the amount of the depositary fees from any distribution to be made to the ADS holder.

The fees and charges ADS holders may be required to pay may vary overtime and may be changed by us and by the depositary. ADS holders will receive prior notice of such changes.

Payments by Depositary

In 2024, we received US$0.3 million net payments (after deducting the 30% U.S. withholding tax) from JPMorgan Chase Bank, N.A., the Depositary Bank for our ADR program. The payments were intended to cover certain of our expenses incurred in relation to the ADR program for the year, including:

• investor relations efforts;

• legal fees, NYSE listing fees, proxy process expenses, and SEC filing fees;

• Sarbanes-Oxley and accounting related expenses in connection with ongoing SEC compliance and listing requirements; and

• other ADR program-related expenses.

Par t II

ITEM 13. DEFAULTS, DIVID END ARREARAGES AND DELINQUENCIES

None.

ITEM 14. MATERIAL MODIFICATIONS TO THE R IGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

None.

ITEM 15. CONTROLS AN D PROCEDURES

Disclosure Controls and Procedures

As of the end of the period covered by this annual report, an evaluation has been carried out under the supervision and with the participation of our management, including our chief executive officer and our chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rules 13a-14(c) and 15d-14(c) promulgated under the Securities Exchange Act of 1934, as amended. Based on that evaluation, our chief executive officer and chief financial officer have concluded that our disclosure controls and procedures are effective in ensuring that material information required to be disclosed in this annual report is recorded, processed, summarized and reported to them for assessment, and required disclosure is made within the time period specified in the rules and forms of the SEC.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended, for our company. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IASB), or IFRSs, and includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of a company’s assets, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with IFRSs, and that a company’s receipts and expenditures are being made only in accordance with authorizations of a company’s management and directors, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of a company’s assets that could have a material effect on the consolidated financial statements.

Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance with respect to consolidated financial statement preparation and presentation and may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As required by Section 404 of the Sarbanes-Oxley Act of 2002 and related rules as promulgated by the SEC, management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024 using criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2024 based on the criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

PricewaterhouseCoopers, Taiwan, an independent registered public accounting firm who has also audited our consolidated financial statements as of and for the year ended December 31, 2024, has issued an attestation report on the effectiveness of our internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States).

Attestation Report of the Registered Public Accounting Firm

Our independent registered public accounting firm, PricewaterhouseCoopers, Taiwan has audited the effectiveness of our internal control over financial reporting, as stated in its report. See “Report of Independent Registered Public Accounting Firm” to our consolidated financial statements included elsewhere in the annual report.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the year ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 16. [R eserved]

ITEM 16A. AUDIT COMM ITTEE FINANCIAL EXPERT

Su-ming Lin and Chia-Chung Chen are our audit committee financial experts and independent directors. See “Item 6. Directors, Senior Management and Employees —C. Board Practices.”

The SEC has indicated that the designation of Mr. Lin and Mr. Chen as the audit committee financial experts does not: (i) make Mr. Lin and Mr. Chen the “experts” for any purpose, including without limitation for purposes of Section 11 of the Securities Act of 1933, as amended, as a result of this designation; (ii) impose any duties, obligations or liability on Mr. Lin and Mr. Chen that are greater than those imposed on them as members of the audit committee and the board of directors in the absence of such designation; or (iii) affect the duties, obligations or liability of any other member of the audit committee or the board of directors.

ITEM 16B. CO DE OF ETHICS

We have adopted a Code of Ethics and Ethical Corporate Management Best Practice Principles that apply to our directors, managers, employees, and mandataries, including our chief executive officer and chief financial officer. We have posted copies of our Code of Ethics and Ethical Corporate Management Best Practice Principles on our website at https://www.cht.com.tw/en/home/cht/about-cht/introduction/board-of-directors .

ITEM 16C. PRINCIPAL ACCOUN TANT FEES AND SERVICES

The following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered by Deloitte & Touche (PCAOB ID No. 1060 ) for the fiscal year ended December 31, 2023 and PricewaterhouseCoopers, Taiwan (PCAOB ID. 1345 ) for the fiscal year ended December 31, 2024, our principal accountant for the years indicated. We did not pay any other fees to Deloitte & Touche and PricewaterhouseCoopers, Taiwan during the periods indicated below.

2023	2024
NT$	NT$	US$
(in millions)
Audit fees (1)	59.1	47.2	1.4
Audit-related fees (2)	—	—	—
Tax fees (3)	—	—	—
All other fees (4)	2.9	5.7	0.2

(1) “Audit fees” means the aggregate fees billed in each of the fiscal years listed for professional services rendered by our principal accountant for the audit of our annual consolidated financial statements or services that are normally provided by the auditors in connection with statutory and regulatory filings or engagements.

(2) “Audit-related fees” means the aggregate fees billed in each of the fiscal years listed for assurance and related services by our principal accountant that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit fees.” Services comprising the fees disclosed under the category of “Audit-related fees” involve principally the issuance of agreed-upon procedures letters.

(3) “Tax fees” means the aggregate fees billed in each of the fiscal years listed for professional services rendered by our principal accountant for tax compliance, tax advice and tax planning. Services comprising the fees disclosed under the category of “Tax Fees” involve tax advice.

(4) “All other fees” means the aggregate fees billed in each of the last two fiscal years for products and services provided by our principal accountant other than the services reported in items (1) to (3) above.

All audit and non-audit services provided by Deloitte & Touche for the fiscal year ended December 31, 2023 and PricewaterhouseCoopers, Taiwan for the fiscal year ended December 31, 2024 were pre-approved by our audit committee according to the revised Rule 201(c)(7) of Regulation S-X, entitled “Audit Committee Administration of the Engagement,” that served to strengthen requirements regarding auditor independence.

ITEM 16D. EXEMPTIONS FROM THE LISTING STA NDARDS FOR AUDIT COMMITTEES

None.

ITEM 16E. PURCHASES OF EQUITY SECURITIES B Y THE ISSUER AND AFFILIATED PURCHASERS

Not applicable.

ITEM 16F. CHANGE IN REGISTRANT’S C ERTIFYING ACCOUNTANT

On December 22, 2023, we announced the dismissal of Deloitte & Touche as our independent registered public accounting firm, effective upon the completion of its audit work for the financial statements of the company for the fiscal year ended December 31, 2023, and the appointment of PricewaterhouseCoopers, Taiwan as our independent registered public accounting firm, effective from the audit work for the first quarter of 2024. The decision to change the company’s independent registered public accounting firm was approved by the audit committee and the board of directors.

The report of Deloitte & Touche on the financial statements of the company for the fiscal years ended December 31, 2023 and 2022 did not contain an adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles.

During the two fiscal years ended December 31, 2023 and 2022, (a) there were no disagreements as defined in Item 16F(a)(1)(iv) of Form 20-F with Deloitte & Touche on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Deloitte & Touche, would have caused it to make reference thereto in its reports on the financial statements for such years and (b) there were no reportable events as defined in Item 16F(a)(1)(v) of Form 20-F during the most recent fiscal years or in the subsequent interim period.

The company provided Deloitte & Touche with a copy of the above disclosure and requested that Deloitte & Touche furnish the company with a letter addressed to the U.S. Securities and Exchange Commission stating whether or not it agrees with the above statements. A copy of the Deloitte & Touche’s letter dated April 17, 2024 is attached herewith as Exhibit 15.1.

During each of the fiscal years ended December 31, 2023 and 2022 and the subsequent interim period prior to our engagement of PricewaterhouseCoopers, Taiwan, neither the company, nor anyone on our behalf, has consulted PricewaterhouseCoopers, Taiwan regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the company’s financial statements, and neither a written report was provided to the company nor was oral advice provided that PricewaterhouseCoopers Taiwan concluded was an important factor considered by the company in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement, as that term is defined in Item 16F(a)(1)(iv) and the related instructions to Item 16F of Form 20-F, or a reportable event, as that term is defined in Item 16F(a)(1)(v) of Form 20-F.

ITEM 16G. CORPORAT E GOVERNANCE

As a ROC company listed on the NYSE, we are subject to the U.S. corporate governance rules to the extent that these rules are applicable to foreign private issuers. The following summary details the significant differences between our corporate governance practices and corporate governance standards for non-foreign private issuers (e.g., U.S. companies) under the NYSE Listed Company Manual.

Under Section 303A of the NYSE Listed Company Manual, NYSE-listed foreign private issuers may, in general, follow their home country corporate governance practices in lieu of most of the new NYSE corporate governance requirements. However, all NYSE-listed foreign private issuers must comply with Sections 303A.06, 303A.11, 303A.12(b), 303A.12(c) and 303A.14 of the NYSE Listed Company Manual.

The Legal Framework . In general, corporate governance principles for Taiwanese companies are set forth in the ROC Company Act, the ROC Securities Exchange Act, regulations promulgated by the Securities and Futures Bureau of the FSC and, to the extent they are listed on the TWSE, listing rules of the TWSE. Corporate governance

principles under provisions of ROC law may differ in significant ways to corporate governance standards for non-foreign private issuers listed on the NYSE. Committed to high standards of corporate governance, we have generally brought our corporate governance in line with U.S. regulations. However, we have not adopted certain recommended NYSE corporate governance standards where such standards are not in conformity with ROC laws or regulations or generally prevailing business practices in Taiwan. We believe the following to be the significant differences between our corporate governance practices and NYSE corporate governance rules applicable to non-foreign private issuers listed on the NYSE.

Director Independence . The NYSE corporate governance rules applicable to non-foreign private issuers listed on the NYSE require companies to have a majority of independent directors on the board of directors. The ROC Securities Exchange Act requires the independent directors of a public company to comprise of no less than two persons and one-fifth of the total number of directors. We currently have five independent directors on our thirteen-member board of directors. We follow the standards regulated under the ROC Securities Exchange Act and by the FSC for determining director independence, which are comparable to the standards imposed by the NYSE.

In addition, under the ROC requirements, our board of directors is not required to make a formal determination of a director’s independence. Nevertheless, we believe that our independent directors are free from any business or other relationships that would impair the exercise of their independent judgment. Furthermore, pursuant to the NYSE Listed Company Manual, non-executive directors must meet on a regular basis without the management directors present. All of our directors attend our board of directors’ meetings; however, no separate meeting is held among non-executive directors.

Audit Committee . On April 1, 2003, the SEC adopted final rules relating to the audit committee requirements. Foreign private issuers listed on the NYSE were required to comply with the related NYSE corporate governance rules by July 31, 2005. Our audit committee was established in September 2004 in accordance with the rules set forth in the NYSE Listed Company Manual. According to the NYSE corporate governance rules applicable to non-foreign private issuers listed on the NYSE, the board must review the status of any audit member that serves on more than three audit committees. There is no such requirement under the ROC law, which allows a person to serve as an independent director on up to four public companies in the ROC.

Section 303A.07 of the NYSE Listed Company Manual requires issuers to have at least three directors on the audit committee that meets the definition of independence set forth under Rule 10A-3 of the Exchange Act and Section 303A of the NYSE Listed Company Manual. There is no such requirement under the ROC law, which requires all independent directors of a public company to be members of the audit committee if the company has established such a committee.

On December 19, 2018, the FSC announced that, effective from January 1, 2020, all companies listed on TWSE/Taipei Exchange should establish an audit committee to replace supervisors. Our new audit committee started from the date of the annual general meeting on June 25, 2013, and is maintained as of the date of this annual report. See “Item 6. Directors, Senior Management and Employees—C. Board Practices.” We now simultaneously comply with the relevant rules of the NYSE Listed Company Manual and the relevant rules and regulations in the ROC.

Nominating/Corporate Governance Committee and Corporate Governance Principles . The NYSE corporate governance rules applicable to non-foreign private issuers listed on the NYSE require companies to have a nominating/corporate governance committee, composed entirely of independent directors. In addition to identifying individuals qualified to become board members, the nominating/corporate governance committee must develop and recommend to the board a set of corporate governance principles. The ROC Company Act does not require companies incorporated in the ROC to have a nominating/corporate governance committee. We do not currently have a nominating committee or a corporate governance committee; however, we do have formulated our company’s Code of Corporate Governance to follow.

Currently, our board of directors performs the duties of a corporate governance committee and regularly reviews our corporate governance principles and practices. The ROC Company Act requires that directors shall be elected by stockholders. Our Articles of Incorporation requires us, beginning in the fifth commencement, to establish at least three independent directors in the number of directors. The elections for directors shall proceed

with the candidate nomination mechanism; the stockholders shall elect the directors from among the nominees listed in the roster of director candidates. Stockholders holding 1% or more of our outstanding shares are entitled to nominate candidates of directors in writing to us. The numbers of candidates nominated by stockholders shall not exceed the numbers of directors to be elected; neither the numbers of candidates nominated by the Board. Elections for independent and non-independent directors shall proceed concurrently, and the number of elected independent and non-independent directors shall be calculated separately.

Non-foreign private issuers listed on the NYSE are also required to adopt and disclose corporate governance guidelines. We currently comply with the ROC Non-Binding Corporate Governance Best Practice Principles for TWSE/Taipei Exchange Listed Companies promulgated by the TWSE, or Best Practice Principles, and we explain differences between our practice and the principles, if any, in our ROC annual report.

Compensation Committee . The NYSE corporate governance rules applicable to non-foreign private issuers listed on the NYSE require companies to have a compensation committee, composed entirely of independent directors. Article 14-6 of the ROC Securities and Exchange Act requires all listed companies to establish a compensation committee for directors, supervisors and managers’ compensation, which includes salary, stock options and other rewards, as well as authorizes the Competent Authority (i.e., FSC) to enact a regulation on the authorities of the compensation committee and the qualifications of its members. See “Item 6. Directors, Senior Management and Employees—C. Board Practices” for description of our compliance.

Code of Business Conduct and Ethics . The NYSE corporate governance rules applicable to non-foreign private issuers listed on the NYSE require companies must adopt a code of business conduct and ethics for directors, officers and employees and promptly disclose any waivers of the code for directors or executive officers. We have adopted the Code of Ethics which applies to our directors, managers and employees, and the Ethical Corporate Management Best Practice Principles that applies to our directors, managers, employees and persons having substantial control over us. We have filed the Code of Ethics and the Ethical Corporate Management Best Practice Principles as exhibits to our annual report filed with the U.S. SEC and a copy is available to any stockholder upon request.

Equity Compensation Plans . The NYSE corporate governance rules applicable to non-foreign private issuers listed on the NYSE require that equity compensation plans be approved by a company’s stockholders. Under the ROC Company Act and the ROC Securities and Exchange Act, the distribution of compensation to employees should be decided by the board of directors and reported in stockholders’ meeting. The approval of stockholders’ meeting is required for any issuances of restricted stock to employees, and the board of director has authority to approve employee stock option plans and to grant options to employees pursuant to such plans, subject to the approval of the FSC, and to approve share buy-back programs and transfer of shares to employees under such programs. We intend to follow only the ROC requirements.

Means to Communicate with Non-Management Directors . The NYSE corporate governance rules applicable to non-foreign private issuers listed on the NYSE require companies to establish a means for stockholders, employees and other interested parties to communicate with non-management directors. The ROC law does not have comparable requirements. However, according to the Best Practice Principles, companies are required to establish channels of communication with employees and encourage employees to communicate directly with the management or directors so as to reflect employees’ opinions about the management, financial conditions and material decisions of the company concerning employee welfare. We have complied with these provisions.

Internal Audit Function . The NYSE corporate governance rules applicable to non-foreign private issuers listed on the NYSE require companies to establish an internal audit function to provide management and the audit committee with assessments of the company’s risk management processes and system of internal control. We have complied with the Best-Practice Principles by setting up an internal control/audit system in accordance with the ROC Regulations Governing Establishment of Internal Control Systems by Public Companies.

Furthermore, from the year 2023, we began implementing digital auditing, utilizing digital tools within a risk-based framework, which has allowed us to enhance our risk identification capabilities and effectively risk assessments.

In addition, the FSC announced in August 2023 that corporates in Taiwan have aligned with the IFRS Sustainability Disclosure Standards. By the end of 2024, we have integrated sustainability information management into our internal control system and have included it as a mandatory annual audit item from 2025.

CEO Certification to the NYSE. The NYSE listing standards require the CEO of companies to certify compliance with NYSE corporate governance standards annually. ROC law does not contain such requirement. In this regard, we only follow the ROC corporate governance requirement which does not require CEO annual certification. However, our CEO and CFO are required to certify in the 20-F annual report that, to his or her knowledge the information contained therein fairly represents in all material respects the financial condition and results of operations of our company.

ITEM 16H. MINE SAFET Y DISCLOSURE

Not applicable.

ITEM 16I. DISCLOSURE REGARDING FOREIGN JUR ISDICTIONS THAT PREVENT INSPECTION

Not applicable.

ITEM 16J. INSIDER TRAD ING POLICIES

We have adopted an insider trading policy governing the purchase, sale, and other dispositions of our securities by directors, senior management, and employees. A copy of the insider trading policy is attached as Exhibit 11.3 to this annual report.

ITEM 16K. CYBERSE CURITY

Risk Management and Strategy

In order to ensure full security of our critical infrastructure and critical information infrastructure, we referenced Cybersecurity Framework, or CSF, of the National Institute of Standards and Technology in the U.S., as well as domestic and international standards and regulations, including the Administration Regulations of Cyber Security on Telecommunications Business, Cyber Security Management Act, Personal Data Protection Act, General Data Protection Regulation, or GDPR, BS 10012, ISO 27001, ISO 27011, ISO 27701, to establish our Cyber Security and Privacy Protection Risk Management Framework. Set forth below are measures that we undertake to manage cybersecurity risks.

Internal Policies

In order to prevent cybersecurity incidents, we have adopted a “Cybersecurity Policy” approved by the Chairman as well as the following measures:

•

• response: incident report and response, anomaly analysis, forensics and decision-making, recovery and improvement plan, cybersecurity intelligence sharing and joint defense enhancement; and

• recovery: cybersecurity and personal data incident drills, internal and external audits, third-party certification, performance evaluation and continual improvement.

Through intelligent and automated cybersecurity governance mechanisms, the detection of cybersecurity threats and violation risks, while regularly conducting red team security assessments that include cybersecurity health diagnosis, we have fully integrated cybersecurity management into our daily operations, including employees, facilities, network, systems, applications and supply chain, the details measures implemented in these areas are described below:

• employee security training: regularly hold cybersecurity training sessions and classes, encourage employees to obtain international cybersecurity certifications, promote employee awareness and professional capacities for cybersecurity and privacy protection, and regularly hold Social Engineering exercises to improve employee alertness to Advanced Persistent Threat, or APT, attacks.

• facilities security: implement physical isolation, individualized gates, 24-hour intrusion alarms and video monitoring systems, and implement access control systems and prohibit personnel with concerns that may damage national security from causing machine room breach.

• network security: deploy multi-layered, in-depth security protection and detection mechanisms, and establish Demilitarized Zone, or DMZ, to control network access.

• system and application security: develop software based on Secure Software Development Life Cycle, or SSDLC, systems pass the security assessment before launch or updates, applications receive Mobile Application Basic Security, or MAS, certification marks from the Ministry o f Economic Affairs, regularly scan for vulnerabilities and patch within time limit, establish software lists, understand the risk of software vulnerabilities and respond immediately through critical vulnerability early warnings, notifications and patching mechanisms, and all developers are required to pass security coding training and tests.

Engagement of Service Providers

We have engaged CHT Security Co, Ltd., an industry expert in cybersecurity protection, to perform in-depth cybersecurity health diagnoses to ensure the safety of our information system. CHT Security Co, Ltd.’s Digital Forensic and Cybersecurity Analysis Center is ISO 17025 certified. Moreover, its Red Team Security Assessment is the only ISO 20000 certificated team in Taiwan that has discovered more than 50 Common Vulnerabilities and Exposures on software, website and IoT equipment. The Red Team is also the only cybersecurity service provider in Taiwan to be awarded the highest 5A rating for cybersecurity services by the Executive Yuan for five consecutive years.

We have adopted third-party security assessment procedures and data access control procedures to manage risks from cybersecurity threats associated with our use of third-party service providers. We perform security assessments on third parties that provide information and communication services to us by assessing their basic data security capabilities, information security compliance and application security vulnerabilities. In-data transmission processing and data security is ensured through access control in line with ISO 27001 standard and security measures such as transmission encryption.

We have included standardized cybersecurity complement provisions and personal data protection complement provisions in our procurement contracts with third-party suppliers to stipulate the cybersecurity responsibilities of such third parties, remediation measures to be taken in the event of cybersecurity risks, and damages upon the occurrence of cybersecurity incidents. We also conduct contract-based monitoring or on-site audits to ensure compliance with our cybersecurity policy and laws and regulations.

Cybersecurity Governance Structur e

Board of Directors

Our board of directors is responsible for and engaged in the oversight of our continuous efforts in monitoring, assessing and managing the risks associated with cybersecurity threats or incidents. Our President regularly reports to the board of directors on the company’s cybersecurity and privacy protection governance. The board reviews reports from management on material cybersecurity risks and incidents and discusses risk treatment plans with the management. At board meetings, the board also hears period reports from the management on cybersecurity risk management and governance and has follow-up discussions with the management.

Policy Review and Approval

All cybersecurity-related internal policies shall be reviewed and approved by the management personnel in charge of the proposing departments as well as the President prior to adoption.

Our management makes assessments of cybersecurity risks and incidents and reports the nature, origin and potential impact of cybersecurity risks and incidents to the board of directors based on an assessment of materiality so that the board can learn about material cybersecurity risks and incidents on a timely basis and make decisions accordingly. In addition, to keep the board regularly informed about cybersecurity matters, the management makes periodic reports to the board on cybersecurity risk management and governance at board meetings, has live discussions with the board and addresses their questions.

Corporate Governance Committees

In August 2023, we established the risk management committee at our board level, comprised of directors with various areas of expertise, including ICT, legal, risk management, auditing and cybersecurity. The committee oversees the implementation of our risk management mechanism, including cybersecurity and privacy protection risk management, and provides necessary recommendations for improvement to our board of directors .

Under the supervision of the abovementioned risk management committee, we established the risk management steering committee, which tracks and manages risk control issues of cybersecurity and privacy protection on a monthly basi s. When a risk level has reached a greater extent than risk appetite or risk tolerance level and an early warning is required, or where there is a major crisis, the convener of our risk management steering committee will report to our risk management committee in a timely fashion and, if necessary, report to our board of directors accordingly.

Furthermore, to ensure effective cybersecurity management, we also established the cybersecurity and privacy protection management committee with the Chairman representing the board of directors to supervise the implementation of our “Cybersecurity Policy.” Meanwhile, the president has been appointed as the convener, and our Chief Information Security Officer, or CISO, is responsible for supervising our internal cybersecurity matters.

On September 30, 2024, we appointed Dr. Jung-Kuei Chen as our CISO and Vice President of the Cybersecurity Department. Dr. Chen holds a Ph.D. in Electrical Engineering from National Taiwan University and has been with us for over 36 years. He possesses extensive cross-disciplinary practical experience in telecommunications, networks, cybersecurity, AI, information technology, and risk management. Previously, he served as the President of the Information Technology Group and the Vice President of the Telecom Laboratories. Dr. Chen has been instrumental in cultivating cybersecurity professionals within our company and enhancing our capabilities in independent cybersecurity technology research and development.

In addition, we established CHT Security Operation Center, or SOC, in 2013 with abundant experiences in large-scale hacking and defense scenarios. The Cybersecurity Department, a department dedicated to ICT security management, was also set up in 2016 as the executive secretariat. The Cybersecurity Department includes executive secretary with responsibilities that range from reporting on cybersecurity management performance, reviewing and improving risk-related issues, reviewing the suitability of cybersecurity programs, privacy protection policies and regulations, and supervising and evaluating compliance and efficacy of strategies. Our senior management is actively involved in the discussion with and decision process of the Cybersecurity Department in order to (i) align regulations with technology advancement for new business development, (ii) coordinate the overall cybersecurity policy, (iii) enact and amend required security specifications, (iv) utilize equipment for centralized security monitor, (v) defense and mitigate enterprise security risks, (vi) accelerate new business development, and (vii) provide customers with a secure and reliable digital ecosystem. The Cybersecurity Department is composed of the cybersecurity working group and the privacy protection working group. The two working groups hold meetings regularly and report to the board of directors.

Since 2021, we have arranged and been covered by data protection insurance to prevent potential major financial losses from cybersecurity incidents and safeguard the rights of our customers and investors. In 2024, we had not been subject to any punishment due to cybersecurity, and there were no incidents of material risks arising from cybersecurity or personal data protection. For more information, please visit the websites at: https://www.cht.com.tw/en/home/cht/esg/customer-care/cybersecurity (cybersecurity); www.cht.com.tw/en/home/cht/esg/customer-care/privacy-protection/privacy-policy (privacy protection). The information contained on our website is not incorporated herein by reference and does not constitute part of this annual r eport.

PAR T III

ITEM 17. FINANCIA L STATEMENTS

The Registrant has elected to provide the consolidated financial statements and related information specified in Item 18 in lieu of Item 17.

ITEM 18. FINANCI AL STATEMENTS

The following is a list of the consolidated financial statements and report of independent registered public accounting firm included in this annual report beginning on page F-1.

100

ITEM 19. E XHIBITS

Exhibit Number	Description of Exhibits
1.1*	Articles of Incorporation of Chunghwa Telecom Co., Ltd. (English translation), as last amended by Annual General Meeting on May 31, 2024.
2.1	Form of Amended and Restated Deposit Agreement dated as of December 27, 2023 among Chunghwa Telecom Co. Ltd., JPMorgan Chase Bank, N.A., as depositary, and all holders from time to time of ADRs issued thereunder, including the Form of American Depositary Receipt (incorporated by reference to Exhibit (a)(2) to the Registrant’s Registration Statement on Form F-6 (File No. 333-147321) filed with the Commission on December 27, 2023).
2.2*	Description of our securities registered pursuant to Section 12 of the Securities Exchange Act of 1934.
8.1*	List of Subsidiaries.
11.1	Code of Ethics (English translation) (incorporated by reference to Exhibit 11.1 to the Registrant’s Annual Report on Form 20-F for the fiscal year ended December 31, 2022 (File No. 001-31731) filed with the Commission on April 17, 2023).
11.2*	Ethical Corporate Management Best Practice Principles (English translation), as last amended by Board of Directors on April 17, 2024.
11.3*	Insider Trading Policy of Chunghwa Telecom Co., Ltd.
12.1*	Certification of our Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
12.2*	Certification of our Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
13.1**	Certification of our Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
13.2**	Certification of our Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
15.1	Letter of Deloitte & Touche. (incorporated by reference to Exhibit 15.1 to the Registrant’s Annual Report on Form 20-F for the fiscal year ended December 31, 2023 (File No. 001-31731) filed with the Commission on April 17, 2024)
97	Incentive Compensation Clawback Policy of Chunghwa Telecom Co., Ltd. (incorporated by reference to Exhibit 97 to the Registrant’s Annual Report on Form 20-F for the fiscal year ended December 31, 2023 (File No. 001-31731) filed with the Commission on April 17, 2024)
101.INS*	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document.
101.SCH*	Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents.
104*	Cover page formatted as Inline XBRL and contained in Exhibit 101.

Filed herewith.

** Furnished herewith.

101

SIGNAT URES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

/s/ CHIH-CHENG CHIEN
Name:	Chih-Cheng Chien
Title:	Chairman and Chief Executive Officer
	Date: April 16, 2025

102

INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm	F- 1
Consolidated Balance Sheets as of December 31, 2023 and 2024	F-4
Consolidated Statements of Comprehensive Income for the years ended December 31, 2022, 2023 and 2024	F- 6
Consolidated Statements of Changes in Equity for the years ended December 31, 2022, 2023 and 2024	F- 8
Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2023 and 2024	F- 9
Notes to Consolidated Financial Statements	F- 12

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Chunghwa Telecom Co., Ltd.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheet of Chunghwa Telecom Co., Ltd. and its subsidiaries (the “Company”) as of December 31, 2024, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the year then ended, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year then ended in conformity with IFRS Accounting Standards as issued by the International Accounting Standards Board. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 15. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made

F- 1

only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Accuracy of Revenue on Mobile Service

As described in Notes 3, 31 and 44 to the consolidated financial statements, revenue from mobile service makes up a portion of total revenues of $229,968 million for the year ended December 31, 2024. The Company recognizes revenue for mobile service based on the terms of mobile service contracts and actual usage of mobile services. Given that revenue on mobile service is comprised of a large number of low-dollar transactions from a large number of contracts and a wide variety of tariff plans, the Company highly relies on the automated information systems to process and recognize revenue for mobile service.

The principal considerations for our determination that performing procedures relating to accuracy of revenue on mobile service is a critical audit matter are that the Company’s revenue from mobile service is made up of a large number of low-dollar transactions and highly relies on information technology systems. This in turn led to a high degree of auditor effort required in performing procedures related to accuracy of the Company’s revenue on mobile service.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included obtaining an understanding over the design of internal controls and information systems related to the business process of the Company’s revenue recognition on mobile service and evaluating operating effectiveness of such controls, including (i) obtaining an understanding and evaluated the significant systems related to revenue on mobile service, and testing the information technology general controls as well as the automated controls for automatic calculations and system interface over these systems and (ii) testing manual controls related to the review of information on mobile service, including service acceptance, updates to price information, data collection and system interface, pricing, billing, and accounting processes. These procedures also included, among others, selecting samples from mobile service revenue, agreed the samples selected to service contracts, invoices, payment records, and tested consistency between the data entered into the system and the original service contracts.

/s/ PricewaterhouseCoopers, Taiwan

Taipei, Taiwan

April 16, 2025

We have served as the Company’s auditor since 2024.

F- 2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Chunghwa Telecom Co., Ltd.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Chunghwa Telecom Co., Ltd. and subsidiaries (the “Company”) as of December 31, 2023, the related consolidated statements of comprehensive income, changes in equity, and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Deloitte & Touche

Taipei, Taiwan

Republic of China

April 17, 2024

We began serving as the Company's auditor in 1998. In 2024 we became the predecessor auditor.

F- 3

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31, 2023 and 2024

(In Millions of New Taiwan or U.S. Dollars)

ASSETS	Notes	2023 — NT$	2024 — NT$	US$ (Note 6)
CURRENT ASSETS
Cash and cash equivalents	3, 7, 40	$ 33,824	$ 36,260	$ 1,106
Financial assets at fair value through profit or loss	3, 4, 8	1	—	—
Hedging financial assets	3, 22	—	1	—
Contract assets	3, 31	6,713	8,401	256
Trade notes and accounts receivable, net	3, 4, 11, 31	24,842	26,026	794
Receivables from related parties	40	78	193	6
Inventories	3, 4, 12, 31, 41, 42	11,521	12,087	369
Prepayments	13	2,840	3,138	96
Other current monetary assets	14, 29, 40	20,352	23,408	714
Incremental costs of obtaining contracts	3, 31	211	339	10
Other current assets	21, 33, 41	2,822	3,115	94
Total current assets		103,204	112,968	3,445
NONCURRENT ASSETS
Financial assets at fair value through profit or loss	3, 4, 8	1,036	1,005	31
Financial assets at fair value through other comprehensive income	3, 4, 9	4,412	4,667	142
Financial assets at amortized cost	3, 10	—	2,000	61
Investments accounted for using equity method	3, 16	8,252	8,879	271
Contract assets	3, 31	3,769	4,327	132
Property, plant and equipment	3, 4, 17, 36, 40, 41, 42	292,338	289,840	8,839
Right-of-use assets	3, 4, 18, 40	11,238	10,912	333
Investment properties	3, 4, 19	9,805	12,302	375
Intangible assets	3, 4, 20, 40	72,727	66,283	2,021
Deferred income tax assets	3, 33	2,099	1,661	51
Incremental costs of obtaining a contract	3, 31	939	1,222	37
Net defined benefit assets	3, 4, 29	5,963	8,884	271
Prepayments	13, 42	3,330	4,461	136
Other noncurrent assets	21, 41, 42	4,629	4,886	150
Total noncurrent assets		420,537	421,329	12,850
TOTAL		$ 523,741	$ 534,297	$ 16,295

(Continued)

F- 4

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31, 2023 and 2024

(In Millions of New Taiwan or U.S. Dollars)

LIABILITIES AND EQUITY	Notes	2023 — NT$	2024 — NT$	US$ (Note 6)
CURRENT LIABILITIES
Short-term loans	23	$ 585	$ 215	$ 7
Hedging financial liabilities	3, 22	—	2	—
Contract liabilities	3, 31, 42	14,088	16,301	497
Trade notes and accounts payable	26	14,396	17,743	541
Payables to related parties	40	385	480	15
Current tax liabilities	3, 33	6,613	6,822	208
Lease liabilities	3, 4, 18, 36, 40	3,505	3,558	109
Other payables	27, 36	25,257	26,581	811
Provisions	3, 28	337	442	13
Current portion of long-term loans	3, 24 ,25, 41	1,600	8,803	268
Other current liabilities		984	1,050	32
Total current liabilities		67,750	81,997	2,501
NONCURRENT LIABILITIES
Long-term loans	3, 24, 41	—	1,631	50
Bonds payable	3, 25	30,483	21,689	661
Contract liabilities	3, 31, 42	7,560	7,541	230
Deferred income tax liabilities	3, 33	2,461	2,658	81
Provisions	3, 28	485	535	16
Lease liabilities	3, 4, 18, 36, 40	7,470	7,334	224
Customers’ deposits	40	5,309	5,311	163
Net defined benefit liabilities	3, 4, 29	2,098	2,107	64
Other noncurrent liabilities		7,406	7,688	234
Total noncurrent liabilities		63,272	56,494	1,723
Total liabilities		131,022	138,491	4,224
EQUITY ATTRIBUTABLE TO STOCKHOLDERS OF THE PARENT
Common stocks		77,574	77,574	2,366
Additional paid-in capital		149,828	150,054	4,576
Retained earnings
Legal reserve		77,574	77,574	2,366
Special reserve		2,899	2,676	82
Unappropriated earnings		72,059	74,362	2,267
Total retained earnings		152,532	154,612	4,715
Others		353	586	18
Total equity attributable to stockholders of the parent	15, 30	380,287	382,826	11,675
NONCONTROLLING INTERESTS	15, 30	12,432	12,980	396
Total equity		392,719	395,806	12,071
TOTAL		$ 523,741	$ 534,297	$ 16,295

(Concluded)

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

F- 5

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

YEARS ENDED DECEMBER 31, 2022, 2023 and 2024

(In Millions of New Taiwan or U.S. Dollars, Except Earnings Per Share That Are in New Taiwan or U.S. Dollars)

	Notes	2022 — NT$	NT$		NT$		US$ (Note 6)
REVENUES	3, 31, 40, 44	$ 216,739	$	223,199	$	229,968	$	7,013
OPERATING COSTS	3, 12, 29, 31, 32, 40	136,717		141,767		146,583		4,470
GROSS PROFIT		80,022		81,432		83,385		2,543
OPERATING EXPENSES
Marketing		22,819		23,599		25,104		765
General and administrative		6,580		6,801		7,175		219
Research and development		3,774		3,892		4,167		127
Expected credit loss		117		152		188		6
Total operating expenses	3, 11, 29, 32, 40	33,290		34,444		36,634		1,117
OTHER INCOME AND EXPENSES	17, 19, 20, 32, 44	93		( 635	)	122		3
INCOME FROM OPERATIONS		46,825		46,353		46,873		1,429
NON-OPERATING INCOME AND EXPENSES
Interest income	40, 44	249		618		781		24
Other income	10, 32, 40	369		382		463		14
Other gains and losses	16, 32, 40	( 418	)	( 279	)	( 94	)	( 3	)
Interest expense	18, 32, 40, 44	( 263	)	( 319	)	( 339	)	( 10	)
Share of profits of associates and joint ventures accounted for using equity method	16, 44	442		253		157		5
Total non-operating income and expenses		379		655		968		30
INCOME BEFORE INCOME TAX		47,204		47,008		47,841		1,459
INCOME TAX EXPENSE	3, 33	9,335		8,947		9,333		285
NET INCOME		37,869		38,061		38,508		1,174
TOTAL OTHER COMPREHENSIVE INCOME (LOSS)
Items that will not be reclassified to profit or loss:
Remeasurements of defined benefit pension plans	29	1,154		157		2,255		69
Unrealized gain or loss on investments in equity instruments at fair value through other comprehensive income	3, 30, 39	( 137	)	619		48		2
Gain or loss on hedging instruments subject to basis adjustment	3, 22	21		( 13	)	( 1	)	—
Share of other comprehensive income of associates and joint ventures	3, 16, 30	3		6		14		—
Income tax relating to items that will not be reclassified to profit or loss	33	( 231	)	( 31	)	( 451	)	( 14	)
		810		738		1,865		57

(Continued)

F- 6

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

YEARS ENDED DECEMBER 31, 2022, 2023 and 2024

(In Millions of New Taiwan or U.S. Dollars, Except Earnings Per Share That Are in New Taiwan or U.S. Dollars)

	Notes	2022 — NT$	2023 — NT$		2024 — NT$	US$ (Note 6)
Items that may be reclassified subsequently to profit or loss:
Exchange differences arising from the translation of the foreign operations		$ 296	$ ( 46	)	$ 192	$ 6
Share of other comprehensive income (loss) of associates and joint ventures	3, 16, 30	6	( 23	)	24	1
		302	( 69	)	216	7
Total other comprehensive income, net of income tax		1,112	669		2,081	64
TOTAL COMPREHENSIVE INCOME		$ 38,981	$ 38,730		$ 40,589	$ 1,238
NET INCOME ATTRIBUTABLE TO
Stockholders of the parent		$ 36,358	$ 36,958		$ 37,189	$ 1,134
Noncontrolling interests		1,511	1,103		1,319	40
		$ 37,869	$ 38,061		$ 38,508	$ 1,174
COMPREHENSIVE INCOME ATTRIBUTABLE TO
Stockholders of the parent		$ 37,450	$ 37,658		$ 39,223	$ 1,196
Noncontrolling interests		1,531	1,072		1,366	42
		$ 38,981	$ 38,730		$ 40,589	$ 1,238
EARNINGS PER SHARE	34
Basic		$ 4.69	$ 4.76		$ 4.79	$ 0.15
Diluted		$ 4.68	$ 4.76		$ 4.78	$ 0.15
EARNINGS PER EQUIVALENT ADS
Basic		$ 46.87	$ 47.64		$ 47.94	$ 1.46
Diluted		$ 46.81	$ 47.58		$ 47.83	$ 1.46

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

F- 7

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

YEARS ENDED DECEMBER 31, 2022, 2023 and 2024

(In Millions of New Taiwan or U.S. Dollars)

	Equity Attributable to Stockholders of the Parent
			Retained Earnings							Others
	Common Stocks	Additional Paid-in Capital	Legal Reserve		Special Reserve	Unappropriated Earnings		Total Retained Earnings		Exchange Differences Arising from the Translation of the Foreign Operations			Unrealized Gain or Loss on Financial Assets at Fair Value through Other Comprehensive Income		Gain or Loss on Hedging Instruments		Total Others		Total Equity Attributable to Stockholders of the Parent	Noncontrolling Interests		Total Equity
	NT$	NT$	NT$		NT$	NT$		NT$		NT$			NT$		NT$		NT$		NT$	NT$		NT$
BALANCE, JANUARY 1, 2022	$ 77,574	$ 149,810	$	77,574	$ 2,676	$	70,157	$	150,407	$	( 392	)	$ ( 8	)	$ ( 8	)	$ ( 408	)	$ 377,383	$	11,747	$	389,130
Appropriation of 2021 earnings
Special reserve	—	—		—	408		( 408	)	—		—		—		—		—		—		—		—
Cash dividends distributed by Chunghwa	—	—		—	—		( 35,746	)	( 35,746	)	—		—		—		—		( 35,746	)	—		( 35,746	)
Cash dividends distributed by subsidiaries	—	—		—	—		—		—		—		—		—		—		—		( 1,053	)	( 1,053	)
Unclaimed dividend	—	2		—	—		—		—		—		—		—		—		2		—		2
Net income for the year ended December 31, 2022	—	—		—	—		36,358		36,358		—		—		—		—		36,358		1,511		37,869
Other comprehensive income (loss) for the year ended December 31, 2022	—	—		—	—		907		907		281		( 117	)	21		185		1,092		20		1,112
Total comprehensive income (loss) for the year ended December 31, 2022	—	—		—	—		37,265		37,265		281		( 117	)	21		185		37,450		1,531		38,981
Disposal of investments in equity instruments at fair value through other comprehensive income	—	—		—	—		—		—		—		—		—		—		—		—		—
Changes in equities of subsidiaries	—	32		—	—		—		—		—		—		—		—		32		72		104
Net increase in noncontrolling interests	—	—		—	—		—		—		—		—		—		—		—		111		111
BALANCE, DECEMBER 31, 2022	77,574	149,844		77,574	3,084		71,268		151,926		( 111	)	( 125	)	13		( 223	)	379,121		12,408		391,529
Appropriation of 2022 earnings
Special reserve	—	—		—	( 185	)	185		—		—		—		—		—		—		—		—
Cash dividends distributed by Chunghwa	—	—		—	—		( 36,476	)	( 36,476	)	—		—		—		—		( 36,476	)	—		( 36,476	)
Cash dividends distributed by subsidiaries	—	—		—	—		—		—		—		—		—		—		—		( 1,092	)	( 1,092	)
Unclaimed dividend	—	2		—	—		—		—		—		—		—		—		2		—		2
Change in additional paid-in capital from investments in associates and joint ventures accounted for using equity method	—	( 26	)	—	—		—		—		—		—		—		—		( 26	)	—		( 26	)
Actual acquisition of interests in subsidiaries	—	—		—	—		—		—		—		—		—		—		—		—		—
Net income for the year ended December 31, 2023	—	—		—	—		36,958		36,958		—		—		—		—		36,958		1,103		38,061
Other comprehensive income (loss) for the year ended December 31, 2023	—	—		—	—		124		124		( 57	)	646		( 13	)	576		700		( 31	)	669
Total comprehensive income (loss) for the year ended December 31, 2023	—	—		—	—		37,082		37,082		( 57	)	646		( 13	)	576		37,658		1,072		38,730
Changes in equities of subsidiaries	—	8		—	—		—		—		—		—		—		—		8		25		33
Net increase in noncontrolling interests	—	—		—	—		—		—		—		—		—		—		—		19		19
BALANCE, DECEMBER 31, 2023	77,574	149,828		77,574	2,899		72,059		152,532		( 168	)	521		—		353		380,287		12,432		392,719
Appropriation of 2023 earnings
Special reserve	—	—		—	( 223	)	223		—		—		—		—		—		—		—		—
Cash dividends distributed by Chunghwa	—	—		—	—		( 36,910	)	( 36,910	)	—		—		—		—		( 36,910	)	—		( 36,910	)
Cash dividends distributed by subsidiaries	—	—		—	—		—		—		—		—		—		—		—		( 898	)	( 898	)
Unclaimed dividend	—	2		—	—		—		—		—		—		—		—		2		—		2
Actual disposal of interests in subsidiaries	—	224		—	—		—		—		—		—		—		—		224		35		259
Net income for the year ended December 31, 2024	—	—		—	—		37,189		37,189		—		—		—		—		37,189		1,319		38,508
Other comprehensive income (loss) for the year ended December 31, 2024	—	—		—	—		1,801		1,801		191		43		( 1	)	233		2,034		47		2,081
Total comprehensive income (loss) for the year ended December 31, 2024	—	—		—	—		38,990		38,990		191		43		( 1	)	233		39,223		1,366		40,589
Changes in equities of subsidiaries	—	—		—	—		—		—		—		—		—		—		—		45		45
BALANCE, DECEMBER 31, 2024	$ 77,574	$ 150,054	$	77,574	$ 2,676	$	74,362	$	154,612	$	23		$ 564		$ ( 1	)	$ 586		$ 382,826	$	12,980	$	395,806
BALANCE, DECEMBER 31, 2024 (IN MILLIONS OF US$ - Note 6)	$ 2,366	$ 4,576	$	2,366	$ 82	$	2,267	$	4,715	$	1		$ 17		$ —		$ 18		$ 11,675	$	396	$	12,071

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

F- 8

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEM ENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2022, 2023 and 2024

(In Millions of New Taiwan or U.S. Dollars)

	2022 — NT$	NT$		NT$		US$ (Note 6)
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax	$ 47,204	$	47,008	$	47,841	$	1,459
Adjustments for:
Depreciation	32,786		32,956		32,920		1,004
Amortization	6,643		6,699		6,699		204
Amortization of incremental costs of obtaining contracts	841		856		906		28
Expected credit loss	117		152		188		6
Valuation loss on financial assets and liabilities at fair value through profit or loss, net	206		98		147		4
Interest expense	263		319		339		10
Interest income	( 249	)	( 618	)	( 781	)	( 24	)
Dividend income	( 157	)	( 167	)	( 240	)	( 7	)
Compensation cost of share-based payment transactions	16		8		8		—
Share of profits of associates and joint ventures accounted for using equity method	( 442	)	( 253	)	( 157	)	( 5	)
Loss on disposal of property, plant and equipment	5		—		17		1
Gain on disposal of financial instruments	( 1	)	—		( 1	)	—
Loss (gain) on disposal of investments accounted for using equity method	14		( 6	)	( 85	)	( 3	)
Provision for impairment loss and obsolescence of inventory	34		23		60		2
Impairment loss on property, plant and equipment	—		299		—		—
Impairment loss (reversal of impairment loss) on investment properties	( 107	)	336		( 139	)	( 4	)
Impairment loss on intangible assets	9		—		—		—
Others	254		( 60	)	( 69	)	( 2	)
Changes in operating assets and liabilities:
Decrease (increase) in:
Contract assets	( 1,031	)	( 1,291	)	( 2,249	)	( 69	)
Trade notes and accounts receivable	( 785	)	( 287	)	( 1,322	)	( 40	)
Receivables from related parties	( 34	)	( 3	)	( 115	)	( 4	)
Inventories	( 23	)	( 178	)	( 626	)	( 19	)
Prepayments	2		( 315	)	( 29	)	( 1	)
Other current monetary assets	( 165	)	107		64		2
Other current assets	( 576	)	733		( 293	)	( 9	)
Incremental cost of obtaining contracts	( 833	)	( 1,026	)	( 1,317	)	( 40	)
Increase (decrease) in:
Contract liabilities	1,990		584		2,194		67
Trade notes and accounts payable	( 1,631	)	( 2,033	)	3,347		102
Payables to related parties	147		( 154	)	95		3
Other payables	782		562		1,540		47
Provisions	( 28	)	373		153		5
Net defined benefit plans	( 724	)	( 728	)	( 657	)	( 20	)
Other current liabilities	60		( 14	)	78		3
Cash generated from operations	84,587		83,980		88,516		2,700
Interests paid	( 239	)	( 314	)	( 333	)	( 10	)
Income taxes paid	( 8,397	)	( 9,107	)	( 8,939	)	( 273	)
Net cash provided by operating activities	75,951		74,559		79,244		2,417

(Continued)

F- 9

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2022, 2023 and 2024

(In Millions of New Taiwan or U.S. Dollars)

	2022 — NT$		2023 — NT$		2024 — NT$		US$ (Note 6)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at fair value through other comprehensive income	$ ( 19	)	$ ( 305	)	$ ( 313	)	$ ( 9	)
Proceeds from disposal of financial assets at fair value through other comprehensive income	—		—		—		—
Proceeds from capital reduction of financial assets at fair value through other comprehensive income	7		—		112		4
Acquisition of financial assets at amortized cos	—		—		( 2,000	)	( 61	)
Acquisition of financial assets at fair value through profit or loss	( 360	)	( 133	)	( 162	)	( 5	)
Proceeds from disposal of financial assets at fair value through profit or loss	15		—		5		—
Acquisition of investments accounted for using equity method	( 52	)	( 1,555	)	( 776	)	( 23	)
Proceeds from capital reduction of investments accounted for using equity method	340		—		—		—
Acquisition of property, plant and equipment	( 31,535	)	( 30,741	)	( 28,756	)	( 877	)
Proceeds from disposal of property, plant and equipment	16		19		13		—
Acquisition of intangible assets	( 1,893	)	( 237	)	( 234	)	( 7	)
Acquisition of investment properties	( 18	)	( 54	)	( 4	)	—
Acquisition of time deposits, negotiable certificates of deposit and commercial paper with maturities of more than three months	( 5,670	)	( 45,239	)	( 72,915	)	( 2,224	)
Proceeds from disposal of time deposits, negotiable certificates of deposit and commercial paper with maturities of more than three months	7,310		28,577		69,886		2,131
Decrease (increase) in other noncurrent assets	235		166		( 258	)	( 8	)
Increase in prepayments for leases	—		( 1,729	)	( 1,400	)	( 43	)
Interests received	219		568		764		23
Dividends received	550		467		663		20
Proceeds from capital reduction and profit distribution of financial assets at fair value through profit or loss	66		22		43		1
Net cash used in investing activities	( 30,789	)	( 50,174	)	( 35,332	)	( 1,078	)

(Continued)

F- 10

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2022, 2023 and 2024

(In Millions of New Taiwan or U.S. Dollars)

	2022 — NT$	NT$		NT$		US$ (Note 6)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term loans	$ 1,292	$	2,590	$	700	$	21
Repayments of short-term loans	( 635	)	( 2,727	)	( 1,070	)	( 33	)
Proceeds from long-term loans	—		—		35		1
Increase (decrease) in customers’ deposits	( 223	)	134		( 9	)	—
Proceeds from issuance of bonds	3,500		—		—		—
Payments for transaction costs attributable to the issuance of bonds	( 4	)	—		—		—
Payments for the principal of lease liabilities	( 3,777	)	( 3,884	)	( 3,944	)	( 120	)
Increase in other noncurrent liabilities	1,644		680		282		9
Cash dividends paid	( 35,746	)	( 36,476	)	( 36,910	)	( 1,126	)
Acquisition of additional interests in subsidiaries	—		—		—		—
Partial disposal of interests in subsidiaries without losing control	—		—		259		8
Cash dividends distributed to noncontrolling interests	( 1,053	)	( 1,092	)	( 898	)	( 27	)
Change in other noncontrolling interests	200		43		37		1
Unclaimed dividend	2		2		2		—
Net cash used in financing activities	( 34,800	)	( 40,730	)	( 41,516	)	( 1,266	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	52		( 24	)	40		1
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	10,414		( 16,369	)	2,436		74
CASH AND CASH EQUIVALENTS, BEGINNING OF THE YEAR	39,779		50,193		33,824		1,032
CASH AND CASH EQUIVALENTS, END OF THE YEAR	$ 50,193	$	33,824	$	36,260	$	1,106

(Concluded)

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

F- 11

CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

1. GENERAL

Chunghwa Telecom Co., Ltd. (“Chunghwa”; Chunghwa together with its subsidiaries are hereinafter referred to collectively as the “Company”.) was incorporated on July 1, 1996 in the Republic of China (“ROC”). Chunghwa is a company limited by shares and, prior to August 2000, was wholly owned by the Ministry of Transportation and Communications (“MOTC”). Prior to July 1, 1996, the current operations of Chunghwa were carried out under the Directorate General of Telecommunications (“DGT”). The DGT was established by the MOTC in June 1943 to take primary responsibility in the development of telecommunications infrastructure and to formulate policies related to telecommunications. On July 1, 1996, the telecom operations of the DGT were spun-off as Chunghwa which continues to carry out the business and the DGT continues to be the industry regulator.

Effective August 12, 2005, the MOTC completed the process of privatizing Chunghwa by reducing the government ownership to below 50% in various stages. In July 2000, Chunghwa received approval from the Securities and Futures Commission (the “SFC”) for a domestic initial public offering and its common stocks were listed and traded on the Taiwan Stock Exchange (the “TWSE”) on October 27, 2000. Certain of Chunghwa’s common stocks were sold, in connection with the foregoing privatization plan, in domestic public offerings at various dates from August 2000 to July 2003. Certain of Chunghwa’s common stocks were also sold in an international offering of securities in the form of American Depository Shares (“ADS”) on July 17, 2003 and were listed and traded on the New York Stock Exchange (the “NYSE”). The MOTC sold common stocks of Chunghwa by auction in the ROC on August 9, 2005 and completed the second international offering on August 10, 2005. Upon completion of the share transfers associated with these offerings on August 12, 2005, the MOTC owned less than 50% of the outstanding shares of Chunghwa and completed the privatization plan.

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were authorized for issue by the management on March 28, 2025 .

3. SUMMARY OF MATERIAL ACCO UNTING POLICY INFORMATION

Statement of Compliance

The accompanying consolidated financial statements have been prepared in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board (collectively, “IFRSs”).

Basis of Preparation

The consolidated financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at fair values and net defined benefit liabilities (assets) which are measured at the present value of the defined benefit obligations less the fair value of plan assets.

F- 12

Current and Noncurrent Assets and Liabilities

Current assets include:

a. Assets held primarily for the purpose of trading;

b. Assets expected to be realized within twelve months after the reporting period; and

c. Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

Current liabilities include:

a. Liabilities held primarily for the purpose of trading;

b. Liabilities due to be settled within twelve months after the reporting period; and

c. Liabilities for which the Company on the balance sheet date does not have in substance the right to defer settlement for at least twelve months after the reporting period.

Assets and liabilities that are not classified as current are classified as noncurrent.

Light Era Development Co., Ltd. (“LED”) , a wholly owned subsidiary of the company, engages mainly in development of property for rent and sale. The assets and liabilities of LED related to property development within its operating cycle, which is over one year, are classified as current items.

Basis of Consolidation

a. Principles for preparing consolidated financial statements

The consolidated financial statements incorporate the financial statements of Chunghwa and entities controlled by Chunghwa (its subsidiaries).

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with those used by the Company.

All inter-company transactions, balances, income and expenses are eliminated in full upon consolidation.

Attribution of total comprehensive income to noncontrolling interests

Total comprehensive income of subsidiaries is attributed to the stockholders of the parent and to the noncontrolling interests even if it results in the noncontrolling interests having a deficit balance.

Changes in the Company’s ownership interests in subsidiaries

Changes in the Company’s ownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Company’s interests and the noncontrolling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the noncontrolling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to stockholders of the parent.

F- 13

b. The subsidiaries in the consolidated financial statements

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

			Percentage of Ownership interests
			December 31
Name of Investor	Name of Investee	Main Businesses and Products	2023	2024	Note
Chunghwa Telecom Co., Ltd.	Senao International Co., Ltd. (“SENAO”)	Handset and peripherals retailer, sales of CHT mobile phone plans as an agent	28	28	a)
	Light Era Development Co., Ltd. (“LED”)	Planning and development of real estate and intelligent buildings, and property management	100	100
	Donghwa Telecom Co., Ltd. (“DHT”)	International private leased circuit, IP VPN service, and IP transit services	100	100
	Chunghwa Telecom Singapore Pte., Ltd. (“CHTS”)	International private leased circuit, IP VPN service, and IP transit services	100	100
	Chunghwa System Integration Co., Ltd. (“CHSI”)	Providing system integration services and telecommunications equipment	100	100
	Chunghwa Investment Co., Ltd. (“CHI”)	Investment	89	89
	CHIEF Telecom Inc. (“CHIEF”)	Network integration, internet data center (“IDC”), communications integration and cloud application services	56	56	b)
	CHYP Multimedia Marketing & Communications Co., Ltd. (“CHYP”)	Digital information supply services and advertisement services	100	100
	Prime Asia Investments Group Ltd. (“Prime Asia”)	Investment	100	100
	Spring House Entertainment Tech. Inc. (“SHE”)	Software design services, internet contents production and play, and motion picture production and distribution	56	56
	Chunghwa Telecom Global, Inc. (“CHTG”)	International private leased circuit, internet services, and transit services	100	100
	Chunghwa Telecom Vietnam Co., Ltd. (“CHTV”)	Intelligent energy saving solutions, international circuit, and information and communication technology (“ICT”) services	100	100
	Smartfun Digital Co., Ltd. (“SFD”)	Providing diversified family education digital services	65	65
	Chunghwa Telecom Japan Co., Ltd. (“CHTJ”)	International private leased circuit, IP VPN service, and IP transit services	100	100
	Chunghwa Sochamp Technology Inc. (“CHST”)	Design, development and production of Automatic License Plate Recognition software and hardware	37	37	c)
	Honghwa International Co., Ltd. (“HHI”)	Telecommunications engineering, sales agent of mobile phone plan application and other business services, etc.	100	100
	Chunghwa Leading Photonics Tech Co., Ltd. (“CLPT”)	Production and sale of electronic components and finished products	75	70	d)
	Chunghwa Telecom (Thailand) Co., Ltd. (“CHTT”)	International private leased circuit, IP VPN service, ICT and cloud VAS services	100	100

F- 14

(Continued)

			Percentage of Ownership interests
			December 31
Name of Investor	Name of Investee	Main Businesses and Products	2023	2024	Note
	CHT Security Co., Ltd. (“CHTSC”)	Computing equipment installation, wholesale of computing and business machinery equipment and software, management consulting services, data processing services, digital information supply services and internet identity services	69	63	e)
	International Integrated Systems, Inc. (“IISI”)	IT solution provider, IT application consultation, system integration and package solution	51	50	f)
	Chunghwa Digital Cultural and Creative Capital Co., Ltd (“CDCC Capital”)	Investment and management consulting	—	100	g)
	Chunghwa Telecom Europe GmbH (“CHTEU”)	International private leased circuit, internet services, transit services and ICT services	—	100	h)
Senao International Co., Ltd.	Senao International (Samoa) Holding Ltd. (“SIS”)	International investment	—	—	i)
	Youth Co., Ltd. (“Youth”)	Sale of information and communication technologies products	96	96
	Aval Technologies Co., Ltd. (“Aval”)	Sale of information and communication technologies products	100	100
	Senyoung Insurance Agent Co., Ltd. (“SENYOUNG”)	Property and liability insurance agency	100	100
Youth Co., Ltd.	ISPOT Co., Ltd. (“ISPOT”)	Sale of information and communication technologies products	100	100
	Youyi Co., Ltd. (“Youyi”)	Maintenance of information and communication technologies products	—	—	j)
Aval Technologies Co., Ltd.	Wiin Technology Co., Ltd. (“Wiin”)	Sale of information and communication technologies products	100	100
Senyoung Insurance Agent Co., Ltd.	Senaolife Insurance Agent Co., Ltd. (“Senaolife”)	Life insurance services	—	—	k)
CHIEF Telecom Inc.	Unigate Telecom Inc. (“Unigate”)	Telecommunications and internet service	100	100
	Chief International Corp. (“CIC”)	Telecommunications and internet service	100	100
	Shanghai Chief Telecom Co., Ltd. (“SCT”)	Telecommunications and internet service	49	49	l)
Chunghwa Investment Co., Ltd.	Chunghwa Precision Test Tech. Co., Ltd. (“CHPT”)	Production and sale of semiconductor testing components and printed circuit board	34	34	m)
Chunghwa Precision Test Tech. Co., Ltd.	Chunghwa Precision Test Tech. USA Corporation (“CHPT (US)”)	Design and after-sale services of semiconductor testing components and printed circuit board	100	100
	CHPT Japan Co., Ltd. (“CHPT (JP)”)	Related services of electronic parts, machinery processed products and printed circuit board	100	100
	Chunghwa Precision Test Tech. International, Ltd. (“CHPT (International)”)	Wholesale and retail of electronic materials, and investment	100	100
	TestPro Investment Co., Ltd. (“TestPro”)	Investment	100	100

F- 15

(Continued)

			Percentage of Ownership interests
			December 31
Name of Investor	Name of Investee	Main Businesses and Products	2023	2024	Note
TestPro Investment Co., Ltd.	NavCore Tech. Co., Ltd. (“NavCore”)	Sale and manufacturing of smart equipment, smart factory software and hardware integration and technical consulting service	54	54
Senao International (Samoa) Holding Ltd.	Senao International HK Limited (“SIHK”)	International investment	—	—	n)
Prime Asia Investments Group Ltd.	Chunghwa Hsingta Co., Ltd. (“CHC”)	Investment	100	100
Chunghwa Precision Test Tech. International, Ltd.	Shanghai Taihua Electronic Technology Limited (“STET”)	Design of printed circuit board and related consultation service	100	100
	Su Zhou Precision Test Tech. Ltd. (“SZPT”)	Assembly processed of circuit board, design of printed circuit board and related consultation service	100	100
International Integrated Systems, Inc.	Infoexplorer International Co., Ltd.(“IESA”)	Investment	—	—	o)
	Unitronics Technology Corp. (“UTC”)	Development and maintenance of information system	100	100	p)
Infoexplorer International Co., Ltd.	International Integrated Systems (Hong Kong) Limited (“IEHK”)	Investment and technical consulting service	—	—	q)

(Concluded)

a) Chunghwa continues to control more than half of seats of the Board of Directors of SENAO through the support of large beneficial stockholders. As a result, the Company treated SENAO as a subsidiary.

b) CHIEF issued new shares in December 2023 and December 2024 as its employees exercised options. Therefore, the Company’s ownership interest in CHIEF decreased to 58.63 % and 58.57 % as of December 31, 2023 and 2024, respectively.

c) Chunghwa controls more than half of seats of the Board of Directors of CHST as of December 31, 2024. As a result, the Company treated CHST as a subsidiary. For the information of changes in Chunghwa’s control over CHST in January 2025, please refer to Note 43.

d) CLPT issued new shares in May 2023 and July 2024 as its employees exercised options. Therefore, the Company’s ownership interest in CLPT decreased to 74.56 % and 69.87 % as of December 31, 2023 and 2024, respectively.

e) CHTSC issued new shares in February 2023, May 2023, January 2024, March 2024 and December 2024 as its employees exercised options. In addition, Chunghwa disposed of some shares of CHTSC in August 2024 before CHTSC traded its shares on the emerging stock market according to the local requirements. Therefore, the Company’s ownership interest in CHTSC decreased to 69.28 % and 63.45 % as of December 31, 2023 and 2024, respectively.

f) Chunghwa disposed of some shares of IISI in August 2024 before IISI traded its shares on the emerging stock market according to the local requirements. Therefore, the Company’s ownership interest in IISI decreased to 49.64 % as of December 31, 2024. Chunghwa continues to control more than half of seats of the Board of Directors of IISI. As a result, the Company treated IISI as a subsidiary.

g) Chunghwa invested and established CDCC Capital in February 2024. Chunghwa obtained 100 % ownership interest of CDCC Capital.

F- 16

h) Chunghwa invested and established CHTEU in July 2024. Chunghwa obtained 100 % ownership interest of CHTEU.

i) SIS completed its liquidation in September 2023.

j) Youyi completed its liquidation in November 2023.

k) In order to coordinate with financial planning and adjustment of organizational resources, the Board of Directors of SENYOUNG approved the merger with Senaolife. SENYOUNG was the surviving company. The merger was completed on May 1, 2023.

l) CHIEF has more than half of seats of the Board of Directors of SCT according to the mutual agreements among stockholders and gained control over SCT; hence, SCT is deemed as a subsidiary of the Company.

m) Though the Company’s ownership interest in CHPT is less than 50 %, the management considered the absolute and relative size of ownership interest, and the dispersion of shares owned by the other stockholders and concluded that the Company has a sufficiently dominant voting interest to direct the relevant activities; hence, CHPT is deemed as a subsidiary of the Company.

n) SIHK completed its liquidation in July 2023.

o) IESA completed its liquidation in September 2023.

p) IISI purchased shares of UTC in August 2023. Therefore, the Company’s ownership interest in UTC increased to 100 %.

q) IEHK completed its liquidation in June 2023.

The following diagram presented information regarding the relationship and percentages of ownership interests between Chunghwa and its subsidiaries as of December 31, 2024.

Foreign Currencies

In preparing the financial statements of each individual entity, transactions in currencies other than the entity’s functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

F- 17

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period in which they arise.

Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined and related exchange differences are recognized in profit or loss. Conversely, when the fair value changes were recognized in other comprehensive income, related exchange difference shall be recognized in other comprehensive income.

Non-monetary items that are measured at historical cost in a foreign currency are not retranslated.

Chunghwa uses New Taiwan dollars (NT$) as the functional currency. For the purpose of presenting consolidated financial statements, the assets and liabilities of the Company’s foreign operations (including those subsidiaries, associates and joint ventures in other countries or currencies used different with Chunghwa) are translated into New Taiwan dollars using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising, if any, are recognized in other comprehensive income and attributed to stockholders of the parent and noncontrolling interests as appropriate.

Cash Equivalents

Cash equivalents include those maturities within three months from the date of acquisition, highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value such as commercial paper, negotiable certificates of deposit, time deposits and stimulus vouchers. These cash equivalents are held for the purpose of meeting short-term cash commitments.

Inventories

Inventories are stated at the lower of cost or net realizable value item by item, except for those that may be appropriate to group items of similar or related inventories. Net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. The calculation of the cost of inventory is derived using the weighted-average method.

Buildings and Land Consigned to Construction Contractors

Inventories of LED are stated at the lower of cost or net realizable value item by item, except for those that may be appropriate to group as similar items or related inventories. Land acquired before construction is classified as land held for development and then reclassified as land held under development after LED begins its construction project.

Upon the completion of the construction project, LED recognizes revenues in the amount of proceeds from customers for land and buildings and related costs when ownership is transferred to the customers. The unsold portion of the completed construction project is transferred to land and building held for sale.

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. A joint venture is a joint arrangement whereby the Company and other parties that have joint control of the arrangement have rights to the net assets of the arrangement.

Investments accounted for using the equity method include investments in associates and interests in joint ventures. Under the equity method, an investment in an associate and a joint venture is initially recognized at cost and adjusted thereafter to recognize the Company’s share of profit or loss and other comprehensive income of the associate and joint venture as well as the distribution received. The Company also recognizes its share in changes in the associates and joint ventures.

F- 18

When the Company subscribes for new shares of an associate and a joint venture at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Company’s proportionate interest in the associate and joint venture. The Company records such a difference as an adjustment to investments with the corresponding amount charged or credited to additional paid-in capital. When the adjustment should be debited to additional paid-in capital but the additional paid-in capital recognized from investments accounted for using equity method is insufficient, the shortage is debited to retained earnings.

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

The entire carrying amount of an investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized is not allocated to any asset, including goodwill, that 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.

The Company discontinues the use of the equity method from the date on which its investment ceases to be an associate and a joint venture. Any retained investment is measured at fair value at that date, and the fair value is regarded as the investment’s fair value on initial recognition as a financial asset. The difference between the previous carrying amount of the associate and joint venture attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate and joint venture. The Company accounts for all amounts previously recognized in other comprehensive income in relation to that associate and joint venture on the same basis as would be required had that associate and joint venture directly disposed of the related assets or liabilities.

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

Property, Plant and Equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost less accumulated depreciation and accumulated impairment loss.

Property, plant and equipment in the course of construction are depreciated and classified to the appropriate categories of property, plant and equipment when completed and ready for their intended use.

Depreciation on property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. Freehold land is not depreciated. The estimated useful lives, residual values and depreciation method are reviewed at the end of each year, with the effect of any changes in estimate accounted for on a prospective basis.

On derecognition of an item of property, plant and equipment, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss in the period in which the property is derecognized.

Investment Properties

Investment properties are properties held to earn rentals and/or for capital appreciation. Investment properties also include land held for a currently undetermined future use.

Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation and accumulated impairment loss. Depreciation is recognized using the straight-line method.

F- 19

For a transfer from the investment properties to property, plant and equipment, the deemed cost of the property, plant and equipment for subsequent accounting is its carrying amount at the commencement of owner-occupation.

For a transfer from the property, plant and equipment to investment properties, the deemed cost of the investment properties for subsequent accounting is its carrying amount at the end of owner-occupation.

On derecognition of the investment properties, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss in the period in which the property is derecognized.

Goodwill

Goodwill arising from the acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment loss.

For the purpose of impairment testing, goodwill is allocated to each of the Company’s cash-generating units or groups of cash-generating units (referred to as “cash-generating unit”) that are expected to benefit from the synergies of the business combination.

A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired, by comparing its carrying amount, including the attributable goodwill, with its recoverable amount. However, if the goodwill allocated to a cash-generating unit was acquired in a business combination during the current annual period, that unit shall be tested for impairment before the end of the current annual period. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss is recognized directly in profit or loss. An impairment loss recognized for goodwill is not reversed in subsequent periods.

Intangible Assets Other Than Goodwill

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful life, residual value, and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. The residual value of an intangible asset with a finite useful life shall be assumed to be zero unless the Company expects to dispose of the intangible asset before the end of its economic life. Intangible assets with indefinite useful lives are measured at cost less accumulated impairment loss.

Intangible assets acquired in a business combination and recognized separately from goodwill are initially recognized at their fair value at the acquisition date (which is regarded as their cost). Subsequent to initial recognition, they are measured on the same basis as intangible assets that are acquired separately.

Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in profit or loss in the period in which the asset is derecognized.

Impairment of Property, Plant and Equipment, Right-of-use Assets, Investment Properties, Intangible Assets Other Than Goodwill and Incremental Costs of Obtaining Contracts

At the end of each reporting period, the Company reviews the carrying amounts of its property, plant and equipment, right-of-use assets, investment properties and intangible assets, excluding goodwill, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

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Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually and whenever there is an indication that the assets may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

Impairment loss from the assets related to incremental cost of obtaining contracts is recognized to the extent that the carrying amount of the assets exceeds the remaining amount of consideration that the Company expects to receive in exchange for related goods or services less the costs which relate directly to providing those goods or services.

When an impairment loss is subsequently reversed, the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss.

Financial Instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

a. Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. The regular way of transaction means the purchase or sale of financial assets delivered within the time frame established by regulation or convention in the marketplace.

1) Measurement category

a) Financial assets at fair value through profit or loss (FVTPL)

Financial asset is classified as at FVTPL when the financial asset is mandatorily classified as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at fair value through other comprehensive income (FVOCI).

Financial assets at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss does not incorporate any dividend earned on the financial asset. Fair value is determined in the manner described in Note 39.

b) Financial assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

i. The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

ii. The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

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Subsequent to initial recognition, financial assets at amortized cost are measured at amortized cost, which equals to gross carrying amount determined by the effective interest method less any impairment loss, except for short-term receivables as the effect of discounting is immaterial. Exchange differences are recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of such financial assets.

c) Investments in equity instruments at FVOCI

On initial recognition, the Company may make an irrevocable election to designate investments in equity instruments as at FVOCI. Designation at FVOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

Investments in equity instruments at FVOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments. Instead, it will be transferred to retained earnings.

Dividends on these investments in equity instruments are recognized in profit or loss when the Company’s right to receive the dividends is established, unless the dividends clearly represent a recovery of part of the cost of the investment.

2) Impairment of financial assets and contract assets

The Company recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including accounts receivable) and contract assets.

The Company recognizes lifetime Expected Credit Loss (ECL) for accounts receivable and contract assets. For all other financial instruments, the Company recognizes lifetime ECL when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on the financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month ECL.

Expected credit losses reflect the weighted average of credit losses with the respective risks of a default occurring as the weights. Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECL represents the portion of ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

The Company recognizes an impairment loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account.

3) Derecognition of financial assets

The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss.

On derecognition of investments in equity instruments at FVOCI in its entirety, the cumulative gain or loss is directly transferred to retained earnings, and it is not reclassified to profit or loss.

b. Financial liabilities

1) Subsequent measurement

Except for financial liabilities at FVTPL, all the financial liabilities are subsequently measured at amortized cost using the effective interest method.

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2) Derecognition of financial liabilities

The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

c. Derivative financial instruments

The Company enters into derivative financial instruments to manage its exposure to foreign exchange rate risks, including forward exchange contracts.

Derivatives are initially measured at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship. When the fair value of derivative financial instruments is positive, the derivative is recognized as a financial asset; when the fair value of derivative financial instruments is negative, the derivative is recognized as a financial liability.

Hedge Accounting

The Company designates some derivatives instruments as cash flow hedges. Hedges of foreign exchange risk on firm commitments are accounted for as cash flow hedges.

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss.

The associated gains or losses that were recognized in other comprehensive income are reclassified from equity to profit or loss as a reclassification adjustment in the line item relating to the hedged item in the same period when the hedged item affects profit or loss. If a hedge of a forecast transaction subsequently results in the recognition of a non-financial asset or a non-financial liability, the associated gains and losses that were recognized in other comprehensive income are removed from equity and are included in the initial cost of the non-financial asset or non-financial liability.

The Company discontinues hedge accounting only when the hedging relationship ceases to meet the qualifying criteria; for instance, when the hedging instrument expires or is sold, terminated or exercised. The cumulative gain or loss on the hedging instrument that has been previously recognized in other comprehensive income from the period when the hedge was effective remains separately in equity until the forecast transaction occurs. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognized immediately in profit or loss.

Provisions

Provisions are measured at the best estimate of the expenditure required to settle the Company’s obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. The provisions for warranties claims are made by management according to the sales agreements which represent the management’s best estimate of the future outflow of economic benefits. The provisions of warranties claims are recognized as operating cost in the period in which the goods are sold. The provision for onerous contracts represents the present obligation resulting from the measurement for the unavoidable costs of meeting the Company’s contractual obligations exceed the economic benefits expected to be received from the contracts. In assessing whether a contract is onerous, the cost of fulfilling a contract includes both the incremental costs of fulfilling that contract and an allocation of other costs that are related directly to fulfilling contracts.

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Revenue Recognition

The Company identifies the performance obligations in the contract with the customers, allocates transaction price to each performance obligation and recognizes revenue when performance obligations are satisfied.

Sales of products are recognized as revenue when the Company delivers products and the customer accepts and controls the product. Except for the consumer electronic products such as mobile devices sold in channel stores which are usually in cash sale, the Company recognizes revenues for sale of other electronic devices and corresponding trade notes and accounts receivable.

Usage revenues from fixed-line services (including local, domestic long distance and international long distance telephone services), mobile services, internet and data services, and interconnection and call transfer fees from other telecommunications companies and carriers are billed in arrears and are recognized based upon seconds or minutes of traffic processed when the services are provided in accordance with contract terms. The usage revenues and corresponding trade notes and accounts receivable are recognized monthly.

Other revenues are recognized as follows: (a) one-time subscriber connection fees (on fixed-line services) are first recognized as contract liabilities and revenues are recognized subsequently over the average expected customer service periods, (b) monthly fees (on fixed-line services, mobile, internet and data services) and related receivables are accrued monthly, and (c) prepaid services (fixed-line, mobile, internet and data services) are recognized as contract liabilities upon collection considerations from customers and are recognized as revenues subsequently based upon actual usage by customers.

Where the Company enters into transactions which involve both the provision of telecommunications service bundled with products such as handsets, total consideration received from products and telecommunications service in these arrangements are allocated based on their relative stand-alone selling price. The amount of sales revenue recognized for products is not limited to the amount paid by the customer for the products. When the amount of sales revenue recognized for products exceeded the amount paid by the customer for the products, the difference is recognized as contract assets. Contract assets are reclassified to accounts receivable when the amounts become collectible from customers subsequently. When the amount of sales revenue recognized for products was less than the amount paid by the customer for the products, the difference is recognized as contract liabilities and revenues are recognized subsequently when the telecommunications services are provided.

For project business contracts, if a substantial part of the Company’s promise to customers is to manage and coordinate the various tasks and assume the risks of those tasks to ensure the individual goods or services are incorporated into the combined output, they are treated as a single performance obligation since the Company provides a significant integration service. The Company recognizes revenues and corresponding accounts receivable when the project business contract is completed and accepted by customers. For some project contracts, the Company does not create an asset with an alternative use to the Company and has an enforceable right to payment for performance completed to date; therefore, performance obligations are satisfied and revenues are recognized over time.

For service contracts such as maintenance and warranties, customers simultaneously receive and consume the benefits provided by the Company; thus, revenues and corresponding accounts receivable of service contracts are recognized over the related service period.

When another party is involved in providing goods or services to a customer, the Company is acting as a principal if it controls the specified good or service before that good or service is transferred to a customer; otherwise, the Company is acting as an agent. When the Company is acting as a principal, gross inflow of economic benefits arising from transactions is recognized as revenue. When the Company is acting as an agent, revenue is recognized as its share of transaction.

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Incremental Costs of Obtaining Contracts

Commissions and equipment subsidy related to telecommunications service as a result of obtaining contracts are recognized as an asset under the incremental costs of obtaining contracts to the extent the costs are expected to be recovered and are amortized over the contract period. However, the Company elects not to capitalize the incremental costs of obtaining contracts if the amortization period of the assets that the Company otherwise would have recognized is expected to be one year or less.

Commissions for real estate sales as a result of obtaining contracts are recognized as an asset under the incremental costs of obtaining contracts to the extent the costs are expected to be recovered and are amortized when the real estate is sold and its ownership is transferred to the customers.

Leasing

At inception of a contract, the Company assesses whether the contract is, or contains, a lease.

a. The Company as lessor

Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease.

b. The Company as lessee

The Company recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for lease payments for low-value assets are recognized as expenses on a straight-line basis over the lease terms accounted for applying recognition exemption.

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities and for lease payments made at or before the commencement date. Right-of-use assets are subsequently measured at cost less accumulated depreciation and accumulated impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented separately on the consolidated balance sheets.

Right-of-use assets are depreciated using the straight-line basis from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

Lease liabilities were initially measured at the present value of the lease payments, which comprise fixed payments, in-substance fixed payments, variable lease payments which depend on an index or a rate. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If such rate cannot be readily determined, the lessee’s incremental borrowing rate is used.

Lease liabilities are subsequently measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term or a change in future lease payments resulting from a change in an index or a rate used to determine those payments, the Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. The Company accounts for the remeasurement of the lease liability as a result of the decrease of lease scope by decreasing the carrying amount of the right-of-use assets and recognizes in profit or loss any gain or loss on the partial or full termination of the lease. Lease liabilities are presented separately on the consolidated balance sheets.

Variable lease payments not depending on an index or a rate are recognized as expenses in the periods in which they are incurred.

Borrowing Costs

All borrowing costs are recognized in profit or loss in the period in which they are incurred.

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Government Grants

Government grants are not recognized until there is reasonable assurance that the Company will comply with the conditions attached to government grants and that the grants will be received.

Government grants related to income are recognized in profit or loss on a systematic basis over the periods in which the Company recognizes expenses of the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Company should construct noncurrent assets are recognized as deferred revenue and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.

Government grants that become receivable as compensation for expenses or losses already incurred are recognized in profit or loss in the period in which they become receivable.

Employee Benefits

a. Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

b. Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.

Defined benefit costs (including service cost, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost and gains or losses on settlements) and net interest on the net defined benefit liability (asset) are recognized as employee benefits expense in the period they occur. Remeasurement, comprising (a) actuarial gains and losses; and (b) the return on plan assets, excluding amounts included in net interest on the net defined benefit liability (asset), is recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit liability (asset) represents the actual deficit (surplus) in the Company’s defined benefit plan. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

c. Other long-term employee benefits

Other long-term employee benefits are accounted for in the same way as the accounting required for defined benefit plan except that remeasurement is recognized in profit or loss.

Share-based Payment Arrangements - Employee Stock Options

The fair value determined at the grant date of the employee share options is expensed on a straight-line basis over the vesting period, based on the Company’s estimate of employee stock options that are expected to ultimately vest, with a corresponding increase in additional paid-in capital - employee stock options. If the equity instruments granted vest immediately at the grant date, expenses are recognized in full in profit or loss.

At the end of each reporting period, the Company revises its estimate of the number of employee share options expected to vest. The impact of the revision of the original estimates, if any, is recognized in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to additional paid-in capital - employee stock options.

Income Tax

Income tax expense represents the sum of the tax currently payable and deferred tax.

a. Current tax

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The current tax is based on taxable profit for the year. Taxable profit differs from profit as reported in the consolidated statements of comprehensive income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Income tax on unappropriated earnings is accrued during the period the earnings arise and adjusted to the extent that distributions are approved by the stockholders in the following year.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

b. Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. A deferred tax liability is not recognized on taxable temporary difference arising from initial recognition of goodwill.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences, unused loss carry forward and unused tax credits from purchases of machinery, equipment and technology and research, and development expenditures, etc. to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, associates, and joint ventures, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities 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 assets and liabilities 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.

The Company has applied the exception to recognizing and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes. Therefore, the Company neither recognizes nor discloses information about deferred tax assets and liabilities related to Pillar Two income taxes.

c. Current and deferred tax

Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income, in which case, the current and deferred tax are also recognized in other comprehensive income.

Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

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4. MATERIAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION, UNCERTAINTY AND ASSUMPTION

In the application of the Company’s accounting policies, the management is required to make judgments, estimates and assumptions which are based on historical experience and other factors that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed by the management on an ongoing basis.

a. Material accounting judgments

1) Principal versus agent

The Company’s project agreements are mainly to provide one or more customized equipment or services to customers. In order to fulfill the agreements, another party may be involved in some agreements. The Company considers the following factors to determine whether the Company is a principal of the transaction: whether the Company is the primary obligation provider of the agreements, its exposures to inventory risks and the discretion in establishing prices, etc. The determination of whether the Company is a principal or an agent will affect the amount of revenue recognized by the Company. Only when the Company is acting as a principal, gross inflows of economic benefits arising from transactions is recognized as revenue.

2) Control over subsidiaries

As discussed in Note 3, “Summary of Material Accounting Policy Information - Basis of Consolidation”, some entities are subsidiaries of the Company although the Company only owns less than 50 % ownership interests in these entities. After considering the Company’s absolute size of holding in the entity and the relative size of and the dispersion of shares owned by the other stockholders, and the contractual arrangements between the Company and other investors, potential voting interests and the written agreement between stockholders, the management concluded that the Company has a sufficiently dominant voting interest to direct the relevant activities of the entity and to have control over the governance of the entity and therefore the Company has control over these entities.

b. Key sources of estimation uncertainty and assumption

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period. Actual results may differ from these estimates.

1) Impairment of trade notes and accounts receivable

The provision for impairment of trade notes and accounts receivable is based on assumptions on probability of default and expected credit loss rates. The Company uses judgment in making these assumptions and in selecting the inputs to the impairment calculation, based on the Company’s past experience, current market conditions as well as forward looking information at the end of each reporting period. For details of the key assumptions and inputs used, see Note 11. Where the actual future cash flows are less than expected, a material impairment loss may arise.

2) Fair value measurements and valuation processes

For the assets and liabilities measured at fair value without quoted prices in active markets, the Company’s management determines the appropriate valuation techniques for the fair value measurements and whether to engage third party qualified appraisers based on the related regulations and professional judgments.

Information about the valuation techniques and inputs used in determining the fair value of various assets and liabilities was disclosed in Note 39. If the actual changes of inputs in the future differ from expectation, the fair value may vary accordingly. The Company updates inputs periodically to monitor the appropriateness of the fair value measurement.

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3) Provision for inventory valuation and obsolescence

Inventories are stated at the lower of cost or net realizable value. Estimates of net realizable value are based on the most reliable evidence available at the time the estimates are made at the end of reporting period. These estimates take into consideration fluctuations of price or cost directly relating to events occurring after the end of the period to the extent that such events confirm conditions existing at the end of the period. Inventory write-downs are determined on an item by item basis, except for those similar items which could be categorized into the same groups. The Company uses the inventory holding period and turnover as the evaluation basis for inventory obsolescence losses.

4) Impairment of property, plant and equipment, right-of-use assets, investment properties and intangible assets

In the process of evaluating the potential impairment of tangible and intangible assets, the Company is required to consider internal and external indicators of impairment and make subjective judgments in determining the independent cash flows, useful lives, expected future revenue and expenses related to the specific asset groups within the context of the telecommunication industry. Any changes in these estimates based on changed economic conditions or business strategies could result in significant impairment charges in future periods.

5) Useful lives of property, plant and equipment

As discussed in Note 3, “Summary of Material Accounting Policy Information - Property, Plant and Equipment”, the Company reviews estimated useful lives of property, plant and equipment at the end of each year.

6) Recognition and measurement of defined benefit plans

Net defined benefit liabilities (assets) and the resulting pension expense under defined benefit pension plans are calculated using the Projected Unit Credit Method. Actuarial assumptions comprise the discount rate, employee turnover rate, average future salary increase and etc. Changes in economic circumstances and market conditions will affect these assumptions and may have a material impact on the amount of the expense and the liability.

7) Lessees’ incremental borrowing rates

In determining a lessee’s incremental borrowing rate used in discounting lease payments, a risk-free rate for relevant duration and the same currency is selected as a reference rate. The lessee’s credit spread adjustments and lease specific adjustments are also taken into account.

5. APPLICATION OF NEW AND AMENDED INTERNATIONAL FINANCIAL REPORTING STANDARDS

Amendments to IFRSs and the New Interpretation That Are Mandatorily Effective for the Current Year

The Company has applied Amendments to IFRS 16: Leases Liability in a Sale and Leaseback, Amendments to IAS 1: Classification of Liabilities as Current or Non-current, Amendments to IAS 1: Non-current Liabilities with Covenants, and Amendments to IAS 7 and IFRS 7: Supplier Finance Arrangements. The application of these amendments has had no impact on the disclosures or amounts recognized in the Company’s consolidated financial statements.

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New and Amended IFRSs in Issue But Not Yet Effective

The Company has not applied the following new and amended IFRSs that have been issued but are not yet effective.

New or Amended Standards and Interpretations		Effective Date Issued by IASB (Note)
Amendments to IAS 21	Lack of Exchangeability	January 1, 2025
Amendments to IFRS 9 and IFRS 7	Amendments to the Classification and Measurement of Financial Instruments	January 1, 2026
Amendments to IFRS 9 and IFRS 7	Contracts Referencing Nature-Dependent Electricity	January 1, 2026
Amendments to IFRS 10 and IAS 28	Sale or Contribution of Assets between an Investor and Its Associate or Joint Venture	To be determined by IASB
IFRS 18	Presentation and Disclosure in Financial Statements	January 1, 2027
IFRS 19	Subsidiaries without Public Accountability: Disclosures	January 1, 2027
Amendments to IFRS Accounting Standards	Annual Improvements -Volume 11	January 1, 2026

Note: The aforementioned new or amended standards or interpretations are effective after fiscal year beginning on or after the effective dates, unless specified otherwise.

The application of “Amendments to IAS 21: Lack of Exchangeability” will not have material impact on the Company’s consolidated financial statements.

As of the date the consolidated financial statements were authorized for issue, the Company is continuously assessing whether the application of the Standards listed above, except for the “Amendments to IAS 21: Lack of Exchangeability” will have the impact on the Company’s financial position and operating result. The Company will disclose the relevant impact when the assessment is completed.

6. U.S. DOLLAR AMOUNTS

The Company maintains its accounts and expresses its consolidated financial statements in New Taiwan dollars. For readers’ convenience only, U.S. dollar amounts presented in the accompanying consolidated financial statements have been translated from New Taiwan dollars as set forth in the statistical release of the Federal Reserve Board of the United States as of December 31, 2024, which was NT$ 32.79 to US$1.00. The convenience translations should not be construed as representations that the New Taiwan dollar amounts have been, could have been, or could in the future be, converted into U.S. dollars at this or any other rate of exchange.

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7. CASH AND CASH EQUIVALENTS

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Cash
Cash on hand	$ 404	$ 444
Bank deposits	9,522	13,243
	9,926	13,687
Cash equivalents (with maturities of less than three months)
Commercial paper	$ 14,496	$ 16,887
Negotiable certificates of deposit	5,900	2,800
Time deposits	3,502	2,884
Stimulus vouchers	—	2
	23,898	22,573
	$ 33,824	$ 36,260

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

	December 31 — 2023	2024
Bank deposits	0.00 %- 3.10 %	0.00 %- 2.55 %
Commercial paper	0.72 %- 1.33 %	0.95 %- 1.56 %
Negotiable certificates of deposit	1.38 %	1.55 %- 1.70 %
Time deposits	0.01 %- 5.50 %	0.01 %- 4.90 %

8. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Financial assets-current
Mandatorily measured at FVTPL
Derivatives (not designated for hedge)
Forward exchange contracts	$ 1	$ —
Non-derivatives
Listed stocks - domestic	—	—
	$ 1	$ —
Financial assets-noncurrent
Mandatorily measured at FVTPL
Non-derivatives
Non-listed stocks - domestic	$ 704	$ 629
Non-listed stocks - foreign	89	32
Limited partnership - domestic	219	307
Other investing agreements	24	37
	$ 1,036	$ 1,005

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Chunghwa’s Board of Directors approved an investment in Taiwania Capital Buffalo Fund VI, L.P. at the amount of $ 600 million in January 2022. As of December 31, 2024, Chunghwa invested $ 300 million.

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

	Currency	Maturity — Period	Contract Amount — (In Millions)
December 31, 2023
Forward exchange contracts - buy	NT$/EUR	March 2024	NT$ 145 /EUR 4
December 31, 2024
Forward exchange contracts - buy	NT$/USD	January 2025	NT$ 46 /USD 1
Forward exchange contracts - buy	NT$/EUR	March 2025	NT$ 10 /EUR 0.3

The Company entered into the above forward exchange contracts to manage its exposure to foreign currency risk due to fluctuations in exchange rates. However, the aforementioned derivatives did not meet the criteria for hedge accounting.

9. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - NONCURRENT

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Domestic investments
Listed and emerging stocks	$ 243	$ 126
Non-listed stocks	3,734	3,874
Foreign investments
Non-listed stocks	435	667
	$ 4,412	$ 4,667

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

The Company disposed of all its investments in UUPON Inc. (UUPON) in December 2022 and the fair value of the disposed investment was $ 0.2 million.

The related unrealized loss on financial assets at FVOCI was $ 0.1 million and transferred from other equity to retained earnings upon the aforementioned disposals in 2022.

The Company recognized dividend income of $ 157 million, $ 167 million and $ 240 million for the years ended December 31, 2022, 2023 and 2024, respectively, with $ 157 million, $ 167 million and $ 239 million from the outstanding investments on December 31, 2022, 2023 and 2024, respectively.

F- 32

10. FINANCIAL ASSETS AT AMORTIZED COST - NONCURRENT

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Corporate bonds	$ —	$ 2,000

The Company acquired the 10-year unsecured cumulative subordinated corporate bond of Fubon Life Insurance Co., Ltd. at the amount of $ 2,000 million in October 2024.

11. TRADE NOTES AND ACCOUNTS RECEIVABLE, NET

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Trade notes and accounts receivable	$ 25,944	$	27,169
Less: Loss allowance	( 1,102	)	( 1,143	)
	$ 24,842	$	26,026

The main credit terms range from 30 to 90 days.

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

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

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

The Company applies the simplified approach to recognize expected credit losses prescribed by IFRS 9, which permits the use of lifetime expected loss provision for receivables. The expected credit losses on receivables are estimated using a provision matrix by reference to past default experience of the customers and an analysis of the customers’ current financial positions, as well as the forward-looking indicators such as macroeconomic business indicators.

When there is evidence indicating that the counterparty is in evasion, bankruptcy, deregistration or the accounts receivable are over two years past due and the recoverable amount cannot be reasonable estimated, the Company writes off the trade notes and accounts receivable. For accounts receivable that have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

F- 33

Except for receivables arising from telecommunications business and project business, the Company’s remaining accounts receivable are insignificant. Therefore, only Chunghwa’s provision matrix arising from telecommunications business and project business is disclosed below:

December 31, 2023

	Not Past Due — NT$	NT$		NT$		NT$		NT$		NT$		NT$		NT$
						(In Millions)
Telecommunications business
Expected credit loss rate (Note a)	0 %- 1 %	1 %- 20 %		3 %- 65 %		12 %- 82 %		23 %- 91 %		40 %- 96 %		100 %
Gross carrying amount	$ 17,066	$	346	$	135	$	70	$	48	$	49	$	578	$	18,292
Loss allowance (Lifetime ECL)	( 50	)	( 22	)	( 29	)	( 29	)	( 35	)	( 22	)	( 578	)	( 765	)
Amortized cost	$ 17,016	$	324	$	106	$	41	$	13	$	27	$	—	$	17,527
Project business
Expected credit loss rate (Note b)	0 %- 5 %	5 %		10 %		30 %		50 %		80 %		100 %
Gross carrying amount	$ 3,869	$	101	$	12	$	18	$	1	$	1	$	287	$	4,289
Loss allowance (Lifetime ECL)	( 3	)	( 17	)	( 1	)	( 5	)	( 1	)	—		( 287	)	( 314	)
Amortized cost	$ 3,866	$	84	$	11	$	13	$	—	$	1	$	—	$	3,975

December 31, 2024

	Not Past Due — NT$	NT$		NT$		NT$		NT$			Past Due 121 to 180 Days — NT$	NT$		NT$
						(In Millions)
Telecommunications business
Expected credit loss rate (Note a)	0 %- 1 %	1 %- 22 %		2 %- 68 %		11 %- 84 %		21 %- 92 %			39 %- 96 %	100 %
Gross carrying amount	$ 16,477	$	335	$	139	$	75	$	50		$ 48	$	606	$	17,730
Loss allowance (Lifetime ECL)	( 51	)	( 24	)	( 34	)	( 31	)	( 33	)	( 34	)	( 606	)	( 813	)
Amortized cost	$ 16,426	$	311	$	105	$	44	$	17		$ 14	$	—	$	16,917
Project business
Expected credit loss rate (Note b)	0 %- 5 %	5 %		10 %		30 %		50 %			80 %	100 %
Gross carrying amount	$ 5,548	$	44	$	83	$	3	$	1		$ -	$	280	$	5,959
Loss allowance (Lifetime ECL)	( 3	)	( 2	)	( 8	)	( 1	)	( 1	)	-		( 280	)	( 295	)
Amortized cost	$ 5,545	$	42	$	75	$	2	$	—		$ —	$	—	$	5,664

Note a: Please refer to Note 44 for the information of disaggregation of telecommunications service revenue. The expected credit loss rate applicable to different business revenue varies so as to reflect the risk level indicating by factors like historical experience.

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

F- 34

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

	Year Ended December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Beginning balance	$ 1,365	$	1,102
Add: Provision for credit loss	128		179
Less: Amounts written off	( 391	)	( 138	)
Ending balance	$ 1,102	$	1,143

12. INVENTORIES

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Merchandise	$ 4,340	$ 4,874
Project in process	4,771	4,564
Work in process	74	269
Raw materials	221	222
	9,406	9,929
Land held under development	1,999	1,999
Construction in progress	116	159
	$ 11,521	$ 12,087

The operating costs related to inventories were $ 49,544 million, $ 53,814 million and $ 52,856 million for the years ended December 31, 2022, 2023 and 2024, respectively.

For the years ended December 31, 2022, 2023 and 2024, valuation loss on inventories recognized as operating costs included the amounts of $ 34 million, $ 23 million and $ 60 million, respectively.

As of December 31, 2023 and 2024, inventories of $ 2,115 million and $ 2,158 million, respectively, were expected to be realized from the sale after more than twelve months. The aforementioned amount of inventories is related to property development owned by LED.

Land held under development and construction in progress was mainly developed by LED for Qingshan Sec., Dayuan Dist., Taoyuan City project. The Board of Directors of LED resolved to sign a joint construction and separate sale contract with Farglory Land Development Co., Ltd. in June 2021. LED entrusts Land Bank of Taiwan to execute fund control and property right management for the land held under development.

Construction in progress also included the Datong S. Sec., Sanchong Dist., New Taipei City project. The Board of Directors of Chunghwa resolved to sign a joint construction with separate sale and partition contract with LED in August 2021. Chunghwa classified the land of the project as investment properties.

Regarding the aforementioned two projects, the Company has signed the house and land presale contracts with customers and has received payments in accordance with the contracts. Please refer to Notes 31 and 42 for details .

F- 35

13. PREPAYMENTS

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Prepayments for leases - satellite (Note 42)	$ 1,729	$ 3,129
Prepaid rents	2,143	1,762
Others	2,298	2,708
	$ 6,170	$ 7,599
Current
Prepaid rents	$ 581	$ 497
Others	2,259	2,641
	$ 2,840	$ 3,138
Noncurrent
Prepayments for leases - satellite (Note 42)	$ 1,729	$ 3,129
Prepaid rents	1,562	1,265
Others	39	67
	$ 3,330	$ 4,461

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

14. OTHER CURRENT MONETARY ASSETS

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Time deposits, negotiable certificates of deposit and commercial paper with maturities of more than three months	$ 18,573	$ 21,680
Accrued custodial receipts	893	725
Others	886	1,003
	$ 20,352	$ 23,408

The annual yield rates of time deposits, negotiable certificates of deposit and commercial paper with maturities of more than three months at the balance sheet dates were as follows:

	December 31 — 2023	2024
Time deposits, negotiable certificates of deposit and commercial paper with maturities of more than three months	0.03 %- 5.54 %	0.03 %- 5.10 %

F- 36

15. SUBSID IARIES

a. Information on subsidiaries with material noncontrolling 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	Proportion of Ownership Interests and Voting Rights Held by Noncontrolling Interests — December 31
Subsidiaries	Place of Business	2023	2024
SENAO	Taiwan	72 %	72 %
CHPT	Taiwan	66 %	66 %

	Profit Allocated to Noncontrolling Interests			Accumulated Noncontrolling Interests
	Year Ended December 31			December 31
	2022	2023	2024	2023	2024
	NT$	NT$	NT$	NT$	NT$
	(In Millions)
SENAO	$ 462	$ 510	$ 353	$ 4,533	$ 4,549
CHPT	$ 496	$ 15	$ 295	4,994	5,289
Individually immaterial subsidiaries with noncontrolling interests				2,905	3,142
				$ 12,432	$ 12,980

Summarized financial information in respect of SENAO and its subsidiaries that has material noncontrolling interests is set out below. The summarized financial information below represented amounts before intercompany eliminations.

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Current assets	$ 6,540	$ 6,738
Noncurrent assets	$ 3,141	$ 3,522
Current liabilities	$ 2,982	$ 3,582
Noncurrent liabilities	$ 459	$ 416
Equity attributable to the parent	$ 1,707	$ 1,713
Equity attributable to noncontrolling interests	$ 4,533	$ 4,549

F- 37

	Year Ended December 31 — 2022		2023		2024
	NT$		NT$		NT$
			(In Millions)
Revenues and income	$ 31,602		$ 31,675		$ 32,503
Costs and expenses	30,958		30,964		32,012
Profit for the year	$ 644		$ 711		$ 491
Profit attributable to the parent	$ 182		$ 201		$ 138
Profit attributable to noncontrolling interests	462		510		353
Profit for the year	$ 644		$ 711		$ 491
Other comprehensive income (loss) attributable to the parent	$ 11		$ ( 9	)	$ 11
Other comprehensive income (loss) attributable to noncontrolling interests	26		( 23	)	30
Other comprehensive income (loss) for the year	$ 37		$ ( 32	)	$ 41
Total comprehensive income attributable to the parent	$ 192		$ 192		$ 149
Total comprehensive income attributable to noncontrolling interests	488		487		383
Total comprehensive income for the year	$ 680		$ 679		$ 532
Net cash flow from operating activities	$ ( 329	)	$ 1,146		$ 904
Net cash flow from investing activities	36		36		( 356	)
Net cash flow from financing activities	( 826	)	( 873	)	( 819	)
Effect of exchange rate changes on cash and cash equivalents	1		—		—
Net cash inflow (outflow)	$ ( 1,118	)	$ 309		$ ( 271	)
Dividends paid to noncontrolling interests	$ 371		$ 408		$ 371

Summarized financial information in respect of CHPT and its subsidiaries that has material noncontrolling interests is set out below. The summarized financial information below represented amounts before intercompany eliminations.

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Current assets	$ 3,773	$ 4,936
Noncurrent assets	$ 4,499	$ 4,222
Current liabilities	$ 677	$ 1,102
Noncurrent liabilities	$ 23	$ 21
Equity attributable to CHI	$ 2,578	$ 2,746
Equity attributable to noncontrolling interests	$ 4,994	$ 5,289

F- 38

	Year Ended December 31 — 2022	2023			2024
	NT$	NT$			NT$
		(In Millions)
Revenues and income	$ 4,434	$	2,941		$ 3,670
Costs and expenses	3,673		2,905		3,207
Profit for the year	$ 761	$	36		$ 463
Profit attributable to CHI	$ 265	$	21		$ 168
Profit attributable to noncontrolling interests	496		15		295
Profit for the year	$ 761	$	36		$ 463
Other comprehensive income (loss) attributable to CHI	$ 5	$	( 1	)	$ 6
Other comprehensive income (loss) attributable to noncontrolling interests	7		( 2	)	10
Other comprehensive income (loss) for the year	$ 12	$	( 3	)	$ 16
Total comprehensive income attributable to CHI	$ 270	$	20		$ 174
Total comprehensive income attributable to noncontrolling interests	503		13		305
Total comprehensive income for the year	$ 773	$	33		$ 479
Net cash flow from operating activities	$ 1,401	$	325		$ 616
Net cash flow from investing activities	( 1,011	)	( 244	)	( 188	)
Net cash flow from financing activities	( 388	)	( 409	)	( 43	)
Effect of exchange rate changes on cash and cash equivalents	8		( 2	)	15
Net cash inflow (outflow)	$ 10	$	( 330	)	$ 400
Dividends paid to noncontrolling interests	$ 293	$	253		$ 11

b. Equity transactions with noncontrolling interests

Chunghwa did not participate in the capital increase of CHST in November 2022. Therefore, the Company’s ownership interest in CHST decreased.

CHIEF issued new shares in March 2022, December 2022, December 2023 and December 2024 as its employees exercised options. Therefore, the Company’s ownership interest in CHIEF decreased. See Note 35(a) for details.

CHTSC issued new shares in February 2022, May 2022, February 2023, May 2023, January 2024, March 2024 and December 2024 as its employees exercised options. In addition, Chunghwa disposed of some shares of CHTSC in August 2024 before CHTSC traded its shares on the emerging stock market according to the local requirements. Therefore, the Company’s ownership interest in CHTSC decreased. See Note 35(b) for details.

IISI purchased shares of UTC in August 2023. Therefore, the Company’s ownership interest in UTC increased. Chunghwa disposed of some shares of IISI in August 2024 before IISI traded its shares on the emerging stock market according to the local requirements. Therefore, the Company’s ownership interest in IISI decreased.

CLPT issued new shares in May 2023 and July 2024 as its employees exercised options. Therefore, the Company’s ownership interest in CLPT decreased. See Note 35(c) for details.

F- 39

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

The detailed information of the equity transactions for the years ended December 31, 2022, 2023 and 2024 was as follows:

	Year Ended December 31, 2022 — CHIEF Share-Based Payment	CHTSC Share-Based Payment		Chunghwa Not Proportionately Participating in the Capital Increase of CHST
	NT$	NT$		NT$
	(In Millions)
Cash consideration received from noncontrolling interests	$ 39	$	35	$	15
The proportionate share of the carrying amount of the net assets of the subsidiary transferred to noncontrolling interests	( 17	)	( 30	)	( 10	)
Differences arising from equity transactions	$ 22	$	5	$	5
Line items for equity transaction adjustments
Additional paid-in capital - arising from changes in equities of subsidiaries	$ 22	$	5	$	5

	Year Ended December 31, 2023 — CHIEF Share-Based Payment	CHTSC Share-Based Payment		CLPT Share-Based Payment		Purchasing UTC shares
	NT$	NT$		NT$		NT$
	(In Millions)
Cash consideration received from (paid to) noncontrolling interests(Note)	$ 8	$	15	$	1	$	—
The proportionate share of the carrying amount of the net assets of the subsidiary transferred from (to) noncontrolling interests	( 2	)	( 13	)	( 1	)	—
Differences arising from equity transactions	$ 6	$	2	$	—	$	—
Line items for equity transaction adjustments
Additional paid-in capital - arising from the difference between the consideration received or paid and the carrying amount of the subsidiaries’ net assets during actual disposal or acquisition	$ —	$	—	$	—	$	—
Additional paid-in capital - arising from changes in equities of subsidiaries	$ 6	$	2	$	—	$	—

F- 40

	Year Ended December 31, 2024 — CHIEF Share-Based Payment	CHTSC Share-Based Payment		CLPT Share-Based Payment			Disposal of CHTSC Shares	Disposal of IISI Shares
	NT$	NT$		NT$			NT$	NT$
	(In Millions)
Cash consideration received from noncontrolling interests (Note)	$ 14	$	14	$	9		$ 207	$	52
The proportionate share of the carrying amount of the net assets of the subsidiary transferred to noncontrolling interests	( 10	)	( 14	)	( 13	)	( 19	)	( 16	)
Differences arising from equity transactions	$ 4	$	—	$	( 4	)	$ 188	$	36
Line items for equity transaction adjustments
Additional paid-in capital - arising from the difference between the consideration received or paid and the carrying amount of the subsidiaries’ net assets during actual disposal or acquisition	$ —	$	—	$	—		$ 188	$	36
Additional paid-in capital - arising from changes in equities of subsidiaries	$ 4	$	—	$	( 4	)	$ —	$	—

Note: The proceeds from the new shares issued in February 2023 and January 2024 by CHTSC have been received in advance in December 2022 and December 2023, respectively.

16. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Investments in associates	$ 8,243	$ 8,870
Investment in joint venture	9	9
	$ 8,252	$ 8,879

F- 41

a. Investments in associates

Investments in associates were as follows:

	Carrying Amount
	December 31
	2023	2024
	NT$	NT$
	(In Millions)
Material associate
Non-listed
Next Commercial Bank Co., Ltd. (“NCB”)	$ 4,293	$ 3,951
Associates that are not individually material
Listed
Senao Networks, Inc. (“SNI”)	1,409	1,849
KingwayTek Technology Co., Ltd. (“KWT”)	229	242
Non-listed
Viettel-CHT Co., Ltd. (“Viettel-CHT”)	543	573
Taiwan International Standard Electronics Co., Ltd. (“TISE”)	309	373
ST-2 Satellite Ventures Pte., Ltd. (“STS”)	285	313
Taiwania Hive Technology Fund L.P. (“TWTF”)	—	276
WiAdvance Technology Corporation (“WATC”)	212	274
Chunghwa PChome Fund I Co., Ltd. (“CPFI”)	258	253
So-net Entertainment Taiwan Limited (“So-net”)	226	193
KKBOX Taiwan Co., Ltd. (“KKBOXTW”)	165	151
Taiwan International Ports Logistics Corporation (“TIPL”)	120	132
Porrima Inc. (“PORRIMA”)	—	78
CHT Infinity Singapore Pte., Ltd. (“CISG”)	57	61
Imedtac Co., Ltd. (“IME”)	47	57
Click Force Co., Ltd. (“CF”)	42	51
AgriTalk Technology Inc. (“ATT”)	31	26
Baohwa Trust Co., Ltd. (“BHT”)	10	12
Cornerstone Ventures Co., Ltd. (“CVC”)	7	5
	$ 8,243	$ 8,870

F- 42

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


December 31
2023	2024
Material associate
Non-listed
Next Commercial Bank Co., Ltd. (“NCB”)	46	46
Associates that are not individually material
Listed
Senao Networks, Inc. (“SNI”)	34	33
KingwayTek Technology Co., Ltd. (“KWT”)	23	23
Non-listed
Viettel-CHT Co., Ltd. (“Viettel-CHT”)	30	30
Taiwan International Standard Electronics Co., Ltd. (“TISE”)	40	40
ST-2 Satellite Ventures Pte., Ltd. (“STS”)	38	38
Taiwania Hive Technology Fund L.P. (“TWTF”)	—	42
WiAdvance Technology Corporation (“WATC”)	19	16
Chunghwa PChome Fund I Co., Ltd. (“CPFI”)	50	50
So-net Entertainment Taiwan Limited (“So-net”)	30	30
KKBOX Taiwan Co., Ltd. (“KKBOXTW”)	30	30
Taiwan International Ports Logistics Corporation (“TIPL”)	27	27
Porrima Inc. (“PORRIMA”)	—	10
CHT Infinity Singapore Pte., Ltd. (“CISG”)	40	40
Imedtac Co., Ltd. (“IME”)	7	10
Click Force Co., Ltd. (“CF”)	49	49
AgriTalk Technology Inc. (“ATT”)	29	29
Baohwa Trust Co., Ltd. (“BHT”)	25	25
Cornerstone Ventures Co., Ltd. (“CVC”)	49	49

Summarized financial information of NCB was set out below:

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Assets	$ 37,431	$	48,637
Liabilities	( 28,084	)	( 40,043	)
Equity	$ 9,347	$	8,594
The percentage of ownership interest held by the Company	46.26	%	46.26	%
Equity attributable to the Company	$ 4,324	$	3,975
Unrealized gain or loss from downstream transactions	( 31	)	( 24	)
The carrying amount of investment	$ 4,293	$	3,951

F- 43

	Year Ended December 31 — 2022		2023		2024
	NT$		NT$		NT$
			(In Millions)
Net Revenues (losses)	$ ( 47	)	$ 10		$ 314
Net loss for the period	$ ( 1,004	)	$ ( 969	)	$ ( 747	)
Other comprehensive income (loss)	( 10	)	14		( 6	)
Total comprehensive loss for the period	$ ( 1,014	)	$ ( 955	)	$ ( 753	)

Except for NCB, no associate is considered individually material to the Company. Summarized financial information of associates that are not individually material to the Company was as follows:

	Year Ended December 31 — 2022	2023	2024
	NT$	NT$	NT$
		(In Millions)
The Company’s share of profits	$ 868	$ 647	$	494
The Company’s share of other comprehensive income (loss)	13	( 23	)	40
The Company’s share of total comprehensive income	$ 881	$ 624	$	534

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

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
SNI	$ 4,062	$ 3,838
KWT	$ 988	$ 897

The Company invested and obtained 50 % ownership interest in CPFI. However, as the Company has only two out of five seats of the Board of Directors of CPFI, the Company has no control but significant influence over CPFI. Therefore, the Company recognized CPFI as an investment in associate.

The Company subscribed for all the shares in the capital increase of ATT at the amount of $ 32 million in November 2022. Therefore, the Company’s ownership interest in ATT increased to 29.33 % as of December 31, 2022.

STS reduces its capital in April 2022 and the Company received $ 340 million from capital reduction. The Company’s ownership interest in STS remained the same.

CVC was approved to end and dissolve its business in November 2024. The liquidation of CVC is still in process. The Company invested and obtained 49 % ownership interest in CVC. However, as the Company has only two out of five seats of the Board of Directors of CVC, the Company has no control but significant influence over CVC. Therefore, the Company recognized CVC as an investment in associate.

The Company increased its investment in IME proportionally at the amount of $ 11 million in December 2023, and increased its investment in IME in higher proportion to the original shareholder percentage at the amount of $ 32 million in April 2024, respectively. Therefore, the Company’s ownership interest in IME increased to 10.00 % as of December 31, 2024. As the Company continues to control one out of five seats of the Board of Directors of IME, the Company has significant influence over IME.

F- 44

The Company did not participate in the capital increase of WATC in January 2024. WATC issued new shares in March 2022, October 2022, April 2023, September 2023, December 2023, March 2024 and September 2024 as its employees exercised option. Therefore, the Company’s ownership interest in WATC decreased to 20.05 %, 19.22 % and 16.24 % as of December 31, 2022, December 31, 2023, and December 31, 2024,respectively. However, as the Company continues to control one out of five seats of the Board of Directors of WATC, the Company has significant influence over WATC.

The Company invested $ 20 million and obtained 40.00 % ownership interest in BHT in March 2022. BHT mainly engages in VR integration and AIoT security services. The Company did not participate in the capital increase of BHT in September 2023. Therefore, the Company’s ownership interest in BHT decreased to 25.00 %.

The Company’s ownership interest in NCB was originally 41.90 %. NCB reduced 26.43 % of its capital to offset accumulated deficits and increased its capital in December 2023. The Company increased its investment in NCB in higher proportion to the original shareholder percentage at the amount of $ 1,544 million. Therefore, the Company’s ownership interest in NCB increased to 46.26 % as of December 31, 2023. Although Chunghwa is the single largest stockholder of NCB, it only obtained six out of fifteen seats of the Board of Directors of NCB. In addition, the management considered the size of ownership interest and the dispersion of shares owned by the other stockholders, other holdings are not extremely dispersed. Chunghwa is not able to direct its relevant activities. Therefore, Chunghwa does not have control over NCB and merely has significant influence over NCB and treats it as an associate.

KWT transferred its treasury stock repurchased from December 2019 to February 2020 to employees in October 2024. Therefore, the Company’s ownership interest in KWT decreased to 22.58 % as of December 31, 2024.

The Company increased its investment in SNI in lower proportion to the original shareholder percentage at the amount of $ 376 million in October 2024. Therefore, the Company’s ownership interest in SNI decreased to 33.16 % as of December 31, 2024.

Chunghwa’s Board of Directors approved an investment in TWTF at the amount of USD 30 million in February 2024. The Company initially invested $ 288 million (USD 9 million) in August 2024 and obtained 41.75 % ownership interest in TWTF. TWTF mainly engages in investment.

The Company participated in the capital increase of PORRIMA at the amount of $ 80 million in May 2024 and obtained 10.00 % ownership interest. PORRIMA mainly engages in designing and selling zero-emission ships. As the Company has one out of five seats of the Board of Directors of PORRIMA, the Company has significant influence over PORRIMA.

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

b. Investment in joint venture

Investment in joint venture was as follows:

	Carrying Amount — December 31		% of Ownership Interests and Voting Rights — December 31
Name of Joint Venture	2023	2024	2023	2024
Non-listed
Chunghwa SEA Holdings (“CHT SEA”)	$ 9	$ 9	51	51

F- 45

The Company invested and established a joint venture, CHT SEA, with Delta Electronics, Inc. and Kwang Hsing Industrial Co., Ltd. and obtained 51 % ownership interest of CHT SEA. However, according to the mutual agreements among stockholders, the Company does not individually direct CHT SEA’s relevant activities and has joint control with the other party; therefore, the Company treated CHT SEA as a joint venture.

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

	Year Ended December 31 — 2022	2023	2024
	NT$	NT$	NT$
		(In Millions)
The Company’s share of loss	$ —	$ —	$ —
The Company’s share of other comprehensive income	—	—	—
The Company’s share of total comprehensive loss	$ —	$ —	$ —

The above amounts are less than one million and not zero.

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

17. PROPERTY, PLANT AND EQUIPMENT

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Assets used by the Company	$ 285,085	$ 284,715
Assets subject to operating leases	7,253	5,125
	$ 292,338	$ 289,840

F- 46

a. Assets used by the Company

	Land — NT$	NT$			Buildings — NT$		Computer Equipment — NT$		Telecommuni- cations Equipment — NT$		Transportation Equipment — NT$		Miscellaneous Equipment — NT$		Construction in Progress and Equipment to be Accepted — NT$	NT$
	(In Millions)
Cost
Balance on January 1, 2022	$ 102,645	$	1,662		$ 71,358		$ 11,217		$ 713,534		$ 3,927		$ 10,809		$ 10,786	$	925,938
Additions	460		—		133		102		149		1		253		30,167		31,265
Disposal	( 4	)	( 6	)	( 7	)	( 808	)	( 18,395	)	( 104	)	( 392	)	—		( 19,716	)
Effect of foreign exchange differences	—		—		—		—		209		—		4		19		232
Others	563		19		1,046		578		24,571		147		794		( 26,545	)	1,173
Balance on December 31, 2022	$ 103,664	$	1,675		$ 72,530		$ 11,089		$ 720,068		$ 3,971		$ 11,468		$ 14,427	$	938,892
Accumulated depreciation and impairment
Balance on January 1, 2022	$ —	$	( 1,442	)	$ ( 30,578	)	$ ( 9,632	)	$ ( 590,533	)	$ ( 3,699	)	$ ( 8,205	)	$ —	$	( 644,089	)
Depreciation expenses	—		( 39	)	( 1,452	)	( 725	)	( 25,654	)	( 77	)	( 754	)	—		( 28,701	)
Disposal	—		7		7		807		18,382		104		388		—		19,695
Effect of foreign exchange differences	—		—		—		—		( 110	)	—		( 2	)	—		( 112	)
Others	—		—		( 240	)	( 4	)	( 42	)	( 1	)	( 69	)	—		( 356	)
Balance on December 31, 2022	$ —	$	( 1,474	)	$ ( 32,263	)	$ ( 9,554	)	$ ( 597,957	)	$ ( 3,673	)	$ ( 8,642	)	$ —	$	( 653,563	)
Balance on December 31, 2022, net	$ 103,664	$	201		$ 40,267		$ 1,535		$ 122,111		$ 298		$ 2,826		$ 14,427	$	285,329
Cost
Balance on January 1, 2023	$ 103,664	$	1,675		$ 72,530		$ 11,089		$ 720,068		$ 3,971		$ 11,468		$ 14,427		938,892
Additions	99		—		36		127		106		3		243		29,780		30,394
Disposal	( 2	)	—		( 1	)	( 1,049	)	( 24,877	)	( 112	)	( 418	)	—		( 26,459	)
Effect of foreign exchange differences	—		—		—		—		( 5	)	—		( 3	)	—		( 8	)
Others	( 876	)	34		( 810	)	878		26,143		188		801		( 28,270	)	( 1,912	)
Balance on December 31, 2023	$ 102,885	$	1,709		$ 71,755		$ 11,045		$ 721,435		$ 4,050		$ 12,091		$ 15,937	$	940,907

(Continued)

F- 47

	Land — NT$	NT$			Buildings — NT$		Computer Equipment — NT$		Telecommuni- cations Equipment — NT$		Transportation Equipment — NT$		Miscellaneous Equipment — NT$		Construction in Progress and Equipment to be Accepted — NT$	NT$
	(In Millions)
Accumulated depreciation and impairment
Balance on January 1, 2023	$ —	$	( 1,474	)	$ ( 32,263	)	$ ( 9,554	)	$ ( 597,957	)	$ ( 3,673	)	$ ( 8,642	)	$ —	$	( 653,563	)
Depreciation expenses	—		( 34	)	( 1,439	)	( 698	)	( 25,704	)	( 94	)	( 797	)	—		( 28,766	)
Disposal	—		—		—		1,049		24,867		113		411		—		26,440
Impairment losses	—		—		—		—		( 299	)	—		—		—		( 299	)
Effect of foreign exchange differences	—		—		—		—		5		—		1		—		6
Others	—		—		418		( 18	)	( 43	)	( 1	)	4		—		360
Balance on December 31, 2023	$ —	$	( 1,508	)	$ ( 33,284	)	$ ( 9,221	)	$ ( 599,131	)	$ ( 3,655	)	$ ( 9,023	)	$ —	$	( 655,822	)
Balance on December 31, 2023, net	$ 102,885	$	201		$ 38,471		$ 1,824		$ 122,304		$ 395		$ 3,068		$ 15,937	$	285,085
Cost
Balance on January 1, 2024	$ 102,885	$	1,709		$ 71,755		$ 11,045		$ 721,435		$ 4,050		$ 12,091		$ 15,937	$	940,907
Additions	—		—		176		25		321		4		139		27,910		28,575
Disposal	—		—		( 18	)	( 1,240	)	( 27,010	)	( 154	)	( 506	)	—		( 28,928	)
Effect of foreign exchange differences	—		—		—		—		167		—		9		16		192
Others	( 539	)	40		2,265		619		23,440		284		947		( 27,290	)	( 234	)
Balance on December 31, 2024	$ 102,346	$	1,749		$ 74,178		$ 10,449		$ 718,353		$ 4,184		$ 12,680		$ 16,573	$	940,512
Accumulated depreciation and impairment
Balance on January 1, 2024	$ —	$	( 1,508	)	$ ( 33,284	)	$ ( 9,221	)	$ ( 599,131	)	$ ( 3,655	)	$ ( 9,023	)	$ —	$	( 655,822	)
Depreciation expenses	—		( 36	)	( 1,467	)	( 747	)	( 25,434	)	( 128	)	( 830	)	—		( 28,642	)
Disposal	—		—		17		1,240		27,003		153		485		—		28,898
Effect of foreign exchange differences	—		—		—		—		( 105	)	—		( 5	)	—		( 110	)
Others	—		—		12		2		( 7	)	—		( 128	)	—		( 121	)
Balance on December 31, 2024	$ —	$	( 1,544	)	$ ( 34,722	)	$ ( 8,726	)	$ ( 597,674	)	$ ( 3,630	)	$ ( 9,501	)	$ —	$	( 655,797	)
Balance on December 31, 2024, net	$ 102,346	$	205		$ 39,456		$ 1,723		$ 120,679		$ 554		$ 3,179		$ 16,573	$	284,715

(Concluded)

There was no indication that property, plant and equipment was impaired; therefore, the Company did no t recognize any impairment loss for the years ended December 31, 2022 and 2024.

After the evaluation of certain telecommunications equipment, the Company determined that the recoverable amount of such assets was nil because the telecommunications service provided by 3G network would be discontinued in 2024; therefore, the Company recognized an impairment loss of $ 299 million for the year ended December 31, 2023. The aforementioned impairment loss was included in other income and expenses in the statements of comprehensive income.

Depreciation expense for assets used by the Company is computed using the straight-line method over the following estimated service lives:

F- 48

Land improvements	10 - 30 years
Buildings
Main buildings	20 - 60 years
Other building facilities	3 - 15 years
Computer equipment	2 - 8 years
Telecommunications equipment
Telecommunication circuits	2 - 30 years
Telecommunication machinery and antennas equipment	2 - 30 years
Transportation equipment	2 - 10 years
Miscellaneous equipment
Leasehold improvements	1 - 18 years
Mechanical and air conditioner equipment	3 - 16 years
Others	1 - 15 years

F- 49

b. Assets subject to operating leases

	Land — NT$	NT$			Total — NT$
	(In Millions)
Cost
Balance on January 1, 2022	$ 4,809	$	4,134		$ 8,943
Additions	—		—		—
Others	( 433	)	( 949	)	( 1,382	)
Balance on December 31, 2022	$ 4,376	$	3,185		$ 7,561
Accumulated depreciation and impairment
Balance on January 1, 2022	$ —	$	( 1,692	)	$ ( 1,692	)
Depreciation expenses	—		( 59	)	( 59	)
Others	—		389		389
Balance on December 31, 2022	$ —	$	( 1,362	)	$ ( 1,362	)
Balance on December 31, 2022, net	$ 4,376	$	1,823		$ 6,199
Cost
Balance on January 1, 2023	$ 4,376	$	3,185		$ 7,561
Additions	—		4		4
Others	548		942		1,490
Balance on December 31, 2023	$ 4,924	$	4,131		$ 9,055
Accumulated depreciation and impairment
Balance on January 1, 2023	$ —	$	( 1,362	)	$ ( 1,362	)
Depreciation expenses	—		( 73	)	( 73	)
Others	—		( 367	)	( 367	)
Balance on December 31, 2023	$ —	$	( 1,802	)	$ ( 1,802	)
Balance on December 31, 2023, net	$ 4,924	$	2,329		$ 7,253
Cost
Balance on January 1, 2024	$ 4,924	$	4,131		$ 9,055
Additions	—		1		1
Others	( 1,820	)	( 394	)	( 2,214	)
Balance on December 31, 2024	$ 3,104	$	3,738		$ 6,842
Accumulated depreciation and impairment
Balance on January 1, 2024	$ —	$	( 1,802	)	$ ( 1,802	)
Depreciation expenses	—		( 65	)	( 65	)
Others	—		150		150
Balance on December 31, 2024	$ —	$	( 1,717	)	$ ( 1,717	)
Balance on December 31, 2024, net	$ 3,104	$	2,021		$ 5,125

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

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

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Year 1	$ 381	$ 305
Year 2	279	198
Year 3	221	122
Year 4	176	92
Year 5	146	62
Onwards	1,025	137
	$ 2,228	$ 916

F- 50

The above items of property, plant and equipment subject to operating leases are depreciated on a straight-line basis over their estimated useful lives as follows:

Buildings
Main buildings	35 - 60 years
Other building facilities	3 - 15 years

18. LEASE ARRANGEMENTS

a. Right-of-use assets

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Land and buildings
Handsets base stations	$ 7,577	$ 7,648
Others	1,754	1,564
Equipment	1,907	1,700
	$ 11,238	$ 10,912

	Year Ended December 31 — 2022	2023	2024
	NT$	NT$	NT$
	(In Millions)
Additions to right-of-use assets	$ 4,369	$ 4,415	$ 4,092
Depreciation charge for right-of-use assets
Land and buildings
Handsets base stations	$ 2,863	$ 2,939	$ 3,009
Others	770	787	805
Equipment	349	346	354
	$ 3,982	$ 4,072	$ 4,168

The Company did no t have significant sublease or impairment of right-of-use assets for the years ended December 31, 2022, 2023 and 2024.

b. Lease liabilities

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Lease liabilities
Current	$ 3,505	$ 3,558
Noncurrent	7,470	7,334
	$ 10,975	$ 10,892

F- 51

Ranges of discount rates for lease liabilities were as follows:

	December 31 — 2023	2024
Land and buildings
Handsets base stations	0.37 %- 1.84 %	0.37 %- 2.00 %
Others	0.37 %- 9.00 %	0.37 %- 9.00 %
Equipment	0.37 %- 3.50 %	0.37 %- 3.50 %

c. Important lease-in activities and terms

The Company mainly enters into lease-in agreements of land and buildings for handsets base stations located throughout Taiwan with lease terms ranging from 1 to 20 years. The lease agreements do not contain bargain purchase options to acquire the assets at the expiration of the respective leases. For majority of the lease-in agreements on handsets base station, the Company has the right to terminate the agreement prior to the expiration date if the Company is unable to build the required telecommunication equipment, either due to legal restrictions, controversial events, or other events.

The Company also leases land and buildings for the use of offices, server rooms, and stores with lease terms from 1 to 30 years. Most of the lease agreements for national land adjust the lease payment according to the changes of the announced land values by the authority. At the expiry of the lease term, the Company does not have bargain purchase options to acquire the assets.

The lease agreements for equipment include a contract between Chunghwa and ST-2 Satellite Ventures Pte., Ltd. to lease capacity on the ST-2 satellite. For the information of lease agreements with related parties, please refer to Note 40.

d. Other lease information

	Year Ended December 31 — 2022	2023	2024
	NT$	NT$	NT$
	(In Millions)
Expenses relating to low-value asset leases	$ 9	$ 9	$ 10
Expenses relating to variable lease payments not included in the measurement of lease liabilities	$ 8	$ 8	$ 7
Total cash outflow for leases	$ 3,869	$ 4,006	$ 4,089

The Company leases certain equipment which qualifies as low-value asset leases. The Company has elected to apply the recognition exemption and, thus, not to recognize right-of-use assets and lease liabilities for these leases.

Lease-out arrangements under operating leases for freehold property, plant, and equipment and investment properties were set out in Notes 17 and 19.

19. INVESTMENT PROPERTIES

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Carrying amount
Investment properties	$ 9,805	$ 12,302

F- 52

	Investment Properties
	NT$
	(In Millions)
Cost
Balance on January 1, 2022	$ 10,663
Additions	18
Reclassification	99
Balance on December 31, 2022	$ 10,780
Accumulated depreciation and impairment
Balance on January 1, 2022	$ ( 1,000	)
Depreciation expense	( 44	)
Reversal of impairment loss	107
Reclassification	( 39	)
Balance on December 31, 2021	$ ( 976	)
Balance on December 31, 2021, net	$ 9,804
Cost
Balance on January 1, 2023	$ 10,780
Additions	54
Reclassification	328
Balance on December 31, 2023	$ 11,162
Accumulated depreciation and impairment
Balance on January 1, 2023	$ ( 976	)
Depreciation expense	( 45	)
Impairment loss	( 336	)
Balance on December 31, 2023	$ ( 1,357	)
Balance on December 31, 2023, net	$ 9,805
Cost
Balance on January 1, 2024	$ 11,162
Additions	4
Reclassification	2,427
Balance on December 31, 2024	$ 13,593
Accumulated depreciation and impairment
Balance on January 1, 2024	$ ( 1,357	)
Depreciation expense	( 45	)
Reversal of impairment loss	139
Reclassification	( 28	)
Balance on December 31, 2024	$ ( 1,291	)
Balance on December 31, 2024, net	$ 12,302

After the evaluation of land and buildings by comparing the recoverable amount which represented the fair value less costs of disposal with the carrying amount, the Company recognized reversal of impairment losses of $ 107 million and $ 139 million for the years ended December 31, 2022 and 2024, respectively, and an impairment loss of $ 336 million for the year ended December 31, 2023. The impairment loss and the reversal of impairment loss were included in “other income and expenses” in the consolidated statements of comprehensive income.

F- 53

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

Land improvements	15 - 30 years
Buildings
Main buildings	8 - 60 years
Other building facilities	10 - 35 years

The fair values of the Company’s investment properties as of December 31, 2023 and 2024 were determined by Level 3 fair value measurements inputs based on the appraisal reports conducted by independent appraisers. Those appraisal reports are based on the comparison approach, income approach or cost approach. Key assumptions and the fair values were as follows:

	2023	2024
	NT$	NT$
	(In Millions)
Fair value	$ $ 24,237	$ $ 41,285
Overall capital interest rate	1.43 %- 5.51 %	1.47 %- 5.81 %
Profit margin ratio	10 %- 20 %	12 %- 20 %
Discount rate	—	0 %- 10 %
Capitalization rate	0.23 %- 2.28 %	1.12 %- 2.13 %

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

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

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Year 1	$ 168	$ 274
Year 2	157	248
Year 3	134	217
Year 4	105	192
Year 5	83	190
Onwards	435	1,306
	$ 1,082	$ 2,427

20. INTANGIBLE ASSETS

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Carrying amount
Mobile Broadband Concession	$ 71,761	$ 65,371
Computer software	579	551
Goodwill	217	217
Others	170	144
	$ 72,727	$ 66,283

F- 54

	Mobile Broadband Concession — NT$		Computer Software — NT$		Goodwill — NT$		Others — NT$		Total — NT$
	(In Millions)
Cost
Balance on January 1, 2022	$ 108,338		$ 3,203		$ 291		$ 413		112,245
Additions-acquired separately	1,625		257		—		11		1,893
Disposal	—		( 663	)	—		( 2	)	( 665	)
Effect of foreign exchange differences	—		—		—		—		—
Others	—		1		—		—		1
Balance on December 31, 2022	$ 109,963		$ 2,798		$ 291		$ 422		$ 113,474
Accumulated amortization and impairment
Balance on January 1, 2022	$ ( 25,518	)	$ ( 2,530	)	$ ( 74	)	$ ( 178	)	$ ( 28,300	)
Amortization expenses	( 6,295	)	( 310	)	—		( 38	)	( 6,643	)
Disposal	—		664		—		1		665
Impairment losses	—		—		—		( 9	)	( 9	)
Effect of foreign exchange differences	—		—		—		—		—
Others	—		—		—		—		—
Balance on December 31, 2022	$ ( 31,813	)	$ ( 2,176	)	$ ( 74	)	$ ( 224	)	$ ( 34,287	)
Balance on December 31, 2022, net	$ 78,150		$ 622		$ 217		$ 198		$ 79,187
Cost
Balance on January 1, 2023	$ 109,963		$ 2,798		$ 291		$ 422		$ 113,474
Additions-acquired separately	—		231		—		6		237
Disposal	—		( 499	)	—		( 6	)	( 505	)
Effect of foreign exchange differences	—		—		—		—		—
Others	—		3		—		—		3
Balance on December 31, 2023	$ 109,963		$ 2,533		$ 291		$ 422		$ 113,209
Accumulated amortization and impairment
Balance on January 1, 2023	$ ( 31,813	)	$ ( 2,176	)	$ ( 74	)	$ ( 224	)	$ ( 34,287	)
Amortization expenses	( 6,389	)	( 276	)	—		( 34	)	( 6,699	)
Disposal	—		499		—		6		505
Effect of foreign exchange differences	—		( 1	)	—		—		( 1	)
Others	—		—		—		—		—
Balance on December 31, 2023	$ ( 38,202	)	$ ( 1,954	)	$ ( 74	)	$ ( 252	)	$ ( 40,482	)
Balance on December 31, 2023, net	$ 71,761		$ 579		$ 217		$ 170		$ 72,727
Cost
Balance on January 1, 2024	$ 109,963		$ 2,533		$ 291		$ 422		$ 113,209
Additions-acquired separately	—		229		—		5		234
Disposal	—		( 358	)	—		( 8	)	( 366	)
Effect of foreign exchange differences	—		—		—		—		—
Others	—		24		—		—		24
Balance on December 31, 2024	$ 109,963		$ 2,428		$ 291		$ 419		$ 113,101
Accumulated amortization and impairment
Balance on January 1, 2024	$ ( 38,202	)	$ ( 1,954	)	$ ( 74	)	$ ( 252	)	$ ( 40,482	)
Amortization expenses	( 6,390	)	( 278	)	—		( 31	)	( 6,699	)
Disposal	—		358		—		8		366
Effect of foreign exchange differences	—		—		—		—		—
Others	—		( 3	)	—		—		( 3	)
Balance on December 31, 2024	$ ( 44,592	)	$ ( 1,877	)	$ ( 74	)	$ ( 275	)	$ ( 46,818	)
Balance on December 31, 2024, net	$ 65,371		$ 551		$ 217		$ 144		$ 66,283

F- 55

Chunghwa’s Board of Directors approved the acquisition of the 900MHz frequency band and equipment from Asia Pacific Telecom Co., Ltd. in November 2021. The aforementioned tax-excluded transaction amount was $ 1,800 million included in intangible assets- mobile broadband concession and other assets- spare parts. The transaction was approved by the related authority in May 2022 and completed in July 2022.

The concessions are granted and issued by the National Communications Commission (“NCC”). The concession fees are amortized using the straight-line method over the period from the date operations commence through the date the license expires or the useful life, whichever is shorter. The 4G concession fees will be fully amortized by December 2030 and December 2033, and 5G concession fees will be fully amortized by December 2040.

The computer software is amortized using the straight-line method over the estimated useful lives of 1 to 10 years. Other intangible assets, except for those assessed as having indefinite useful lives, are amortized using the straight-line method over the estimated useful lives of 3 to 20 years. Goodwill is not amortized.

SENAO concluded the recoverable amounts of the license agreement and the right of trademark were lower than the carrying amounts and recognized impairment loss of $ 9 million for the year ended December 31, 2022. The aforementioned impairment losses were included in other income and expenses in the consolidated statements of comprehensive income. The recoverable amount of license agreement and right of trademark was measured at the fair value less costs of disposal. The fair value was calculated based on asset approach by reference to the net assets value of Youth. The Company did no t recognize any impairment loss on intangible assets for the year ended December 31, 2023 and 2024.

21. OTHER ASSETS

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Refundable deposits	$ 1,995	$ 2,162
Spare parts	2,233	2,006
Other financial assets	1,000	1,000
Others	2,223	2,833
	$ 7,451	$ 8,001
Current
Spare parts	$ 2,233	$ 2,006
Others	589	1,109
	$ 2,822	$ 3,115
Noncurrent
Refundable deposits	$ 1,995	$ 2,162
Other financial assets	1,000	1,000
Others	1,634	1,724
	$ 4,629	$ 4,886

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.

22. HEDGING FINANCIAL INSTRUMENTS

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

F- 56

Chunghwa signed equipment purchase contracts with suppliers and entered into forward exchange contracts to avoid foreign currency risk exposure to Euro-denominated purchase commitments. Those forward exchange contracts were designated as cash flow hedges. When forecast purchases actually take place, basis adjustments are made to the initial carrying amounts of hedged items.

For the hedges of highly probable forecast sales and purchases, as the critical terms (i.e. the notional amount, life and underlying) of the forward foreign exchange contracts and their corresponding hedged items are the same, the Company performs a qualitative assessment of effectiveness and it is expected that the value of the forward contracts and the value of the corresponding hedged items will systematically change in opposite direction in response to movements in the underlying exchange rates.

The main source of hedge ineffectiveness in these hedging relationships is the effect of credit risks of the Company and the counterparty on the fair value of the forward exchange contracts. Such credit risks do not impact the fair value of the hedged item attributable to changes in foreign exchange rates. No other sources of ineffectiveness emerged from these hedging relationships.

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

December 31, 2022

Hedging Instruments	Currency	Notional — Amount	Maturity	Forward — Rate	Line Item in — Balance Sheet	Carrying Amount — Asset	Liability	Change in Fair Values of Hedging Instruments Used for Calculating Hedge — Ineffectiveness
		(In Millions)		(In Dollars)		NT$	NT$	NT$
						(In Millions)
Cash flow hedge
Forecast purchases - forward exchange contracts	NT$/EUR	NT$ 423 / EUR 13	March 2023	$ 31.69	Hedging financial assets (liabilities)	$ 13	$ —	$ 21

Hedged Items	Change in Value of Hedged Item Used for — Calculating Hedge Ineffectiveness		Accumulated Gain or Loss on Hedging Instruments in Other Equity — Continuing Hedges	Hedge Accounting No Longer Applied
	NT$		NT$	NT$
			(In Millions)
Cash flow hedge
Forecast equipment purchases	$ ( 21	)	$ 13	$ —

December 31, 2023

Hedging Instruments	Currency	Notional — Amount	Maturity	Forward — Rate	Line Item in — Balance Sheet	Carrying Amount — Asset	Liability	Change in Fair Values of Hedging Instruments Used for Calculating Hedge — Ineffectiveness
		(In Millions)		(In Dollars)		NT$	NT$	NT$
						(In Millions)
Cash flow hedge
Forecast purchases - forward exchange contracts	NT$/EUR	NT$ 24 / EUR 1	March 2024	$ 33.88	Hedging financial assets (liabilities)	$ —	$ —	$ ( 13	)

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Hedged Items	Change in Value of Hedged Item Used for — Calculating Hedge Ineffectiveness	Accumulated Gain or Loss on Hedging Instruments in Other Equity — Continuing Hedges	Hedge Accounting No Longer Applied
	NT$	NT$	NT$
		(In Millions)
Cash flow hedge
Forecast equipment purchases	$ 13	$ —	$ —

December 31, 2024

Hedging Instruments	Currency	Notional — Amount	Maturity	Forward — Rate	Line Item in — Balance Sheet	Carrying Amount — Asset	Liability	Change in Fair Values of Hedging Instruments Used for Calculating Hedge — Ineffectiveness
		(In Millions)		(In Dollars)		NT$	NT$	NT$
						(In Millions)
Cash flow hedge
Forecast purchases - forward exchange contracts	NT$/EUR	NT$ 341 / EUR 10	March 2025	$ 34.10	Hedging financial assets (liabilities)	$ 1	$ 2	$ ( 1	)

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

Year ended December 31, 2022

	Comprehensive Income — Hedging Gain or Loss	Amount of Hedge Ineffectiveness	Line Item in Which Hedge	Reclassification from Equity to Assets and the Adjusted Line Item — Amount Reclassified to Assets and	Due to Hedged Future Cash Flows No
Hedge	Recognized	Recognized in	Ineffectiveness	the Adjusted	Longer Expected
Transaction	in OCI	Profit or Loss	is Included	Line Item	to Occur
	NT$	NT$	NT$	NT$	NT$
	(In Millions)
Cash flow hedge
Forecast equipment purchases	$ 21	$ —	—	$ 6	$ —
				Construction in progress and equipment to be accepted	Other gains and losses

Year ended December 31, 2023

	Comprehensive Income — Hedging Gain or Loss		Amount of Hedge Ineffectiveness	Line Item in Which Hedge	Reclassification from Equity to Assets and the Adjusted Line Item — Amount Reclassified to Assets and	Due to Hedged Future Cash Flows No
Hedge	Recognized		Recognized in	Ineffectiveness	the Adjusted	Longer Expected
Transaction	in OCI		Profit or Loss	is Included	Line Item	to Occur
	NT$		NT$	NT$	NT$	NT$
	(In Millions)
Cash flow hedge
Forecast equipment purchases	$ ( 13	)	$ —	—	$ 37	$ —
					Construction in progress and equipment to be accepted	Other gains and losses

F- 58

Year ended December 31, 2024

	Comprehensive Income — Hedging Gain or Loss		Amount of Hedge Ineffectiveness	Line Item in Which Hedge	Reclassification from Equity to Assets and the Adjusted Line Item — Amount Reclassified to Assets and		Due to Hedged Future Cash Flows No
Hedge	Recognized		Recognized in	Ineffectiveness	the Adjusted		Longer Expected
Transaction	in OCI		Profit or Loss	is Included	Line Item		to Occur
	NT$		NT$	NT$	NT$		NT$
	(In Millions)
Cash flow hedge
Forecast equipment purchases	$ ( 1	)	$ —	—	$ ( 2	)	$ —
					Construction in progress and equipment to be accepted		Other gains and losses

23. SHORT-TERM LOANS

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Unsecured bank loans	$ 585	$ 215

The annual interest rates of bank loans were as follows:

	December 31 — 2023	2024
Unsecured bank loans	2.16 %- 3.36 %	1.82 %- 3.49 %

CHST entered into an unsecured loan contract with Bank of Taiwan, and the loan amount of $ 50 million has matured in November 2024. CHST has been continuously negotiating the loan extension with Bank of Taiwan.

24. LONG-TERM LOANS

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Secured bank loans (Note 41)	$ 1,600	$	1,600
Unsecured bank loans	—	$	35
Less: Current portion	( 1,600	)	( 4	)
	$ -	$	1,631

The annual interest rates of bank loans were as follows:

	December 31 — 2023	2024
Secured bank loans	1.87 %	2.09 %
Unsecured bank loans	—	2.22 %

LED obtained a secured loan from Chang Hwa Bank with monthly interest payments. LED entered into a contract with Chang Hwa Bank to renew the contract upon the maturity of the aforementioned contract in August 2024, and the due date of the renewed contract is September 2027 .

F- 59

CLPT entered into an unsecured loan contract with Mega International Commercial Bank, interest is paid monthly, and the principal will be repaid in 48 equal installments from August 2025 to July 2029.

25. BONDS PAYABLE

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Unsecured domestic bonds	$ 30,500	$	30,500
Less: Discounts on bonds payable	( 17	)	( 12	)
	$ 30,483	$	30,488
Less: Current portion	—		( 8,799	)
	$ 30,483	$	21,689

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

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

26. TRADE NOTES AND ACCOUNTS PAYABLE

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Trade notes and accounts payable	$ 14,396	$ 17,743

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

F- 60

27. OTHER PAYABLES

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Accrued salary and compensation	$ 10,441	$ 10,722
Accrued compensation to employees and remuneration to directors and supervisors	2,108	2,500
Payables to contractors	1,990	2,265
Amounts collected for others	1,544	1,707
Accrued maintenance costs	1,316	1,117
Payables to equipment suppliers	1,311	720
Others	6,547	7,550
	$ 25,257	$ 26,581

28. PROVISIONS

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Employee benefits	$ 387	$ 416
Warranties	238	281
Onerous contracts	194	266
Others	3	14
	$ 822	$ 977
Current	$ 337	$ 442
Noncurrent	485	535
	$ 822	$ 977

	Employee Benefits — NT$	NT$		NT$		NT$		NT$
	(In Millions)
Balance on January 1, 2022	$ 63	$	213	$	147	$	4	$	427
Additional / (reversal of) provisions recognized	2		108		( 52	)	—		58
Used / forfeited during the year	—		( 86	)	—		—		( 86	)
Effect of foreign exchange differences	—		—		—		—		—
Balance on December 31, 2022	$ 65	$	235	$	95	$	4	$	399
Balance on January 1, 2023	$ 65	$	235	$	95	$	4	$	399
Additional / (reversal of) provisions recognized	323		69		49		( 1	)	440
Used / forfeited during the year	( 1	)	( 66	)	—		—		( 67	)
Reclassification	—		—		50		—		50
Effect of foreign exchange differences	—		—		—		—		—
Balance on December 31, 2023	$ 387	$	238	$	194	$	3	$	822
Balance on January 1, 2024	$ 387	$	238	$	194	$	3	$	822
Additional / (reversal of) provisions recognized	34		114		72		11		231
Used / forfeited during the year	( 5	)	( 71	)	—		—		( 76	)
Effect of foreign exchange differences	—		—		—		—		—
Balance on December 31, 2024	$ 416	$	281	$	266	$	14	$	977

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

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

c. The provision for onerous contracts represents the present obligation resulting from the measurement for the unavoidable costs of meeting the Company’s contractual obligations exceed the economic benefits expected to be received from the contracts.

29. 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 its 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.

Chunghwa and its subsidiaries SENAO, CHIEF, CHSI, SHE, IISI and UTC with the pension mechanism under the Labor Standards Law in the ROC are considered as defined benefit plans. These pension plans 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. According to the Article 56 of the Labor Standards Law in the ROC, entities are required to contribute the difference in one appropriation to their pension funds before the end of next March when the balance of the Funds is insufficient to pay the eligible employees who meet the retirement criteria in the following year.

F- 62

The amounts included in the consolidated balance sheets arising from the Company’s obligation in respect of its defined benefit plans were as follows:

	December 31 — 2023		2024
	NT$		NT$
	(In Millions)
Present value of funded defined benefit obligations	$ 30,313		$ 27,985
Fair value of plan assets	( 34,178	)	( 34,762	)
Funded status - surplus	$ ( 3,865	)	$ ( 6,777	)
Net defined benefit liabilities	$ 2,098		$ 2,107
Net defined benefit assets	( 5,963	)	( 8,884	)
	$ ( 3,865	)	$ ( 6,777	)

F- 63

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

	Present Value of Funded Defined Benefit Obligations — NT$	NT$		NT$
		(In Millions)
Balance on January 1, 2022	$ 35,502	$	36,605	$	( 1,103	)
Current service cost	1,085		—		1,085
Interest expense/interest income	171		181		( 10	)
Amounts recognized in profit or loss	1,256		181		1,075
Remeasurement on the net defined benefit liability
Return on plan assets (excluding amounts included in net interest)	—		2,968		( 2,968	)
Actuarial loss recognized from changes in financial assumptions	208		—		208
Actuarial loss recognized from experience adjustments	1,606		—		1,606
Amounts recognized in other comprehensive income	1,814		2,968		( 1,154	)
Contributions from employer	—		1,555		( 1,555	)
Benefits paid	( 4,729	)	( 4,729	)	—
Benefits paid directly by the Company	( 244	)	—		( 244	)
Balance on December 31, 2022	33,599		36,580		( 2,981	)
Current service cost	1,006		—		1,006
Loss on settlements	1		—		1
Interest expense/interest income	403		452		( 49	)
Amounts recognized in profit or loss	1,410		452		958
Remeasurement on the net defined benefit liability
Return on plan assets (excluding amounts included in net interest)	—		309		( 309	)
Actuarial gain recognized from changes in financial assumptions	( 100	)	—		( 100	)
Actuarial loss recognized from experience adjustments	252		—		252
Amounts recognized in other comprehensive income	152		309		( 157	)
Contributions from employer	—		1,386		( 1,386	)
Benefits paid	( 4,549	)	( 4,549	)	—
Benefits paid directly by the Company	( 299	)	—		( 299	)
Balance on December 31, 2023	30,313		34,178		( 3,865	)
Current service cost	904		—		904
Interest expense/interest income	372		422		( 50	)
Amounts recognized in profit or loss	1,276		422		854
Remeasurement on the net defined benefit liability
Return on plan assets (excluding amounts included in net interest)	—		3,105		( 3,105	)
Actuarial gain recognized from changes in financial assumptions	( 382	)	—		( 382	)
Actuarial loss recognized from experience adjustments	1,232		—		1,232
Amounts recognized in other comprehensive income	850		3,105		( 2,255	)
Contributions from employer	—		1,245		( 1,245	)
Benefits paid	( 4,188	)	( 4,188	)	—
Settlement of plan obligation of subsidiaries	—		—		—
Benefits paid directly by the Company	( 266	)	—		( 266	)
Balance on December 31, 2024	$ 27,985	$	34,762	$	( 6,777	)

F- 64

Relevant pension costs recognized in profit and loss for defined benefit plans were as follows:

	Year Ended December 31 — 2022	2023	2024
	NT$	NT$	NT$
	(In Millions)
Operating costs	$ 565	$ 488	$ 416
Marketing expenses	360	334	314
General and administrative expenses	86	78	73
Research and development expenses	37	35	32
	$ 1,048	$ 935	$ 835

The Company is exposed to following risks for the defined benefits plans under the Labor Standards Law in the ROC:

a. Investment risk

Under the Labor Standards Law in the ROC, the rate of return on assets shall not be lower 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 mainly invested in foreign and domestic equity and debt securities and bank deposits 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 obligations is referred to the plan participants’ future salary. Hence, the increase in plan participants’ salary will increase the present value of the defined benefit obligations.

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligations 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
	2023	2024
Discount rates	1.25 %	1.75 %
Expected rates of salary increase	1.00 %- 2.25 %	1.00 %- 2.25 %

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If reasonably possible changes of the respective significant actuarial assumptions occur at the end of reporting periods, while holding all other assumptions constant, the present values of the defined benefit obligations would increase (decrease) as follows:

	December 31 — 2023		2024
	NT$		NT$
	(In Millions)
Discount rates
0.5 % increase	$ ( 880	)	$ ( 790	)
0.5 % decrease	$ 932		$ 836
Expected rates of salary increase
0.5 % increase	$ 1,000		$ 904
0.5 % decrease	$ ( 953	)	$ ( 862	)

The sensitivity analysis presented above may not be representative of the actual change in the present value of the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated. There is no change in the methods and assumptions used in preparing the sensitivity analysis from the previous period.

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
The expected contributions to the plan for the next year	$ 1,355	$ 1,224
The average duration of the defined benefit obligations	6.1 - 10 years	6 - 10 years

As of December 31, 2024, the Company’s maturity analysis of the undiscounted benefit payments was as follows:

Year	Amount
	NT$
	(In Millions)
2025	$ 2,214
2026	5,345
2027	8,537
2028	9,808
2029 and thereafter	30,311
	$ 56,215

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30. EQUITY

a. Share capital

1) Common stocks

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Number of authorized shares	12,000	12,000
Authorized shares	$ 120,000	$ 120,000
Number of issued and paid shares	7,757	7,757
Issued shares	$ 77,574	$ 77,574

Each issued common stock with par value of $ 10 is entitled the right to vote and receive dividends.

2) Global depositary receipts

The MOTC and some stockholders sold some common stocks of Chunghwa in an international offering of securities in the form of American Depositary Shares (“ADS”) (one ADS represents 10 common stocks) in July 2003, August 2005, and September 2006. The ADSs were traded on the New York Stock Exchange since July 17, 2003. As of December 31, 2024, the outstanding ADSs were 178 million common stocks, which equaled 18 million units and represented 2.29 % of Chunghwa’s total outstanding common stocks .

The ADS holders generally have the same rights and obligations as other common stockholders, subject to the provision of relevant laws. The exercise of such rights and obligations shall comply with the related regulations and deposit agreement, which stipulate, among other things, that ADS holders are entitled to, through deposit agents:

a) Exercise their voting rights,

b) Sell their ADSs, and

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

F- 67

b. Additional paid-in capital

The adjustments of additional paid-in capital for the years ended December 31, 2022, 2023 and 2024 were as follows:

	Share Premium	Movements of Additional Paid-in Capital for Associates and Joint Ventures Accounted for Using Equity Method		Movements of Additional Paid-in Capital Arising from Changes in Equities of Subsidiaries	Difference between Consideration Received or Paid and Carrying Amount of the Subsidiaries’ Net Assets during Actual Disposal or Acquisition	Donated Capital	Stockholders’ Contribution Due to Privatization	Total
	NT$	NT$		NT$	NT$	NT$	NT$	NT$
	(In Millions)
Balance on January 1, 2022	$ 126,045	$ 1		$ 2,106	$ 987	$ 23	$ 20,648	$ 149,810
Unclaimed dividend	—	—		—	—	2	—	2
Changes in equities of subsidiaries	—	—		32	—	—	—	32
Balance on December 31, 2022	$ 126,045	$ 1		$ 2,138	$ 987	$ 25	$ 20,648	$ 149,844
Balance on January 1, 2023	$ 126,045	$ 1		$ 2,138	$ 987	$ 25	$ 20,648	$ 149,844
Unclaimed dividend	—	—		—	—	2	—	2
Change in additional paid-in capital from investments in associates and joint ventures accounted for using equity method	—	( 26	)	—	—	—	—	( 26	)
Actual acquisition of interests in subsidiaries	—	—		—	—	—	—	—
Changes in equities of subsidiaries	—	—		8	—	—	—	8
Balance on December 31, 2023	$ 126,045	$ ( 25	)	$ 2,146	$ 987	$ 27	$ 20,648	$ 149,828
Balance on January 1, 2024	$ 126,045	$ ( 25	)	$ 2,146	$ 987	$ 27	$ 20,648	$ 149,828
Unclaimed dividend	—	—		—	—	2	—	2
Actual disposal of interests in subsidiaries	—	—		—	224	—	—	224
Changes in equities of subsidiaries	—	—		—	—	—	—	—
Balance on December 31, 2024	$ 126,045	$ ( 25	)	$ 2,146	$ 1,211	$ 29	$ 20,648	$ 150,054

Under the R.O.C. relevant laws, additional paid-in capital from share premium, donated capital and the difference between consideration received or paid and the carrying amount of the subsidiaries’ net assets during actual disposal or acquisition may be utilized to offset deficits. Furthermore, when Chunghwa has no deficit, it may be distributed in cash or capitalized, which however is limited to a certain percentage of Chunghwa’s paid-in capital except the additional paid-in capital arising from unclaimed dividend can only be utilized to offset deficits.

The additional paid-in capital from movements of paid-in capital arising from changes in equities of subsidiaries may only be utilized to offset deficits.

Among additional paid-in capital from movements of investments in associates and joint ventures accounted for using equity method, the portion arising from the difference between consideration received or paid and the carrying amount of the subsidiaries’ net assets during actual disposal or acquisition may be utilized to offset deficits; furthermore, when the Company has no deficit, it may be distributed in cash or capitalized. However, other additional paid-in capital recognized in proportion of share ownership may only be utilized to offset deficits.

c. Retained earnings and dividends policy

In accordance with the Chunghwa’s Articles of Incorporation, Chunghwa must pay all outstanding taxes, offset deficits in prior years and set aside a legal reserve equal to 10 % of its net income before distributing a dividend or making any other distribution to stockholders, except when the accumulated amount of such legal reserve equals to Chunghwa’s total issued capital, and depending on its business needs or requirements, may also set aside or reverse special reserves. No less than 50 % of the

F- 68

remaining earnings comprising remaining balance of net income, if any, plus cumulative undistributed earnings shall be distributed as stockholders’ dividends, of which cash dividends to be distributed shall not be less than 50 % of the total amount of dividends to be distributed. If cash dividend to be distributed is less than $ 0.10 per share, such cash dividend shall be distributed in the form of common stocks.

Special reserve was appropriated in accordance with the relevant laws and regulations or as requested by local authority. Pursuant to existing regulations, the Company should appropriate a special reserve when the net amount of other equity items is negative at the end of reporting period upon the earnings distribution. Distributions can be made out of any subsequent reversal of the debit to other equity items.

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

The appropriations of the 2022 and 2023 earnings of Chunghwa approved by the stockholders in their meetings on May 26, 2023 and May 31, 2024, respectively, were as follows:

	Appropriation of Earnings — For Fiscal Year 2022		For Fiscal Year 2023	For Fiscal Year 2022	For Fiscal Year 2023
Reversal of special reserve	$ ( 185	)	$ ( 223	)
Cash dividends	36,476		36,910	$ 4.702	$ 4.758

The appropriations of earnings for 2024 had been proposed by Chunghwa’s Board of Directors on February 26, 2025. The appropriations and dividends per share were as follows:

Cash dividends	38,787	Dividends Per Share (NT$) — $ 5.000

The appropriations of earnings for 2024 are subject to the resolution of the stockholders’ meeting planned to be held on May 29, 2025.

d. Others

F- 69

1) Exchange differences arising from the translation of the foreign operations

The exchange differences arising from the translation of the foreign operations from their functional currency to New Taiwan dollars were recognized as exchange differences arising from the translation of the foreign operations in other comprehensive income.

2) Unrealized gain or loss on financial assets at FVOCI

	Year Ended December 31 — 2022		2023		2024
	NT$		NT$		NT$
	(In Millions)
Beginning balance	$ ( 8	)	$ ( 125	)	$ 521
Recognized for the year
Unrealized gain or loss
Equity instruments	( 111	)	641		45
Share of profits (loss) of associates and joint ventures accounted for using equity method	( 6	)	5		( 2	)
Transferred accumulated gain or loss to unappropriated earnings resulting from the disposal of equity instruments (Note 9)	—		—		—
Ending balance	$ ( 125	)	$ 521		$ 564

e. Noncontrolling interests

	Year Ended December 31 — 2022	2023		2024
	NT$	NT$		NT$
	(In Millions)
Beginning balance	$ 11,747	$	12,408	$	12,432
Attributable to noncontrolling interests
Net income for the year	1,511		1,103		1,319
Exchange differences arising from the translation of the foreign operations	21		2		12
Unrealized gain or loss on financial assets at FVOCI	( 25	)	( 22	)	4
Remeasurements of defined benefit pension plans	24		12		18
Income tax relating to remeasurements of defined benefit pension plans	( 5	)	( 2	)	( 4	)
Share of other comprehensive income (loss) of associates and joint ventures accounted for using equity method	5		( 21	)	17
Cash dividends distributed by subsidiaries	( 1,053	)	( 1,092	)	( 898	)
Actual acquisition or disposal of interests in subsidiaries	—		—		35
Net increase in noncontrolling interests	183		44		45
Ending balance	$ 12,408	$	12,432	$	12,980

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31. REVENUE

	Year Ended December 31 — 2022	2023	2024
	NT$	NT$	NT$
	(In Millions)
Revenue from contracts with customers	$ 214,498	$ 220,190	$ 227,185
Other revenues
Government grants income	1,030	1,704	1,393
Rental income	1,022	1,120	1,196
Others	189	185	194
	2,241	3,009	2,783
Total	$ 216,739	$ 223,199	$ 229,968

For the information of performance obligations related to customer contracts, please refer to Note 3 Summary of Material Accounting Policy Information for details.

a. Disaggregation of revenue

Please refer to Note 44 Segment Information for details.

b. Contract balances

	January 1, — 2023	2023		2024
	NT$	NT$		NT$
	(In Millions)
Trade notes and accounts receivable (Note 11)	$ 24,672	$	24,842	$	26,026
Contract assets
Products and service bundling	$ 7,956	$	9,297	$	10,446
Others	1,256		1,206		2,306
Less : Loss allowance	( 19	)	( 21	)	( 24	)
	$ 9,193	$	10,482	$	12,728
Current	$ 6,056	$	6,713	$	8,401
Noncurrent	3,137		3,769		4,327
	$ 9,193	$	10,482	$	12,728
Contract liabilities
Telecommunications business	$ 14,081	$	14,016	$	13,931
Project business	6,586		6,654		8,015
Advance house and land receipts (Notes 12 and 42)	—		460		1,064
Others	397		518		832
	$ 21,064	$	21,648	$	23,842
Current	$ 13,390	$	14,088	$	16,301
Noncurrent	7,674		7,560		7,541
	$ 21,064	$	21,648	$	23,842

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The changes in the contract asset and the contract liability balances primarily result from the timing difference between the satisfaction of performance obligations and the payments collected from customers. Significant changes of contract assets and liabilities recognized resulting from product and service bundling were as follows:

	Year Ended December 31 — 2022	2023		2024
	NT$	NT$		NT$
	(In Millions)
Contract assets
Net increase of customer contracts	$ 6,933	$	7,961	$	8,617
Reclassified to trade receivables	( 6,149	)	( 6,574	)	( 7,443	)
	$ 784	$	1,387	$	1,174
Contract liabilities
Net increase of customer contracts	$ 9	$	187	$	197
Recognized as revenues	( 5	)	( 173	)	( 184	)
	$ 4	$	14	$	13

The Company applies the simplified approach to recognize expected credit losses prescribed by IFRS 9, which permits the use of lifetime expected loss provision for receivables. Contract assets will be reclassified to trade receivables when the corresponding invoice is billed to the client. Contract assets have substantially the same risk characteristics as the trade receivables of the same types of contracts. Therefore, the Company concluded that the expected loss rates for trade receivables can be applied to the contract assets.

Revenue recognized for the year that was included in the contract liability at the beginning of the year was as follows:

	Year Ended December 31 — 2022	2023	2024
	NT$	NT$	NT$
	(In Millions)
Telecommunications business	$ 6,626	$ 6,660	$ 6,721
Project business	4,067	5,290	4,474
Others	440	540	459
	$ 11,133	$ 12,490	$ 11,654

c. Incremental costs of obtaining contracts

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Current
Incremental costs of obtaining contracts	$ 211	$ 339
Noncurrent
Incremental costs of obtaining contracts	$ 939	$ 1,222

The Company considered the past experience and the default clauses in the telecommunications service contracts and believes the commissions and equipment subsidies paid for obtaining such contracts are expected to be recoverable; therefore, such costs were capitalized. The Company also believes the commissions paid for obtaining real estate sale contracts are expected to be recoverable; therefore, such costs were capitalized and classified as current by the operating cycle. Amortization expenses for the

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years ended December 31 2022, 2023 and 2024 were $ 841 million, $ 856 million and $ 906 million, respectively.

d. Remaining Performance Obligations

As of December 31, 2024, the aggregate amount of transaction price allocated to performance obligations for non-cancellable telecommunications service contracts that are unsatisfied is $ 41,020 million. The Company recognizes revenue when service is provided over contract terms. The Company expects to recognize such revenue of $ 24,078 million, $ 12,627 million and $ 4,315 million in 2025, 2026 and 2027, respectively. The variable consideration collected from customers on nonrecurring basis resulting from exceeded usage from monthly fee and revenue recognized for contracts that the Company has a right to consideration from customers in the amount corresponding directly with the value to the customers of the Company’s performance completed to date have been excluded from the disclosure of remaining performance obligations.

As of December 31, 2024, the aggregate amount of transaction price allocated to performance obligations for non-cancellable project business contracts that are unsatisfied is $ 34,104 million. The Company recognizes revenues when the project business contract is completed and accepted by customers. The Company expects to recognize such revenue of $ 12,617 million, $ 10,413 million and $ 11,074 million in 2025, 2026 and 2027, respectively. Project business contracts whose expected duration are less than a year have been excluded from the aforementioned disclosure.

32. NET INCOME

a. Other income and expenses

	Year Ended December 31 — 2022		2023		2024
	NT$		NT$		NT$
	(In Millions)
Loss on disposal of property, plant and equipment	$ ( 5	)	$ —		$ ( 17	)
Impairment loss on property, plant and equipment	—		( 299	)	—
Reversal of impairment loss / (impairment loss) on investment properties	107		( 336	)	139
Impairment loss on intangible assets	( 9	)	—		—
	$ 93		$ ( 635	)	$ 122

b. Other income

	Year Ended December 31 — 2022	2023	2024
	NT$	NT$	NT$
	(In Millions)
Dividend income	$ 157	$ 167	$ 240
Rental income	79	76	75
Others	133	139	148
	$ 369	$ 382	$ 463

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c. Other gains and losses

	Year Ended December 31 — 2022		2023		2024
	NT$		NT$		NT$
	(In Millions)
Valuation loss on financial assets and liabilities at fair value through profit or loss, net	$ ( 206	)	$ ( 98	)	$ ( 147	)
Foreign currency exchange gain or loss, net	( 185	)	( 116	)	( 22	)
Gain (loss) on disposal of investments accounted for using equity method, net	( 14	)	6		85
Gain on disposal of financial instruments, net	1		—		1
Others	( 14	)	( 71	)	( 11	)
	$ ( 418	)	$ ( 279	)	$ ( 94	)

d. Interest expenses

	Year Ended December 31 — 2022	2023	2024
	NT$	NT$	NT$
	(In Millions)
Interest on bonds payable	$ 161	$ 168	$ 168
Interest on lease liabilities	75	105	128
Interest paid to financial institutions	26	44	42
Others	1	2	1
	$ 263	$ 319	$ 339

e. Impairment loss (reversal of impairment loss)

	Year Ended December 31 — 2022		2023	2024
	NT$		NT$	NT$
	(In Millions)
Contract assets	$ 1		$ 2	$ 3
Trade notes and accounts receivable	$ 109		$ 128	$ 179
Other receivables	$ 7		$ 22	$ 6
Inventories	$ 34		$ 23	$ 60
Property, plant and equipment	$ —		$ 299	$ —
Investment properties	$ ( 107	)	$ 336	$ ( 139	)
Intangible assets	$ 9		$ —	$ —

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f. Depreciation and amortization expenses

	Year Ended December 31 — 2022	2023	2024
	NT$	NT$	NT$
	(In Millions)
Property, plant and equipment	$ 28,760	$ 28,839	$ 28,707
Right-of-use assets	3,982	4,072	4,168
Investment properties	44	45	45
Intangible assets	6,643	6,699	6,699
Incremental costs of obtaining contracts	841	856	906
Total depreciation and amortization expenses	$ 40,270	$ 40,511	$ 40,525
Depreciation expenses summarized by functions
Operating costs	$ 30,735	$ 30,874	$ 30,770
Operating expenses	2,051	2,082	2,150
	$ 32,786	$ 32,956	$ 32,920
Amortization expenses summarized by functions
Operating costs	$ 7,286	$ 7,370	$ 7,406
Marketing expenses	77	70	95
General and administrative expenses	71	68	63
Research and development expenses	50	47	41
	$ 7,484	$ 7,555	$ 7,605

g. Employee benefit expenses

	Year Ended December 31 — 2022	2023	2024
	NT$	NT$	NT$
	(In Millions)
Post-employment benefit
Defined contribution plans	$ 862	$ 963	$ 1,074
Defined benefit plans	1,048	935	835
	1,910	1,898	1,909
Share-based payment
Equity-settled share-based payment	16	8	8
Other employee benefit (Note)	43,746	44,305	46,964
Total employee benefit expenses	$ 45,672	$ 46,211	$ 48,881
Summary by functions
Operating costs	$ 21,857	$ 21,858	$ 22,796
Operating expenses	23,815	24,353	26,085
	$ 45,672	$ 46,211	$ 48,881

Note: Other employee benefit mainly includes salaries, compensation and labor and health insurance expenses, etc.

The amendments to the Chunghwa’s Articles of Incorporation were approved by the Chunghwa’s stockholders in their meeting on May 31, 2024. The distribution rate of employees’ compensation increased from 1.7 % to 4.3 % of pre-tax income to 2 % to 5 % of pre-tax income, while the distribution rate of directors’ remuneration remained at no higher than 0.17 %. As of December 31, 2024, the payables of the employees’ compensation and the remuneration to directors were $ 1,932 million and $ 40 million, respectively. Such amounts have been approved by the Chunghwa’s Board of Directors on February 26, 2025 and will be reported to the stockholders in their meeting planned to be held on May 29, 2025.

F- 75

If there is a change in the proposed amounts after the annual consolidated financial statements are authorized for issue, the difference is recorded as a change in accounting estimate.

The compensation to the employees and remuneration to the directors of 2022 and 2023 approved by the Board of Directors on February 24, 2023 and February 23, 2024, respectively, were as follows :

	2022	2023
	Cash	Cash
	NT$	NT$
	(In Millions)
Compensation distributed to the employees	$ 1,498	$ 1,522
Remuneration paid to the directors	39	40

There was no difference between the initial accrual amounts recognized in 2022 and 2023 and the amounts approved by in the Board of Directors in 2023 and 2024 of the aforementioned compensation to employees and the remuneration to directors .

33. INCOME TAX

a. Income tax recognized in profit or loss

The major components of income tax expense were as follows:

	Year Ended December 31 — 2022	2023		2024
	NT$	NT$		NT$
	(In Millions)
Current tax
Current tax expenses recognized for the year	$ 8,863	$	8,875	$	9,199
Income tax on unappropriated earnings	137		( 31	)	122
Income tax adjustments on prior years	( 141	)	( 128	)	( 176	)
Others	7		4		4
	8,866		8,720		9,149
Deferred tax
Deferred tax expense recognized for the year	318		218		176
Income tax adjustments on prior years	151		9		8
	469		227		184
Income tax recognized in profit or loss	$ 9,335	$	8,947	$	9,333

F- 76

Reconciliation of accounting profit and income tax expense was as follows:

	Year Ended December 31 — 2022	2023		2024
	NT$	NT$		NT$
	(In Millions)
Income before income tax	$ 47,204	$	47,008	$	47,841
Income tax expense calculated at the statutory rate	$ 9,441	$	9,401	$	9,568
Nondeductible income and expenses in determining taxable income	( 20	)	28		25
Tax-exempt income	( 3	)	( 9	)	( 29	)
Income tax on unappropriated earnings	137		( 31	)	122
Investment credits	( 207	)	( 209	)	( 218	)
Effect of different tax rates of group entities operating in other jurisdictions	( 31	)	( 7	)	10
Income tax adjustments on prior years	10		( 119	)	( 168	)
Others	8		( 107	)	23
Income tax expense recognized in profit or loss	$ 9,335	$	8,947	$	9,333

The applicable tax rate used by the entities subject to the Income Tax Act of the Republic of China is 20 %. Tax rates used by other entities of the Company operating in other jurisdictions are based on the tax laws in those jurisdictions.

b. Income tax recognized in other comprehensive income

	Year Ended December 31 — 2022	2023	2024
	NT$	NT$	NT$
	(In Millions)
Deferred tax
Remeasurement on defined benefit pension plans	$ 231	$ 31	$ 451

c. Current tax assets and liabilities

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Current tax assets
Tax refund receivable (included in other current assets - others)	$ 4	$ 5
Current tax liabilities
Income tax payable	$ 6,613	$ 6,822

d. Deferred income tax assets and liabilities

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The movements of deferred income tax assets and liabilities were as follows:

For the year ended December 31, 2022

	January 1, 2022 — NT$		Recognized in Profit or Loss — NT$		Recognized in Other Comprehensive Income — NT$		December 31, 2022 — NT$
	(In Millions)
Deferred income tax assets
Temporary differences
Defined benefit pension plans	$ 1,744		$ 1		$ ( 231	)	$ 1,514
Allowance for doubtful receivables over quota	265		( 81	)	—		184
Valuation loss on inventory	197		( 92	)	—		105
Seniority bonus	5		—		—		5
Valuation loss on financial assets	—		24		—		24
Impairment loss on assets	—		—		—		—
Estimated warranty liabilities	43		4		—		47
Valuation loss on onerous contracts	26		( 8	)	—		18
Share of profit or loss of associates and joint ventures accounted for using equity method	401		( 399	)	—		2
Accrued award credits liabilities	9		3		—		12
Deferred revenue	49		( 19	)	—		30
Unrealized foreign exchange loss, net	2		56		—		58
Others	33		( 5	)	—		28
	2,774		( 516	)	( 231	)	2,027
Loss carryforwards	11		159		—		170
	$ 2,785		$ ( 357	)	$ ( 231	)	$ 2,197
Deferred income tax liabilities
Temporary differences
Defined benefit pension plans	$ ( 1,969	)	$ ( 145	)	$ —		$ ( 2,114	)
Deferred revenue for award credits	( 55	)	( 15	)	—		( 70	)
Land value incremental tax	( 95	)	—		—		( 95	)
Intangible assets	( 24	)	4		—		( 20	)
Unrealized foreign exchange gain, net	( 27	)	26		—		( 1	)
Others	( 19	)	18		—		( 1	)
	$ ( 2,189	)	$ ( 112	)	$ —		$ ( 2,301	)

F- 78

For the year ended December 31, 2023

	January 1, 2023 — NT$		Recognized in Profit or Loss — NT$		Recognized in Other Comprehensive Income — NT$		December 31, 2023 — NT$
	(In Millions)
Deferred income tax assets
Temporary differences
Defined benefit pension plans	$ 1,514		$ 1		$ ( 31	)	$ 1,484
Allowance for doubtful receivables over quota	184		( 41	)	—		143
Valuation loss on inventory	105		( 29	)	—		76
Seniority bonus	5		64		—		69
Valuation loss on financial assets	24		21		—		45
Impairment loss on assets	—		60		—		60
Estimated warranty liabilities	47		1		—		48
Valuation loss on onerous contracts	18		19		—		37
Share of profit or loss of associates and joint ventures accounted for using equity method	2		6		—		8
Accrued award credits liabilities	12		5		—		17
Deferred revenue	30		( 15	)	—		15
Unrealized foreign exchange loss, net	58		( 55	)	—		3
Others	28		( 3	)	—		25
	2,027		34		( 31	)	2,030
Loss carryforwards	170		( 101	)	—		69
	$ 2,197		$ ( 67	)	$ ( 31	)	$ 2,099
Deferred income tax liabilities
Temporary differences
Defined benefit pension plans	$ ( 2,114	)	$ ( 146	)	$ —		$ ( 2,260	)
Deferred revenue for award credits	( 70	)	4		—		( 66	)
Land value incremental tax	( 95	)	—		—		( 95	)
Intangible assets	( 20	)	2		—		( 18	)
Unrealized foreign exchange gain, net	( 1	)	( 11	)	—		( 12	)
Others	( 1	)	( 9	)	—		( 10	)
	$ ( 2,301	)	$ ( 160	)	$ —		$ ( 2,461	)

F- 79

For the year ended December 31, 2024

	January 1, 2024 — NT$		Recognized in Profit or Loss — NT$		Recognized in Other Comprehensive Income — NT$		December 31, 2024 — NT$
	(In Millions)
Deferred income tax assets
Temporary differences
Defined benefit pension plans	$ 1,484		$ 11		$ ( 450	)	$ 1,045
Allowance for doubtful receivables over quota	143		( 25	)	—		118
Valuation loss on inventory	76		3		—		79
Seniority bonus	69		6		—		75
Valuation loss on financial assets	45		29		—		74
Impairment loss on assets	60		—		—		60
Estimated warranty liabilities	48		8		—		56
Valuation loss on onerous contracts	37		8		—		45
Share of profit or loss of associates and joint ventures accounted for using equity method	8		7		—		15
Accrued award credits liabilities	17		( 2	)	—		15
Deferred revenue	15		( 10	)	—		5
Unrealized foreign exchange loss, net	3		( 2	)	—		1
Others	25		48		—		73
	2,030		81		( 450	)	1,661
Loss carryforwards	69		( 69	)	—		—
	$ 2,099		$ 12		$ ( 450	)	$ 1,661
Deferred income tax liabilities
Temporary differences
Defined benefit pension plans	$ ( 2,260	)	$ ( 142	)	$ ( 1	)	$ ( 2,403	)
Deferred revenue for award credits	( 66	)	( 45	)	—		( 111	)
Land value incremental tax	( 95	)	—		—		( 95	)
Intangible assets	( 18	)	2		—		( 16	)
Unrealized foreign exchange gain, net	( 12	)	6		—		( 6	)
Valuation gain on financial assets, net	—		—		—		—
Others	( 10	)	( 17	)	—		( 27	)
	$ ( 2,461	)	$ ( 196	)	$ ( 1	)	$ ( 2,658	)

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e. Unused loss carryforwards and deductible temporary differences for which no deferred tax assets have been recognized in the consolidated balance sheets

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Loss carryforwards
Expire in 2024	$ 1	$ —
Expire in 2025	15	17
Expire in 2026	8	10
Expire in 2027	3	3
Expire in 2028	1	1
Expire in 2029	1	2
Expire in 2030	—	1
Expire in 2031	—	1
Expire in 2032	5	6
Expire in 2033	13	20
Expire in 2034	—	12
	$ 47	$ 73
Investment credits - research and development expenditures
Expire in 2025	$ 8	$ —
Deductible temporary differences	$ 10	$ 16

f. Information about unused investment credits and loss carryforwards

As of December 31, 2024, information about investment credits - research and development expenditures was as follows:

Remaining Creditable Amount	Expiry Year
NT$ (In Millions)
$ —	2025

As of December 31, 2024, information about unused loss carryforwards was as follows:

Remaining Creditable Amount	Expiry Year
NT$ (In Millions)
$ 17	2025
10	2026
3	2027
1	2028
2	2029
1	2030
1	2031
6	2032
20	2033
12	2034
$ 73

g. Income tax examinations

Income tax returns of Chunghwa, SENAO, Youth, ISPOT, Aval, Wiin, SENYOUNG, CHYP, CHSI, LED, SHE, CHIEF, Unigate, CHPT, NavCore, TestPro, CHST, SFD, CLPT, CHTSC, HHI, IISI and UTC

F- 81

have been examined by the tax authorities through 2022. Income tax returns of CHI have been examined by the tax authorities through 2023.

h. Pillar Two Model Rules

The application of the Pillar Two rules does not have a material impact on the Company’s consolidated financial statements. The Company will continue to review the possible impact on the Company’s future financial performance.

34. EARNINGS PER SHARE

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

Net Income

	Year Ended December 31 — 2022	2023		2024
	NT$	NT$		NT$
	(In Millions)
Net income used to compute the basic earnings per share
Net income attributable to the parent	$ 36,358	$	36,958	$	37,189
Assumed conversion of all dilutive potential common stocks
Employee stock options and employee compensation of subsidiaries	( 7	)	( 5	)	( 3	)
Net income used to compute the diluted earnings per share	$ 36,351	$	36,953	$	37,186

Weighted Average Number of Common Stocks

(Millions Shares)

2022	2023	2024
Weighted average number of common stocks used to compute the basic earnings per share	7,757	7,757	7,757
Assumed conversion of all dilutive potential common stocks
Employee compensation	8	8	18
Weighted average number of common stocks used to compute the diluted earnings per share	7,765	7,765	7,775

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

35. SHARE-BASED PAYMENT ARRANGEMENT

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

The Board of Directors of CHIEF resolved to issue 950 , 50 and 200 stock options on December 19, 2017, October 31, 2018 and November 13, 2020. Each option is eligible to subscribe for one thousand

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common stocks when exercisable and the exercise price is $ 147.00 , $ 147.00 and $ 206.00 per share, respectively. The options are granted to specific employees that meet the vesting conditions. The CHIEF Plan has an exercise price adjustment formula upon the changes in common stocks or distribution of cash dividends. The options of the CHIEF Plan are valid for five years and the graded vesting schedule will vest two years after the grant date.

The compensation costs for stock options for the years ended December 31, 2022, 2023 and 2024 were $ 8.8 million, $ 5.0 million and $ 2.7 million, respectively.

CHIEF modified the plan terms of stock options granted on December 19, 2017 in July 2022; therefore, the exercise price changed from $ 128.70 to 124.70 per share. The modification did not cause any incremental fair value granted.

CHIEF modified the plan terms of stock options granted on October 31, 2018 in July 2022; therefore, the exercise price changed from $ 134.50 to $ 130.30 per share. The modification did not cause any incremental fair value granted.

CHIEF modified the plan terms of stock options granted on November 13, 2020 in July 2022, August 2023 and July 2024; therefore, the exercise price changed from $ 199.70 to $ 193.50 , $ 171.70 and $ 166.50 per share, respectively. The modification did not cause any incremental fair value granted.

Information about CHIEF’s outstanding stock options for the years ended December 31, 2022, 2023 and 2024 was as follows:


Granted on December 19, 2017			Granted on October 31, 2018			Granted on November 13, 2020
Number of Options		Weighted Average Exercise Price (NT$)	Number of Options		Weighted Average Exercise Price (NT$)	Number of Options		Weighted Average Exercise Price (NT$)
Employee stock options
Options outstanding at beginning of the year	213.25	$	128.70	10.50	$	134.50	194.00	$	199.70
Options exercised	( 213.25	)	124.70	( 10.50	)	130.30	( 51.00	)	193.50
Options forfeited	—		—	—		—	( 0.75	)	—
Options outstanding at end of the year	—		—	—		—	142.25		193.50
Options exercisable at end of the year	—		—	—		—	0.50		193.50
Weighted average remaining contractual life (years)	—			0.83			2.87

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Granted on November 13, 2020			Granted on November 13, 2020
Number of Options		Weighted Average Exercise Price (NT$)	Number of Options		Weighted Average Exercise Price (NT$)
Employee stock options
Options outstanding at beginning of the year	142.25	$	193.50	93	$	171.70
Options exercised	( 47.00	)	171.70	( 85	)	166.50
Options forfeited	( 2.25	)	—	( 1	)	—
Options outstanding at end of the year	93.00		171.70	7		166.50
Options exercisable at end of the year	—		—	7		166.50
Weighted average remaining contractual life (years)	1.87			0.87

CHIEF used the fair value method to evaluate the options using the Black-Scholes model and binomial option pricing model and the related assumptions and the fair value of the options were as follows:

	Stock Options Granted on December 19, 2017	Stock Options Granted on October 31, 2018	Stock Options Granted on November 13, 2020
Grant-date share price (NT$)	$ 95.92	$ 166.00	$ 356.00
Exercise price (NT$)	$ 147.00	$ 147.00	$ 206.00
Dividend yield	—	—	—
Risk-free interest rate	0.62 %	0.72 %	0.18 %
Expected life	5 years	5 years	5 years
Expected volatility	17.35 %	16.60 %	34.61 %
Weighted average fair value of grants (NT$)	$ 2,318	$ 33,540	$ 173,893

The expected volatility for the options granted in 2020 was based on CHIEF’s average annualized historical share price volatility from June 5, 2018, CHIEF’s listing date on Taipei Exchange, to the grant date. The expected volatilities for the options granted from 2017 to 2018 were based on the average annualized historical share price volatility of CHIEF’s comparable companies before the grant date.

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

The Board of Directors of CHTSC resolved to issue 4,500 and 3,500 stock options on December 20, 2019 and February 20, 2021, respectively. Each option is eligible to subscribe for one thousand common stocks when exercisable and the exercise prices are both $ 19.085 per share. The options are granted to specific employees that meet the vesting conditions. The CHTSC Plan has an exercise price adjustment formula upon the changes in common stocks. The options of the CHTSC Plan are valid for five years and the graded vesting schedule will vest one year after the grant date.

The compensation costs for stock options for the years ended December 31, 2022, 2023 and 2024 were $ 5.1 million, $ 0.5 million and $ 0.2 million, respectively.

F- 84

Information about CHTSC’s outstanding stock options for the years ended December 31, 2022, 2023 and 2024 was as follows:


Granted on December 20, 2019			Granted on February 20, 2021
Number of Options		Weighted Average Exercise Price (NT$)	Number of Options		Weighted Average Exercise Price (NT$)
Employee stock options
Options outstanding at beginning of the year	3,174	$	19.085	3,324	$	19.085
Options exercised	( 2,049	)	19.085	( 815	)	19.085
Options forfeited	( 42	)	—	( 166	)	—
Options outstanding at end of the year	1,083		19.085	2,343		19.085
Options exercisable at end of the year	31		19.085	7		19.085
Weighted average remaining contractual life (years)	1.97			3.14


Granted on December 20, 2019			Granted on February 20, 2021
Number of Options		Weighted Average Exercise Price (NT$)	Number of Options		Weighted Average Exercise Price (NT$)
Employee stock options
Options outstanding at beginning of the year	1,083	$	19.085	2,343	$	19.085
Options exercised	( 1,002	)	19.085	( 778	)	19.085
Options forfeited	( 41	)	—	( 46	)	—
Options outstanding at end of the year	40		19.085	1,519		19.085
Options exercisable at end of the year	5		19.085	7		19.085
Weighted average remaining contractual life (years)	0.97			2.14


Granted on December 20, 2019			Granted on February 20, 2021
Number of Options		Weighted Average Exercise Price (NT$)	Number of Options		Weighted Average Exercise Price (NT$)
Employee stock options
Options outstanding at beginning of the year	40	$	19.085	1,519	$	19.085
Options exercised	( 20	)	19.085	( 699	)	19.085
Options forfeited	( 20	)	—	( 165	)	—
Options outstanding at end of the year	—		—	655		19.085
Options exercisable at end of the year	—		—	5		19.085
Weighted average remaining contractual life (years)	—			1.14

CHTSC used the fair value method to evaluate the options using the Black-Scholes model and the related assumptions and the fair value of the options were as follows:

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	Stock Options Granted on December 20, 2019	Stock Options Granted on February 20, 2021
Grant-date share price (NT$)	$ 20.17	$ 23.76
Exercise price (NT$)	$ 19.085	$ 19.085
Dividend yield	12.49 %	15.18 %
Risk-free interest rate	0.54 %	0.25 %
Expected life	5 years	5 years
Expected volatility	42.41 %	47.35 %
Weighted average fair value of grants (NT$)	$ 2,470	$ 3,350

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

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

The Board of Directors of CLPT resolved to issue 690 , 600 and 755 stock options on February 26, 2021, May 31, 2022 and September 26, 2023, respectively. Each option is eligible to subscribe for one thousand common stocks when exercisable and the exercise prices are all $ 16.87 per share. The options are granted to specific employees that meet the vesting conditions. The CLPT Plan has an exercise price adjustment formula upon the changes in common stocks or distribution of cash dividends. The options of the CLPT Plan are valid for four years and the graded vesting schedule will vest two years after the grant date.

The compensation costs for stock options for the years ended December 31, 2022, 2023 and 2024 were $ 1.5 million, $ 2.9 million and $ 4.9 million, respectively.

CLPT modified the plan terms of stock options granted on February 26, 2021 in September 2023 and October 2024; therefore, the exercise price changed from $ 15.90 to $ 14.40 and $ 13.30 per share, respectively. The modification did not cause any incremental fair value granted.

CLPT modified the plan terms of stock options granted on May 31, 2022 in September 2023 and October 2024; therefore, the exercise price changed from $ 16.87 to $ 15.30 and $ 14.10 per share, respectively. The modification did not cause any incremental fair value granted.

CLPT modified the plan terms of stock options granted on September 26, 2023 in September 2023 and October 2024; therefore, the exercise price changed from $ 16.87 to $ 15.30 and 14.10 per share, respectively. The modification did not cause any incremental fair value granted.

Information about CLPT’s outstanding stock options for the year ended December 31, 2022, 2023 and 2024 was as follows:

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Granted on February 26, 2021			Granted on May 31, 2022
Number of Options		Weighted Average Exercise Price (NT$)	Number of Options		Weighted Average Exercise Price (NT$)
Employee stock options
Options outstanding at beginning of the year	550	$	15.90	—	$	—
Options granted	—		—	600		16.87
Options forfeited	( 40	)	—	( 160	)	—
Options outstanding at end of the year	510		15.90	440		16.87
Options exercisable at end of the year	—		—	—		—
Weighted average remaining contractual life (years)	2.16			3.41


Granted on February 26, 2021			Granted on May 31, 2022			Granted on September 26, 2023
Number of Options		Weighted Average Exercise Price (NT$)	Number of Options		Weighted Average Exercise Price (NT$)	Number of Options	Weighted Average Exercise Price (NT$)
Employee stock options
Options outstanding at beginning of the year	510	$	15.90	440	$ 16.87	—	$ —
Options granted	—		—	—	—	755	16.87
Options exercised	( 55	)	15.90	—	—	—	—
Options forfeited	( 15	)	—	—	—	—	—
Options outstanding at end of the year	440		14.40	440	15.30	755	15.30
Options exercisable at end of the year	192		14.40	—	—	—	—
Weighted average remaining contractual life (years)	1.16			2.41		3.74


Granted on February 26, 2021			Granted on May 31, 2022			Granted on September 26, 2023
Number of Options		Weighted Average Exercise Price (NT$)	Number of Options		Weighted Average Exercise Price (NT$)	Number of Options		Weighted Average Exercise Price (NT$)
Employee stock options
Options outstanding at beginning of the year	440	$	14.40	440	$	15.30	755	$	15.30
Options exercised	( 415	)	14.40	( 220	)	15.30	—		—
Options forfeited	—		—	—		—	( 5	)	—
Options outstanding at end of the year	25		13.30	220		14.10	750		14.10
Options exercisable at end of the year	25		13.30	—		—	—		—
Weighted average remaining contractual life (years)	0.16			1.41			2.74

CLPT used the fair value method to evaluate the options using the Black-Scholes model and the related assumptions and the fair value of the options were as follows:

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	Stock Options Granted on February 26, 2021	Stock Options Granted on May 31, 2022	Stock Options Granted on September 26, 2023
Grant-date share price (NT$)	$ 17.63	$ 18.66	$ 28.43
Exercise price (NT$)	$ 16.87	$ 16.87	$ 16.87
Dividend yield	—	—	—
Risk-free interest rate	0.31 %	0.98 %	1.10 %
Expected life	4 years	4 years	4 years
Expected volatility	35.22 %	35.76 %	31.99 %
Weighted average fair value of grants (NT$)	$ 4,750	$ 5,665	$ 13,225

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

36. CASH FLOW INFORMATION

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

Investing activities	Year Ended December 31 — 2022	2023	2024
	NT$	NT$	NT$
	(In Millions)
Additions of property, plant and equipment	$ 31,265	$ 30,398	$ 28,576
Changes in other payables	270	343	180
Payments for acquisition of property, plant and equipment	$ 31,535	$ 30,741	$ 28,756

Financing activities

	Balance on January 1, 2022	Cash Flows from Financing Activities		Changes in Non-Cash Transactions — New Leases	Others		Cash Flows from Operating Activities - Interest Paid		Balance on December 31, 2022
	NT$	NT$		NT$	NT$		NT$		NT$
	(In Millions)
Lease liabilities	$ 10,273	$ ( 3,777	)	$ 4,369	$ ( 117	)	$ ( 75	)	$ 10,673

	Balance on January 1, 2023	Cash Flows from Financing Activities		Changes in Non-Cash Transactions — New Leases	Others		Cash Flows from Operating Activities - Interest Paid		Balance on December 31, 2023
	NT$	NT$		NT$	NT$		NT$		NT$
	(In Millions)
Lease liabilities	$ 10,673	$ ( 3,884	)	$ 4,415	$ ( 124	)	$ ( 105	)	$ 10,975

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	Balance on January 1, 2024	Cash Flows from Financing Activities		Changes in Non-Cash Transactions — New Leases	Others		Cash Flows from Operating Activities - Interest Paid		Balance on December 31, 2024
	NT$	NT$		NT$	NT$		NT$		NT$
	(In Millions)
Lease liabilities	$ 10,975	$ ( 3,944	)	$ 4,092	$ ( 103	)	$ ( 128	)	$ 10,892

37. CAPITAL MANAGEMENT

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

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

Some consolidated entities are required to maintain minimum paid-in capital amount as prescribed by the applicable laws.

The management reviews the capital structure of the Company as needed. As part of this review, the management considers the cost of capital and the risks associated with each class of capital. According to the management’s suggestions, the Company maintains a balanced capital structure through paying cash dividends, increasing its share capital, purchasing outstanding shares, and issuing new debt or repaying debt.

38. FINANCIAL INSTRUMENTS

Categories of Financial Instruments

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Financial assets
Measured at FVTPL
Mandatorily measured at FVTPL	$ 1,037	$ 1,005
Hedging financial assets	—	1
Financial assets at amortized cost (Note a)	82,091	91,049
Financial assets at FVOCI	4,412	4,667
Financial liabilities
Hedging financial liabilities	—	2
Financial liabilities at amortized cost (Note b)	65,466	69,231

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

Note b: The balances included short-term loans, trade notes and accounts payable, payables to related parties, partial other payables, customers’ deposits, bonds payable (including the current portion) and long-term loans (including the current portion).

Financial Risk Management Objectives

The main financial instruments of the Company include investments in equity and debt instruments, trade notes and accounts receivable, trade notes and accounts payable, lease liabilities, loans and bonds payable. The Company’s Finance Department provides services to its business units, co-ordinates access to domestic and international capital markets, monitors and manages the financial risks relating to the operations

F- 89

of the Company through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including foreign currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

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

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

a. Market risk

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

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

1) Foreign currency risk

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

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Assets
USD	$ 2,044	$ 2,962
EUR	68	57
SGD	920	1,075
RMB	155	176
Liabilities
USD	1,030	1,216
EUR	675	1,039
SGD	1,864	1,739
RMB	38	41

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

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Assets
USD	$ —	$ —
EUR	—	1
Liabilities
EUR	—	2

F- 90

Foreign currency sensitivity analysis

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

The following table details the Company’s sensitivity to a 5 % increase and decrease in the functional currency against the relevant foreign currencies. 5 % is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible changes in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and forward exchange contracts. A positive number below indicates an increase in pre-tax profit or equity where the functional currency weakens 5 % against the relevant currency.

	Year Ended December 31 — 2022	2023		2024
	NT$	NT$		NT$
	(In Millions)
Profit or loss
Monetary assets and liabilities (a)
USD	$ 75	$	51	$	87
EUR	( 39	)	( 30	)	( 49	)
SGD	( 69	)	( 47	)	( 33	)
RMB	—		6		7
Derivatives (b)
USD	—		—		2
EUR	3		7		1
Equity
Derivatives (c)
EUR	22		1		17

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

b) This is mainly attributable to forward exchange contracts.

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

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

2) Interest rate risk

The carrying amounts of the Company’s exposures to interest rates on financial assets and financial liabilities at the balance sheet dates were as follows:

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Fair value interest rate risk
Financial assets	$ 43,156	$ 47,563
Financial liabilities	41,458	41,445
Cash flow interest rate risk
Financial assets	9,136	12,950
Financial liabilities	2,185	1,785

F- 91

Interest rate sensitivity analysis

The sensitivity analyses below have been determined based on the exposure to interest rates for non-derivative instruments at the end of the reporting period. A 25 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 25 basis points higher/lower and all other variables were held constant, the Company’s pre-tax income would increase/decrease by $ 18 million, $ 17 million and $ 28 million for the years ended December 31, 2022, 2023 and 2024, respectively. This is mainly attributable to the Company’s exposure to floating interest rates on its financial assets, short-term and long-term loans.

3) Other price risk

The Company is exposed to equity price risks arising from holding other company’s equity. Equity investments are held for strategic rather than trading purposes. The management managed the risk through holding various risk portfolios. Further, the Company assigned finance and investment departments to monitor the price risk.

Equity price sensitivity analysis

The sensitivity analyses below have been determined based on the exposure to equity price risks at the end of the reporting period.

If equity prices had been 5% higher/lower, pre-tax profit and pre-tax other comprehensive income for the year ended December 31, 2022 would have increased/decreased by $ 50 million and $ 175 million as a result of the changes in fair value of financial assets at FVTPL and financial assets at FVOCI, respectively. If equity prices had been 5% higher/lower, pre-tax profit and pre-tax other comprehensive income for the year ended December 31, 2023 would have increased/decreased by $ 51 million and $ 221 million as a result of the changes in fair value of financial assets at FVTPL and financial assets at FVOCI, respectively. If equity prices had been 5% higher/lower, pre-tax profit and pre-tax other comprehensive income for the year ended December 31, 2024 would have increased/decreased by $ 48 million and $ 233 million as a result of the changes in fair value of financial assets at FVTPL and financial assets at FVOCI, respectively.

b. Credit risk

Credit risk refers to the risk that a counterparty would default on its contractual obligations resulting in financial loss to the Company. The maximum credit exposure of the aforementioned financial instruments is equal to their carrying amounts recognized in the consolidated balance sheet as of the balance sheet date.

The Company has large trade receivables outstanding with its customers. A substantial majority of the Company’s outstanding trade receivables are not covered by collateral or credit insurance. The Company has implemented ongoing measures including enhancing credit assessments and strengthening overall risk management to reduce its credit risk. While the Company has procedures to monitor and limit exposure to credit risk on trade receivables, there can be no assurance such procedures will effectively limit its credit risk and avoid losses. This risk is heightened during periods when economic conditions worsen. As the Company serves a large number of unrelated consumers, the concentration of credit risk was limited.

The Company mitigates its financial credit risk by selecting counterparties with investment grade credit ratings and by limiting the exposure to any individual counterparty. The Company regularly monitors and reviews market conditions, and adjusts the limit applied to counterparties according to their credit standing.

F- 92

In accordance with the Company’s investment and risk management policies, counterparties for debt investments must be financial institutions with investment grade or higher, and thus there is no significant credit exposure resulting from such investments. The Company assesses whether there has been a significant increase in credit risk on debt instruments since initial recognition by reviewing changes in financial market conditions, and external credit ratings and material information of the issuers.

The Company assesses the 12-month expected credit loss and lifetime expected credit loss for debt instruments based on the probability of default and loss given default provided by external credit rating agencies.

c. Liquidity risk

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

1) Liquidity and interest risk tables

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

December 31, 2023

		Less than 1 Month	1-3 Months	3 Months to 1 Year	1-5 Years	More than 5 Years	Total
		NT$	NT$	NT$	NT$	NT$	NT$
		(In Millions)
Non-derivative financial liabilities
Non-interest bearing	—	$ 37,930	$ —	$ 2,108	$ 5,309	$ —	$ 45,347
Floating interest rate instruments	1.99	—	15	2,170	—	—	2,185
Fixed interest rate instruments	0.53	—	—	—	25,800	4,700	30,500
		$ 37,930	$ 15	$ 4,278	$ 31,109	$ 4,700	$ 78,032

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

	Less than 1 Year	1-3 Years	3-5 Years	More than 5 Years	Total
	NT$	NT$	NT$	NT$	NT$
	(In Millions)
Lease liabilities	$ 3,519	$ 4,819	$ 2,357	$ 518	$ 11,213

December 31, 2024

		Less than 1 Month	1-3 Months	3 Months to 1 Year	1-5 Years	More than 5 Years	Total
		NT$	NT$	NT$	NT$	NT$	NT$
		(In Millions)
Non-derivative financial liabilities
Non-interest bearing	—	$ 42,220	$ -	$ 2,500	$ 5,311	$ -	$ 50,031
Floating interest rate instruments	2.08	104	6	79	1,691	-	1,880
Fixed interest rate instruments	0.54	79	45	8,969	17,248	4,719	31,060
		$ 42,403	$ 51	$ 11,548	$ 24,250	$ 4,719	$ 82,971

F- 93

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

	Less than 1 Year	1-3 Years	3-5 Years	More than 5 Years	Total
	NT$	NT$	NT$	NT$	NT$
	(In Millions)
Lease liabilities	$ 3,586	$ 5,255	$ 2,143	$ 164	$ 11,148

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

	Less than 1 Month	1-3 Months		3 Months to 1 Year	1-5 Years	Total
	NT$	NT$		NT$	NT$	NT$
	(In Millions)
December 31, 2023
Gross settled
Forward exchange contracts
Inflows	$ —	$ 169		$ —	$ —	$ 169
Outflows	—	169		—	—	169
	$ —	$ —		$ —	$ —	$ —
December 31, 2024
Gross settled
Forward exchange contracts
Inflows	$ 46	$ 350		$ —	$ —	$ 396
Outflows	46	351		—	—	397
	$ —	$ ( 1	)	$ —	$ —	$ ( 1	)

2) Financing facilities

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Unsecured bank loan facilities
Amount used	$ 585	$ 250
Amount unused	56,191	56,438
	$ 56,776	$ 56,688
Secured bank loan facilities
Amount used	$ 1,600	$ 1,600
Amount unused	20	15
	$ 1,620	$ 1,615

39. FAIR VALUE INFORMATION

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

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

F- 94

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

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

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

Except those listed in the table below, the Company considers that the carrying amounts of financial assets and liabilities not measured at fair value approximate their fair values.

	December 31, 2023 — Carrying Value	Fair Value	December 31, 2024 — Carrying Value	Fair Value
Financial assets
Financial assets at amortized cost
Corporate bonds	$ —	$ —	$ 2,000	$ 2,002
Financial liabilities
Financial liabilities at amortized cost
Bonds payable	$ 30,483	$ 30,469	$ 30,488	$ 30,485

The fair value of bonds is measured using Level 2 inputs. The valuation of fair value is based on the quoted market prices provided by third party pricing services.

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

December 31, 2023

	Level 1	Level 2	Level 3	Total
Financial assets at FVTPL
Derivatives	$ —	$ 1	$ —	$ 1
Listed stocks	—	—	—	—
Non-listed stocks	—	—	793	793
Limited partnership	—	—	219	219
Other investing agreements	—	—	24	24
	$ —	$ 1	$ 1,036	$ 1,037
Financial assets at FVOCI
Listed and emerging stocks	$ 243	$ —	$ —	$ 243
Non-listed stocks	—	—	4,169	4,169
	$ 243	$ —	$ 4,169	$ 4,412
Hedging financial liabilities	$ —	$ —	$ —	$ —

F- 95

December 31, 2024

	Level 1	Level 2	Level 3	Total
Financial assets at FVTPL
Derivatives	$ —	$ —	$ —	$ —
Non-listed stocks	—	—	661	661
Limited partnership	—	—	307	307
Other investing agreements	—	—	37	37
	$ —	$ —	$ 1,005	$ 1,005
Financial assets at FVOCI
Listed and emerging stocks	$ 126	$ —	$ —	$ 126
Non-listed stocks	—	—	4,541	4,541
	$ 126	$ —	$ 4,541	$ 4,667
Hedging financial assets	$ —	$ 1	$ —	$ 1
Hedging financial liabilities	$ —	$ 2	$ —	$ 2

There were no transfers between Levels 1 and 2 for the years ended December 31, 2022, 2023 and 2024.

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

2022

Financial Assets	Measured at Fair Value through Profit or Loss — NT$	NT$		NT$
		(In Millions)
Balance at January 1, 2022	$ 909	$	3,157	$	4,066
Acquisition	348		16		364
Disposal	—		—		—
Recognized in profit or loss under “Other gains and losses”	( 215	)	—		( 215	)
Recognized in other comprehensive income under “Unrealized gain or loss on financial assets at fair value through other comprehensive income”	—		52		52
Proceeds from capital reduction from investees	( 22	)	( 7	)	( 29	)
Balance at December 31, 2022	$ 1,020	$	3,218	$	4,238
Unrealized gain or loss in 2022	$ ( 209	)

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2023

Financial Assets	Measured at Fair Value through Profit or Loss — NT$	NT$		NT$
		(In Millions)
Balance at January 1, 2023	$ 1,020	$	3,218	$	4,238
Acquisition	133		305		438
Recognized in profit or loss under “Other gains and losses”	( 95	)	—		( 95	)
Recognized in other comprehensive income under “Unrealized gain or loss on financial assets at fair value through other comprehensive income”	—		649		649
Proceeds from capital reduction from investees and profit distribution	( 22	)	( 3	)	( 25	)
Balance at December 31, 2023	$ 1,036	$	4,169	$	5,205
Unrealized gain or loss in 2023	$ ( 95	)

2024

Financial Assets	Measured at Fair Value through Profit or Loss — NT$	NT$		NT$
		(In Millions)
Balance at January 1, 2024	$ 1,036	$	4,169	$	5,205
Acquisition	159		313		472
Recognized in profit or loss under “Other gains and losses”	( 147	)	—		( 147	)
Recognized in other comprehensive income under “Unrealized gain or loss on financial assets at fair value through other comprehensive income”	—		62		62
Proceeds from capital reduction from investees and profit distribution	( 43	)	( 3	)	( 46	)
Balance at December 31, 2024	$ 1,005	$	4,541	$	5,546
Unrealized gain or loss in 2024	$ ( 143	)

The fair values of financial assets and financial liabilities of Level 2 are determined as follows:

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

2) For derivatives, fair values are estimated using discounted cash flow model. Future cash flows are estimated based on observable inputs including forward exchange rates at the end of the reporting periods and the forward and spot exchange rates stated in the contracts, discounted at a rate that reflects the credit risk of various counterparties.

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The fair values of non-listed domestic and foreign equity investments and film and drama investing agreements were Level 3 financial assets and determined using the market approach by reference the Price-to-Book ratios (P/B ratios) of peer companies that traded in active markets, using the income approach, in which the discounted cash flow is used to capture the present value of the expected future economic benefits to be derived from the investments, or using assets approach. The significant unobservable inputs used were listed in the below table. An increase in growth rate of long-term revenue, a decrease in discount for the lack of marketability or noncontrolling interests discount, or a decrease in the discount rate would result in increases in the fair values.

	December 31 — 2023	2024
Discount for lack of marketability	3.75 %- 20.00 %	20.00 %- 30.00 %
Noncontrolling interests discount	17.01 %- 25.00 %	15.00 %- 29.04 %
Growth rate of long-term revenue	0.19 %	0.12 %
Discount rate	7.11 %- 8.20 %	8.32 %- 14.40 %

If the inputs to the valuation model were changed to reflect reasonably possible alternative assumptions while all the other variables were held constant, the fair values of Level 3 financial assets would increase (decrease) as below table.

	December 31 — 2023		2024
	NT$		NT$
	(In Millions)
Discount for lack of marketability
5% increase	$ ( 49	)	$ ( 63	)
5% decrease	$ 45		$ 63
Noncontrolling interests discount
5% increase	$ ( 22	)	$ ( 51	)
5% decrease	$ 22		$ 51
Growth rate of long-term revenue
0.1% increase	$ 35		$ 31
0.1% decrease	$ ( 35	)	$ ( 31	)
Discount rate
1% increase	$ ( 396	)	$ ( 363	)
1% decrease	$ 488		$ 439

40. RELATED PARTIES TRANSACTIONS

The ROC Government has significant equity interest in Chunghwa. Chunghwa provides fixed-line services, mobile services, internet and data and other services to the various departments and institutions of the ROC Government in the normal course of business and at arm’s-length prices. Except for those disclosed in other notes or this note, the transactions with the ROC government bodies have not been disclosed because the

F- 98

transactions are not individually or collectively significant. However, the related revenues and operating costs have been appropriately recorded.

a. The Company engages in business transactions with the following related parties:

Company	Relationship
Taiwan International Standard Electronics Co., Ltd.	Associate
So-net Entertainment Taiwan Limited	Associate
KKBOX Taiwan Co., Ltd.	Associate
KingwayTek Technology Co., Ltd.	Associate
Taiwan International Ports Logistics Corporation	Associate
Senao Networks, Inc.	Associate
EnGenius Networks Inc.	Subsidiary of the Company’s associate, SNI
EnRack Technology Inc.	Subsidiary of the Company’s associate, SNI
Emplus Technologies, Inc.	Subsidiary of the Company’s associate, SNI
ST-2 Satellite Ventures Pte., Ltd.	Associate
CHT Infinity Singapore Pte., Ltd.	Associate
Viettel-CHT Co., Ltd.	Associate
PT. CHT Infinity Indonesia	Subsidiary of the Company’s associate, CISG
Click Force Co., Ltd.	Associate
Chunghwa PChome Fund I Co., Ltd.	Associate
Cornerstone Ventures Co., Ltd.	Associate
Next Commercial Bank Co., Ltd.	Associate
WiAdvance Technology Corporation	Associate
AgriTalk Technology Inc.	Associate
Imedtac Co., Ltd.	Associate
Baohwa Trust Co., Ltd.	Associate
Porrima Inc.	Associate
Taiwania Hive Technology Fund L.P.	Associate
Chunghwa SEA Holdings	Joint venture
Other related parties
Chunghwa Telecom Foundation	A nonprofit organization of which the funds donated by Chunghwa exceeds one third of its total funds
Senao Technical and Cultural Foundation	A nonprofit organization of which the funds donated by SENAO exceeds one third of its total funds
Sochamp Technology Co., Ltd.	Investor of significant influence over CHST
Tsann Kuen Enterprise Co., Ltd.	Substantial related party of SENAO
E-Life Mall Co., Ltd.	Substantial related party of SENAO
Engenius Technologies Co., Ltd.	Substantial related party of SENAO
Cheng Keng Investment Co., Ltd.	Substantial related party of SENAO
Cheng Feng Investment Co., Ltd.	Substantial related party of SENAO
All Oriented Investment Co., Ltd.	Substantial related party of SENAO
Hwa Shun Investment Co., Ltd.	Substantial related party of SENAO
Yu Yu Investment Co., Ltd.	Substantial related party of SENAO
Kangsin Co., Ltd.	Substantial related party of SENAO
United Daily News Co., Ltd.	Investor of significant influence over SFD
Shenzhen Century Communication Co., Ltd.	Investor of significant influence over SCT
Advantech Co., Ltd.	Investor of significant influence over IISI
Z-Com, Inc.	Investor of significant influence over CHST

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b. Balances and transactions between Chunghwa and its subsidiaries, which are related parties of Chunghwa, have been eliminated on consolidation and are not disclosed in this note. Terms of the foregoing transactions with related parties were not significantly different from transactions with non-related parties. When no similar transactions with non-related parties can be referenced, terms were determined in accordance with mutual agreements. Details of transactions between the Company and other related parties are disclosed below:

1) Operating transactions

	Revenues
	Year Ended December 31
	2022	2023	2024
	NT$	NT$	NT$
	(In Millions)
Associates	$ 417	$ 403	$ 402
Others	61	57	65
	$ 478	$ 460	$ 467

	Operating Costs and Expenses
	Year Ended December 31
	2022	2023	2024
	NT$	NT$	NT$
	(In Millions)
Associates	$ 1,247	$ 1,322	$ 1,108
Others	80	74	82
	$ 1,327	$ 1,396	$ 1,190

2) Non-operating transactions

	Non-operating Income and Expenses
	Year Ended December 31
	2022	2023	2024
	NT$	NT$	NT$
		(In Millions)
Associates	$ 37	$ 38	$ 40
Others	2	2	1
	$ 39	$ 40	$ 41

3) Receivables

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Associates	$ 76	$ 184
Others	2	9
	$ 78	$ 193

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4) Payables

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Associates	$ 381	$ 476
Others	4	4
	$ 385	$ 480

5) Customers’ deposits

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Associates	$ 20	$ 4
Others	—	—
	$ 20	$ 4

6) Acquisition of property, plant and equipment

	Year Ended December 31 — 2022	2023	2024
	NT$	NT$	NT$
	(In Millions)
Associates	$ 32	$ 173	$ 144

7) Acquisition of intangible assets

	Year Ended December 31 — 2022	2023	2024
	NT$	NT$	NT$
	(In Millions)
Associates	$ 1	$ —	$ —

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8) Lease-in agreements

Chunghwa entered into a contract with ST-2 Satellite Ventures Pte., Ltd. on March 12, 2010 to lease capacity on the ST-2 satellite. This lease term is for 15 years which should start from the official operation of ST-2 satellite and the total contract value is approximately $ 6,000 million (SGD 261 million), including a prepayment of $ 3,068 million at the inception of the lease, and the rest of amount should be paid annually when ST-2 satellite starts its official operation. ST-2 satellite was launched in May 2011 and began its official operation in August 2011. As ST-2 satellite is in good operating condition, the useful life is extended for another 3 years and 3 months after evaluation in 2021. The Board of Directors of Chunghwa approved to extend the lease period accordingly with the original contract terms in December 2021; therefore, Chunghwa acquired right-of-use asset of $ 1,125 million from the aforementioned lease extension.

The lease liabilities of ST-2 Satellite Ventures Pte., Ltd. as of December 31, 2023 and 2024 were as follows:

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Lease liabilities - current	$ 197	$ 204
Lease liabilities - noncurrent	1,603	1,463
	$ 1,800	$ 1,667

The interest expense recognized for the aforementioned lease liabilities for the years ended December 31, 2022, 2023 and 2024 were $ 8 million, $ 8 million and $ 7 million, respectively.

9) Others

The bank deposits and other financial assets of NCB as of December 31, 2023 and 2024 were as follows:

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Bank deposits and other financial assets	$ 1,132	$ 2,709

The interest income recognized for the aforementioned bank deposits and other financial assets for the year ended December 31, 2023 and 2024 were $ 1 million and $ 25 million, respectively.

c. Compensation of key management personnel

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

	Year Ended December 31 — 2022	2023	2024
	NT$	NT$	NT$
		(In Millions)
Short-term employee benefits	$ 360	$ 352	$ 369
Post-employment benefits	8	26	9
Share-based payment	2	1	1
Termination benefits	—	—	—
	$ 370	$ 379	$ 379

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

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41. PLEDGED ASSETS

The following assets are mainly pledged as collaterals for bank loans, customs duties of the imported materials and warranties of contract performance, or the trust account the Company entrusts to Land Bank of Taiwan for fund control and property rights management.

	December 31 — 2023	2024
	NT$	NT$
	(In Millions)
Property, plant and equipment	$ 2,469	$ 2,439
Land held under development (included in inventories)	1,999	1,999
Restricted assets (included in other assets - others)	546	1,189
	$ 5,014	$ 5,627

42. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

Except for those disclosed in other notes, the Company’s significant commitments and contingent liabilities as of December 31, 2024 were as follows:

a. Acquisitions of property, plant and equipment of $ 14,396 million.

b. Acquisitions of telecommunications-related inventory of $ 12,366 million.

c. Unused letters of credit amounting to $ 10 million.

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

e. Chunghwa committed that when its ownership interest in NCB is greater than 25 % and NCB encounters financial difficulty or the capital adequacy ratio of NCB cannot meet the related regulation requirements, Chunghwa will provide financial support to assist NCB in maintaining a healthy financial condition.

f. Chunghwa signed a contract, the ST-2 Satellite Succession Plan, with Singapore Telecommunications Limited, for a total transaction price of EUR 177 million and SGD 51 million. As of December 31, 2024, Chunghwa had paid the amount of EUR 89 million (classified as prepayments - noncurrent) .

g. The Company has signed the house and land presale contracts amounting to $ 7,704 million and has received $ 1,064 million in accordance with the contracts (classified as contract liabilities).

h. Chunghwa’s Board of Directors approved an investment in Cultural Content Industry Fund in February 2024. The investment amount is capped at $ 1,200 million.

43. SIGNIFICANT SUBSEQUENT EVENTS

a. Chunghwa’s Board of Directors approved an investment in TRF 1 L.P. at the amount of $ 300 million in January 2025.

b. Chunghwa no longer had more than half of seats of the Board of Directors of CHST since January 2025. As a result, the Company lost control over CHST and recognized CHST as an investment in associate.

c. Chunghwa’s Board of Directors approved a satellite investment project with Astranis Space Technologies Corp. in April 2025, with an investment amount not exceeding USD 115 million.

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44. SEGMENT INFORMATION

The Company’s reportable segments are "Consumer Business", "Enterprise Business", "International Business" and "Others", which are managed separately because each segment represents a strategic business unit that serves different customers. Segment information is provided to the chief operating decision maker who allocates resources and assesses segment performance. The Company’s measure of segment performance is mainly based on revenues and income before income tax.

Some operating segments have been aggregated into a single operating segment taking into account the following factors: (a) the type or class of customer for the telecommunications products and services are similar; (b) the nature of the telecommunications products and services are similar; and (c) the methods used to provide the services to the customers are similar.

The accounting policies of the operating segments are the same as those described in Note 3.

a. Segment revenues and operating results

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

	Consumer Business	Enterprise Business	International Business	Others	Total
	NT$	NT$	NT$	NT$	NT$
	(In Millions)
Year ended December 31, 2022
Revenues
From external customers	$ 132,063	$ 72,152	$ 7,189	$ 5,335	$ 216,739
Intersegment revenues	2,166	952	864	348	4,330
Segment revenues	$ 134,229	$ 73,104	$ 8,053	$ 5,683	221,069
Intersegment elimination					( 4,330	)
Consolidated revenues					$ 216,739
Segment income before income tax	$ 28,505	$ 15,607	$ 1,694	$ 1,398	$ 47,204
Year ended December 31, 2023
Revenues
From external customers	$ 137,093	$ 73,005	$ 9,188	$ 3,913	$ 223,199
Intersegment revenues	2,626	1,014	995	406	5,041
Segment revenues	$ 139,719	$ 74,019	$ 10,183	$ 4,319	228,240
Intersegment elimination					( 5,041	)
Consolidated revenues					$ 223,199
Segment income before income tax	$ 28,907	$ 14,363	$ 2,141	$ 1,597	$ 47,008
Year ended December 31, 2024
Revenues
From external customers	$ 139,982	$ 75,338	$ 9,919	$ 4,729	$ 229,968
Intersegment revenues	2,765	884	1,107	376	5,132
Segment revenues	$ 142,747	$ 76,222	$ 11,026	$ 5,105	235,100
Intersegment elimination					( 5,132	)
Consolidated revenues					$ 229,968
Segment income before income tax	$ 29,771	$ 12,881	$ 2,383	$ 2,806	$ 47,841

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b. Other segment information

Other information reviewed by the chief operating decision maker or regularly provided to the chief operating decision maker was as follows:

For the year ended December 31, 2022

	Consumer Business		Enterprise Business	International Business	Others	Total
	NT$		NT$	NT$	NT$	NT$
	(In Millions)
Share of profits (loss) of associates and joint ventures accounted for using equity method	$ ( 43	)	$ 23	$ 315	$ 147	$ 442
Interest income	$ 11		$ 28	$ 8	$ 202	$ 249
Interest expenses	$ 151		$ 83	$ 7	$ 22	$ 263
Depreciation and amortization	$ 28,703		$ 9,714	$ 1,114	$ 739	$ 40,270
Reversal of impairment loss on investment properties	$ —		$ —	$ —	$ 107	$ 107
Impairment loss on intangible assets	$ 9		$ —	$ —	$ —	$ 9

For the year ended December 31, 2023

	Consumer Business		Enterprise Business	International Business	Others	Total
	NT$		NT$	NT$	NT$	NT$
	(In Millions)
Share of profits (loss) of associates and joint ventures accounted for using equity method	$ ( 129	)	$ 29	$ 283	$ 70	$ 253
Interest income	$ 25		$ 58	$ 36	$ 499	$ 618
Interest expenses	$ 185		$ 94	$ 8	$ 32	$ 319
Depreciation and amortization	$ 28,699		$ 9,721	$ 1,354	$ 737	$ 40,511
Impairment loss on investment properties	$ —		$ —	$ —	$ 336	$ 336
Impairment loss on property, plant and equipment	$ 249		$ 50	$ —	$ —	$ 299

For the year ended December 31, 2024

	Consumer Business		Enterprise Business	International Business	Others	Total
	NT$		NT$	NT$	NT$	NT$
	(In Millions)
Share of profits (loss) of associates and joint ventures accounted for using equity method	$ ( 303	)	$ 55	$ 277	$ 128	$ 157
Interest income	$ 29		$ 56	$ 58	$ 638	$ 781
Interest expenses	$ 199		$ 98	$ 8	$ 34	$ 339
Depreciation and amortization	$ 28,421		$ 9,943	$ 1,422	$ 739	$ 40,525
Reversal of impairment loss on investment properties	$ —		$ —	$ —	$ 139	$ 139

F- 105

c. Main products and service revenues

	Year Ended December 31 — 2022	2023	2024
	NT$	NT$	NT$
	(In Millions)
Consumer Business
Mobile services	$ 51,821	$ 55,138	$ 57,067
Fixed-line services	42,766	42,574	42,872
Sales	35,172	36,816	37,231
Others	2,304	2,565	2,812
	132,063	137,093	139,982
Enterprise Business
Fixed-line services	34,537	33,967	33,757
ICT business	24,248	24,697	27,792
Mobile services	8,942	9,119	9,152
Others	4,425	5,222	4,637
	72,152	73,005	75,338
International Business
Fixed-line services	5,063	5,389	5,087
ICT business	1,506	2,841	4,016
Others	620	958	816
	7,189	9,188	9,919
Others
Sales	4,553	3,034	3,803
Others	782	879	926
	5,335	3,913	4,729
	$ 216,739	$ 223,199	$ 229,968

d. Geographic information

The users of the Company’s services are mainly from Taiwan, ROC. The revenues it derived outside Taiwan are mainly revenues from international long distance telephone and leased line services. The geographic information for revenues was as follows:

	Year Ended December 31 — 2022	2023	2024
	NT$	NT$	NT$
	(In Millions)
Taiwan, ROC	$ 209,727	$ 215,265	$ 220,398
Overseas	7,012	7,934	9,570
	$ 216,739	$ 223,199	$ 229,968

The Company has long-lived assets in U.S., Singapore, Hong Kong, China, Vietnam, Japan, Thailand and Germany for $ 3,093 million and $ 2,948 million as of December 31, 2023 and 2024, respectively, in the aforementioned areas, the other long-lived assets are located in Taiwan, ROC.

e. Major customers

As the years ended December 31, 2022, 2023 and 2024, the Company did not have any single customer whose revenue exceeded 10% of the total revenues.

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