TWM - Interim / Quarterly Report 2020

Taiwan Mobile Co., Ltd. and Subsidiaries

Consolidated Financial Statements for the Nine Months Ended September 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 September 30, 2020 and 2019, the consolidated statements of comprehensive income for the three months and the nine months ended September 30, 2020 and 2019, the consolidated statements of changes in equity and cash flows for the nine 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 the 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 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 September 30, 2020 and 2019, and of its consolidated financial performance for the three months ended September 30, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the nine 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 the 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 November 6, 2020

Notice to Readers

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

For the convenience of readers, the independent auditors’ review report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in 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 (Note 29) Financial assets at fair value through other comprehensive income (Note 7) Contract assets (Note 22) Notes and accounts receivable, net (Note 8) Accounts receivable due from related parties (Note 29) Other receivables (Note 29) Inventories (Note 9) Prepayments (Note 29) Assets held for sale Other financial assets (Notes 29 and 30) Other current assets Total current assets NON-CURRENT ASSETS Financial assets at fair value through profit or loss 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		September 30, 2020 (Reviewed)		December 31, 2019 (Audited)		September 30, 2019 (Reviewed)
		Amount % $ 10,458,046 6 - - 1,610,652 1 4,610,329 3 7,277,145 4 168,665 - 1,387,608 1 4,885,413 3 817,885 - 30,615 - 677,356 - 126,421 - 32,050,135 18 - - 1,948,156 1 3,100,897 2 1,848,260 1 38,592,413 21 9,010,505 5 2,770,780 2 65,879,630 36 15,832,440 9 5,275,420 3 768,906 - 1,780,975 1 307,067 - 1,571,058 1 148,686,507 82		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 % $ 13,023,288 8 - - 249,034 - 4,911,308 3 7,585,200 5 155,872 - 2,151,715 2 4,706,877 3 738,341 1 - - 600,461 - 106,576 - 34,228,672 22 2,500 - 4,786,983 3 3,506,891 2 1,640,080 1 36,990,076 23 9,930,778 6 2,978,278 2 38,414,344 24 15,872,595 10 5,548,621 3 805,778 1 2,243,280 2 208,224 - 1,672,806 1 124,601,234 78

TOTAL $ 180,736,642 100 $ 153,919,959 100 $ 158,829,906 100

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) 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		September 30, 2020 (Reviewed)		December 31, 2019 (Audited)		September 30, 2019 (Reviewed)
		Amount % $ 15,100,000 8 17,289,545 10 1,701,749 1 8,396,236 5 138,601 - 10,385,029 6 1,395,178 1 60,335 - 3,466,731 2 198,275 - 2,303,351 1 2,472,973 1 62,908,003 35 51,588 - 35,602,395 20 2,383,511 1 1,501,571 1 1,042,650 - 5,518,479 3 493,079 - 1,153,460 1 462,537 - 48,209,270 26 111,117,273 61 35,093,765 19 30,450 - 18,937,441 10 30,170,398 17 - - 10,329,388 6 (1,496,880) (1) (29,717,344) (16) 63,347,218 35 6,272,151 4 69,619,369 39 $ 180,736,642 100		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 % $ 15,670,000 10 1,200,000 1 1,726,286 1 11,897,943 7 180,126 - 8,387,740 5 2,561,672 2 102,327 - 3,525,545 2 119,946 - 4,803,227 3 2,482,571 2 52,657,383 33 47,871 - 17,214,347 11 8,636,924 5 1,448,562 1 960,745 1 6,373,530 4 471,530 - 1,093,515 1 522,124 - 36,769,148 23 89,426,531 56 34,679,531 22 279,910 - 19,110,633 12 28,922,281 18 95,381 - 10,054,123 6 (26,166) - (29,717,344) (18) 63,398,349 40 6,005,026 4 69,403,375 44 $ 158,829,906 100

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 September 30	For the Three Months Ended September 30	For the Nine Months	Ended September 30
2020	2019 Reclassified (Note 3)	2020	2019 Reclassified (Note 3)
Amount % $ 31,242,977 100 23,724,197 76 7,518,780 24 2,435,714 8 1,259,265 4 54,333 - 50,309 - 3,799,621 12 123,599 - 3,842,758 12 14,548 - 97,752 - (7,071 ) - (157,022 ) - 16,649 - (35,144) - 3,807,614 12 743,749 2 3,063,865 10 (232,829 ) (1 ) 2,431 - 7,601 - (3,164) - (225,961) (1) $ 2,837,904 9 $ 2,818,867 9 244,998 1 $ 3,063,865 10 $ 2,588,119 8 249,785 1 $ 2,837,904 9 $ 1.01 $ 1.00	Amount % $ 30,825,915 100 22,691,898 74 8,134,017 26 2,593,839 8 1,266,748 4 41,060 - 70,930 - 3,972,577 12 114,973 - 4,276,413 14 16,826 - 130,160 - (28,175 ) - (141,920 ) - (522) - (23,631) - 4,252,782 14 840,738 3 3,412,044 11 (1,143,034 ) (4 ) 269 - (30,624 ) - 5,822 - (1,167,567) (4) $ 2,244,477 7 $ 3,253,393 11 158,651 - $ 3,412,044 11 $ 2,098,701 7 145,776 - $ 2,244,477 7 $ 1.17 $ 1.15	Amount % $ 94,437,295 100 70,714,635 75 23,722,660 25 7,346,778 8 3,878,281 4 157,913 - 134,523 - 11,517,495 12 252,270 - 12,457,435 13 50,537 - 116,055 - 32,267 - (459,372 ) - 68,475 - (192,038) - 12,265,397 13 2,322,095 2 9,943,302 11 (788,950 ) (1 ) 29,799 - (14,875 ) - (876) - (774,902) (1) $ 9,168,400 10 $ 9,181,100 10 762,202 1 $ 9,943,302 11 $ 8,395,355 9 773,045 1 $ 9,168,400 10 $ 3.27 $ 3.25	Amount % $ 90,313,139 100 65,863,707 73 24,449,432 27 7,865,130 9 3,816,633 4 115,913 - 196,059 - 11,993,735 13 374,780 - 12,830,477 14 51,096 - 173,232 - (66,113 ) - (433,638 ) - 11,159 - (264,264) - 12,566,213 14 2,467,685 3 10,098,528 11 71,615 - 8,643 - (13,724 ) - 4,277 - 70,811 - $ 10,169,339 11 $ 9,530,067 11 568,461 - $ 10,098,528 11 $ 9,599,403 11 569,936 - $ 10,169,339 11 $ 3.46 $ 3.39

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 nine months ended September 30, 2019 Other comprehensive income (loss) for the nine months ended September 30, 2019 Total comprehensive income (loss) for the nine months ended September 30, 2019 Conversion of convertible bonds to common stock Cash dividends paid to non-controlling interests of subsidiaries BALANCE, SEPTEMBER 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 nine months ended September 30, 2020 Other comprehensive income (loss) for the nine months ended September 30, 2020 Total comprehensive income (loss) for the nine months ended September 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, SEPTEMBER 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) - 9,530,067 568,461 69,336 1,475 9,599,403 569,936 7,251,044 - - (693,361) $ 63,398,349 $ 6,005,026 $ 68,017,291 $ 6,158,984 - - - - (11,756,844) - (11,756,844) - (1,593,624) - 9,181,100 762,202 (785,745) 10,843 8,395,355 773,045 289,779 - - - (2,001) (1,491) (2,738) (3,344) - (655,043) $ 63,347,218 $ 6,272,151	Total Equity $ 67,993,696 48,880 68,042,576 - - (15,366,223) (15,366,223) 10,098,528 70,811 10,169,339 7,251,044 (693,361) $ 69,403,375 $ 74,176,275 - - (11,756,844) (11,756,844) (1,593,624) 9,943,302 (774,902) 9,168,400 289,779 - (3,492) (6,082) (655,043) $ 69,619,369
	Common Stock $ 34,208,519 - 34,208,519 - - - - - - - 471,012 - $ 34,679,531 $ 34,959,441 - - - - - - - - 134,324 - - - - $ 35,093,765	Capital Collected in Advanced Capital Surplus $ 29,819 $ 12,580,692 - - 29,819 12,580,692 - - - - - - - - - - - - - - 250,091 6,529,941 - - $ 279,910 $ 19,110,633 $ 134,104 $ 20,274,694 - - - - - - - - - (1,593,624) - - - - - - (103,654) 259,109 - - - - - (2,738) - - $ 30,450 $ 18,937,441	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) - - 9,530,067 - - 121 - - 9,530,188 - - - - - - $ 28,922,281 $ 95,381 $ 10,054,123 $ 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) - - - - - 9,181,100 - - (235) - - 9,180,865 - - - - - 1,148,079 - - (2,001) - - 2,196 - - - $ 30,170,398 $ - $ 10,329,388	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) - - - - - - - - - - - - - - - (5,002) 74,217 - (5,002) 74,217 - - - - - - - $ (29,400) $ 3,234 $ (29,717,344) $ (34,505) $ 473,410 $ (29,717,344) - - - - - - - - - - - - - - - - - - (7,104) (778,406) - (7,104) (778,406) - - - - - (1,148,079) - - - - - (2,196) - - - - $ (41,609) $ (1,455,271) $ (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 Financial assets mandatorily classified as at fair value through profit or loss Contract assets Notes and accounts receivable 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 Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 12,265,397 8,206,431 2,944,679 1,331,557 40,113 (8,800) 134,523 459,372 (50,537) (102,762) (68,475) (73,859) 149 (3,656) - 589,273 294,807 (22,479) 100,865 785,063 (356,470) 75,710 (3,684) (993,480) (99,363) 735,951 3,439 (1,014,998) (23,669) 111,465 96,944 (24,096) 25,329,410 8,389 (987) (2,321,479) 23,015,333	2019 $ 12,566,213 9,723,595 2,582,492 1,950,516 54,305 - 196,059 433,638 (51,096) (117,211) (11,159) - (5,209) 6,990 84,864 264,859 (404,063) (9,962) (123,992) (761,214) (282,081) 810,449 (5,212) (1,247,514) (76,623) 5,140,963 538 (1,231,872) 365 8,024 92,532 (39,350) 29,549,844 197 (974) (2,210,403) 27,338,664

(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 Increase (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 (including paid to non-controlling interests) Interest paid Net cash generated from (used in) financing activities		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ (4,755,435) (25,030) (29,851,204) (248,765) 23,448 6,000 361 (407,419) 1,568,159 (482,516) 219,742 - 33,298 (261,756) 226,816 (220,941) 96,213 33,650 122,926 (33,922,453) (1,170,000) 15,385,465 19,979,415 (4,203,000) (2,939,852) 128,203 (66,953) (14,005,485) (405,207) 12,702,586	2019 $ (5,109,985) (16,808) (206,165) (200,110) 37,146 - 368 - - (27,000) - (100,000) - (208,262) 204,232 (152,825) 55,090 46,429 185,379 (5,492,511) 5,400,000 (298,700) - (2,253,000) (2,824,316) 172,162 (93,114) (16,059,547) (362,330) (16,318,845) (Continued)

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

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

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND EQUIVALENTS NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD CASH AND CASH EQUIVALENTS AT END OF PERIOD		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ (790) 1,794,676 8,663,370 $ 10,458,046	2019 $ (2,730) 5,524,578 7,498,710 $ 13,023,288

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 NINE MONTHS ENDED SEPTEMBER 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 November 6, 2020.

3. APPLICATION OF NEW AND AMENDED STANDARDS AND INTERPRETATIONS

a. Application of the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the 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 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 January 1, 2021 “Interest Rate Benchmark Reform - Phase 2” 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 nine months ended September 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 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
September 30,
2020
December 31,
2019
September 30,
2019
Note
100.00%
100.00%
100.00%
-
100.00%
100.00%
100.00%
-
100.00%
100.00%
100.00%
-
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 1
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
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
MFS Co., Ltd. (MFS)
Wholesaling
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
September 30,
2020
December 31,
2019
September 30,
2019
Note
100.00%
100.00%
100.00%
Note 1
100.00%
100.00%
100.00%
-
100.00%
100.00%
100.00%
Note 1
100.00%
100.00%
100.00%
-
100.00%
100.00%
100.00%
-
29.53%
29.53%
29.53%
Note 2
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 3
100.00%
-
-
Note 4
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: TCCI, TUI and TID collectively owned 698,752 thousand shares of TWM, representing 19.89% of total outstanding shares as of September 30, 2020.

Note 2: The other 70.47% of shares were held under trustee accounts.

Note 3: Set up in February 2020.

Note 4: Set up in July 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

September 30, 2020 Cash on hand and revolving funds $ 79,992 Cash in banks 4,595,393 Time deposits 3,097,572 Government bonds with repurchase rights 2,685,089 $ 10,458,046	December 31, 2019 September 30, 2019 $ 60,483 $ 152,688 3,545,544 7,955,311 2,423,103 2,167,192 2,634,240 2,748,097 $ 8,663,370 $ 13,023,288

14 -

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
		2020		2019		2019
Investments in equity instruments-current
Domestic investments
Listed stocks	$	1,607,043	$	239,086	$	241,260
Foreign investments
Unlisted stocks		3,609		7,407		7,774
	$	1,610,652	$	246,493	$	249,034
Investments in equity instruments-non-current
Domestic investments
Listed stocks	$	923,124	$	4,580,516	$	4,078,476
Unlisted stocks		651,898		173,515		177,585
Foreign investments
Limited partnerships		342,335		462,068		500,880
Unlisted stocks		30,799		29,789		30,042
	$	1,948,156	$	5,245,888	$	4,786,983

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 three quarters of 2020, TFN sold part of THSR’s stock at fair value of $1,621,105 thousand. As of September 30, 2020, the amount of outstanding receivables was $52,946 thousand. The related unrealized gain of $1,147,893 thousand was transferred from other equity to retained earnings.

8. NOTES AND ACCOUNTS RECEIVABLE, NET

	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
		2020		2019		2019
Notes receivable	$	70,877	$	224,042	$	103,797
Accounts receivable		7,502,508		7,793,254		7,853,328
Less: Allowance for impairment loss		(296,240)		(345,458)		(371,925)
	$	7,277,145	$	7,671,838	$	7,585,200

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:

September 30, 2020

Not Past Due Gross carrying amount $ 6,965,950 Loss allowance (Lifetime ECLs) (50,202) Amortized cost $ 6,915,748 December 31, 2019 Not Past Due Gross carrying amount $ 7,381,152 Loss allowance (Lifetime ECLs) (52,054) Amortized cost $ 7,329,098 September 30, 2019 Not Past Due Gross carrying amount $ 7,284,358 Loss allowance (Lifetime ECLs) (54,860) Amortized cost $ 7,229,498	Overdue 1 to 120 Days 121 to 365 Days Over 365 Days $ 471,406 $ 132,987 $ 3,042 (122,644) (120,489) (2,905) $ 348,762 $ 12,498 $ 137 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 $ 480,631 $ 191,796 $ 340 (135,900) (180,825) (340) $ 344,731 $ 10,971 $ -	Total $ 7,573,385 (296,240) $ 7,277,145 Total $ 8,017,296 (345,458) $ 7,671,838 Total $ 7,957,125 (371,925) $ 7,585,200

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%	10%-100%

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

Beginning balance Add: Provision Recovery Less: Write-off Ending balance		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 345,458 136,129 27,829 (213,176) $ 296,240	2019 $ 464,049 195,016 31,635 (318,775) $ 371,925

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:

Amount of accounts receivable sold Proceeds of the sale of accounts receivable		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 918,412 $ 52,589	2019 $ 583,132 $ 35,389

9. INVENTORIES

	September 30,	December 31,	September 30,
	2020	2019	2019
Merchandise	$ 4,874,061	$ 5,662,872	$ 4,699,744
Materials for maintenance	11,352	7,604	7,133
	$ 4,885,413	$ 5,670,476	$ 4,706,877

For the three months and the nine months ended September 30, 2020, the cost of goods sold related to the inventories amounted to $16,414,963 thousand and $49,553,983 thousand, respectively, which included the inventory write-down, totaling $7,795 thousand and $69,403 thousand, respectively.

For the three months and the nine months ended September 30, 2019, the cost of goods sold related to the inventories amounted to $15,345,741 thousand and $43,633,227 thousand, respectively, which included the inventory write-down, totaling $15,276 thousand and $18,119 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)		September 30, 2020 Amount % of Owner- ship $ 577,080 20.00 387,984 15.50 256,495 51.00 318,723 20.11 152,376 20.00 - - 121,375 32.50 25,631 15.00 8,596 14.40 $ 1,848,260		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		September 30, 2019
						Amount % of Owner- ship $ 711,017 20.00 397,662 17.70 235,000 51.00 - - - - 124,391 35.00 141,419 32.50 25,530 15.00 5,061 14.40 $ 1,640,080

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 three quarters of 2020, momo sold part of TPE’s stock for $72,970 thousand. Although momo’s percentage of ownership interest in TPE decreased to 15.5%, momo still has significant influence on TPE due to its having two seats on TPE’s board of directors.

c. AppWorks

At the end of September 2019, TWM acquired 51% equity interest of AppWorks. Payments for the investment in AppWorks were made on October 1, 2019. 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. In August 2020, TVC’s percentage of ownership interest in AppWorks Fund III increased to 20.11% due to non-proportionate subscription to AppWorks Fund III’s issuance of new capital stock.

e. TV Direct

In June 2020, momo acquired 16.2% equity interest of TV Direct and had significant influence on TV Direct. In July 2020, momo’s percentage of ownership interest in TV Direct increased to 20% due to its acquisition of additional 3.8% equity interest of TV Direct. momo has one seat on TV Direct’s board of directors.

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 September 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
	September 30, 2020 December 31, 2019 September 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:

September 30, 2020 Current assets $ 7,964,598 Non-current assets 14,972,942 Current liabilities (8,115,552) Non-current liabilities (1,022,893) Equity $ 13,799,095 Equity attributable to: Owners of the parent $ 9,389,952 Non-controlling interests of momo 4,391,706 Non-controlling interests of momo’s subsidiaries 17,437 $ 13,799,095 For the Three Months Ended September 30 2020 2019 Operating revenues $ 15,582,993 $ 12,371,510 Profit $ 418,522 $ 267,015 Other comprehensive income (loss) 8,576 (23,113) Comprehensive income $ 427,098 $ 243,902 Profit (loss) attributable to: Owners of the parent $ 188,876 $ 120,270 Non-controlling interests of momo 230,710 146,908 Non-controlling interests of momo’s subsidiaries (1,064) (163) $ 418,522 $ 267,015 Comprehensive income (loss) attributable to: Owners of the parent $ 192,664 $ 110,032 Non-controlling interests of momo 235,335 134,403 Non-controlling interests of momo’s subsidiaries (901) (533) $ 427,098 $ 243,902	September 30, 2020 Current assets $ 7,964,598 Non-current assets 14,972,942 Current liabilities (8,115,552) Non-current liabilities (1,022,893) Equity $ 13,799,095 Equity attributable to: Owners of the parent $ 9,389,952 Non-controlling interests of momo 4,391,706 Non-controlling interests of momo’s subsidiaries 17,437 $ 13,799,095 For the Three Months Ended September 30 2020 2019 Operating revenues $ 15,582,993 $ 12,371,510 Profit $ 418,522 $ 267,015 Other comprehensive income (loss) 8,576 (23,113) Comprehensive income $ 427,098 $ 243,902 Profit (loss) attributable to: Owners of the parent $ 188,876 $ 120,270 Non-controlling interests of momo 230,710 146,908 Non-controlling interests of momo’s subsidiaries (1,064) (163) $ 418,522 $ 267,015 Comprehensive income (loss) attributable to: Owners of the parent $ 192,664 $ 110,032 Non-controlling interests of momo 235,335 134,403 Non-controlling interests of momo’s subsidiaries (901) (533) $ 427,098 $ 243,902	December 31, 2019 September 30, 2019 $ 7,547,400 $ 9,766,431 14,525,235 14,650,617 (7,372,246) (9,915,146) (1,050,690) (1,109,929) $ 13,649,699 $ 13,391,973 $ 9,321,432 $ 9,204,978 4,308,010 4,165,765 20,257 21,230 $ 13,649,699 $ 13,391,973 For the Nine Months Ended September 30 2020 2019 $ 46,522,804 $ 35,922,568 $ 1,328,907 $ 974,513 19,780 2,891 $ 1,348,687 $ 977,404 $ 599,443 $ 438,768 732,211 535,949 (2,747) (204) $ 1,328,907 $ 974,513 $ 608,380 $ 440,184 743,127 537,679 (2,820) (459) $ 1,348,687 $ 977,404	December 31, 2019 September 30, 2019 $ 7,547,400 $ 9,766,431 14,525,235 14,650,617 (7,372,246) (9,915,146) (1,050,690) (1,109,929) $ 13,649,699 $ 13,391,973 $ 9,321,432 $ 9,204,978 4,308,010 4,165,765 20,257 21,230 $ 13,649,699 $ 13,391,973 For the Nine Months Ended September 30 2020 2019 $ 46,522,804 $ 35,922,568 $ 1,328,907 $ 974,513 19,780 2,891 $ 1,348,687 $ 977,404 $ 599,443 $ 438,768 732,211 535,949 (2,747) (204) $ 1,328,907 $ 974,513 $ 608,380 $ 440,184 743,127 537,679 (2,820) (459) $ 1,348,687 $ 977,404	December 31, 2019 September 30, 2019 $ 7,547,400 $ 9,766,431 14,525,235 14,650,617 (7,372,246) (9,915,146) (1,050,690) (1,109,929) $ 13,649,699 $ 13,391,973 $ 9,321,432 $ 9,204,978 4,308,010 4,165,765 20,257 21,230 $ 13,649,699 $ 13,391,973 For the Nine Months Ended September 30 2020 2019 $ 46,522,804 $ 35,922,568 $ 1,328,907 $ 974,513 19,780 2,891 $ 1,348,687 $ 977,404 $ 599,443 $ 438,768 732,211 535,949 (2,747) (204) $ 1,328,907 $ 974,513 $ 608,380 $ 440,184 743,127 537,679 (2,820) (459) $ 1,348,687 $ 977,404
		$
		$
		$

2020 $ 15,582,993 $ 418,522 8,576 $ 427,098 $ 188,876 230,710 (1,064) $ 418,522 $ 192,664 235,335 (901) $ 427,098	2019 $ 12,371,510 $ 267,015 (23,113) $ 243,902 $ 120,270 146,908 (163) $ 267,015 $ 110,032 134,403 (533) $ 243,902		2020 $ 46,522,804 $ 1,328,907 19,780 $ 1,348,687 $ 599,443 732,211 (2,747) $ 1,328,907 $ 608,380 743,127 (2,820) $ 1,348,687	2019 $ 35,922,568 $ 974,513 2,891 $ 977,404 $ 438,768 535,949 (204) $ 974,513 $ 440,184 537,679 (459) $ 977,404

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 increase (decrease) in cash Dividends paid to non-controlling interests		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 1,956,565 (693,057) (1,462,795) (196) $ (199,483) $ 654,596	2019 $ 4,728,601 (195,105) (1,468,158) (889) $ 3,064,449 $ 693,102

12. PROPERTY, PLANT AND EQUIPMENT

Cost Balance, January 1, 2020 Additions Reclassification Disposals and retirements Effect of exchange rate changes Balance, September 30, 2020 Accumulated depreciation and impairment Balance, January 1, 2020 Depreciation Reclassification Disposals and retirements Effect of exchange rate changes Balance, September 30, 2020 Carrying amount, January 1, 2020 Carrying amount, September 30, 2020 Cost Balance, January 1, 2019 Additions Reclassification Disposals and retirements Effect of exchange rate changes Balance, September 30, 2019	Land $ 8,261,041 431,785 324,224 (8,055 ) - $ 9,008,995 $ - - - - - $ - $ 8,261,041 $ 9,008,995 $ 8,289,085 - 3,593 (18,112 ) - $ 8,274,566	Buildings Telecommuni- cations Equipment and Machinery $ 5,641,608 $ 90,366,481 - 124,086 59,619 5,869,335 (9,626 ) (1,056,798 ) - (586) $ 5,691,601 $ 95,302,518 $ 1,649,207 $ 69,379,600 121,044 4,619,930 27,839 - (5,421 ) (1,006,721 ) - (534) $ 1,792,669 $ 72,992,275 $ 3,992,401 $ 20,986,881 $ 3,898,932 $ 22,310,243 $ 5,672,957 $ 87,623,044 1,116 589,048 3,891 3,967,978 (22,599 ) (1,068,008 ) - (1,915) $ 5,655,365 $ 91,110,147	Others Construction in Progress and Equipment to be Inspected $ 9,549,160 $ 1,506,915 221,702 6,560,703 231,660 (6,073,929 ) (173,502 ) (213 ) (38) - $ 9,828,982 $ 1,993,476 $ 8,114,393 $ - 506,344 - - - (172,491 ) - (31) - $ 8,448,215 $ - $ 1,434,767 $ 1,506,915 $ 1,380,767 $ 1,993,476 $ 9,346,834 $ 1,349,217 205,739 4,227,514 99,689 (4,083,218 ) (238,361 ) (38 ) (125) - $ 9,413,776 $ 1,493,475	Total $ 115,325,205 7,338,276 410,909 (1,248,194 ) (624) $ 121,825,572 $ 79,143,200 5,247,318 27,839 (1,184,633 ) (565) $ 83,233,159 $ 36,182,005 $ 38,592,413 $ 112,281,137 5,023,417 (8,067 ) (1,347,118 ) (2,040) $ 115,947,329 (Continued)

21 -

Accumulated depreciation and impairment Balance, January 1, 2019 Depreciation Reclassification Disposals and retirements Effect of exchange rate changes Balance, September 30, 2019 Carrying amount, September 30, 2019	Land $ 1,662 - - - - $ 1,662 $ 8,272,904	Buildings Telecommuni- cations Equipment and Machinery $ 1,499,982 $ 64,521,396 121,102 5,900,643 1,570 - (8,238 ) (1,010,993 ) - (1,768) $ 1,614,416 $ 69,409,278 $ 4,040,949 $ 21,700,869	Others Construction in Progress and Equipment to be Inspected Total $ 7,402,137 $ - $ 73,425,177 766,301 - 6,788,046 - - 1,570 (236,436 ) - (1,255,667 ) (105) - (1,873) $ 7,931,897 $ - $ 78,957,253 $ 1,481,879 $ 1,493,475 $ 36,990,076 (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

September 30, 2020 Carrying amounts Land $ 557,212 Buildings 7,616,416 Telecommunications equipment and machinery 661,053 Others 175,824 $ 9,010,505 Additions to right-of-use assets	December 31, 2019 September 30, 2019 $ 565,364 $ 564,445 8,025,737 8,293,831 874,638 953,746 192,199 118,756 $ 9,657,938 $ 9,930,778 For the Nine Months Ended September 30	December 31, 2019 September 30, 2019 $ 565,364 $ 564,445 8,025,737 8,293,831 874,638 953,746 192,199 118,756 $ 9,657,938 $ 9,930,778 For the Nine Months Ended September 30	December 31, 2019 September 30, 2019 $ 565,364 $ 564,445 8,025,737 8,293,831 874,638 953,746 192,199 118,756 $ 9,657,938 $ 9,930,778 For the Nine Months Ended September 30
		2020 $ 2,601,367	2019 $ 2,939,408

22 -

Depreciation charge for right-of-use assets Land Buildings Telecommunications equipment and machinery Others		For the Three Months Ended September 30 2020 2019 $ 59,945 $ 58,608 861,105 863,438 44,708 50,792 15,733 16,046 $ 981,491 $ 988,884		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 59,945 861,105 44,708 15,733 $ 981,491		2020 $ 180,092 2,579,891 138,059 45,970 $ 2,944,012	2019 $ 174,609 2,542,418 153,873 49,439 $ 2,920,339

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

b. Lease liabilities

	September 30,	December 31,	September 30,
	2020	2019	2019
Carrying amounts
Current	$ 3,466,731	$ 3,532,951	$ 3,525,545
Non-current	$ 5,518,479	$ 6,117,438	$ 6,373,530
Range of discount rate for lease liabilities was as follows:
	September 30,	December 31,	September 30,
	2020	2019	2019
Land	0.74%-1%	0.78%-1%	0.82%-1%
Buildings	0.74%-1.2%	0.78%-5.44%	0.82%-5.44%
Telecommunications equipment and
machinery	0.74%-4.38%	0.86%-4.38%	0.86%-4.38%
Others	0.74%-0.86%	0.78%-5.44%	0.82%-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 in some lease agreements. 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.

23 -

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 September 30 2020 2019 $ 10,277 $ 9,435 $ 18,094 $ 18,050 $ 10,491 $ 10,913		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 10,277 $ 18,094 $ 10,491		2020 2019 $ 29,546 $ 45,259 $ 54,449 $ 53,063 $ 33,426 $ 30,777 For the Nine Months Ended September 30
				2020 $ 3,153,515	2019 $ 3,038,773

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 September 30, 2020, December 31, 2019 and September 30, 2019, the fair values of investment properties were $6,676,676 thousand, $6,989,343 thousand and $6,976,270 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 nine months ended September 30, 2020 and 2019 were $4,926 thousand, $5,068 thousand, $15,101 thousand, and $15,210 thousand, respectively.

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

			September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
				2020		2019		2019
Year	1		$ 142,174		$ 153,723		$ 153,332
Year	2			135,628		143,089		145,838
Year	3			98,720		133,686		133,358
Year	4			30,299		81,103		96,409
Year	5			28,737		29,888		27,987
Year	6	and thereafter		27,987		51,310		55,975
			$ 463,545		$ 592,799		$ 612,899

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15. INTANGIBLE ASSETS

Cost Balance, January 1, 2020 Addition Disposals and retirements Reclassification Effect of exchange rate changes Balance, September 30, 2020 Accumulated amortization and impairment Balance, January 1, 2020 Amortization Disposals and retirements Effect of exchange rate changes Balance, September 30, 2020 Carrying amount, January 1, 2020 Carrying amount, September 30, 2020 Cost Balance, January 1, 2019 Addition Disposals and retirements Reclassification Effect of exchange rate changes Balance, September 30, 2019 Accumulated amortization and impairment Balance, January 1, 2019 Amortization Disposals and retirements Effect of exchange rate changes Balance, September 30, 2019 Carrying amount, September 30, 2019		Conces	sions Service Concessions $ 8,180,078 - - - - $ 8,180,078 $ 1,210,025 134,039 - - $ 1,344,064 $ 6,970,053 $ 6,836,014 $ 8,180,078 - - - - $ 8,180,078 $ 1,031,305 134,040 - - $ 1,165,345 $ 7,014,733	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 25,910 (30,000 ) 31,550 - $ 52,657 $ 25,197 24,105 - - $ 49,302 $ - $ 3,355 $ 15,222 8,567 - - - $ 23,789 $ 13,538 9,448 - - $ 22,986 $ 803	Total $ 75,771,788 29,800,450 (88,669 ) 1,083,267 (97) $106,566,739 $ 16,693,313 2,944,679 (58,669 ) (74) $ 19,579,249 $ 59,078,475 $ 86,987,490 $ 75,572,855 146,616 (138,990 ) 95,856 (317) $ 75,676,020 $ 13,397,210 2,582,492 (138,990 ) (252) $ 15,840,460 $ 59,835,560
		Concession Licenses $ 41,043,375 29,656,000 - 1,000,000 - $ 71,699,375 $ 10,303,927 2,351,832 - - $ 12,655,759 $ 30,739,448 $ 59,043,616 $ 41,043,375 - - - - $ 41,043,375 $ 7,663,274 1,980,490 - - $ 9,643,764 $ 31,399,611				Computer Software $ 4,096,570 118,474 (58,614 ) 51,717 (97) $ 4,208,050 $ 3,465,304 332,297 (58,614 ) (74) $ 3,738,913 $ 631,266 $ 469,137 $ 3,907,630 138,031 (138,990 ) 95,856 (317) $ 4,002,210 $ 3,176,937 356,102 (138,990 ) (252) $ 3,393,797 $ 608,413	Customer Relationships $ 2,654,089 - - - - $ 2,654,089 $ 1,647,063 102,300 - - $ 1,749,363 $ 1,007,026 $ 904,726 $ 2,654,089 - - - - $ 2,654,089 $ 1,510,663 102,300 - - $ 1,612,963 $ 1,041,126	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 66 (55 ) - - $ 2,517,895 $ 1,642 106 (55 ) - $ 1,693 $ 2,516,242 $ 2,516,202 $ 2,517,866 18 - - - $ 2,517,884 $ 1,493 112 - - $ 1,605 $ 2,516,279

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.

25 -
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:

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

16. OTHER NON-CURRENT ASSETS

	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
		2020		2019		2019
Long-term accounts receivable	$	321,536	$	325,482	$	293,960
Refundable deposits (Note)		668,908		1,633,054		627,818
Prepayments for equipment		75,613		131,228		139,599
Prepayments for investment		-		100,000		100,000
Others		505,001		504,706		511,429
	$	1,571,058	$	2,694,470	$	1,672,806

26 -

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

September 30, 2020 Unsecured loans $ 15,100,000 Annual interest rates 0.56%-0.89%	December 31, 2019 September 30, 2019 $ 16,270,000 $ 15,670,000 0.65%-0.95% 0.65%-0.95%

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

b. Short-term notes and bills payable

	September 30,	December 31,	September 30,
	2020	2019	2019
Short-term notes and bills payable	$ 17,300,000	$ 1,900,000	$ 1,200,000
Less: Discounts on short-term notes and bills
payable	(10,455)	(1,889)	-
	$ 17,289,545	$ 1,898,111	$ 1,200,000
Annual interest rates	0.398%-0.448%	0.688%	0.678%
Long-term borrowings
	September 30,	December 31,	September 30,
	2020	2019	2019
Unsecured loans	$ 2,000,000	$ 6,000,000	$ 6,000,000
Secured loans	2,686,862	2,889,373	2,940,209
Less: Current portion	(2,303,351)	(303,297)	(303,285)
	$ 2,383,511	$ 8,586,076	$ 8,636,924
Annual interest rates:
Unsecured loans	0.79%	0.72%-0.79%	0.72%-0.79%
Secured loans	1.7495%	2.0337%	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.

27 -

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

September 30, 2020 3rd domestic unsecured straight corporate bonds $ - 5th domestic unsecured straight corporate bonds 14,990,829 6th domestic unsecured straight corporate bonds 19,980,992 3rd domestic unsecured convertible bonds 630,574 Less: Current portion - $ 35,602,395	December 31, 2019 September 30, 2019 $ - $ 4,499,942 14,988,914 14,988,270 - - 914,522 2,226,077 - (4,499,942) $ 15,903,436 $ 17,214,347

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 September 30, 2020, the amount of unamortized bond issue cost was $9,171 thousand. The trustee of bond holders is Bank of Taiwan.

28 -

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 September 30, 2020, the amount of unamortized bond issue cost was $19,008 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 $95.6 per share since July 25, 2020. 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 September 30, 2020, the amount of unamortized bond discount was $6,626 thousand.

29 -

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 September 30, 2019

Liability component on January 1, 2020

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

Liability component on September 30, 2020

$ 9,989,130
(400,564)

(35,961)
9,552,605
230,058
(7,556,586)
$ 2,226,077
$ 914,522
5,831

(289,779)
$ 630,574

As of September 30, 2020, December 31, 2019 and September 30, 2019, the bondholders had requested to convert the bonds at face values of $9,362,800 thousand, $9,069,500 thousand and $7,729,800 thousand, respectively.

19. PROVISIONS

Restoration
Decommissioning
Warranties
Current
Non-current
Balance, January 1, 2020

Provision

Payment/Reversal

Unwinding of discount

Balance, September 30, 2020

Balance, January 1, 2019

Provision

Payment/Reversal

Unwinding of discount

Balance, September 30, 2019

September 30,
2020
December 31,
2019
September 30,
2019
$ 1,168,720
$ 1,183,427
$ 1,187,488
370,205
324,693
310,225

22,981

40,111

53,176
$ 1,561,906
$ 1,548,231
$ 1,550,889
$ 60,335
$ 88,961
$ 102,327

1,501,571

1,459,270

1,448,562
$ 1,561,906
$ 1,548,231
$ 1,550,889
Restoration
Decom-
missioning
Warranties
Total

$ 1,183,427 $ 324,693 $ 40,111 $ 1,548,231
27,741
38,655
25,746
92,142
(45,245)
-
(42,876)
(88,121)

2,797

6,857

-

9,654
$ 1,168,720
$ 370,205
$ 22,981
$ 1,561,906
$ 1,184,823 $ 268,536 $ 67,929 $ 1,521,288
38,309
37,675
54,918
130,902
(38,810)
(1,714)
(69,671)
(110,195)

3,166

5,728

-

8,894
$ 1,187,488
$ 310,225
$ 53,176
$ 1,550,889

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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 (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 $82,388 thousand and $77,791 thousand for the three months ended September 30, 2020 and 2019, respectively, and $245,074 thousand and $232,076 thousand for the nine months ended September 30, 2020 and 2019, respectively.

b. Defined benefit plans

The Group recognized pension amounts of $1,577 thousand and $1,967 thousand for the three months ended September 30, 2020 and 2019, respectively, and $4,731 thousand and $5,904 thousand for the nine months ended September 30, 2020 and 2019, respectively, by using the actuarially determined pension cost rate.

21. EQUITY

a. Common stock

As of September 30, 2020, December 31, 2019, and September 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 $34,679,531 thousand, respectively, divided into 3,509,376 thousand shares, 3,495,944 thousand shares and 3,467,953 thousand shares, respectively, which were all common stocks, at a par value of $10 each.

As of September 30, 2020, December 31, 2019, and September 30, 2019, the bondholders of the 3rd domestic unsecured convertible bonds had requested to convert the bonds into 91,589 thousand, 88,522 thousand and 75,111 thousand common stocks, respectively. As of September 30, 2020, December 31, 2019, and September 30, 2019, TWM recognized 3,045 thousand,13,410 thousand and 27,991 thousand of common stocks, respectively, as capital collected in advance, totaling $30,450 thousand,$134,104 thousand and $279,910 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

September 30,
2020
Additional paid-in capital from convertible
corporate bonds
$ 13,102,020
Treasury stock transactions
5,159,704
Difference between consideration and
carrying amount arising from the disposal
of subsidiaries’ stock
85,965
Changes in equity of subsidiaries
501,215
Convertible bonds payable options
25,524
Changes in equity of associates accounted for
using equity method
28,063
Others

34,950

$ 18,937,441

December 31,
2019
September 30,
2019
$ 14,424,786 $ 13,190,698

5,159,704
5,159,704

85,965
85,965

501,215
501,215

37,273
90,936

30,801
48,147

34,950

33,968
$ 20,274,694
$ 19,110,633

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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.

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

(6,989)
-
Changes in fair value of financial assets at
FVTOCI

-
(812,213)
Unrealized gain of equity instruments
transferred to retained earnings due to
disposal

-
(1,148,079)
Changes in other comprehensive income of
associates accounted for using equity
method

(115)
10,701
Other comprehensive income transferred to
retained earnings due to disposal of
investments accounted for using equity
method

-
(2,196)
Income tax effect

-

23,106

Balance, September 30, 2020
$ (41,609)
$ (1,455,271)

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

(6,883)
-
Changes in fair value of financial assets at
FVTOCI

-
14,078
Changes in other comprehensive income of
associates accounted for using equity
method

1,881
4,910
Income tax effect

-

55,229

Balance, September 30, 2019
$ (29,400)
$ 3,234

Total
$ 438,905
(6,989)

(812,213)
(1,148,079)
10,586

(2,196)

23,106
$ (1,496,880)
$ (95,381)
(6,883)
14,078
6,791

55,229
$ (26,166)

e. Treasury stock

As of September 30, 2020, December 31, 2019 and September 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 $67,499,405 thousand, $78,260,179 thousand and $78,260,179 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 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 Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 6,158,984 - 6,158,984 762,202 (7,886) 157 18,572 (1,491) (3,344) (655,043) $ 6,272,151	2019 $ 6,112,176 16,275 6,128,451 568,461 (6,841) 2,308 6,008 - - (693,361) $ 6,005,026

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 September 30 2020 2019 $ 11,090,292 $ 11,988,429 18,374,079 17,005,817 1,516,789 1,485,483 261,817 346,186 $ 31,242,977 $ 30,825,915		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 11,090,292 18,374,079 1,516,789 261,817 $ 31,242,977		2020 $ 33,522,595 55,681,851 4,523,868 708,981 $ 94,437,295	2019 $ 36,399,014 48,393,382 4,498,930 1,021,813 $ 90,313,139

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

September 30, 2020 December 31, 2019 September 30, 2019 Contract assets Bundle sales $ 7,777,257 $ 8,366,531 $ 8,490,267 Less: Allowance for impairment loss (66,031) (71,032) (72,068) $ 7,711,226 $ 8,295,499 $ 8,418,199 Current $ 4,610,329 $ 4,832,043 $ 4,911,308 Non-current 3,100,897 3,463,456 3,506,891 $ 7,711,226 $ 8,295,499 $ 8,418,199	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.

September 30,
2020
December 31,
2019
September 30,
2019
Contract liabilities
Telecommunications and
value-added services
$ 1,035,277 $ 1,125,265 $ 1,040,291
Sales of goods
36,578
42,417
24,344
Cable TV and broadband
services
666,547
672,667
695,596
Others

14,935

12,351

13,926

$ 1,753,337
$ 1,852,700
$ 1,774,157

Current
$ 1,701,749 $ 1,807,407 $ 1,726,286
Non-current

51,588

45,293

47,871

$ 1,753,337
$ 1,852,700
$ 1,774,157

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

	September 30,	December 31,	September 30,
	2020	2019	2019
Incremental costs of obtaining a
contract - non-current	$ 1,780,975	$ 2,119,052	$ 2,243,280

35 -

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 September 30, 2020 and 2019 were $406,298 thousand and $593,316 thousand, respectively, and for the nine months ended September 30, 2020 and 2019 were $1,331,557 thousand and $1,950,516 thousand, respectively.

23. NON-OPERATING INCOME AND EXPENSES

a. Other income

Dividend income Other income	For the Three Months Ended September 30 2020 2019 $ 94,364 $ 110,773 3,388 19,387 $ 97,752 $ 130,160	For the Three Months Ended September 30 2020 2019 $ 94,364 $ 110,773 3,388 19,387 $ 97,752 $ 130,160	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 94,364 3,388 $ 97,752		2020 $ 102,762 13,293 $ 116,055	2019 $ 117,211 56,021 $ 173,232

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 September 30 2020 2019 $ (16,315) $ (16,768) - - 15,365 - - (580) - - (6,909) (10,094) 788 (733) $ (7,071) $ (28,175)	For the Three Months Ended September 30 2020 2019 $ (16,315) $ (16,768) - - 15,365 - - (580) - - (6,909) (10,094) 788 (733) $ (7,071) $ (28,175)	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ (16,315) - 15,365 - - (6,909) 788 $ (7,071)		2020 $ (40,113) 8,800 73,859 (149) - (10,505) 375 $ 32,267	2019 $ (54,305) - - 3,390 1,819 (14,546) (2,471) $ (66,113)

36 -

c. Finance costs

Interest expense Bank loans Corporate bonds Lease liabilities Others Less: Capitalized interest Capitalization rates	For the Three Months Ended September 30 2020 2019 $ 41,660 $ 52,094 72,346 58,803 20,993 24,600 22,023 7,741 157,022 143,238 - (1,318) $ 157,022 $ 141,920 - 1.34%	For the Three Months Ended September 30 2020 2019 $ 41,660 $ 52,094 72,346 58,803 20,993 24,600 22,023 7,741 157,022 143,238 - (1,318) $ 157,022 $ 141,920 - 1.34%	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 41,660 72,346 20,993 22,023 157,022 - $ 157,022 -		2020 $ 148,144 185,083 66,000 60,145 459,372 - $ 459,372 -	2019 $ 135,795 196,773 73,408 31,368 437,344 (3,706) $ 433,638 1.34%

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 September 30 2020 2019 $ 694,716 $ 812,556 (10,590) 1,959 - - 684,126 814,515 59,623 26,223 $ 743,749 $ 840,738		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 694,716 (10,590) - 684,126 59,623 $ 743,749		2020 $ 2,181,878 (18,313) - 2,163,565 158,530 $ 2,322,095	2019 $ 2,347,933 49,670 (17,079) 2,380,524 87,161 $ 2,467,685

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

Deferred income tax income Unrealized gain on financial assets at FVTOCI	For the Three Months Ended September 30 2020 2019 $ 9,987 $ 2,470	For the Three Months Ended September 30 2020 2019 $ 9,987 $ 2,470	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 9,987		2020 $ 23,106	2019 $ 55,229

37 -

c. Income tax examinations

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

Company TWM TCC WMT TNH TFN TT&T TCCI 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 2018 2018 2018 2018 2018 2018 2018 2018 2017 2018 2018 2017 2017 2018 2017 2017 2017 2018 2018 2018 2018 2018

25. EARNINGS PER SHARE

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 September 30, 2020	For the Three Months Ended September 30, 2020
	Amount After Income Tax Weighted- average Number of Shares (In Thousands) $ 2,818,867 2,812,725 - 2,961 1,658 7,610 $ 2,820,525 2,823,296	EPS (NT$) $ 1.01 $ 1.00

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 September 30, 2019	For the Three Months Ended September 30, 2019
	Amount After Income Tax Weighted- average Number of Shares (In Thousands) $ 3,253,393 2,786,849 - 2,683 7,460 33,068 $ 3,260,853 2,822,600 For the Nine Months Ended September 30, 2020	EPS (NT$) $ 1.17 $ 1.15
	Amount After Income Tax Weighted- average Number of Shares (In Thousands) $ 9,181,100 2,811,327 - 3,712 5,831 9,008 $ 9,186,931 2,824,047 For the Nine Months Ended September 30, 2019	EPS (NT$) $ 3.27 $ 3.25
	Amount After Income Tax Weighted- average Number of Shares (In Thousands) $ 9,530,067 2,754,546 - 3,144 42,480 65,371 $ 9,572,547 2,823,061	EPS (NT$) $ 3.46 $ 3.39

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 Nine Months Ended September 30, 2020

Opening Balance Cash Flows Lease liabilities (including current and non-current portions) $ 9,650,389 $ (3,005,624) For the Nine Months Ended September 30, 2019 Opening Balance Cash Flows Lease liabilities (including current and non-current portions) $ 9,980,846 $ (2,897,338)	Opening Balance Cash Flows Lease liabilities (including current and non-current portions) $ 9,650,389 $ (3,005,624) For the Nine Months Ended September 30, 2019 Opening Balance Cash Flows Lease liabilities (including current and non-current portions) $ 9,980,846 $ (2,897,338)	Non-cash Changes New Leases Others $ 2,598,741 $ (258,296) Non-cash Changes New Leases Others $ 2,924,220 $ (108,653)	Closing Balance $ 8,985,210

			Closing Balance $ 9,899,075
Lease liabilities (including current and non-current portions)	Opening Balance $ 9,980,846
		New Leases $ 2,924,220

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

September 30,
2020
Financial assets
Financial assets at FVTPL (including current
and non-current portions)
$ -
Financial assets at FVTOCI (including
current and non-current portions)
3,558,808
Financial assets measured at amortized cost
(including current and non-current
portions) (Note 1)

21,266,331

Total
$ 24,825,139

Financial liabilities
Financial liabilities measured at amortized
cost (including current and non-current
portions) (Note 2)
$ 93,581,134

December 31,
2019
September 30,
2019
$ 149 $ 2,500

5,492,381
5,036,017

20,722,936

24,646,538
$ 26,215,466
$ 29,685,055
$ 61,453,923
$ 69,833,028

40 -
Note 1: The balances comprise cash and cash equivalents, notes and accounts receivable, other receivables, other financial assets and refundable deposits, which were financial assets measured at amortized cost.
Note 2: The balances comprise short-term borrowings, short-term notes and bills payable, notes and accounts payables, other financial liabilities (classified as other current liabilities), bonds payable, long-term borrowings and guarantee deposits, which were financial liabilities carried at amortized cost.
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)	September 30, 2020 Carrying Amount Fair Value $35,602,395$35,811,727	December 31, 2019 Carrying Amount Fair Value $ 15,903,436 $ 16,077,220	September 30, 2019
			Carrying Amount Fair Value $ 21,714,289 $ 22,082,667

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).

September 30, 2020

Financial assets at FVTPL Equity instruments Limited partnerships	Level 1 $ -	Level 2 $ -	Level 3 $ -	Total $ -

(Continued)

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 September 30, 2019 Financial assets at FVTPL Equity instruments Limited partnerships	Level 1 $ 2,530,167 - - - $ 2,530,167 Level 1 $ - $ 4,819,602 - - - $ 4,819,602 Level 1 $ -	Level 2 $ - - - 3,609 $ 3,609 Level 2 $ - $ - - - 7,407 $ 7,407 Level 2 $ -	Level 3 $ - 651,898 342,335 30,799 $ 1,025,032 Level 3 $ 149 $ - 173,515 462,068 29,789 $ 665,372 Level 3 $ 2,500	Total $ 2,530,167 651,898 342,335 34,408 $ 3,558,808 (Concluded) Total $ 149 $ 4,819,602 173,515 462,068 37,196 $ 5,492,381 Total $ 2,500 (Continued)

42 -

Financial assets at FVTOCI Equity instruments Domestic listed stocks Domestic unlisted stocks Limited partnerships Foreign unlisted stocks Financial liabilities at FVTPL	Level 1 $ 4,319,736 - - - $ 4,319,736 $ -	Level 2 $ - - - 7,774 $ 7,774 $ -	Level 3 $ - 177,585 500,880 30,042 $ 708,507 $ -	Total $ 4,319,736 177,585 500,880 37,816 $ 5,036,017 $ - (Concluded)

There was no transfer between the fair value measurements of Levels 1 and 2 for the nine months ended September 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 September 30, 2020, December 31, 2019 and September 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 September 30, 2020, December 31, 2019 and September 30, 2019, respectively.

43 -
3) Reconciliation of Level 3 fair value measurements of financial instruments

For the Nine Months Ended September 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)		-	(140,340)
Balance at September 30, 2020	$	-	$1,025,032
For the Nine Months Ended September 30, 2019
	Financial Assets		Financial Assets
	at	FVTPL -	at FVTOCI -
		Equity	Equity
	Instruments		Instruments
Balance at January 1, 2019	$	-	$ 984,950
Additions		2,500	-
Recognized in other comprehensive income (unrealized loss
on financial assets at FVTOCI)		-	(276,443)
Balance at September 30, 2019	$	2,500	$ 708,507

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.

44 -

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.

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 September 30, 2020, December 31, 2019 and September 30, 2019, the Group had unused bank facilities of $60,625,319 thousand, $56,641,022 thousand and $52,491,122 thousand, respectively.

45 -

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.

September 30, 2020 Unsecured loans Secured loans Short-term notes and bills payable Bonds payable Lease liabilities December 31, 2019 Unsecured loans Secured loans Short-term notes and bills payable Bonds payable Lease liabilities September 30, 2019 Unsecured loans Secured loans Short-term notes and bills payable Bonds payable Lease liabilities	Contractual Cash Flows Within 1 Year $ 17,130,303 $ 17,130,303 2,852,113 348,904 17,300,000 17,300,000 37,221,840 274,880 9,116,734 3,525,365 $ 83,620,990 $ 38,579,452 $ 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 $ 21,764,588 $ 15,734,763 3,193,787 361,957 1,200,004 1,200,004 22,574,020 4,701,180 10,073,738 3,608,086 $ 58,806,137 $ 25,605,990	1-5 Years $ - 2,503,209 - 21,634,960 5,537,113 $ 29,675,282 $ 6,013,788 2,767,413 - 7,443,140 6,173,611 $ 22,397,952 $ 6,029,825 999,562 - 8,782,840 6,385,303 $ 22,197,530	More Than 5 Years $ - - - 15,312,000 54,256 $ 15,366,256 $ - - - 9,090,000 35,138 $ 9,125,138 $ - 1,832,268 - 9,090,000 80,349 $ 11,002,617

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.

46 -

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.

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	September 30, 2020
	Foreign Currencies Exchange Rate New Taiwan Dollars $ 57,799 $ 29.12 $ 1,682,984 981 34 33,340 28,028 4.266 119,566 12,814 29.12 373,134 135,274 4.266 577,080 961 3.757 3,609 164,873 0.924 152,376 12,920 29.12 376,090 71 34 2,418 6,245 3.757 23,464 32,378 0.276 8,930 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 (Continued)

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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	December 31, 2019
	Foreign Currencies Exchange Rate New Taiwan Dollars $ 15,795 30.02 $ 474,108 97 33.62 3,251 9,326 3.855 35,950 38,710 0.275 10,645 (Concluded) September 30, 2019
	Foreign Currencies Exchange Rate New Taiwan Dollars $ 53,841 31.02 $ 1,670,089 1,152 33.87 39,004 28,133 4.356 122,549 17,115 31.02 530,922 163,227 4.356 711,017 1,965 3.956 7,774 121,892 1.021 124,391 20,075 31.02 622,697 185 33.87 6,279 9,809 3.956 38,805 39,580 0.288 11,389

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 nine months ended September 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 $71,249 thousand and $57,624 thousand for the nine months ended September 30, 2020 and 2019, respectively.

48 -

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.

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

	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
		2020		2019		2019
Fair value interest rate risk
Financial assets	$	6,373,896	$	5,763,639	$	5,565,428
Financial liabilities		77,946,576		41,837,415		45,657,287
Cash flow interest rate risk
Financial assets		4,986,376		3,697,273		8,054,962
Financial liabilities		3,086,862		9,859,372		9,540,209

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 increased by $7,123 thousand and decreased by $5,570 thousand for the nine months ended September 30, 2020 and 2019, respectively.

c) Other market price risk

The exposure to equity price risk is mainly due to holding of stocks. 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 $125 thousand since the fair value of financial assets at FVTPL decreased for the nine months ended September 30, 2019, and other comprehensive income would have decreased by $177,940 thousand and $251,801 thousand since the fair value of financial assets at FVTOCI decreased for the nine months ended September 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) Beijing Global Zhiqun Trading 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. (Fubon Life) Other related party Fubon Insurance Co., Ltd. (Fubon Ins.) Other related party Fubon Securities Investment Trust Co., Ltd. (FSIT) 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. (Ming Dong) 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 Chen Yun Co., Ltd. Xi Guo Co., Ltd. Cho Pharma Inc. Mitchiller Media Co., Ltd. Taiwan Mobile Foundation (TMF) Taipei New Horizon Foundation (TNHF) Fubon Cultural & Educational Foundation Fubon Charity Foundation Fubon Art Foundation Taipei Fubon Bank Charity Foundation Taipei New Horizon Management Agency Key management	Nature of Relationship
	Other related party Other related party Other related party Other related party (not a related party since August 2019) Other related party Other related party Other related party Other related party Other related party Other related party Other related party Chairman, director, president, manager, etc. (Concluded)

c. Significant transactions with related parties

1) Operating revenue

Associates Other related parties	For the Three Months Ended September 30 2020 2019 $ 11,854 $ 15,183 245,257 241,688 $ 257,111 $ 256,871	For the Three Months Ended September 30 2020 2019 $ 11,854 $ 15,183 245,257 241,688 $ 257,111 $ 256,871	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 11,854 245,257 $ 257,111		2020 $ 41,443 658,647 $ 700,090	2019 $ 60,232 650,725 $ 710,957

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 September 30 2020 2019 $ 207,564 $ 191,478 87,302 90,413 $ 294,866 $ 281,891	For the Three Months Ended September 30 2020 2019 $ 207,564 $ 191,478 87,302 90,413 $ 294,866 $ 281,891	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 207,564 87,302 $ 294,866		2020 $ 595,819 214,835 $ 810,654	2019 $ 381,980 296,077 $ 678,057

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

	Related Party	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
Account	Categories		2020		2019		2019
Accounts receivable	Associates	$	12,147	$	4,729	$	11,889
Accounts receivable	Other related parties		156,518		141,457		143,983
		$	168,665	$	146,186	$	155,872
Other receivables	Associates	$	54,821	$	63,988	$	109,435
Other receivables	Other related parties		135,826		65,285		110,254
		$	190,647	$	129,273	$	219,689

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

	Related Party	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
Account	Categories		2020		2019		2019
Accounts payable	Associates	$	86,157	$	101,077	$	111,406
Accounts payable	Other related parties		52,444		34,085		68,720
		$	138,601	$	135,162	$	180,126
Other payables	Other related parties	$	11,134	$	13,723	$	12,701
Prepayments
		September 30,		December 31,		September 30,
		2020		2019			2019
Other related parties		$	31,719	$	15,803	$	29,386

5) Prepayments

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

	September 30,	December 31,	September 30,
	2020	2019	2019
Other related parties
TFCB	$ 1,586,147	$ 2,102,334	$ 7,150,605
Others	24,837	18,736	16,864
	$ 1,610,984	$ 2,121,070	$ 7,167,469

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7) Cash equivalents

For the Nine Months Ended September 30, 2019

8)
9)

Related Party
Target Disposed
Original
Purchase Price
Proceeds
Interest
Income
TFCB
Government bonds
with repurchase
rights
$ 146,013
$ 146,034
$ 21
Acquisition of investments accounted for using equity method
For the Nine Months Ended September 30, 2020
Related Party
Target
Shares (In
Thousands)
Purchase Price
AppWorks Fund III
AppWorks Fund III
33,000
$ 330,000
For the Nine Months Ended September 30, 2019
Related Party
Target
Shares (In
Thousands)
Purchase Price
Jamie Lin, President of
TWM
AppWorks
387
$ 62,000
Financial assets at FVTPL - current
For the Nine Months Ended September 30, 2019
Related Party
Target
Purchase Price
Proceeds of
Disposal
FSIT
Fund
$ 100,000
$ 84,864

8) Acquisition of investments accounted for using equity method

The cumulative losses were $15,136 thousand, and the Group recognized $3,390 thousand as gain for the three months and the nine months ended September 30, 2019.

10) Others

	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
		2020		2019		2019
Guarantee deposits
Other related parties	$	60,040	$	54,256	$	54,117
Other current liabilities - receipts under
custody
Other related parties	$	127,749	$	123,993	$	105,472

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Operating expenses Other related parties TMF TNHF TFCB Others Other income Other related parties TFCB Others	For the Three Months Ended September 30 2020 2019 $ 4,800 $ 4,800 - - 47,217 65,293 32,325 42,966 $ 84,342 $ 113,059 $ 16,219 $ - 642 15,308 $ 16,861 $ 15,308	For the Three Months Ended September 30 2020 2019 $ 4,800 $ 4,800 - - 47,217 65,293 32,325 42,966 $ 84,342 $ 113,059 $ 16,219 $ - 642 15,308 $ 16,861 $ 15,308	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 4,800 - 47,217 32,325 $ 84,342 $ 16,219 642 $ 16,861		2020 $ 15,650 5,000 142,455 126,973 $ 290,078 $ 47,427 642 $ 48,069	2019 $ 13,100 5,000 193,508 130,518 $ 342,126 $ - 15,308 $ 15,308

11) Lease arrangements

Acquisition of right-of-use assets

Other related parties Lease liabilities (including current and non-current portions) September 30, 2020 Other related parties $ 454,981		For the Nine Months Ended September 30
	2020 2019 $ 10,045 $ 89,995 December 31, 2019 September 30, 2019 $ 611,736 $ 662,477

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 September 30 2020 2019 $ 75,740 $ 59,426 957 889 $ 76,697 $ 60,315	For the Three Months Ended September 30 2020 2019 $ 75,740 $ 59,426 957 889 $ 76,697 $ 60,315	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 75,740 957 $ 76,697		2020 $ 220,374 6,792 $ 227,166	2019 $ 202,036 17,591 $ 219,627

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30. ASSETS PLEDGED

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

	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
		2020		2019		2019
Other current financial assets	$	162,453	$	165,201	$	168,863
Services concessions		6,836,014		6,970,053		7,014,733
Other non-current financial assets		307,067		271,653		208,224
	$	7,305,534	$	7,406,907	$	7,391,820

31. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

a. Unrecognized commitments

	September 30,	December 31,	September 30,
	2020	2019	2019
Purchases of property, plant and equipment$ 13,739,178		$ 3,670,907	$ 3,979,264
Purchases of cellular phones	$ 2,987,843	$ 2,268,710	$ 3,749,548

As of September 30, 2020, December 31, 2019 and September 30, 2019, the amounts of lease commitments commencing after the balance sheet date were $686,143 thousand, $648,683 thousand and $418,455 thousand, respectively.

b. As of September 30, 2020, December 31, 2019 and September 30, 2019, the amounts of endorsements and guarantees provided to entities in the Group 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 $487,581 thousand and $17,836 thousand, respectively, as of September 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 September 30, 2020, the cable television companies had provided $74,386 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 $97,098 thousand and $37,832 thousand, respectively, as of September 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.

55 -

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 September 30, 2020, $736,937 thousand (tax included) of the concession had been paid.

3) Performance guarantee:

As of September 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.

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. In May 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. Under the first retrial of the High Court, TWM filed a counterclaim requesting that FET pay $14,482 thousand, as well as a 5% annual interest payment, for the period starting from the date following the service of the counterclaim until the
56 -

settlement date. In August 2020, the judgment dismissed by the High Court first retrial were as follows: regarding the portion of the High Court’s original judgment on dismissing FET’s claim stated below, in which the corresponding portion of FET’s claimed provisional execution and litigation expenses (except the part of final and binding judgement) were rejected. For the dismissed portion stated in the above, TWM shall pay FET $242,154 thousand as well as, a 5% annual interest payment, for the period starting from September 30, 2016 to the payment date, on $142,685 thousand of the above amount; and a 5% annual interest payment, for the period starting from July 21, 2017 to the payment date, on $99,469 thousand of the above amount. The rest of FET’s appeals were rejected. TWM's counterclaim and the motion of provisional execution were rejected. FET shall bear 75% of the litigation expenses in the first and the second trial (except for the part of the final and binding judgement) as well as the third trial prior to the remand; and TWM shall bear the rest. TWM shall bear the litigation expenses of the counterclaim. Regarding the portion of the judgment regarding TWM's payment, FET may file a provisional execution with a collateral of $80,720 thousand; and TWM may provide a counter-security of $242,154 thousand to be exempted from the above provisional execution. TWM and FET appealed the sentence respectively. The case is now in the process of the Supreme 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 September 30	For the Three Months Ended September 30
	2020 Classified as Operating Costs Classified as Operating Expenses Total $ 623,427 $ 1,225,799 $ 1,849,226 53,458 105,939 159,397 28,312 55,654 83,966 29,869 68,104 97,973 2,482,104 250,741 2,732,845 1,141,437 484,749 1,626,186	2019
		Classified as Operating Costs Classified as Operating Expenses Total $ 555,454 $ 1,151,468 $ 1,706,922 46,770 102,802 149,572 25,565 52,407 77,972 26,477 67,233 93,710 2,918,046 248,733 3,166,779 759,607 691,012 1,450,619

Employee benefits Salary Insurance expenses Pension Others Depreciation Amortization	For the Nine Months	Ended September 30
	2020 Classified as Operating Costs Classified as Operating Expenses Total $ 1,856,407 $ 3,705,392 $ 5,561,799 159,035 316,855 475,890 83,741 164,625 248,366 88,173 194,526 282,699 7,450,514 755,917 8,206,431 2,683,495 1,592,741 4,276,236	2019
		Classified as Operating Costs Classified as Operating Expenses Total $ 1,664,039 $ 3,486,314 $ 5,150,353 139,846 308,537 448,383 75,593 156,901 232,494 77,589 194,625 272,214 8,971,625 751,970 9,723,595 2,276,598 2,256,410 4,533,008

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 $87,896 thousand, $102,984 thousand, $285,986 thousand and $300,488 thousand, and remuneration to directors were $8,790 thousand, $10,299 thousand, $28,599 thousand and $30,049 thousand, which were calculated by applying the rates to the aforementioned profit before income tax, for the three months and the nine months ended September 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.

57 -

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.

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
58 -
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)

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.

For the Three Months					Adjustments
Ended September 30,	Telecommuni-		Cable		and
2020	cations	Retail	Television	Others	Eliminations	Total
Operating revenues	$ 14,435,094	$ 15,582,993	$ 1,561,796 $	150,212	$ (487,118)	$ 31,242,977
Operating costs	9,099,486	14,155,437	805,759	82,564	(419,049)	23,724,197
Operating expenses	2,720,314	994,315	203,642	12,860	(131,510)	3,799,621
Net other income and						123,599
expenses	111,682	24,457	(1,098)	1,111	(12,553)
Profit	2,726,976	457,698	551,297	55,899	50,888	3,842,758
EBITDA (Note)	6,253,215	659,967	728,845	104,253	49,211	7,795,491
For the Three Months					Adjustments
Ended September 30,	Telecommuni-		Cable		and
2019	cations	Retail	Television	Others	Eliminations	Total
Operating revenues	$ 17,176,506	$ 12,371,510	$ 1,523,292 $	149,653	$ (395,046)	$ 30,825,915
Operating costs	10,978,647	11,181,313	792,395	86,671	(347,128)	22,691,898
Operating expenses	2,972,035	863,109	191,411	12,626	(66,604)	3,972,577
Net other income and
expenses	112,192	4,614	9,241	-	(11,074)	114,973
Profit	3,338,016	331,702	548,727	50,356	7,612	4,276,413
EBITDA (Note)	6,909,971	512,380	776,649	103,353	(1,858)	8,300,495

59 -

For the Nine Months					Adjustments
Ended September 30,	Telecommuni-		Cable		and
2020	cations	Retail	Television	Others	Eliminations	Total
Operating revenues	$ 44,411,377	$ 46,522,804	$ 4,646,217 $	421,787	$ (1,564,890)	$ 94,437,295
Operating costs	27,247,672	42,172,241	2,376,847	244,386	(1,326,511)	70,714,635
Operating expenses	8,331,400	2,941,516	592,496	41,618	(389,535)	11,517,495
Net other income and
expenses	220,044	71,558	(3,073)	1,111	(37,370)	252,270
Profit	9,052,349	1,480,605	1,673,801	136,894	113,786	12,457,435
EBITDA (Note)	18,937,891	2,070,726	2,210,596	281,750	107,582	23,608,545
For the Nine Months					Adjustments
Ended September 30,	Telecommuni-		Cable		and
2019	cations	Retail	Television	Others	Eliminations	Total
Operating revenues	$ 50,120,766	$ 35,922,568	$ 4,611,644 $	444,774	$ (786,613)	$ 90,313,139
Operating costs	31,430,202	32,364,100	2,464,430	259,508	(654,533)	65,863,707
Operating expenses	9,107,007	2,438,704	574,393	42,773	(169,142)	11,993,735
Net other income and
expenses	377,258	16,952	11,077	2,710	(33,217)	374,780
Profit	9,960,815	1,136,716	1,583,898	145,203	3,845	12,830,477
EBITDA (Note)	20,862,888	1,622,706	2,370,420	304,215	(23,665)	25,136,564

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.

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 Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 92,613,487 1,823,808 $ 94,437,295	2019 $ 87,764,871 2,548,268 $ 90,313,139

60 -

TABLE 1

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

FINANCING EXTENDED TO OTHER PARTIES FOR THE NINE MONTHS ENDED SEPTEMBER 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	$ 346,000 341,000	0.86889%-1.09422% 1.17033%-1.39400%	Short-term financing Short-term financing	$ - -	Operation requirements Operation requirements	$ - -	- -	$ - -	$ 31,956,085 31,956,085	$ 31,956,085 31,956,085	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	2,461,000 - 1,200,000 735,000	0.86889%-1.09422% - 0.87033%-1.09422% 0.86878%-1.09433%	Short-term financing Short-term financing Short-term financing Short-term financing	- - - -	Operation requirements Operation requirements Operation requirements Operation requirements	- - - -	- - - -	- - - -	8,266,852 8,266,852 8,266,852 8,266,852	8,266,852 8,266,852 8,266,852 8,266,852	Note 2 Note 2 Note 2 Note 2
3	TFN	TWM TCC	Other receivables Other receivables	Yes Yes	11,000,000 700,000	11,000,000 700,000	7,323,000 341,000	0.86900%-1.09422% 0.87033%-1.09400%	Short-term financing Short-term financing	- -	Operation requirements Operation requirements	- -	- -	- -	20,871,881 20,871,881	20,871,881 20,871,881	Note 2 Note 2
4	YJCTV	TFNM	Other receivables	Yes	100,000	50,000	50,000	1.09378%	Transactions	461,043	-	-	-	-	461,043	461,043	Notes 3 and 4
5	PCTV	TFNM	Other receivables	Yes	520,000	520,000	520,000	1.09378%	Transactions	537,938	-	-	-	-	537,938	537,938	Notes 3 and 4
6	GCTV	TFNM	Other receivables	Yes	250,000	250,000	250,000	1.09378%	Short-term financing	-	Repayment of financing	-	-	-	282,184	282,184	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 NINE MONTHS ENDED SEPTEMBER 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	$ 8,391,500 50,000	$ - -	33.94 0.08	$ 63,347,218 63,347,218	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) SEPTEMBER 30, 2020

(In Thousands of New Taiwan Dollars)

Investing Company	Marketable Securities Type and Name	Relationship with the Securities Issuer	Financial Statement Account		September 30, 2020	September 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 THSR 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 - 43,427 200,497 10,000 410,665 87,590 0.2 0.0335	$ 232,566 923,124 30,799 463,729 276,902 65,433 96,504 - 1,374,477 19,367,987 38,409 39,670,267 8,461,151 - -	0.028 2.55 10 5 21.67 21.67 5.21 7.14 0.77 5.71 6.67 11.69 2.49 0.33 0.056	$ 232,566 923,124 30,799 463,729 276,902 65,433 96,504 - 1,374,477 19,367,987 38,409 39,670,267 8,461,151 - -	Note 1 Note 1 Note 1

(Continued)

63 -

Investing Company	Marketable Securities Type and Name	Relationship with the Securities Issuer	Financial Statement Account		September 30, 2020	September 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	$ 3,609 53,256	2.04 7.73	$ 3,609 53,256

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 NINE MONTHS ENDED SEPTEMBER 30, 2020

(In Thousands of New Taiwan Dollars)

Company Name	Type and Name of Marketable Securities	Financial Statement Account	Counter-party	Relationship	Beginning Balance	Beginning Balance	Acquisition	Acquisition		Disposal	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 (Note 2)
TWM TVC TWM TFN	TVC AppWorks Fund III LINE Bank Taiwan Limited THSR	Investments accounted for using equity method Investments accounted for using equity method Non-current financial assets at FVTOCI Current financial assets at FVTOCI	- - - -	Subsidiary Associate - -	500 - - 90,212	$ 4,907 - 100,000 (Note 1) 3,464,156	160,000 33,000 50,000 -	$ 1,600,000 330,000 400,000 -	- - - 46,785	$ - - - 1,621,105	$ - - - 473,212	$ - - - 1,147,893	160,500 33,000 50,000 43,427	$ 1,592,943 318,723 463,729 1,374,477

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

Note 2: The ending balance includes share of profit/loss of associates accounted for using equity method and 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 NINE MONTHS ENDED SEPTEMBER 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 NINE MONTHS ENDED SEPTEMBER 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 TFN TT&T TPIA TFNM MCTV momo	TFN TPIA TKT momo TFNM Fubon Life TWM Fubon Ins. YJCTV PCTV UCTV GCTV Dai-Ka Ltd. TPE	Subsidiary Subsidiary Subsidiary Subsidiary Fellow subsidiary Other related party Ultimate parent Other related party Subsidiary Subsidiary Subsidiary Subsidiary Other related party Associate	Sale Purchase Sale Purchase Sale Purchase Sale Sale Sale Sale Channel leasing fee Channel leasing fee Channel leasing fee Channel leasing fee Royalty for copyright Purchase	$ 171,254 3,216,274 111,424 186,976 1,144,942 186,270 116,251 103,208 757,629 176,369 317,355 372,293 163,394 141,470 118,370 589,946	- 12 - 1 3 1 2 2 90 90 13 15 7 6 52 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 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 Note 1 Note 1 Note 1 Note 1 -	$ 25,643 (425,491 ) 58,493 (73,910 ) 124,247 (15,785 ) 24,202 16,466 84,275 71,687 - - - - (65,761 ) (86,157 )	- (Note 2) 1 5 2 1 2 2 90 88 - - - - 92 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 SEPTEMBER 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 PCTV GCTV momo	momo TWM TFC TWM TFNM WTVB TWM TCC TFNM TFNM TFCB	Subsidiary Parent Subsidiary Parent Subsidiary Subsidiary Ultimate parent Parent Parent Parent Other related party	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 Other receivables	$ 124,247 346,526 342,015 2,469,755 1,203,144 737,215 436,191 7,391,651 341,787 5,577 521,470 2,404 250,693 113,346	9.84 10.43 5.83 5.81	$ - - - - - - - - - - - - - -	- - - - - - - - - - - - - -	$ 120,678 - 342,015 8,743 131,433 1,755 378,322 25,813 341,787 1,776 520,036 722 250,002 113,346	$ - - - - - - - - - - - - - -

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 NINE MONTHS ENDED SEPTEMBER 30, 2020

(In Thousands of New Taiwan Dollars)

Investor	Investee	Location	Main Businesses and Products	Investment Amount	Investment Amount	Balance	as of September 30, 2020	as of September 30, 2020	Net Income (Loss) of the Investee	Investment Income (Loss)	Note
				September 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 1,605,000 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 8,129,394 330,000 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 42,065 160,500 191,866 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 33,000 400 104,712 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 20.11 100 100 100 100 29.53 100 99.22 92.38 32.5 15	$ 19,487,495 20,667,196 1,592,943 1,853,622 256,495 8,596 52,180,665 97,811 225,027 26,503,542 100,195 64,997 193,605 6,461,230 17,028 97,675 285,765 9,389,952 318,723 34,476,814 7,358,734 252,546 1,713,338 629,279 3,432,032 2,025,554 1,274,230 121,375 25,631	$ 2,359,097 1,846,766 (5,884) 64,622 65,186 17,529 2,184,662 38,341 (2,043) 3,459 5,802 54,997 (3,805) 1,299,403 125 2,952 22,478 1,331,654 (73,107) (123) (83) 7,224 (56,768) 37,432 129,083 31,887 45,393 (55,726) 4,024	$ 2,359,474 1,846,839 (5,884) 33,178 32,599 2,524 - - - - - - - - - - - - - - - - - - - - - - -	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 September 30, 2020	as of September 30, 2020	Net Income (Loss) of the Investee	Investment Income (Loss)	Note
				September 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 MFS 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 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 Wholesaling 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 85,000 250,000 100,000 295,860 154,268 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 - 111,597 1,132,789 1,132,789 670,448	1,300 3,825 9,735 21,778 500 500 3,000 8,500 25,000 10,000 14,793 153,031 Note 6 11,594 11,594 16,600	0.76 6.83 81.99 100 100 100 100 85 100 100 15.5 20 Note 6 100 100 100	$ 15,572 96,198 34,196 647,431 7,644 8,344 44,986 58,134 249,618 100,346 387,984 152,376 Note 6 37,383 37,383 647,431	$ 31,887 45,393 (7,689) 26,256 (1,147) (912) 4,819 (5,715) (382) 346 156,868 39,198 Note 6 (7,598) (7,598) 26,256	$ - - - - - - - - - - - - - - - -	Note 2 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 September 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 NINE MONTHS ENDED SEPTEMBER 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 TFNM TFN TT&T TDS 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 Notes and accounts payable Other payables Other payables Other payables Lease liabilities - current Lease liabilities - current Other current liabilities Other current liabilities	$ 26,208 58,493 124,247 36,333 18,211 7,323,000 2,461,000 346,000 67,714 73,910 15,785 11,670 405,462 84,275 18,052 21,876 104,907 26,188 19,999	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	$ 30,740 281,814 29,433 15,789 171,254 19,550 111,424 1,144,942 3,216,274 186,976 50,027 186,270 30,420 23,042 757,629 31,945 57,561 21,195	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	342,015 341,000	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	1,203,144 737,215	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)

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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	$ 16,018 24,202 69,761 116,251 37,206 82,017	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 FGE Bebe Poshe FSL TFNM	1 1 1 1 3	Notes and accounts payable Operating revenues Operating costs Operating costs Operating costs	36,380 19,919 31,385 83,172 36,950	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	1 1 1 1 1 1 1 1 3	Other receivables Other receivables Other receivables Other receivables Other receivables Short-term borrowings Short-term borrowings Short-term borrowings Notes and accounts payable	56,570 36,743 28,551 20,232 17,155 520,000 50,000 250,000 64,003	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)

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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	PCTV YJCTV UCTV GCTV MCTV PCTV YJCTV UCTV GCTV WTVB	1 1 1 1 1 1 1 1 1 3	Operating revenues Operating revenues Operating revenues Operating revenues Operating revenues Operating costs Operating costs Operating costs Operating costs Operating costs	$ 403,673 345,537 163,394 154,044 13,584 26,408 23,760 17,215 11,067 64,003	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	- - - - - - - - - -

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)

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TABLE 10

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

INVESTMENTS IN MAINLAND CHINA FOR THE NINE MONTHS ENDED SEPTEMBER 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 September 30, 2020	Net Income (Loss) of Investee	% Ownership through Direct or Indirect Investment	Investment Income (Loss)	Carrying Value as of September 30, 2020	Accumulated Inward Remittance of Earnings as of September 30, 2020
								Outflow	Inflow
TWMC FGE Haobo GHS	Mobile application development and design Wholesaling Investment Wholesaling		$ 87,360 (USD 3,000) 330,613 (RMB 77,500) 46,926 (RMB 11,000) 213,299 (RMB 50,000)		b b b b	$ 141,870 (USD 4,872) 788,491 (USD 14,000) (RMB 89,267) - -		$ - - - -	$ - - - -	$ 141,870 (USD 4,872) 788,491 (USD 14,000) (RMB 89,267) - -	$ 1,024 (7,826) 26,233 156,407	100 76.7 100 20	$ 1,024 (6,003) 26,233 26,129	$ 77,739 23,997 620,253 577,080	- - - -

Company		Accumulated Investment in Mainland China as of September 30, 2020		Investment Amounts Authorized by Investment Commission, MOEA			Upper Limit on Investment Authorized by Investment Commission, MOEA (Note 2)
TWM and subsidiaries		$1,563,562 (US$18,872, RMB89,267 and HK$168,539)		$1,563,562 (US$18,872, RMB89,267 and HK$168,539)			$41,771,621

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 SEPTEMBER 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	410,665,284 319,492,000 212,284,900 200,496,761 184,736,452	11.69 9.10 6.04 5.71 5.26

Note: The table discloses the information of major 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 number of 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.

76 -

AI assistant

TWM — Interim / Quarterly Report 2020

52277_rns_2020-11-06_bfecd969-b0bb-4693-893d-985ef9f9940a.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

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

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

September 30, 2020

9. INVENTORIES

10. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

a. GHS

b. TPE

c. AppWorks

d. AppWorks Fund III

e. TV Direct

f. TVD Shopping

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

TWM Interim / Quarterly Report 2020