TWM - Interim / Quarterly Report 2021

Taiwan Mobile Co., Ltd. and Subsidiaries

Consolidated Financial Statements for the Six Months Ended June 30, 2021 and 2020 and Independent Auditors’ Review Report

INDEPENDENT AUDITORS’ REVIEW REPORT

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

Introduction

We have reviewed the accompanying consolidated balance sheets of Taiwan Mobile Co., Ltd. and its subsidiaries (collectively, the “Group”) as of June 30, 2021 and 2020, the consolidated statements of comprehensive income for the three months and the six months ended June 30, 2021 and 2020, the consolidated statements of changes in equity and cash flows for the six months then ended, and the related notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34 “Interim Financial Reporting” endorsed and issued into effect by Financial Supervisory Commission of Taiwan, the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

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

Conclusion

Based on our reviews, nothing has come to our attention that caused us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as of June 30, 2021 and 2020, and of its consolidated financial performance for the three months ended June 30, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for the six months then ended in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and International Accounting Standard 34 “Interim Financial Reporting” endorsed and issued into effect by Financial Supervisory Commission of Taiwan, the Republic of China.

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

Deloitte & Touche Taipei, Taiwan Republic of China August 5, 2021

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 financial statements are those generally accepted and 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 other comprehensive income (Note 7) Contract assets (Note 22) Notes and accounts receivable, net (Note 8) Notes and accounts receivable due from related parties (Note 29) Other receivables (Note 29) Inventories (Note 9) Prepayments (Note 29) 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 other comprehensive income (Note 7) Contract assets (Note 22) Investments accounted for using equity method (Notes 10 and 29) Property, plant and equipment (Notes 12 and 29) 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 and 30) Other non-current assets (Notes 16 and 29) Total non-current assets		June 30, 2021 (Reviewed)		December 31, 2020 (Audited)		June 30, 2020 (Reviewed)
		Amount % $ 15,753,196 8 268,585 - 4,488,222 3 7,090,437 4 400,201 - 2,300,927 1 3,923,040 2 733,172 1 - - 664,144 - 166,540 - 35,788,464 19 3,018,348 1 4,643,740 3 1,590,979 1 43,744,192 23 9,388,911 5 2,617,035 1 62,651,076 33 15,819,108 8 5,105,243 3 807,828 1 1,725,300 1 356,012 - 1,669,139 1 153,136,911 81		Amount % $ 10,777,791 6 245,446 - 4,617,051 3 7,638,043 4 186,903 - 1,348,704 1 5,766,264 3 652,375 - 23,005 - 677,891 - 159,321 - 32,092,794 17 2,289,746 1 3,753,081 2 1,966,894 1 42,479,314 23 9,011,290 5 2,626,185 2 64,803,445 35 15,819,108 9 5,143,958 3 883,367 - 1,771,884 1 355,432 - 1,588,104 1 152,491,808 83		Amount % $ 8,237,272 5 2,985,211 2 4,677,432 3 7,357,742 4 193,179 - 1,546,009 1 3,719,234 2 730,294 - - - 688,913 - 131,228 - 30,266,514 17 1,855,031 1 3,033,639 2 1,714,204 1 35,579,874 20 9,211,915 5 2,965,503 2 66,955,815 38 15,832,440 9 5,367,340 3 796,349 - 1,878,963 1 267,507 - 1,663,404 1 147,121,984 83

TOTAL $ 188,925,375 100 $ 184,584,602 100 $ 177,388,498 100

LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 17) Short-term notes and bills payable (Note 17) Contract liabilities (Note 22) Notes and accounts payable Accounts payable due to related parties (Note 29) Dividends payable (Note 21) Other payables (Note 29) Current tax liabilities Provisions (Note 19) Lease liabilities (Notes 13, 26 and 29) 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 surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Other equity interests Treasury stock Total equity attributable to owners of the parent NON-CONTROLLING INTERESTS (Note 21) Total equity TOTAL		June 30, 2021 (Reviewed)		December 31, 2020 (Audited)		June 30, 2020 (Reviewed)
		Amount % $ 12,300,000 6 8,897,262 5 1,742,412 1 11,378,675 6 262,861 - 12,868,894 7 9,938,649 5 1,495,481 1 66,841 - 3,648,611 2 2,938,302 2 2,813,349 1 68,351,337 36 92,465 - 34,975,986 18 8,675,860 5 1,487,005 1 1,176,216 1 5,772,662 3 513,028 - 1,180,404 1 401,587 - 54,275,213 29 122,626,550 65 35,124,215 19 16,339,311 9 31,500,472 17 2,449,739 1 5,690,332 3 (1,862,339) (1) (29,717,344) (16) 59,524,386 32 6,774,439 3 66,298,825 35 $ 188,925,375 100		Amount % $ 9,800,000 5 14,195,385 8 1,892,749 1 9,625,964 5 160,556 - - - 11,153,442 6 2,192,429 1 68,531 - 3,505,968 2 2,935,405 2 3,001,890 2 58,532,319 32 102,767 - 34,973,223 19 8,780,081 5 1,449,171 1 1,063,734 - 5,530,987 3 534,071 - 1,165,500 1 462,537 - 54,062,071 29 112,594,390 61 35,124,215 19 18,936,574 10 30,170,398 16 - - 13,300,996 7 (2,449,739) (1) (29,717,344) (16) 65,365,100 35 6,625,112 4 71,990,212 39 $ 184,584,602 100		Amount % $ 11,590,000 7 9,795,551 5 1,685,736 1 8,202,132 5 150,956 - 13,350,468 8 7,567,050 4 1,501,928 1 64,469 - 3,529,437 2 303,320 - 2,442,667 1 60,183,714 34 39,290 - 35,886,949 20 4,484,367 3 1,503,649 1 1,020,457 1 5,676,851 3 504,812 - 1,127,425 1 462,566 - 50,706,366 29 110,890,080 63 35,093,765 20 18,681,980 10 30,170,398 17 - - 6,787,948 4 (542,778) - (29,717,344) (17) 60,473,969 34 6,024,449 3 66,498,418 37 $ 177,388,498 100

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

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share) (Reviewed, Not Audited)

For the Three Months Ended June 30	For the Three Months Ended June 30	For the Six Months Ended June 30	For the Six Months Ended June 30
2021	2020	2021	2020
Amount % $ 38,421,194 100 30,447,038 79 7,974,156 21 2,350,328 6 1,351,587 4 59,720 - 61,790 - 3,823,425 10 106,335 - 4,257,066 11 14,355 - 1,146 - (6,178 ) - (151,895 ) - 5,631 - (136,941) - 4,120,125 11 784,681 2 3,335,444 9 468,694 1 (10,924 ) - (10,503 ) - (1,061) - 446,206 1 $ 3,781,650 10 $ 2,839,943 8 495,501 1 $ 3,335,444 9 $ 3,280,084 9 501,566 1 $ 3,781,650 10 $ 1.01 $ 1.01	Amount % $ 31,341,639 100 23,408,985 75 7,932,654 25 2,477,608 8 1,300,044 4 53,820 - 49,319 - 3,880,791 12 80,808 - 4,132,671 13 17,683 - 16,468 - 45,566 - (157,692 ) - 73,154 - (4,821) - 4,127,850 13 812,929 2 3,314,921 11 998,253 3 23,792 - (9,512 ) - 2,424 - 1,014,957 3 $ 4,329,878 14 $ 3,047,593 10 267,328 1 $ 3,314,921 11 $ 4,049,814 13 280,064 1 $ 4,329,878 14 $ 1.08 $ 1.08	Amount % $ 73,733,784 100 58,318,286 79 15,415,498 21 4,789,435 6 2,644,281 4 117,230 - 124,917 - 7,675,863 10 157,595 - 7,897,230 11 26,848 - 2,593 - 152,343 - (307,778 ) - (2,122) - (128,116) - 7,769,114 11 1,166,825 2 6,602,289 9 637,354 1 10,467 - (24,848 ) - (2,384) - 620,589 1 $ 7,222,878 10 $ 5,672,520 8 929,769 1 $ 6,602,289 9 $ 6,282,805 9 940,073 1 $ 7,222,878 10 $ 2.02 $ 2.01	Amount % $ 63,194,318 100 46,990,438 74 16,203,880 26 4,911,064 8 2,619,016 4 103,580 - 84,214 - 7,717,874 12 128,671 - 8,614,677 14 35,989 - 18,303 - 39,338 - (302,350 ) - 51,826 - (156,894) - 8,457,783 14 1,578,346 3 6,879,437 11 (556,121 ) (1 ) 27,368 - (22,476 ) - 2,288 - (548,941) (1) $ 6,330,496 10 $ 6,362,233 10 517,204 1 $ 6,879,437 11 $ 5,807,236 9 523,260 1 $ 6,330,496 10 $ 2.26 $ 2.25

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, 2020 Distribution of 2019 earnings Legal reserve Reversal of special reserve Cash dividends Total distribution of earnings Cash dividends from capital surplus Profit for the six months ended June 30, 2020 Other comprehensive income (loss) for the six months ended June 30, 2020 Total comprehensive income (loss) for the six months ended June 30, 2020 Conversion of convertible bonds to common stock Disposal of investments in equity instruments designated as at fair value through other comprehensive income Changes in equity of associates accounted for using equity method Disposal of investments accounted for using equity method Cash dividends for non-controlling interests of subsidiaries BALANCE, JUNE 30, 2020 BALANCE, JANUARY 1, 2021 Distribution of 2020 earnings Legal reserve Special reserve Cash dividends Total distribution of earnings Cash dividends from capital surplus Profit for the six months ended June 30, 2021 Other comprehensive income (loss) for the six months ended June 30, 2021 Total comprehensive income (loss) for the six months ended June 30, 2021 Changes in equity of associates accounted for using equity method Disposal of investments accounted for using equity method Cash dividends for non-controlling interests of subsidiaries BALANCE, JUNE 30, 2021			Equity Attributable to Owners of the Parent	Equity Attributable to Owners of the Parent	Total Non-controlling Interests $ 68,017,291 $ 6,158,984 - - - - (11,756,844) - (11,756,844) - (1,593,624) - 6,362,233 517,204 (554,997) 6,056 5,807,236 523,260 2,163 - - - (1,220) (1,490) (1,033) (1,262) - (655,043) $ 60,473,969 $ 6,024,449 $ 65,365,100 $ 6,625,112 - - - - (9,521,178) - (9,521,178) - (2,577,603) - 5,672,520 929,769 610,285 10,304 6,282,805 940,073 (2,854) 735 (21,884) (20,968) - (770,513) $ 59,524,386 $ 6,774,439	Total Equity $ 74,176,275 - - (11,756,844) (11,756,844) (1,593,624) 6,879,437 (548,941) 6,330,496 2,163 - (2,710) (2,295) (655,043) $ 66,498,418 $ 71,990,212 - - (9,521,178) (9,521,178) (2,577,603) 6,602,289 620,589 7,222,878 (2,119) (42,852) (770,513) $ 66,298,825
	Common Stock $ 34,959,441 - - - - - - - - 134,324 - - - - $ 35,093,765 $ 35,124,215 - - - - - - - - - - - $ 35,124,215	Capital Collected in Advance Capital Surplus $ 134,104 $ 20,274,694 - - - - - - - - - (1,593,624) - - - - - - (134,104) 1,943 - - - - - (1,033) - - $ - $ 18,681,980 $ - $ 18,936,574 - - - - - - - - - (2,577,603) - - - - - - - 2,224 - (21,884) - - $ - $ 16,339,311	Retained Earnings Legal Reserve Special Reserve Unappropriated Earnings $ 28,922,281 $ 95,381 $ 12,909,829 1,248,117 - (1,248,117) - (95,381) 95,381 - - (11,756,844) 1,248,117 (95,381) (12,909,580) - - - - - 6,362,233 - - (235) - - 6,361,998 - - - - - 426,241 - - (1,220) - - 680 - - - $ 30,170,398 $ - $ 6,787,948 $ 30,170,398 $ - $ 13,300,996 1,330,074 - (1,330,074) - 2,449,739 (2,449,739) - - (9,521,178) 1,330,074 2,449,739 (13,300,991) - - - - - 5,672,520 - - - - - 5,672,520 - - (5,078) - - 22,885 - - - $ 31,500,472 $ 2,449,739 $ 5,690,332	Other Equity Interests Exchange Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Differences on Translation Comprehensive Income Treasury Stock $ (34,505) $ 473,410 $ (29,717,344) - - - - - - - - - - - - - - - - - - (10,060) (544,702) - (10,060) (544,702) - - - - - (426,241) - - - - - (680) - - - - $ (44,565) $ (498,213) $ (29,717,344) $ (31,679) $ (2,418,060) $ (29,717,344) - - - - - - - - - - - - - - - - - - (12,526) 622,811 - (12,526) 622,811 - - - - - (22,885) - - - - $ (44,205) $ (1,818,134) $ (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 (Gain) loss on disposal and retirement of property, plant and equipment, net Gain on disposal of intangible assets Expected credit loss Finance costs Interest income Dividend income Gain on disposal of investments accounted for using equity method Share of (profit) loss of associates accounted for using equity method Valuation loss on financial assets at fair value through profit or loss Others Changes in operating assets and liabilities Contract assets Notes and accounts receivable Notes and accounts receivable due from related parties Other receivables Inventories Prepayments Other current assets Other financial assets Incremental costs of obtaining a contract Contract liabilities Notes and accounts payable Accounts payable due to related parties Other payables Provisions Other current liabilities Net defined benefit liabilities Cash inflows generated from operating activities Interest received Interest paid Income taxes paid Net cash generated from operating activities		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 7,769,114 6,068,381 2,376,633 724,557 (57,198) - 124,917 307,778 (26,848) - (99,052) 2,122 - (2,033) (768,353) (168,042) (192,704) (378,866) 1,843,224 (152,428) (7,287) 10,362 (677,973) (160,639) 1,752,711 102,305 (384,361) 10,447 (187,054) (21,043) 17,808,670 3,132 (458) (1,790,072) 16,021,272	2020 $ 8,457,783 5,473,586 1,724,791 925,259 23,798 (8,800) 84,214 302,350 (35,989) (8,398) (58,494) (51,826) 149 (7,188) 589,440 193,346 (46,993) (10,356) 1,951,242 (279,170) 69,015 (1,671) (685,170) (127,674) 541,847 15,794 (770,840) (4,767) (21,936) (12,363) 18,220,979 3,035 (626) (1,516,935) 16,706,453 (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 advance receipts from asset disposals Acquisition of investments accounted for using equity method Disposal of investments accounted for using equity method Acquisition of financial assets at fair value through other comprehensive income Disposal of financial assets at fair value through other comprehensive income 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 Dividends 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 to non-controlling interests of subsidiaries Interest paid Net cash generated from (used in) financing activities		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ (6,052,964) (12,825) (191,158) (78,354) 164,995 6,400 151 (54,155) 466,547 - - - - (187,016) 181,644 (35,934) 38,100 16,631 7,914 (5,730,024) 2,500,000 (5,293,976) - (114,962) (1,986,685) 76,903 (60,569) (400) (434,949) (5,314,638)	2020 $ (3,173,445) (20,821) (29,810,586) (219,127) 12,431 6,000 149 (335,246) 166,807 (407,419) 548,542 (30,554) 33,298 (196,782) 164,391 (160,515) 68,572 24,888 - (33,329,417) (4,680,000) 7,893,678 19,979,415 (4,102,000) (1,938,642) 73,475 (38,401) (655,043) (332,790) 16,199,692 (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 CASH EQUIVALENTS NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ (1,205) 4,975,405 10,777,791 $ 15,753,196	2020 $ (2,826) (426,098) 8,663,370 $ 8,237,272

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

(Concluded)

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020 (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 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 services and the sale of mobile phones and accessories, games, e-books and value-added services.

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

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

2. APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS

The Board of Directors approved the consolidated financial statements on August 5, 2021.

3. APPLICATION OF NEW, AMENDED AND REVISED 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 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. The IFRSs issued by International Accounting Standards Board (IASB) and endorsed by the FSC for application starting from 2022

Effective Date New IFRSs Announced by IASB

“Annual Improvements to IFRS Standards 2018-2020” January 1, 2022 (Note 1) Amendments to IFRS 3 “Reference to the Conceptual Framework” January 1, 2022 (Note 2) Amendments to IAS 16 “Property, Plant and Equipment - Proceeds January 1, 2022 (Note 3) before Intended Use” Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a January 1, 2022 (Note 4) Contract”

Note 1: The amendments to IFRS 9 will be 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” will be 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” will be applied retrospectively for annual reporting periods beginning on or after January 1, 2022.
Note 2: 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 3: 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 4: 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. New IFRSs issued by IASB but not yet endorsed and issued into effect by the FSC

New IFRSs Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” Amendments to IFRS 17 Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” Amendments to IAS 1 “Disclosure of Accounting Policies” Amendments to IAS 8 “Definition of Accounting Estimates” Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”	Effective Date Announced by IASB (Note 1)
	To be determined by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 (Note 2) January 1, 2023 (Note 3) January 1, 2023 (Note 4)

New IFRSs
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture”

IFRS 17 “Insurance Contracts”

Amendments to IFRS 17

Amendments to IAS 1 “Classification of Liabilities as Current or
Non-current”

Amendments to IAS 1 “Disclosure of Accounting Policies”

Amendments to IAS 8 “Definition of Accounting Estimates”

Amendments to IAS 12 “Deferred Tax related to Assets and
Liabilities arising from a Single Transaction”

Effective Date
Announced by IASB (Note 1)

To be determined by IASB
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023 (Note 2)
January 1, 2023 (Note 3)
January 1, 2023 (Note 4)

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 will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.
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Note 3: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.
Note 4: Except that deferred taxes will be recognized on January 1, 2022 for temporary differences associated with leases and decommissioning obligations, the amendments will be applied prospectively to transactions that occur on or after January 1, 2022.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Except for the following, 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, 2020.

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 preparation of the consolidated financial statements is the same as that of the consolidated financial statements for the year ended December 31, 2020.
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

11 -

Investor
Subsidiary
Main Business and
Products
TCC
Taiwan Digital Service
Co., Ltd. (TDS)
Commissioned
maintenance services
Taihsin Property Insurance
Agent Co., Ltd. (TPIA)
Property insurance agent
Tai-Fu Cloud Technology
Co., Ltd. (TFC)
Cloud and information
services
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
TVC
TWM Film Co., Ltd.
(TWMFM)
Film production
TFN
TFN Union Investment
Co., Ltd. (TUI)
Investment
TWM Holding
TWM Communications
(Beijing) Co., Ltd.
(TWMC)
Data communication
application development
TCCI
TCCI Investment and
Development Co., Ltd.
(TID)
Investment
TFNM
Taiwan Kuro Times Co.,
Ltd. (TKT)
Digital music services
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

Percentage of Ownership
June 30,
2021
December 31,
2020
June 30,
2020
Note
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%
-
100.00%
-
-
Note 2
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 3
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%
100.00%
100.00%
-
100.00%
100.00%
-
Note 4
100.00%
100.00%
100.00%
-
100.00%
100.00%
100.00%
-
(Continued)

12 -

Investor Subsidiary Main Business and Products Honest Development Hongkong Yue Numerous Investment Co., Ltd. (HK Yue Numerous) Investment HK Yue Numerous Haobo Information Consulting (Shenzhen) Co., Ltd. (Haobo) Investment HK Fubon Multimedia Fubon Gehua (Beijing) Enterprise Ltd. (FGE) Wholesaling	Percentage of Ownership June 30, 2021 December 31, 2020 June 30, 2020 Note 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 June 30, 2021.

Note 2: Set up in April 2021.

Note 3: The other 70.47% of shares were held under trustee accounts.

Note 4: Set up in July 2020.

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

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, 2020.

6. CASH AND CASH EQUIVALENTS

Cash on hand and revolving funds Cash in banks Time deposits Government bonds with repurchase rights	June 30, 2021 December 31, 2020 $ 78,680 $ 100,230 10,631,834 6,199,436 3,387,524 2,035,253 1,655,158 2,442,872 $ 15,753,196 $ 10,777,791	June 30, 2020 $ 62,759 3,810,709 2,015,838 2,347,966 $ 8,237,272

13 -

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Investments in equity instruments-current Domestic investments Listed stocks Foreign investments Unlisted stocks Investments in equity instruments-non-current Domestic investments Listed stocks Unlisted stocks Foreign investments Limited partnerships Unlisted stocks	June 30, 2021 December 31, 2020 $ 247,780 $ 236,913 20,805 8,533 $ 268,585 $ 245,446 $ 1,613,859 $ 981,427 691,721 657,756 463,503 249,827 249,265 400,736 $ 3,018,348 $ 2,289,746	June 30, 2020 $ 2,982,545 2,666 $ 2,985,211 $ 766,679 664,043 394,124 30,185 $ 1,855,031

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 fair value through other comprehensive income (FVTOCI) as they believed that recognizing short-term fluctuations from these investments’ fair value in profit or loss would not be consistent with the Group’s strategy of holding these investments for long-term purposes.

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

8. NOTES AND ACCOUNTS RECEIVABLE, NET

Notes receivable Accounts receivable Less: Allowance for impairment loss	June 30, 2021 December 31, 2020 $ 43,525 $ 109,259 7,394,789 7,835,539 (347,877) (306,755) $ 7,090,437 $ 7,638,043	June 30, 2020 $ 60,063 7,599,042 (301,363) $ 7,357,742

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 entering into 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.

14 -

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

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

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

June 30, 2021

Not Past Due Gross carrying amount $ 6,769,718 Loss allowance (Lifetime ECLs) (51,948) Amortized cost $ 6,717,770 December 31, 2020 Not Past Due Gross carrying amount $ 7,322,918 Loss allowance (Lifetime ECLs) (57,523) Amortized cost $ 7,265,395 June 30, 2020 Not Past Due Gross carrying amount $ 7,064,255 Loss allowance (Lifetime ECLs) (50,902) Amortized cost $ 7,013,353	Overdue 1 to 120 Days 121 to 365 Days Over 365 Days $ 501,857 $ 162,358 $ 4,381 (137,807) (153,784) (4,338) $ 364,050 $ 8,574 $ 43 Overdue 1 to 120 Days 121 to 365 Days Over 365 Days $ 489,896 $ 127,120 $ 4,864 (123,915) (120,541) (4,776) $ 365,981 $ 6,579 $ 88 Overdue 1 to 120 Days 121 to 365 Days Over 365 Days $ 445,695 $ 147,139 $ 2,016 (114,633) (133,812) (2,016) $ 331,062 $ 13,327 $ -	Total $ 7,438,314 (347,877) $ 7,090,437 Total $ 7,944,798 (306,755) $ 7,638,043 Total $ 7,659,105 (301,363) $ 7,357,742

15 -

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 services	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:

For the Six Months Ended June 30 2021 2020 Beginning balance $ 306,755 $ 345,458 Add: Provision 117,592 86,569 Recovery 22,359 17,851 Less: Write-off (98,829) (148,515) Ending balance $ 347,877 $ 301,363 The Group entered into an accounts receivable factoring contract with a private institution and sold those overdue accounts receivable that had been written off. Under the contract, the Group would no longer assume the risk on the receivables. The related factored accounts receivable information was as follows: For the Six Months Ended June 30, 2021 Amount of accounts receivable sold $ 716,882 Proceeds of the sale of accounts receivable $ 58,058		For the Six Months Ended June 30	For the Six Months Ended June 30	For the Six Months Ended June 30
				$ 716,882 $ 58,058

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

9. INVENTORIES

Merchandise Materials for maintenance	June 30, 2021 December 31, 2020 $ 3,914,081 $ 5,756,903 8,959 9,361 $ 3,923,040 $ 5,766,264	June 30, 2020 $ 3,711,405 7,829 $ 3,719,234

For the three months and the six months ended June 30, 2021, the cost of goods sold related to inventories amounted to $22,743,533 thousand and $42,981,672 thousand, respectively, which included the reversal of inventory write-down totaling $21,956 thousand and $29,086 thousand, respectively.

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

16 -

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) AppWorks Ventures Co., Ltd. (AppWorks) AppWorks Fund III Co., Ltd. (AppWorks Fund III) kbro Media Co., Ltd. (kbro Media) TV Direct Public Company Limited (TV Direct) Mistake Entertainment Co., Ltd. (M.E.) Alliance Digital Tech Co., Ltd. (ADT) Taiwan Pelican Express Co., Ltd. (TPE)		June 30, 2021 Amount % of Owner- ship $ 611,108 20.00 280,224 51.00 343,692 21.15 164,917 33.58 157,168 21.35 25,350 15.00 8,520 14.40 - - $ 1,590,979		December 31, 2020 Amount % of Owner- ship $ 606,376 20.00 265,526 51.00 315,027 20.11 167,135 33.58 192,103 24.99 25,698 15.00 8,615 14.40 386,414 15.50 $ 1,966,894		June 30, 2020
						Amount % of Owner- ship $ 555,409 20.00 255,767 51.00 204,887 19.46 124,936 32.50 128,288 16.20 25,274 15.00 6,072 14.40 413,571 16.87 $ 1,714,204

a. GHS

In June 2015, momo acquired 20% equity interest of GHS through its subsidiary.

As momo’s subsidiary did not participate in GHS’s capital increase in October 2015, its percentage of ownership interest in GHS decreased to 18%. In January 2016, its percentage of ownership interest in GHS increased to 20% due to the acquisition of an additional 2% equity interest of GHS.

b. AppWorks

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

c. 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 and May 2021, TVC’s percentage of ownership interest in AppWorks Fund III increased to 20.11% and 21.15%, respectively, due to non-proportionate subscription to AppWorks Fund III’s issuance of new capital stock.

d. kbro Media

In August 2012, TFNM acquired 32.5% equity interest of kbro Media.

In November 2020, kbro Media both decreased and increased capital. TFNM’s percentage of ownership interest in kbro Media increased to 33.58% due to non-proportionate subscription to kbro Media’s issuance of new capital stock.

17 -

e. TV Direct

In April 2014, momo acquired 35% equity interest of TVD Shopping Co., Ltd. (TVD Shopping). In March 2020, momo received $33,298 thousand as a proportional capital reduction. In June 2020, momo sold all of its equity interest of TVD Shopping to TV Direct for $146,772 thousand.

In June 2020, momo acquired 16.2% equity interest of TV Direct and had significant influence on TV Direct. In the second half of 2020, momo’s percentage of ownership interest in TV Direct increased to 24.99% due to its acquisition of an additional 8.79% equity interest of TV Direct. momo’s percentage of ownership interest in TV Direct decreased to 21.35% due to non-subscription to the exercise of the share options, which were granted by TV Direct, in the first half of 2021.

f. 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.

g. 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. On June 29, 2021, ADT resolved the liquidation process in the extraordinary stockholders’ meeting. As of June 30, 2021, ADT was still under liquidation procedures.

h. TPE

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

In December 2013, momo’s percentage of ownership interest in TPE decreased to 17.7% as it did not subscribe for the new stock issued by TPE and sold part of its stock when TPE went public.

In the first half of 2020, momo’s percentage of ownership interest in TPE decreased to 16.87% since momo sold portion of its equity interests in TPE for $27,698 thousand. As of June 30, 2020, the amount of outstanding receivables was $7,663 thousand. In the second half of 2020, momo’s percentage of ownership interest in TPE decreased to 15.5% since momo sold other portion of its equity interests in TPE, whilst momo still had two seats on TPE’s board of directors. In March 2021, momo sold the rest of its equity interests in TPE for $466,547 thousand.

11. SUBSIDIARIES WITH MATERIAL NON-CONTROLLING INTERESTS

Subsidiary momo	Proportion of Non-controlling Interests’ Ownership and Voting Rights
	June 30, 2021 December 31, 2020 June 30, 2020 54.99% 54.99% 54.99%

For information on the principal place of business and the company’s country of registration, see Table 7.

18 -

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

June 30, 2021 Current assets $ 13,994,651 Non-current assets 15,130,992 Current liabilities (13,018,350) Non-current liabilities (1,444,067) Equity $ 14,663,226 Equity attributable to: Owners of the parent $ 9,780,678 Non-controlling interests of momo 4,868,974 Non-controlling interests of momo’s subsidiaries 13,574 $ 14,663,226 For the Three Months Ended June 30 2021 2020 Operating revenue $ 22,258,273 $ 15,834,104 Profit $ 883,809 $ 469,054 Other comprehensive income 11,045 23,277 Comprehensive income $ 894,854 $ 492,331 Profit (loss) attributable to: Owners of the parent $ 398,361 $ 211,623 Non-controlling interests of momo 486,591 258,493 Non-controlling interests of momo’s subsidiaries (1,143) (1,062) $ 883,809 $ 469,054 Comprehensive income (loss) attributable to: Owners of the parent $ 403,341 $ 222,166 Non-controlling interests of momo 492,675 271,371 Non-controlling interests of momo’s subsidiaries (1,162) (1,206) $ 894,854 $ 492,331	June 30, 2021 Current assets $ 13,994,651 Non-current assets 15,130,992 Current liabilities (13,018,350) Non-current liabilities (1,444,067) Equity $ 14,663,226 Equity attributable to: Owners of the parent $ 9,780,678 Non-controlling interests of momo 4,868,974 Non-controlling interests of momo’s subsidiaries 13,574 $ 14,663,226 For the Three Months Ended June 30 2021 2020 Operating revenue $ 22,258,273 $ 15,834,104 Profit $ 883,809 $ 469,054 Other comprehensive income 11,045 23,277 Comprehensive income $ 894,854 $ 492,331 Profit (loss) attributable to: Owners of the parent $ 398,361 $ 211,623 Non-controlling interests of momo 486,591 258,493 Non-controlling interests of momo’s subsidiaries (1,143) (1,062) $ 883,809 $ 469,054 Comprehensive income (loss) attributable to: Owners of the parent $ 403,341 $ 222,166 Non-controlling interests of momo 492,675 271,371 Non-controlling interests of momo’s subsidiaries (1,162) (1,206) $ 894,854 $ 492,331	December 31, 2020 June 30, 2020 $ 9,932,680 $ 7,344,919 15,349,820 15,000,954 (9,651,475) (7,985,268) (1,207,579) (984,820) $ 14,423,446 $ 13,375,785 $ 9,671,655 $ 9,198,993 4,735,804 4,158,454 15,987 18,338 $ 14,423,446 $ 13,375,785 For the Six Months Ended June 30 2021 2020 $ 40,619,491 $ 30,939,811 $ 1,663,087 $ 910,385 18,795 11,204 $ 1,681,882 $ 921,589 $ 752,287 $ 410,567 913,145 501,501 (2,345) (1,683) $ 1,663,087 $ 910,385 $ 760,778 $ 415,716 923,517 507,792 (2,413) (1,919) $ 1,681,882 $ 921,589	December 31, 2020 June 30, 2020 $ 9,932,680 $ 7,344,919 15,349,820 15,000,954 (9,651,475) (7,985,268) (1,207,579) (984,820) $ 14,423,446 $ 13,375,785 $ 9,671,655 $ 9,198,993 4,735,804 4,158,454 15,987 18,338 $ 14,423,446 $ 13,375,785 For the Six Months Ended June 30 2021 2020 $ 40,619,491 $ 30,939,811 $ 1,663,087 $ 910,385 18,795 11,204 $ 1,681,882 $ 921,589 $ 752,287 $ 410,567 913,145 501,501 (2,345) (1,683) $ 1,663,087 $ 910,385 $ 760,778 $ 415,716 923,517 507,792 (2,413) (1,919) $ 1,681,882 $ 921,589	December 31, 2020 June 30, 2020 $ 9,932,680 $ 7,344,919 15,349,820 15,000,954 (9,651,475) (7,985,268) (1,207,579) (984,820) $ 14,423,446 $ 13,375,785 $ 9,671,655 $ 9,198,993 4,735,804 4,158,454 15,987 18,338 $ 14,423,446 $ 13,375,785 For the Six Months Ended June 30 2021 2020 $ 40,619,491 $ 30,939,811 $ 1,663,087 $ 910,385 18,795 11,204 $ 1,681,882 $ 921,589 $ 752,287 $ 410,567 913,145 501,501 (2,345) (1,683) $ 1,663,087 $ 910,385 $ 760,778 $ 415,716 923,517 507,792 (2,413) (1,919) $ 1,681,882 $ 921,589
		$
		$
		$

2021 $ 22,258,273 $ 883,809 11,045 $ 894,854 $ 398,361 486,591 (1,143) $ 883,809 $ 403,341 492,675 (1,162) $ 894,854	2020 $ 15,834,104 $ 469,054 23,277 $ 492,331 $ 211,623 258,493 (1,062) $ 469,054 $ 222,166 271,371 (1,206) $ 492,331		2021 $ 40,619,491 $ 1,663,087 18,795 $ 1,681,882 $ 752,287 913,145 (2,345) $ 1,663,087 $ 760,778 923,517 (2,413) $ 1,681,882	2020 $ 30,939,811 $ 910,385 11,204 $ 921,589 $ 410,567 501,501 (1,683) $ 910,385 $ 415,716 507,792 (1,919) $ 921,589

19 -

Net cash generated from operating activities Net cash generated from (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 Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 4,643,129 348,050 (232,898) (218) $ 4,758,063 $ -	2020 $ 2,039,040 (739,488) (1,366,513) (690) $ (67,651) $ 654,596

12. PROPERTY, PLANT AND EQUIPMENT

Cost Balance, January 1, 2021 Additions Disposals and retirements Reclassification Effect of exchange rate changes Balance, June 30, 2021 Accumulated depreciation and impairment Balance, January 1, 2021 Depreciation Disposals and retirements Reclassification Effect of exchange rate changes Balance, June 30, 2021 Carrying amount, January 1, 2021 Carrying amount, June 30, 2021 Cost Balance, January 1, 2020 Additions Disposals and retirements Reclassification Effect of exchange rate changes Balance, June 30, 2020	Land $ 9,101,010 - (10,637 ) - - $ 9,090,373 $ - - - - - $ - $ 9,101,010 $ 9,090,373 $ 8,261,041 431,785 (2,005 ) 193,748 - $ 8,884,569	Buildings Telecommuni- cations Equipment and Machinery $ 5,725,270 $ 96,632,051 - 51,951 (10,645 ) (1,250,091 ) - 3,874,970 - (958) $ 5,714,625 $ 99,307,923 $ 1,840,925 $ 71,461,532 81,476 3,610,143 (4,762 ) (1,176,982 ) - (415 ) - (935) $ 1,917,639 $ 73,893,343 $ 3,884,345 $ 25,170,519 $ 3,796,986 $ 25,414,580 $ 5,641,608 $ 90,366,481 - 67,762 (2,039 ) (724,004 ) 5,407 1,841,417 - (2,111) $ 5,644,976 $ 91,549,545	Others Construction in Progress and Equipment to be Inspected $ 9,934,447 $ 2,950,912 150,509 5,201,950 (81,056 ) (11 ) 155,530 (4,025,466 ) (63) - $ 10,159,367 $ 4,127,385 $ 8,561,919 $ - 360,435 - (77,775 ) - (21 ) - (59) - $ 8,844,499 $ - $ 1,372,528 $ 2,950,912 $ 1,314,868 $ 4,127,385 $ 9,549,160 $ 1,506,915 115,444 2,107,033 (159,962 ) (44 ) 128,364 (1,953,477 ) (138) - $ 9,632,868 $ 1,660,427	Total $ 124,343,690 5,404,410 (1,352,440 ) 5,034 (1,021) $ 128,399,673 $ 81,864,376 4,052,054 (1,259,519 ) (436 ) (994) $ 84,655,481 $ 42,479,314 $ 43,744,192 $ 115,325,205 2,722,024 (888,054 ) 215,459 (2,249) $ 117,372,385 (Continued)

20 -

Accumulated depreciation and impairment Balance, January 1, 2020 Depreciation Disposals and retirements Reclassification Effect of exchange rate changes Balance, June 30, 2020 Carrying amount, June 30, 2020	Land $ - - - - - $ - $ 8,884,569	Buildings Telecommuni- cations Equipment and Machinery $ 1,649,207 $ 69,379,600 80,597 3,082,010 (742 ) (691,796 ) 2,333 - - (1,968) $ 1,731,395 $ 71,767,846 $ 3,913,581 $ 19,781,699	Others Construction in Progress and Equipment to be Inspected Total $ 8,114,393 $ - $ 79,143,200 338,283 - 3,500,890 (159,287 ) - (851,825 ) - - 2,333 (119) - (2,087) $ 8,293,270 $ - $ 81,792,511 $ 1,339,598 $ 1,660,427 $ 35,579,874 (Concluded)

Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives as follows:

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

13. LEASE ARRANGEMENTS

a. Right-of-use assets

Carrying amount Land Buildings Telecommunications equipment and machinery Others Additions to right-of-use assets	June 30, 2021 $ 513,549 8,195,902 530,065 149,395 $ 9,388,911		December 31, 2020 June 30, 2020 $ 530,915 $ 561,847 7,713,486 7,721,598 597,078 749,232 169,811 179,238 $ 9,011,290 $ 9,211,915 For the Six Months Ended June 30	December 31, 2020 June 30, 2020 $ 530,915 $ 561,847 7,713,486 7,721,598 597,078 749,232 169,811 179,238 $ 9,011,290 $ 9,211,915 For the Six Months Ended June 30
			2021 $ 2,408,591	2020 $ 1,701,498

21 -

Depreciation charge for right-of-use assets Land Buildings Telecommunications equipment and machinery Others		For the Three Months Ended June 30 2021 2020 $ 60,518 $ 60,457 888,528 858,012 39,716 46,137 15,206 15,106 $ 1,003,968 $ 979,712		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 60,518 888,528 39,716 15,206 $ 1,003,968		2021 $ 120,618 1,775,201 80,553 30,805 $ 2,007,177	2020 $ 120,147 1,718,786 93,351 30,237 $ 1,962,521

Except for the aforementioned additions and recognized depreciation, the Group did not have significant sublease or impairment of right-of-use assets during the six months ended June 30, 2021 and 2020.

b. Lease liabilities

Carrying amount Current Non-current Range of discount rates for lease liabilities was as Land Buildings Telecommunications equipment and machinery Others	June 30, 2021 December 31, 2020 $ 3,648,611 $ 3,505,968 $ 5,772,662 $ 5,530,987 follows: June 30, 2021 December 31, 2020 0.61%-1% 0.74%-1% 0.61%-1.2% 0.72%-1.2% 0.61%-4.38% 0.74%-4.38% 0.61%-0.86% 0.74%-0.86%	June 30, 2020 $ 3,529,437 $ 5,676,851 June 30, 2020 0.74%-1% 0.74%-1.2% 0.78%-4.38% 0.74%-0.86%

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.

22 -

d. Other lease information

Expenses related to short-term leases Expenses related to low-value asset leases Expenses related to variable lease payments and not included in the measurement of lease liabilities Total cash outflow for leases		For the Three Months Ended June 30 2021 2020 $ 9,298 $ 10,225 $ 17,788 $ 17,873 $ 10,637 $ 11,490		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 9,298 $ 17,788 $ 10,637		2021 2020 $ 19,207 $ 19,269 $ 35,139 $ 36,355 $ 21,056 $ 22,935 For the Six Months Ended June 30
				2021 $ 2,114,739	2020 $ 2,083,705

14. INVESTMENT PROPERTIES

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

The fair values of investment properties were measured using Level 3 inputs, arising from income approach, comparative approach, and cost approach adopted by a third party real estate appraiser, HomeBan Appraisers Joint Firm. As of June 30, 2021, December 31, 2020 and June 30, 2020, the fair values of investment properties were $6,161,888 thousand, $6,160,847 thousand and $7,346,416 thousand, respectively, and the capitalization rates for the aforementioned financial reporting periods were ranging from 1.41%-5.23%, 1.46%-5.23% and 1.32%-4.95%, respectively.

The amounts of depreciation recognized for the three months and the six months ended June 30, 2021 and 2020 were $4,575 thousand, $5,076 thousand, $9,150 thousand, and $10,175 thousand, respectively.

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

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 and thereafter	June 30, 2021 December 31, 2020 $ 134,186 $ 135,195 128,399 129,010 24,381 76,399 22,735 24,532 22,220 22,392 7,407 18,517 $ 339,328 $ 406,045	June 30, 2020 $ 152,313 137,571 133,113 30,634 29,452 37,316 $ 520,399

23 -

15. INTANGIBLE ASSETS

Cost Balance, January 1, 2021 Additions Disposals and retirements Reclassification Effect of exchange rate changes Balance, June 30, 2021 Accumulated amortization and impairment Balance, January 1, 2021 Amortization Disposals and retirements Effect of exchange rate changes Balance, June 30, 2021 Carrying amount, January 1, 2021 Carrying amount, June 30, 2021 Cost Balance, January 1, 2020 Additions Disposals and retirements Reclassification Effect of exchange rate changes Balance, June 30, 2020 Accumulated amortization and impairment Balance, January 1, 2020 Amortization Disposals and retirements Effect of exchange rate changes Balance, June 30, 2020 Carrying amount, June 30, 2020		Conces	sions Service Concessions $ 8,180,078 - - - - $ 8,180,078 $ 1,388,744 89,359 - - $ 1,478,103 $ 6,791,334 $ 6,701,975 $ 8,180,078 - - - - $ 8,180,078 $ 1,210,025 89,359 - - $ 1,299,384 $ 6,880,694	Goodwill $ 15,872,595 - - - - $ 15,872,595 $ 53,487 - - - $ 53,487 $ 15,819,108 $ 15,819,108 $ 15,872,595 - - - - $ 15,872,595 $ 40,155 - - - $ 40,155 $ 15,832,440		Othe	r Intangible Asse	ts	Copyrights $ 63,133 6,482 - 51,822 - $ 121,437 $ 54,387 24,162 - - $ 78,549 $ 8,746 $ 42,888 $ 25,197 17,937 (30,000 ) 31,550 - $ 44,684 $ 25,197 18,126 - - $ 43,323 $ 1,361	Total $ 105,600,561 125,885 (31,779 ) 59,677 (158) $105,754,186 $ 19,834,050 2,376,633 (31,779 ) (145) $ 22,178,759 $ 85,766,511 $ 83,575,427 $ 75,771,788 29,759,051 (56,947 ) 1,072,924 (349) $106,546,467 $ 16,693,313 1,724,791 (26,947 ) (285) $ 18,390,872 $ 88,155,595
		Concession Licenses $ 71,699,375 - - - - $ 71,699,375 $ 13,687,264 2,063,010 - - $ 15,750,274 $ 58,012,111 $ 55,949,101 $ 41,043,375 29,656,000 - 1,000,000 - $ 71,699,375 $ 10,303,927 1,320,327 - - $ 11,624,254 $ 60,075,121			Computer Software $ 3,231,391 119,389 (31,779 ) 7,855 (158) $ 3,326,698 $ 2,864,980 131,837 (31,779 ) (145) $ 2,964,893 $ 366,411 $ 361,805 $ 4,096,570 85,077 (26,947 ) 41,374 (349) $ 4,195,725 $ 3,465,304 228,707 (26,947 ) (285) $ 3,666,779 $ 528,946	Customer Relationships $ 2,654,089 - - - - $ 2,654,089 $ 1,783,463 68,200 - - $ 1,851,663 $ 870,626 $ 802,426 $ 2,654,089 - - - - $ 2,654,089 $ 1,647,063 68,200 - - $ 1,715,263 $ 938,826	Operating Rights $ 1,382,000 - - - - $ 1,382,000 $ - - - - $ - $ 1,382,000 $ 1,382,000 $ 1,382,000 - - - - $ 1,382,000 $ - - - - $ - $ 1,382,000	Trademarks $ 2,517,900 14 - - - $ 2,517,914 $ 1,725 65 - - $ 1,790 $ 2,516,175 $ 2,516,124 $ 2,517,884 37 - - - $ 2,517,921 $ 1,642 72 - - $ 1,714 $ 2,516,207

The above intangible assets are amortized on a straight-line basis over their estimated useful lives 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. Service concessions

On January 15, 2009, TNH signed a BOT contract with the 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.

b. 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.

24 -
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 services 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.
c. Goodwill

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

Mobile communication services Fixed network services Cable television business Retail business	June 30, 2021 $ 7,211,936 357,970 3,269,636 4,979,566 $ 15,819,108	December 31, 2020 $ 7,211,936 357,970 3,269,636 4,979,566 $ 15,819,108	June 30, 2020 $ 7,211,936 357,970 3,269,636 4,992,898
			$ 15,832,440

d. Impairment of assets

See Note 15(e) to the consolidated financial statements for the year ended December 31, 2020 for the related information on impairment of assets. There was no significant evidence indicating impairment of intangible assets as of June 30, 2021.

16. OTHER NON-CURRENT ASSETS

Long-term accounts receivable Refundable deposits Other prepayments Prepayments for investment Others	June 30, 2021 December 31, 2020 $ 311,455 $ 296,045 697,080 698,876 197,025 119,006 - - 463,579 474,177 $ 1,669,139 $ 1,588,104	June 30, 2020 $ 367,937 666,633 117,363 30,554 480,917 $ 1,663,404

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17. BORROWINGS

a. Short-term borrowings

Unsecured loans Annual interest rates	June 30, 2021 $ 12,300,000 0.57%-0.88%	December 31, 2020 $ 9,800,000 0.64%-0.88%	June 30, 2020 $ 11,590,000 0.58%-0.895%

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

b. Short-term notes and bills payable

	June 30,	December 31,	June 30,
	2021	2020	2020
Short-term notes and bills payable	$ 8,900,000	$ 14,200,000	$ 9,800,000
Less: Discounts on short-term notes and bills
payable	(2,738)	(4,615)	(4,449)
	$ 8,897,262	$ 14,195,385	$ 9,795,551
Annual interest rates	0.278%-0.298%	0.328%-0.418%	0.398%-0.538%

c. Long-term borrowings

June 30,
2021
December 31,
2020
Unsecured loans
$ 2,000,000
$ 2,000,000

Secured loans
2,484,322
2,586,036
Commercial papers payable
6,500,000
6,500,000
Less: Current portion
(2,303,398) (2,303,375)
Less: Discounts on commercial papers
payable

(5,064)

(2,580)

$ 8,675,860
$ 8,780,081

Annual interest rates:
Unsecured loans
0.79%
0.79%
Secured loans
1.50%
1.7495%
Commercial papers payable
0.687%-0.697% 0.687%-0.697%

June 30,
2020
$ 2,000,000
2,787,687
-

(303,320)

-
$ 4,484,367
0.79%
1.7495%
-

1) Unsecured loans

TWM 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.

26 -

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.

3) Commercial papers payable

TWM’s commercial papers payable are treated as revolving credit facilities under the contracts. The repayment dates of the commercial papers payable are no later than December 2023.

18. BONDS PAYABLE

5th domestic unsecured straight corporate bonds 6th domestic unsecured straight corporate bonds 3rd domestic unsecured convertible bonds Less: Current portion	June 30, 2021 $ 14,992,741 19,983,245 634,904 (634,904) $ 34,975,986	December 31, 2020 $ 14,991,472 19,981,751 632,030 (632,030) $ 34,973,223	June 30, 2020 $ 14,990,186 19,980,232 916,531 - $ 35,886,949

a. 5th domestic unsecured straight corporate bonds

On April 20, 2018, TWM issued the 5th domestic unsecured straight corporate bonds. The bonds included five-year and seven-year bonds, with the principal amount of $6,000,000 thousand and $9,000,000 thousand, each having a face value of $10,000 thousand, and coupon rates of 0.848% and 1% per annum, respectively, with simple interest due annually. Repayment will be made in full at maturity. As of June 30, 2021, the amount of unamortized bond issue cost was $7,259 thousand. The trustee of bond holders is Bank of Taiwan.

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

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

b. 6th domestic unsecured straight corporate bonds

On March 24, 2020, TWM issued the 6th domestic unsecured straight corporate bonds. The bonds included five-year, seven-year, and ten-year bonds, with the principal amount of $5,000,000 thousand, $10,000,000 thousand and 5,000,000 thousand, each having a face value of $10,000 thousand, and coupon rates of 0.64%, 0.66% and 0.72% per annum, respectively, with simple interest due annually. Repayment will be made in full at maturity. As of June 30, 2021, the amount of unamortized bond issue cost was $16,755 thousand. The trustee of bond holders is Bank of Taiwan.

27 -

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

c. 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 June 30, 2021, the amount of unamortized bond discount was $2,296 thousand.

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

Equity component
Financial liabilities

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

Liability component on June 30, 2020

Liability component on January 1, 2021

Interest charged at an effective interest rate

Liability component on June 30, 2021

$ 9,989,130
(400,564)

(35,961)
9,552,605
237,204
(8,873,278)
$ 916,531
$ 632,030

2,874
$ 634,904

As of June 30, 2021, December 31, 2020 and June 30, 2020, the bondholders had requested to convert the bonds at face values of $9,362,800 thousand, $9,362,800 thousand and $9,071,700 thousand, respectively.

28 -

19. PROVISIONS

Restoration Replacement Warranties Current Non-current Balance, January 1, 2021 Provision Payment/Reversal Unwinding of discount Balance, June 30, 2021 Balance, January 1, 2020 Provision Payment/Reversal Unwinding of discount Balance, June 30, 2020	Restoration $ 1,110,392 18,722 (16,302) 1,639 $ 1,114,451 $ 1,183,427 18,223 (17,240) 1,897 $ 1,186,307	June 30, 2021 December 31, 2020 $ 1,114,451 $ 1,110,392 416,909 385,375 22,486 21,935 $ 1,553,846 $ 1,517,702 $ 66,841 $ 68,531 1,487,005 1,449,171 $ 1,553,846 $ 1,517,702 Replacement Warranties $ 385,375 $ 21,935 26,440 15,933 (267) (15,382) 5,361 - $ 416,909 $ 22,486 $ 324,693 $ 40,111 25,770 16,237 - (29,571) 4,571 - $ 355,034 $ 26,777	June 30, 2020 $ 1,186,307 355,034 26,777 $ 1,568,118 $ 64,469 1,503,649 $ 1,568,118 Total $ 1,517,702 61,095 (31,951) 7,000 $ 1,553,846 $ 1,548,231 60,230 (46,811) 6,468 $ 1,568,118

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 provision, the Group’s contribution to the pension plan amounted to $85,641 thousand and $81,586 thousand for the three months ended June 30, 2021 and 2020, respectively, and $171,179 thousand and $162,686 thousand for the six months ended June 30, 2021 and 2020, respectively.

b. Defined benefit plans

The Group recognized pension amounts of $1,064 thousand and $1,577 thousand for the three months ended June 30, 2021 and 2020, respectively, and $2,126 thousand and $3,154 thousand for the six months ended June 30, 2021 and 2020, respectively, by using the actuarially determined pension cost rate.

29 -

21. EQUITY

a. Share capital

As of June 30, 2021, December 31, 2020, and June 30, 2020, TWM’s authorized capital was $60,000,000 thousand and capital issued and outstanding were $35,124,215 thousand, $35,124,215 thousand and $35,093,765 thousand, respectively, divided into 3,512,421 thousand shares, 3,512,421 thousand shares and 3,509,376 thousand shares, respectively, which were all common stocks, at a par value of $10 each.

As of June 30, 2021, December 31, 2020, and June 30, 2020, the bondholders of the 3rd domestic unsecured convertible bonds had requested to convert the bonds into 91,589 thousand, 91,589 thousand and 88,544 thousand common stocks, respectively.

b. Capital surplus

Additional paid-in capital from convertible corporate bonds Treasury stock transactions Difference between consideration and carrying amount arising from the disposal of subsidiaries’ stock Changes in equity of subsidiaries Convertible bonds payable options Changes in equity of associates accounted for using equity method Others	June 30, 2021 $ 10,524,417 5,159,704 85,965 501,215 25,524 6,682 35,804 $ 16,339,311	December 31, 2020 $ 13,102,020 5,159,704 85,965 501,215 25,524 26,342 35,804 $ 18,936,574	June 30, 2020 $ 12,833,194 5,159,704 85,965 501,215 37,184 29,768 34,950 $ 18,681,980

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. 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.

30 -

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 earnings as legal reserve until the legal reserve equals the paid-in capital. The legal reserve may be used to 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.

Pursuant to existing regulations, TWM is required to set aside and reverse additional special reserve equivalent to the net debit balance of the other equity interests, such as the exchange differences on translation and unrealized gain or loss on financial assets at fair value through other comprehensive income.

The appropriations of earnings for 2020 and 2019, which have been proposed by the Board of Directors on May 4, 2021 and resolved in the AGM on June 18, 2020, respectively, were as follows:

Legal reserve Special reserve Cash dividends Cash dividends per share (NT$)	Appropriation of Earnings
	For the Year Ended December 31
	2020 2019 $ 1,330,074 $ 1,248,117 2,449,739 (95,381) 9,521,178 11,756,844 3.3839 4.183

In addition, cash distributions arising from capital surplus with respect to the excess of stock issuance price over the par value of capital stock, totaling $2,577,603 thousand and $1,593,624 thousand and representing $0.9161 and $0.567 per share, were proposed by the Board of Directors and resolved in the AGM; thus, total distributions will be $4.3 and was $4.75 per share, respectively, for 2020 and 2019.

In response to “Measures for Public Companies to Postpone Shareholders’ Meetings for Pandemic Prevention” issued by the FSC, TWM’s AGM will be postponed to August 20, 2021. However, the e-voting result regarding the earnings appropriation and cash appropriation from the capital surplus for 2020 reached the legal resolution threshold, and TWM recognized the related distribution amounts accordingly.

As of June 30, 2021, the cash dividends to stockholders of TWM and subsidiaries amounted to $12,868,894 thousand and were recognized under dividends payable account.

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d. Other equity interests

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

Balance, January 1, 2021
$ (31,679) $ (2,418,060)
Exchange differences on translation

(11,702)
-
Changes in fair value of financial assets at
FVTOCI

-
736,464
Changes in other comprehensive income
(loss) of associates accounted for using
equity method

(824)
735
Other comprehensive income transferred to
retained earnings due to disposal of
investments accounted for using equity
method

-
(22,885)
Income tax effect

-

(114,388)

Balance, June 30, 2021
$ (44,205)
$ (1,818,134)

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

Exchange differences on translation

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

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

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

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

-
(680)
Income tax effect

-

13,119

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

Total
$ (2,449,739)
(11,702)
736,464
(89)

(22,885)

(114,388)
$ (1,862,339)
$ 438,905
(11,196)

(567,269)

(426,241)
10,584

(680)

13,119
$ (542,778)

e. Treasury stock

As of June 30, 2021, December 31, 2020 and June 30, 2020, 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 $71,272,663 thousand, $69,106,533 thousand and $77,212,052 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.

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f. Non-controlling interests

Beginning balance Profit Other comprehensive income Exchange differences on translation Unrealized gain (loss) on financial assets 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 for non-controlling interests of subsidiaries Ending balance		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 6,625,112 929,769 (13,146) 15,278 8,172 735 (20,968) (770,513) $ 6,774,439	2020 $ 6,158,984 517,204 (11,280) (1,971) 19,307 (1,490) (1,262) (655,043) $ 6,024,449

22. OPERATING REVENUE

Revenue from contracts with customers Telecommunications and value-added services Sales revenue Cable TV and broadband services Others Other operating revenue		For the Three Months Ended June 30 2021 2020 $ 11,187,698 $ 11,104,139 25,508,133 18,505,394 1,486,730 1,501,993 201,914 189,464 36,719 40,649 $ 38,421,194 $ 31,341,639		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 11,187,698 25,508,133 1,486,730 201,914 36,719 $ 38,421,194		2021 $ 22,312,715 47,957,893 2,977,334 412,401 73,441 $ 73,733,784	2020 $ 22,432,301 37,307,772 3,007,079 364,969 82,197 $ 63,194,318

a. Contract information

Refer to Note 35 and to Note 4 to the consolidated financial statements for the year ended December 31, 2020.

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b. Contract balances

Contract assets Bundle sales Less: Allowance for impairment loss Current Non-current	June 30, 2021 $ 9,210,172 (78,210) $ 9,131,962 $ 4,488,222 4,643,740 $ 9,131,962	December 31, 2020 $ 8,441,819 (71,687) $ 8,370,132 $ 4,617,051 3,753,081 $ 8,370,132	June 30, 2020 $ 7,777,091 (66,020) $ 7,711,071 $ 4,677,432 3,033,639 $ 7,711,071	January 1, 2020 $ 8,366,531 (71,032) $ 8,295,499 $ 4,832,043 3,463,456 $ 8,295,499

For notes and accounts receivable, please refer to Note 8.

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

Contract liabilities Telecommunications and value-added services Sales of goods Cable TV and broadband services Others Current Non-current	June 30, 2021 December 31, 2020 $ 1,125,524 $ 1,289,917 65,742 36,981 633,771 656,162 9,840 12,456 $ 1,834,877 $ 1,995,516 $ 1,742,412 $ 1,892,749 92,465 102,767 $ 1,834,877 $ 1,995,516	June 30, 2020 $ 1,002,011 46,401 659,770 16,844 $ 1,725,026 $ 1,685,736 39,290 $ 1,725,026	January 1, 2020 $ 1,125,265 42,417 672,667 12,351 $ 1,852,700 $ 1,807,407 45,293 $ 1,852,700

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

c. Assets related to contract costs

Incremental costs of obtaining a contract - non-current	June 30, 2021 December 31, 2020 $ 1,725,300 $ 1,771,884	June 30, 2020 $ 1,878,963

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. The amounts of amortization recognized for the three months ended June 30, 2021 and 2020 were $355,343 thousand and $441,520 thousand, respectively, and for the six months ended June 30, 2021 and 2020 were $724,557 thousand and $925,259 thousand, respectively.

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23. NON-OPERATING INCOME AND EXPENSES

a. Other gains and losses, net

Gain (loss) on disposal and retirement of property, plant and equipment, net Gain on disposal of intangible assets Gain on disposal of investments accounted for using equity method Valuation loss on financial assets at fair value through profit and loss (FVTPL) Gain (loss) on foreign exchange, net Others Finance costs Interest expense Corporate bonds Bank loans Commercial papers payable Lease liabilities Others	For the Three Months Ended June 30 2021 2020 $ (7,860) $ (8,849) - 8,800 - 58,494 - - 1,421 (12,939) 261 60 $ (6,178) $ 45,566 For the Three Months Ended June 30 2021 2020 $ 71,367 $ 71,986 35,210 43,549 18,586 13,285 20,009 21,945 6,723 6,927 $ 151,895 $ 157,692	For the Three Months Ended June 30 2021 2020 $ (7,860) $ (8,849) - 8,800 - 58,494 - - 1,421 (12,939) 261 60 $ (6,178) $ 45,566 For the Three Months Ended June 30 2021 2020 $ 71,367 $ 71,986 35,210 43,549 18,586 13,285 20,009 21,945 6,723 6,927 $ 151,895 $ 157,692		For the Six Months Ended June 30	For the Six Months Ended June 30
				2021 2020 $ 57,198 $ (23,798) - 8,800 99,052 58,494 - (149) (4,911) (3,596) 1,004 (413) $ 152,343 $ 39,338 For the Six Months Ended June 30
		2021 $ 71,367 35,210 18,586 20,009 6,723 $ 151,895		2021 $ 141,947 71,862 40,428 40,071 13,470 $ 307,778	2020 $ 112,737 106,484 24,240 45,007 13,882 $ 302,350

b. Finance costs

24. INCOME TAX

a. Income tax recognized in profit or loss

Current income tax expense Current period Prior years’ adjustment Deferred income tax expense Temporary differences Income tax expense		For the Three Months Ended June 30 2021 2020 $ 780,895 $ 781,914 (35,761) (7,723) 745,134 774,191 39,547 38,738 $ 784,681 $ 812,929		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 780,895 (35,761) 745,134 39,547 $ 784,681		2021 $ 1,460,960 (367,768) 1,093,192 73,633 $ 1,166,825	2020 $ 1,487,162 (7,723) 1,479,439 98,907 $ 1,578,346

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

Deferred income tax expense (income) Unrealized gain/loss on financial assets at FVTOCI	For the Three Months Ended June 30 2021 2020 $ 65,564 $ 11,631	For the Three Months Ended June 30 2021 2020 $ 65,564 $ 11,631		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 65,564		2021 $ 114,388	2020 $ (13,119)

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 TVC 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
	2018 2019 2019 2019 2019 2019 2018 2019 2019 2019 2018 2019 2019 2019 2017 2019 2019 2018 2017 2019 2017 2017 2017 2019 2019 2019 2019 2019

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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) Basic EPS Profit attributable to owners of the parent Effect of potential dilutive common stock: Employees’ compensation Convertible bonds Diluted EPS Profit attributable to owners of the parent (adjusted for potential effect of common stock) Basic EPS Profit attributable to owners of the parent Effect of potential dilutive common stock: Employees’ compensation Convertible bonds Diluted EPS Profit attributable to owners of the parent (adjusted for potential effect of common stock)	For the Three Months Ended June 30, 2021	For the Three Months Ended June 30, 2021
	Amount After Income Tax Weighted- average Number of Shares (In Thousands) EPS (NT$) $ 2,839,943 2,813,670 $ 1.01 - 1,779 1,447 6,665 $ 2,841,390 2,822,114 $ 1.01 For the Three Months Ended June 30, 2020
	Amount After Income Tax Weighted- average Number of Shares (In Thousands) EPS (NT$) $ 3,047,593 2,810,625 $ 1.08 - 1,793 2,088 9,292 $ 3,049,681 2,821,710 $ 1.08 For the Six Months Ended June 30, 2021
	Amount After Income Tax Weighted- average Number of Shares (In Thousands) $ 5,672,520 2,813,670 - 2,991 2,874 6,665 $ 5,675,394 2,823,326	EPS (NT$) $ 2.02 $ 2.01

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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 Six Months Ended June 30, 2020	For the Six Months Ended June 30, 2020
	Amount After Income Tax Weighted- average Number of Shares (In Thousands) $ 6,362,233 2,810,621 - 2,924 4,173 9,296 $ 6,366,406 2,822,841	EPS (NT$) $ 2.26 $ 2.25

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.

26. CASH FLOW INFORMATION

Changes in liabilities arising from financing activities:

For the Six Months Ended June 30, 2021

Opening Balance Lease liabilities (including current and non-current portions) $ 9,036,955 For the Six Months Ended June 30, 2020 Opening Balance Lease liabilities (including current and non-current portions) $ 9,650,389	Non-cash Changes New Leases Others $ 2,405,896 $ 5,089 Non-cash Changes New Leases Others $ 1,699,731 $ (160,291)	Ending Balance $ 9,421,273

		Ending Balance $ 9,206,288
Lease liabilities (including current and non-current portions)
	New Leases $ 1,699,731

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.

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28. FINANCIAL INSTRUMENTS

a. Categories of financial instruments

Financial assets Financial assets at FVTOCI (including current and non-current portions) Financial assets measured at amortized cost (including current and non-current portions) (Note 1) Total Financial liabilities Financial liabilities measured at amortized cost (including current and non-current portions) (Note 2)	June 30, 2021 $ 3,286,933 27,573,452 $ 30,860,385 $ 104,187,854	December 31, 2020 $ 2,535,192 21,990,185 $ 24,525,377 $ 93,671,945	June 30, 2020 $ 4,840,242 19,342,412 $ 24,182,654 $ 93,241,980

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 long-term and short-term borrowings, commercial papers payable, notes and accounts payable, other payables, dividends payable, other financial liabilities (classified as other current liabilities), bonds payable and guarantee deposits, which were financial liabilities carried at amortized cost.
b. Fair value of financial instruments
1) Financial instruments not measured at fair value

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

Financial liabilities Bonds payable (including current portion)	June 30, 2021 Carrying Amount Fair Value $ 35,610,890 $ 35,924,745	December 31, 2020 Carrying Amount Fair Value $ 35,605,253 $ 35,885,879	June 30, 2020
			Carrying Amount Fair Value $ 35,886,949 $ 36,108,629

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

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

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

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

June 30, 2021

Financial assets at FVTOCI Equity instruments Domestic listed stocks Domestic unlisted stocks Limited partnerships Foreign unlisted stocks December 31, 2020 Financial assets at FVTOCI Equity instruments Domestic listed stocks Domestic unlisted stocks Limited partnerships Foreign unlisted stocks	Level 1 $ 1,861,639 - - - $ 1,861,639 Level 1 $ 1,218,340 - - - $ 1,218,340	Level 2 $ - - - 20,805 $ 20,805 Level 2 $ - - - 8,533 $ 8,533	Level 3 $ - 691,721 463,503 249,265 $ 1,404,489 Level 3 $ - 657,756 249,827 400,736 $ 1,308,319	Total $ 1,861,639 691,721 463,503 270,070 $ 3,286,933 Total $ 1,218,340 657,756 249,827 409,269 $ 2,535,192

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June 30, 2020

Financial assets at FVTOCI Equity instruments Domestic listed stocks Domestic unlisted stocks Limited partnerships Foreign unlisted stocks	Level 1 $ 3,749,224 - - - $ 3,749,224	Level 2 $ - - - 2,666 $ 2,666	Level 3 $ - 664,043 394,124 30,185 $ 1,088,352	Total $ 3,749,224 664,043 394,124 32,851 $ 4,840,242

There was no transfer between the fair value measurements of Levels 1 and 2 for the six months ended June 30, 2021 and 2020.

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 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 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 was mainly referenced to the same type of companies through the market approach or asset approach. The unobservable input was the liquidity discount rate, which ranged from 19.6% to 25%, 10.7% to 25% and 20% to 25% as of June 30, 2021, December 31, 2020 and June 30, 2020, respectively.

The fair value of limited partnerships investments was evaluated through the market approach and income approach. The evaluation and assumptions were mainly referenced to related information of comparable market targets and estimated future cash flows. The unobservable input was the liquidity discount rate, which was estimated to be 31.6%, 33.5% and 33.5% as of June 30, 2021, December 31, 2020 and June 30, 2020, respectively.

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

For the Six Months Ended June 30, 2021

	Financial Assets
	at FVTOCI -
	Equity
	Instruments
Balance at January 1, 2021	$ 1,308,319
Recognized in other comprehensive income (unrealized gain
on financial assets at FVTOCI)	336,116
Transferred out of Level 3 (Note)	(239,946)
Balance at June 30, 2021	$ 1,404,489

Note: Because certain equity investment’s quoted price (unadjusted) in active markets became available in the second quarter of 2021, its fair value hierarchy was transferred from Level 3 to Level 1.

For the Six Months Ended June 30, 2020

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

c. Financial risk management
1) The Group’s major financial instruments include equity investments, trade receivables, trade payables, commercial papers 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.

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2) Risk management framework
a) Decision-making mechanism

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

b) Risk management policies
i. Promote a risk-management-based business model.
ii. Establish a risk management mechanism that can effectively recognize, evaluate, supervise and control risk.

iii. Create a company-wide risk management structure that can limit risk to an acceptable level.

iv. Introduce best risk management practices and continue to seek improvements.
c) Monitoring mechanism

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

3) Credit risk

Credit risk refers to the risk that a counterparty would default on its contractual obligations resulting in a financial loss to the Group. The maximum credit exposure of the aforementioned financial instruments is equal to their carrying amounts recognized in consolidated balance sheet as of the balance sheet date. The 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.

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The Group manages and maintains a sufficient level of capital to ensure the requirements of paying estimated operating expenditures, including financial obligations on each contract. The Group also monitors its bank credit facilities to ensure that the Group fully complies with the provisions and financial covenants of loan contracts. As of June 30, 2021, December 31, 2020 and June 30, 2020, the Group had unused bank facilities of $61,758,898 thousand, $65,511,976 thousand and $69,353,385 thousand, respectively.

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

June 30, 2021 Unsecured loans Secured loans Commercial papers payable Bonds payable Lease liabilities Other non-current liabilities December 31, 2020 Unsecured loans Secured loans Commercial papers payable Bonds payable Lease liabilities Other non-current liabilities June 30, 2020 Unsecured loans Secured loans Commercial papers payable Bonds payable Lease liabilities Other non-current liabilities	Contractual Cash Flows Within 1 Year 1-5 Years $ 14,311,431 $ 14,311,431 $ - 2,608,589 341,192 2,267,397 15,506,559 8,939,654 6,566,905 36,946,960 912,080 20,824,880 9,550,655 3,713,540 5,605,887 511,875 73,125 292,500 $ 79,436,069 $ 28,291,022 $ 35,557,569 $ 11,818,822 $ 11,818,822 $ - 2,736,728 347,574 2,389,154 20,831,278 14,242,137 6,589,141 37,221,840 912,080 20,997,760 9,163,237 3,574,784 5,501,261 585,000 73,125 292,500 $ 82,356,905 $ 30,968,522 $ 35,769,816 $ 13,619,883 $ 11,615,944 $ 2,003,939 2,968,159 350,233 2,617,926 9,800,000 9,800,000 - 37,512,940 274,880 21,926,060 9,345,939 3,592,077 5,718,193 585,000 73,125 292,500 $ 73,831,921 $ 25,706,259 $ 32,558,618	More Than 5 Years $ - - - 15,210,000 231,228 146,250 $ 15,587,478 $ - - - 15,312,000 87,192 219,375 $ 15,618,567 $ - - - 15,312,000 35,669 219,375 $ 15,567,044

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5) Market risk

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

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

a) Exchange rate risk

The Group mainly operates in Taiwan, except for international roaming services. Most of the operating revenue 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	June 30, 2021
	Foreign Currencies Exchange Rate New Taiwan Dollars $ 48,629 27.895 $ 1,356,573 1,191 33.23 39,579 28,041 4.318 121,080 25,552 27.895 712,768 141,526 4.318 611,108 5,790 3.593 20,805 179,744 0.874 157,168 11,911 27.895 332,318 57 33.23 1,906 3,439 3.593 12,355 26,516 0.252 6,682

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Foreign currency assets Monetary items USD EUR RMB Non-monetary items USD RMB HKD THB Foreign currency liabilities Monetary items USD EUR HKD JPY Foreign currency assets Monetary items USD EUR RMB Non-monetary items USD RMB HKD THB Foreign currency liabilities Monetary items USD EUR HKD JPY	December 31, 2020
	Foreign Currencies Exchange Rate New Taiwan Dollars $ 52,099 28.48 $ 1,483,792 1,021 34.94 35,666 25,768 4.372 112,657 22,843 28.48 650,563 138,695 4.372 606,376 2,323 3.673 8,533 201,029 0.956 192,103 9,931 28.48 282,855 61 34.94 2,142 5,751 3.673 21,122 29,867 0.276 8,234 June 30, 2020
	Foreign Currencies Exchange Rate New Taiwan Dollars $ 50,268 29.58 $ 1,486,900 1,446 33.27 48,111 33,708 4.18 140,898 14,344 29.58 424,309 132,873 4.18 555,409 699 3.816 2,666 133,009 0.965 128,288 14,016 29.58 414,565 68 33.27 2,252 6,474 3.816 24,706 35,618 0.276 9,827

Refer to Note 23(a) for the information related to the Group’s realized and unrealized foreign exchange gains (losses) for the three months and the six months ended June 30, 2021 and 2020, 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.

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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 $58,199 thousand and $61,228 thousand for the six months ended June 30, 2021 and 2020, respectively.

b) Interest rate risk

The Group issued unsecured straight corporate bonds and signed facility agreements with financial institutions 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:

		June 30,	December 31,	December 31,	June 30,
		2021		2020	2020
Fair value interest rate risk
Financial assets	$	6,741,724	$	5,218,262 $	5,065,348
Financial liabilities		74,649,255		76,502,983	64,572,257
Cash flow interest rate risk
Financial assets		10,872,307		6,486,835	3,989,526
Financial liabilities		2,484,322		2,586,036	5,777,687

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 $20,970 thousand and decreased by $4,470 thousand for the six months ended June 30, 2021 and 2020, 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), other comprehensive income would have decreased by $164,347 thousand and $242,012 thousand since the fair value of financial assets at FVTOCI decreased for the six months ended June 30, 2021 and 2020, respectively.

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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 AppWorks AppWorks Fund III kbro Media M.E. TV Direct TPE Beijing Global JiuSha Media Technology Co., Ltd. GHS Trading Ltd. Beijing YueShih JiuSha Media Technology Co., Ltd. Citruss Saudi Trading Company LLC AppWorks School Co., Ltd. Good Image Co., Ltd. TVD Shopping Fubon Life Insurance Co., Ltd. (Fubon Life) Fubon Insurance Co., Ltd. (Fubon Ins.) Fubon Securities Investment Trust Co., Ltd. Fubon Sports & Entertainment Co., Ltd. Taipei Fubon Commercial Bank Co., Ltd. (TFCB) Fubon Financial Holding Co., Ltd. Fubon Life Insurance (HK) Ltd. Fubon Securities Co., Ltd. Fubon Futures Co., Ltd. Fubon Investment Services Co., Ltd. Fubon Marketing Co., Ltd. Fu-Sheng Insurance Agency Co., Ltd. Fubon Insurance Agency Co., Ltd. Fubon Financial Venture Capital Co., Ltd. Fubon Gymnasium Co., Ltd. Fubon Asset Management Co., Ltd. One Production Film Co., Ltd. Fubon Bank (China) Co., Ltd. Fubon Land Development Co., Ltd. Fubon Property Management Co., Ltd. Fubon Real Estate Management Co., Ltd. Fubon Hospitality Management Co., Ltd. TFB Capital Co., Ltd. P. League+ Co., Ltd.

Associate Associate Associate Associate Associate Associate Associate (not a related party since March 2021) Associate (subsidiary of GHS) Associate (subsidiary of GHS) Associate (subsidiary of GHS) Associate (subsidiary of GHS) Associate (subsidiary of AppWorks) Associate (subsidiary of kbro Media) Associate (subsidiary of TV Direct, not a related party since November 2020) Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party (formerly known as Fu-Sheng Life Insurance Agency Co., Ltd.) Other related party (formerly known as Fu-Sheng General Insurance Agency Co., Ltd.) Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party

(Continued)

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Related Party Nature of Relationship

Jih Sun Financial Holding Co., Ltd.	Other related party
Jih Sun Securities Co., Ltd.	Other related party
Jih Sun International Bank, Ltd.	Other related party
Jih Sun Life Insurance Agent Co., Ltd.	Other related party
Jih Sun Futures Co., Ltd.	Other related party
Jih Sun Securities Investment Consulting 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
Chen Yun Co., Ltd.	Other related party
Xi Guo Co., Ltd.	Other related party
Cho Pharma Inc.	Other related party
Dun Fu Industrial Corporation Limited.	Other related party
kbro Co., Ltd. (kbro)	Other related party
Daanwenshan CATV Co., Ltd.	Other related party
North Taoyuan CATV Co., Ltd.	Other related party
Yangmingshan CATV Co., Ltd.	Other related party
Hsin Taipei CATV Co., Ltd.	Other related party
Chinpingtao CATV Co., Ltd.	Other related party
Hsintangcheng CATV Co., Ltd.	Other related party
Chuanlien CATV Co., Ltd.	Other related party
Chen Tao Cable TV Co., Ltd.	Other related party
Fengmeng Cable TV Co., Ltd.	Other related party
Hsinpingtao CATV Co., Ltd.	Other related party
Kuansheng CATV Co., Ltd.	Other related party
Nantien CATV Co., Ltd.	Other related party
Taiwan Win TV Media Co., Ltd.	Other related party
Taiwan Mobile Foundation (TMF)	Other related party
Taipei New Horizon Foundation (TNHF)	Other related party
Fubon Cultural & Educational Foundation	Other related party
Fubon Charity Foundation	Other related party
Fubon Art Foundation	Other related party
Taipei Fubon Bank Charity Foundation	Other related party
Taipei New Horizon Management Agency	Other related party
Key management	Chairman, director, president, vice
	president, etc.

(Concluded)

49 -

c. Significant transactions with related parties

1) Operating revenue

Associates Other related parties	For the Three Months Ended June 30 2021 2020 $ 2,545 $ 19,016 384,792 223,031 $ 387,337 $ 242,047	For the Three Months Ended June 30 2021 2020 $ 2,545 $ 19,016 384,792 223,031 $ 387,337 $ 242,047		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 2,545 384,792 $ 387,337		2021 $ 5,948 739,335 $ 745,283	2020 $ 29,589 413,390 $ 442,979

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

2) Purchases

Associates Other related parties	For the Three Months Ended June 30 2021 2020 $ 359 $ 192,765 220,022 69,601 $ 220,381 $ 262,366	For the Three Months Ended June 30 2021 2020 $ 359 $ 192,765 220,022 69,601 $ 220,381 $ 262,366		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 359 220,022 $ 220,381		2021 $ 128,790 331,476 $ 460,266	2020 $ 388,255 127,533 $ 515,788

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

3) Receivables due from related parties

Account Related Party Categories Notes and accounts receivable Associates Notes and accounts receivable Other related parties Other receivables Associates Other receivables Other related parties	June 30, 2021 December 31, 2020 $ 2,500 $ 2,266 397,701 176,565 $ 400,201 $ 178,831 $ - $ 63,244 129,137 111,681 $ 129,137 $ 174,925	June 30, 2020 $ 13,605 179,574 $ 193,179 $ 48,442 126,045 $ 174,487

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

50 -

4) Payables due to related parties

5)
6)
7)
8)

Account
Related Party
Categories
June 30,
2021
December 31,
2020
June 30,
2020
Accounts payable
Associates
$ 57
$ 99,281
$ 80,122
Accounts payable
Other related parties
262,804

61,275

70,834
$ 262,861
$ 160,556
$ 150,956
Other payables
Other related parties$ 38,904
$ 22,952
$ 22,184
Prepayments
June 30,
2021
December 31,
2020
June 30,
2020
Other related parties
$ 69,029
$ 10,353
$ 48,383
Bank deposits, time deposits and other financial assets (including current and non-current portions)
June 30,
2021
December 31,
2020
June 30,
2020
Other related parties
TFCB
$ 2,636,064
$ 1,807,422
$ 1,833,281
Others

15,351

24,798

27,890
$ 2,651,415
$ 1,832,220
$ 1,861,171
Acquisition of investments accounted for using equity method
Related Party Transactions
Transaction
Date
Shares
(In Thousands) Purchase Price
Contributions to AppWorks Fund III’s
capital increase
April 2020
21,000
$ 210,000
May 2021
4,964
$ 54,155
Acquisition of property, plant and equipment
For the Six Months Ended June 30, 2020
Purchase Price
Other related parties
$ 17,760

51 -

9) Others

June 30, 2021 December 31, 2020 June 30, 2020 Guarantee deposits Other related parties $ 62,018 $ 60,135 $ 54,533 Other current liabilities - receipts under custody Other related parties $ 141,775 $ 150,528 $ 124,780 For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 Operating expenses Associates $ 1,692 $ 119 $ 12,474 $ 454 Other related parties TMF 5,775 5,112 11,100 10,850 TNHF 2,000 2,000 5,000 5,000 TFCB 61,487 49,412 112,419 95,238 Others 94,609 75,905 127,562 94,648 $ 165,563 $ 132,548 $ 268,555 $ 206,190 Other income Other related parties TFCB $ 8,089 $ 15,233 $ 16,566 $ 31,208	June 30, 2021 December 31, 2020 June 30, 2020 Guarantee deposits Other related parties $ 62,018 $ 60,135 $ 54,533 Other current liabilities - receipts under custody Other related parties $ 141,775 $ 150,528 $ 124,780 For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 Operating expenses Associates $ 1,692 $ 119 $ 12,474 $ 454 Other related parties TMF 5,775 5,112 11,100 10,850 TNHF 2,000 2,000 5,000 5,000 TFCB 61,487 49,412 112,419 95,238 Others 94,609 75,905 127,562 94,648 $ 165,563 $ 132,548 $ 268,555 $ 206,190 Other income Other related parties TFCB $ 8,089 $ 15,233 $ 16,566 $ 31,208	June 30, 2021 December 31, 2020 June 30, 2020 Guarantee deposits Other related parties $ 62,018 $ 60,135 $ 54,533 Other current liabilities - receipts under custody Other related parties $ 141,775 $ 150,528 $ 124,780 For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 Operating expenses Associates $ 1,692 $ 119 $ 12,474 $ 454 Other related parties TMF 5,775 5,112 11,100 10,850 TNHF 2,000 2,000 5,000 5,000 TFCB 61,487 49,412 112,419 95,238 Others 94,609 75,905 127,562 94,648 $ 165,563 $ 132,548 $ 268,555 $ 206,190 Other income Other related parties TFCB $ 8,089 $ 15,233 $ 16,566 $ 31,208
$

	2021 $ 12,474 11,100 5,000 112,419 127,562 $ 268,555 $ 16,566	2020 $ 454 10,850 5,000 95,238 94,648 $ 206,190 $ 31,208

10) Lease arrangements

Acquisition of right-of-use assets

Other related parties Fubon Life Lease liabilities (including current and non-current portions) June 30, 2021 Other related parties $ 777,800		For the Six Months Ended June 30	For the Six Months Ended June 30
	2021 $ 376,685 December 31, 2020 $ 438,045		2020 $ 2,050 June 30, 2020 $ 513,690
Other related parties

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

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d. Key management compensation

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

Short-term employee benefits Termination and post-employment benefits	For the Three Months Ended June 30 2021 2020 $ 72,685 $ 69,216 3,387 939 $ 76,072 $ 70,155	For the Three Months Ended June 30 2021 2020 $ 72,685 $ 69,216 3,387 939 $ 76,072 $ 70,155		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 72,685 3,387 $ 76,072		2021 $ 154,087 6,810 $ 160,897	2020 $ 144,634 5,835 $ 150,469

30. ASSETS PLEDGED

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

Other current financial assets Service concessions Other non-current financial assets	June 30, 2021 December 31, 2020 $ 157,375 $ 169,230 6,701,975 6,791,334 356,012 355,432 $ 7,215,362 $ 7,315,996	June 30, 2020 $ 166,999 6,880,694 267,507 $ 7,315,200

31. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

a. Unrecognized commitments

Purchases of property, plant and equipment Purchases of inventories	June 30, 2021 December 31, 2020 $ 7,178,937 $ 8,695,105 $ 3,103,564 $ 5,500,331	June 30, 2020 $ 17,846,986 $ 2,194,041

As of June 30, 2021, December 31, 2020 and June 30, 2020, the amounts of lease commitments commencing after the balance sheet date were $842,264 thousand, $619,099 thousand and $537,879 thousand, respectively.

b. As of June 30, 2021, December 31, 2020 and June 30, 2020, the amounts of endorsements and guarantees provided to entities in the Group were all $21,550,000 thousand.
c. 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.

53 -

2) Development concession:

The total initial amount of concession was $1,238,095 thousand (tax excluded). According to the supplemental agreement signed in November 2014, the concession will be paid with additional business tax from the signing date of the supplemental agreement; thus, the concession will be increased by $48,750 thousand. The rest of the concession will be paid over 14 years from fiscal year 2015. As of June 30, 2021, $813,719 thousand (tax included) of the concession had been paid.

3) Performance guarantee:

As of June 30, 2021, 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.

d. 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 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
54 -

which the corresponding portion of FET’s claimed provisional execution and litigation expenses (except the part of final and binding judgment) 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 judgment) 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. SIGNIFICANT EVENTS SUBSEQUENT TO THE REPORTING PERIOD

a. In May 2021, the Board of Directors resolved that TWM would issue unsecured straight corporate bonds. In July 2021, the TPEx approved TWM’s proposed issuance of the 7th domestic unsecured straight corporate bonds, with the principal amount of $2,500,000 thousand, for a seven-year period and a coupon rate of 0.53% per annum, with simple interest due annually. Repayment of the principal will be made in full at maturity. The issuance of the bonds was completed on July 13, 2021.
b. In July 2021, the Board of Directors of TVC, one of TWM’s subsidiaries, resolved that TVC would acquire the preferred stocks of TIKI GLOBAL PTE. LTD. amounting to approximately USD20,000 thousand.
c. In July 2021, the Board of Directors of momo, one of TWM’s subsidiaries, resolved that momo would sign lease agreements for its warehousing facility for a period of ten years and one month, starting from January and May 2022, respectively, with Yongyou Development Ltd. The expected value of right-of-use assets would be $923,075 thousand.

33. OTHERS

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

Employee benefits Salary Insurance expenses Pension Others Depreciation Amortization	For the Three Months Ended June 30	For the Three Months Ended June 30
	2021 Classified as Operating Costs Classified as Operating Expenses Total $ 649,449 $ 1,305,231 $ 1,954,680 58,524 117,983 176,507 28,904 57,801 86,705 30,831 69,035 99,866 2,792,239 253,288 3,045,527 1,150,209 396,471 1,546,680	2020
		Classified as Operating Costs Classified as Operating Expenses Total $ 616,487 $ 1,229,390 $ 1,845,877 52,976 105,043 158,019 28,094 55,068 83,162 29,241 61,983 91,224 2,456,719 251,162 2,707,881 776,797 536,780 1,313,577

55 -

For the Six Months Ended June 30

Employee benefits Salary Insurance expenses Pension Others Depreciation Amortization	2021 Classified as Operating Costs Classified as Operating Expenses Total $ 1,306,609 $ 2,619,117 $ 3,925,726 118,063 239,396 357,459 57,819 115,486 173,305 61,279 135,966 197,245 5,558,253 510,128 6,068,381 2,297,055 804,135 3,101,190	2020
		Classified as Operating Costs Classified as Operating Expenses Total $ 1,232,980 $ 2,479,593 $ 3,712,573 105,577 210,916 316,493 55,429 108,971 164,400 58,304 126,422 184,726 4,968,410 505,176 5,473,586 1,542,058 1,107,992 2,650,050

Information of employees’ compensation and remuneration of directors

According to TWM’s Articles, the estimated employees’ compensation and remuneration of directors are set at the rates of 1% to 3% and no higher than 0.3%, respectively, of profit before income tax, employees’ compensation, and remuneration of directors. Estimations for employees’ compensation were $96,044 thousand, $96,193 thousand, $181,402 thousand and $198,090 thousand, and remuneration to directors were $9,604 thousand, $9,619 thousand, $18,140 thousand and $19,809 thousand, which were calculated by applying the rates to the aforementioned profit before income tax, for the three months and the six months ended June 30, 2021 and 2020, respectively.

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

The employees’ compensation and remuneration of directors of 2020 and 2019 shown below were approved by the Board of Directors on February 25, 2021 and February 21, 2020, respectively. The differences with the amounts recognized in the consolidated financial statements have been adjusted in 2021 and 2020, 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
	2020 Employees’ Compensation Paid in Cash Remuneration of Directors $ 390,869 $ 39,087 $ 351,782 $ 35,178	2019
		Employees’ Compensation Paid in Cash Remuneration of Directors $ 437,880 $ 43,788 $ 394,092 $ 39,409

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

b. As of the date the consolidated financial statements were authorized for issue, the COVID-19 pandemic did not have a significant impact on the Group’s operating ability, financing situation and assessment of asset impairment, and the Group is continuously monitoring and assessing the situation.
56 -

34. 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 or 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: None
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 5 (attached)
8) Receivables from related parties of at least NT$100 million or 20% of the paid-in capital: Table 6 (attached)
9) Names, locations and related information of investees on which TWM exercised significant influence (excluding information on investments in mainland China): Table 7 (attached)
10) Trading in derivative instruments: None
11) Business relationships between the parent and the subsidiaries and significant intercompany transactions: Table 8 (attached)
c. Information on investments 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 9 (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: None
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 10 (attached)
57 -

35. SEGMENT INFORMATION

Segment Revenue and Operating Results

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, 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 telecommunication, retail, and cable television.

						Adjustments
For the Three Months	Telecommuni-			Cable		and
Ended June 30, 2021	cations	Retail	Television		Others	Eliminations	Total
Operating revenue	$ 15,064,727	$ 22,258,273	$	1,550,484 $	134,278	$ (586,568)	$ 38,421,194
Operating costs and
expenses	12,633,599	21,178,127		1,006,539	94,597	(642,399)	34,270,463
Operating income	2,527,342	1,102,020		544,080	40,039	43,585	4,257,066
						Adjustments
For the Three Months	Telecommuni-			Cable		and
Ended June 30, 2020	cation	Retail	Television		Others	Eliminations	Total
Operating revenue	$ 14,355,250	$ 15,834,104	$	1,542,673 $	134,716	$ (525,104)	$ 31,341,639
Operating costs and
expenses	11,390,184	15,397,118		978,034	92,237	(567,797)	27,289,776
Operating income	3,035,091	460,974		563,868	42,479	30,259	4,132,671
						Adjustments
For the Six Months	Telecommuni-			Cable		and
Ended June 30, 2021	cation	Retail	Television		Others	Eliminations	Total
Operating revenue	$ 30,968,513	$ 40,619,491	$	3,101,145 $	274,389	$ (1,229,754)	$ 73,733,784
Operating costs and
expenses	26,413,427	38,712,506		2,006,577	195,919	(1,334,280)	65,994,149
Operating income	4,696,322	1,947,874		1,094,209	78,828	79,997	7,897,230
						Adjustments
For the Six Months	Telecommuni-			Cable		and
Ended June 30, 2020	cation	Retail	Television		Others	Eliminations	Total
Operating revenue	$ 29,976,283	$ 30,939,811	$	3,084,421 $	271,575	$ (1,077,772)	$ 63,194,318
Operating costs and
expenses	23,759,272	29,964,005		1,959,942	190,580	(1,165,487)	54,708,312
Operating income	6,325,373	1,022,907		1,122,504	80,995	62,898	8,614,677

58 -

Geographical information

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

Consolidated geographic information for revenue was as follows:

Taiwan, ROC Overseas		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 72,577,005 1,156,779 $ 73,733,784	2020 $ 61,944,006 1,250,312 $ 63,194,318

59 -

TABLE 1

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

FINANCING EXTENDED TO OTHER PARTIES FOR THE SIX MONTHS ENDED JUNE 30, 2021

(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	0.86867%-0.86900% 1.16867%	Short-term financing Short-term financing	$ - -	Operation requirements Operation requirements	$ - -	- -	$ - -	$ 32,430,887 32,430,887	$ 32,430,887 32,430,887	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 2,500,000 1,200,000	3,800,000 100,000 2,500,000 1,200,000	3,700,000 - - 700,000	0.86867%-0.87033% - 0.87033%-0.87178% 0.86878%-0.87033%	Short-term financing Short-term financing Short-term financing Short-term financing	- - - -	Operation requirements Operation requirements Operation requirements Operation requirements	- - - -	- - - -	- - - -	8,283,241 8,283,241 8,283,241 8,283,241	8,283,241 8,283,241 8,283,241 8,283,241	Note 2 Note 2 Note 2 Note 2
3	TVC	TWM	Other receivables	Yes	600,000	600,000	600,000	0.86867%	Short-term financing	-	Operation requirements	-	-	-	843,987	843,987	Note 2
4	TFN	TWM TCC	Other receivables Other receivables	Yes Yes	11,000,000 700,000	11,000,000 700,000	9,413,000 341,000	0.86856%-0.86900% 0.86867%	Short-term financing Short-term financing	- -	Operation requirements Operation requirements	- -	- -	- -	20,767,827 20,767,827	20,767,827 20,767,827	Note 2 Note 2
5	YJCTV	TFNM	Other receivables	Yes	60,000	30,000	20,000	0.86900%	Transactions	439,866	-	-	-	-	439,866	439,866	Notes 3 and 4
6	PCTV	TFNM	Other receivables	Yes	520,000	520,000	520,000	0.86900%	Transactions	534,287	-	-	-	-	534,287	534,287	Notes 3 and 4
7	GCTV	TFNM	Other receivables	Yes	250,000	250,000	250,000	0.86900%	Short-term financing	-	Repayment of financing	-	-	-	276,629	276,629	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.

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TABLE 2

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED TO OTHER PARTIES FOR THE SIX MONTHS ENDED JUNE 30, 2021

(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	$ 6,500,000 50,000	$ - -	36.12 0.08	$ 59,524,386 59,524,386	Y Y	N N	N N	Note 3 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.

61 -

TABLE 3

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

MARKETABLE SECURITIES HELD (EXCLUDING INVESTMENTS IN SUBSIDIARIES AND ASSOCIATES) JUNE 30, 2021

(In Thousands of New Taiwan Dollars)

Investing Company	Marketable Securities Type and Name	Relationship with the Securities Issuer	Financial Statement Account		At the End of the Period	At the End of the Period		Note
				Units/Shares (In Thousands)	Carrying Amount	Percentage of Ownership (%)	Fair Value
TWM TCC WMT TVC 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 Stampede Entertainment, Inc. 91APP, Inc. 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 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 Non-current financial assets at FVTOCI Non-current financial assets at FVTOCI	2,174 97,171 800 50,000 - - 6,998 - 1,333 2,500 200,497 10,000 410,665 87,590 0.2 0.0335	$ 247,780 846,359 26,105 450,175 447,603 15,900 118,129 - 223,160 767,500 20,450,669 37,651 41,887,859 8,934,135 - -	0.028 2.55 10 5 21.67 21.67 5.21 7.14 8.45 2.07 5.71 6.67 11.69 2.49 0.33 0.056	$ 247,780 846,359 26,105 450,175 447,603 15,900 118,129 - 223,160 767,500 20,450,669 37,651 41,887,859 8,934,135 - -	Note 1 Note 1 Note 1

(Continued)

62 -

Investing Company	Marketable Securities Type and Name	Relationship with the Securities Issuer	Financial Statement Account		At the End of the Period	At the End of the Period		Note
				Units/Shares (In Thousands)	Carrying Amount	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	4,367 3,140	$ 20,805 85,766	0.15 7.85	$ 20,805 85,766

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

Note 2: For the information on investments in subsidiaries and associates, see Table 7 and Table 9 for details.

(Concluded)

63 -

TABLE 4

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

MARKETABLE SECURITIES ACQUIRED OR DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE SIX MONTHS ENDED JUNE 30, 2021

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

Company Name	Type and Name of Marketable Securities	Financial Statement Account	Counter-party	Relationship	Beginning Balance		Acquisition			Disposal			Ending	Balance
					Units/Shares (In Thousands)	Amount	Units/Shares (In Thousands)	Amount	Units/Shares (In Thousands)	Amount	Carrying Amount	Gain (Loss) on Disposal (Note 2)	Units/Shares (In Thousands)	Amount
momo	TPE	Investments accounted for using equity method	Note 1	Note 1	14,793	$ 386,414	-	$ -	14,793	$ 466,547	$ 410,229	$ 99,052	-	$ -

Note 1: Sold on open market.

Note 2: The amounts included capital surplus derecognized and other comprehensive income transferred in.

64 -

TABLE 5

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE SIX MONTHS ENDED JUNE 30, 2021

(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 TWM&TDS TFN TT&T TPIA TFNM WTVB momo	TFN TKT momo Fubon Ins. kbro TWM Fubon Ins. YJCTV PCTV UCTV kbro FSL TPE	Subsidiary Subsidiary Subsidiary Other related party Other related party Ultimate parent Other related party Subsidiary Subsidiary Subsidiary Other related party Subsidiary Associate	Purchase Purchase Sale Purchase Sale Sale Sale Sale Channel leasing fee Channel leasing fee Channel leasing fee Sale Purchase Purchase	$ 1,977,119 200,968 991,539 100,993 113,362 174,183 495,405 147,452 192,553 245,314 108,309 113,506 142,806 127,694	9 1 3 - - 4 90 94 11 15 6 22 - -	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 - - -	$ (408,591 ) (98,865 ) 159,769 (19,893 ) 41,833 60,322 79,799 81,776 - - - 113,506 (65,564 ) -	Note 2 6 3 1 1 6 90 92 - - - 13 1 -	Note 3 Note 4

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.

Note 4: TPE has not been a related party since March 2021.

65 -

TABLE 6

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

RECEIVABLES FROM RELATED PARTIES OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL JUNE 30, 2021

(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 TVC TFN PCTV GCTV WTVB momo	momo TWM TFC TWM WTVB TWM TWM TCC TFNM TFNM kbro TFCB	Subsidiary Parent Subsidiary Parent Subsidiary Parent Ultimate parent Parent Parent Parent Other related party 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 Accounts receivable Accounts receivable Other receivables	$ 159,769 346,469 341,622 3,711,146 701,030 600,814 414,783 9,487,258 341,463 9,836 520,037 4,296 250,003 113,506 21,810 108,702	7.85 8.81 5.38 5.35 4.00 Note	$ - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - -	$ 155,188 - - 1,004,702 - - 359,946 1,530,934 - 7,596 34 3,327 - - 67 108,702	$ - - - - - - - - - - - - - - - -

Note: Not applicable due to the transaction partners and the nature of transactions.

66 -

TABLE 7

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

NAMES, LOCATIONS AND RELATED INFORMATION OF INVESTEES ON WHICH TWM EXERCISED SIGNIFICANT INFLUENCE (EXCLUDING INFORMATION ON INVESTMENT IN MAINLAND CHINA) FOR THE SIX MONTHS ENDED JUNE 30, 2021

(In Thousands of New Taiwan Dollars)

Investor	Investee	Location	Main Businesses and Products	Investment Amount	Investment Amount	Balance at the End of the Period	Balance at the End of the Period	Balance at the End of the Period	Net Income (Loss) of the Investee	Investment Income (Loss)	Note
				June 30, 2021	December 31, 2020	Shares (In Thousands)	Percentage of Ownership %	Carrying Amount
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 TWMFM 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 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 services Property insurance agent Cloud and information services Type II telecommunications business Investment Investment TV program provider Wholesale and retail sales Film production Venture capital Investment Investment Digital music services 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 services, and entertainment Livestreaming artists management services and digital media production	$ 40,397,288 16,871,894 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 8,129,394 300 384,155 22,314,609 3,603,149 156,900 2,061,522 510,724 3,261,073 1,986,250 1,221,002 341,250 27,000	$ 40,397,288 16,871,894 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 22,314,609 3,603,149 156,900 2,061,522 510,724 3,261,073 1,986,250 1,221,002 341,250 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 30 37,964 400 104,712 14,700 33,940 6,248 68,090 169,141 51,733 21,994 460	100 100 100 49.9 51 14.4 100 100 100 100 100 100 100 100 100 100 100 45.01 100 21.15 100 100 100 100 29.53 100 99.22 92.38 33.58 15	$ 17,128,266 20,708,025 2,109,966 1,882,791 280,224 8,520 51,920,530 84,596 221,218 27,963,131 98,277 54,985 181,331 6,174,939 17,129 96,762 280,572 9,780,678 277 343,692 36,561,302 7,803,254 350,710 1,645,985 616,986 3,392,383 2,026,412 1,261,399 164,917 25,350	$ 1,521,973 1,631,732 (6,513) 37,451 32,897 (667) 1,409,192 25,126 (2,005) 1,063 3,884 44,985 (4,340) 916,560 51 1,674 14,333 1,665,432 (23) (40,003) (97) (81) 72,096 (27,525) 20,408 73,100 19,183 25,918 (32,693) (2,314)	$ 1,522,534 1,631,585 (6,513) 18,811 16,347 (96) - - - - - - - - - - - - - - - - - - - - - - - -	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 Note 2 Notes 2 and 5 Note 2 Note 2 Note 2 Note 2 Note 2

(Continued)

67 -

Investor	Investee	Location	Main Businesses and Products	Investment Amount	Investment Amount	Balance at the End of the Period	Balance at the End of the Period	Balance at the End of the Period	Net Income (Loss) of the Investee	Investment Income (Loss)	Note
				June 30, 2021	December 31, 2020	Shares (In Thousands)	Percentage of Ownership %	Carrying Amount
GFMT GWMT momo Asian Crown (BVI) Fortune Kingdom Honest Development	UCTV GCTV Asian Crown (BVI) Honest Development FLI FPI FST Bebe Poshe FSL MFS TV Direct TPE Fortune Kingdom HK Fubon Multimedia HK Yue Numerous	Taiwan Taiwan British Virgin Islands Samoa Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Thailand Taiwan 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 Wholesale and retail sales Logistics industry Investment Investment Investment	$ 16,218 91,910 885,285 670,448 3,000 3,000 6,000 85,000 250,000 100,000 183,756 Note 6 1,132,789 1,132,789 670,448	$ 16,218 91,910 885,285 670,448 3,000 3,000 6,000 85,000 250,000 100,000 183,756 295,860 1,132,789 1,132,789 670,448	1,300 3,825 9,735 21,778 500 500 3,000 8,500 25,000 10,000 191,213 Note 6 11,594 11,594 16,600	0.76 6.83 81.99 100 100 100 100 85 100 100 21.35 Note 6 100 100 100	$ 15,579 95,249 25,713 682,922 6,292 8,568 42,838 37,253 260,027 103,923 157,168 Note 6 27,279 27,279 682,922	$ 19,183 25,918 (6,597) 14,916 (827) 839 2,113 (4,875) 13,477 3,742 (68,222) Note 6 (6,438) (6,438) 14,916	$ - - - - - - - - - - - - - - -	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 as of period end.

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 TPE in March 2021.

Note 7: For information on investment in mainland China, see Table 9 for details.

(Concluded)

68 -

TABLE 8

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT TRANSACTIONS FOR THE SIX MONTHS ENDED JUNE 30, 2021

(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 Revenue or Total Assets
				Account	Amount	Transaction Terms (Note 2)
0	TWM	TFN TPIA momo TFN momo TFNM TFNM TNH TFN WMT TCC TVC TFN TKT momo TFNM TFN WMT momo TT&T TDS TFN TNH TFN momo TFN TNH YJCTV GCTV TFN TPIA TFNM momo TFN TKT TDS	1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 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 receivables Other receivables Other non-current assets Other non-current assets Short-term borrowings 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 Other payables Other payables Lease liabilities - current Lease liabilities - current Other current liabilities Other current liabilities Lease liabilities - non-current Lease liabilities - non-current Lease liabilities - non-current Lease liabilities - non-current Operating revenue Operating revenue Operating revenue Operating revenue Operating costs Operating costs Operating costs	$ 28,711 64,589 159,769 35,076 11,739 10,830 13,313 18,352 9,413,000 3,700,000 346,000 600,000 76,606 98,865 19,893 25,871 385,184 11,146 16,230 79,799 15,786 39,527 115,606 26,529 43,496 125,327 195,001 24,149 12,845 88,927 89,859 14,415 991,539 1,977,119 200,968 32,118	- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -	- - - - - - - - 5% 2% - - - - - - - - - - - - - - - - - - - - - - 1% 3% - -
							(Continued)

69 -

Number	Company Name	Counter-party	Nature of Relationship (Note 1)		Transaction Details	Transaction Details	Percentage of Consolidated Total Operating Revenue or Total Assets
				Account	Amount	Transaction Terms (Note 2)
0	TWM	momo TFNM TFN TT&T TFN TFN WMT	1 1 1 1 1 1 1	Operating costs Operating costs Operating expenses Operating expenses Other income and expenses, net Finance costs Finance costs	$ 100,993 55,052 16,901 495,405 20,843 39,373 14,616	- - - - - - -	- - - 1% - - -
1	TCC	TFC TFN	1 1	Other receivables Short-term borrowings	341,622 341,000	- -	- -
2	WMT	WTVB	1	Other receivables	701,030	-	-
3	TFN	TFC TFNM TFC momo TFNM TT&T	3 3 3 3 3 3	Notes and accounts receivable, net Notes and accounts receivable, net Operating revenue Operating revenue Operating revenue Operating expenses	18,546 32,765 51,105 21,021 86,652 54,604	- - - - - -	- - - - - -
4	momo	MFS FSL TFNM MFS Bebe Poshe FSL TFNM	1 1 3 1 1 1 3	Notes and accounts payable Notes and accounts payable Notes and accounts payable Operating costs Operating costs Operating costs Operating costs	16,266 65,564 22,787 60,389 26,370 142,806 22,784	- - - - - - -	- - - - - - -
5	TFNM	PCTV YJCTV UCTV GCTV MCTV PCTV YJCTV GCTV WTVB PCTV YJCTV UCTV GCTV PCTV YJCTV UCTV WTVB	1 1 1 1 1 1 1 1 3 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 Operating revenue Operating revenue Operating revenue Operating revenue Operating costs Operating costs Operating costs Operating costs	56,725 39,489 29,401 23,865 17,620 520,000 20,000 250,000 42,669 265,171 209,507 108,309 95,843 18,858 16,915 11,354 42,669	- - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - -

70 -

(Concluded)

Note 1: 1. Parent to subsidiary.
Subsidiary to parent.
Between subsidiaries.

Note 2: The terms of transaction are determined in accordance with mutual agreements or general business practices.

Note 3: All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation.

71 -

TABLE 9

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

INVESTMENTS IN MAINLAND CHINA FOR THE SIX MONTHS ENDED JUNE 30, 2021

(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 at the Beginning of the Period	Accumulated Outflow of Investment from Taiwan at the Beginning of the Period	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan at the End of the Period	Net Income (Loss) of Investee	% Ownership through Direct or Indirect Investment	Investment Income (Loss)	Carrying Value at the End of the Period	Accumulated Inward Remittance of Earnings at the End of the Period
								Outflow	Inflow
TWMC FGE Haobo GHS	Data communication application development Wholesaling Investment Wholesaling		$ 83,685 (USD 3,000) 334,643 (RMB 77,500) 47,498 (RMB 11,000) 215,899 (RMB 50,000)		b b b b	$ 135,902 (USD 4,872) 775,983 (USD 14,000) (RMB 89,267) - -		$ - - - -	$ - - - -	$ 135,902 (USD 4,872) 775,983 (USD 14,000) (RMB 89,267) - -	$ 729 (6,595) 15,131 48,696	100 76.7 100 20	$ 729 (5,059) 15,131 15,424	$ 79,757 16,074 655,213 611,108	$ - - - -

Company		Accumulated Investment in Mainland China at the End of the Period		Investment Amounts Authorized by Investment Commission, MOEA			Upper Limit on Investment Authorized by Investment Commission, MOEA (Note 2)
TWM and subsidiaries		$1,517,446 (US$18,872, RMB89,267 and HK$168,539)		$1,517,446 (US$18,872, RMB89,267 and HK$168,539)			$39,779,295

Note 1: The investment types are as follows:

a. Direct investment in mainland China.

b. Indirect investments in mainland China through subsidiaries, invested by TCC and momo, in third regions.

c. Others.

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

72 -

TABLE 10

TAIWAN MOBILE CO., LTD

INFORMATION OF MAJOR STOCKHOLDERS JUNE 30, 2021

(In Number of Shares)

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	410,665,284 282,071,000 210,300,900 200,496,761 184,736,452	11.69 8.03 5.99 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.

73 -

AI assistant

TWM — Interim / Quarterly Report 2021

52277_rns_2021-11-05_02eb94d1-fc8f-4f4d-a3a3-cb790005610e.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

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, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

Effective Date New IFRSs Announced by IASB

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Statement of Compliance

Basis of Consolidation

Employee Benefits

Income Tax

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

6. CASH AND CASH EQUIVALENTS

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

8. NOTES AND ACCOUNTS RECEIVABLE, NET

June 30, 2021

9. INVENTORIES

10. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

a. GHS

b. AppWorks

c. AppWorks Fund III

d. kbro Media

e. TV Direct

f. M.E.

g. ADT

h. TPE

11. SUBSIDIARIES WITH MATERIAL NON-CONTROLLING INTERESTS

12. PROPERTY, PLANT AND EQUIPMENT

13. LEASE ARRANGEMENTS

d. Other lease information

14. INVESTMENT PROPERTIES

15. INTANGIBLE ASSETS

a. Service concessions

b. Customer relationships, operating rights, and trademarks

16. OTHER NON-CURRENT ASSETS

17. BORROWINGS

a. Short-term borrowings

b. Short-term notes and bills payable

c. Long-term borrowings

2) Secured loans

3) Commercial papers payable

18. BONDS PAYABLE

a. 5th domestic unsecured straight corporate bonds

b. 6th domestic unsecured straight corporate bonds

c. 3rd domestic unsecured convertible bonds

19. PROVISIONS

20. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

b. Defined benefit plans

21. EQUITY

a. Share capital

b. Capital surplus

c. Appropriation of earnings and dividend policy

d. Other equity interests

e. Treasury stock

f. Non-controlling interests

22. OPERATING REVENUE

a. Contract information

b. Contract balances

23. NON-OPERATING INCOME AND EXPENSES

TWM Interim / Quarterly Report 2021