TWM — Interim / Quarterly Report 2021

Nov 5, 2021

Taiwan Mobile Co., Ltd. and Subsidiaries

Consolidated Financial Statements for the Three Months Ended March 31, 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 March 31, 2021 and 2020, the consolidated statements of comprehensive income, the consolidated statements of changes in equity and cash flows for the three months then ended, and the related notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34 “Interim Financial Reporting” endorsed and issued into effect by Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

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

Conclusion

Based on our reviews, nothing has come to our attention that caused us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as of March 31, 2021 and 2020, and of its consolidated financial performance and its consolidated cash flows for the three months then ended in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and International Accounting Standard 34 “Interim Financial Reporting” endorsed and issued into effect by Financial Supervisory Commission of the Republic of China.

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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

May 4, 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.

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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 (Note 10) 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		March 31, 2021 (Reviewed)		December 31, 2020 (Audited)		March 31, 2020 (Reviewed)
		Amount % $ 11,355,088 6 259,289 - 4,566,339 3 6,718,104 4 359,299 - 2,327,050 1 4,661,611 3 626,484 - - - 664,513 - 149,956 - 31,687,733 17 2,493,387 1 4,266,636 2 1,555,473 1 43,696,686 24 9,417,310 5 2,621,610 1 63,727,260 35 15,819,108 9 5,113,335 3 839,121 - 1,737,914 1 355,582 - 1,667,978 1 153,311,400 83		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 % $ 9,101,031 5 2,829,810 2 4,788,514 3 7,108,225 4 166,124 - 1,430,938 1 3,770,454 2 665,978 - - - 692,163 - 132,318 - 30,685,555 17 1,583,446 1 3,302,355 2 1,412,442 1 35,371,585 20 9,538,465 5 2,978,445 2 67,660,658 38 15,832,440 9 5,438,359 3 824,214 - 2,007,740 1 271,844 - 1,824,270 1 148,046,263 83

TOTAL $ 184,999,133 100 $ 184,584,602 100 $ 178,731,818 100

LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 17) Short-term notes and bills payable (Note 17) Contract liabilities (Note 22) Notes and accounts payable Accounts payable due to related parties (Note 29) Other payables (Note 29) Current tax liabilities Provisions (Note 19) Lease liabilities (Notes 13, 26 and 29) Long-term liabilities, current portion (Notes 17 and 18) Other current liabilities (Note 29) Total current liabilities NON-CURRENT LIABILITIES Contract liabilities (Note 22) Bonds payable (Note 18) Long-term borrowings (Note 17) Provisions (Note 19) Deferred tax liabilities Lease liabilities (Notes 13, 26 and 29) Net defined benefit liabilities Guarantee deposits Other non-current liabilities Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT (Note 21) Common stock Capital collected in advance Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Other equity interests Treasury stock Total equity attributable to owners of the parent NON-CONTROLLING INTERESTS (Note 21) Total equity TOTAL		March 31, 2021 (Reviewed)		December 31, 2020 (Audited)		March 31, 2020 (Reviewed)
		Amount % $ 9,400,000 5 12,796,309 7 1,745,623 1 8,282,443 4 195,233 - 10,539,785 6 2,747,122 1 66,674 - 3,635,045 2 2,936,844 2 3,005,145 2 55,350,223 30 97,320 - 34,974,597 19 8,726,644 5 1,470,484 1 1,102,398 - 5,785,452 3 519,644 - 1,182,298 1 401,438 - 54,260,275 29 109,610,498 59 35,124,215 19 - - 18,914,711 10 30,170,398 16 - - 16,156,458 9 (2,302,480) (1) (29,717,344) (16) 68,345,958 37 7,042,677 4 75,388,635 41 $ 184,999,133 100		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 % $ 20,930,000 12 5,397,446 3 1,782,559 1 7,546,419 5 152,333 - 7,283,354 4 2,238,348 1 69,808 - 3,579,174 2 303,309 - 2,316,079 1 51,598,829 29 42,394 - 35,883,474 20 4,535,222 3 1,487,831 1 997,953 - 5,929,848 3 510,961 - 1,106,395 1 462,565 - 50,956,643 28 102,555,472 57 35,093,545 20 220 - 20,276,637 11 28,922,281 16 95,381 - 16,223,014 9 (1,118,078) (1) (29,717,344) (16) 69,775,656 39 6,400,690 4 76,176,346 43 $ 178,731,818 100

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

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TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

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

OPERATING REVENUE (Notes 22, 29 and 35) OPERATING COSTS (Notes 9, 29, 33 and 35) GROSS PROFIT FROM OPERATIONS OPERATING EXPENSES (Notes 29, 33 and 35) Marketing Administrative Research and development Expected credit loss Total operating expenses OTHER INCOME AND EXPENSES, NET (Note 29) OPERATING INCOME (Note 35) NON-OPERATING INCOME AND EXPENSES Interest income Other income Other gains and losses, net (Note 23) Finance costs (Note 23) Share of loss of associates accounted for using equity method Total non-operating income and expenses PROFIT BEFORE TAX INCOME TAX EXPENSE (Note 24) NET PROFIT OTHER COMPREHENSIVE INCOME (LOSS) (Notes 21 and 24) Items that will not be reclassified subsequently to profit or loss Unrealized gain (loss) on investments in equity instruments at fair value through other comprehensive income Share of other comprehensive income of associates accounted for using equity method Items that may be reclassified subsequently to profit or loss Exchange differences on translation Share of other comprehensive loss of associates accounted for using equity method Other comprehensive income (loss) (after tax) TOTAL COMPREHENSIVE INCOME NET PROFIT ATTRIBUTABLE TO: Owners of the parent Non-controlling interests TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the parent Non-controlling interests EARNINGS PER SHARE (Note 25) Basic earnings per share Diluted earnings per share		**For the Three Months Ended March 31 **	**For the Three Months Ended March 31 **	**For the Three Months Ended March 31 **
		2021 Amount % $ 35,312,590 100 27,871,248 79 7,441,342 21 2,439,107 7 1,292,694 4 57,510 - 63,127 - 3,852,438 11 51,260 - 3,640,164 10 12,493 - 1,447 - 158,521 - (155,883) - (7,753) - 8,825 - 3,648,989 10 382,144 1 3,266,845 9 168,660 1 21,391 - (14,345) - (1,323) - 174,383 1 $ 3,441,228 10 $ 2,832,577 8 434,268 1 $ 3,266,845 9 $ 3,002,721 9 438,507 1 $ 3,441,228 10 $ 1.01 $ 1.00		2020
				Amount % $ 31,852,679 100 23,581,453 74 8,271,226 26 2,433,456 8 1,318,972 4 49,760 - 34,895 - 3,837,083 12 47,863 - 4,482,006 14 18,306 - 1,835 - (6,228) - (144,658) - (21,328) - (152,073) - 4,329,933 14 765,417 3 3,564,516 11 (1,554,374) (5) 3,576 - (12,964) - (136) - (1,563,898) (5) $ 2,000,618 6 $ 3,314,640 10 249,876 1 $ 3,564,516 11 $ 1,757,422 5 243,196 1 $ 2,000,618 6 $ 1.18 $ 1.17

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

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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 Profit for the three months ended March 31, 2020 Other comprehensive income (loss) for the three months ended March 31, 2020 Total comprehensive income (loss) for the three months ended March 31, 2020 Conversion of convertible bonds to common stock Changes in equity of associates accounted for using equity method BALANCE, MARCH 31, 2020 BALANCE, JANUARY 1, 2021 Profit for the three months ended March 31, 2021 Other comprehensive income (loss) for the three months ended March 31, 2021 Total comprehensive income (loss) for the three months ended March 31, 2021 Changes in equity of associates accounted for using equity method Disposal of investments accounted for using equity method BALANCE, MARCH 31, 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 3,314,640 249,876 (1,557,218) (6,680) 1,757,422 243,196 2,163 - (1,220) (1,490) $ 69,775,656 $ 6,400,690 $ 65,365,100 $ 6,625,112 2,832,577 434,268 170,144 4,239 3,002,721 438,507 21 26 (21,884) (20,968) $ 68,345,958 $ 7,042,677	Total Equity $ 74,176,275 3,564,516 (1,563,898) 2,000,618 2,163 (2,710) $ 76,176,346 $ 71,990,212 3,266,845 174,383 3,441,228 47 (42,852) $ 75,388,635
	Common Stock $ 34,959,441 - - - 134,104 - $ 35,093,545 $ 35,124,215 - - - - - $ 35,124,215	Capital Collected in Advanced Capital Surplus $ 134,104 $ 20,274,694 - - - - - - (133,884) 1,943 - - $ 220 $ 20,276,637 $ - $ 18,936,574 - - - - - - - 21 - (21,884) $ - $ 18,914,711	Retained Earnings Legal Reserve Special Reserve Unappropriated Earnings $ 28,922,281 $ 95,381 $ 12,909,829 - - 3,314,640 - - (235) - - 3,314,405 - - - - - (1,220) $ 28,922,281 $ 95,381 $ 16,223,014 $ 30,170,398 $ - $ 13,300,996 - - 2,832,577 - - - - - 2,832,577 - - - - - 22,885 $ 30,170,398 $ - $ 16,156,458	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) - - - (6,432) (1,550,551) - (6,432) (1,550,551) - - - - - - - $ (40,937) $ (1,077,141) $ (29,717,344) $ (31,679) $ (2,418,060) $ (29,717,344) - - - (7,399) 177,543 - (7,399) 177,543 - - - - - (22,885) - $ (39,078) $ (2,263,402) $ (29,717,344)

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

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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 Expected credit loss Finance costs Interest income Gain on disposal of investments accounted for using equity method Share of 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) received Net cash generated from operating activities		For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 3,648,989 3,022,854 1,185,296 369,214 (65,058) 63,127 155,883 (12,493) (99,052) 7,753 - 747 (466,818) 262,248 (151,802) (408,371) 1,104,653 (36,446) 9,308 7,067 (335,244) (152,573) (1,343,521) 34,677 (1,008,605) 5,650 5,165 (14,427) 5,788,221 1,478 (229) 206,692 5,996,162	2020 $ 4,329,933 2,765,705 852,734 483,739 14,949 34,895 144,658 (18,306) - 21,328 149 2,398 206,389 503,080 (19,938) (14,876) 1,924,022 (216,358) 68,092 (1,390) (372,427) (27,747) (113,866) 17,171 (1,186,701) (3,200) (147,507) (6,214) 9,240,712 1,550 (314) (6,490) 9,235,458 (Continued)

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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 Increase in advanced receipts from assets disposals Disposal of investments accounted for equity method Proceeds from capital return of investments accounted for using equity method Acquisition of financial assets at fair value through other comprehensive income Increase in refundable deposits Decrease in refundable deposits Increase in other financial assets Decrease in other financial assets Interest received Dividend received Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in short-term borrowings Increase (decrease) in short-term notes and bills payable Proceeds from issue of bonds Repayment of long-term borrowings Repayment of the principal portion of lease liabilities Increase in guarantee deposits received Decrease in guarantee deposits received Interest paid Net cash generated from (used in) financing activities EFFECT OF EXCHANGE RATE CHANGES ON CASH AND EQUIVALENTS NET INCREASE 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 Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ (2,787,894) (8,968) (107,821) (37,650) 127,447 161 466,547 - - (108,295) 101,698 (187) 5,954 7,144 7,914 (2,333,950) (400,000) (1,397,385) - (61,383) (1,019,556) 36,665 (21,147) (221,258) (3,084,064) (851) 577,297 10,777,791 $ 11,355,088	2020 $ (1,388,647) (9,833) (29,748,793) (166,746) 1,012 147 - 33,298 (400,000) (71,841) 46,802 (100,227) 1,505 12,092 - (31,791,231) 4,660,000 3,496,713 19,979,415 (4,051,000) (997,335) 34,339 (20,666) (106,918) 22,994,548 (1,114) 437,661 8,663,370 $ 9,101,031

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

(Concluded)

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TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 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 May 4, 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. New IFRSs issued by International Accounting Standards Board (IASB) but not yet endorsed and issued into effect by the FSC

Effective Date New IFRSs Announced by IASB (Note 1) “Annual Improvements to IFRS Standards 2018-2020” January 1, 2022 (Note 2) Amendments to IFRS 3 “Reference to the Conceptual Framework” January 1, 2022 (Note 3) Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets To be determined by IASB between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” January 1, 2023 Amendments to IFRS 17 January 1, 2023 Amendments to IAS 1 “Classification of Liabilities as Current or January 1, 2023 Non-current” Amendments to IAS 1 “Disclosure of Accounting Policies” January 1, 2023 (Note 4) Amendments to IAS 8 “Definition of Accounting Estimates” January 1, 2023 (Note 5) Amendments to IAS 16 “Property, Plant and Equipment - Proceeds January 1, 2022 (Note 6) before Intended Use” Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a January 1, 2022 (Note 7) Contract”

• Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.

• Note 2: The amendments to IFRS 9 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 3: The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the annual reporting period beginning on or after January 1, 2022.

• Note 4: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.

• Note 5: 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 6: 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 7: 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.

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Except for the following description, the significant accounting policies adopted for the consolidated financial statements are the same as those adopted for the consolidated financial statements for the year ended December 31, 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 preparing 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 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) Type II telecommunications business WMT TFN Media Co., Ltd. (TFNM) Type II telecommunications business Global Forest Media Technology Co., Ltd. (GFMT) Investment Global Wealth Media Technology Co., Ltd. (GWMT) Investment Win TV Broadcasting Co., Ltd. (WTVB) TV program provider momo.com Inc. (momo) Wholesale and retail sales TFN TFN Union Investment Co., Ltd. (TUI) Investment

Percentage of Ownership March 31, 2021 December 31, 2020 March 31, 2020 Note 100.00% 100.00% 100.00% - 100.00% 100.00% 100.00% - 100.00% 100.00% 100.00% - 49.90% 49.90% 49.90% - 100.00% 100.00% 100.00% - 100.00% 100.00% 100.00% - 100.00% 100.00% 100.00% - 100.00% 100.00% 100.00% Note 1 100.00% 100.00% 100.00% - 100.00% 100.00% 100.00% - 100.00% 100.00% 100.00% - 100.00% 100.00% 100.00% - 100.00% 100.00% 100.00% - 100.00% 100.00% 100.00% - 100.00% 100.00% 100.00% - 45.01% 45.01% 45.01% - 100.00% 100.00% 100.00% Note 1 (Continued)

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Investor Subsidiary Main Business and Products TWM Holding TWM Communications (Beijing) Co., Ltd. (TWMC) Mobile application development and design TCCI TCCI Investment and Development Co., Ltd. (TID) Investment TFNM Taiwan Kuro Times Co., Ltd. (TKT) Online music 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 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 March 31, 2021 December 31, 2020 March 31, 2020 Note 100.00% 100.00% 100.00% - 100.00% 100.00% 100.00% Note 1 100.00% 100.00% 100.00% - 100.00% 100.00% 100.00% - 29.53% 29.53% 29.53% Note 2 100.00% 100.00% 100.00% - 99.22% 99.22% 99.22% - 92.38% 92.38% 92.38% - 0.76% 0.76% 0.76% - 6.83% 6.83% 6.83% - 81.99% 81.99% 81.99% - 100.00% 100.00% 100.00% - 100.00% 100.00% 100.00% - 100.00% 100.00% 100.00% - 100.00% 100.00% 100.00% - 85.00% 85.00% 85.00% - 100.00% 100.00% 100.00% - 100.00% 100.00% - Note 3 100.00% 100.00% 100.00% - 100.00% 100.00% 100.00% - 100.00% 100.00% 100.00% - 100.00% 100.00% 100.00% - 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 March 31, 2021.

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

Note 3: 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.

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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	March 31, 2021 $ 79,428 5,553,609 3,325,948 2,396,103 $ 11,355,088	December 31, 2020 $ 100,230 6,199,436 2,035,253 2,442,872 $ 10,777,791	March 31, 2020 $ 56,520 3,840,585 2,746,246 2,457,680
			$ 9,101,031

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	March 31, 2021 December 31, 2020 $ 242,347 $ 236,913 16,942 8,533 $ 259,289 $ 245,446 $ 927,983 $ 981,427 663,033 657,756 401,564 249,827 500,807 400,736 $ 2,493,387 $ 2,289,746	March 31, 2020 $ 2,827,259 2,551 $ 2,829,810 $ 553,875 662,034 336,665 30,872 $ 1,583,446

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

In January 2020, the Directors of TFN resolved that TFN would sell all its equity interest in Taiwan High Speed Rail Corporation (THSR) to monetize financial assets, and, therefore, the subject equity investment in THSR was subsequently reclassified from non-current to current. TFN sold all of THSR’s stock in 2020.

8. NOTES AND ACCOUNTS RECEIVABLE, NET

Notes receivable Accounts receivable Less: Allowance for impairment loss	March 31, 2021 December 31, 2020 $ 17,313 $ 109,259 7,025,839 7,835,539 (325,048) (306,755) $ 6,718,104 $ 7,638,043	March 31, 2020 $ 71,775 7,356,572 (320,122) $ 7,108,225

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.

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.

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

March 31, 2021

Not Past Due Gross carrying amount $ 6,400,530 Loss allowance (Lifetime ECLs) (50,004) Amortized cost $ 6,350,526 December 31, 2020 Not Past Due Gross carrying amount $ 7,322,918 Loss allowance (Lifetime ECLs) (57,523) Amortized cost $ 7,265,395 March 31, 2020 Not Past Due Gross carrying amount $ 6,855,491 Loss allowance (Lifetime ECLs) (49,444) Amortized cost $ 6,806,047	Overdue 1 to 120 Days 121 to 365 Days Over 365 Days $ 501,591 $ 136,611 $ 4,420 (141,364) (129,323) (4,357) $ 360,227 $ 7,288 $ 63 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 $ 394,093 $ 177,134 $ 1,629 (100,966) (168,083) (1,629) $ 293,127 $ 9,051 $ -	Total $ 7,043,152 (325,048) $ 6,718,104 Total $ 7,944,798 (306,755) $ 7,638,043 Total $ 7,428,347 (320,122) $ 7,108,225

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:

Beginning balance Add: Provision Recovery Less: Write-off Ending balance	For the Three Months Ended **March 31 **	For the Three Months Ended **March 31 **	For the Three Months Ended **March 31 **
		2021 $ 306,755 58,293 11,209 (51,209) $ 325,048	2020 $ 345,458 33,344 7,511 (66,191) $ 320,122

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9. INVENTORIES

Merchandise Materials for maintenance	March 31, 2021 December 31, 2020 $ 4,651,556 $ 5,756,903 10,055 9,361 $ 4,661,611 $ 5,766,264	March 31, 2020 $ 3,761,440 9,014 $ 3,770,454

For the three months ended March 31, 2021 and 2020, the cost of goods sold related to inventories amounted to $20,238,139 thousand and $16,641,532 thousand, respectively, which included the reversal of inventory write-down totaling $7,130 thousand, and the inventory write-down totaling $23,516 thousand, respectively.

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) TV Direct Public Company Limited (TV Direct) TVD Shopping Co., Ltd. (TVD Shopping) kbro Media Co., Ltd. (kbro Media) Mistake Entertainment Co., Ltd. (M.E.) Alliance Digital Tech Co., Ltd. (ADT) Taiwan Pelican Express Co., Ltd. (TPE)		March 31, 2021 Amount % of Owner- ship $ 608,621 20.00 268,117 51.00 314,485 20.11 169,668 24.94 - - 160,487 33.58 25,480 15.00 8,615 14.40 - - $ 1,555,473		December 31, 2020 Amount % of Owner- ship $ 606,376 20.00 265,526 51.00 315,027 20.11 192,103 24.99 - - 167,135 33.58 25,698 15.00 8,615 14.40 386,414 15.50 $ 1,966,894		March 31, 2020
						Amount % of Owner- ship $ 532,537 20.00 218,677 51.00 - - - - 80,520 35.00 129,218 32.50 25,587 15.00 6,072 14.40 419,831 17.70 $ 1,412,442

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.

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

d. TV Direct

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 24.94% due to the exercise of the share options, which were granted by TV Direct, in January 2021.

e. TVD Shopping

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

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

In June 2020, momo sold all of its equity interest of TVD Shopping to TV Direct.

f. 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.

g. M.E.

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

h. ADT

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

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

ADT had resolved December 31, 2018 as the dissolution date. As of March 31, 2021, ADT was still under liquidation procedures.

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i. 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.

momo’s percentage of ownership interest in TPE decreased to 15.5% since momo sold portion of its equity interests in TPE during the period from May to July 2020, 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
	March 31, 2021 December 31, 2020 March 31, 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.

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:

Current assets Non-current assets Current liabilities Non-current liabilities Equity Equity attributable to: Owners of the parent Non-controlling interests of momo Non-controlling interests of momo’s subsidiaries	March 31, 2021 $ 10,232,649 15,041,309 (8,798,802) (1,307,488) $ 15,167,668 $ 10,007,229 5,145,703 14,736 $ 15,167,668	December 31, 2020 $ 9,932,680 15,349,820 (9,651,475) (1,207,579) $ 14,423,446 $ 9,671,655 4,735,804 15,987 $ 14,423,446	March 31, 2020 $ 7,927,932 14,541,659 (7,378,842) (1,014,503) $ 14,076,246 $ 9,513,762 4,542,940 19,544 $ 14,076,246

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Operating revenue Profit Other comprehensive income (loss) Comprehensive income Profit (loss) attributable to: Owners of the parent Non-controlling interests of momo Non-controlling interests of momo’s subsidiaries Comprehensive income (loss) attributable to: Owners of the parent Non-controlling interests of momo Non-controlling interests of momo’s subsidiaries 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 in cash		For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 2020 $ 18,361,218 $ 15,105,707 $ 779,278 $ 441,331 7,750 (12,073) $ 787,028 $ 429,258 $ 353,926 $ 198,944 426,554 243,008 (1,202) (621) $ 779,278 $ 441,331 $ 357,437 $ 193,550 430,842 236,421 (1,251) (713) $ 787,028 $ 429,258 For the Three Months Ended March 31
			2021 $ 549,998 393,209 (114,084) (158) $ 828,965	2020 $ 898,283 (252,937) (88,495) (270) $ 556,581

12. PROPERTY, PLANT AND EQUIPMENT

Cost Balance, January 1, 2021 Additions Disposals and retirements Reclassification Effect of exchange rate changes Balance, March 31, 2021	Land $ 9,101,010 - - - - $ 9,101,010	Buildings Telecommuni- cations Equipment and Machinery $ 5,725,270 $ 96,632,051 - 31,089 - (388,705 ) - 2,148,938 - (673) $ 5,725,270 $ 98,422,700	Others Construction in Progress and Equipment to be Inspected $ 9,934,447 $ 2,950,912 79,955 3,168,713 (47,829 ) (2 ) 71,601 (2,220,758 ) (44) - $ 10,038,130 $ 3,898,865	Total $ 124,343,690 3,279,757 (436,536 ) (219 ) (717) $ 127,185,975 (Continued)

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Accumulated depreciation and impairment Balance, January 1, 2021 Depreciation Disposals and retirements Reclassification Effect of exchange rate changes Balance, March 31, 2021 Carrying amount, January 1, 2021 Carrying amount, March 31, 2021 Cost Balance, January 1, 2020 Additions Disposals and retirements Reclassification Effect of exchange rate changes Balance, March 31, 2020 Accumulated depreciation and impairment Balance, January 1, 2020 Depreciation Disposals and retirements Reclassification Effect of exchange rate changes Balance, March 31, 2020 Carrying amount, March 31, 2020	Land $ - - - - - $ - $ 9,101,010 $ 9,101,010 $ 8,261,041 - - 193 - $ 8,261,234 $ - - - - - $ - $ 8,261,234	Buildings Telecommuni- cations Equipment and Machinery $ 1,840,925 $ 71,461,532 40,756 1,794,745 - (343,773 ) - (415 ) - (656) $ 1,881,681 $ 72,911,433 $ 3,884,345 $ 25,170,519 $ 3,843,589 $ 25,511,267 $ 5,641,608 $ 90,366,481 - 51,228 - (126,183 ) 653 863,392 - (834) $ 5,642,261 $ 91,154,084 $ 1,649,207 $ 69,379,600 40,292 1,566,092 - (110,441 ) 333 - - (776) $ 1,689,832 $ 70,834,475 $ 3,952,429 $ 20,319,609	Others Construction in Progress and Equipment to be Inspected Total $ 8,561,919 $ - $ 81,864,376 179,569 - 2,015,070 (45,250 ) - (389,023 ) (21 ) - (436 ) (42) - (698 ) $ 8,696,175 $ - $ 83,489,289 $ 1,372,528 $ 2,950,912 $ 42,479,314 $ 1,341,955 $ 3,898,865 $ 43,696,686 $ 9,549,160 $ 1,506,915 $ 115,325,205 82,851 853,381 987,460 (9,757 ) (24 ) (135,964 ) 49,230 (917,192 ) (3,724 ) (54) - (888) $ 9,671,430 $ 1,443,080 $ 116,172,089 $ 8,114,393 $ - $ 79,143,200 171,413 - 1,777,797 (9,562 ) - (120,003 ) - - 333 (47) - (823 ) $ 8,276,197 $ - $ 80,800,504 $ 1,395,233 $ 1,443,080 $ 35,371,585 (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

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13. LEASE ARRANGEMENTS

a. Right-of-use assets

Carrying amounts Land Buildings Telecommunications equipment and machinery Others Additions to right-of-use assets Depreciation charge for right-of-use assets Land Buildings Telecommunications equipment and machinery Others	March 31, 2021 $ 526,042 8,160,211 577,020 154,037 $ 9,417,310	December 31, 2020 March 31, 2020 $ 530,915 $ 577,735 7,713,486 7,975,211 597,078 797,427 169,811 188,092 $ 9,011,290 $ 9,538,465 For the Three Months Ended **March 31 **	December 31, 2020 March 31, 2020 $ 530,915 $ 577,735 7,713,486 7,975,211 597,078 797,427 169,811 188,092 $ 9,011,290 $ 9,538,465 For the Three Months Ended **March 31 **	December 31, 2020 March 31, 2020 $ 530,915 $ 577,735 7,713,486 7,975,211 597,078 797,427 169,811 188,092 $ 9,011,290 $ 9,538,465 For the Three Months Ended **March 31 **
			2021 $ 1,504,215 $ 60,100 886,673 40,837 15,599 $ 1,003,209	2020 $ 963,995 $ 59,690 860,774 47,214 15,131 $ 982,809

Except for the aforementioned additions and recognized depreciation, the Group did not have significant sublease or impairment of right-of-use assets during the three months ended March 31, 2021 and 2020.

• b. Lease liabilities

Carrying amounts Current Non-current Range of discount rates for lease liabilities was as Land Buildings Telecommunications equipment and machinery Others	March 31, 2021 December 31, 2020 $ 3,635,045 $ 3,505,968 $ 5,785,452 $ 5,530,987 follows: March 31, 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%	March 31, 2020 $ 3,579,174 $ 5,929,848 March 31, 2020 0.78%-1% 0.78%-5.44% 0.78%-4.38% 0.78%-0.86%

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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.

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 **March 31 **	For the Three Months Ended **March 31 **
		2021 $ 9,909 $ 17,351 $ 10,419 $ 1,086,899	2020 $ 9,044 $ 18,482 $ 11,445 $ 1,069,085

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 March 31, 2021, December 31, 2020 and March 31, 2020, the fair values of investment properties were $6,160,847 thousand, $6,160,847 thousand and $7,355,209 thousand, respectively, and the capitalization rates for the aforementioned financial reporting periods were ranging from 1.46%-5.23%, 1.46%-5.23% and 1.32%-4.95%, respectively.

The amounts of depreciation recognized for the three months ended March 31, 2021 and 2020 were $4,575 thousand and $5,099 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	March 31, 2021 December 31, 2020 $ 136,887 $ 135,195 128,884 129,010 42,375 76,399 22,906 24,532 22,220 22,392 11,110 18,517 $ 364,382 $ 406,045	March 31, 2020 $ 154,693 139,778 132,900 47,154 29,413 41,981 $ 545,919

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15. INTANGIBLE ASSETS

Cost Balance, January 1, 2021 Additions Disposals and retirements Reclassification Effect of exchange rate changes Balance, March 31, 2021 Accumulated amortization and impairment Balance, January 1, 2021 Amortization Disposals and retirements Effect of exchange rate changes Balance, March 31, 2021 Carrying amount, January 1, 2021 Carrying amount, March 31, 2021 Cost Balance, January 1, 2020 Additions Disposals and retirements Reclassification Effect of exchange rate changes Balance, March 31, 2020 Accumulated amortization and impairment Balance, January 1, 2020 Amortization Disposals and retirements Effect of exchange rate changes Balance, March 31, 2020 Carrying amount, March 31, 2020		Concess	ions Service Concessions $ 8,180,078 - - - - $ 8,180,078 $ 1,388,744 44,680 - - $ 1,433,424 $ 6,791,334 $ 6,746,654 $ 8,180,078 - - - - $ 8,180,078 $ 1,210,025 44,679 - - $ 1,254,704 $ 6,925,374	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			Oth	er Intangible Assets		Copyrights $ 63,133 2,705 - 27,821 - $ 93,659 $ 54,387 8,903 - - $ 63,290 $ 8,746 $ 30,369 $ 25,197 9,582 - - - $ 34,779 $ 25,197 5,068 - - $ 30,265 $ 4,514	Total $ 105,600,561 47,798 (11,172 ) 30,699 (111) $ 105,667,775 $ 19,834,050 1,185,296 (11,172 ) (102) $ 21,008,072 $ 85,766,511 $ 84,659,703 $ 75,771,788 29,694,710 (5,563 ) 1,011,031 (138) $ 106,471,828 $ 16,693,313 852,734 (5,563 ) (113) $ 17,540,371 $ 88,931,457
		Concession Licenses $ 71,699,375 - - - - $ 71,699,375 $ 13,687,264 1,031,505 - - $ 14,718,769 $ 58,012,111 $ 56,980,606 $ 41,043,375 29,656,000 - 1,000,000 - $ 71,699,375 $ 10,303,927 660,164 - - $ 10,964,091 $ 60,735,284				Computer Software $ 3,231,391 45,084 (11,172 ) 2,878 (111) $ 3,268,070 $ 2,864,980 66,076 (11,172 ) (102) $ 2,919,782 $ 366,411 $ 348,288 $ 4,096,570 29,110 (5,563 ) 11,031 (138) $ 4,131,010 $ 3,465,304 108,686 (5,563 ) (113) $ 3,568,314 $ 562,696	Customer Relationships $ 2,654,089 - - - - $ 2,654,089 $ 1,783,463 34,100 - - $ 1,817,563 $ 870,626 $ 836,526 $ 2,654,089 - - - - $ 2,654,089 $ 1,647,063 34,100 - - $ 1,681,163 $ 972,926	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 9 - - - $ 2,517,909 $ 1,725 32 - - $ 1,757 $ 2,516,175 $ 2,516,152 $ 2,517,884 18 - - - $ 2,517,902 $ 1,642 37 - - $ 1,679 $ 2,516,223

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.

• 22 -

• 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	March 31, 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	March 31, 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 March 31, 2021.

16. OTHER NON-CURRENT ASSETS

Long-term accounts receivable Refundable deposits Other prepayments Others	March 31, 2021 December 31, 2020 $ 310,696 $ 296,045 698,409 698,876 184,601 119,006 474,272 474,177 $ 1,667,978 $ 1,588,104	March 31, 2020 $ 356,562 658,901 345,030 463,777 $ 1,824,270

• 23 -

17. BORROWINGS

a. Short-term borrowings

Unsecured loans Annual interest rates	March 31, 2021 $ 9,400,000 0.59%-0.90%	December 31, 2020 $ 9,800,000 0.64%-0.88%	March 31, 2020 $ 20,930,000 0.68%-0.89%

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

• b. Short-term notes and bills payable

	March 31,	December 31,		March 31,
	2021	2020		2020
Short-term notes and bills payable	$ 12,800,000	$ 14,200,000	$	5,400,000
Less: Discounts on short-term notes and bills
payable	(3,691)	(4,615)		(2,554)
	$ 12,796,309	$ 14,195,385	$	5,397,446
Annual interest rates	0.308%-0.318%	0.328%-0.418%	0.618%-0.638%
Long-term borrowings
	March 31,	December 31,		March 31,
	2021	2020		2020
Unsecured loans	$ 2,000,000	$ 2,000,000	$ 2,000,000
Secured loans	2,535,180	2,586,036		2,838,531
Commercial papers payable	6,500,000	6,500,000		-
Less: Current portion	(2,303,387)	(2,303,375)		(303,309)
Less: Discounts on commercial papers
payable	(5,149)	(2,580)		-
	$ 8,726,644	$ 8,780,081	$ 4,535,222
Annual interest rates:
Unsecured loans	0.79%	0.79%		0.79%
Secured loans	1.50%	1.7495%		1.7495%
Commercial papers payable	0.687%-0.697%	0.687%-0.697%		-

c. Long-term borrowings

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.

• 24 -

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	March 31, 2021 $ 14,992,103 19,982,494 633,457 (633,457) $ 34,974,597	December 31, 2020 $ 14,991,472 19,981,751 632,030 (632,030) $ 34,973,223	March 31, 2020 $ 14,989,550 19,979,481 914,443 - $ 35,883,474

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 March 31, 2021, the amount of unamortized bond issue cost was $7,897 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 March 31, 2021, the amount of unamortized bond issue cost was $17,506 thousand. The trustee of bond holders is Bank of Taiwan.

• 25 -

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 March 31, 2021, the amount of unamortized bond discount was $3,743 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 March 31, 2020 Liability component on January 1, 2021 Interest charged at an effective interest rate Liability component on March 31, 2021

$ 9,989,130 (400,564) (35,961) 9,552,605 235,116 (8,873,278) $ 914,443 $ 632,030 1,427 $ 633,457

As of March 31, 2021, December 31, 2020 and March 31, 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.

• 26 -

19. PROVISIONS

Restoration Replacement Warranties Current Non-current Balance, January 1, 2021 Provision Payment/Reversal Unwinding of discount Balance, March 31, 2021 Balance, January 1, 2020 Provision Payment/Reversal Unwinding of discount Balance, March 31, 2020	Restoration $ 1,110,392 10,310 (7,840) 833 $ 1,113,695 $ 1,183,427 9,383 (8,368) 962 $ 1,185,404	March 31, 2021 December 31, 2020 $ 1,113,695 $ 1,110,392 401,275 385,375 22,188 21,935 $ 1,537,158 $ 1,517,702 $ 66,674 $ 68,531 1,470,484 1,449,171 $ 1,537,158 $ 1,517,702 Replacement Warranties $ 385,375 $ 21,935 13,220 8,617 - (8,364) 2,680 - $ 401,275 $ 22,188 $ 324,693 $ 40,111 12,885 9,420 - (17,159) 2,285 - $ 339,863 $ 32,372	March 31, 2020 $ 1,185,404 339,863 32,372 $ 1,557,639 $ 69,808 1,487,831 $ 1,557,639 Total $ 1,517,702 32,147 (16,204) 3,513 $ 1,537,158 $ 1,548,231 31,688 (25,527) 3,247 $ 1,557,639

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 $85,538 thousand and $81,100 thousand for the three months ended March 31, 2021 and 2020, respectively.

b. Defined benefit plans

The Group recognized pension amounts of $1,062 thousand and $1,577 thousand for the three months ended March 31, 2021 and 2020, respectively, by using the actuarially determined pension cost rate.

• 27 -

21. EQUITY

a. Share capital

As of March 31, 2021, December 31, 2020, and March 31, 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 $35,093,545 thousand, respectively, divided into 3,512,421 thousand shares, 3,512,421 thousand shares and 3,509,354 thousand shares, respectively, which were all common stocks, at a par value of $10 each.

As of March 31, 2021, December 31, 2020, and March 31, 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. As of March 31, 2020, TWM recognized 22 thousand of common stocks as capital collected in advance, totaling $220 thousand. TWM would complete the related corporate registrations after the issuance of new stocks on the record date in accordance with the regulations.

b. Capital surplus

Additional paid-in capital from convertible corporate bonds Treasury stock transactions Difference between consideration and carrying amount arising from the disposal of subsidiaries’ stock Changes in equity of subsidiaries Convertible bonds payable options Changes in equity of associates accounted for using equity method Others	March 31, 2021 $ 13,102,020 5,159,704 85,965 501,215 25,524 4,479 35,804 $ 18,914,711	December 31, 2020 $ 13,102,020 5,159,704 85,965 501,215 25,524 26,342 35,804 $ 18,936,574	March 31, 2020 $ 14,426,818 5,159,704 85,965 501,215 37,184 30,801 34,950 $ 20,276,637

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.

• 28 -

• c. Appropriation of earnings and dividend policy

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

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

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

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

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.

TWM’s 2020 earnings appropriation and cash appropriation from the capital surplus are awaiting approval in the AGM on June 16, 2021.

• 29 -

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 (6,820) - Changes in fair value of financial assets at FVTOCI - 214,708 Changes in other comprehensive income (loss) of associates accounted for using equity method (579) 11,659 Other comprehensive income transferred to retained earnings due to disposal of investments accounted for using equity method - (22,885) Income tax effect - (48,824) Balance, March 31, 2021 $ (39,078) $ (2,263,402) Balance, January 1, 2020 $ (34,505) $ 473,410 Exchange differences on translation (6,262) - Changes in fair value of financial assets at FVTOCI - (1,575,649) Changes in other comprehensive income (loss) of associates accounted for using equity method (170) 348 Income tax effect - 24,750 Balance, March 31, 2020 $ (40,937) $ (1,077,141)

Total $ (2,449,739) (6,820) 214,708 11,080 (22,885) (48,824) $ (2,302,480) $ 438,905 (6,262) (1,575,649) 178 24,750 $ (1,118,078)

e. Treasury stock

As of March 31, 2021, December 31, 2020 and March 31, 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 $68,617,407 thousand, $69,106,533 thousand and $69,805,285 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.

• 30 -

f. Non-controlling interests

Beginning balance Profit Other comprehensive income Exchange differences on translation Unrealized gain (loss) on financial asset at FVTOCI Share of other comprehensive income of associates accounted for using equity method Changes in equity of associates accounted for using equity method Changes in capital surplus due to disposal of investments accounted for using equity method Ending balance		For the Three Months Ended **March 31 **	For the Three Months Ended **March 31 **
		2021 $ 6,625,112 434,268 (7,525) 2,776 8,988 26 (20,968) $ 7,042,677	2020 $ 6,158,984 249,876 (6,702) (3,475) 3,497 (1,490) - $ 6,400,690

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 **March 31 **	For the Three Months Ended **March 31 **
		2021 $ 11,125,017 22,449,760 1,490,604 210,487 36,722 $ 35,312,590	2020 $ 11,328,162 18,802,378 1,505,086 175,505 41,548 $ 31,852,679

a. Contract information

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

b. Contract balances

Contract assets Bundle sales Less: Allowance for impairment loss Current Non-current	March 31, 2021 December 31, 2020 $ 8,908,637 $ 8,441,819 (75,662) (71,687) $ 8,832,975 $ 8,370,132 $ 4,566,339 $ 4,617,051 4,266,636 3,753,081 $ 8,832,975 $ 8,370,132	March 31, 2020 $ 8,160,142 (69,273) $ 8,090,869 $ 4,788,514 3,302,355 $ 8,090,869	January 1, 2020 $ 8,366,531 (71,032) $ 8,295,499 $ 4,832,043 3,463,456 $ 8,295,499

• 31 -

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	March 31, 2021 December 31, 2020 $ 1,116,369 $ 1,289,917 45,469 36,981 668,348 656,162 12,757 12,456 $ 1,842,943 $ 1,995,516 $ 1,745,623 $ 1,892,749 97,320 102,767 $ 1,842,943 $ 1,995,516	March 31, 2020 $ 1,072,016 47,651 690,121 15,165 $ 1,824,953 $ 1,782,559 42,394 $ 1,824,953	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	March 31, 2021 December 31, 2020 $ 1,737,914 $ 1,771,884	March 31, 2020 $ 2,007,740

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 March 31, 2021 and 2020 were $369,214 thousand and $483,739 thousand, respectively.

• 32 -

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 investments accounted for using equity method Valuation loss on financial assets at FVTPL Gain (loss) on foreign exchange, net Others	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 65,058 99,052 - (6,332) 743 $ 158,521	2020 $ (14,949) - (149) 9,343 (473) $ (6,228)

b. Finance costs

Interest expense Corporate bonds Bank loans Commercial papers payable Lease liabilities Others	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 70,580 36,652 21,842 20,062 6,747 $ 155,883	2020 $ 40,751 62,935 10,955 23,062 6,955 $ 144,658

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 March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 680,065 (332,007) 348,058 34,086 $ 382,144	2020 $ 705,248 - 705,248 60,169 $ 765,417

• 33 -

• 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 March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 48,824	2020 $ (24,750)

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 2018 2019 2019 2019 2019

• 34 -

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)	For the Three Months Ended March	31, 2021
	Amount After Income Tax Weighted- average Number of Shares (In Thousands) $ 2,832,577 2,813,670 - 3,307 1,427 6,665 $ 2,834,004 2,823,642 **For the Three Months Ended March **	EPS (NT$) $ 1.01 $ 1.00 31, 2020
	Amount After Income Tax Weighted- average Number of Shares (In Thousands) $ 3,314,640 2,810,617 - 3,282 2,085 9,300 $ 3,316,725 2,823,199	EPS (NT$) $ 1.18 $ 1.17

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 Three Months Ended March 31, 2021

Lease liabilities (including current and non-current portions)	Opening Balance $ 9,036,955	Cash Flows $ (1,039,591)		Non-cash Changes New Leases Others $ 1,502,401 $ (79,268)	Ending Balance $ 9,420,497
				New Leases $ 1,502,401

• 35 -

For the Three Months Ended March 31, 2020

Lease liabilities (including current and non-current portions)	Opening Balance $ 9,650,389	Cash Flows $ (1,020,349)		Non-cash Changes New Leases Others $ 962,981 $ (83,999)	Ending Balance $ 9,509,022
				New Leases $ 962,981

27. CAPITAL MANAGEMENT

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

28. FINANCIAL INSTRUMENTS

• a. Categories of financial instruments

Financial assets Financial assets at 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)	March 31, 2021 $ 2,752,676 22,799,241 $ 25,551,917 $ 89,847,360	December 31, 2020 $ 2,535,192 21,990,185 $ 24,525,377 $ 93,671,945	March 31, 2020 $ 4,413,256 19,785,788
			$ 24,199,044
			$ 83,862,690

• 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, other financial liabilities (classified as other current liabilities), bonds payable and guarantee deposits, which were financial liabilities carried at amortized cost.

• 36 -

• 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)	March 31, 2021 Carrying Amount Fair Value $ 35,608,054 $ 35,927,565	December 31, 2020 Carrying Amount Fair Value $ 35,605,253 $ 35,885,879	March 31, 2020
			Carrying Amount Fair Value $ 35,883,474 $ 36,058,629

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.

• 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).

March 31, 2021

Financial assets at FVTOCI Equity instruments Domestic listed stocks Domestic unlisted stocks Limited partnerships Foreign unlisted stocks	Level 1 $ 1,170,330 - - - $ 1,170,330	Level 2 $ - - - 16,942 $ 16,942	Level 3 $ - 663,033 401,564 500,807 $ 1,565,404	Total $ 1,170,330 663,033 401,564 517,749 $ 2,752,676

• 37 -

December 31, 2020

Financial assets at FVTOCI Equity instruments Domestic listed stocks Domestic unlisted stocks Limited partnerships Foreign unlisted stocks March 31, 2020 Financial assets at FVTOCI Equity instruments Domestic listed stocks Domestic unlisted stocks Limited partnerships Foreign unlisted stocks	Level 1 $ 1,218,340 - - - $ 1,218,340 Level 1 $ 3,381,134 - - - $ 3,381,134	Level 2 $ - - - 8,533 $ 8,533 Level 2 $ - - - 2,551 $ 2,551	Level 3 $ - 657,756 249,827 400,736 $ 1,308,319 Level 3 $ - 662,034 336,665 30,872 $ 1,029,571	Total $ 1,218,340 657,756 249,827 409,269 $ 2,535,192 Total $ 3,381,134 662,034 336,665 33,423 $ 4,413,256

There was no transfer between the fair value measurements of Levels 1 and 2 for the three months ended March 31, 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 is mainly referenced to the same type of companies through the market approach or asset approach. The unobservable input parameter was liquidity discount rates, which were ranging from 9% to 25%, 10.7% to 25% and 20% to 30% as of March 31, 2021, December 31, 2020 and March 31, 2020, respectively.

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

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

For the Three Months Ended March 31, 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)	257,085
Balance at March 31, 2021	$ 1,565,404

For the Three Months Ended March 31, 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)			-		(135,801)
Balance at March 31, 2020	$		-	$	1,029,571

• 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 financial loss. 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 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 March 31, 2021, December 31, 2020 and March 31, 2020, the Group had unused bank facilities of $62,898,922 thousand, $65,511,976 thousand and $56,962,756 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.

March 31, 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 March 31, 2020 Unsecured loans Secured loans Commercial papers payable Bonds payable Lease liabilities Other non-current liabilities	Contractual Cash Flows Within 1 Year $ 11,413,546 $ 11,413,546 2,668,384 340,220 19,417,653 12,839,568 37,087,840 912,080 9,546,182 3,701,199 511,875 73,125 $ 80,645,480 $ 29,279,738 $ 11,818,822 $ 11,818,822 2,736,728 347,574 20,831,278 14,242,137 37,221,840 912,080 9,163,237 3,574,784 585,000 73,125 $ 82,356,905 $ 30,968,522 $ 22,975,677 $ 20,967,799 3,031,845 351,823 5,400,000 5,400,000 37,653,820 274,880 9,661,587 3,650,212 585,000 73,125 $ 79,307,929 $ 30,717,839	1-5 Years $ - 2,328,164 6,578,085 20,965,760 5,746,364 292,500 $ 35,910,873 $ - 2,389,154 6,589,141 20,997,760 5,501,261 292,500 $ 35,769,816 $ 2,007,878 2,680,022 - 12,976,940 5,975,839 292,500 $ 23,933,179	More Than 5 Years $ - - - 15,210,000 98,619 146,250 $ 15,454,869 $ - - - 15,312,000 87,192 219,375 $ 15,618,567 $ - - - 24,402,000 35,536 219,375 $ 24,656,911

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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	March 31, 2021
	Foreign Currencies Exchange Rate New Taiwan Dollars $ 49,405 28.51 $ 1,408,633 1,159 33.46 38,770 26,257 4.334 113,796 31,651 28.51 902,371 140,429 4.334 608,621 4,620 3.667 16,942 185,449 0.915 169,668 10,819 28.51 308,529 60 33.46 1,991 5,066 3.667 18,576 28,195 0.259 7,294

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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 March 31, 2020
	Foreign Currencies Exchange Rate New Taiwan Dollars $ 41,038 30.205 $ 1,239,557 1,176 33.48 39,356 31,585 4.252 134,300 12,168 30.205 367,537 125,244 4.252 532,537 655 3.895 2,551 86,861 0.927 80,520 13,741 30.205 415,056 95 33.48 3,175 8,530 3.895 33,225 36,276 0.28 10,150

Refer to Note 23(a) for the information related to the Group’s realized and unrealized foreign exchange gains (losses) for the three months ended March 31, 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 $61,240 thousand and $47,580 thousand for the three months ended March 31, 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:

		March 31,	December 31,	December 31,	March 31,
		2021		2020	2020
Fair value interest rate risk
Financial assets	$	7,426,514	$	5,218,262 $	5,918,806
Financial liabilities		75,714,811		76,502,983	69,505,499
Cash flow interest rate risk
Financial assets		5,796,946		6,486,835	4,083,053
Financial liabilities		2,535,180		2,586,036	6,138,531

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 $4,077 thousand and decreased by $2,569 thousand for the three months ended March 31, 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 $137,634 thousand and $220,663 thousand since the fair value of financial assets at FVTOCI decreased for the three months ended March 31, 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

GHS AppWorks 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 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. Chung Hsing Constructions Co., Ltd. Ming Dong Co., Ltd. (Ming Dong) Fu Yi Health Management Co., Ltd.

Nature of Relationship

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 Other related party

(Continued)

• 45 -

Related Party Dao Ying Co., Ltd. Fubon Xinji Investment Co., Ltd. Far Eastern Memorial Hospital Dai-Ka Ltd. Chen Feng Investment Ltd. Chen Yun Co., Ltd. Xi Guo Co., Ltd. Cho Pharma Inc. Dun Fu Industrial Corporation Limited. kbro Co., Ltd. Daanwenshan CATV Co., Ltd. North Taoyuan CATV Co., Ltd. Yangmingshan CATV Co., Ltd. Hsin Taipei CATV Co., Ltd. Chinpingtao CATV Co., Ltd. Hsintangcheng CATV Co., Ltd. Chuanlien CATV Co., Ltd. Chen Tao Cable TV Co., Ltd. Fengmeng Cable TV Co., Ltd. Hsinpingtao CATV Co., Ltd. Kuansheng CATV Co., Ltd. Nantien CATV Co., Ltd. Taiwan Win TV Media Co., Ltd. Taiwan Mobile Foundation (TMF) Taipei New Horizon Foundation (TNHF) Fubon Cultural & Educational Foundation Fubon Charity Foundation Fubon Art Foundation Taipei Fubon Bank Charity Foundation Taipei New Horizon Management Agency Key management

Nature of Relationship

Other related party Other related party Other related party Other related party 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 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 Other related party Other related party Chairman, director, president, vice president, etc.

(Concluded)

• c. Significant transactions with related parties

• 1) Operating revenue

Associates Other related parties	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 3,403 354,543 $ 357,946	2020 $ 10,573 190,359 $ 200,932

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.

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2) Purchases

Associates Other related parties	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 128,431 111,454 $ 239,885	2020 $ 195,490 64,135 $ 259,625

The entities mentioned above provide logistics, copyright 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 Accounts receivable Associates Accounts receivable Other related parties Other receivables Associates Other receivables Other related parties	March 31, 2021 December 31, 2020 $ 339 $ 2,266 358,960 176,565 $ 359,299 $ 178,831 $ - $ 63,244 105,497 111,681 $ 105,497 $ 174,925	March 31, 2020 $ 5,181 160,943 $ 166,124 $ 44,550 98,340 $ 142,890

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

4) Payables due to related parties

Account Related Party Categories Accounts payable Associates Accounts payable Other related parties Other payables Other related parties 5) Prepayments Other related parties	March 31, 2021 December 31, 2020 $ 29 $ 99,281 195,204 61,275 $ 195,233 $ 160,556 $ 66,359 $ 18,223 March 31, 2021 December 31, 2020 $ 39,459 $ 10,353	March 31, 2020 $ 89,098 63,235 $ 152,333 $ 53,363 March 31, 2020 $ 49,983

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

Other related parties TFCB Others 7) Acquisition of property, plant and equipment Other related parties 8) Others Guarantee deposits Other related parties Other current liabilities - receipts under custody Other related parties Operating expenses Associates Other related parties TMF TNHF Others Other income Other related parties TFCB	March 31, 2021 $ 1,928,882 20,249 $ 1,949,131 March 31, 2021 $ 62,062 $ 141,608	December 31, 2020 March 31, 2020 $ 1,807,422 $ 2,249,133 24,798 23,544 $ 1,832,220 $ 2,272,677 Purchase Price	December 31, 2020 March 31, 2020 $ 1,807,422 $ 2,249,133 24,798 23,544 $ 1,832,220 $ 2,272,677 Purchase Price	December 31, 2020 March 31, 2020 $ 1,807,422 $ 2,249,133 24,798 23,544 $ 1,832,220 $ 2,272,677 Purchase Price	December 31, 2020 March 31, 2020 $ 1,807,422 $ 2,249,133 24,798 23,544 $ 1,832,220 $ 2,272,677 Purchase Price
			For the Three Months Ended **March 31 **
		2021 2020 $ 17,760 $ - December 31, 2020 March 31, 2020 $ 60,135 $ 54,396 $ 150,528 $ 127,140 For the Three Months Ended March 31
				2021 $ 10,782 5,325 3,000 83,885 $ 102,992 $ 8,477	2020 $ 335 5,738 3,000 64,569 $ 73,642 $ 15,975

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9) Lease arrangements

Acquisition of right-of-use assets

Other related parties Fubon Life Lease liabilities (including current and non-current portions) March 31, 2021 Other related parties $ 763,057	For the Three Months Ended March 31	For the Three Months Ended March 31
	2021 $ 311,686 December 31, 2020 $ 431,137	2020 $ 287 March 31, 2020 $ 558,717
Other related parties

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

d. Key management compensation

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

Short-term employee benefits Termination and post-employment benefits	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 81,402 3,423 $ 84,825	2020 $ 75,418 4,896 $ 80,314

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	March 31, 2021 December 31, 2020 $ 157,976 $ 169,230 6,746,654 6,791,334 355,582 355,432 $ 7,260,212 $ 7,315,996	March 31, 2020 $ 165,123 6,925,374 271,844 $ 7,362,341

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31. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

• a. Unrecognized commitments

Purchases of property, plant and equipment Purchases of cellular phones	March 31, 2021 December 31, 2020 $ 6,080,101 $ 8,695,105 $ 4,424,526 $ 5,500,331	March 31, 2020 $ 3,202,440 $ 2,480,823

As of March 31, 2021, December 31, 2020 and March 31, 2020, the amounts of lease commitments commencing after the balance sheet date were $351,691 thousand, $619,099 thousand and $378,764 thousand, respectively.

• b. As of March 31, 2021, December 31, 2020 and March 31, 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.

• 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 March 31, 2021, $813,719 thousand (tax included) of the concession had been paid.

• 3) Performance guarantee:

As of March 31, 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

• 50 -

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 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 AFTER REPORTING PERIOD

• a. In May 2021, the Board of Directors resolved that TWM would issue unsecured straight corporate bonds with a total amount of no more than $2,500,000 thousand.

• b. In April 2021, the Board of Directors of momo, one of TWM’s subsidiaries, resolved that momo would sign a lease arrangement for its warehousing facility for a period of ten years and one month, starting from May 2023 with Zong Sine Industries Inc. The expected value of right-of-use assets would be $675,157 thousand.

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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 March 31 **	**For the Three Months Ended March 31 **
	2021 Classified as Operating Costs Classified as Operating Expenses Total $ 657,160 $ 1,313,886 $ 1,971,046 59,539 121,413 180,952 28,915 57,685 86,600 30,448 66,931 97,379 2,766,014 256,840 3,022,854 1,146,846 407,664 1,554,510	2020
		Classified as Operating Costs Classified as Operating Expenses Total $ 616,493 $ 1,250,203 $ 1,866,696 52,601 105,873 158,474 27,335 53,903 81,238 29,063 64,439 93,502 2,511,691 254,014 2,765,705 765,261 571,212 1,336,473

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 $85,358 thousand and $101,897 thousand, and remuneration to directors were $8,536 thousand and $10,190 thousand, which were calculated by applying the rates to the aforementioned profit before income tax, for the three months ended March 31, 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 on the Market Observation Post System website of the Taiwan Stock Exchange.

• b. As of the date the consolidated financial statements were authorized for issue, the COVID-19 epidemic 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.

• 52 -

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)

• 53 -

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 March 31, 2021	cations	Retail	Television	Others	Eliminations	Total
Operating revenue	$ 15,903,786	$ 18,361,218	$ 1,550,661 $	140,111	$ (643,186)	$ 35,312,590
Operating costs and
expenses	13,779,828	17,534,379	1,000,038	101,322	(691,881)	31,723,686
Operating income	2,168,980	845,854	550,129	38,789	36,412	3,640,164
					Adjustments
For the Three Months	Telecommuni-		Cable		and
Ended March 31, 2020	cations	Retail	Television	Others	Eliminations	Total
Operating revenue	$ 15,621,033	$ 15,105,707	$ 1,541,748 $	136,859	$ (552,668)	$ 31,852,679
Operating costs and
expenses	12,369,088	14,566,887	981,908	98,343	(597,690)	27,418,536
Operating income	3,290,282	561,933	558,636	38,516	32,639	4,482,006

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 Three Months Ended **March 31 **	For the Three Months Ended **March 31 **
		2021 $ 34,741,594 570,996 $ 35,312,590	2020 $ 31,200,775 651,904 $ 31,852,679

• 54 -

TABLE 1

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

FINANCING EXTENDED TO OTHER PARTIES FOR THE THREE MONTHS ENDED MARCH 31, 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	0.86889%-0.86900% 1.16867%	Short-term financing Short-term financing	$ - -	Operation requirements Operation requirements	$ - -	- -	$ - -	$ 33,031,822 33,031,822	$ 33,031,822 33,031,822	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 2,430,000 1,000,000	3,800,000 100,000 1,930,000 1,000,000	3,580,000 - 230,000 590,000	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	- - - -	- - - -	- - - -	8,865,644 8,865,644 8,865,644 8,865,644	8,865,644 8,865,644 8,865,644 8,865,644	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	-	-	-	667,873	667,873	Note 2
4	TFN	TWM TCC	Other receivables Other receivables	Yes Yes	11,000,000 700,000	11,000,000 700,000	9,213,000 341,000	0.86856%-0.86900% 0.86867%	Short-term financing Short-term financing	- -	Operation requirements Operation requirements	- -	- -	- -	21,723,067 21,723,067	21,723,067 21,723,067	Note 2 Note 2
5	YJCTV	TFNM	Other receivables	Yes	60,000	50,000	40,000	0.86900%	Transactions	460,390	-	-	-	-	460,390	460,390	Notes 3 and 4
6	PCTV	TFNM	Other receivables	Yes	520,000	520,000	520,000	0.86900%	Transactions	538,139	-	-	-	-	538,139	538,139	Notes 3 and 4
7	GCTV	TFNM	Other receivables	Yes	250,000	250,000	250,000	0.86900%	Short-term financing	-	Repayment of financing	-	-	-	290,670	290,670	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.

• 55 -

TABLE 2

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED TO OTHER PARTIES FOR THE THREE MONTHS ENDED MARCH 31, 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	$ - -	31.46 0.07	$ 68,345,958 68,345,958	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.

• 56 -

TABLE 3

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

MARKETABLE SECURITIES HELD (EXCLUDING INVESTMENTS IN SUBSIDIARIES AND ASSOCIATES) MARCH 31, 2021

(In Thousands of New Taiwan Dollars)

Investing Company	Marketable Securities Type and Name	Relationship with the Securities Issuer	Financial Statement Account		March 31, 2021	March 31, 2021		Note
				Units/Shares (In Thousands)	Carrying Value	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	$ 242,347 927,983 27,798 450,960 390,017 11,547 107,491 - 228,080 244,929 19,688,782 37,690 40,327,331 8,601,294 - -	0.028 2.55 10 5 21.67 21.67 5.21 7.14 8.45 2.33 5.71 6.67 11.69 2.49 0.33 0.056	$ 242,347 927,983 27,798 450,960 390,017 11,547 107,491 - 228,080 244,929 19,688,782 37,690 40,327,331 8,601,294 - -	Note 1 Note 1 Note 1

(Continued)

• 57 -

Investing Company	Marketable Securities Type and Name	Relationship with the Securities Issuer	Financial Statement Account		March 31, 2021	March 31, 2021		Note
				Units/Shares (In Thousands)	Carrying Value	Percentage of Ownership %	Fair Value
momo	Stock Media Asia Group Holdings Limited We Can Medicines Co., Ltd.	- -	Current financial assets at FVTOCI Non-current financial assets at FVTOCI	4,367 3,140	$ 16,942 66,892	0.15 7.85	$ 16,942 66,892

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)

• 58 -

TABLE 4

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

MARKETABLE SECURITIES ACQUIRED OR DISPOSED OF AT COSTS OR PRICES OF AT LEAST $300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE THREE MONTHS ENDED MARCH 31, 2021

(In Thousands of New Taiwan Dollars)

Company Name	Type and Name of Marketable Securities	Financial Statement Account	Counter-party	Relationship	Beginning Balance	Beginning Balance	Acquisition	Acquisition		Disposal	Disposal		Ending	Balance
					Units/Shares (In Thousands)	Amount	Units/Shares (In Thousands)	Amount	Units/Shares (In Thousands)	Amount	Carrying Amount	Gain (Loss) on Disposal (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.

• 59 -

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 THREE MONTHS ENDED MARCH 31, 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 TT&T TFNM momo	TFN TKT momo TWM YJCTV PCTV TPE	Subsidiary Subsidiary Subsidiary Ultimate parent Subsidiary Subsidiary Associate	Purchase Purchase Sale Sale Channel leasing fee Channel leasing fee Purchase	$ 932,311 103,700 537,968 247,911 105,785 124,098 127,694	8 1 4 90 12 15 1	Based on contract terms Based on contract terms Based on contract terms Based on contract terms Based on contract terms Based on contract terms Based on contract terms	- - - - Note 1 Note 1 -	- - - - Note 1 Note 1 -	$ (359,356 ) (105,416 ) 140,852 83,858 - - -	Note 2 9 3 90 - - -	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.

• 60 -

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 MARCH 31, 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 TKT PCTV GCTV momo	momo TWM TFC TWM TFNM WTVB TWM TWM TCC TWM TFNM TFNM TFCB	Subsidiary Parent Subsidiary Parent Subsidiary Subsidiary Parent Ultimate parent Parent Ultimate parent Parent Parent Other related party	Accounts receivable Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Accounts receivable Other receivables Other receivables Accounts receivable Accounts receivable Other receivables Accounts receivable Other receivables Accounts receivable Other receivables	$ 140,852 346,543 342,594 3,584,056 230,888 591,850 602,085 364,833 9,292,303 342,185 105,416 7,791 521,150 3,290 250,538 26,263 101,739	8.85 8.80 4.02 5.86 6.04 Note	$ - - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - -	$ 137,364 346,543 - 390,511 230,888 591,850 - 311,824 9,256,025 - 36,924 2,321 34 1,069 - 3,760 101,739	$ - - - - - - - - - - - - - - - - -

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

• 61 -

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 THREE MONTHS ENDED MARCH 31, 2021

(In Thousands of New Taiwan Dollars)

Investor	Investee	Location	Main Businesses and Products	Investment Amount	Investment Amount	Balance as of March 31, 2021	Balance as of March 31, 2021	Balance as of March 31, 2021	Net Income (Loss) of the Investee	Investment Income (Loss)	Note
				March 31, 2021	December 31, 2020	Shares (In Thousands)	Percentage of Ownership %	Carrying Value
TWM TCC WMT TVC TFN TCCI TFNM TKT	TCC WMT TVC TNH AppWorks ADT TFN TT&T TWM Holding TCCI TDS TPIA TFC TFNM GFMT GWMT WTVB momo AppWorks Fund III TUI TID TKT YJCTV MCTV PCTV UCTV GCTV kbro Media M.E.	Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan British Virgin Islands Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan	Investment Investment Investment Building and operating Songshan Cultural and Creative Park BOT project Venture capital, investment consulting, and management consulting Technology development of mobile payment and information processing services Fixed line service provider Call center service and telephone marketing Investment Investment Commissioned maintenance services Property insurance agent Type II telecommunications business Type II telecommunications business Investment Investment TV program provider Wholesale and retail sales Venture capital Investment Investment Digital music service Cable TV service provider Cable TV service provider Cable TV service provider Cable TV service provider Cable TV service provider Film distribution, arts and literature services, and entertainment Livestreaming artists management services, digital media production, and media planning	$ 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	$ 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 33,000 400 104,712 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 20.11 100 100 100 100 29.53 100 99.22 92.38 33.58 15	$ 21,126,262 22,164,140 1,669,683 1,872,872 268,117 8,615 54,308,629 116,529 224,162 26,937,248 105,528 114,665 187,119 7,310,528 17,081 99,032 298,548 10,007,229 314,485 35,094,422 7,490,386 318,367 1,648,925 650,508 3,502,500 2,044,308 1,293,830 160,487 25,480	$ 698,883 796,209 (2,281) 17,625 2,707 - 638,942 12,620 642 430 1,599 23,111 1,449 462,564 4 666 5,731 780,480 (14,007) (81) (79) 38,070 (24,585) 11,349 36,215 10,233 10,752 (19,861) (1,451)	$ 699,159 796,172 (2,281) 8,892 1,166 - - - - - - - - - - - - - - - - - - - - - - - -	Note 1 Note 1 Note 1 Note 1 Note 2 Note 2 Notes 2 and 3 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Notes 2 and 4 Note 2 Note 2 Note 2 Note 2 Note 2 Notes 2 and 5 Note 2 Note 2 Note 2 Note 2 Note 2

(Continued)

• 62 -

Investor	Investee	Location	Main Businesses and Products	Investment Amount	Investment Amount	Balance as of March 31, 2021	Balance as of March 31, 2021	Balance as of March 31, 2021	Net Income (Loss) of the Investee	Investment Income (Loss)	Note
				March 31, 2021	December 31, 2020	Shares (In Thousands)	Percentage of Ownership %	Carrying Value
GFMT GWMT momo Asian Crown (BVI) Fortune Kingdom Honest Development	UCTV GCTV Asian Crown (BVI) Honest Development FLI FPI FST Bebe Poshe FSL MFS 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 85,000 250,000 100,000 192,267 Note 6 1,132,789 1,132,789 670,448	$ 16,218 91,910 885,285 670,448 3,000 3,000 6,000 85,000 250,000 100,000 192,267 295,860 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 24.94 Note 6 100 100 100	$ 15,716 97,647 28,623 680,566 6,733 7,341 46,408 38,968 248,367 101,782 169,668 Note 6 30,655 30,655 680,566	$ 10,233 10,752 (3,122) 8,779 (386) (388) 671 (2,857) 1,812 (33) (38,622) Note 6 (3,136) (3,136) 8,779	$ - - - - - - - - - - - - - - -	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Notes 2 and 6 Note 2 Note 2 Note 2

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

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

Note 3: Held 1 share on March 31, 2021.

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)

• 63 -

TABLE 8

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT TRANSACTIONS FOR THE THREE MONTHS ENDED MARCH 31, 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 TNH TFN WMT TCC TVC TFN TKT momo TFNM TFN TT&T TDS TFN TNH TFN momo TFN TNH YJCTV GCTV TFN TPIA momo TFN TKT TDS momo TFNM TT&T TFN TFN	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 1	Notes and accounts receivable, net Notes and accounts receivable, net Notes and accounts receivable, net 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 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 costs Operating costs Operating costs Operating costs Operating costs Operating expenses Other income and expenses, net Finance costs	$ 22,335 65,607 140,852 31,194 20,749 11,213 18,305 9,213,000 3,580,000 346,000 600,000 71,341 105,416 16,568 21,257 340,844 83,858 17,646 39,328 115,319 31,216 27,145 134,631 224,010 25,471 14,038 44,304 46,043 537,968 932,311 103,700 16,285 40,736 25,241 247,911 10,627 19,065	- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -	- - - - - 5% 2% - - - - - - - - - - - - - - - - - - - 2% 3% - - - - 1% - -
							(Continued)

• 64 -

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)
1	TCC	TFC TFN	1 1	Other receivables Short-term borrowings	$ 342,594 341,000	- -	- -
2	WMT	TFNM WTVB	1 1	Other receivables Other receivables	230,888 591,850	- -	- -
3	TFN	TFC TFNM TFC TFNM TT&T	3 3 3 3 3	Notes and accounts receivable, net Notes and accounts receivable, net Operating revenue Operating revenue Operating expenses	15,179 24,363 21,912 39,697 27,677	- - - - -	- - - - -
4	momo	FSL TFNM MFS Bebe Poshe FSL TFNM	1 3 1 1 1 3	Notes and accounts payable Notes and accounts payable Operating costs Operating costs Operating costs Operating costs	36,818 11,395 14,956 14,509 55,717 11,392	- - - - - -	- - - - - -
5	TFNM	PCTV YJCTV UCTV GCTV MCTV PCTV YJCTV GCTV WTVB PCTV YJCTV UCTV GCTV WTVB	1 1 1 1 1 1 1 1 3 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	76,631 38,511 31,687 25,452 17,038 520,000 40,000 250,000 21,334 134,558 115,179 54,465 51,348 21,334	- - - - - - - - - - - - - -	- - - - - - - - - - - - - -

• 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.

(Concluded)

• 65 -

TABLE 9

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

INVESTMENTS IN MAINLAND CHINA FOR THE THREE MONTHS ENDED MARCH 31, 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	Note
								Outflow	Inflow
TWMC FGE Haobo GHS	Mobile application development and design Wholesaling Investment Wholesaling		$ 85,530 (USD 3,000) 335,886 (RMB 77,500) 47,674 (RMB 11,000) 216,701 (RMB 50,000)		b b b b	$ 138,898 (USD 4,872) 786,024 (USD 14,000) (RMB 89,267) - -		$ - - - -	$ - - - -	$ 138,898 (USD 4,872) 786,024 (USD 14,000) (RMB 89,267) - -	$ 358 (3,274) 8,955 8,499	100 76.7 100 20	$ 358 (2,511) 8,955 9,156	$ 79,683 18,682 652,817 608,621	- - - -
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		$1,542,955 (US$18,872, RMB89,267 and HK$168,539)		$1,542,955 (US$18,872, RMB89,267 and HK$168,539)			$45,233,181

Note 1: The investment types are as follows:

a. Direct investment in mainland China.

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

c. Others.

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

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TABLE 10

TAIWAN MOBILE CO., LTD

INFORMATION OF MAJOR STOCKHOLDERS MARCH 31, 2021

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	410,665,284 289,331,000 210,300,900 200,496,761 184,736,452	11.69 8.24 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.

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