TWM - Interim / Quarterly Report 2020

Taiwan Mobile Co., Ltd. and Subsidiaries

Consolidated Financial Statements for the Six Months Ended June 30, 2020 and 2019 and Independent Auditors’ Review Report

INDEPENDENT AUDITORS’ REVIEW REPORT

The Board of Directors and Stockholders Taiwan Mobile Co., Ltd.

Introduction

We have reviewed the accompanying consolidated balance sheets of Taiwan Mobile Co., Ltd. and its subsidiaries (collectively, the “Group”) as of June 30, 2020 and 2019, the consolidated statements of comprehensive income for the three months and the six months ended June 30, 2020 and 2019, the consolidated statements of changes in equity and cash flows for the six months then ended, and the related notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34 “Interim Financial Reporting” endorsed and issued into effect by Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

We conducted our reviews in accordance with the Statement of Auditing Standards No. 65 “Review of Financial Information Performed by the Independent Auditor of the Entity”. A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our reviews, nothing has come to our attention that caused us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as of June 30, 2020 and 2019, and of its consolidated financial performance for the three months ended June 30, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the six months then ended in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and International Accounting Standard 34 “Interim Financial Reporting” endorsed and issued into effect by Financial Supervisory Commission of the Republic of China.

The engagement partners on the reviews resulting in this independent auditors’ review report are Pei-De Chen and Kwan-Chung Lai.

Deloitte & Touche Taipei, Taiwan Republic of China

August 4, 2020

Notice to Readers

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

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

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 6 and 29) Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income (Note 7) Contract assets (Note 22) Notes and accounts receivable, net (Note 8) Notes and accounts receivable due from related parties (Note 29) Other receivables (Note 29) Inventories (Note 9) Prepayments (Note 29) Other financial assets (Notes 29 and 30) Other current assets Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income (Note 7) Contract assets (Note 22) Investments accounted for using equity method (Notes 10 and 29) Property, plant and equipment (Note 12) Right-of-use assets (Notes 13 and 29) Investment properties (Note 14) Concessions (Notes 15 and 30) Goodwill (Note 15) Other intangible assets (Note 15) Deferred tax assets Incremental costs of obtaining a contract (Note 22) Other financial assets (Notes 29, 30 and 31) Other non-current assets (Notes 16 and 29) Total non-current assets		June 30, 2020 (Reviewed)		December 31, 2019 (Audited)		June 30, 2019 (Reviewed)
		Amount % $ 8,237,272 5 - - 2,985,211 2 4,677,432 3 7,357,742 4 193,179 - 1,546,009 1 3,719,234 2 730,294 - 688,913 - 131,228 - 30,266,514 17 1,855,031 1 3,033,639 2 1,714,204 1 35,579,874 20 9,211,915 5 2,965,503 2 66,955,815 38 15,832,440 9 5,367,340 3 796,349 - 1,878,963 1 267,507 - 1,663,404 1 147,121,984 83		Amount % $ 8,663,370 6 149 - 246,493 - 4,832,043 3 7,671,838 5 146,186 - 1,418,485 1 5,670,476 4 463,334 - 592,868 - 200,458 - 29,905,700 19 5,245,888 4 3,463,456 2 1,478,025 1 36,182,005 24 9,657,938 6 2,984,057 2 37,709,501 24 15,832,440 10 5,536,534 4 839,240 1 2,119,052 1 271,653 - 2,694,470 2 124,014,259 81		Amount % $ 6,774,567 4 85,444 - 257,243 - 5,013,363 3 7,359,220 5 150,868 - 2,081,099 2 4,075,835 3 604,338 1 573,742 - 120,790 - 27,096,509 18 5,924,278 4 3,346,768 2 1,431,802 1 37,754,329 24 9,666,957 6 2,983,166 2 39,119,187 25 15,872,595 10 5,641,739 4 818,405 1 2,428,080 2 168,054 - 1,351,906 1 126,507,266 82

TOTAL $ 177,388,498 100 $ 153,919,959 100 $ 153,603,775 100

LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 17) Short-term notes and bills payable (Note 17) Contract liabilities (Note 22) Notes and accounts payable Accounts payable due to related parties (Note 29) Dividends payable (Note 21) Other payables (Note 29) Current tax liabilities Provisions (Note 19) Lease liabilities (Notes 13, 26 and 29) Advance receipts Long-term liabilities, current portion (Notes 17 and 18) Other current liabilities (Note 29) Total current liabilities NON-CURRENT LIABILITIES Contract liabilities (Note 22) Bonds payable (Note 18) Long-term borrowings (Note 17) Provisions (Note 19) Deferred tax liabilities Lease liabilities (Notes 13, 26 and 29) Net defined benefit liabilities Guarantee deposits Other non-current liabilities Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT (Note 21) Common stock Capital collected in advance Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Other equity interests Treasury stock Total equity attributable to owners of the parent NON-CONTROLLING INTERESTS (Note 21) Total equity TOTAL		June 30, 2020 (Reviewed)		December 31, 2019 (Audited)		June 30, 2019 (Reviewed)
		Amount % $ 11,590,000 7 9,795,551 5 1,685,736 1 8,202,132 5 150,956 - 13,350,468 8 7,567,050 4 1,501,928 1 64,469 - 3,529,437 2 152,620 - 303,320 - 2,290,047 1 60,183,714 34 39,290 - 35,886,949 20 4,484,367 3 1,503,649 1 1,020,457 1 5,676,851 3 504,812 - 1,127,425 1 462,566 - 50,706,366 29 110,890,080 63 35,093,765 20 - - 18,681,980 10 30,170,398 17 - - 6,787,948 4 (542,778) - (29,717,344) (17) 60,473,969 34 6,024,449 3 66,498,418 37 $ 177,388,498 100		Amount % $ 16,270,000 11 1,898,111 1 1,807,407 1 7,660,285 5 135,162 - - - 8,823,705 6 1,539,638 1 88,961 - 3,532,951 2 87,410 - 303,297 - 2,376,029 2 44,522,956 29 45,293 - 15,903,436 10 8,586,076 6 1,459,270 1 977,560 1 6,117,438 4 517,175 - 1,092,364 1 522,116 - 35,220,728 23 79,743,684 52 34,959,441 23 134,104 - 20,274,694 13 28,922,281 19 95,381 - 12,909,829 8 438,905 - (29,717,344) (19) 68,017,291 44 6,158,984 4 74,176,275 48 $ 153,919,959 100		Amount % $ 3,900,000 2 - - 1,959,865 1 6,943,978 5 191,450 - 15,366,223 10 8,790,462 6 1,808,424 1 109,315 - 3,424,882 2 105,373 - 4,803,111 3 2,356,830 2 49,759,913 32 51,023 - 19,944,211 13 8,787,754 6 1,434,203 1 949,619 1 6,193,616 4 477,378 - 1,063,021 1 522,108 - 39,422,933 26 89,182,846 58 34,335,243 22 344,288 - 16,652,574 11 28,922,281 19 95,381 - 6,800,609 4 1,128,647 1 (29,717,344) (19) 58,561,679 38 5,859,250 4 64,420,929 42 $ 153,603,775 100

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

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share) (Reviewed, Not Audited)

For the Three Months Ended June 30	For the Three Months Ended June 30	For the Six Months Ended June 30	For the Six Months Ended June 30
2020	2019 Reclassified (Note 3)	2020	2019 Reclassified (Note 3)
Amount % $ 31,341,639 100 23,408,985 75 7,932,654 25 2,477,608 8 1,300,044 4 53,820 - 49,319 - 3,880,791 12 80,808 - 4,132,671 13 17,683 - 16,468 - 45,566 - (157,692 ) - 73,154 - (4,821) - 4,127,850 13 812,929 2 3,314,921 11 998,253 3 23,792 - (9,512 ) - 2,424 - 1,014,957 3 $ 4,329,878 14 $ 3,047,593 10 267,328 1 $ 3,314,921 11 $ 4,049,814 13 280,064 1 $ 4,329,878 14 $ 1.08 $ 1.08	Amount % $ 29,614,551 100 21,490,597 73 8,123,954 27 2,582,082 9 1,251,869 4 37,897 - 73,471 - 3,945,319 13 147,335 - 4,325,970 14 18,957 - 26,049 - (28,532 ) - (138,631 ) - 18,667 - (103,490) - 4,222,480 14 834,970 3 3,387,510 11 890,442 3 2,880 - (7,254 ) - 2,423 - 888,491 3 $ 4,276,001 14 $ 3,205,701 11 181,809 - $ 3,387,510 11 $ 4,096,464 14 179,537 - $ 4,276,001 14 $ 1.16 $ 1.14	Amount % $ 63,194,318 100 46,990,438 74 16,203,880 26 4,911,064 8 2,619,016 4 103,580 - 84,214 - 7,717,874 12 128,671 - 8,614,677 14 35,989 - 18,303 - 39,338 - (302,350 ) - 51,826 - (156,894) - 8,457,783 14 1,578,346 3 6,879,437 11 (556,121 ) (1 ) 27,368 - (22,476 ) - 2,288 - (548,941) (1) $ 6,330,496 10 $ 6,362,233 10 517,204 1 $ 6,879,437 11 $ 5,807,236 9 523,260 1 $ 6,330,496 10 $ 2.26 $ 2.25	Amount % $ 59,487,224 100 43,171,809 73 16,315,415 27 5,271,291 9 2,549,885 4 74,853 - 125,129 - 8,021,158 13 259,807 - 8,554,064 14 34,270 - 43,072 - (37,938 ) - (291,718 ) - 11,681 - (240,633) - 8,313,431 14 1,626,947 3 6,686,484 11 1,214,649 2 8,374 - 16,900 - (1,545) - 1,238,378 2 $ 7,924,862 13 $ 6,276,674 11 409,810 - $ 6,686,484 11 $ 7,500,702 13 424,160 - $ 7,924,862 13 $ 2.29 $ 2.24

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

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars)

(Reviewed, Not Audited)

BALANCE, JANUARY 1, 2019 Effect of retrospective application ADJUSTED BALANCE, JANUARY 1, 2019 Distribution of 2018 earnings Legal reserve Reversal of special reserve Cash dividends Total distribution of earnings Profit for the six months ended June 30, 2019 Other comprehensive income (loss) for the six months ended June 30, 2019 Total comprehensive income (loss) for the six months ended June 30, 2019 Conversion of convertible bonds to common stock Cash dividends paid to non-controlling interests of subsidiaries BALANCE, JUNE 30, 2019 BALANCE, JANUARY 1, 2020 Distribution of 2019 earnings Legal reserve Reversal of special reserve Cash dividends Total distribution of earnings Cash dividends from capital surplus Profit for the six months ended June 30, 2020 Other comprehensive income (loss) for the six months ended June 30, 2020 Total comprehensive income (loss) for the six months ended June 30, 2020 Conversion of convertible bonds to common stock Disposal of investments in equity instruments designated as at fair value through other comprehensive income Changes in equity of associates accounted for using equity method Disposal of investments accounted for using equity method Cash dividends paid to non-controlling interests of subsidiaries BALANCE, JUNE 30, 2020			Equity Attributable to Owners of the Parent	Equity Attributable to Owners of the Parent	Total Non-controlling Interests $ 61,881,520 $ 6,112,176 32,605 16,275 61,914,125 6,128,451 - - - - (15,366,223) - (15,366,223) - 6,276,674 409,810 1,224,028 14,350 7,500,702 424,160 4,513,075 - - (693,361) $ 58,561,679 $ 5,859,250 $ 68,017,291 $ 6,158,984 - - - - (11,756,844) - (11,756,844) - (1,593,624) - 6,362,233 517,204 (554,997) 6,056 5,807,236 523,260 2,163 - - - (1,220) (1,490) (1,033) (1,262) - (655,043) $ 60,473,969 $ 6,024,449	Total Equity $ 67,993,696 48,880 68,042,576 - - (15,366,223) (15,366,223) 6,686,484 1,238,378 7,924,862 4,513,075 (693,361) $ 64,420,929 $ 74,176,275 - - (11,756,844) (11,756,844) (1,593,624) 6,879,437 (548,941) 6,330,496 2,163 - (2,710) (2,295) (655,043) $ 66,498,418
	Common Stock $ 34,208,519 - 34,208,519 - - - - - - - 126,724 - $ 34,335,243 $ 34,959,441 - - - - - - - - 134,324 - - - - $ 35,093,765	Capital Collected in Advanced Capital Surplus $ 29,819 $ 12,580,692 - - 29,819 12,580,692 - - - - - - - - - - - - - - 314,469 4,071,882 - - $ 344,288 $ 16,652,574 $ 134,104 $ 20,274,694 - - - - - - - - - (1,593,624) - - - - - - (134,104) 1,943 - - - - - (1,033) - - $ - $ 18,681,980	Retained Earnings Legal Reserve Special Reserve Unappropriated Earnings $ 27,558,064 $ 362,703 $ 16,954,448 - - 32,605 27,558,064 362,703 16,987,053 1,364,217 - (1,364,217) - (267,322) 267,322 - - (15,366,223) 1,364,217 (267,322) (16,463,118) - - 6,276,674 - - - - - 6,276,674 - - - - - - $ 28,922,281 $ 95,381 $ 6,800,609 $ 28,922,281 $ 95,381 $ 12,909,829 1,248,117 - (1,248,117) - (95,381) 95,381 - - (11,756,844) 1,248,117 (95,381) (12,909,580) - - - - - 6,362,233 - - (235) - - 6,361,998 - - - - - 426,241 - - (1,220) - - 680 - - - $ 30,170,398 $ - $ 6,787,948	Other Equity Interests Exchange Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Differences on Translation Comprehensive Income Treasury Stock $ (24,398) $ (70,983) $ (29,717,344) - - - (24,398) (70,983) (29,717,344) - - - - - - - - - - - - - - - 7,378 1,216,650 - 7,378 1,216,650 - - - - - - - $ (17,020) $ 1,145,667 $ (29,717,344) $ (34,505) $ 473,410 $ (29,717,344) - - - - - - - - - - - - - - - - - - (10,060) (544,702) - (10,060) (544,702) - - - - - (426,241) - - - - - (680) - - - - $ (44,565) $ (498,213) $ (29,717,344)

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

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments for: Depreciation expense Amortization expense Amortization of incremental costs of obtaining a contract Loss on disposal of property, plant and equipment, net Gain on disposal of intangible assets Expected credit loss Finance costs Interest income Dividend income Share of profit of associates accounted for using equity method Gain on disposal of investments accounted for using equity method Valuation (gain) loss on financial assets and liabilities at fair value through profit or loss Others Changes in operating assets and liabilities Contract assets Notes and accounts receivable Notes and accounts receivable due from related parties Other receivables Inventories Prepayments Other current assets Other financial assets Incremental costs of obtaining a contract Contract liabilities Notes and accounts payable Accounts payable due to related parties Other payables Provisions Advance receipts Other current liabilities Net defined benefit liabilities Cash inflows generated from operating activities Interest received Interest paid Income taxes paid Net cash generated from operating activities		For the Six Months Ended June 30	For the Six Months Ended June 30
		2020 $ 8,457,783 5,473,586 1,724,791 925,259 23,798 (8,800) 84,214 302,350 (35,989) (8,398) (51,826) (58,494) 149 (7,188) 589,440 193,346 (46,993) (10,356) 1,951,242 (279,170) 69,015 (1,671) (685,170) (127,674) 541,847 15,794 (770,840) (4,767) 64,046 (85,982) (12,363) 18,220,979 3,035 (626) (1,516,935) 16,706,453	2019 $ 8,313,431 6,556,816 1,725,189 1,357,200 37,537 - 125,129 291,718 (34,270) (6,438) (11,681) - (5,789) 5,217 323,453 82,166 (4,958) (33,691) (130,172) (138,434) 796,237 (4,028) (838,998) (76,049) 186,998 11,862 (1,033,309) 4,149 (6,839) 202,676 (33,502) 17,661,620 67 (634) (2,149,230) 15,511,823 (Continued)

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of property, plant and equipment Acquisition of right-of-use assets Acquisition of intangible assets Increase in prepayments for equipment Proceeds from disposal of property, plant and equipment Proceeds from disposal of intangible assets Increase in advanced receipts from assets disposals Acquisition of financial assets at fair value through other comprehensive income Disposal of financial assets at fair value through other comprehensive income Acquisition of investments accounted for using equity method Disposal of investments accounted for using equity method Increase in prepayments for investment Proceeds from capital return of investments accounted for using equity method Increase in refundable deposits Decrease in refundable deposits Increase in other financial assets Decrease in other financial assets Interest received Dividend received Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Decrease in short-term borrowings Increase (decrease) in short-term notes and bills payable Proceeds from issue of bonds Repayment of long-term borrowings Repayment of the principal portion of lease liabilities Increase in guarantee deposits received Decrease in guarantee deposits received Cash dividends paid to non-controlling interests of subsidiaries Interest paid Net cash generated from (used in) financing activities EFFECT OF EXCHANGE RATE CHANGES ON CASH AND EQUIVALENTS		For the Six Months Ended June 30	For the Six Months Ended June 30
		2020 $ (3,173,445) (20,821) (29,810,586) (219,127) 12,431 6,000 149 (407,419) 548,542 (335,246) 166,807 (30,554) 33,298 (196,782) 164,391 (160,515) 68,572 24,888 - (33,329,417) (4,680,000) 7,893,678 19,979,415 (4,102,000) (1,938,642) 73,475 (38,401) (655,043) (332,790) 16,199,692 (2,826)	2019 $ (3,167,261) (14,546) (158,677) (73,891) 36,126 - 222 - - (27,000) - (100,000) - (145,115) 135,093 (72,735) 43,227 31,564 52,007 (3,460,986) (6,370,000) (1,498,700) - (2,102,000) (1,858,702) 119,138 (70,647) (693,361) (301,990) (12,776,262) 1,282 (Continued)

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

NET DECREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD CASH AND CASH EQUIVALENTS AT END OF PERIOD		For the Six Months Ended June 30	For the Six Months Ended June 30
		2020 $ (426,098) 8,663,370 $ 8,237,272	2019 $ (724,143) 7,498,710 $ 6,774,567

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

(Concluded)

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise) (Reviewed, Not Audited)

1. ORGANIZATION AND OPERATIONS

Taiwan Mobile Co., Ltd. (“TWM”) was incorporated in Taiwan, the Republic of China (“ROC”) on February 25, 1997. TWM’s stock was listed on the ROC Over-the-Counter (“OTC”) Securities Exchange (currently known as The Taipei Exchange, TPEx) on September 19, 2000. On August 26, 2002, TWM’s stock was shifted to be listed on the Taiwan Stock Exchange. TWM is mainly engaged in rendering wireless communication service and the sale of mobile phones and accessories, games, e-books and value-added services.

TWM received a second-generation (“2G”) mobile telecommunications concession operation license issued by the Directorate General of Telecommunications (“DGT”) of the ROC. The license allows TWM to provide services for 15 years from 1997 onwards. The 2G concession license had been renewed by the National Communications Commission (“NCC”) and terminated on June 30, 2017. TWM received a third-generation (“3G”) concession license issued by the DGT in March 2005, and the 3G concession license terminated on December 31, 2018. TWM participated in the mobile spectrum auctions held by NCC for the need of long-term business development and from April 2014 to June 2018 acquired the concession licenses for the fourth-generation (“4G”) mobile broadband spectrum in the 700MHz, 1800MHz and 2100MHz frequency bands separately, and the aforementioned licenses are valid until December 2030 and December 2033, respectively. In June 2020, TWM acquired the concession licenses for the fifth-generation (“5G”) mobile broadband spectrum in the 3500MHz and 28000MHz frequency bands, and the aforementioned licenses are valid until December 2040.

The accompanying consolidated financial statements comprise of TWM and its subsidiaries (collectively, the “Group”).

2. APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS

The Board of Directors approved the consolidated financial statements on August 4, 2020.

3. APPLICATION OF NEW AND AMENDED STANDARDS AND INTERPRETATIONS

a. Application of the International Financial Reporting Standards (“IFRS”), International Accounting Standards (“IAS”), Interpretations of IFRS (“IFRIC”), and Interpretations of IAS (“SIC”) (collectively, the “IFRSs”) endorsed and issued into effect by the ROC Financial Supervisory Commission (“FSC”).

Application of the amendments to the IFRSs endorsed and issued into effect by the FSC did not have any material impact on the Group’s accounting policies.

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b. New IFRSs issued by International Accounting Standards Board (“IASB”) but not yet endorsed and issued into effect by the FSC.

Effective Date New IFRSs Announced by IASB (Note 1)

“Annual Improvements to IFRS Standards 2018-2020” January 1, 2022 (Note 2) Amendments to IFRS 3 “Reference to the Conceptual Framework” January 1, 2022 (Note 3) Amendments to IFRS 4 “Extension of the Temporary Exemption from Effective immediately upon Applying IFRS 9” promulgation by the IASB Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets To be determined by IASB between An Investor and Its Associate or Joint Venture” IFRS 17 “Insurance Contracts” January 1, 2023 Amendments to IFRS 17 January 1, 2023 Amendments to IAS 1 “Classification of Liabilities as Current or January 1, 2023 Non-current” Amendments to IAS 16 “Property, Plant and Equipment - Proceeds January 1, 2022 (Note 4) before Intended Use” Amendments to IAS 37 “Onerous Contracts-Cost of Fulfilling a January 1, 2022 (Note 5) Contract”

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.
Note 2: The amendments to IFRS 9 are applied prospectively to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IAS 41 “Agriculture” are applied prospectively to the fair value measurements on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IFRS 1 “First-time Adoptions of IFRSs” are applied retrospectively for annual reporting periods beginning on or after January 1, 2022.
Note 3: The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the annual reporting period beginning on or after January 1, 2022.
Note 4: The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.
Note 5: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.

As of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the possible impact that the application of other standards and interpretations will have on the Group’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

c. Reclassification

To enhance the understanding of the Group’s consolidated financial statements for users, the Group’s management decided to present research and development (“R&D”) expenses, which were part of operating expenses, separately in the consolidated statements of comprehensive income starting from January 1, 2020. The comparative information of R&D expenses for the three months and the six months ended June 30, 2019 was made to conform to the current period’s presentation.

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Except for the following description, the significant accounting policies adopted for the consolidated financial statements are the same as those adopted for the consolidated financial statements for the year ended December 31, 2019.

Statement of Compliance

The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34 Interim Financial Reporting endorsed and issued into effect by the FSC. The consolidated financial statements do not include all the information, which should be disclosed in the annual consolidated financial statements in accordance with the IFRSs endorsed and issued into effect by the FSC.

Basis of Consolidation

a. The basis of preparing the consolidated financial statements is the same as that of the consolidated financial statements for the year ended December 31, 2019.
b. The subsidiaries included in the consolidated financial statements were as follows:

Investor
Subsidiary
Main Business and
Products
TWM
Taiwan Cellular Co., Ltd.
(TCC)
Investment
Wealth Media Technology
Co., Ltd. (WMT)
Investment
TWM Venture Co., Ltd.
(TVC)
Investment
Taipei New Horizon Co.,
Ltd. (TNH)
Building and operating
Songshan Cultural and
Creative Park BOT
project
TCC
Taiwan Fixed Network
Co., Ltd. (TFN)
Fixed-line service provider
Taiwan Teleservices &
Technologies Co., Ltd.
(TT&T)
Call center service and
telephone marketing
TWM Holding Co., Ltd.
(TWM Holding)
Investment
TCC Investment Co., Ltd.
(TCCI)
Investment
Taiwan Digital
Communications Co.,
Ltd. (TDC)
Mobile phone wholesaling
and TV program
production
Taiwan Digital Service
Co., Ltd. (TDS)
Commissioned
maintenance service
Taihsin Property Insurance
Agent Co., Ltd. (TPIA)
Property insurance agent
Tai-Fu Cloud Technology
Co., Ltd. (TFC)
Type II
telecommunications
business
WMT
TFN Media Co., Ltd.
(TFNM)
Type II
telecommunications
business
Global Forest Media
Technology Co., Ltd.
(GFMT)
Investment
Global Wealth Media
Technology Co., Ltd.
(GWMT)
Investment
Win TV Broadcasting Co.,
Ltd. (WTVB)
TV program provider
momo.com Inc. (momo)
Wholesale and retail sales

Percentage of Ownership
June 30,
2020
December 31,
2019
June 30,
2019
Note
100.00%
100.00%
100.00%
-
100.00%
100.00%
100.00%
-
100.00%
100.00%
-
Note 1
49.90%
49.90%
49.90%
-
100.00%
100.00%
100.00%
-
100.00%
100.00%
100.00%
-
100.00%
100.00%
100.00%
-
100.00%
100.00%
100.00%
Note 2
-
-
100.00%
Note 3
100.00%
100.00%
100.00%
-
100.00%
100.00%
100.00%
-
100.00%
100.00%
100.00%
-
100.00%
100.00%
100.00%
-
100.00%
100.00%
100.00%
-
100.00%
100.00%
100.00%
-
100.00%
100.00%
100.00%
-
45.01%
45.01%
45.01%
-
(Continued)

11 -

Investor
Subsidiary
Main Business and
Products
TFN
TFN Union Investment
Co., Ltd. (TUI)
Investment
TFN HK Ltd.
Telecommunications
service provider
TWM Holding
TWM Communications
(Beijing) Co., Ltd.
(TWMC)
Mobile application
development and design
TCCI
TCCI Investment and
Development Co., Ltd.
(TID)
Investment
TFNM
Taiwan Kuro Times Co.,
Ltd. (TKT)
Online music service
Yeong Jia Leh Cable TV
Co., Ltd. (YJCTV)
Cable TV service provider
Mangrove Cable TV Co.,
Ltd. (MCTV)
Cable TV service provider
Phoenix Cable TV Co.,
Ltd. (PCTV)
Cable TV service provider
Union Cable TV Co., Ltd.
(UCTV)
Cable TV service provider
Globalview Cable TV Co.,
Ltd. (GCTV)
Cable TV service provider
GFMT
UCTV
Cable TV service provider
GWMT
GCTV
Cable TV service provider
momo
Asian Crown International
Co., Ltd. (Asian Crown
(BVI))
Investment
Honest Development Co.,
Ltd. (Honest
Development)
Investment
Fuli Life Insurance Agent
Co., Ltd. (FLI)
Life insurance agent
Fuli Property Insurance
Agent Co., Ltd. (FPI)
Property insurance agent
Fu Sheng Travel Service
Co., Ltd. (FST)
Travel agent
Bebe Poshe International
Co., Ltd. (Bebe Poshe)
Wholesale of cosmetics
Fu Sheng Logistics Co.,
Ltd. (FSL)
Logistics and transport
Asian Crown
(BVI)
Fortune Kingdom
Corporation (Fortune
Kingdom)
Investment
Fortune
Kingdom
Hong Kong Fubon
Multimedia Technology
Co., Ltd. (HK Fubon
Multimedia)
Investment
Honest
Development
Hongkong Yue Numerous
Investment Co., Ltd.
(HK Yue Numerous)
Investment
HK Yue
Numerous
Haobo Information
Consulting (Shenzhen)
Co., Ltd. (Haobo)
Investment
HK Fubon
Multimedia
Fubon Gehua (Beijing)
Enterprise Ltd. (FGE)
Wholesaling

Percentage of Ownership
June 30,
2020
December 31,
2019
June 30,
2019
Note
100.00%
100.00%
100.00%
Note 2
-
-
100.00%
Note 3
100.00%
100.00%
100.00%
-
100.00%
100.00%
100.00%
Note 2
100.00%
100.00%
100.00%
-
100.00%
100.00%
100.00%
-
29.53%
29.53%
29.53%
Note 4
100.00%
100.00%
100.00%
-
99.22%
99.22%
99.22%
-
92.38%
92.38%
92.38%
-
0.76%
0.76%
0.76%
-
6.83%
6.83%
6.83%
-
81.99%
81.99%
81.99%
-
100.00%
100.00%
100.00%
-
100.00%
100.00%
100.00%
-
100.00%
100.00%
100.00%
-
100.00%
100.00%
100.00%
-
85.00%
85.00%
85.00%
-
100.00%
-
-
Note 5
100.00%
100.00%
100.00%
-
100.00%
100.00%
100.00%
-
100.00%
100.00%
100.00%
-
100.00%
100.00%
100.00%
-
93.55%
93.55%
93.55%
-
(Concluded)

Note 1: Set up in September 2019.

Note 2: TCCI, TUI and TID collectively owned 698,752 thousand shares of TWM, representing 19.91% of total outstanding shares as of June 30, 2020.

Note 3: Liquidation procedures were completed in August 2019.

Note 4: The other 70.47% of shares were held under trustee accounts. Note 5: Set up in February 2020.

c. Subsidiaries excluded from the consolidated financial statements: None.
12 -

Leases

At inception of a contract, the Group assesses whether the contract is, or contains, a lease.

a. The Group as lessor

Leases in which the lessee assumes substantially all of the risks and rewards of ownership are classified as finance leases. All other leases are classified as operating leases.

When the Group subleases a right-of-use asset, the sublease is classified by reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset.

Under finance leases, the lease payments comprise fixed payments and in-substance fixed payments. The net investment in a lease is measured at the present value of the sum of the lease payments receivable by a lessor and is presented as a finance lease receivable. Finance lease income is allocated to the relevant accounting periods so as to reflect a constant, periodic rate of return on the Group’s net investment outstanding in respect of leases.

Lease payments from operating leases are recognized on a straight-line basis over the terms of the relevant leases.

When a lease includes both land and building elements, the Group assesses the classification of each element separately as a finance or an operating lease based on the assessment as to whether substantially all the risks and rewards incidental to ownership of each element have been transferred to the lessee. The entire lease is classified as an operating lease when it is clear that both elements are operating leases.

b. The Group as lessee

The Group recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the consolidated balance sheets.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier dates of the end of the useful lives of the right-of-use assets or the end of the lease term.

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments, in-substance fixed payments and variable lease payments which depend on an index. The lease payments are discounted using the lessee’s incremental borrowing rate.

13 -

Subsequently, lease liabilities are 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 used to determine those payments, the Group 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. For a lease modification, the Group accounts for the remeasurement of the lease liability by (a) adjusting the carrying amount of the right-of-use asset of lease modifications that adjust the scope and the term of the lease, and recognizes in profit or loss any gain or loss on the partial or full termination of the lease and (b) making a corresponding adjustment to the right-of-use asset of all other lease modifications. The Group also accounts for the rent concessions as lease modifications if the rent payments due by June 30, 2021 were adjusted due to the COVID-19 epidemic. Lease liabilities are presented on a separate line in the consolidated balance sheets.

Variable lease payments that do not depend on an index are recognized as expenses in the periods in which they are incurred.

Employee Benefits

Defined benefit pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior fiscal year.

Income Tax

Income tax expense represents the sum of the tax currently payable and deferred tax. The interim-period income tax expense is accrued using the tax rate that would be applicable to expected total annual earnings, that is, the estimated average annual effective income tax rate applied to the profit before tax of the interim-period.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

The same critical accounting judgments and key sources of estimation uncertainty have been followed when preparing these interim consolidated financial statements as those that were applied in the preparation of the consolidated financial statements for the year ended December 31, 2019.

6. CASH AND CASH EQUIVALENTS

Cash on hand and revolving funds Cash in banks Time deposits Government bonds with repurchase rights	June 30, 2020 December 31, 2019 $ 62,759 $ 60,483 3,810,709 3,545,544 2,015,838 2,423,103 2,347,966 2,634,240 $ 8,237,272 $ 8,663,370	June 30, 2019 $ 135,213 2,493,915 1,655,350 2,490,089 $ 6,774,567

14 -

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Investments in equity instruments-current Domestic investments Listed stocks Foreign investments Unlisted stocks Investments in equity instruments-non-current Domestic investments Listed stocks Unlisted stocks Foreign investments Limited partnerships Unlisted stocks	June 30, 2020 December 31, 2019 $ 2,982,545 $ 239,086 2,666 7,407 $ 2,985,211 $ 246,493 $ 766,679 $ 4,580,516 664,043 173,515 394,124 462,068 30,185 29,789 $ 1,855,031 $ 5,245,888	June 30, 2019 $ 245,607 11,636 $ 257,243 $ 5,204,969 176,665 513,038 29,606 $ 5,924,278

These investments in equity instruments are held for medium to long-term strategic purposes. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI as they believed that recognizing short-term fluctuations from these investments’ fair value in profit or loss would not be consistent with the Group’s strategy of holding these investments for long-term purposes.

In January 2020, the Directors of TFN resolved that TFN would sell all its equity interest in Taiwan High Speed Rail Corporation (“THSR”) to monetize financial assets, and, therefore, the subject equity investment in THSR was subsequently reclassified from non-current to current. In the first half of 2020, TFN sold part of THSR’s stock at fair value of $582,488 thousand. As of June 30, 2020, the amount of outstanding receivables was $33,946 thousand. The related unrealized gain of $426,056 thousand was transferred from other equity to retained earnings.

8. NOTES AND ACCOUNTS RECEIVABLE, NET

Notes receivable Accounts receivable Less: Allowance for impairment loss	June 30, 2020 December 31, 2019 $ 60,063 $ 224,042 7,599,042 7,793,254 (301,363) (345,458) $ 7,357,742 $ 7,671,838	June 30, 2019 $ 114,937 7,645,690 (401,407) $ 7,359,220

The main credit terms range from 30 to 90 days.

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

15 -

The Group adopted a policy of dealing with counterparties with considerable scale of operations, certain credit ratings and financial conditions for project business. In addition to examining publicly available financial information and its own historical transaction experience, the Group obtains collateral where necessary to mitigate the risk of loss arising from default. The Group continues to monitor the credit exposure and financial and credit conditions of its counterparties, and spreads the total amount of the transactions among qualified counterparties.

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

The Group measures the loss allowance for trade receivables at an amount equal to lifetime expected credit losses (ECLs). The ECLs on trade receivables are estimated using a provision matrix with reference to past default experiences of the customers and an analysis of the customers’ current financial positions, as well as forward-looking indicators such as the industrial economic conditions. As the Group’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision matrix does not distinguish customer segments. As a result, the expected credit loss rate is based on the number of past due days of trade receivables.

The Group writes off a trade receivable when there are evidences indicating that the counterparty is in severe financial difficulty and the trade receivable is considered uncollectible. For trade receivables that have been written off, the Group continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

Movements of allowance for doubtful notes and accounts receivable by individual and collective assessment were as follows:

June 30, 2020

Not Past Due Gross carrying amount $ 7,064,255 Loss allowance (Lifetime ECLs) (50,902) Amortized cost $ 7,013,353 December 31, 2019 Not Past Due Gross carrying amount $ 7,381,152 Loss allowance (Lifetime ECLs) (52,054) Amortized cost $ 7,329,098 June 30, 2019 Not Past Due Gross carrying amount $ 7,089,942 Loss allowance (Lifetime ECLs) (54,820) Amortized cost $ 7,035,122	Overdue 1 to 120 Days 121 to 365 Days Over 365 Days $ 445,695 $ 147,139 $ 2,016 (114,633) (133,812) (2,016) $ 331,062 $ 13,327 $ - Overdue 1 to 120 Days 121 to 365 Days Over 365 Days $ 444,507 $ 190,353 $ 1,284 (113,011) (179,114) (1,279) $ 331,496 $ 11,239 $ 5 Overdue 1 to 120 Days 121 to 365 Days Over 365 Days $ 449,794 $ 220,119 $ 772 (135,534) (210,281) (772) $ 314,260 $ 9,838 $ -	Total $ 7,659,105 (301,363) $ 7,357,742 Total $ 8,017,296 (345,458) $ 7,671,838 Total $ 7,760,627 (401,407) $ 7,359,220

16 -

Expected credit loss rates of the Group for the aforementioned periods were as follows:

	Not Past Due
	and Past Due	Past Due Over
	within 120 Days	120 Days
Telecommunications service	0.02%-85%	65.5%-100%
Retail business and others	below 10%	35%-100%

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

For the Six Months Ended June 30 2020 2019 Beginning balance $ 345,458 $ 464,049 Add: Provision 86,569 126,174 Recovery 17,851 22,899 Less: Write-off (148,515) (211,715) Ending balance $ 301,363 $ 401,407 The Group entered into an accounts receivable factoring contract with a private institution and sold those overdue accounts receivable that had been written off. Under the contract, the Group would no longer assume the risk on the receivables. The related factored accounts receivable information was as follows: For the Six Months Ended June 30, 2019 Amount of accounts receivable sold $ 583,132 Proceeds of the sale of accounts receivable $ 35,389		For the Six Months Ended June 30	For the Six Months Ended June 30	For the Six Months Ended June 30
				$ 583,132 $ 35,389

The Group entered into an accounts receivable factoring contract with a private institution and sold those overdue accounts receivable that had been written off. Under the contract, the Group would no longer assume the risk on the receivables. The related factored accounts receivable information was as follows:

9. INVENTORIES

Merchandise Materials for maintenance	June 30, 2020 December 31, 2019 $ 3,711,405 $ 5,662,872 7,829 7,604 $ 3,719,234 $ 5,670,476	June 30, 2019 $ 4,068,730 7,105 $ 4,075,835

For the three months and the six months ended June 30, 2020, the cost of goods sold related to the inventories amounted to $16,497,488 thousand and $33,139,020 thousand, respectively, which included the inventory write-down, totaling $38,092 thousand and $61,608 thousand, respectively.

For the three months and the six months ended June 30, 2019, the cost of goods sold related to the inventories amounted to $14,080,057 thousand and $28,287,486 thousand, respectively, which included the inventory write-down, totaling $17,204 thousand and $2,843 thousand, respectively.

17 -

10. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

Associates, which were not individually material and were accounted for using equity method, were as follows:

Investee Company Global Home Shopping Co., Ltd. (GHS) Taiwan Pelican Express Co., Ltd. (TPE) AppWorks Ventures Co., Ltd. (AppWorks) AppWorks Fund III Co., Ltd. (AppWorks Fund III) TV Direct Public Company Limited (TV Direct) TVD Shopping Co., Ltd. (TVD Shopping) kbro Media Co., Ltd. (kbro Media) Mistake Entertainment Co., Ltd. (M.E.) Alliance Digital Tech Co., Ltd. (ADT)		June 30, 2020 Amount % of Owner- ship $ 555,409 20.00 413,571 16.87 255,767 51.00 204,887 19.46 128,288 16.20 - - 124,936 32.50 25,274 15.00 6,072 14.40 $ 1,714,204		December 31, 2019 Amount % of Owner- ship $ 560,029 20.00 404,413 17.70 226,123 51.00 - - - - 119,531 35.00 136,812 32.50 25,045 15.00 6,072 14.40 $ 1,478,025		June 30, 2019
						Amount % of Owner- ship $ 737,623 20.00 390,869 17.70 - - - - - - 124,946 35.00 146,424 32.50 26,378 15.00 5,562 14.40 $ 1,431,802

a. GHS

In June 2015, one of momo’s subsidiaries acquired 20% equity interest of GHS.

Due to non-participation in GHS’s capital increase in October 2015, momo’s subsidiary’s percentage of ownership interest in GHS decreased to 18%. In January 2016, momo’s subsidiary’s percentage of ownership interest in GHS increased to 20% due to the acquisition of additional 2% equity interest of GHS.

b. TPE

In August 2012, momo acquired 20% equity interest of TPE.

As of December 2013, momo held 17.7% equity interest of TPE due to its not subscribing for new stock issued by TPE and selling part of its stock when TPE went public.

In the first half of 2020, momo sold part of TPE’s stock for $27,698 thousand. As of June 30, 2020, the amount of outstanding receivables was $7,663 thousand. Although momo’s percentage of ownership interest in TPE decreased to 16.87%, momo still has significant influence on TPE due to its having two seats on TPE’s board of directors.

c. AppWorks

In September 2019, TWM acquired 51% equity interest of AppWorks. TWM has no control over AppWorks due to its holding less than half number of seats on AppWorks’ board of directors. Therefore, TWM only has significant influence on AppWorks and accounts for its investment in AppWorks as an associate of TWM, under the equity-method of accounting.

18 -

d. AppWorks Fund III

In April 2020, TVC acquired 19.46% equity interest of AppWorks Fund III. TVC has significant influence on AppWorks Fund III since the president of TWM serves as the chairman of AppWorks Fund III.

e. TV Direct

In June 2020, momo acquired 16.2% equity interest of TV Direct. momo has significant influence on TV Direct.

f. TVD Shopping

In April 2014, momo acquired 35% equity interest of TVD Shopping.

In January 2020, an extraordinary stockholders’ meeting of TVD Shopping resolved to reduce its capital stock. momo received $33,298 thousand as a proportional capital reduction in March 2020.

In June 2020, momo sold all of its equity interest of TVD Shopping to TV Direct for $146,772 thousand.

g. M.E.

In May 2019, TKT acquired 15% equity interest of M.E. TKT has significant influence on M.E. due to its having a seat on M.E.’s board of directors.

h. ADT

In November 2013, TWM acquired 19.23% equity interest of ADT.

In 2014, TWM’s percentage of ownership interest in ADT decreased to 13.33% as TWM did not subscribe for any newly issued ADT stock. In December 2016, TWM increased its percentage of ownership interest in ADT to 14.4% by subscribing for new stock issued by ADT. TWM still has significant influence on ADT due to having a seat on ADT’s board of directors.

ADT had resolved December 31, 2018 as the dissolution date. As of June 30, 2020, ADT was still under liquidation procedures.

11. SUBSIDIARIES WITH MATERIAL NON-CONTROLLING INTERESTS

Subsidiary momo	Proportion of Non-controlling Interests’ Ownership and Voting Rights
	June 30, 2020 December 31, 2019 June 30, 2019 54.99% 54.99% 54.99%

For information on the principal place of business and the company’s country of registration, see Table 8.

19 -

The summarized financial information of momo and its subsidiaries had taken into account the adjustments to acquisition-date fair value, and reflected the amounts before eliminations of intercompany transactions as follows:

June 30, 2020 Current assets $ 7,344,919 Non-current assets 15,000,954 Current liabilities (7,985,268) Non-current liabilities (984,820) Equity $ 13,375,785 Equity attributable to: Owners of the parent $ 9,198,993 Non-controlling interests of momo 4,158,454 Non-controlling interests of momo’s subsidiaries 18,338 $ 13,375,785 For the Three Months Ended June 30 2020 2019 Operating revenues $ 15,834,104 $ 11,815,431 Profit $ 469,054 $ 311,908 Other comprehensive income (loss) 23,277 (4,029) Comprehensive income $ 492,331 $ 307,879 Profit (loss) attributable to: Owners of the parent $ 211,623 $ 140,266 Non-controlling interests of momo 258,493 171,334 Non-controlling interests of momo’s subsidiaries (1,062) 308 $ 469,054 $ 311,908 Comprehensive income (loss) attributable to: Owners of the parent $ 222,166 $ 138,509 Non-controlling interests of momo 271,371 169,188 Non-controlling interests of momo’s subsidiaries (1,206) 182 $ 492,331 $ 307,879	June 30, 2020 Current assets $ 7,344,919 Non-current assets 15,000,954 Current liabilities (7,985,268) Non-current liabilities (984,820) Equity $ 13,375,785 Equity attributable to: Owners of the parent $ 9,198,993 Non-controlling interests of momo 4,158,454 Non-controlling interests of momo’s subsidiaries 18,338 $ 13,375,785 For the Three Months Ended June 30 2020 2019 Operating revenues $ 15,834,104 $ 11,815,431 Profit $ 469,054 $ 311,908 Other comprehensive income (loss) 23,277 (4,029) Comprehensive income $ 492,331 $ 307,879 Profit (loss) attributable to: Owners of the parent $ 211,623 $ 140,266 Non-controlling interests of momo 258,493 171,334 Non-controlling interests of momo’s subsidiaries (1,062) 308 $ 469,054 $ 311,908 Comprehensive income (loss) attributable to: Owners of the parent $ 222,166 $ 138,509 Non-controlling interests of momo 271,371 169,188 Non-controlling interests of momo’s subsidiaries (1,206) 182 $ 492,331 $ 307,879	December 31, 2019 June 30, 2019 $ 7,547,400 $ 5,641,988 14,525,235 14,176,547 (7,372,246) (5,880,175) (1,050,690) (790,289) $ 13,649,699 $ 13,148,071 $ 9,321,432 $ 9,094,946 4,308,010 4,031,362 20,257 21,763 $ 13,649,699 $ 13,148,071 For the Six Months Ended June 30 2020 2019 $ 30,939,811 $ 23,551,058 $ 910,385 $ 707,498 11,204 26,004 $ 921,589 $ 733,502 $ 410,567 $ 318,498 501,501 389,041 (1,683) (41) $ 910,385 $ 707,498 $ 415,716 $ 330,152 507,792 403,276 (1,919) 74 $ 921,589 $ 733,502	December 31, 2019 June 30, 2019 $ 7,547,400 $ 5,641,988 14,525,235 14,176,547 (7,372,246) (5,880,175) (1,050,690) (790,289) $ 13,649,699 $ 13,148,071 $ 9,321,432 $ 9,094,946 4,308,010 4,031,362 20,257 21,763 $ 13,649,699 $ 13,148,071 For the Six Months Ended June 30 2020 2019 $ 30,939,811 $ 23,551,058 $ 910,385 $ 707,498 11,204 26,004 $ 921,589 $ 733,502 $ 410,567 $ 318,498 501,501 389,041 (1,683) (41) $ 910,385 $ 707,498 $ 415,716 $ 330,152 507,792 403,276 (1,919) 74 $ 921,589 $ 733,502	December 31, 2019 June 30, 2019 $ 7,547,400 $ 5,641,988 14,525,235 14,176,547 (7,372,246) (5,880,175) (1,050,690) (790,289) $ 13,649,699 $ 13,148,071 $ 9,321,432 $ 9,094,946 4,308,010 4,031,362 20,257 21,763 $ 13,649,699 $ 13,148,071 For the Six Months Ended June 30 2020 2019 $ 30,939,811 $ 23,551,058 $ 910,385 $ 707,498 11,204 26,004 $ 921,589 $ 733,502 $ 410,567 $ 318,498 501,501 389,041 (1,683) (41) $ 910,385 $ 707,498 $ 415,716 $ 330,152 507,792 403,276 (1,919) 74 $ 921,589 $ 733,502
		$
		$
		$

2020 $ 15,834,104 $ 469,054 23,277 $ 492,331 $ 211,623 258,493 (1,062) $ 469,054 $ 222,166 271,371 (1,206) $ 492,331	2019 $ 11,815,431 $ 311,908 (4,029) $ 307,879 $ 140,266 171,334 308 $ 311,908 $ 138,509 169,188 182 $ 307,879		2020 $ 30,939,811 $ 910,385 11,204 $ 921,589 $ 410,567 501,501 (1,683) $ 910,385 $ 415,716 507,792 (1,919) $ 921,589	2019 $ 23,551,058 $ 707,498 26,004 $ 733,502 $ 318,498 389,041 (41) $ 707,498 $ 330,152 403,276 74 $ 733,502

20 -

Net cash generated from operating activities Net cash used in investing activities Net cash used in financing activities Effect of exchange rate changes Net decrease in cash Dividends paid to non-controlling interests		For the Six Months Ended June 30	For the Six Months Ended June 30
		2020 $ 2,039,040 (739,488) (1,366,513) (690) $ (67,651) $ 654,596	2019 $ 777,366 (44,740) (1,383,962) 196 $ (651,140) $ 693,102

12. PROPERTY, PLANT AND EQUIPMENT

Cost Balance, January 1, 2020 Additions Reclassification Disposals and retirements Effect of exchange rate changes Balance, June 30, 2020 Accumulated depreciation and impairment Balance, January 1, 2020 Depreciation Reclassification Disposals and retirements Effect of exchange rate changes Balance, June 30, 2020 Carrying amount, January 1, 2020 Carrying amount, June 30, 2020 Cost Balance, January 1, 2019 Additions Reclassification Disposals and retirements Effect of exchange rate changes Balance, June 30, 2019	Land $ 8,261,041 431,785 193,748 (2,005 ) - $ 8,884,569 $ - - - - - $ - $ 8,261,041 $ 8,884,569 $ 8,289,085 - 3,708 (18,112 ) - $ 8,274,681	Buildings Telecommuni- cations Equipment and Machinery $ 5,641,608 $ 90,366,481 - 67,762 5,407 1,841,417 (2,039 ) (724,004 ) - (2,111) $ 5,644,976 $ 91,549,545 $ 1,649,207 $ 69,379,600 80,597 3,082,010 2,333 - (742 ) (691,796 ) - (1,968) $ 1,731,395 $ 71,767,846 $ 3,992,401 $ 20,986,881 $ 3,913,581 $ 19,781,699 $ 5,672,957 $ 87,623,044 1,116 411,538 3,960 2,794,598 (22,599 ) (727,282 ) - 993 $ 5,655,434 $ 90,102,891	Others Construction in Progress and Equipment to be Inspected $ 9,549,160 $ 1,506,915 115,444 2,107,033 128,364 (1,953,477 ) (159,962 ) (44 ) (138) - $ 9,632,868 $ 1,660,427 $ 8,114,393 $ - 338,283 - - - (159,287 ) - (119) - $ 8,293,270 $ - $ 1,434,767 $ 1,506,915 $ 1,339,598 $ 1,660,427 $ 9,346,834 $ 1,349,217 139,932 3,036,403 64,091 (2,866,685 ) (216,445 ) (2 ) 65 - $ 9,334,477 $ 1,518,933	Total $ 115,325,205 2,722,024 215,459 (888,054 ) (2,249) $ 117,372,385 $ 79,143,200 3,500,890 2,333 (851,825 ) (2,087 ) $ 81,792,511 $ 36,182,005 $ 35,579,874 $ 112,281,137 3,588,989 (328 ) (984,440 ) 1,058 $ 114,886,416 (Continued)

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Accumulated depreciation and impairment Balance, January 1, 2019 Depreciation Reclassification Disposals and retirements Effect of exchange rate changes Balance, June 30, 2019 Carrying amount, June 30, 2019	Land $ 1,662 - - - - $ 1,662 $ 8,273,019	Buildings Telecommuni- cations Equipment and Machinery $ 1,499,982 $ 64,521,396 80,746 3,989,505 1,573 - (8,238 ) (687,712 ) - 851 $ 1,574,063 $ 67,824,040 $ 4,081,371 $ 22,278,851	Others Construction in Progress and Equipment to be Inspected $ 7,402,137 $ - 544,968 - - - (214,827 ) - 44 - $ 7,732,322 $ - $ 1,602,155 $ 1,518,933	Total $ 73,425,177 4,615,219 1,573 (910,777 ) 895 $ 77,132,087 $ 37,754,329

(Concluded)

The estimated useful lives, for the current and comparative years, of significant items of property, plant and equipment are as follows:

Buildings Primary buildings 20-55 years Mechanical and electrical equipment 5-15 years Telecommunications equipment and machinery 1-20 years Others 1-20 years

13. LEASE ARRANGEMENTS

a. Right-of-use assets

Carrying amounts Land Buildings Telecommunications equipment and machinery Others Additions to right-of-use assets	June 30, 2020 $ 561,847 7,721,598 749,232 179,238 $ 9,211,915		December 31, 2019 June 30, 2019 $ 565,364 $ 577,501 8,025,737 7,996,247 874,638 1,016,339 192,199 76,870 $ 9,657,938 $ 9,666,957 For the Six Months Ended June 30	December 31, 2019 June 30, 2019 $ 565,364 $ 577,501 8,025,737 7,996,247 874,638 1,016,339 192,199 76,870 $ 9,657,938 $ 9,666,957 For the Six Months Ended June 30
			2020 $ 1,701,498	2019 $ 1,606,997

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Depreciation charge for right-of-use assets Land Buildings Telecommunications equipment and machinery Others		For the Three Months Ended June 30 2020 2019 $ 60,457 $ 58,333 858,012 843,588 46,137 51,724 15,106 16,283 $ 979,712 $ 969,928		For the Six Months Ended June 30	For the Six Months Ended June 30
		2020 $ 60,457 858,012 46,137 15,106 $ 979,712		2020 $ 120,147 1,718,786 93,351 30,237 $ 1,962,521	2019 $ 116,001 1,678,980 103,081 33,393 $ 1,931,455

Except for the aforementioned additions and recognized depreciation, the Group did not have significant sublease or impairment of right-of-use assets during the six months ended June 30, 2020 and 2019.

b. Lease liabilities

June 30, 2020 December 31, 2019 Carrying amounts Current $ 3,529,437 $ 3,532,951 Non-current $ 5,676,851 $ 6,117,438 Range of discount rate for lease liabilities was as follows: June 30, 2020 December 31, 2019 Land 0.74%-1% 0.78%-1% Buildings 0.74%-1.2% 0.78%-5.44% Telecommunications equipment and machinery 0.78%-4.38% 0.86%-4.38% Others 0.74%-0.86% 0.78%-5.44%	June 30, 2019 $ 3,424,882 $ 6,193,616 June 30, 2019 0.86%-1% 0.86%-5.44% 0.86%-4.38% 0.86%-5.44%

c. Material lease-in activities and terms

The Group leases base transceiver stations, machine rooms, stores, offices, warehouses, maintenance centers, equipment, etc., with most of the lease terms ranging from 1 to 6 years. The Group does not have bargain purchase options to acquire the leasehold assets at the end of the lease terms. In addition, the Group is prohibited from subleasing all or any portion of the underlying assets without the lessors’ consents. The Group can early terminate the arrangements if there are any controversial or other incidental matters that will cause the leasehold assets not being able to meet the purposes of use.

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d. Other lease information

Expenses related to short-term leases Expenses related to low-value asset leases Expenses related to variable lease payments and not included in the measurement of lease liabilities Total cash outflow for leases		For the Three Months Ended June 30 2020 2019 $ 10,225 $ 16,734 $ 17,873 $ 17,091 $ 11,490 $ 10,199		For the Six Months Ended June 30	For the Six Months Ended June 30
		2020 $ 10,225 $ 17,873 $ 11,490		2020 2019 $ 19,269 $ 35,824 $ 36,355 $ 35,013 $ 22,935 $ 19,864 For the Six Months Ended June 30
				2020 $ 2,083,705	2019 $ 2,018,022

The Group leases certain buildings, which qualify as short-term leases, and certain office equipment and other assets, which qualify as low-value asset leases. The Group has elected to apply the recognition exemption and, thus, no recognition of right-of-use assets and lease liabilities was made for such leases.

14. INVESTMENT PROPERTIES

The Group leases its properties to others and thus reclassifies them from property, plant and equipment to investment property.

The fair values of investment properties were measured using Level 3 inputs, arising from income approach, comparative approach, and cost approach adopted by a third party real estate appraiser, HomeBan Appraisers Joint Firm. As of June 30, 2020, December 31, 2019 and June 30, 2019, the fair values of investment properties were $7,346,416 thousand, $6,989,343 thousand and $6,971,613 thousand, respectively, and the capitalization rates for the aforementioned financial reporting periods were ranging from 1.32%-4.95%, 1.32%-4.95% and 1.32%-5.23%, respectively.

The amounts of depreciation recognized for the three months and the six months ended June 30, 2020 and 2019 were $5,076 thousand, $5,068 thousand, $10,175 thousand, and $10,142 thousand, respectively.

The maturity analysis of lease payments receivable under operating leases of investment properties was as follows:

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 and thereafter	June 30, 2020 December 31, 2019 $ 152,313 $ 153,723 137,571 143,089 133,113 133,686 30,634 81,103 29,452 29,888 37,316 51,310 $ 520,399 $ 592,799	June 30, 2019 $ 153,523 148,737 134,280 130,409 28,048 65,304 $ 660,301

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15. INTANGIBLE ASSETS

Cost Balance, January 1, 2020 Addition Disposals and retirements Reclassification Effect of exchange rate changes Balance, June 30, 2020 Accumulated amortization and impairment Balance, January 1, 2020 Amortization Disposals and retirements Effect of exchange rate changes Balance, June 30, 2020 Carrying amount, January 1, 2020 Carrying amount, June 30, 2020 Cost Balance, January 1, 2019 Addition Disposals and retirements Reclassification Effect of exchange rate changes Balance, June 30, 2019 Accumulated amortization and impairment Balance, January 1, 2019 Amortization Disposals and retirements Effect of exchange rate changes Balance, June 30, 2019 Carrying amount, June 30, 2019		Conces	sions Service Concessions $ 8,180,078 - - - - $ 8,180,078 $ 1,210,025 89,359 - - $ 1,299,384 $ 6,970,053 $ 6,880,694 $ 8,180,078 - - - - $ 8,180,078 $ 1,031,305 89,360 - - $ 1,120,665 $ 7,059,413	Goodwill $ 15,872,595 - - - - $ 15,872,595 $ 40,155 - - - $ 40,155 $ 15,832,440 $ 15,832,440 $ 15,872,595 - - - - $ 15,872,595 $ - - - - $ - $ 15,872,595		Othe	r Intangible Asse	ts	Copyrights $ 25,197 17,937 (30,000 ) 31,550 - $ 44,684 $ 25,197 18,126 - - $ 43,323 $ - $ 1,361 $ 15,222 5,274 - - - $ 20,496 $ 13,538 6,703 - - $ 20,241 $ 255	Total $ 75,771,788 29,759,051 (56,947 ) 1,072,924 (349) $106,546,467 $ 16,693,313 1,724,791 (26,947 ) (285) $ 18,390,872 $ 59,078,475 $ 88,155,595 $ 75,572,855 98,322 (138,990 ) 84,685 164 $ 75,617,036 $ 13,397,210 1,725,189 (138,990 ) 106 $ 14,983,515 $ 60,633,521
		Concession Licenses $ 41,043,375 29,656,000 - 1,000,000 - $ 71,699,375 $ 10,303,927 1,320,327 - - $ 11,624,254 $ 30,739,448 $ 60,075,121 $ 41,043,375 - - - - $ 41,043,375 $ 7,663,274 1,320,327 - - $ 8,983,601 $ 32,059,774			Computer Software $ 4,096,570 85,077 (26,947 ) 41,374 (349) $ 4,195,725 $ 3,465,304 228,707 (26,947 ) (285) $ 3,666,779 $ 631,266 $ 528,946 $ 3,907,630 93,048 (138,990 ) 84,685 164 $ 3,946,537 $ 3,176,937 240,525 (138,990 ) 106 $ 3,278,578 $ 667,959	Customer Relationships $ 2,654,089 - - - - $ 2,654,089 $ 1,647,063 68,200 - - $ 1,715,263 $ 1,007,026 $ 938,826 $ 2,654,089 - - - - $ 2,654,089 $ 1,510,663 68,200 - - $ 1,578,863 $ 1,075,226	Operating Rights $ 1,382,000 - - - - $ 1,382,000 $ - - - - $ - $ 1,382,000 $ 1,382,000 $ 1,382,000 - - - - $ 1,382,000 $ - - - - $ - $ 1,382,000	Trademarks $ 2,517,884 37 - - - $ 2,517,921 $ 1,642 72 - - $ 1,714 $ 2,516,242 $ 2,516,207 $ 2,517,866 - - - - $ 2,517,866 $ 1,493 74 - - $ 1,567 $ 2,516,299

The estimated useful lives for the current and comparative periods are as follows:

Concession licenses 14-21 years Service concessions 44-50 years Computer software 1-10 years Customer relationships 20 years Trademarks 10 years Copyrights Amortized over the broadcast period

a. Concession licenses

In February 2020, TWM acquired the 5G mobile broadband spectrum in the 3500MHz and 28000MHz frequency bands, and paid $30,656,000 thousand as the bid price.

b. Service concessions

On January 15, 2009, TNH signed a BOT contract with Taipei City Government. Under the BOT contract, TNH obtained the right to build and operate a development project located at the old Songshan Tobacco Plant. The development concession premium of superficies is amortized on a straight-line basis during the contract period, and the construction costs are amortized on a straight-line basis from the completion date of the construction to the BOT contract expiry date.

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c. Customer relationships, operating rights, and trademarks

The Group measures the fair value of acquired assets when acquisitions occur, and identifies the fair value and amortization periods of the intangible assets which conform to materiality and related standards. Although some of the intangible assets such as operating rights and trademarks have legal useful lives, which can be extended, the Group regards these assets as intangible assets with indefinite useful lives.

1) On April 17, 2007, TFN, one of TWM’s wholly-owned subsidiaries, acquired more than 50% of the former Taiwan Fixed Network Co., Ltd. (formerly “TFN”) through a public tender offer. TWM split the former TFN and its subsidiaries into two cash-generating units, i.e., fixed network service and cable television business. Accordingly, customer relationships and operating rights are identified as major intangible assets.
2) On September 1, 2010, TFNM, one of TWM’s wholly-owned subsidiaries, acquired 55% of TKT. On August 12, 2011, TFNM acquired 45% of TKT. TWM measured the fair value of the acquired net assets and viewed TKT’s wireless services as one cash-generating unit. Accordingly, trademarks and customer relationships are identified as major intangible assets.
3) On July 13, 2011, WMT, one of TWM’s wholly-owned subsidiaries, acquired control over momo. TWM measured the fair value of the acquired assets and viewed momo’s retail business as one cash-generating unit. Accordingly, trademarks are identified as major intangible assets.
d. Goodwill

The carrying amounts of goodwill allocated to the cash-generating units were as follows:

Telecommunications service Fixed network service Cable television business Retail business	June 30, 2020 $ 7,211,936 357,970 3,269,636 4,992,898 $ 15,832,440	December 31, 2019 $ 7,211,936 357,970 3,269,636 4,992,898 $ 15,832,440	June 30, 2019 $ 7,238,758 357,970 3,269,636 5,006,231
			$ 15,872,595

e. Impairment of assets

See Note 16(e) to the consolidated financial statements for the year ended December 31, 2019 for the related information on impairment of assets. There was no significant evidence indicating impairment of intangible assets as of June 30, 2020.

16. OTHER NON-CURRENT ASSETS

Long-term accounts receivable Refundable deposits (Note) Prepayments for equipment Prepayments for investment Others	June 30, 2020 December 31, 2019 $ 385,157 $ 325,482 666,633 1,633,054 65,877 131,228 30,554 100,000 515,183 504,706 $ 1,663,404 $ 2,694,470	June 30, 2019 $ 98,239 634,680 19,903 100,000 499,084 $ 1,351,906

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Note: TWM applied for the participation in the 5G mobile spectrum auction held by NCC, and paid $1,000,000 thousand as bid bond in October 2019, which had been reclassified as concession licenses in February 2020.

17. BORROWINGS

a. Short-term borrowings

Unsecured loans Annual interest rates	June 30, 2020 $ 11,590,000 0.58%-0.895%	December 31, 2019 $ 16,270,000 0.65%-0.95%	June 30, 2019 $ 3,900,000
			0.7%-0.96%

For the information on endorsements and guarantees, see Note 31(b).

b. Short-term notes and bills payable

June 30,
2020
December 31,
2019
Short-term notes and bills payable
$ 9,800,000
$ 1,900,000

Less: Discounts on short-term notes and bills
payable

(4,449)

(1,889)

$ 9,795,551
$ 1,898,111

Annual interest rates
0.398%-0.538%
0.688%
Long-term borrowings
June 30,
2020
December 31,
2019
Unsecured loans
$ 2,000,000
$ 6,000,000

Secured loans
2,787,687
2,889,373
Less: Current portion

(303,320)

(303,297)

$ 4,484,367
$ 8,586,076

Annual interest rates:
Unsecured loans
0.79%
0.72%-0.79%
Secured loans
1.7495%
2.0337%

June 30,
2019
$ -

-
$ -
-
June 30,
2019
$ 6,000,000
3,091,010

(303,256)
$ 8,787,754
0.72%-0.76%
2.0337%

c. Long-term borrowings

1) Unsecured loans

The Group entered into credit facility agreements with a group of banks for mid-term requirements of operating capital, and the interest is paid periodically. Under certain credit agreements, the loans are treated as revolving credit facilities, and the maturity dates of the loans are based on terms under the agreements. In addition, the expiry date of the repayments is in July 2021, and some credit facilities are subject to financial covenants regarding debt ratios and interest protection multiples during the credit facility period.

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2) Secured loans

TNH entered into a syndicated loan agreement, with respect to the investment under the aforementioned BOT contract. The credit agreement originally signed in 2010 has been early terminated. TNH signed another credit agreement with Bank of Taiwan for a $3,400,000 thousand credit amount and a $65,000 thousand guarantee amount in 2017. The agreement started from the date of the first drawdown of the loan and would last for 7 years with interest payments made on a monthly basis. In accordance with the loan agreement, the regular financial covenants, e.g. current ratio, equity ratio, and interest protection multiples, must be complied with during the credit facility period. For property under the BOT contract and its superficies that have been pledged as collateral, see Note 30 for details.

18. BONDS PAYABLE

3rd domestic unsecured straight corporate bonds 5th domestic unsecured straight corporate bonds 6th domestic unsecured straight corporate bonds 3rd domestic unsecured convertible bonds Less: Current portion	June 30, 2020 $ - 14,990,186 19,980,232 916,531 - $ 35,886,949	December 31, 2019 $ - 14,988,914 - 914,522 - $ 15,903,436	June 30, 2019 $ 4,499,855 14,987,625 - 4,956,586 (4,499,855) $ 19,944,211

a. 3rd domestic unsecured straight corporate bonds

On December 20, 2012, TWM issued $9,000,000 thousand of seven-year 3rd domestic unsecured straight corporate bonds; each bond had a face value of $10,000 thousand and a coupon rate of 1.34% per annum, with simple interest due annually. Repayment will be made in the sixth and seventh years in equal installments, i.e., $4,500,000 thousand. The trustee of bond holders is Hua Nan Commercial Bank.

The above-mentioned corporate bonds were fully liquidated in December 2019.

b. 5th domestic unsecured straight corporate bonds

On April 20, 2018, TWM issued the 5th domestic unsecured straight corporate bonds. The bonds included five-year and seven-year bonds, with the principal amount of $6,000,000 thousand and $9,000,000 thousand, each having a face value of $10,000 thousand, and coupon rates of 0.848% and 1% per annum, respectively, with simple interest due annually. Repayment will be made in full at maturity. As of June 30, 2020, the amount of unamortized bond issue cost was $9,814 thousand. The trustee of bond holders is Bank of Taiwan.

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Future repayments of the above-mentioned corporate bonds are as follows:

Year 2023 2025	Amount $ 6,000,000 9,000,000 $ 15,000,000

c. 6th domestic unsecured straight corporate bonds

On March 24, 2020, TWM issued the 6th domestic unsecured straight corporate bonds. The bonds included five-year, seven-year, and ten-year bonds, with the principal amount of $5,000,000 thousand, $10,000,000 thousand and 5,000,000 thousand, each having a face value of $10,000 thousand, and coupon rates of 0.64%, 0.66% and 0.72% per annum, respectively, with simple interest due annually. Repayment will be made in full at maturity. As of June 30, 2020, the amount of unamortized bond issue cost was $19,768 thousand. The trustee of bond holders is Bank of Taiwan.

Future repayments of the above-mentioned corporate bonds are as follows:

Year 2025 2027 2030	Amount $ 5,000,000 10,000,000 5,000,000 $ 20,000,000

d. 3rd domestic unsecured convertible bonds

On November 22, 2016, TWM issued its 3rd domestic five-year unsecured zero-coupon convertible bonds with an aggregate principal amount of $10,000,000 thousand and a par value of $100 thousand per bond certificate. The conversion price was set initially at $116.1 per share. The conversion price should be adjusted according to the prescribed formula and has been adjusted to $99.9 per share since July 15, 2019. Except for the book closure period, bondholders are entitled to convert bonds into TWM’s common stock from December 23, 2016 to November 22, 2021. The trustee of bond holders is Bank of Taiwan.

If the closing price of TWM’s common stock continues being at least 130% of the conversion price then in effect for 30 consecutive trading days or the aggregate outstanding balance of bonds payable is less than 10% of the original issuance amount, TWM has the right to redeem the outstanding bonds payable at par value in cash during the period from one month after the issuance date to the date 40 days prior to the maturity date.

At the end of the third year from the bond issuance date, bondholders have the right to request TWM to redeem the convertible bonds at par value in cash.

The convertible bonds contain both liability and equity components. The equity component was presented in equity under the heading of capital surplus - option. The effective interest rate of the liability component was 0.9149% per annum on initial recognition. As of June 30, 2020, the amount of unamortized bond discount was $11,769 thousand.

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Proceeds of the issuance (minus transaction costs of $10,870 thousand)

Equity component
Financial liabilities

Liability component at the date of issuance
Interest charged at an effective interest rate
Convertible bonds converted into common stock

Liability component on June 30, 2019

Liability component on January 1, 2020

Interest charged at an effective interest rate
Convertible bonds converted into common stock

Liability component on June 30, 2020

$ 9,989,130
(400,564)

(35,961)
9,552,605
222,598
(4,818,617)
$ 4,956,586
$ 914,522
4,173

(2,164)
$ 916,531

As of June 30, 2020, December 31, 2019 and June 30, 2019, the bondholders had requested to convert the bonds at face values of $9,071,700 thousand, $9,069,500 thousand and $4,933,500 thousand, respectively.

19. PROVISIONS

Restoration Decommissioning Warranties Current Non-current Balance, January 1, 2020 Provision Payment/Reversal Unwinding of discount Balance, June 30, 2020 Balance, January 1, 2019 Provision Payment/Reversal Unwinding of discount Balance, June 30, 2019	Restoration $ 1,183,427 18,223 (17,240) 1,897 $ 1,186,307 $ 1,184,823 24,091 (25,145) 2,136 $ 1,185,905	June 30, 2020 December 31, 2019 $ 1,186,307 $ 1,183,427 355,034 324,693 26,777 40,111 $ 1,568,118 $ 1,548,231 $ 64,469 $ 88,961 1,503,649 1,459,270 $ 1,568,118 $ 1,548,231 Decom- missioning Warranties $ 324,693 $ 40,111 25,770 16,237 - (29,571) 4,571 - $ 355,034 $ 26,777 $ 268,536 $ 67,929 25,117 39,686 - (47,474) 3,819 - $ 297,472 $ 60,141	June 30, 2019 $ 1,185,905 297,472 60,141 $ 1,543,518 $ 109,315 1,434,203 $ 1,543,518 Total $ 1,548,231 60,230 (46,811) 6,468 $ 1,568,118 $ 1,521,288 88,894 (72,619) 5,955 $ 1,543,518
		$
		$
		$

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20. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

Domestic firms of the Group adopted a pension plan under the Labor Pension Act (the “LPA”), which is a state-managed and defined contribution plan. Under the LPA, an entity makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages. The employees of the Group’s subsidiaries in other countries are participants of state-managed retirement benefit plans operated by local governments. In accordance with the above provisions, the Group’s contributions to the pension plan amounted to $81,586 thousand and $76,886 thousand for the three months ended June 30, 2020 and 2019, respectively, and $162,686 thousand and $154,285 thousand for the six months ended June 30, 2020 and 2019, respectively.

b. Defined benefit plans

The Group recognized pension amounts of $1,577 thousand and $1,968 thousand for the three months ended June 30, 2020 and 2019, respectively, and $3,154 thousand and $3,937 thousand for the six months ended June 30, 2020 and 2019, respectively, by using the actuarially determined pension cost rate.

21. EQUITY

a. Common stock

As of June 30, 2020, December 31, 2019, and June 30, 2019, TWM’s authorized capital was $60,000,000 thousand and capital issued and outstanding were $35,093,765 thousand, $34,959,441 thousand and $34,335,243 thousand, respectively, divided into 3,509,376 thousand shares, 3,495,944 thousand shares and 3,433,524 thousand shares, respectively, which were all common stocks, at a par value of $10 each.

As of June 30, 2020, December 31, 2019, and June 30, 2019, the bondholders of the 3rd domestic unsecured convertible bonds had requested to convert the bonds into 88,544 thousand, 88,522 thousand and 47,120 thousand common stocks, respectively. As of December 31, 2019, and June 30, 2019, TWM recognized 13,410 thousand and 34,429 thousand of common stocks, respectively, as capital collected in advance, totaling $134,104 thousand and $344,288 thousand, respectively. TWM would complete the related corporate registrations after the issuance of new stocks on the record date in accordance with the regulations.

b. Capital surplus

Additional paid-in capital from convertible corporate bonds Treasury stock transactions Difference between consideration and carrying amount arising from the disposal of subsidiaries’ stock Changes in equity of subsidiaries Convertible bonds payable options Changes in equity of associates accounted for using equity method Others	June 30, 2020 $ 12,833,194 5,159,704 85,965 501,215 37,184 29,768 34,950 $ 18,681,980	December 31, 2019 $ 14,424,786 5,159,704 85,965 501,215 37,273 30,801 34,950 $ 20,274,694	June 30, 2019 $ 10,620,629 5,159,704 85,965 501,215 202,946 48,147 33,968 $ 16,652,574

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Under the ROC Company Act, capital surplus generated from the excess of the issue price over the par value of capital stock, including the stock issued for new capital, the conversion premium from convertible corporate bonds, the difference between consideration and carrying amount of subsidiaries’ stock acquired or disposed of, and treasury stock transactions, may be applied to make-up accumulated deficit, if any, or be transferred to capital as stock dividends, or be distributed as cash dividends when there is no accumulated deficit, and this transfer is restricted to a certain percentage of the paid-in capital. The capital surplus arising from changes in equity of subsidiaries, changes in equity of associates accounted for using equity method and the overdue unclaimed dividends could also be applied to make-up accumulated deficit, if any. And the other capital surplus cannot be used by any means.

c. Appropriation of earnings and dividend policy

In accordance with the policy, TWM’s profits earned in a fiscal year shall first be set aside to pay the applicable taxes, offset losses, and set aside for legal reserve pursuant to laws and regulations, unless the legal reserve has reached TWM’s total paid-up capital. The remaining profits shall be set aside for special reserve in accordance with laws, regulations, or business requirements. Any further remaining profits plus unappropriated earnings shall be distributed in accordance with the proposal submitted by the Board of Directors for approval at a stockholders’ meeting.

TWM adopts a dividend distribution policy whereby only surplus profits of TWM shall be distributed to stockholders. That is, after setting aside amounts for retained earnings based on TWM’s capital budget plan, the residual profits shall be distributed as cash dividends. Stock dividends in a particular year shall be capped at no more than 80% of total dividends to be distributed for that year. The amount of the distributable dividends, the forms in which dividends shall be distributed, and the ratio thereof shall depend on the actual profit and cash positions of TWM and shall be approved by resolutions of the Board of Directors, who shall, upon such approval, recommend the same to the stockholders for approval by resolution at the stockholders’ meetings.

The above appropriation of earnings should be resolved in the annual general stockholders’ meeting (“AGM”) held in the following year.

According to the ROC Company Act, a company shall first set aside its earning for legal reserve until it equals the paid-in capital. The legal reserve may offset losses. After offsetting any deficit, the legal reserve may be transferred to capital and distributed as stock dividends or cash dividends for the amount in excess of 25% of the paid-in capital pursuant to a resolution adopted in the stockholders’ meeting.

TWM distributes and reverses special reserve in accordance with Decree No. 1010012865, Decree No. 1010047490, and “The Q&A for special reserve recognition after adopting IFRS” issued by the FSC.

The appropriations of earnings for 2019 and 2018, which have been resolved in the AGM on June 18, 2020 and June 12, 2019, respectively, were as follows:

Legal reserve Special reserve Cash dividends Cash dividends per share (NT$)	Appropriation of Earnings
	For the Year Ended December 31
	2019 2018 $ 1,248,117 $ 1,364,217 (95,381) (267,322) 11,756,844 15,366,223 4.183 5.54897

32 -

On June 18, 2020, the AGM resolved cash appropriation from the capital surplus generated from the excess of the issuance price over the par value of capital stock amounting to $1,593,624 thousand, that is, $0.567 per share. Thus, total amount of appropriations distributed was $4.75 per share for 2019.

As of June 30, 2020, the cash dividends to stockholders of TWM amounted to $13,350,468 thousand and were recognized under dividends payable.

d. Other equity interests

Exchange
Differences on
Translation
Unrealized
Gain (Loss) on
Financial Assets
at FVTOCI

Balance, January 1, 2020
$ (34,505) $ 473,410

Exchange differences on translation

(11,196)
-
Changes in fair value of financial assets at
FVTOCI

-
(567,269)
Unrealized gain of equity instruments
transferred to retained earnings due to
disposal

-
(426,241)
Changes in other comprehensive income of
associates accounted for using equity
method

1,136
9,448
Other comprehensive income transferred to
retained earnings due to disposal of
investments accounted for using equity
method

-
(680)
Income tax effect

-

13,119

Balance, June 30, 2020
$ (44,565)
$ (498,213)

Balance, January 1, 2019
$ (24,398) $ (70,983)
Exchange differences on translation

8,150
-
Changes in fair value of financial assets at
FVTOCI

-
1,158,964
Changes in other comprehensive income
(loss) of associates accounted for using
equity method

(772)
4,927
Income tax effect

-

52,759

Balance, June 30, 2019
$ (17,020)
$ 1,145,667

Total
$ 438,905
(11,196)

(567,269)

(426,241)
10,584

(680)

13,119
$ (542,778)
$ (95,381)
8,150
1,158,964
4,155

52,759
$ 1,128,647

e. Treasury stock

As of June 30, 2020, December 31, 2019 and June 30, 2019, TWM’s stocks held for the investment purposes by TCCI, TUI and TID, which are all wholly-owned by TWM, were 698,752 thousand shares, and the market values were $77,212,052 thousand, $78,260,179 thousand and $85,597,071 thousand, respectively. Since TWM’s stocks held by its subsidiaries are regarded as treasury stock, TWM recognized $29,717,344 thousand as treasury stock. For those treasury stockholders, they have the same rights as the other stockholders, except that they are not allowed to subscribe new shares issued by TWM for cash and exercise the voting rights over such treasury stock.

33 -

f. Non-controlling interests

Beginning balance Effect of retrospective application Adjusted beginning balance Portion attributable to non-controlling interests Profit Exchange differences on translation Unrealized gain (loss) on financial asset at FVTOCI Share of other comprehensive income of associates accounted for using equity method Changes in equity of associates accounted for using equity method Changes in capital surplus due to disposal of investments accounted for using equity method Cash dividends paid to non-controlling interests of subsidiaries Ending balance		For the Six Months Ended June 30	For the Six Months Ended June 30
		2020 $ 6,158,984 - 6,158,984 517,204 (11,280) (1,971) 19,307 (1,490) (1,262) (655,043) $ 6,024,449	2019 $ 6,112,176 16,275 6,128,451 409,810 8,750 2,926 2,674 - - (693,361) $ 5,859,250

22. OPERATING REVENUES

Revenue from contracts with customers Telecommunications and value-added services Sales revenue Cable TV and broadband services Other operating revenues		For the Three Months Ended June 30 2020 2019 $ 11,104,141 $ 12,167,090 18,505,394 15,619,361 1,501,993 1,498,128 230,111 329,972 $ 31,341,639 $ 29,614,551		For the Six Months Ended June 30	For the Six Months Ended June 30
		2020 $ 11,104,141 18,505,394 1,501,993 230,111 $ 31,341,639		2020 $ 22,432,303 37,307,772 3,007,079 447,164 $ 63,194,318	2019 $ 24,410,585 31,387,565 3,013,447 675,627 $ 59,487,224

a. Contract information

Refer to Note 34 and to Note 4 to the consolidated financial statements for the year ended December 31, 2019.

34 -

b. Contract balances

Contract assets Bundle sales Less: Allowance for impairment loss Current Non-current	June 30, 2020 December 31, 2019 $ 7,777,091 $ 8,366,531 (66,020) (71,032) $ 7,711,071 $ 8,295,499 $ 4,677,432 $4,832,043 3,033,639 3,463,456 $ 7,711,071 $ 8,295,499	June 30, 2019 $ 8,431,673 (71,542) $ 8,360,131 $ 5,013,363 3,346,768 $ 8,360,131	January 1, 2019 $ 8,755,126 (74,250) $ 8,680,876 $ 5,472,357 3,208,519 $ 8,680,876

For notes and accounts receivable, refer to Note 8.

The Group measures the loss allowance for contract assets at an amount equal to lifetime ECLs. The contract assets will be transferred to accounts receivable when the corresponding invoice is billed to the client, and the contract assets have substantially the same risk as the trade receivables. Therefore, the Group concluded that the expected loss rates for trade receivables can be applied to the contract assets.

Contract liabilities Telecommunications and value-added services Sales of goods Cable TV and broadband services Others Current Non-current	June 30, 2020 December 31, 2019 $ 1,002,011 $ 1,125,265 46,401 42,417 659,770 672,667 16,844 12,351 $1,725,026 $ 1,852,700 $ 1,685,736 $1,807,407 39,290 45,293 $ 1,725,026 $ 1,852,700	June 30, 2019 $ 1,155,553 132,549 706,464 16,322 $ 2,010,888 $ 1,959,865 51,023 $ 2,010,888	January 1, 2019 $ 1,235,446 141,343 694,228 15,920 $ 2,086,937 $ 2,030,793 56,144 $ 2,086,937

The changes in balances of contract assets and contract liabilities primarily result from the timing difference between the satisfaction of performance obligation and the payments collected from customers.

c. Assets related to contract costs

Incremental costs of obtaining a contract - non-current	June 30, 2020 December 31, 2019 $ 1,878,963 $ 2,119,052	June 30, 2019 $ 2,428,080

The Group considered the past experience and the default clauses in the sale contracts and believed the commission and the subsidy paid for obtaining a contract are wholly recoverable, therefore, such costs are capitalized. Amortization recognized for the three months ended June 30, 2020 and 2019 were $441,520 thousand and $653,758 thousand, respectively, and for the six months ended June 30, 2020 and 2019 were $925,259 thousand and $1,357,200 thousand, respectively.

35 -

23. NON-OPERATING INCOME AND EXPENSES

a. Other income

Dividend income Other income b. Other gains and losses, net Loss on disposal of property, plant and equipment, net Gain on disposal of intangible assets Gain on disposal of investments accounted for using equity method Valuation gain (loss) on financial assets at FVTPL Valuation gain on financial liabilities at FVTPL Loss on foreign exchange, net Others	For the Three Months Ended June 30 2020 2019 $ 8,398 $ 6,438 8,070 19,611 $ 16,468 $ 26,049 For the Three Months Ended June 30 2020 2019 $ (8,849) $ (21,570) 8,800 - 58,494 - - 103 - - (12,939) (6,126) 60 (939) $ 45,566 $ (28,532)	For the Three Months Ended June 30 2020 2019 $ 8,398 $ 6,438 8,070 19,611 $ 16,468 $ 26,049 For the Three Months Ended June 30 2020 2019 $ (8,849) $ (21,570) 8,800 - 58,494 - - 103 - - (12,939) (6,126) 60 (939) $ 45,566 $ (28,532)		For the Six Months Ended June 30
				2020 2019 $ 8,398 $ 6,438 9,905 36,634 $ 18,303 $ 43,072 For the Six Months Ended June 30
		2020 $ (8,849) 8,800 58,494 - - (12,939) 60 $ 45,566		2020 2019 $ (23,798) $ (37,537) 8,800 - 58,494 - (149) 3,970 - 1,819 (3,596) (4,452) (413) (1,738) $ 39,338 $ (37,938)

c. Finance costs

Interest expense Bank loans Corporate bonds Lease liabilities Others Less: Capitalized interest Capitalization rates	For the Three Months Ended June 30 2020 2019 $ 43,549 $ 36,784 71,986 67,166 21,945 24,247 20,212 11,643 157,692 139,840 - (1,209) $ 157,692 $ 138,631 - 1.34%	For the Three Months Ended June 30 2020 2019 $ 43,549 $ 36,784 71,986 67,166 21,945 24,247 20,212 11,643 157,692 139,840 - (1,209) $ 157,692 $ 138,631 - 1.34%		For the Six Months Ended June 30	For the Six Months Ended June 30
		2020 $ 43,549 71,986 21,945 20,212 157,692 - $ 157,692 -		2020 $ 106,484 112,737 45,007 38,122 302,350 - $ 302,350 -	2019 $ 83,701 137,970 48,808 23,627 294,106 (2,388) $ 291,718 1.34%

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24. INCOME TAX

a. Income tax recognized in profit or loss

Current income tax expense Current period Prior years’ adjustment Others Deferred income tax expense Temporary differences Income tax expense		For the Three Months Ended June 30 2020 2019 $ 781,914 $ 792,115 (7,723) 47,711 - - 774,191 839,826 38,738 (4,856) $ 812,929 $ 834,970		For the Six Months Ended June 30	For the Six Months Ended June 30
		2020 $ 781,914 (7,723) - 774,191 38,738 $ 812,929		2020 $ 1,487,162 (7,723) - 1,479,439 98,907 $ 1,578,346	2019 $ 1,535,377 47,711 (17,079) 1,566,009 60,938 $ 1,626,947

According to the amendments to the Statute for Industrial Innovation announced in 2019, the amounts of unappropriated earnings in 2018 and thereafter that are reinvested in the construction or purchase of certain assets or technologies are allowed as deduction when computing the income tax on unappropriated earnings. When calculating the tax on unappropriated earnings, the Group has already deducted the amount of the unappropriated earnings that has been reinvested as capital expenditures.

b. Income tax recognized in other comprehensive income (loss)

Deferred income tax expense (income) Unrealized (gain) loss on financial assets at FVTOCI	For the Three Months Ended June 30 2020 2019 $ 11,631 $ 1,982	For the Three Months Ended June 30 2020 2019 $ 11,631 $ 1,982		For the Six Months Ended June 30	For the Six Months Ended June 30
		2020 $ 11,631		2020 $ (13,119)	2019 $ (52,759)

37 -

c. Income tax examinations

The latest years for which the Group entities’ income tax returns have been examined and cleared by the tax authorities were as follows:

Company TWM TCC WMT TNH TFN TT&T TCCI TDC TDS TPIA TFC TUI TID TKT TFNM GFMT GWMT WTVB YJCTV MCTV PCTV UCTV GCTV momo FLI FPI FST Bebe Poshe	Year
	2017 2018 2018 2018 2018 2017 2018 2019 2018 2018 2018 2018 2018 2018 2017 2018 2018 2017 2017 2018 2017 2017 2017 2017 2018 2018 2018 2018

25. EARNINGS PER SHARE

For the Three Months Ended June 30, 2020

Amount After
Income Tax
Weighted-
average
Number of
Common Stock
(In Thousands)
Basic EPS
Profit attributable to owners of the parent
$ 3,047,593
2,810,625

Effect of potential dilutive common stock:
Employees’ compensation
-
1,793
Convertible bonds

2,088

9,292
Diluted EPS
Profit attributable to owners of the parent
(adjusted for potential effect of common stock)
$ 3,049,681

2,821,710

EPS
$ 1.08
$ 1.08

38 -

Basic EPS Profit attributable to owners of the parent Effect of potential dilutive common stock: Employees’ compensation Convertible bonds Diluted EPS Profit attributable to owners of the parent (adjusted for potential effect of common stock) Basic EPS Profit attributable to owners of the parent Effect of potential dilutive common stock: Employees’ compensation Convertible bonds Diluted EPS Profit attributable to owners of the parent (adjusted for potential effect of common stock) Basic EPS Profit attributable to owners of the parent Effect of potential dilutive common stock: Employees’ compensation Convertible bonds Diluted EPS Profit attributable to owners of the parent (adjusted for potential effect of common stock)	For the Three Months Ended June 30, 2019	For the Three Months Ended June 30, 2019
	Amount After Income Tax Weighted- average Number of Common Stock (In Thousands) EPS $ 3,205,701 2,747,493 $ 1.16 - 1,612 16,359 70,099 $ 3,222,060 2,819,204 $ 1.14 For the Six Months Ended June 30, 2020
	Amount After Income Tax Weighted- average Number of Common Stock (In Thousands) EPS $ 6,362,233 2,810,621 $ 2.26 - 2,924 4,173 9,296 $ 6,366,406 2,822,841 $ 2.25 For the Six Months Ended June 30, 2019
	Amount After Income Tax Weighted- average Number of Common Stock (In Thousands) $ 6,276,674 2,738,127 - 2,308 35,020 79,465 $ 6,311,694 2,819,900	EPS $ 2.29 $ 2.24

Since TWM has the discretion to settle the employees’ compensation by cash or stock, TWM should presume that the entire amount of the compensation will be settled in stock, and the potential stock dilution should be included in the weighted-average number of stock outstanding used in the calculation of diluted EPS, provided there is a dilutive effect. Such dilutive effect of the potential stock needs to be included in the calculation of diluted EPS until employees’ compensation is approved in the following year.

39 -

26. CASH FLOW INFORMATION

Changes in liabilities arising from financing activities:

For the Six Months Ended June 30, 2020

Opening Balance Lease liabilities (including current and non-current portions) $ 9,650,389 For the Six Months Ended June 30, 2019 Opening Balance Lease liabilities (including current and non-current portions) $ 9,980,846	Non-cash Changes New Leases Others $ 1,699,731 $ (160,291) Non-cash Changes New Leases Others $ 1,599,238 $ (54,370)	Closing Balance $ 9,206,288

		Closing Balance $ 9,618,498
Lease liabilities (including current and non-current portions)
	New Leases $ 1,599,238

27. CAPITAL MANAGEMENT

The Group maintains and manages its capital to meet the minimum paid-in capital required by the competent authority, and to optimize the balance of liabilities and equity in order to maximize stockholders’ return. By periodically reviewing and measuring relative cost, risk, and rate of return to ensure profit and to maintain adequate financial ratios, the Group may adopt various financing approaches to balance its capital structure in order to meet the demands for capital expenditures, working capital, settlements of liabilities, and dividend payments in its normal course of business for the future.

28. FINANCIAL INSTRUMENTS

a. Categories of financial instruments

Financial assets Financial assets at FVTPL Financial assets at FVTOCI (including current and non-current portions) Financial assets measured at amortized cost (including current and non-current portions) (Note 1) Total Financial liabilities Financial liabilities measured at amortized cost (including current and non-current portions) (Note 2)	June 30, 2020 $ - 4,840,242 19,342,412 $ 24,182,654 $ 93,241,980	December 31, 2019 $ 149 5,492,381 20,722,936 $ 26,215,466 $ 61,453,923	June 30, 2019 $ 85,444 6,181,521 17,840,469
			$ 24,107,434
			$ 70,312,318

40 -
Note 1: The balances comprise cash and cash equivalents, notes and accounts receivable, other receivables, other financial assets and refundable deposits.
Note 2: The balances comprise short-term borrowings, short-term notes and bills payable, payables, other financial liabilities (classified as other current liabilities), bonds payable, long-term borrowings and guarantee deposits.
b. Fair value of financial instruments
1) Financial instruments not at fair value

Except for the table below, the Group considers that the book value of financial assets and liabilities that are not at fair value is close to the fair value, or the fair value cannot be reliably measured.

Financial liabilities Bonds payable (including current portion)	June 30, 2020 Carrying Amount Fair Value $ 35,886,949 $ 36,108,629	December 31, 2019 Carrying Amount Fair Value $ 15,903,436 $ 16,077,220	June 30, 2019
			Carrying Amount Fair Value $ 24,444,066 $ 25,407,096

The fair value of bonds payable is measured by Level 2 inputs, using a volume-weighted average price on the OTC at the end of the reporting period.

2) Fair value of financial instruments that are measured at fair value on a recurring basis

The table below provides the related analysis of financial instruments at fair value after initial recognition. Based on the extent that fair value can be observed, the fair value measurements are grouped into Levels 1 to 3:

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within Level 1 are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
Level 3: Inputs for the assets or liabilities are not based on observable market data (unobservable inputs).

June 30, 2020

==> picture [446 x 112] intentionally omitted <==

----- Start of picture text -----

Level 1 Level 2 Level 3 Total
Financial assets at FVTPL
Equity instruments
Limited partnerships $ - $ - $ - $ -
(Continued)
----- End of picture text -----

41 -

Financial assets at FVTOCI Equity instruments Domestic listed stocks Domestic unlisted stocks Limited partnerships Foreign unlisted stocks December 31, 2019 Financial assets at FVTPL Equity instruments Limited partnerships Financial assets at FVTOCI Equity instruments Domestic listed stocks Domestic unlisted stocks Limited partnerships Foreign unlisted stocks June 30, 2019 Financial assets at FVTPL Beneficiary certificates Financial assets at FVTOCI Equity instruments Domestic listed stocks Domestic unlisted stocks Limited partnerships Foreign unlisted stocks Financial liabilities at FVTPL	Level 1 $ 3,749,224 - - - $ 3,749,224 Level 1 $ - $ 4,819,602 - - - $ 4,819,602 Level 1 $ 85,444 $ 5,450,576 - - - $ 5,450,576 $ -	Level 2 $ - - - 2,666 $ 2,666 Level 2 $ - $ - - - 7,407 $ 7,407 Level 2 $ - $ - - - 11,636 $ 11,636 $ -	Level 3 $ - 664,043 394,124 30,185 $ 1,088,352 Level 3 $ 149 $ - 173,515 462,068 29,789 $ 665,372 Level 3 $ - $ - 176,665 513,038 29,606 $ 719,309 $ -	Total $ 3,749,224 664,043 394,124 32,851 $ 4,840,242 (Concluded) Total $ 149 $ 4,819,602 173,515 462,068 37,196 $ 5,492,381 Total $ 85,444 $ 5,450,576 176,665 513,038 41,242 $ 6,181,521 $ -

42 -

There was no transfer between the fair value measurements of Levels 1 and 2 for the six months ended June 30, 2020 and 2019.

Valuation techniques and assumptions used in fair value determination

a) The fair value of financial instruments traded in active markets is based on quoted market prices (including stocks and funds of publicly traded companies).
b) Valuation techniques and inputs applied for Level 2 fair value measurement:

For foreign unlisted stocks, the Group takes price fluctuations and risk-free rates into consideration by using the market comparison approach. Call and put options of convertible bonds that adopted binomial tree valuation model were evaluated by the observable closing price of the stocks, volatility, risk-free interest rate, risk discount rate, and liquidity risk at the balance sheet date.

c) Valuation techniques and inputs applied for Level 3 fair value measurement:

Equity instruments

The evaluation of fair value of unlisted stocks is mainly referenced to the same type of companies through the market approach or asset approach. The unobservable input parameter was liquidity discount rates, which were ranging from 20% to 25%, 20% to 30% and 20% to 30% as of June 30, 2020, December 31, 2019 and June 30, 2019, respectively.

The fair value of limited partnerships investments was evaluated through the market approach and income approach. The evaluation and assumptions are mainly referenced to related information of comparable market targets and estimated future cash flows. The unobservable input parameter was liquidity discount rates, which were estimated at 33.5%, 29.6% and 29.6% as of June 30, 2020, December 31, 2019 and June 30, 2019, respectively.

3) Reconciliation of Level 3 fair value measurements of financial instruments

For the Six Months Ended June 30, 2020

	Financial Assets	Financial Assets	Financial Assets
	at	FVTPL -	at FVTOCI -
		Equity	Equity
	Instruments		Instruments
Balance at January 1, 2020	$	149	$ 665,372
Additions		-	500,000
Recognized in profit or loss (loss on financial assets at
FVTPL)		(149)	-
Recognized in other comprehensive income (unrealized loss
on financial assets at FVTOCI)		-	(77,020)
Balance at June 30, 2020	$	-	$1,088,352

43 -

For the Six Months Ended June 30, 2019

	Financial Assets
	at FVTOCI -
	Equity
	Instruments
Balance at January 1, 2019	$ 984,950
Recognized in other comprehensive income (unrealized loss
on financial assets at FVTOCI)	(265,641)
Balance at June 30, 2019	$ 719,309

c. Financial risk management
1) The Group’s major financial instruments include equity investments, trade receivables, trade payables, short-term notes and bills payable, bonds payable, borrowings, lease liabilities, etc., and the Group is exposed to the following risks due to usage of financial instruments:
- a) Credit risk
- b) Liquidity risk
- c) Market risk

This note presents information concerning the Group’s risk exposure and the Group’s targets, policies and procedures to measure and manage the risks.

2) Risk management framework
a) Decision-making mechanism

The Board of Directors is the highest supervisory and decision-making body responsible for assessing material risks, designating actions to control these risks, and keeping track of their execution. In addition, the Operations and Management Committee conducts periodic reviews of each business group’s operating target and performance to meet the Group’s guidance and budget.

b) Risk management policies
i. Promote a risk-management-based business model.
ii. Establish a risk management mechanism that can effectively recognize, evaluate, supervise and control risk.
iii. Create a company-wide risk management structure that can limit risk to an acceptable level.
iv. Introduce best risk management practices and continue to seek improvements.
c) Monitoring mechanism

The Internal Audit Office assesses the potential risks that the Group may face and uses this information as a reference for determining its annual audit plan. The Internal Audit Office reports the results and findings of performing such procedures, and follows up the discrepancies, if any, for actions.

44 -

3) Credit risk

Credit risk refers to the risk that a counterparty would default on its contractual obligations resulting in financial loss. The maximum credit exposure of the aforementioned financial instruments is equal to their carrying amounts recognized in consolidated balance sheets as of the balance sheet date. The Group has large trade receivables outstanding with its customers. A substantial majority of the Group’s outstanding trade receivables are not covered by collateral or credit insurance. The Group has implemented ongoing measures including enhancing credit assessments and strengthening overall risk management to reduce its credit risk. While the Group 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 Group serves a large number of unrelated consumers, the concentration of credit risk was limited.

4) Liquidity risk

Liquidity risk is the risk that the Group fails to meet the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to manage liquidity is to ensure, as far as possible, that it always has sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable loss or damage to the Group’s reputation.

The Group manages and maintains sufficient level of capital to ensure the requirements of paying estimated operating expenditures, including financial obligations on each contract. The Group also monitors its bank credit facilities to ensure that the Group fully complies with the provisions and financial covenants of loan contracts. As of June 30, 2020, December 31, 2019 and June 30, 2019, the Group had unused bank facilities of $69,353,385 thousand, $56,641,022 thousand and $68,773,236 thousand, respectively.

The table below summarizes the maturity profile of the Group’s financial liabilities based on contractual undiscounted payments, but not including the financial liabilities of which carrying amounts approximate contractual cash flows.

June 30, 2020 Unsecured loans Secured loans Short-term notes and bills payable Bonds payable Lease liabilities	Contractual Cash Flows Within 1 Year $ 13,619,883 $ 11,615,944 2,968,159 350,233 9,800,000 9,800,000 37,512,940 274,880 9,345,939 3,592,077 $ 73,246,921 $ 25,633,134	1-5 Years $ 2,003,939 2,617,926 - 21,926,060 5,718,193 $ 32,266,118	More Than 5 Years $ - - - 15,312,000 35,669 $ 15,347,669

(Continued)

45 -

December 31, 2019 Unsecured loans Secured loans Short-term notes and bills payable Bonds payable Lease liabilities June 30, 2019 Unsecured loans Secured loans Bonds payable Lease liabilities	Contractual Cash Flows Within 1 Year $ 22,351,278 $ 16,337,490 3,127,824 360,411 1,900,000 1,900,000 16,674,020 140,880 9,814,113 3,605,364 $ 53,867,235 $ 22,344,145 $ 9,989,158 $ 3,948,134 3,369,161 363,503 25,370,320 4,701,180 9,795,025 3,508,470 $ 48,523,664 $ 12,521,287	1-5 Years $ 6,013,788 2,767,413 - 7,443,140 6,173,611 $ 22,397,952 $ 6,041,024 1,011,845 11,579,140 6,155,542 $ 24,787,551	More Than 5 Years $ - - - 9,090,000 35,138 $ 9,125,138 $ - 1,993,813 9,090,000 131,013 $ 11,214,826

(Concluded)

5) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, and equity prices, will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within an acceptable range and to optimize the return.

The Group carefully evaluates each financial instrument transaction involving any risk such as exchange rate risk, interest rate risk, and market price risk in order to decrease potential influences caused by market uncertainty.

a) Exchange rate risk

The Group mainly operates in Taiwan, except for international roaming services. Most of the operating revenues and expenses are measured in NTD. A small portion of the expenses is paid in USD, EUR, etc.; thus, the Group purchases currency at the spot rate based on the conservative principle in order to hedge exchange rate risk.

46 -

The Group’s foreign currency assets and liabilities exposed to significant exchange rate risk were as follows:

Foreign currency assets Monetary items USD EUR RMB Non-monetary items USD RMB HKD THB Foreign currency liabilities Monetary items USD EUR HKD JPY Foreign currency assets Monetary items USD EUR RMB Non-monetary items USD RMB HKD THB Foreign currency liabilities Monetary items USD EUR HKD JPY	June 30, 2020
	Foreign Currencies Exchange Rate New Taiwan Dollars $ 50,268 29.58 $ 1,486,900 1,446 33.27 48,111 33,708 4.18 140,898 14,344 29.58 424,309 132,873 4.18 555,409 699 3.816 2,666 133,009 0.965 128,288 14,016 29.58 414,565 68 33.27 2,252 6,474 3.816 24,706 35,618 0.276 9,827 December 31, 2019
	Foreign Currencies Exchange Rate New Taiwan Dollars $ 50,271 30.02 $ 1,509,081 1,162 33.62 39,057 29,446 4.299 126,589 16,384 30.02 491,857 130,270 4.299 560,029 1,921 3.855 7,407 118,371 1.01 119,531 15,795 30.02 474,108 97 33.62 3,251 9,326 3.855 35,950 38,710 0.275 10,645

47 -

Foreign currency assets Monetary items USD EUR RMB Non-monetary items USD RMB HKD THB Foreign currency liabilities Monetary items USD EUR HKD JPY	June 30, 2019
	Foreign Currencies Exchange Rate New Taiwan Dollars $ 32,611 31.08 $ 1,013,537 871 35.34 30,781 29,425 4.52 133,000 17,460 31.08 542,644 163,191 4.52 737,623 2,926 3.977 11,636 122,918 1.017 124,946 18,899 31.08 587,364 101 35.34 3,552 11,431 3.977 45,461 42,138 0.288 12,123

Refer to Note 23(b) for the information related to the Group’s realized and unrealized foreign exchange gains (losses) for the three months and the six months ended June 30, 2020 and 2019, respectively. Due to the variety of foreign currency transactions and functional currencies, the Group could not disclose the foreign exchange gains (losses) for each foreign currency with significant influence.

Sensitivity analysis

The Group’s exchange rate risk comes mainly from conversion gains and losses of accounts denominated in monetary items of foreign currencies. If there had been an unfavorable 5% movement in the levels of foreign exchanges against NTD at the end of the reporting period (with other factors remaining constant at the end of the reporting period and with analyses of the two periods on the same basis), profit would have decreased by $61,228 thousand and $26,441 thousand for the six months ended June 30, 2020 and 2019, respectively.

b) Interest rate risk

The Group issued unsecured straight corporate bonds and signed facility agreements with banks for locking in medium- and long-term fixed interest rates. In respect of interest payables, the fluctuation of interest rates does not affect the Group significantly.

48 -

The carrying amounts of the Group’s financial assets and financial liabilities exposed to interest rate risk were as follows:

		June 30,	December 31,	December 31,	June 30,
		2020		2019	2019
Fair value interest rate risk
Financial assets	$	5,065,348	$	5,763,639 $	4,741,522
Financial liabilities		64,572,257		41,837,415	35,005,977
Cash flow interest rate risk
Financial assets		3,989,526		3,697,273	2,630,572
Financial liabilities		5,777,687		9,859,372	7,091,011

Sensitivity analysis

The following sensitivity analysis is based on the exposure to interest rate risk of derivative and non-derivative instruments at the end of the reporting period. For floating-rate assets and liabilities, the analysis assumes that the balances of outstanding assets and liabilities at the end of the reporting period have been outstanding for the whole period and that the changes in interest rates are reasonable. If the interest rate had increased by 50 basis points (with other factors remaining constant at the end of the reporting period and with analyses of the two periods on the same basis), profit would have decreased by $4,470 thousand and $11,122 thousand for the six months ended June 30, 2020 and 2019, respectively.

c) Other market price risk

The exposure to equity price risk is mainly due to holding of stocks and beneficiary certificates. The Group manages the risk by maintaining portfolios of investments with different risks and by continuously monitoring the future developments and market trends of investment targets.

Sensitivity analysis

If the prices of equity instruments had decreased by 5% (with other factors remaining constant and with the analyses of the two periods on the same basis), profit would have decreased by $4,272 thousand since the fair value of financial assets at FVTPL decreased for the six months ended June 30, 2019, and other comprehensive income would have decreased by $242,012 thousand and $309,076 thousand since the fair value of financial assets at FVTOCI decreased for the six months ended June 30, 2020 and 2019, respectively.

49 -

29. RELATED-PARTY TRANSACTIONS

a. Parent company and ultimate controlling party

TWM is the ultimate controlling party of the Group.

b. Related party name and nature of relationship

Related Party Nature of Relationship GHS Associate TPE Associate AppWorks Associate AppWorks Fund III Associate kbro Media Associate M.E. Associate ADT Associate Beijing Global JiuSha Media Technology Co., Ltd. Associate (subsidiary of GHS) GHS Trading Ltd. Associate (subsidiary of GHS) Beijing YueShih JiuSha Media Technology Co., Ltd. Associate (subsidiary of GHS) Citruss Saudi Trading Company LLC Associate (subsidiary of GHS) TVD Shopping Associate (subsidiary of TV Direct) Good Image Co., Ltd. Associate (subsidiary of kbro Media) Fubon Life Insurance Co., Ltd. Other related party Fubon Insurance Co., Ltd. (Fubon Ins.) Other related party Fubon Securities Investment Trust Co., Ltd. Other related party Fubon Sports & Entertainment Co., Ltd. Other related party Taipei Fubon Commercial Bank Co., Ltd. (TFCB) Other related party Fubon Financial Holding Co., Ltd. Other related party Fubon Life Insurance (HK) Ltd. Other related party Fubon Securities Co., Ltd. Other related party Fubon Futures Co., Ltd. Other related party Fubon Investment Services Co., Ltd. Other related party Fubon Marketing Co., Ltd. Other related party Fu-Sheng Life Insurance Agency Co., Ltd. Other related party Fu-Sheng General Insurance Agency Co., Ltd. Other related party Fubon Financial Venture Capital Co., Ltd. Other related party Fubon Gymnasium Co., Ltd. Other related party Fubon Asset Management Co., Ltd. Other related party One Production Film Co., Ltd. Other related party Fubon Bank (China) Co., Ltd. Other related party Fubon Land Development Co., Ltd. Other related party Fubon Property Management Co., Ltd. Other related party Fubon Real Estate Management Co., Ltd. Other related party Fubon Hospitality Management Co., Ltd. Other related party Chung Hsing Constructions Co., Ltd. Other related party Ming Dong Co., Ltd. Other related party Fu Yi Health Management Co., Ltd. Other related party Dao Ying Co., Ltd. Other related party Fubon Xinji Investment Co., Ltd. Other related party Far Eastern Memorial Hospital Other related party Dai-Ka Ltd. Other related party Chen Feng Investment Ltd. Other related party

(Continued)

50 -

Related Party Nature of Relationship Chen Yun Co., Ltd. Other related party Xi Guo Co., Ltd. Other related party Cho Pharma Inc. Other related party Mitchiller Media Co., Ltd. Other related party (not a related party since August 2019) Taiwan Mobile Foundation (TMF) Other related party Taipei New Horizon Foundation (TNHF) Other related party Fubon Cultural & Educational Foundation Other related party Fubon Charity Foundation Other related party Fubon Art Foundation Other related party Taipei Fubon Bank Charity Foundation Other related party Taipei New Horizon Management Agency Other related party Key management Chairman, director, general manager, manager, etc. (Concluded)

c. Significant transactions with related parties

1) Operating revenue

Associates Other related parties	For the Three Months Ended June 30 2020 2019 $ 19,016 $ 22,094 223,031 222,708 $ 242,047 $ 244,802	For the Three Months Ended June 30 2020 2019 $ 19,016 $ 22,094 223,031 222,708 $ 242,047 $ 244,802		For the Six Months Ended June 30	For the Six Months Ended June 30
		2020 $ 19,016 223,031 $ 242,047		2020 $ 29,589 413,390 $ 442,979	2019 $ 45,049 409,037 $ 454,086

The Group renders telecommunications, sales, maintenance, lease services, etc., to the related parties. The transaction terms with related parties were not significantly different from those with third parties.

2) Purchases

Associates Other related parties	For the Three Months Ended June 30 2020 2019 $ 192,765 $ 98,163 69,601 76,954 $ 262,366 $ 175,117	For the Three Months Ended June 30 2020 2019 $ 192,765 $ 98,163 69,601 76,954 $ 262,366 $ 175,117		For the Six Months Ended June 30	For the Six Months Ended June 30
		2020 $ 192,765 69,601 $ 262,366		2020 $ 388,255 127,533 $ 515,788	2019 $ 190,502 205,664 $ 396,166

The entities mentioned above provide logistics, copyright, member service costs and other services. The transaction terms with related parties were not significantly different from those with third parties.

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3) Receivables due from related parties

Account Related Party Categories Notes and accounts receivable Associates Notes and accounts receivable Other related parties Other receivables Associates Other receivables Other related parties	June 30, 2020 December 31, 2019 $ 13,605 $ 4,729 179,574 141,457 $ 193,179 $ 146,186 $ 48,442 $ 63,988 126,045 65,285 $ 174,487 $ 129,273	June 30, 2019 $ 5,561 145,307 $ 150,868 $ 113,862 134,108 $ 247,970

Receivables from related parties mentioned above were not secured with collateral, and no provisions for impairment loss were accrued.

4) Payables due to related parties

Account Related Party Categories Accounts payable Associates Accounts payable Other related parties Other payables Other related parties 5) Prepayments Other related parties	June 30, 2020 December 31, 2019 $ 80,122 $ 101,077 70,834 34,085 $ 150,956 $ 135,162 $ 13,896 $ 13,723 June 30, 2020 December 31, 2019 $ 48,383 $ 15,803	$	June 30, 2019 $ 103,113 88,337 $ 191,450 $ 13,895 June 30, 2019 60,873

6) Bank deposits, time deposits and other financial assets (including current and non-current portions)

Other related parties TFCB Others	June 30, 2020 December 31, 2019 $ 1,833,281 $ 2,102,334 27,890 18,736 $ 1,861,171 $ 2,121,070	June 30, 2019 $ 1,538,883 24,000
		$ 1,562,883

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7) Cash equivalents

For the Six Months Ended June 30, 2019

Related Party Target Disposed Original Purchase Price Proceeds Interest Income TFCB Government bonds with repurchase rights $ 146,013 $ 146,034 $ 21 8) Acquisition of investments accounted for using equity method Related Party Transaction Date Target Shares (In Thousands) Purchase Price AppWorks Fund III April 2020 AppWorks Fund III 21,000 $ 210,000 9) Others June 30, 2020 December 31, 2019 June 30, 2019 Guarantee deposits Other related parties $ 54,533 $ 54,256 $ 53,976 Other current liabilities - receipts under custody Other related parties $ 124,780 $ 123,993 $ 92,583 For the Three Months Ended June 30 For the Six Months Ended June 30 2020 2019 2020 2019 Operating expenses Other related parties TMF $ 5,112 $ 4,475 $ 10,850 $ 8,300 TNHF 2,000 2,000 5,000 5,000 TFCB 49,412 73,867 95,238 128,215 Others 75,905 72,452 94,648 87,552 $ 132,429 $ 152,794 $ 205,736 $ 229,067 Other income Other related parties TFCB $ 15,233 $ - $ 31,208 $ -	Related Party Target Disposed Original Purchase Price Proceeds Interest Income TFCB Government bonds with repurchase rights $ 146,013 $ 146,034 $ 21 8) Acquisition of investments accounted for using equity method Related Party Transaction Date Target Shares (In Thousands) Purchase Price AppWorks Fund III April 2020 AppWorks Fund III 21,000 $ 210,000 9) Others June 30, 2020 December 31, 2019 June 30, 2019 Guarantee deposits Other related parties $ 54,533 $ 54,256 $ 53,976 Other current liabilities - receipts under custody Other related parties $ 124,780 $ 123,993 $ 92,583 For the Three Months Ended June 30 For the Six Months Ended June 30 2020 2019 2020 2019 Operating expenses Other related parties TMF $ 5,112 $ 4,475 $ 10,850 $ 8,300 TNHF 2,000 2,000 5,000 5,000 TFCB 49,412 73,867 95,238 128,215 Others 75,905 72,452 94,648 87,552 $ 132,429 $ 152,794 $ 205,736 $ 229,067 Other income Other related parties TFCB $ 15,233 $ - $ 31,208 $ -	Related Party Target Disposed Original Purchase Price Proceeds Interest Income TFCB Government bonds with repurchase rights $ 146,013 $ 146,034 $ 21 8) Acquisition of investments accounted for using equity method Related Party Transaction Date Target Shares (In Thousands) Purchase Price AppWorks Fund III April 2020 AppWorks Fund III 21,000 $ 210,000 9) Others June 30, 2020 December 31, 2019 June 30, 2019 Guarantee deposits Other related parties $ 54,533 $ 54,256 $ 53,976 Other current liabilities - receipts under custody Other related parties $ 124,780 $ 123,993 $ 92,583 For the Three Months Ended June 30 For the Six Months Ended June 30 2020 2019 2020 2019 Operating expenses Other related parties TMF $ 5,112 $ 4,475 $ 10,850 $ 8,300 TNHF 2,000 2,000 5,000 5,000 TFCB 49,412 73,867 95,238 128,215 Others 75,905 72,452 94,648 87,552 $ 132,429 $ 152,794 $ 205,736 $ 229,067 Other income Other related parties TFCB $ 15,233 $ - $ 31,208 $ -
$

	2020 $ 10,850 5,000 95,238 94,648 $ 205,736 $ 31,208	2019 $ 8,300 5,000 128,215 87,552 $ 229,067 $ -

10) Lease arrangements

Acquisition of right-of-use assets

Other related parties		For the Six Months Ended June 30	For the Six Months Ended June 30
		2020 $ 7,769	2019 $ 88,264

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- Lease liabilities (including current and non current portions)

Other related parties	June 30, 2020 December 31, 2019 $ 514,958 $ 620,621	June 30, 2019 $ 725,319

The leases are conducted by referring to general market prices, and all the terms and conditions conform to normal business practices.

d. Key management compensation

The amounts of remuneration of directors and key executives were as follows:

Short-term employee benefits Termination and post-employment benefits	For the Three Months Ended June 30 2020 2019 $ 69,216 $ 64,058 939 4,254 $ 70,155 $ 68,312	For the Three Months Ended June 30 2020 2019 $ 69,216 $ 64,058 939 4,254 $ 70,155 $ 68,312		For the Six Months Ended June 30	For the Six Months Ended June 30
		2020 $ 69,216 939 $ 70,155		2020 $ 144,634 5,835 $ 150,469	2019 $ 142,610 16,702 $ 159,312

30. ASSETS PLEDGED

The assets pledged as collateral for bank loans, purchases, performance bonds and lawsuits were as follows:

Other current financial assets Services concessions Other non-current financial assets	June 30, 2020 December 31, 2019 $ 166,999 $ 165,201 6,880,694 6,970,053 267,507 271,653 $ 7,315,200 $ 7,406,907	June 30, 2019 $ 156,132 7,059,413 168,054 $ 7,383,599

31. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

a. Unrecognized commitments

Purchases of property, plant and equipment Purchases of cellular phones	June 30, 2020 December 31, 2019 $ 17,846,986 $ 3,670,907 $ 2,194,041 $ 2,268,710	June 30, 2019 $ 3,803,534 $ 2,376,495

As of June 30, 2020, December 31, 2019 and June 30, 2019, the amounts of lease commitments commencing after the balance sheet date were $537,879 thousand, $648,683 thousand and $689,232 thousand, respectively.

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b. As of June 30, 2020, December 31, 2019 and June 30, 2019, the amounts of endorsements and guarantees provided to group entities were all $21,550,000 thousand.
c. In accordance with the NCC’s policy and regulations, TWM entered into a contract with DBS Bank Ltd., which provided a performance guarantee for advance receipts from prepaid cards and electronic gift certificates, totaling $510,269 thousand and $19,709 thousand, respectively, as of June 30, 2020.

In accordance with the NCC’s policy and regulations, cable television companies should provide performance bonds based on a certain proportion of the advance receipts from their subscribers. As of June 30, 2020, the cable television companies had provided $74,238 thousand as performance bonds, classified as other non-current financial assets.

In accordance with the Ministry of Economic Affairs’ policy and regulations, momo entered into a contract with First Commercial Bank Co., Ltd., which provided a performance guarantee for advance receipts from prepaid bonuses and electronic tickets totaling $84,828 thousand and $52,992 thousand, respectively, as of June 30, 2020.

d. On January 15, 2009, TNH signed the BOT contract with the Department of Cultural Affairs of Taipei City Government. The primary terms of the contract are summarized as follows:
1) Construction and operating period:

The construction and operating period is 50 years from the day following the signing of the contract.

2) Development concession:

The total initial amount of concession was $1,238,095 thousand (tax excluded). According to the supplemental agreement signed in November 2014, the concession will be paid with additional business tax from the signing date of the supplemental agreement; thus, the concession will be increased by $48,750 thousand. The rest of the concession will be paid over 14 years from fiscal year 2015. As of June 30, 2020, $736,937 thousand (tax included) of the concession had been paid.

3) Performance guarantee:

As of June 30, 2020, TNH had provided a $32,500 thousand performance guarantee regarding the BOT contract.

4) Rental of land:

During the construction period, TNH should pay land value tax (1% of the announced land value) and other expenses.

During the operating period, TNH should pay 60% of 5% of the announced land value, that is, 3% of the announced land value. According to the supplemental agreement signed in November 2014, the concession will be paid with additional business tax from the date of agreement signing.

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e. In August 2015, Far EasTone Telecommunications (“FET”) filed a civil statement of complaint with the Court, in which FET claimed that (i) TWM shall apply for the return the C4 spectrum block (1748.7-1754.9/1843.7-1849.9 MHz) back to the NCC; (ii) TWM shall not use the C4 spectrum block; (iii) TWM shall not use the C1 spectrum block until TWM’s application for the return of the C4 spectrum block is approved by the NCC; and (iv) TWM shall provide $1,005,800 thousand to FET as compensation. In May 2016, the Court decided against TWM regarding claims (i), (ii), and (iii) of the lawsuit; and the Court decided against FET regarding claim (iv) of the lawsuit. FET offered a security deposit of $320,630 thousand for the provisional execution of claims (i) to (iv). TWM offered a counter-security deposit of $961,913 thousand in order to be exempted from the provisional execution of claims (i) to (iv). In addition, TWM offered a counter-security deposit for the exemption from provisional execution of the sentence, and the counter-security deposit was reclaimed in March 2018. TWM and FET appealed the aforementioned sentences respectively. The judgment dismissed by the High Court were as follows: 1. (1) TWM “shall apply for the return of the C4 spectrum block to the NCC immediately”, “shall not use the C4 spectrum block in any way”, and “TWM shall not use the C1 spectrum block before the C4 spectrum block has been returned to and approved by the NCC”, and (2) the claim stated in section 2(2) below, in which the corresponding portion of FET’s claimed provisional execution and litigation expenses were rejected. 2. (1) For the dismissed portion stated in the above section (1), FET’s claim and motion of provisional execution in the first instance were rejected; and (2) for the dismissed portion stated in the above section 1(2), TWM shall pay FET $765,779 thousand, as well as a 5% annual interest payment, for the period starting from September 5, 2015 to the payment date, on $152,584 thousand of the above amount. 3. The rest of FET’s appeals were rejected. 4. TWM shall bear half of the litigation expenses in the first and second instances, and FET shall bear the rest. 5. Regarding the portion of the judgment regarding TWM’s payment, FET may file a provisional execution with a collateral of $255,260 thousand or a negotiable certificate deposit (NCD) issued by Far Eastern International Bank for the equal amount; and TWM may provide a counter-security of $765,779 thousand to be exempted from the above FET provisional execution. 6. The rest of FET’s motions on provisional execution were rejected. TWM and FET appealed the sentence respectively. On May 29, 2019, the judgment dismissed by the Supreme Court was as follows: regarding the portion of the High Court’s original judgment on (1) dismissed FET’s other appeal, (2) ruled the TWM’s payment obligation, and (3) ruled the litigation expenses with respect to above-mentioned two items shall be dismissed, and the Supreme Court remanded the case to the High Court. The case is now under the trial of the High Court.

32. OTHERS

a. Employee benefits, depreciation, and amortization are summarized as follows:

Employee benefits Salary Insurance expenses Pension Others Depreciation Amortization	For the Three Months Ended June 30	For the Three Months Ended June 30
	2020 Classified as Operating Costs Classified as Operating Expenses Total $ 616,487 $ 1,229,390 $ 1,845,877 52,976 105,043 158,019 28,094 55,068 83,162 29,241 61,983 91,224 2,456,719 251,162 2,707,881 776,797 536,780 1,313,577	2019
		Classified as Operating Costs Classified as Operating Expenses Total $ 548,856 $ 1,142,146 $ 1,691,002 47,032 100,314 147,346 25,103 51,905 77,008 25,768 62,220 87,988 2,989,296 249,675 3,238,971 759,342 755,113 1,514,455

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For the Six Months Ended June 30

Employee benefits Salary Insurance expenses Pension Others Depreciation Amortization	2020 Classified as Operating Costs Classified as Operating Expenses Total $ 1,232,980 $ 2,479,593 $ 3,712,573 105,577 210,916 316,493 55,429 108,971 164,400 58,304 126,422 184,726 4,968,410 505,176 5,473,586 1,542,058 1,107,992 2,650,050	2019
		Classified as Operating Costs Classified as Operating Expenses Total $ 1,108,585 $ 2,334,846 $ 3,443,431 93,076 205,735 298,811 50,028 104,494 154,522 51,112 127,392 178,504 6,053,579 503,237 6,556,816 1,516,991 1,565,398 3,082,389

Information of employees’ compensation and remuneration of directors

According to TWM’s Articles, the estimated employees’ compensation and remuneration of directors are set at the rates of 1% to 3% and no higher than 0.3%, respectively, of profit before income tax, employees’ compensation, and remuneration of directors. Estimations for employees’ compensation were $96,193 thousand, $101,441 thousand, $198,090 thousand and $197,504 thousand, and remuneration to directors were $9,619 thousand, $10,144 thousand, $19,809 thousand and $19,750 thousand, which were calculated by applying the rates to the aforementioned profit before income tax, for the three months and the six months ended June 30, 2020 and 2019, respectively.

If there is a change in the approved amounts after the annual consolidated financial statements are authorized for issue, the difference is recorded as a change in accounting estimate in the next year.

The employees’ compensation and remuneration of directors of 2019 and 2018 shown below were approved by the Board of Directors on February 21, 2020 and January 31, 2019, respectively. The differences with the amounts recognized in the consolidated financial statements have been adjusted in 2020 and 2019, respectively.

Amounts approved by the Board of Directors Amounts recognized in the consolidated financial statements	For the Year Ended December 31	For the Year Ended December 31
	2019 Employees’ Compensation Paid in Cash Remuneration of Directors $ 437,880 $ 43,788 $ 394,092 $ 39,409	2018
		Employees’ Compensation Paid in Cash Remuneration of Directors $ 459,368 $ 45,937 $ 432,341 $ 43,234

Information on the employees’ compensation and remuneration of directors approved by the Board of Directors is available on the Market Observation Post System website of the Taiwan Stock Exchange.

b. As of the date the consolidated financial statements were authorized for issue, COVID-19 epidemic did not cause significant impact on the Group’s operating ability, financing situation and assessment of asset impairment, and the Group is continuously assessing and overseeing.
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33. ADDITIONAL DISCLOSURES

a. Information on significant transactions and b. Information on investees:
1) Financing extended to other parties: Table 1 (attached)
2) Endorsements/guarantees provided to other parties: Table 2 (attached)
3) Marketable securities held (excluding investments in subsidiaries and associates): Table 3 (attached)
4) Marketable securities acquired and disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital: Table 4 (attached)
5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in
- capital: Table 5 (attached)
6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital: None
7) Total purchases from or sales to related parties of at least NT$100 million or 20% of the paid-in capital: Table 6 (attached)
8) Receivables from related parties of at least NT$100 million or 20% of the paid-in capital: Table 7 (attached)
9) Names, locations and related information of investees on which TWM exercised significant influence (excluding information on investment in Mainland China): Table 8 (attached)
10) Trading in derivative instruments: None
11) Business relationships between the parent and the subsidiaries and significant intercompany transactions: Table 9 (attached)
c. Information on investment in Mainland China:
1) The names of investees in Mainland China, the main businesses and products, issued capital, method of investment, information on inflow or outflow of capital, ownership, net income or loss and recognized investment gain or loss, ending balance, amount received as earnings distributions from the investment, and limitation on investment: Table 10 (attached)
2) Significant direct or indirect transactions with the investee companies, the prices and terms of payment, unrealized gain or loss, and other related information, which is helpful to understand the impact of investment in Mainland China on financial reports: Table 9 (attached)
d. Information of major stockholders, the name, the number of stocks owned, and percentage of ownership of each stockholder with ownership of 5% or greater: Table 11 (attached)
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34. SEGMENT INFORMATION

The Group divides its business into four reportable segments with different market attributes and operation modes. The four segments are described as follows.

Telecommunications: providing mobile communication services, data mobile services, mobile phone sales and fixed-line services.

Retail: providing online shopping, TV shopping and catalog shopping.

Cable television: providing pay TV and cable broadband services.

Others: business other than telecommunications, retail, and cable television.

					Adjustments
For the Three Months	Telecommuni-		Cable		and
Ended June 30, 2020	cations	Retail	Television	Others	Eliminations	Total
Operating revenues	$ 14,355,250	$ 15,834,104	$ 1,542,673 $	134,716	$ (525,104)	$ 31,341,639
Operating costs	8,575,616	14,390,018	784,001	80,862	(421,512)	23,408,985
Operating expenses	2,814,568	1,007,100	194,033	11,375	(146,285)	3,880,791
Net other income and
expenses	70,025	23,988	(771)	-	(12,434)	80,808
Profit	3,035,091	460,974	563,868	42,479	30,259	4,132,671
EBITDA (Note)	6,190,312	657,619	741,227	90,767	32,684	7,712,609
					Adjustments
For the Three Months	Telecommuni-		Cable		and
Ended June 30, 2019	cation	Retail	Television	Others	Eliminations	Total
Operating revenues	$16,375,698	$ 11,815,431	$ 1,535,854 $	147,703	$ (260,135)	$ 29,614,551
Operating costs	10,131,831	10,668,992	817,728	85,966	(213,920)	21,490,597
Operating expenses	2,990,717	805,995	186,997	15,088	(53,478)	3,945,319
Net other income and
expenses	149,458	10,824	(2,112)	-	(10,835)	147,335
Profit	3,402,608	351,268	529,017	46,649	(3,572)	4,325,970
EBITDA (Note)	7,038,481	507,102	792,898	99,657	(12,500)	8,425,638
					Adjustments
For the Six Months	Telecommuni-		Cable		and
Ended June 30, 2020	cation	Retail	Television	Others	Eliminations	Total
Operating revenues	$ 29,976,283	$ 30,939,811	$ 3,084,421 $	271,575	$ (1,077,772)	$ 63,194,318
Operating costs	18,148,186	28,016,804	1,571,088	161,822	(907,462)	46,990,438
Operating expenses	5,611,086	1,947,201	388,854	28,758	(258,025)	7,717,874
Net other income and
expenses	108,362	47,101	(1,975)	-	(24,817)	128,671
Profit	6,325,373	1,022,907	1,122,504	80,995	62,898	8,614,677
EBITDA (Note)	12,684,676	1,410,759	1,481,751	177,497	58,371	15,813,054
					Adjustments
For the Six Months	Telecommuni-		Cable		and
Ended June 30, 2019	cation	Retail	Television	Others	Eliminations	Total
Operating revenues	$ 32,944,260	$ 23,551,058	$ 3,088,352 $	295,121	$ (391,567)	$ 59,487,224
Operating costs	20,451,555	21,182,787	1,672,035	172,837	(307,405)	43,171,809
Operating expenses	6,134,972	1,575,595	382,982	30,147	(102,538)	8,021,158
Net other income and
expenses	265,066	12,338	1,836	2,710	(22,143)	259,807
Profit	6,622,799	805,014	1,035,171	94,847	(3,767)	8,554,064
EBITDA (Note)	13,952,917	1,110,326	1,593,771	200,862	(21,807)	16,836,069

Note: The Group uses EBITDA (Operating income + Depreciation + Amortization expenses of intangible assets) as the measurement for segment profit and the basis of performance assessment.

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Geographical information

The Group’s revenues are generated mostly from domestic business. Overseas revenues are primarily generated from international calls and data services.

Consolidated geographic information for revenues was as follows:

Taiwan, ROC Overseas		For the Six Months Ended June 30	For the Six Months Ended June 30
		2020 $ 61,944,006 1,250,312 $ 63,194,318	2019 $ 58,016,774 1,470,450 $ 59,487,224

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TABLE 1

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

FINANCING EXTENDED TO OTHER PARTIES FOR THE SIX MONTHS ENDED JUNE 30, 2020

(In Thousands of New Taiwan Dollars)

No.	Lending Company	Borrowing Company	Financial Statement Account	Related Parties	Maximum Balance for the Period (Note 1)	Ending Balance (Note 1)	Drawdown Amounts	Interest Rate	Nature of Financing	Transaction Amounts	Reasons for Short-term Financing	Allowance for Impairment Loss	Collateral	Collateral	Lending Limit for Each Borrowing Company	Lending Company’s Lending Amount Limits	Note
													Item	Value
1	TCC	TWM TFC	Other receivables Other receivables	Yes Yes	$ 400,000 700,000	$ 400,000 700,000	$ 341,000 327,000	0.87178%-1.09422% 1.17056%-1.39400%	Short-term financing Short-term financing	$ - -	Operation requirements Operation requirements	$ - -	- -	$ - -	$ 35,382,479 35,382,479	$ 35,382,479 35,382,479	Note 2 Note 2
2	WMT	TWM TKT TFNM WTVB	Other receivables Other receivables Other receivables Other receivables	Yes Yes Yes Yes	3,800,000 100,000 2,770,000 1,000,000	3,800,000 100,000 2,500,000 1,000,000	2,476,000 - 1,350,000 570,000	0.86989%-1.09422% - 0.87033%-1.09422% 0.87033%-1.09433%	Short-term financing Short-term financing Short-term financing Short-term financing	- - - -	Operation requirements Operation requirements Operation requirements Operation requirements	- - - -	- - - -	- - - -	8,020,997 8,020,997 8,020,997 8,020,997	8,020,997 8,020,997 8,020,997 8,020,997	Note 2 Note 2 Note 2 Note 2
3	TFN	TWM TCC	Other receivables Other receivables	Yes Yes	9,000,000 700,000	9,000,000 700,000	7,323,000 327,000	1.09422% 0.87056%-1.09400%	Short-term financing Short-term financing	- -	Operation requirements Operation requirements	- -	- -	- -	22,817,173 22,817,173	22,817,173 22,817,173	Note 2 Note 2
4	YJCTV	TFNM	Other receivables	Yes	100,000	100,000	100,000	1.09378%	Transactions	461,370	-	-	-	-	461,370	461,370	Notes 3 and 4
5	PCTV	TFNM	Other receivables	Yes	520,000	520,000	520,000	1.09378%	Transactions	538,031	-	-	-	-	538,031	538,031	Notes 3 and 4
6	GCTV	TFNM	Other receivables	Yes	250,000	250,000	250,000	1.09378%	Short-term financing	-	Repayment of financing	-	-	-	276,668	276,668	Note 3

Note 1: The maximum balance for the period and the ending balance represent quotas, not actual drawdown.

Note 2: Where funds are loaned for reasons of business dealings and short-term financing needs, the amount of loaned funds shall be limited to 40% of the lending company’s net worth. For short-term financing needs, the aggregate amount of loaned funds shall not exceed 40% of the lending company’s net worth. The individual loan funds shall be limited to the lowest amount of the following items: 1) 40% of the lending company’s net worth; 2) The amount that the lending company invests in the borrowing entities; or 3) An amount equal to (the share portion of the borrowing entities that the lending company invests in) * (the total loaning amounts of the borrowing company). In the event that a lending company directly and indirectly owns 100% of the borrowing company, or the borrowing company directly and indirectly owns 100% of the lending company, the individual lending amount and the aggregate amount of loaned funds shall not exceed 40% of the lending company’s net worth.

Note 3: Where funds are loaned for reasons of business dealings and short-term financing needs, the amount of loaned funds shall be limited to the total amount of business dealings and 40% of the lending company’s net worth. 1) For reasons of business dealings: The individual lending amount and the aggregate amount of loaned funds shall not exceed the amount of business dealings and the total amount of business dealings, respectively. 2) For short-term financing needs: The individual lending amount and the aggregate amount of loaned funds shall not exceed 40% of the lending company’s net worth.

Note 4: Where funds are loaned for reasons of business dealings, the aggregate amount of loans and the maximum amount permitted to a single borrower shall be prescribed within the aggregate amount of business transactions.

61 -

TABLE 2

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

ENDORSEMENT/GUARANTEE PROVIDED TO OTHER PARTIES FOR THE SIX MONTHS ENDED JUNE 30, 2020

(In Thousands of New Taiwan Dollars)

No.	Company Providing Endorsements/ Guarantees	Receiving Party	Receiving Party	Limits on Endorsements/ Guarantees Amount Provided to Each Entity	Maximum Balance for the Period (Note 1)	Ending Balance (Note 1)	Drawdown Amounts (Note 1)	Amount of Endorsements/ Guarantees Collateralized by Property	Ratio of Accumulated Endorsements/ Guarantees to Net Worth of the Guarantor (Note 1)	Maximum Endorsements/ Guarantees Amount Allowable	Guarantee Provided by Parent Company	Guarantee Provided by a Subsidiary	Guarantee Provided to Subsidiaries in Mainland China	Note
		Name	Nature of Relationship
0	TWM	TFN TKT	Note 2 Note 2	$ 42,000,000 313,800	$ 21,500,000 50,000	$ 21,500,000 50,000	$ 8,425,950 50,000	$ - -	35.55 0.08	$ 60,473,969 60,473,969	Y Y	N N	N N	Notes 3 and 4 Note 3

Note 1: The maximum endorsement/guarantee balance for the period, the ending balance, and the drawdown amounts represent quotas, not actual drawdown.

Note 2: Direct/indirect subsidiary.

Note 3: For 100% directly/indirectly owned subsidiaries, the aggregate endorsement/guarantee amount provided shall not exceed the net worth of TWM, and the upper limit for each subsidiary shall be double the investment amount.

Note 4: Including US$65,000 thousand.

62 -

TABLE 3

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

MARKETABLE SECURITIES HELD (EXCLUDING INVESTMENTS IN SUBSIDIARIES AND ASSOCIATES) JUNE 30, 2020

(In Thousands of New Taiwan Dollars)

Investing Company	Marketable Securities Type and Name	Relationship with the Securities Issuer	Financial Statement Account		June 30, 2020	June 30, 2020		Note
				Units/Shares (In Thousands)	Carrying Value	Percentage of Ownership %	Fair Value
TWM TCC WMT TFN TCCI TUI TID TFNM	Stock Chunghwa Telecom Co., Ltd. Asia Pacific Telecom Co., Ltd. Bridge Mobile Pte Ltd. LINE Bank Taiwan Limited Limited Partnerships Grand Academy Investment, L.P. Starview Heights Investment, L.P. Stock Arcoa Communication Co., Ltd. Limited Partnerships The Last Thieves, L.P. Stock Taiwan High Speed Rail Corporation Stock TWM Great Taipei Broadband Co., Ltd. Stock TWM Stock TWM Beneficiary Certificates Dragon Tiger Capital Partners Limited - Class B Dragon Tiger Capital Partners Limited - Class C	- - - - - - - - - TWM - TWM TWM - -	Current financial assets at FVTOCI Non-current financial assets at FVTOCI Non-current financial assets at FVTOCI Non-current financial assets at FVTOCI Non-current financial assets at FVTOCI Non-current financial assets at FVTOCI Non-current financial assets at FVTOCI Current financial assets at FVTPL Current financial assets at FVTOCI Non-current financial assets at FVTOCI Non-current financial assets at FVTOCI Non-current financial assets at FVTOCI Non-current financial assets at FVTOCI Non-current financial assets at FVTOCI Non-current financial assets at FVTOCI	2,174 97,171 800 50,000 - - 6,998 - 74,746 200,497 10,000 410,665 87,590 0.2 0.0335	$ 254,301 766,679 30,185 483,501 301,213 92,911 92,376 - 2,728,244 22,154,892 37,838 45,378,514 9,678,646 - -	0.028 2.55 10 5 21.67 21.67 5.21 7.14 1.33 5.71 6.67 11.7 2.5 0.33 0.056	$ 254,301 766,679 30,185 483,501 301,213 92,911 92,376 - 2,728,244 22,154,892 37,838 45,378,514 9,678,646 - -	Note 1 Note 1 Note 1

(Continued)

63 -

Investing Company	Marketable Securities Type and Name	Relationship with the Securities Issuer	Financial Statement Account		June 30, 2020	June 30, 2020		Note
				Units/Shares (In Thousands)	Carrying Value	Percentage of Ownership %	Fair Value
momo	Stock Media Asia Group Holdings Limited We Can Medicines Co., Ltd.	- -	Current financial assets at FVTOCI Non-current financial assets at FVTOCI	43,668 2,400	$ 2,666 50,328	2.04 7.73	$ 2,666 50,328

Note 1: Percentage of ownership is the percentage of capital contribution.

Note 2: For the information on investments in subsidiaries and associates, see Table 8 and Table 10 for details.

(Concluded)

64 -

TABLE 4

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

MARKETABLE SECURITIES ACQUIRED AND DISPOSED OF AT COSTS OR PRICES OF AT LEAST $300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE SIX MONTHS ENDED JUNE 30, 2020

												(In	Thousands of New Taiwan Dollars)	Thousands of New Taiwan Dollars)

Company Name	Type and Name of Marketable Securities	Financial Statement Account	Counter-party	Relationship	Beginning Balance		Acquisition			Disposal			Ending	Balance
					Units/Shares (In Thousands)	Amount	Units/Shares (In Thousands)	Amount	Units/Shares (In Thousands)	Amount	Carrying Amount	Gain (Loss) on Disposal	Units/Shares (In Thousands)	Amount
TWM TFN	LINE Bank Taiwan Limited Taiwan High Speed Rail Corporation	Non-current financial assets at FVTOCI Current financial assets at FVTOCI	- -	- -	- 90,212	$ 100,000 (Note 1) 3,464,156	50,000 -	$ 400,000 -	- 15,466	$ - 582,488	$ - 156,432	$ - 426,056	50,000 74,746	$ 483,501 (Note 2) 2,728,244 (Note 2)

Note 1: The beginning balance is recognized as prepayments for investment.

Note 2: The ending balance includes the relevant adjustment to financial assets.

65 -

TABLE 5

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

ACQUISITION OF INDIVIDUAL REAL ESTATE AT COSTS OF AT LEAST $300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE SIX MONTHS ENDED JUNE 30, 2020

											(In	Thousands of New Taiwan Dollars)	Thousands of New Taiwan Dollars)

Buyer	Property	Event Date	Transaction Amount	Payment Status	Counter-party	Relationship	Information on Previous Title Transfer If Counter-party Is A Related Party				Pricing Reference	Purpose of Acquisition	Other Terms
							Property Owner	Relationship	Transaction Date	Amount
momo	Land	July 31, 2019	$ 619,817 (Note)	Paid in full. (including $557,003 thousand paid in current period)	Yi Jinn Industrial Co., Ltd.	-	-	-	-	$ -	Determined by the professional appraisal report and market conditions	Set up a southern logistics center for operational needs	None

Note: Total transaction amount for the land was $628,143 thousand in July 2019 and changed to $619,817 thousand due to the adjustment of transaction volume in April 2020.

66 -

TABLE 6

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE SIX MONTHS ENDED JUNE 30, 2020

(In Thousands of New Taiwan Dollars)

Company Name	Related Party	Nature of Relationship		Transaction Details	Transaction Details		Transactions with Terms Different from Others	Transactions with Terms Different from Others	Notes/Accounts Payable or Receivable	Notes/Accounts Payable or Receivable	Note
			Purchase/Sale	Amount	% to Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total
TWM TT&T TPIA TFNM momo	TFN TKT momo TWM Fubon Ins. YJCTV PCTV UCTV TPE	Subsidiary Subsidiary Subsidiary Ultimate parent Other related party Subsidiary Subsidiary Subsidiary Associate	Sale Purchase Purchase Sale Purchase Sale Sale Channel leasing fee Channel leasing fee Channel leasing fee Purchase	$ 120,164 2,098,387 110,819 783,069 138,259 505,659 116,086 211,570 248,196 108,929 383,828	- 12 1 3 1 90 91 13 15 7 1	Based on contract terms Based on contract terms Based on contract terms Based on contract terms Based on contract terms Based on contract terms Based on contract terms Based on contract terms Based on contract terms Based on contract terms Based on contract terms	- - - - - - - Note 1 Note 1 Note 1 -	- - - - - - - Note 1 Note 1 Note 1 -	$ 25,889 (416,426 ) (56,946 ) 158,009 (21,347 ) 83,495 90,761 - - - (80,122 )	- (Note 2) 4 3 2 90 90 - - - 1	Note 3 Note 3

Note 1: The companies authorized a related party to deal with the copyright fees for cable television. As the said account item is the only one, there is no comparable transaction.

Note 2: Including accounts payable and other payables.

Note 3: Accounts receivable (payable) was the net amount after being offset.

67 -

TABLE 7

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

RECEIVABLES FROM RELATED PARTIES OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL JUNE 30, 2020

(In Thousands of New Taiwan Dollars)

Company Name	Related Party	Nature of Relationship	Ending Balance	Ending Balance	Turnover Rate	Overdue	Overdue	Amount Received in Subsequent Period	Allowance for Impairment Loss
						Amount	Action Taken
TWM TCC WMT TFN YJCTV PCTV GCTV	momo TWM TFC TWM TFNM WTVB TWM TCC TFNM TFNM TFNM	Subsidiary Parent Subsidiary Parent Subsidiary Subsidiary Ultimate parent Parent Parent Parent Parent	Accounts receivable Other receivables Other receivables Other receivables Other receivables Other receivables Accounts receivable Other receivables Other receivables Accounts receivable Other receivables Accounts receivable Other receivables Accounts receivable Other receivables	$ 158,009 342,504 328,761 2,479,660 1,350,512 570,764 421,894 7,421,546 328,380 4,965 100,242 5,560 520,036 2,411 250,002	9.11 10.39 6.04 5.79 5.79	$ - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - -	$ 153,971 342,504 1,714 60,089 - - 366,343 7,388,337 1,345 3,173 173 3,568 1 1,543 1	$ - - - - - - - - - - - - - - -

68 -

TABLE 8

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

NAMES, LOCATIONS AND RELATED INFORMATION OF INVESTEES ON WHICH TWM EXERCISED SIGNIFICANT INFLUENCE (EXCLUDING INFORMATION ON INVESTMENT IN MAINLAND CHINA) FOR THE SIX MONTHS ENDED JUNE 30, 2020

(In Thousands of New Taiwan Dollars)

Investor	Investee	Location	Main Businesses and Products	Investment Amount	Investment Amount	Balance as of June 30, 2020	Balance as of June 30, 2020	Balance as of June 30, 2020	Net Income (Loss) of the Investee	Investment Income (Loss)	Note
				June 30, 2020	December 31, 2019	Shares (In Thousands)	Percentage of Ownership %	Carrying Value
TWM TCC WMT TVC TFN TCCI TFNM TKT	TCC WMT TVC TNH AppWorks ADT TFN TT&T TWM Holding TCCI TDS TPIA TFC TFNM GFMT GWMT WTVB momo AppWorks Fund III TUI TID TKT YJCTV MCTV PCTV UCTV GCTV kbro Media M.E.	Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan British Virgin Islands Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan	Investment Investment Investment Building and operating Songshan Cultural and Creative Park BOT project Venture capital, investment consulting, and management consulting Technology development of mobile payment and information processing services Fixed line service provider Call center service and telephone marketing Investment Investment Commissioned maintenance service Property insurance agent Type II telecommunications business Type II telecommunications business Investment Investment TV program provider Wholesale and retail sales Venture capital Investment Investment Digital music service Cable TV service provider Cable TV service provider Cable TV service provider Cable TV service provider Cable TV service provider Film distribution, arts and literature service, and entertainment Livestreaming artists management service, digital media production, and media planning	$ 40,397,288 16,802,000 215,000 1,918,655 235,000 60,000 21,000,000 56,210 347,951 17,285,441 25,000 5,000 200,000 5,210,443 16,984 92,189 222,417 8,129,394 210,000 22,314,536 3,602,782 156,900 2,061,522 510,724 3,261,073 1,986,250 1,221,002 292,500 27,000	$ 40,397,288 16,802,000 5,000 1,918,655 235,000 60,000 21,000,000 56,210 347,951 17,285,441 25,000 5,000 200,000 5,210,443 16,984 92,189 222,417 8,129,394 - 22,314,536 3,602,782 156,900 2,061,522 510,724 3,261,073 1,986,250 1,221,002 292,500 27,000	502,970 42,065 21,500 191,866 1,275 6,000 2,100,000 2,484 - 154,721 2,500 500 20,000 230,921 1,500 8,945 18,177 63,047 21,000 400 104,712 14,700 33,940 6,248 68,090 169,141 51,733 29,250 460	100 100 100 49.9 51 14.4 100 100 100 100 100 100 100 100 100 100 100 45.01 19.46 100 100 100 100 29.53 100 99.22 92.38 32.5 15	$ 18,923,493 20,051,680 209,616 1,838,202 255,767 6,072 57,043,896 85,041 225,193 30,265,489 97,197 46,086 198,341 6,054,812 16,972 96,757 277,174 9,198,993 204,887 39,842,583 8,503,193 238,967 1,733,949 618,154 3,391,140 2,016,020 1,261,491 124,936 25,274	$ 1,486,057 1,234,501 (1,373) 34,200 66,659 - 1,366,990 25,570 (315) 1,841 2,804 36,086 931 859,175 69 2,033 13,888 912,068 (52,992) (106) (69) (6,355) (36,157) 26,308 88,191 22,278 31,603 (43,874) 1,641	$ 1,486,334 1,234,573 (1,373) 17,757 33,566 - - - - - - - - - - - - - - - - - - - - - - - -	Note 1 Note 1 Note 1 Note 1 Note 2 Note 2 Notes 2 and 3 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Notes 2 and 4 Note 2 Note 2 Note 2 Note 2 Note 2 Notes 2 and 5 Note 2 Note 2 Note 2 Note 2 Note 2

(Continued)

69 -

Investor	Investee	Location	Main Businesses and Products	Investment Amount	Investment Amount	Balance as of June 30, 2020	Balance as of June 30, 2020	Balance as of June 30, 2020	Net Income (Loss) of the Investee	Investment Income (Loss)	Note
				June 30, 2020	December 31, 2019	Shares (In Thousands)	Percentage of Ownership %	Carrying Value
GFMT GWMT momo Asian Crown (BVI) Fortune Kingdom Honest Development	UCTV GCTV Asian Crown (BVI) Honest Development FLI FPI FST Bebe Poshe FSL TPE TV Direct TVD Shopping Fortune Kingdom HK Fubon Multimedia HK Yue Numerous	Taiwan Taiwan British Virgin Islands Samoa Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Thailand Thailand Samoa Hong Kong Hong Kong	Cable TV service provider Cable TV service provider Investment Investment Life insurance agent Property insurance agent Travel agent Wholesale of cosmetics Logistics and transport Logistics industry Wholesale and retail sales Wholesale and retail sales Investment Investment Investment	$ 16,218 91,910 885,285 670,448 3,000 3,000 6,000 85,000 250,000 322,100 133,098 Note 6 1,132,789 1,132,789 670,448	$ 16,218 91,910 885,285 670,448 3,000 3,000 6,000 85,000 - 337,860 - 116,463 1,132,789 1,132,789 670,448	1,300 3,825 9,735 21,778 500 500 3,000 8,500 25,000 16,105 123,981 Note 6 11,594 11,594 16,600	0.76 6.83 81.99 100 100 100 100 85 100 16.87 16.2 Note 6 100 100 100	$ 15,499 95,256 36,485 624,095 8,147 9,366 44,376 59,377 251,234 413,571 128,288 Note 6 40,117 40,117 624,095	$ 22,278 31,603 (4,248) 10,929 (644) 111 4,208 (4,253) 1,234 108,468 17,897 Note 6 (4,214) (4,214) 10,929	$ - - - - - - - - - - - - - - -	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Notes 2 and 6 Note 2 Note 2 Note 2

Note 1: Downstream transactions, upstream transactions, and consolidated unrealized gain or loss are included.

Note 2: The income/loss of the investee was already included in the income/loss of the investor, and is not presented in this table.

Note 3: Held 1 share on June 30, 2020.

Note 4: Non-controlling interests.

Note 5: 70.47% of stocks are held under trustee accounts.

Note 6: momo sold all of its equity interest of TVD Shopping in June 2020.

Note 7: For information on investment in Mainland China, see Table 10 for details.

(Concluded)

70 -

TABLE 9

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT TRANSACTIONS FOR THE SIX MONTHS ENDED JUNE 30, 2020

(In Thousands of New Taiwan Dollars)

Number	Company Name	Counter-party	Nature of Relationship (Note 1)		Transaction Details	Transaction Details	Percentage of Consolidated Total Operating Revenues or Total Assets
				Account	Amount	Transaction Terms
0	TWM	TFN TPIA momo TFN TNH TFN WMT TCC TFN TKT momo TFN TT&T TDS momo TFN TNH TFN momo	1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1	Notes and accounts receivable, net Notes and accounts receivable, net Notes and accounts receivable, net Other receivables Other non-current assets Short-term borrowings Short-term borrowings Short-term borrowings Notes and accounts payable Notes and accounts payable Notes and accounts payable Other payables Other payables Other payables Other payables Lease liabilities - current Lease liabilities - current Other current liabilities Other current liabilities	$ 26,408 58,043 158,009 35,065 18,164 7,323,000 2,476,000 341,000 66,644 56,946 21,347 424,933 83,495 17,249 16,481 23,758 114,462 28,422 19,997	The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices	- - - - - 4% 1% - - - - - - - - - - - -

(Continued)

71 -

Number	Company Name	Counter-party	Nature of Relationship (Note 1)		Transaction Details	Transaction Details	Percentage of Consolidated Total Operating Revenues or Total Assets
				Account	Amount	Transaction Terms
0	TWM	TFN TNH YJCTV GCTV TFN TFNM TPIA momo TFN TKT TDS momo TFNM TFN TT&T TFN TFN WMT	1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1	Lease liabilities - non-current Lease liabilities - non-current Lease liabilities - non-current Lease liabilities - non-current Operating revenues Operating revenues Operating revenues Operating revenues Operating costs Operating costs Operating costs Operating costs Operating costs Operating expenses Operating expenses Other income and expenses, net Finance costs Finance costs	$ 33,363 310,607 30,332 17,237 120,164 11,591 73,253 783,069 2,098,387 110,819 32,831 138,259 16,423 15,137 505,659 21,035 40,403 15,894	The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices	- - - - - - - 1% 3% - - - - - 1% - - -
1	TCC	TFC TFN	1 1	Other receivables Short-term borrowings	328,761 327,000	The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices	- -
2	WMT	TFNM WTVB	1 1	Other receivables Other receivables	1,350,512 570,764	The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices	1% -

(Continued)

72 -

Number	Company Name	Counter-party	Nature of Relationship (Note 1)		Transaction Details	Transaction Details	Percentage of Consolidated Total Operating Revenues or Total Assets
				Account	Amount	Transaction Terms
3	TFN	TFC TFNM TFC TFNM momo TT&T	3 3 3 3 3 3	Notes and accounts receivable, net Notes and accounts receivable, net Operating revenues Operating revenues Operating revenues Operating expenses	$ 15,826 22,594 46,519 77,211 28,561 53,921	The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices	- - - - - -
4	momo	FSL TFNM FGE Bebe Poshe FSL TFNM	1 3 1 1 1 3	Notes and accounts payable Notes and accounts payable Operating revenues Operating costs Operating costs Operating costs	32,126 24,637 17,499 21,756 31,334 24,633	The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices	- - - - - -
5	TFNM	PCTV YJCTV UCTV GCTV MCTV PCTV YJCTV GCTV WTVB PCTV	1 1 1 1 1 1 1 1 3 1	Other receivables Other receivables Other receivables Other receivables Other receivables Short-term borrowings Short-term borrowings Short-term borrowings Notes and accounts payable Operating revenues	60,136 36,646 28,066 25,687 15,911 520,000 100,000 250,000 42,669 269,116	The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices	- - - - - - - - - -

(Continued)

73 -

Number	Company Name	Counter-party	Nature of Relationship (Note 1)		Transaction Details	Transaction Details	Percentage of Consolidated Total Operating Revenues or Total Assets
				Account	Amount	Transaction Terms
5	TFNM	YJCTV UCTV GCTV PCTV YJCTV UCTV WTVB	1 1 1 1 1 1 3	Operating revenues Operating revenues Operating revenues Operating costs Operating costs Operating costs Operating costs	$ 230,358 108,929 102,696 17,553 15,791 11,430 42,669	The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices The terms of transaction are determined in accordance with mutual agreements or general business practices	- - - - - - -

Note 1: 1. Parent to subsidiary.

Subsidiary to parent.
Between subsidiaries.

Note 2: All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation.

(Concluded)

74 -

TABLE 10

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

INVESTMENTS IN MAINLAND CHINA FOR THE SIX MONTHS ENDED JUNE 30, 2020

(In Thousands of New Taiwan Dollars and Foreign Currencies)

Investee Company Name	Main Businesses and Products	Main Businesses and Products	Total Amount of Paid-in Capital	Total Amount of Paid-in Capital	Investment Type (Note 1)	Accumulated Outflow of Investment from Taiwan as of January 1, 2020	Accumulated Outflow of Investment from Taiwan as of January 1, 2020	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of June 30, 2020	Net Income (Loss) of Investee	% Ownership through Direct or Indirect Investment	Investment Income (Loss)	Carrying Value as of June 30, 2020	Accumulated Inward Remittance of Earnings as of June 30, 2020
								Outflow	Inflow
TWMC FGE Haobo GHS	Mobile application development and design Wholesaling Investment Wholesaling		$ 88,740 (USD 3,000) 323,948 (RMB 77,500) 45,980 (RMB 11,000) 208,999 (RMB 50,000)		b b b b	$ 144,111 (USD 4,872) 787,253 (USD 14,000) (RMB 89,267) - -		$ - - - -	$ - - - -	$ 144,111 (USD 4,872) 787,253 (USD 14,000) (RMB 89,267) - -	$ 689 (4,339) 11,519 79,154	100 76.7 100 20	$ 689 (3,328) 11,519 12,467	$ 75,843 26,139 597,530 555,409	- - - -

Company		Accumulated Investment in Mainland China as of June 30, 2020		Investment Amounts Authorized by Investment Commission, MOEA			Upper Limit on Investment Authorized by Investment Commission, MOEA (Note 2)
TWM and subsidiaries		$1,574,509 (US$18,872, RMB89,267 and HK$168,539)		$1,574,509 (US$18,872, RMB89,267 and HK$168,539)			$39,899,051

Note 1: The investment types are as follows:

a. Direct investment in Mainland China.

b. Indirect investment in Mainland China through a subsidiary in a third region, e.g. TCC and momo.

c. Others.

Note 2: The upper limit on investment in Mainland China is calculated by 60% of the consolidated net worth.

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TABLE 11

TAIWAN MOBILE CO., LTD

INFORMATION OF MAJOR STOCKHOLDERS JUNE 30, 2020

Name of Major Stockholder	Shares	Shares
	Number of Shares	Percentage of Ownership (%)
TUI Shin Kong Life Insurance Co., Ltd. Cathay Life Insurance Co., Ltd. TCCI Ming Dong Co., Ltd.	410,665,284 325,962,000 214,661,900 200,496,761 184,736,452	11.70 9.28 6.11 5.71 5.26

Note: The table discloses stockholding information of stockholders whose stockholding percentages are more than 5%. The Taiwan Depository & Clearing Corporation calculates the total number of common stocks and special stocks (including treasury stocks) that have completed the dematerialized registration and delivery on the last business day of the quarter. The stocks reported in the TWM’s consolidated financial statements and the actual number of stocks that have completed the dematerialized registration and delivery may be different due to the basis of calculation.

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AI assistant

TWM — Interim / Quarterly Report 2020

52277_rns_2020-11-06_8bcc20e3-945b-41c7-920e-709609fb086f.pdf

Taiwan Mobile Co., Ltd. and Subsidiaries

INDEPENDENT AUDITORS’ REVIEW REPORT

Introduction

Scope of Review

Conclusion

Notice to Readers

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

(Reviewed, Not Audited)

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

1. ORGANIZATION AND OPERATIONS

2. APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS

3. APPLICATION OF NEW AND AMENDED STANDARDS AND INTERPRETATIONS

Effective Date New IFRSs Announced by IASB (Note 1)

c. Reclassification

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Statement of Compliance

Basis of Consolidation

Leases

a. The Group as lessor

Employee Benefits

Income Tax

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

6. CASH AND CASH EQUIVALENTS

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

8. NOTES AND ACCOUNTS RECEIVABLE, NET

June 30, 2020

9. INVENTORIES

10. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

a. GHS

b. TPE

c. AppWorks

d. AppWorks Fund III

e. TV Direct

g. M.E.

h. ADT

11. SUBSIDIARIES WITH MATERIAL NON-CONTROLLING INTERESTS

12. PROPERTY, PLANT AND EQUIPMENT

13. LEASE ARRANGEMENTS

a. Right-of-use assets

d. Other lease information

14. INVESTMENT PROPERTIES

15. INTANGIBLE ASSETS

a. Concession licenses

b. Service concessions

16. OTHER NON-CURRENT ASSETS

17. BORROWINGS

a. Short-term borrowings

c. Long-term borrowings

2) Secured loans

18. BONDS PAYABLE

c. 6th domestic unsecured straight corporate bonds

d. 3rd domestic unsecured convertible bonds

19. PROVISIONS

20. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

b. Defined benefit plans

21. EQUITY

a. Common stock

b. Capital surplus

c. Appropriation of earnings and dividend policy

d. Other equity interests

e. Treasury stock

f. Non-controlling interests

22. OPERATING REVENUES

a. Contract information

b. Contract balances

23. NON-OPERATING INCOME AND EXPENSES

TWM Interim / Quarterly Report 2020