Taiwan Mobile Co · strengthened and advanced Taiwan Mobile’s thrust into the T.I.M.E. foray Telecoms, Internet, – Media and Entertainment – fields. Steady expansion of core

Taiwan Mobile Co., Ltd.

2012 Annual General Shareholders’ Meeting

Agenda (Translation)

June 22, 2012

Notice to Readers: 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 version shall prevail.

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Table of Contents

Agenda of 2012 Annual General Shareholders’ Meeting

Report Items

Proposed Resolutions

Special Motions

Attachments

I. 2011 Business Report

Audit Committee Report

Ethical Corporate Management Best Practice Principles- Before and After Amendment in

Comparison

2011 Financial Statements

2011 Consolidated Financial Statements

II. Earnings Distribution Proposal

III. Articles of Incorporation - Before and After Amendments in Comparison

IV. Rules and Procedures of Acquisition or Disposal of Assets- Before and After Amendments in

Comparison

Appendixes

I. Shares Owned by Directors

II. Proposal on Employee Bonuses and Compensation to Directors

III. Impact of Stock Dividend Distribution on Business Performance & EPS

IV. Articles of Incorporation

V. Rules and Procedures Governing Shareholders’ Meeting

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Agenda of 2012 Annual General Shareholders’ Meeting

Time: Friday, June 22, 2012 at 9:00 a.m. Place: No.1, Sec. 5, Sinyi Rd., Taipei

(101CD meeting room, Taipei International Convention Center)

1. The Chairman － Call the meeting to order

2. Chairman’s Address 3. Report Items

4. Proposed Resolutions

The voting for each proposal will be conducted after all proposals have been presented.

5. Other Business and Special Motions 6. Meeting Adjourned


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Report Items 1. The 2011 Business Report

The 2011 Business Report is attached hereto as Attachment I. (page 8)

2. The 2011 Audit Committee Report The 2011 Audit Committee Report is attached hereto as Attachment I. (page 10)

3. The Company’s Ethical Corporate Management Best Practice Principles

The Company’s Ethical Corporate Management Best Practice Principles - Before and After Amendment in Comparison is attached hereto as Attachment I. (page 12)

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Proposed Resolutions

1. To accept 2011 Business Report and Financial Statements Taiwan Mobile’s (The Company) financial statements were audited by certified public accountants, Simon Chen and Janice Lai, of KPMG and approved at the board meeting on January 19, 2012. The 2011 Business Report, CPA’s audit report, and financial statements are attached hereto as Attachments I.

Resolution:

2. To ratify the proposal for distribution of 2011 retained earnings

(1) The Company’s 2011 net income was NT$13,468,763,392 (Please see Attachment II for the 2011 Retained Earnings Distribution Proposal).

(2) Cash dividend proposed by the Board is NT$13,880,952,006. The Company received letters of agreement from TCC Investment Co., Ltd. (TCCI), TCCI Investment & Development Co., Ltd. (TID) and TFN Union Investment Co., Ltd. (TUI) forfeiting their share of dividends on January 17, 2012. Deducting 730,725,849 shares collectively owned by TCCI, TID and TUI from the total outstanding shares of 3,420,832,827, the share count entitled to receive dividends is 2,690,106,978, representing $5.16 cash dividend per share. It is proposed that the Chairman be authorized to set a record date for distribution and make relevant adjustments, if any, based on total dividend amount resolved at the shareholders’ meeting and total outstanding shares on the record date.

(3) Employee bonus for 2011 is proposed to be NT$362,844,193, all in cash.

Resolution: 3. To approve revisions to the Articles of Incorporation

The Company proposed the following revisions:

a. To delete the regulations related to the supervisors and add the powers of the Audit Committee.

b. To delete the regulations related to preferred shares.

c. To be in compliance with the revisions of Company Act.

Please refer to Attachment III for the before and after amendments for comparison.

Resolution:

4. To approve revisions to the Rules and Procedures of Acquisition or Disposal of Assets

In compliance with the Executive Yuan’s Financial Supervisory Commission’s issuing of interpretation No. 1010004588 related to the Regulations Governing the Acquisition and Disposal of Assets by Public Companies on February 13, 2012, the Company proposed the following revisions:

a. To strengthen the management of transactions with related parties, adding new regulations related to the Company’s sale of real estate to related parties and the disposal & acquisition of the non- real estate assets from the related parties.

b. CPA’s opinion is not required when the transaction price is lower than the professional appraiser’s appraisal value for the assets to be acquired or when the transaction price is higher than the professional appraiser’s appraisal value for the

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assets to be disposed.

c. To revise the criteria to the mainland China investment disclosure so as to be consistent with the criteria to the regular acquisition or disposal of assets

Please refer to Attachment IV for the before and after amendments for comparison.

Resolution:

Special Motions Meeting Adjourned

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ATTACHMENTS

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Attachment I

Business Report

With digital convergence as ourits core strategy, Taiwan Mobile (“TWM” or “The Company”) has continued to aggressively roll out new and upgraded communications platforms (mobile internet, cable/digital TV, cable broadband), enriched its content (shopping channels, family channel, online music), and expanded traditional/virtual channels (myfone stores/website, momo cosmetic stores, momo department stores, momo online shopping and momo catalogue services). All these have strengthened and advanced Taiwan Mobile’s foray thrust into the T.I.M.E. – Telecoms, Internet, Media and Entertainment – fields. Steady expansion of core business

Despite the impact fromof the National Communication Commissions’ regulatory intervention on mobile operators’ voice revenue, the Company still posted stable profits in 2011 due to healthy revenue growth and good margins from all three major business groups, plus earnings contribution from momo.

In 2011, Taiwan Mobile posted a consolidated revenue of NT$81.37bn, up 16% from a year ago. The Company’s consolidated EBITDA of NT$27.09bn and net income of NT$13.47bn reached 105% and 103% of its annual targets respectively. Earnings per share rose 2% YoY to NT$4.70. The main revenue growth drivers were as follows:

1. Wireless value-added services The popularity of smartphones contributed to an increase in wireless data revenue, offering new opportunities in an already saturated telecommunications market. Taiwan’s mobile carriers, thus, entered into a growth cycle. As of the end of 2011, smartphone penetration in Taiwan was only around 20%, signifying ample room for growth. Taiwan Mobile, differentiating itself by offering qualitytop network efficiency and a wide variety of the latest smartphone models, outperformed its peers by recording a 47% YoY rise in wireless value-added service revenue.

2. Cable broadband services Most FTTx broadband access speed notably slows down when playing media on-demand (MOD) at the same time because both services share a single spectrum. However, unlike its rivals, Taiwan Mobile’s cable broadband service uses a dedicated spectrum, separate from cable TV and other internet connected services, providing better network quality for users. By successfully bundling digital TV services and offering customers higher broadband speed, Taiwan Mobile expanded its market share and saw its number of subscribers and average revenue per user (ARPU) from cable broadband services grow 13% and 4% respectively from a year ago, leading to a steady growth in revenue.

Maximizing shareholders’ value

1. Second round of capital reduction

The Company held a second round of capital reduction in August 2011, returning NT$1 per share to shareholders. This, plus a cash dividend of NT$4.1619 per share for 2010 earnings, translates into a cash yield of 6.4%, providing rich and steady returns for shareholders. Given a sound capital structure and relatively stable profits and dividends, Taiwan Mobile’s stock outperformed the market in 2011.


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2. World-class corporate governance

Taiwan Mobile’s commitment over the years to corporate governance has made it a role model in protecting shareholders’ interests and promoting financial transparency. The Company’s compliance with global standards has earned the trust of investors and has been recognized by various domestic and international ratings institutions. These include: a “CG6006” certification” from the Taiwan Corporate Governance Association; “Best Corporate Governance in Asia” and “Best Investor Relations, Taiwan” from Corporate Governance Asia magazine; and an A+ rating and a top 10 ranking of listed companies for “Transparency and Information Disclosure” by the Securities and Futures Institute. As a further recognition of for its efforts, Taiwan Mobile’s corporate governance model was one of the featured in “Taiwanese Enterprises: Promoting Trust and Integrity,” awardedpublished by the Industrial Development Bureau under the Ministry of Economic Affairs.

3. A role model for corporate social responsibility

TWM has also won recognitions for employing its corporate and financial resources to assist non-profit organizations in promoting social welfare. These include receiving the “Excellence in Corporate Social Responsibility” award from CommonWealth magazine for five consecutive years; the top prize for “Corporate Social Responsibility” in the education category by GlobalViews Monthly magazine; and the “R.O.C. Enterprises Environmental Protection Award” from the Environmental Protection Administration of the Executive Yuan for three years in a row.

4. Premium services and customer satisfaction

TWM’s core value of “truly caring for the customers” and continuous product and service innovations were critical to its winning Reader’s Digest’s “Trusted Brand Gold Award” for the eighth consecutive year, ranking 6th on Business Next magazine’s “Info Tech 100 Taiwan” list and being included oin its “Info Tech 100 Asia”; garnering the top prize in the “2011 Digital Service On Award,” ICT Group, of Business Next magazine’s digital service power survey; as well as an award for “Outstanding IT Applications/ Products” at the 2011 ICT Exhibition.

For 2012, Ddespite continuing challenges fromon the regulatory front, Taiwan Mobile is well-prepared for the digital convergence age, ready to enhance its business synergies, provide an all-encompassing digital life for its customers and create maximum returns for its shareholders.

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January 19, 2012 The Board of Directors of Taiwan Mobile Co., Ltd. (TWM) has submitted the Company’s 2011 business report and financial statements to the Audit Committee. The CPA firm, KPMG, was retained by the Board to audit TWM’s financial statements and has issued an audit report relating to the financial statements. The business report and financial statements have been reviewed and determined to be correct and accurate by the Audit Committee of TWM. According to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, I hereby submit this report on behalf of all members of the committee to 2012 Annual General Meeting for ratifications. Taiwan Mobile Co., Ltd.

Tsung-Ming Chung

Chairman of the Audit Committee


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April 26, 2012

The Board of Directors of Taiwan Mobile Co., Ltd. (TWM) has submitted the Company’s proposal for distribution of 2011 retained earnings to the Audit Committee. The proposal has been reviewed and determined to be correct and accurate by the Audit Committee of TWM. According to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, I hereby submit this report on behalf of all members of the committee to 2012 Annual General Meeting for ratifications. Taiwan Mobile Co., Ltd.

Tsung-Ming Chung

Chairman of the Audit Committee


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Ethical Corporate Management Best Practice Principles - Before and After Amendment for Comparison

Article Amended Original Explanation

21

The Ethical Corporate Management Best Practice Principles of the Company shall be implemented after thea review is made by the Audit Committee, approval is granted by the board of directors, and shall be submitted to the shareholders' meeting. The same shall apply to any amendments thereto.

The Ethical Corporate Management Best Practice Principles of the Company shall be implemented after athe review is made by the Corporate Governance Committee, approval is granted by the board of directors, and shall be submitted to the shareholders' meeting. The same shall apply to any amendments thereto.

Amended due to the discontinuance of the Corporate Governance Committee has been discontinued.


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The 2011 Financial Statements

Independent Auditors’ Report The Board of Directors and Shareholders Taiwan Mobile Co., Ltd. We have audited the accompanying balance sheets of Taiwan Mobile Co., Ltd. (the Corporation) as of December 31, 2011 and 2010, and the related statements of income, changes in shareholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the Rules Governing the Audit of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Those rules and standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the mounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred above present fairly, in all material respects, the financial position of Taiwan Mobile Co., Ltd. as of December 31, 2011 and 2010, and the results of its operations and its cash flows for the years then ended, in conformity with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers and accounting principles generally accepted in the Republic of China. We have also audited the consolidated balance sheets of the Corporation and its subsidiaries as of December 31, 2011 and 2010 and the related consolidated statements of income, changes in shareholders’ equity, and cash flows for the years then ended, on which we have issued unqualified audit report and modified audit report dated January 19, 2012 and January15, 2011, respectively. We have also audited the accompanying schedules of significant accounts, provided as supplementary analysis, by applying the same procedures described above. In our opinion, such schedules are consistent, in all material respects, with the financial statements referred to above. KPMG Taipei, Taiwan (the Republic of China) January 19, 2012

Note to Readers The accompanying financial statements are intended only to present the financial position, results of operations, and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures, and practices to audit such financial statements are those generally accepted and applied in the Republic of China.

TAIWAN MOBLIE CO., LTD. BALANCE SHEETS DECEMBER 31, 2011 AND 2010

(In Thousands of New Taiwan Dollars, Except Par Value)

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2011 2010

ASSETS Amount ％ Amount ％ CURRENT ASSETS： Cash and cash equivalents (Notes 2, 4(a), 4(s) and 5) $ 877,518 1 3,880,881 4 Available-for-sale financial assets-current (Notes 2, 4(b) and 4(s)) 217,351 - 201,322 - Notes receivable, net (Note 4(s)) 791 - 378 - Accounts receivable, net (Notes 2, 4(c) and 4(s)) 5,865,783 7 5,493,572 6 Accounts receivable-related parties (Notes 2, 4(s) and 5) 43,675 - 85,823 - Other receivables (Note 4(s)) 95,996 - 370,390 1 Other receivables-related parities (Notes 4(s) and 5) 1,378,824 2 12,251,892 14 Inventories (Note 2) 1,430,322 2 1,065,263 1 Prepayments (Note 4(d)) 393,694 - 463,123 1 Deferred income tax assets-current (Notes 2 and 4(q)) - - 5,184 - Other current assets 3,133 - 1,857 - Total current assets 10,307,087 12 23,819,685 27 INVESTMENTS： Investments accounted for using the equity method (Notes 2 and 4(e))

26,620,333 32 11,308,819 13

Financial assets carried at cost-non-current (Notes 2, 4(f) and 4(s)) 50,324 - 50,324 - Total investments 26,670,657 32 11,359,143 13 PROPERTY AND EQUIPMENT (Notes 2, 4(g) and 5)： Land 4,149,141 5 3,979,837 4 Buildings 2,177,293 3 2,448,616 3 Telecommunication equipment 58,748,354 69 56,323,134 65 Office equipment 11,308 - 9,377 - Leased assets 1,285,920 2 1,285,920 1 Miscellaneous equipment 2,788,789 3 2,448,210 3 69,160,805 82 66,495,094 76 Less accumulated depreciation (39,441,325) (47) (33,240,498) (38) Less accumulated impairment property (110,481) - (74,229) - Construction in progress and prepayments for equipment 2,068,952 2 1,834,018 2 Net property and equipment 31,677,951 37 35,014,385 40 INTANGIBLE ASSETS (Note 2) 3G concession license 5,233,964 6 5,981,673 7 Computer software cost 1,129 - 1,165 - Goodwill (Note 4(h)) 7,121,871 9 6,835,370 8 Total intangible assets 12,356,964 15 12,818,208 15 OTHER ASSETS： Assets leased to others (Notes 2 ,4(i) and 5) 2,016,031 2 2,202,746 3 Idle assets (Notes 2 and 4(i)) 10,864 - 64,822 - Refundable deposits (Note 4(s)) 333,644 - 316,243 - Deferred charges (Note 2) 584,533 1 396,430 1 Deferred income tax asset-non-current (Notes 2 and 4(q)) 737,989 1 1,130,136 1 Other (Notes 2 and 4(o)) 31,984 - 33,659 - Total other assets 3,715,045 4 4,144,036 5 TOTAL $ 84,727,704 100 87,155,457 100

2011 2010

LIABILITIES AND SHAREHOLDERS' EQUITY Amount % Amount % CURRENT LIABILITIES： Short-term borrowings (Notes 4(j), 4(s) and 5) $ 9,000,000 10 9,645,000 11 Short-term notes and bills payable (Notes 4(k) and 4(s)) 899,273 1 499,732 1 Accounts payable (Note 4(s)) 3,384,431 4 2,739,933 3 Accounts payable-related parties (Notes 4(s) and 5) 38,861 - - - Income taxes payable (Notes 2, 4(q) and 4(s)) 668,216 1 917,585 1 Accrued expenses (Notes 4(s)and 5) 5,092,903 6 4,471,500 5 Other payables (Notes 2, 4(s) and 5) 3,125,316 4 4,348,846 5 Advance receipts (Note 4(l)) 3,105,012 4 2,500,500 3 Current portion of long-term liabilities (Notes 4(m) and 4(s)) 4,000,000 5 - - Guarantee deposits-current (Note 4(s)) 103,813 - 65,194 - Deferred income tax liability - current (Notes 2 and 4(q)) 193 - - - Other current liabilities (Note 5) 485,995 - 432,995 1 Total current liabilities 29,904,013 35 25,621,285 30 LONG-TERM LIABILITIES： Bonds payable (Notes 4(m) and 4(s)) 4,000,000 5 8,000,000 9 Long-term borrowings (Notes 4(n) and 4(s)) - - 800,000 1 Total long-term liabilities 4,000,000 5 8,800,000 10 OTHER LIABILITIES： Guarantee deposits (Note 4(s)) 231,552 - 259,587 - Deferred credits-gains on intercompany accounts (Notes 2 and 4(e)) 1,238,378 2 1,238,378 2 Other (Note 2) 405,750 - 366,652 - Total other liabilities 1,875,680 2 1,864,617 2 Total liabilities 35,779,693 42 36,285,902 42 SHAREHOLDERS' EQUITY (Notes 2 and 4(p))： Capital stock -NT$10.00 par value Authorized: 6,000,000 thousand shares Issued: 3,420,833 thousand shares in 2011 3,800,925 thousand shares in 2010

34,208,328

40

38,009,254

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Capital surplus： From convertible bonds 8,775,819 11 8,775,819 10 From treasury stock transactions 3,639,302 4 3,639,302 4 From long-term investments 4,485 - 4,528 - Other 12,840 - 12,840 - Retained earnings： Legal reserve 16,715,018 20 15,332,799 18 Special reserve 821,741 1 821,741 1 Unappropriated earnings 15,735,518 18 16,088,941 18 Other equity： Cumulative translation adjustments 17,612 - (5,716) - Net loss not recognized as pension cost (16,775) - (10,695) - Unrealized gains on financial instruments 111,306 - 89,842 - Treasury stock (31,077,183) (36) (31,889,100) (37) Total shareholders’ equity 48,948,011 58 50,869,555 58 Commitments and Contingencies (Note 7) TOTAL $ 84,727,704 100 87,155,457 100

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TAIWAN MOBLIE CO., LTD.

STATEMENTS OF INCOME

YEARS ENDED DECEMBER 31, 2011 AND 2010 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

2011 2010 Amount ％ Amount ％

OPERATING REVENUES (Notes 2 and 5) Telecommunication service revenue $ 55,916,663 90 55,001,883 94 Other revenue 6,002,610 10 3,545,402 6 Total operating revenues 61,919,273 100 58,547,285 100 OPERATING COSTS (Notes 2, 5 and 10) 37,793,874 61 32,808,712 56 GROSS PROFIT 24,125,399 39 25,738,573 44 OPERATING EXPENSES (Notes 2, 5 and 10) Marketing 9,672,619 16 8,330,905 14 Administrative 3,283,056 5 3,707,102 6 Total operating expenses 12,955,675 21 12,038,007 20 OPERATING INCOME 11,169,724 18 13,700,566 24 NON-OPERATING INCOME AND GAINS Investment income recognized under the equity method, net (Notes 2 and 4(e))

3,743,703 6 3,658,491 6

Income from penalty charge 373,503 1 272,040 1 Rental income (Notes 2 and 5) 178,848 - 189,974 - Interest income (Notes 5) 120,393 - 88,456 - Dividend income (Note 2) 12,007 - 11,031 - Gain on disposal of property and equipment - - 47,576 - Other (Notes 2 and 4(c)) 78,008 - 198,148 - Total non-operating income and gains 4,506,462 7 4,465,716 7 NON-OPERATING EXPENSES AND LOSSES Loss on disposal and retirement of property and equipment (Note 2)

411,837 1 1,289,178 2

Interest expenses (Notes 2,4 (g) and 5) 238,856 - 327,998 1 financial charges 11,465 - 21,907 - Other (Note 2) 171,032 - 129,055 - Total non-operating expenses and losses 833,190 1 1,768,138 3 INCOME BEFORE INCOME TAX 14,842,996 24 16,398,144 28 INCOME TAX EXPENSE (Notes 2 and 4(q)) 1,374,233 2 2,575,958 5 NET INCOME $ 13,468,763 22 13,822,186 23

Before

Income Tax

After Income

Tax

Before Income

Tax

After Income

Tax EARNINGS PER SHARE (Note 4(r)) Basic $ 5.18 4.70 5.48 4.62 Diluted $ 5.17 4.69 5.47 4.61

Pro forma information if the Corporation’s stocks held by its subsidiaries were treated as an investment instead of treasury stock (after income tax): NET INCOME

$ 13,468,763 13,822,186

EARNINGS PER SHARE AFTER INCOME TAX Basic $ 3.70 3.64 Diluted $ 3.69 3.63

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STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

YEARS ENDED DECEMBER 31, 2011 AND 2010 (In Thousands of New Taiwan Dollars, Except Per Share Amounts)

Retained Earnings

Capital Stock

Capital Surplus

Legal Reserve

Special Reserve

Unappropriated

Total

Cumulative Translation

Adjustments

Net Loss Not

Recognized as Pension Cost

Unrealized Gains on Financial

Instruments

Treasury Stock

Total

Shareholders' Equity

BALANCE, JANUARY 1, 2010 $ 38,009,254 12,431,704 13,943,913 3,350,000 16,155,617 33,449,530 12,011 (3,797) 63,624 (31,889,100) 52,073,226

Appropriation of the 2009 earnings：

Legal reserve - - 1,388,886 - (1,388,886) - - - - - -

Reversal of special reserve - - - (2,528,259) 2,528,259 - - - - - -

Cash dividends-NT$5.02783 per share - - - - (15,028,235) (15,028,235) - - - - (15,028,235)

Balance after appropriation 38,009,254 12,431,704 15,332,799 821,741 2,266,755 18,421,295 12,011 (3,797) 63,624 (31,889,100) 37,044,991

Net income in 2010 - - - - 13,822,186 13,822,186 - - - - 13,822,186

Unrealized gain on financial instruments, net - - - - - - - - 26,218 - 26,218

Adjustment on change of equity-method investments - 785 - - - - (17,727) (6,898) - - (23,840)

BALANCE, DECEMBER 31, 2010 38,009,254 12,432,489 15,332,799 821,741 16,088,941 32,243,481 (5,716) (10,695) 89,842 (31,889,100) 50,869,555

Appropriation of the 2010 earnings：

Legal reserve - - 1,382,219 - (1,382,219) - - - - - -

Cash dividends-NT$4.1619 per share - - - - (12,439,967) (12,439,967) - - - - (12,439,967)

Balance after appropriation 38,009,254 12,432,489 16,715,018 821,741 2,266,755 19,803,514 (5,716) (10,695) 89,842 (31,889,100) 38,429,588

Net income in 2011 - - - - 13,468,763 13,468,763 - - - - 13,468,763

Capital reduction (Note 4(p)) (3,800,926) - - - - - - - - - (3,800,926)

Adjustment of stock held by subsidiaries (Note 4(p)) - - - - - - - - - 811,917 811,917

Unrealized gain on financial instruments, net - - - - - - - - 21,464 - 21,464

Adjustment on change of equity-method investments - (43) - - - - 23,328 (6,080) - - 17,205

BALANCE, DECEMBER 31, 2011 $ 34,208,328 12,432,446 16,715,018 821,741 15,735,518 33,272,277 17,612 (16,775) 111,306 (31,077,183) 48,948,011

Note 1：The remuneration to directors and supervisors of $37,483 thousand and the bonus to employees of $374,826 thousand have been expensed and deducted from 2009 earnings.

Note 2：The remuneration to directors and supervisors of $37,306 thousand and the bonus to employees of $373,059 thousand have been expensed and deducted from 2010 earnings.

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STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2011 AND 2010 (In Thousands of New Taiwan Dollars)

2011 2010

CASH FLOWS FROM OPERATING ACTIVITIES

Net income $ 13,468,763 13,822,186

Adjustments to reconcile net income to net cash provided by operating

activities

Depreciation 7,010,357 7,184,516

Investment income recognized under the equity method (3,743,703) (3,658,491)

Cash dividends received from equity-method investees 3,310,805 2,383,941

Amortization 1,059,449 878,155

Loss on disposal and retirement of property and equipment, net 411,837 1,241,602

Deferred income taxes 397,523 518,387

Bad debts 139,185 436,428

Provision of allowance for loss on inventories 9,888 22,704

Pension cost 3,036 3,125

Changes in operating assets and liabilities

Notes receivable (414) 16,394

Accounts receivable (526,602) (392,042)

Accounts receivable - related parties 42,148 (63,155)

Other receivables 274,423 (290,621)

Other receivables - related parties 50,068 (45,577)

Inventories (374,946) (658,838)

Prepayments 69,429 19,475

Other current assets (1,276) 677

Accounts payable 644,498 684,175

Accounts payable-related parties 38,861 -

Income taxes payable (249,368) (560,768)

Accrued expenses 621,403 (77,706)

Other payables (1,138,316) 494,630

Advance receipts 604,512 1,304,668

Other current liabilities 53,000 54,189

Other liabilities (3,284) -

Net cash provided by operating activities 22,171,276 23,318,054

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STATEMENTS OF CASH FLOWS (CONT'D)


2011 2010 CASH FLOWS FROM INVESTING ACTIVITIES Increase in long-term investments accounted for using the equity method (14,049,600) (299,600) Decrease (increase) in financing provided to investees, net 10,823,000 (10,098,000) Acquisition of property and equipment (4,308,374) (4,193,402) Increase in deferred charges (351,765) (121,722) Increase in refundable deposits (17,402) (3,328) Proceeds from investees' capital reduction 5,540 3,502,717 Increase in computer software cost (1,049) - Proceeds from disposal of property and equipment 110 93,367 Decrease in pledged time deposits - 10,000 Decrease in other assets - 142 Net cash used in investing activities (7,899,540) (11,109,826) CASH FLOWS FROM FINANCING ACTIVITIES Cash dividends paid (12,439,928) (15,028,201) Capital reduction (3,800,295) - Decrease in long-term borrowings (3,466,667) - Increase in long-term borrowings 2,666,667 800,000 (Decrease) increase in short-term borrowings (645,000) 4,645,000 Increase in short-term notes and bills payable 399,541 199,860 Increase (decrease) in guarantee deposits 10,583 (1,048) Net cash used in financing activitie (17,275,099) (9,384,389)

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (3,003,363) 2,823,839 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 3,880,881 1,057,042 CASH AND CASH EQUIVALENTS, END OF YEAR $ 877,518 3,880,881 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Interest paid $ 395,861 261,635 Less interest capitalized 10,244 7,753 Interest paid - excluding interest capitalized $ 385,617 253,882 Income tax paid $ 2,347,903 2,110,960 NON-CASH INVESTING AND FINANCING ACTIVITIES Current portion of long-term liabilities $ 4,000,000 - Reclassification of the corporation's shares held by its subsidiaries

to treasury stock $ 31,077,183 31,889,100

CASH AND NON-CASH INVESTING AND FINANCING ACTIVITIES Acquisition of property and equipment $ 3,992,189 4,344,632 Decrease (increase) in other payables 358,567 (137,972) Increase in other liabilities-other (42,382) (13,258)

Cash paid for acquisition of property and equipment $ 4,308,374 4,193,402

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The 2011 Consolidated Financial Statements

Independent Auditors’ Report

The Board of Directors and Shareholders Taiwan Mobile Co., Ltd. We have audited the accompanying consolidated balance sheets of Taiwan Mobile Co., Ltd. (the “Corporation”) and subsidiaries as of December 31, 2011 and 2010, and the related consolidated statements of income, changes in shareholders’ equity and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the Rules Governing the Audit of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Those rules and standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Taiwan Mobile Co., Ltd. And subsidiaries as of December 31, 2011 and 2010, and the consolidated results of its operations and its consolidated cash flows for the years then ended, in conformity with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers and accounting principles generally accepted in the Republic of China. KPMG Taipei, Taiwan (the Republic of China) January 19, 2012

Notice to Readers The accompanying consolidated financial statements are intended only to present the financial position, results of operations and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally accepted and applied in the Republic of China.

TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2011 AND 2010

(In Thousands of New Taiwan Dollars, Except Par Value)

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2011 2010 ASSETS Amount ％ Amount ％ CURRENT ASSETS Cash and cash equivalents (Notes 2, 4(a), 4(u) and 5) $ 6,693,992 8 6,049,330 7 Financial assets at fair value through profit or loss - current (Notes 2, 4(b) and 4(u))

60,186 - - -

Available-for-sale financial assets - current (Notes 2, 4(c) and 4(u)) 217,351 - 201,322 - Notes receivable (Note 4(u)) 23,423 - 45,277 - Accounts receivable, net (Notes 2, 4(d) and 4(u)) 7,675,936 9 6,455,465 8 Accounts receivable - related parties (Notes 2, 4(u) and 5) 124,601 - 132,642 - Other receivables (Note 4(u)) 241,558 - 524,087 1 Inventories (Notes 2 and 4(e)) 2,070,536 2 1,131,628 1 Prepayments (Note 5) 877,470 1 676,375 1 Deferred income tax assets - current (Notes 2 and 4(s)) 28,391 - 10,060 - Pledged time deposits (Notes 4(u), 5 and 6) 73,062 - 1,100 - Other current assets 46,041 - 15,106 - Total current assets 18,132,547 20 15,242,392 18 INVESTMENTS Investments accounted for using the equity method (Notes 2 and 4(f)) 562,812 1 388,002 - Financial assets carried at cost - non-current (Notes 2, 4(g) and 4(u)) 1,098,739 1 2,308,709 3 Bonds measured at amortized cost - non-current (Notes 2,4(h) and 4(u)) 500,000 - 500,000 1 Total investments 2,161,551 2 3,196,711 4 PROPERTY AND EQUIPMENT (Notes 2 and 4(i)) Cost Land 6,358,920 7 6,302,821 7 Buildings 3,705,635 4 4,061,567 5 Telecommunication equipment 66,376,747 72 61,822,603 72 Office equipment 142,497 - 95,342 - Leased assets 1,285,920 2 1,285,920 2 Miscellaneous equipment 3,739,801 4 2,776,007 3 81,609,520 89 76,344,260 89 Less accumulated depreciation (43,102,742) (47) (35,235,653) (41) Less accumulated impairment-property (110,482) - (74,229) - Construction in progress and prepayments for equipment 2,909,040 3 2,579,615 3 Net property and equipment 41,305,336 45 43,613,993 51 INTANGIBLE ASSETS (Note 2) Trademarks (Note 4(j)) 2,516,674 3 19,087 - 3G concession license 5,233,964 6 5,981,673 7 Computer software cost 78,940 - 49,895 - Goodwill (Note 4(j)) 15,846,068 17 10,529,148 12 Customer relationship (Note 4(j)) 2,168,107 2 2,341,808 3 Operating rights (Note 4(j)) 1,382,000 2 1,382,000 2 Other intangible assets 26,047 - 43,439 - Total intangible assets 27,251,800 30 20,347,050 24 OTHER ASSETS Assets leased to others (Notes 2 and 4(k)) 307,784 - 298,891 - Idle assets (Notes 2 and 4(k)) 99,813 - 154,412 - Refundable deposits (Notes 4(u) and 5) 510,464 - 400,186 - Deferred charges (Note 2) 596,245 1 408,579 - Deferred income tax assets - non-current (Notes 2 and 4(s)) 743,916 1 1,135,264 2 Other (Notes 2, 4(n),4(q), 5, and 6) 684,912 1 686,722 1 Total other assets 2,943,134 3 3,084,054 3 TOTAL $ 91,794,368 100 85,484,200 100

2011 2010 LIABILITIES AND SHAREHOLDERS' EQUITY Amount % Amount % CURRENT LIABILITIES Short-term borrowings (Notes 4(l) and 4(u)) $ 9,000,000 10 3,203,000 4 Short-term notes and bills payable (Notes 4(m) and 4(u)) 899,273 1 499,732 - Notes payable (Note 4(u)) 641,166 1 232,299 - Accounts payable (Note 4(u)) 5,703,352 6 3,423,611 4 Income taxes payable (Notes 4(s) and 4(u)) 1,331,623 2 1,387,348 2 Accrued expenses (Note 4(u)) 6,132,359 7 5,564,242 6 Other payables (Notes 2 and 4(u)) 3,594,997 4 5,001,640 6 Current portion of long-term liabilities (Note 4(o) and 4(u)) 4,000,000 4 - - Advance receipts (Note 4(n)) 4,028,165 4 3,370,888 4 Guarantee deposits - current (Note 4(u)) 103,813 - 65,194 - Deferred income tax liability - current (Note 2 and 4(s)) 193 - - - Other current liabilities 919,470 1 483,699 1 Total current liabilities 36,354,411 40 23,231,653 27 LONG-TERM LIABILITIES Bonds payable (Notes 4(o) and 4(u)) 4,000,000 4 8,000,000 9 Long-term borrowings (Notes 4(p) and 4(u)) - - 2,300,000 3 Total long-term liabilities 4,000,000 4 10,300,000 12 OTHER LIABILITIES Guarantee deposits (Note 4(u)) 490,480 - 314,672 - Deferred income tax liability - non-current (Notes 2 and 4(s)) 195,847 - 153,486 - Other (Note 2) 689,745 1 584,971 1 Total other liabilities 1,376,072 1 1,053,129 1 Total liabilities 41,730,483 45 34,584,782 40 SHAREHOLDERS' EQUITY (Notes 2 and 4(r)) Parent's shareholders' equity Capital stock-NT$10 par value

Authorized:6,000,000 thousand shares； Issued:2011-3,420,833 thousand shares

2010-3,800,925 thousand shares

34,208,328 38 38,009,254 44

Capital surplus From convertible bonds 8,775,819 10 8,775,819 10 From treasury stock transactions 3,639,302 4 3,639,302 5 From long-term investments 4,485 - 4,528 - Other 12,840 - 12,840 - Retained earnings Legal reserve 16,715,018 18 15,332,799 18 Special reserve 821,741 1 821,741 1 Unappropriated earnings 15,735,518 17 16,088,941 19 Other equity Cumulative translation adjustments 17,612 - (5,716) - Net loss not recognized as pension cost (16,775) - (10,695) - Unrealized gains on financial instruments 111,306 - 89,842 - Treasury stock (31,077,183) (34) (31,889,100) (37) 48,948,011 54 50,869,555 60 Minority interest 1,115,874 1 29,863 - Total shareholders' equity 50,063,885 55 50,899,418 60 Commitments and Contingencies(Note 7) TOTAL $ 91,794,368 100 85,484,200 100

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TAIWAN MOBILE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

YEARS ENDED DECEMBER 31, 2011 AND 2010 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

2011 2010 Amount ％ Amount ％

OPERATING REVENUES (Notes 2 and 5) $ 81,369,183 100 70,146,004 100 OPERATING COSTS (Notes 2, 5, and 10) 48,655,458 60 38,162,363 54 GROSS PROFIT 32,713,725 40 31,983,641 46 OPERATING EXPENSES (Notes 2, 5, and 10) Marketing 10,788,437 13 9,160,136 13 Administrative 4,335,483 5 4,515,794 7 Total operating expenses 15,123,920 18 13,675,930 20 OPERATING INCOME 17,589,805 22 18,307,711 26 NON-OPERATING INCOME AND GAINS Income from penalty charge 387,128 1 285,470 1 Interest income 99,460 - 42,471 - Rental income (Notes 2 and 5) 45,210 - 61,849 - Dividend income (Note 2) 19,114 - 13,318 - Gain on disposal of property and equipment (Note 2) 1,435 - 47,731 - Gain on disposal of investments (Notes 2 and 4(g)) 512 - 51,499 - Other 120,017 - 237,178 - Total non-operating income and gains 672,876 1 739,516 1 NON-OPERATING EXPENSES AND LOSSES Impairment loss (Notes 2 and 4(g)) 1,209,970 2 3,229 - Loss on disposal and retirement of property and equipment

(Note 2) 441,413 1 1,465,392 2

Interest expenses(Notes 2 and 4(i)) 240,835 - 319,501 1 Investment loss recognized under the equity method (Notes 2

and 4(f)) 24,790 - 25,768 -

Financial charges 12,268 - 22,877 - Other 204,836 - 109,138 - Total non-operating expenses and losses 2,134,112 3 1,945,905 3 INCOME BEFORE INCOME TAX 16,128,569 20 17,101,322 24 INCOME TAX EXPENSES (Notes 2 and 4(s)) 2,502,389 3 3,283,544 4 CONSOLIDATED NET INCOME $ 13,626,180 17 13,817,778 20 ATTRIBUTED TO Shareholders of the parent $ 13,468,763 17 13,822,186 20 Minority interest 157,417 - (4,408) - $ 13,626,180 17 13,817,778 20

Before

Income Tax After

Income Tax Before

Income Tax After

Income Tax EARNINGS PER SHARE (Note 4(t)) Basic $ 5.18 4.70 5.48 4.62 Diluted $ 5.17 4.69 5.47 4.61

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY


Retained earnings Other equity

Capital Stock

Capital Surplus

Legal Reserve

Special Reserve

Unappro- priated

Total

Cumulative Translation

Adjustments

Net Loss Not

Recognized as Pension Cost

Unrealized Gains on Financial

Instruments

Treasury Stock

Minority Interest

Total

Shareholders' Equity

BALANCE, JANUARY 1, 2010 $ 38,009,254 12,431,704 13,943,913 3,350,000 16,155,617 33,449,530 12,011 (3,797) 63,624 (31,889,100) 9,883 52,083,109 Appropriation of the 2009 earnings Legal reserve - - 1,388,886 - (1,388,886) - - - - - - - Reversal of special reserve - - - (2,528,259) 2,528,259 - - - - - - - Cash dividends - NT$5.02783 per share - - - - (15,028,235) (15,028,235) - - - - - (15,028,235) Balance after appropriation 38,009,254 12,431,704 15,332,799 821,741 2,266,755 18,421,295 12,011 (3,797) 63,624 (31,889,100) 9,883 37,054,874 Consolidated net income in 2010 - - - - 13,822,186 13,822,186 - - - - (4,408) 13,817,778 Unrealized gain on financial instruments, net - - - - - - - - 26,218 - - 26,218 Adjustments on change of equity in equity-method investments - 785 - - - - (17,727) (6,898) - - - (23,840) Cash dividends paid to minority interests by subsidiaries - - - - - - - - - - (323) (323) Control effect of the acquisition of subsidiaries - - - - - - - - - - 30,865 30,865 Decrease in minority interest - - - - - - - - - - (6,154) (6,154) BALANCE, DECEMBER 31, 2010 38,009,254 12,432,489 15,332,799 821,741 16,088,941 32,243,481 (5,716) (10,695) 89,842 (31,889,100) 29,863 50,899,418 Appropriation of the 2010 earnings Legal reserve - - 1,382,219 - (1,382,219) - - - - - - - Cash dividends - NT$4.1619 per share - - - - (12,439,967) (12,439,967) - - - - - (12,439,967) Balance after appropriation 38,009,254 12,432,489 16,715,018 821,741 2,266,755 19,803,514 (5,716) (10,695) 89,842 (31,889,100) 29,863 38,459,451 Consolidated net income in 2011 - - - - 13,468,763 13,468,763 - - - - 157,417 13,626,180 Captial reduction (3,800,926) - - - - - - - - - - (3,800,926) Adjustment of stock held by subsidiaries - - - - - - - - - 811,917 - 811,917 Unrealized gain on financial instruments, net - - - - - - - - 21,464 - - 21,464 Adjustments on change of equity in equity-method investments - (43) - - - - 23,328 (6,080) - - - 17,205 Cash dividends paid to minority interests by subsidiaries - - - - - - - - - - (599) (599) Control effect of the acquisition of subsidiaries - - - - - - - - - - 926,756 926,756 Increase in minority interest - - - - - - - - - - 2,437 2,437 BALANCE, DECEMBER 31, 2011 $ 34,208,328 12,432,446 16,715,018 821,741 15,735,518 33,272,277 17,612 (16,775) 111,306 (31,077,183) 1,115,874 50,063,885

Note 1: The remuneration to directors and supervisors of $37,483 thousand and the bonus to employees of $374,826 thousand have been expensed and deducted from 2009 earnings.

Note 2: The remuneration to directors and supervisors of $37,306 thousand and the bonus to employees of $373,059 thousand have been expensed and deducted from 2010 earnings.

23 (Continued)


CONSOLIDATED STATEMENTS OF CASH FLOWS


2011 2010 CASH FLOWS FROM OPERATING ACTIVITIES Consolidated net income $ 13,626,180 13,817,778 Adjustments to reconcile net income to net cash provided by

operating activities:

Depreciation 8,209,121 8,062,576 Impairment loss 1,209,970 3,229 Amortization 1,287,706 1,094,436 Loss on disposal and retirement of property and equipment, net 439,978 1,417,661 Deferred income taxes 436,627 542,908 Bad debts 141,254 456,476 Provision of allowance for loss on inventories 44,292 24,857 Investment loss recognized under equity method 24,790 25,768 Pension cost (6,616) 4,696 Gain on disposal of investments (512) (51,499) Other 6,754 4,833 Changes in operating assets and liabilities Financial assets at fair value through profit or loss 399,931 - Notes receivable 22,075 23,228 Accounts receivable, net (1,102,338) (258,638) Accounts receivable – related parties 8,041 31,356 Other receivables 286,045 (206,970) Long-term capital lease receivables 27,866 (27,593) Inventories (602,199) (684,742) Prepayments 463,364 39,619 Other current assets 51,892 (10,857) Notes payable 326,327 (48,486) Accounts payable 305,703 806,885 Income taxes payable (135,592) (753,804) Accrued expenses 413,738 (102,682) Other payables (1,305,821) 514,943 Advance receipts 570,814 1,309,370 Other current liabilities 101,374 (41,636) Other liabilities 9,516 - Net cash provided by operating activities 25,260,280 25,993,712

24 (Continued)


CONSOLIDATED STATEMENTS OF CASH FLOWS(Continued)


2011 2010 CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of subsidiaries (8,414,168) (74,492) Acquisition of property and equipment (6,417,225) (6,196,382) Increase in deferred charges (352,819) (121,892) Increase in long-term investments accounted for using the equity

method (199,600) (199,600)

Increase in computer software costs and other intangible assets (34,992) (12,101) Increase in refundable deposits (13,003) (11,795) Increase in other assets (8,529) (51,685) Proceeds from investees' capital reduction 5,435 2,717 (Increase) decrease in pledged time deposits (3,363) 13,379 Proceeds from disposal of property and equipment 2,622 887 Proceeds from disposal of idle assets - 92,787 Proceeds from disposal of financial assets carried at cost - 238,541 Net cash used in investing activities (15,435,642) (6,319,636) CASH FLOWS FROM FINANCING ACTIVITIES Cash dividends paid (12,439,928) (15,028,201) Increase (decrease) in short-term borrowings 5,797,000 (3,597,000) Decrease in long-term borrowings (4,966,667) - Capital reduction (2,988,378) - Increase in long-term borrowings 2,666,667 2,300,000 Increase (decrease) in short-term notes and bills payable 399,541 (299,906) Increase (decrease) in guarantee deposits 22,295 (5,000) Employee stock option issued by subsidiaries 8,300 - Cash dividends paid to minority interest (599) (323) Net cash used in financing activities (11,501,769) (16,630,430) EFFECT OF EXCHANGE RATE CHANGES 35,963 (14,014) ACQUISITION OF CASH AND CASH EQUIVALENT FOR

SUBSIDIARIES 2,285,830

20,662

NET INCREASE IN CASH AND CASH EQUIVALENTS 644,662 3,050,294 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 6,049,330 2,999,036 CASH AND CASH EQUIVALENTS, END OF YEAR $ 6,693,992 6,049,330

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Interest paid $ 369,262 273,193 Less interest capitalized 10,244 7,753 Interest paid - excluding interest capitalized $ 359,018 265,440 Income tax paid $ 3,370,526 2,980,613 CASH AND NON-CASH INVESTING AND FINANCING

ACTIVITIES

Acquisition of property and equipment $ 5,980,697 6,345,918 Increase in accrued expenses - (137) Decrease (increase) in other payables 524,401 (169,834) (Increase) decrease in other liabilities – other (87,873) 20,435 Cash paid for acquisition of property and equipment $ 6,417,225 6,196,382


CONSOLIDATED STATEMENTS OF CASH FLOWS(Continued)


25 (Continued)

The Corporation acquired 51% of Fubon Multimedia Technology Co., Ltd.’s shares on July 13, 2011. The fair values of the assets and liabilities upon acquisition were as follows:

Cash $ 2,285,830 Financial assets at fair value through profit or loss-current 460,117 Receivables 275,190 Inventories 380,956 Prepayments 666,379 Other current assets 183,684 Property and equipment 464,111 Intangible assets 4,923,979 Other assets 114,421 9,754,667 Payables 2,446,781 Advance receipts 86,463 Other current liabilities 334,397 Long-Term liabilities 7,384 Other liabilities 192,132 3,067,157 Net 6,687,510 Minority interest (82,837) Net 6,604,673 Percentage of equity interest 51% 3,368,383 Add: Goodwill 4,979,566 Cash paid for acquisition of Fubon Multimedia Technology Co., Ltd. $ 8,347,949

26 (Continued)

The Corporation acquired 45.012% of Taiwan Kuro Times Co., Ltd.’s shares on August 12, 2011. The fair values of the assets and liabilities upon acquisition were as follows:

Cash $ 18,584 Receivables 45,597 Prepayments 5,894 Other current assets 1,217 Property and equipment 2,823 Intangible assets 39,922 Other assets 1,528 115,565 Short-term borrowings 8,000 Payables 66,828 Advance receipts 3,450 Other current liabilities 3,281 81,559 Net 34,006 Percentage of equity interest 45.012% 15,307 Add: Goodwill 50,693 Cash paid for acquisition of Taiwan Kuro Times Co., Ltd. $ 66,000

Ticker: 3045.tw

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The Corporation acquired 54.988% of Taiwan Kuro Times Co., Ltd.’s shares on September 1, 2010. The fair values of the assets and liabilities upon acquisition were as follows:

Cash $ 20,662 Receivables 18,200 Prepayments 18,619 Other current assets 2,280 Property and equipment 952 Intangible assets 36,629 Other assets 1,133 98,475 Payables 52,024 Advance receipts 3,875 Other current liabilities 442 56,341 Net 42,134 Percentage of equity interest 54.988% 23,169 Add: Goodwill 39,444 Less: Fair value of 45% stake owned before tender offer (including

investment loss recognized under the equity method from May 2, 2010, to August 31, 2010, and the difference between preceding and following fair market value of purchase price allocation)

(51,813)

Cash paid for acquisition of Taiwan Kuro Times Co., Ltd. $ 10,800

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Attachment II

Taiwan Mobile Co., Ltd. 2011 Earnings Distribution Proposal

Unit: NT$

Item Amount

Unappropriated retained earnings as of December 31, 2010 2,266,754,432

Add: Reversal of special reserve 821,741,451

Net income of 2011 13,468,763,392

Less: Legal reserve (10%) 1,346,876,339

Earnings available for distribution 15,210,382,936

Appropriation:

Cash dividends (Note 1) 13,880,952,006

Unappropriated retained earnings balance 1,329,430,930

Note 1：Dividend per share will be based on the actual outstanding shares on the ex-dividend date. Note 2：Cash bonus to employees will be NT$362,844,193 and remuneration to directors will be NT$ 36,284,419.


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Attachment III

Articles of Incorporation - Before and After Amendments for Comparison


7

The total registered capital stock of the Company shall be Sixty Billion New Taiwan Dollars (NT$60,000,000,000), divided into Six Billion (6,000,000,000) shares with a par value of Ten New Taiwan Dollars (NT$10) per share. Any unissued shares shall be issued, where necessary, upon the approval of the Board. Two hundred and fifty million shares of the above total capital stock of the Company with a par value of Ten New Taiwan Dollars (NT$10) per share shall be retained for the issuance of employee stock options, which may be issued from time to time upon the approval of the Board.

The total registered capital stock of the Company shall be Sixty Billion New Taiwan Dollars (NT$60,000,000,000), divided into Six Billion (6,000,000,000) shares with a par value of Ten New Taiwan Dollars (NT$10) per share. Any unissued shares shall be issued, where necessary, upon the approval of the Board. The Company may issue preferred shares out of the above authorized capital stock.

Two hundred and fifty million shares of the above total capital stock of the Company with a par value of Ten New Taiwan Dollars (NT$10) per share shall be retained for the issuance of employee stock options, which may be issued from time to time upon the approval of the Board.

Delete the wording related to preferred shares.

7-1

(Deleted) Rights and obligations of the preferred shares are set out below:

(1) Holders of the preferred shares shall be entitled to receive prior to all other classes of shares dividends and bonuses payable annually each fiscal year, provided there are earnings after setting aside amounts for payment of taxes, recovery of prior year losses, and legal reserve.

(2) Holders of preferred shares shall be entitled to receive dividends and bonuses of 4.5% of the face value of the preferred shares per annum, in cash, payable in one

Delete the wording related to preferred shares.


30

installment; however, the entitlement to dividends and bonuses in the year in which the preferred shares are issued shall be proportional to the number of days in a fiscal year after the Date of Issue. (For the purpose of this Article, the Date of Issue shall mean the next day after the day on which the preferred shares are fully paid up.) Holders of preferred shares shall not be entitled to the aforesaid dividends and bonuses in the year in which the preferred shares are converted to common shares, but shall nevertheless be entitled to participate in the distribution of earnings and capital surplus of common shareholders in that year.

(3) Dividends and bonuses on the preferred shares shall be non-cumulative, if and to the extent that all or any part of the aforesaid dividends and bonuses are not paid because there is no or insufficient earnings in respect of a particular fiscal year.

(4) Holders of preferred shares shall not be entitled to participate in the distribution of earnings of the common shareholders.

(5) Holders of preferred shares shall not be entitled to participate in the recapitalization of retained earnings or capital surplus.

(6) Both holders of common shares and preferred shares shall be entitled to subscribe news shares issued by the Company in rights issues.

(7) Holders of preferred shares shall not be entitled to vote at any shareholders’ meetings of the Company and shall not have any rights of election.

(8) Holders of preferred shares shall have the right prior to the common shareholders to the

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distribution of the residual assets of the Company, provided however, the entitlement to the distribution shall not be in excess of the paid up capital of their respective preferred shares.

(9) Capital surplus from share premium attributable to the issuance of preferred shares shall not be transferred to the capital account, except for the purpose of recovery of prior year losses of the Company, prior to conversion of preferred shares to common shares, unless approved by two thirds of the preferred shareholders at the preferred shareholders’ meeting attended by at least one half of all preferred shareholders.

(10) Preferred shares shall not be converted to common shares during the circulation period of the preferred shares but shall all be converted to common shares two years after the date of issue. Each preferred share is convertible into one common share. Rights and obligations of the common shares converted from preferred shares shall be the same as those of the common shares.

20

Resolutions at a shareholders’ meeting shall be recorded in a meeting minute signed by or affixed with the personal seal of the chairman. The meeting minute shall be distributed to all the shareholders of the Company by public announcement within 20 days after the shareholders’ meeting. The meeting minute shall contain information such as the time and venue of the meeting, name of the chairman of the meeting, manner in which resolutions are passed, and a summary and outcome of all proceedings of the meeting.

Resolutions at a shareholders’ meeting shall be recorded in a meeting minute signed by or affixed with the personal seal of the chairman. The meeting minute shall be distributed to all the shareholders of the Company within 20 days after the shareholders’ meeting, except however, for shareholders with less than 1,000 shares, public announcement of the meeting minute shall suffice. The meeting minute shall contain information such as the time and venue of the meeting, name of the chairman of the meeting, manner in which resolutions are passed, and a summary and

Amend the distribution method of the meeting minutes.

32

outcome of all proceedings of the meeting.

Chapter 4

Directors Directors and Supervisors Delete “the Supervisors”

21

There shall be 9 to 11 Directors of the Company. Directors shall be persons with legal capacity and shall be elected by the shareholders at the shareholders’ meeting. The tenure of offices of Directors shall be 3 years and the Directors shall be eligible for re-elections. The election of Directors is adopted by candidate nomination system per Article 192-1 of the Company Act. No more than half of the Directors of the Company shall have the following relationships among them: 1. A spousal relationship. 2. A familial relationship within the second degree of kinship. The Chairman and the Vice Chairman shall be elected from amongst the Directors by a simple majority of the Directors present at the Board meetings attended by at least two thirds of all the Directors. The Company may purchase liability insurance for directors with respect to their liabilities resulting from exercising their duties during their terms of occupancy.

There shall be 9 to 11 Directors and 2 to 3 Supervisors of the Company. Directors and Supervisors shall be persons with legal capacity and shall be elected by the shareholders at the shareholders’ meeting. The tenure of offices of Directors and Supervisors shall be 3 years and the Directors and Supervisors shall be eligible for re-elections.

No more than half of the Directors of the Company shall have the following relationships among them:

1. A spousal relationship.

2. A familial relationship within the second degree of kinship.

And Supervisors, or one or more Supervisors and Directors shall not have the following relationships among them:

1. A spousal relationship.

2. A familial relationship within the second degree of kinship.

The Chairman and the Vice Chairman shall be elected from amongst the Directors by a simple majority of the Directors present at the Board meetings attended by at least two thirds of all the Directors.

The Company may purchase liability insurance for directors and supervisors with respect to their liabilities resulting from exercising their duties during their terms of occupancy.

Delete the wording related to the supervisors, and add that the election of directors is adopted by the candidate nomination system.

33

21-1

According to Article 14-2 of Securities and Exchange Act, among the directors, there shall be no less than 3 independent directors. The independent directors shall together constitute the Audit Committee to substitute the supervisors.

According to Article 14-2 of Securities and Exchange Act, among the directors, there shall be no less than 3 independent directors, and the election of independent directors is adopted by candidate nomination systems per Article 192-1 of Company Act.

To conform with Article 14-4 and Article 181-2 of Securities and Exchange Act, the ipso facto dismissal of supervisors will be applied when an audit committee is established.

Delete the wording of supervisors, move the provision of election of independent directors to Article 21, and add the constitution of Audit Committee.

23

If any new Directors are not elected in time before the expiration of the tenure of the relevant existing offices of Directors, the tenure of the existing offices shall be extended until such time when the new Directors duly elected to assume their offices.

If any new Directors or Supervisors are not elected in time before the expiration of the tenure of the relevant existing offices of Directors or Supervisors, the tenure of the existing offices shall be extended until such time when the new Directors or Supervisors duly elected to assume their offices.

Delete the wording of supervisors

24

The business policy and other imperative matters of the Company shall be determined by the Board. The Board shall be entitled to form different functional committees, and determine the duties and responsibilities of the committees. Except for the first meeting of each term of the Board which shall be convened by the Director who received a ballot representing the largest number of votes at the election of Directors, Board meetings shall be convened by the Chairman, who shall also be the chairman of the meetings. If the Chairman is unable to perform his duties for any reasons, the Vice Chairman shall act on his behalf. If the Vice Chairman is also absent from the meetings, the Chairman shall designate one of the Directors to act on his behalf, failing which, the Directors present at the meetings shall elect a person from amongst themselves to act on behalf of the Chairman.

The business policy and other imperative matters of the Company shall be determined by the Board. The Board shall be entitled to form different functional committees, Corporate Governance Committee and Audit Committee etc., and determine the duties and responsibilities of the committees. Except for the first meeting of the Board which shall be convened by the Director who received a ballot representing the largest number of votes at the election of Directors, Board meetings shall be convened by the Chairman, who shall also be the chairman of the meetings. If the Chairman is unable to perform his duties for any reasons, the Vice Chairman shall act on his behalf. If the Vice Chairman is also absent from the meetings, the Chairman shall designate one of the Directors to act on his behalf, failing which, the Directors present at the meetings shall

Delete the names of the Corporate Governance Committee and Audit Committee.

34

The notice of the Board meetings may be made and delivered by letter, email or facsimile.

elect a person from amongst themselves to act on behalf of the Chairman.

The notice of the Board meetings may be made and delivered by letter, email or facsimile.

27

The Audit Committee shall exercise their powers and other relevant matters in accordance with the relevant laws, regulations or the Company’s Articles of Incorporation.

Supervisors shall independently exercise their supervisory powers in accordance with the relevant laws and shall be entitled to attend the Board meetings. Supervisors, however, shall not be entitled to vote at the aforesaid meetings.

Delete the wording of supervisors and add the powers of the Audit Committee.

27-1

(Deleted) If all Supervisors of the Company are discharged, the Board shall, within 60 days, convene an extraordinary meeting of the shareholders to elect new Supervisors.


30

The fiscal year of the Company shall begin on 1 January and end on 31 December of each year. The Board shall prepare the following reports after the end of each fiscal year, and present to the shareholders at the general meeting of the shareholders for their ratifications in accordance with the legal procedure:

(1) Business Report (2) Financial Statements (3) Proposal for distribution of earnings to

shareholders or recovery of prior year losses.

The fiscal year of the Company shall begin on 1 January and end on 31 December of each year. The Board shall prepare the following reports after the end of each fiscal year, present the same first to the Supervisors for their inspection at least 30 days prior to the general meeting of the shareholders, and then to the shareholders at the general meeting of the shareholders for their ratifications:

(1) Business Report (2) Financial Statements (3) Proposal for distribution of earnings to

shareholders or recovery of prior year losses.


31

The profits of the Company of each fiscal year shall first be applied to payment of taxes and recovery of prior year losses, secondly 10% of which balance shall then be set aside as Legal Reserve. Thereafter, the Company shall set aside or reverse special reserves in accordance with the law or to satisfy the business needs of the Company. Any balance left over shall be applied in the following order: (1) Remuneration of Directors, not

exceeding 0.3%; (2) Employee bonuses in the sum of 1% to

3%; (3) The balance shall be distributed to the

shareholders as dividends in accordance with resolutions of the shareholders’

The profits of the Company of each fiscal year shall first be applied to payment of taxes and recovery of prior year losses, 10% of which balance shall then be set aside as Legal Reserve. Next, the Company shall set aside special reserves in accordance with the law or to satisfy the business needs of the Company. Any balance left over shall be applied in the following order:

(1) Dividends and bonuses for preferred shareholders;

(2) Remuneration of Directors and Supervisors, not exceeding 0.3%;

(3) Employee bonuses in the sum of 1% to 3%;

(4) The balance shall be distributed to the

Delete the wording related to preferred shares and add the appropriation/ reversal of special reserves to sequence of earnings distribution.

35

meetings. If any of the employee bonuses referred to in Item (2) above shall be paid in the form of bonus shares, the employees entitled to such bonus shares may include employees of subsidiaries of the Company satisfying certain criteria. The criteria and the proportion of such employee bonus shares distributable shall be determined by the Board.

shareholders as dividends and bonuses in accordance with resolutions of the shareholders’ meetings.

If any of the employee bonuses referred to in Item (3) above shall be paid in the form of bonus shares, the employees entitled to such bonus shares may include employees of subsidiaries of the Company satisfying certain criteria. The criteria and the proportion of such employee bonus shares distributable shall be determined by the Board.

34

The Articles of Incorporation were agreed to and signed on 30 January 1997. … The twentieth amendment was made on 19 June 2009. The twenty-first amendment was made on 15 June 2011.

The twenty-second amendment was made on 22 June 2012.

The Articles of Incorporation were agreed to and signed on 30 January 1997. … The twentieth amendment was made on 19 June 2009. The twenty-first amendment was made on 15 June 2011.

Add the amendment sequence number, and the date of the latest amendment to the Articles of Incorporation

36

Attachment IV

Rules and Procedures of Acquisition or Disposal of Assets - Before and After Amendments for Comparison


1

The Procedures are enacted in accordance with the provisions of Article 36-1 of the Securities and Exchange Act and “Regulations Governing the Acquisition and Disposal of Assets by Public Companies”.

The Procedures are enacted in accordance with the provisions of Article 36-1 of the Securities and Exchange Act and Order No. 0910006105 of “Regulations Governing the Acquisition and Disposal of Assets by Public Companies” announced on Dec. 10, 2002.

Wording amendment

2

The Company shall handle the acquisition or disposal of assets in compliance with these Procedures; provided, where another law or regulation provides otherwise, such provisions shall govern.

The Company shall handle the acquisition or disposal of assets in compliance with the Procedures; provided, where another law provides otherwise, such provisions shall govern.

Amendment in compliance with the “Regulations Governing the Acquisition and Disposal of Assets by Public Companies” (the “Regulations”).

6

The Procedures for the acquisition and disposal of assets shall be adopted after approved by more than half of all Audit Committee members, and then submitted to the board of directors for a resolution. After the Procedures have been approved by the board of directors, they shall be submitted to a shareholders' meeting for approval; the same applies when the Procedures are amended. If any director expresses dissent which is contained in the minutes or a written statement, the company shall submit the director's dissenting opinion to the Audit Committee.

The Company has created the position(s) of independent director(s) in accordance with the provisions of the Securities and Exchange Act. When the procedures for the acquisition and disposal of assets are submitted for discussion by the board of directors pursuant to the preceding paragraph, the board of directors shall take into full consideration each independent director's opinions. The minutes

The Procedures for the acquisition and disposal of assets shall be adopted after the procedures have been approved by the board of directors, they shall be submitted to each supervisor, and then to a shareholders' meeting for approval; the same applies when the Procedures are amended. If any director expresses dissent which is contained in the minutes or a written statement, the company shall submit the director's dissenting opinion to each supervisor.

If the Company has created the position(s) of independent director(s) in accordance with the provisions of the Securities and Exchange Act, upon the procedures for the acquisition and disposal of assets are submitted for discussion by the board of directors pursuant to the preceding paragraph, the board of directors shall take into full consideration each independent director's opinions. The minutes shall contain the dissenting opinions or reservations made by the independent

Delete or amend the regulations related to supervisors.


37

shall contain the dissenting opinions or reservations made by the independent directors, if any.

If the approval of more than half of all audit committee members as required in the first paragraph is not obtained, the Procedures may be implemented if approved by more than two-thirds of all directors, and the resolution of the audit committee shall be recorded in the minutes of the board of directors meeting. The terms of "all Audit Committee members" in the first paragraph and "all directors" in the preceding paragraph shall be counted as the actual number of persons currently holding those positions.

directors, if any.

In the event that an Audit Committee has been established in accordance with the provisions of the Securities and Exchange Act, when the Procedures for the acquisition and disposal of assets are adopted or amended, they shall be approved by more than half of all Audit Committee members and submitted to the board of directors for a resolution.

If the approval of more than half of all audit committee members as required in the preceding paragraph is not obtained, the Procedures may be implemented if approved by more than two-thirds of all directors, and the resolution of the audit committee shall be recorded in the minutes of the board of directors meeting.

The terms of "all Audit Committee members" in the paragraph 3 and "all directors" in the preceding paragraph shall be counted as the actual number of persons currently holding those positions.

7

The following items shall be specified in the Procedures: 1. (omitted) 2. Appraisal procedures:

((1) to (3) omitted) (4) Related Party Transactions: refer to Section 3 of these Procedures. ((5) to (6) omitted)

3. Operating procedures: (1) The amount and levels of authority

delegated: Any acquisition and disposal of assets by the Company which in compliance with the criteria of public announcement and filing shall be resolved by the board of directors except for the following circumstances:

(i) The Company may delegate the chairman to decide such matters when a single transaction does not exceed NT$300,000,000, subject to

The following items shall be specified in the Procedures: 1. (omitted) 2. Appraisal procedures:

((1) to (3) omitted)

(4) Acquiring Real Estate from related parties: refer to Section 3 of these Procedures. ((5) to (6) omitted)

3. Operating procedures: (1) The amount and levels of authority

delegated: Any acquisition and disposal of assets by the Company which in compliance with the criteria of public announcement and filing shall be resolved by the board of directors except for the following circumstances: (i) The Company may delegate the

chairman to decide such matters when a single transaction does not exceed 300,000,000, subject to ratifications by the next board

Amendment in compliance with the Regulations to strengthen the management of related party transactions.

38

ratifications by the next board meeting.

(ii) (omitted) (iii) The stipulation of amount and levels

of authority delegated for the derivatives trading shall be effective after approved by the board of directors.

(2) (omitted) (4 to 7 omitted) The subsidiaries of the Company shall adopt and implement procedures for the acquisition or disposal of assets in compliance with the Procedures.

meeting. (ii) (omitted) (iii) The stipulation of amount and

levels of authority delegated for the derivatives trading shall be effective after approved by the board of directors.

(2) (omitted) (4 to 7 omitted) The subsidiaries of the Company shall adopt procedures for the acquisition or disposal of assets in compliance with the Procedures.

8

With respect to the Company's Rules and Procedures of Acquisition or Disposal of Assets that is subject to the approval of the board of directors or other laws or regulations, if a director expresses dissent which is contained in the minutes or a written statement, the Company shall, subject to mutatis mutandis application of paragraphs 2 of Article 6, submit the director's dissenting opinion to the Audit Committee.

Any transaction involving major assets or derivative trading shall be approved by more than half of all audit committee members and submitted to the board of directors for a resolution, and shall be subject to mutatis mutandis application of paragraphs 3 and 4 of Article 6.

With respect to the Company's Rules and Procedures of Acquisition or Disposal of Assets that is subject to the approval of the board of directors or other laws or regulations, if a director expresses dissent which is contained in the minutes or a written statement, the company shall submit the director's dissenting opinion to each supervisor.

Where the position of independent director has been created in accordance with the provisions of the Securities and Exchange Act, when a transaction involving the acquisition or disposal of assets is submitted for discussion by the board of directors pursuant to the preceding paragraph, the board of directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the board of directors meeting.

Where an audit committee has been established in accordance with the provisions of the Act, any transaction involving major assets or derivative trading shall be approved by more than half of all Audit Committee members and submitted to the board of directors for a resolution, and shall be subject to mutatis mutandis application of paragraphs


39

4 and 5 of Article 6.

9

In acquiring or disposing of real estate or other fixed assets where the transaction amount reaches 20％ of the Company's paid-in capital or NT$300,000,000 or more, the Company, unless transacting with a government agency, engaging others to build on its own land, engaging others to build on leased land, or acquiring or disposing of machinery and equipment for business use, shall obtain an appraisal report prior to the date of the occurrence of the event from a professional appraiser and shall further comply with the following provisions:

1. In the event that due to special circumstances it is necessary to give a limited price, specified price, or special price as a reference basis for the transaction price, the transaction shall be submitted for approval in advance by the board of directors, and the same procedures shall apply for any future changes to the terms and conditions of the transaction. 2. In the event that the transaction amount is NT$1 billion or more, appraisals from two or more professional appraisers shall be obtained. 3. Any one of the following circumstances applies with respect to the professional appraiser's appraisal results, unless all the appraisal results for the assets to be acquired are higher than the transaction amount, or the appraisal results for the assets to be disposed of are lower than the transaction amount, a certified public accountant shall be engaged to perform the appraisal in accordance with the provisions of Statement of Auditing Standards No. 20 published by the Accounting Research and Development Foundation (ARDF) and render a specific opinion regarding the reasons for the discrepancy and the appropriateness of the transaction price: (1) The discrepancy between the appraisal result and the transaction amount is 20% or more of the transaction amount. (2) The discrepancy between the appraisal results of two or more professional appraisers is 10% or more of the transaction amount.

In acquiring or disposing of real estate or other fixed assets where the transaction amount reaches 20 ％ of the Company's paid-in capital or NT$300,000,000 or more, the Company, unless transacting with a government agency, engaging others to build on its own land, engaging others to build on leased land, or acquiring or disposing of machinery and equipment for business use, shall first obtain an appraisal report from a professional appraiser and shall further comply with the following provisions:

1. Where due to special circumstances it is necessary to give a limited price, specified price, or special price as a reference basis for the transaction price, the transaction shall be submitted for approval in advance by the board of directors, and the same procedures shall apply for any future changes to the terms and conditions of the transaction.

2. Where the transaction amount is NT$1 billion or more, appraisals from two or more professional appraisers shall be obtained.

3. Where any one of the following circumstances applies with respect to the professional appraiser's appraisal results, a certified public accountant shall be engaged to perform the appraisal in accordance with the provisions of Statement of Auditing Standards No. 20 published by the Accounting Research and Development Foundation (ARDF) and render a specific opinion regarding the reasons for the discrepancy and the appropriateness of the transaction price: (1) Where the discrepancy between the appraisal result and the transaction amount is 20% or more of the transaction amount. (2) Where the discrepancy between the appraisal results of two or more professional appraisers is 10% or more of the transaction amount.

Amendment in compliance with the amended Regulations and add exceptions for seeking CPA’s opinions.

40

4. No more than 3 months may elapse between the date of the appraisal report issued by a professional appraiser and the contract execution date; provided, where the current land value for the same period announced by Ministry of Interior is used and not more than 6 months have elapsed, an opinion may still be issued by the original professional appraiser.

4. For appraisals made before signing a contract, no more than 3 months may elapse between the date of the appraisal report and the contract execution date; provided, where the current land value for the same period announced by Ministry of Interior is used and not more than 6 months have elapsed, an opinion may still be issued by the original professional appraiser.

10

The Company, acquiring or disposing of securities, shall, prior to the date of the occurrence of the event, obtain financial statements of the target companies for the most recent period, certified or reviewed by a certified public accountant, for reference in evaluating the transaction price, and if the amount of the transaction is 20% of the Company's paid-in capital or NT$300,000,000 or more, the Company shall additionally engage a certified public accountant prior to the date of the occurrence of the event to provide an opinion regarding the reasonableness of the transaction price. If the CPA needs to use the report of a financial advisor as a reference, the CPA shall do so in accordance with the provisions of Statement of Auditing Standards No. 20 published by the Accounting Research and Development Foundation (ARDF). This requirement does not apply, however, to publicly traded securities that have an active market, or where otherwise provided by regulations of the competent authority.

The Company acquiring or disposing of securities shall, first obtain financial statements of the target companies for the most recent period, certified or reviewed by a certified public accountant, for reference in evaluating the transaction price, and if the amount of the transaction is 20% of the Company's paid-in capital or NT$300,000,000 or more, the Company shall additionally engage a certified public accountant to provide an opinion regarding the reasonableness of the transaction price. This requirement does not apply, however, to publicly traded securities that have an active market, or where otherwise provided by regulations of the competent authority.

Amendment in compliance with the amended Regulations.

11

Where the Company acquires or disposes of memberships or intangible assets and the transaction amount reaches 20% or more of paid-in capital or NT$300,000,000 or more, the company shall engage a CPA prior to the date of occurrence of the event to render an opinion on the reasonableness of the transaction price; the CPA shall comply with the provisions of Statement of Auditing Standards No. 20 published by the ARDF.

Where the Company acquires or disposes of memberships or intangible assets and the transaction amount reaches 20% or more of paid-in capital or NT$300,000,000 or more, the Company shall engage a CPA to render an opinion on the reasonableness of the transaction price.


11-1 The transaction amounts referred to in the preceding three articles shall be calculated in accordance with paragraph 2 of Article 30 herein, and "within the preceding year"

(Newly Added) Amendment in compliance with the amended Regulations.

41

as used herein refers to the year preceding the date of occurrence of the transaction. The amounts due to professional appraisers for the appraisal report and CPA for CPA’s opinions can be excluded from the calculation.

Section 3

Related Party Transactions Acquiring Real Estate from Related Parties Amendment in compliance with the amended Regulations and strengthen the management of related party transactions.

13

When the Company engages in any acquisition or disposal of assets from or to a related party, in addition to ensuring that necessary resolutions be adopted and the reasonableness of the transaction terms be evaluated, if the transaction amount reaches 10% or more of the company's total assets, the Company shall also obtain an appraisal report from a professional appraiser or a CPA's opinion in compliance with the provisions of the preceding Section and this Section. The calculation of the transaction amount referred to in the preceding paragraph shall be made in accordance with Article 11-1 herein. When judging whether a trading counterparty is a related party, in addition to legal formalities, the substance of the relationships shall also be considered.

When the Company purchases or exchanges real estate from or to a related party, the Company shall ensure that necessary resolutions be adopted and the reasonableness of the transaction terms be evaluated in compliance with the provisions of the preceding Section and this Section. When judging whether a trading counterparty is a related party, in addition to legal formalities, the substance of the relationships shall also be considered.

Amendment in compliance with the amended Regulations and strengthen the management of related party transactions.

14

When the Company intends to acquire or dispose of real estate from or to a related party, or when it intends to acquire or dispose of assets other than real estate from or to a related party and the transaction amount reaches 20% or more of paid-in capital, 10% or more of the Company's total assets, or NT$300,000,000 or more, subject to mutatis mutandis application of paragraphs 2, 3 and 4 of Article 6, the Company may not proceed to enter into a transaction contract or make a payment until the following matters have been approved by more than half of all Audit Committee members, and then submitted to the board of directors for a

When the Company intends to acquire real estate from or to a related party, the Company shall not proceed to enter into an agreement or make a payment until the following matters have been approved by the board of directors and ratified by the supervisors:

Amendment in compliance with the amended Regulations and strengthen the management of related party transactions.

42

resolution: 1. The purpose, necessity and estimated benefit of the acquisition or disposal of assets. 2. (omitted) 3. With respect to the acquisition of real estate from a related party, information regarding evaluation of the reasonableness of the pre-determined transaction terms in accordance with Article 15 and Article 16. (4. to 5 omitted) 6. An appraisal report from a professional appraiser or a CPA's opinion obtained in compliance with the preceding article. 7. Restrictive covenants and other major terms associated with the transaction. The calculation of the transaction amounts referred to in the preceding paragraph shall be made in accordance with paragraph 2 of Article 30 herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the transaction. The amounts approved by the board of directors and ratified by the Audit Committee can be excluded from the calculation. With respect to the acquisition or disposal of business-use machinery and equipment between the Company and its subsidiaries, the Company's board of directors may pursuant to subparagraph 3, paragraph 1 of Article 7, delegate the chairman to decide such matters when the transaction is less than NT$300,000,000 and have the decisions subsequently ratified by the next board of directors meeting.

1. The purpose, necessity and estimated benefit of the acquisition of the real property. 2. (omitted) 3. Information regarding the evaluation of the reasonableness of the pre-determined transaction terms in accordance with Article 15 and Article 16.

(4 to 5 omitted)

6. Restrictive covenants and other major terms associated with the transaction. Where the position of independent director has been created in accordance with the provisions of the Securities and Exchange Act, when the transaction is submitted for discussion by the board of directors pursuant to the preceding paragraph, the board of directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the board of directors meeting. Where an Audit Committee has been established in accordance with the provisions of the Securities and Exchange Act, the matters per paragraph 1 requiring ratifications by the supervisors shall first be approved by half of all audit committee members or more and then submitted to the board of directors for resolutions, and shall be subject to mutatis mutandis application of paragraphs 4 and 5 of Article 6.

17

Where the Company acquires real estate from a related party and the results of appraisals conducted in accordance with Article 15 and Article 16 are uniformly lower than the transaction price, the following steps shall be taken: 1. (omitted)

Where a the Company acquires real estate from a related party and the results of appraisals conducted in accordance with Article 15 and Article 16 are uniformly lower than the transaction price, the following steps shall be taken: 1. (omitted)


43

2. The Audit Committee shall comply with Article 218 of the Company Act. 3. (omitted) (paragraph 2 and 3 omitted)

2. Supervisors shall comply with Article 218 of the Company Act. 3. (omitted) (paragraph 2 and 3 omitted)

20

(paragraph 1 omitted) Senior management authorized by the board of directors shall manage derivatives trading in accordance with the following principles: 1. (omitted) 2. When irregular circumstances are found in the course of supervising trading and profit-loss circumstances, due measures shall be adopted and reported immediately to the board of directors; and the independent director(s) shall be present at the board meeting and express opinions.

(paragraph 1 omitted) Senior management authorized by the board of directors shall manage derivatives trading in accordance with the following principles: 1. (omitted) 2. When irregular circumstances are found in the course of supervising trading and profit-loss circumstances, due measures shall be adopted and reported immediately to the board of directors; where the Company has independent directors, independent directors shall be present at the board meeting and express opinions.

Wording amendment.

21

(paragraph 1 omitted) The Company's internal audit personnel shall periodically examine the appropriateness of internal controls over derivatives trading and conduct a monthly audit of the compliance of derivatives trading by the trading department with the procedures, and prepare an audit report. In the event of any material violations, the Audit Committee shall be notified in writing.

(paragraph 1 omitted) The Company's internal audit personnel shall periodically examine the appropriateness of internal controls over derivatives and conduct a monthly audit of compliance of derivatives trading by the trading department with the procedures, and prepare an audit report. In the event of any material violations, all supervisors shall be notified in writing.


24

(paragraph 1 and 2 omitted) When participating in a merger, spinoff, acquisition, or share transfer where shares are listed on an exchange or traded on an OTC market, a full written record of the following information shall be kept for 5 years for reference: (1 to 3 omitted) When participating in a merger, spinoff, acquisition, or share transfer where shares are listed on an exchange or traded on an OTC market, within 2 days immediately from the date of passage of a resolution by the board of directors, report (in the prescribed format and via the Internet-based information system) the information set out in subparagraphs 1 and 2 of the preceding paragraph shall be sent to the FSC for review. (paragraph 5 omitted)

(paragraph 1 and 2 omitted) When participating in a merger, spinoff, acquisition, or share transfer where shares are listed on an exchange or traded on an OTC market, a full written record of the following information shall be kept for 5 years for reference. (1 to 3 omitted) When participating in a merger, spinoff, acquisition, or share transfer where shares are listed on an exchange or traded on an OTC market, within 2 days from the date of passage of a resolution by the board of directors, report (in the prescribed format and via the Internet-based information system) the information set out in subparagraphs 1 and 2 of the preceding paragraph shall be sent to the FSC for review. (paragraph 5 omitted)


30 Under any of the following circumstances, the Company acquiring or disposing of assets shall publicly announce and report the relevant

Under any of the following circumstances, the Company acquiring or disposing of assets shall publicly announce and report the

Amendment in compliance with the amended

44

information on the FSC's designated website in an appropriate format as prescribed by regulations within 2 days commencing immediately from the date of occurrence of the event: 1. Acquisition or disposal of real estate from

or to a related party, or acquisition or disposal of assets other than real estate from or to a related party where the transaction amount reaches 20% or more of paid-in capital, or 10% or more of the Company's total assets, or NT$300,000,000 or more, trading of government bonds or repurchase and resale agreements not applicable.

2. Merger, spinoff, acquisition, or transfer of shares.

3. Losses from derivatives trading reaching the limits of aggregate losses or losses on individual contract set out in the procedures adopted by the Company.

4. Any asset transactions other than those referred to in the preceding three subparagraphs, or an investment in the mainland China area with amount reaching 20% or more of paid-in capital or NT$300,000,000 ore more, the following circumstances shall not apply to:

((1) to (4) omitted) (5) Engaging others to build on the

Company's own land, engaging others to build on leased land, joint construction and allocation of housing units, joint construction and allocation of ownership, or joint construction and separate sale, with estimated amount of investment by the Company less than NT$500,000,000.

(paragraph 2 omitted) "Within the preceding year" as used in the preceding paragraph refers to the year preceding the date of occurrence of the transaction. Items duly announced in accordance with the Regulations need not be re-announced. (paragraph 4 and 5 omitted)

relevant information on the FSC's designated website in an appropriate format as prescribed by regulations within 2 days commencing from the date of occurrence of the event: 1. Acquisition real estate from or to a related

party. 2. Investment in the mainland China. 3. Merger, spinoff, acquisition, or transfer of

shares. 4. Losses from derivatives trading reaching

the limits of aggregate losses or losses on individual contract set out in the procedures adopted by the Company.

5. Any asset transactions other than those referred to in the preceding four subparagraphs, with amount reaching 20% or more of paid-in capital or NT$300,000,000 or more, the following circumstances shall not apply to: ((1) to (4) omitted) (5) Engaging others to build on the

Company's own land, joint construction and allocation of housing units, joint construction and allocation of ownership, or joint construction and separate sale, with estimated amount of investment by the Company less than NT$500,000,000.

(paragraph 2 omitted)

"Within the preceding year" as used in the second preceding paragraph refers to the year preceding the date of occurrence of the transaction. Items duly announced in accordance with the Regulations need not be re-announced. (paragraph 4 and 5 omitted)

Regulations, and strengthen the management of related party transactions. The investment in the mainland China shall comply with the Regulations.

45

31

Where any of the following circumstances occurs with respect to a transaction that the Company has already announced publicly and reported in accordance with the preceding article, a public announcement of relevant information shall be made on the information reporting website designated by the FSC within 2 days commencing immediately from the date of occurrence of the event: (sub-paragraph 1 and 2 omitted) 3. Change in the originally publicly announced and reported information.

Where any of the following circumstances occurs with respect to a transaction that the Company has already announced publicly and reported in accordance with the preceding article, a public report of relevant information shall be made on the information reporting website designated by the FSC within 2 days commencing from the date of occurrence of the event: (sub-paragraph 1 and 2 omitted)


32

(paragraph 1 omitted) Where the subsidiaries of the Company are required to make public announcements due to reach of 20% paid-in capital or 10% of total assets, in accordance with paragraph 1 of Article 30, the Company’s paid-in capital and total assets shall be applied as the bases.

(paragraph 1 omitted) Where the subsidiaries of the Company are required to make public announcements due to reach of 20% paid-in capital, in accordance with sub-paragraph 5, paragraph 1of Article 30, the Company’s paid-in capital shall be applied as the bases.


32-1

(Deleted) Where an Audit Committee has been established in accordance with the provisions of the Securities and Exchange Act, the provisions regarding supervisors set out in Articles 6, 8, and 14, and in paragraph 2 of Article 21, shall apply mutatis mutandis to the Audit Committee; the provisions set out in subparagraph 2, paragraph 1 of Article 17, shall apply mutatis mutandis to the independent directors of the Audit Committee.


32-1

(Newly Added) In the case of a foreign issuer whose shares have no par value or a par value other than NT$10, for the calculation of transaction amounts of 20% of paid-in capital under Articles 9 to 11, 14, 30, and 32, 10% of shareholders’ equity shall be substituted.

(Newly Added) Amendment in compliance with the amended Regulations

46

APPENDIXES

47

Appendix I

Shares Owned by Directors

As of April 24, 2012

Note:

1. According to Article 26 of Security and Exchange Act, total shares owned by all directors shall not be less than 2.4% of total shares issued, or 82,099,987 shares.

2. As the Company’s supervisors were replaced by the Audit Committee, the minimum holding requirement of supervisors no longer applies.

Title Name Current shareholding

Shares %

Chairman Fu-Chi Venture Corp. Representative: Richard Tsai 5,748,763 0.17%

Vice-Chairman Fu-Chi Venture Corp. Representative: Daniel Tsai 5,748,763 0.17%

Director Fu-Chi Venture Corp. Representative: Victor Kung 5,748,763 0.17%

Director TCC Investment Co., Ltd. Representative: Cliff 200,496,761 5.86%

Director TCC Investment Co., Ltd. Representative: Vivien Hsu 200,496,461 5.86%

Independent Director Jack J.T. Huang 0 0.00% Independent Director Tsung-Ming Chung 0 0.00% Independent Director Wen-Li Yeh 0 0.00% Independent Director J. Carl Hsu 0 0.00% The total shares owned by the directors were 206,245,524 shares, or 6.03% of the total issued shares.


48

Appendix II & III

Proposal on Employee Bonuses and Compensation to Directors

The proposal for 2012 earnings distribution has been resolved by the BOD as follows pending AGM approval

1. Proposed employee cash bonus: NT$362,844,193

Proposed remuneration to directors: NT$36,284,419.

2. The employee cash bonus and remuneration to directors were booked as expenses in 2011, and the amounts proposed by the BOD equals to the amount expensed.

Impact of Stock Dividend Distribution on Business Performance & EPS

Not applicable. The BOD proposes to distribute only cash dividend this year.


49

Appendix IV

Articles of Incorporation Last amended on June 15, 2011

Chapter I General Provisions

Article l The Company shall be incorporated as a company limited by shares, under the Company Act of the Republic of China. The name of the Company shall be 台灣大

哥大股份有限公司. Article 2 The scope of business of the Company shall be:

1. F401021 Regulated Telecom Radio Frequency Equipments and Materials Import; 2. G901011 Type I Telecommunications Enterprise; 3. G902011 Type II Telecommunications Enterprise; 4. ZZ99999 Any other business (other than those approved by the relevant

authorities) not prohibited or restricted by law. Article 3 The Company may act as a guarantor where necessary for the purpose of carrying

out its business. Article 4 The Company shall have its registered head office in Taipei, Taiwan, Republic of

China and shall, where necessary and with a resolution to do so by the Board of Directors (“Board”), set up branch offices either within or outside the territory of the Republic of China.

Article 5 (Deleted.) Article 6 The Company’s aggregate investment shall not exceed forty percent of its paid-up

capital. Chapter II Capital Stock Article 7 The total registered capital stock of the Company shall be Sixty Billion New Taiwan

Dollars (NT$60,000,000,000), divided into Six Billion (6,000,000,000) shares with a par value of Ten New Taiwan Dollars (NT$10) per share. Any unissued shares shall be issued, where necessary, upon the approval of the Board. The Company may issue preferred shares out of the above authorized capital stock.

Two hundred and fifty million shares of the above total capital stock of the Company with a par value of Ten New Taiwan Dollars (NT$10) per share shall be retained for the issuance of employee stock options, which may be issued from time to time upon the approval of the Board.

Article 7-1 Rights and obligations of the preferred shares are set out below:

(1) Holders of the preferred shares shall be entitled to receive prior to all other classes of


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shares dividends and bonuses payable annually each fiscal year, provided there are earnings after setting aside amounts for payment of taxes, recovery of prior year losses, and legal reserve.

(2) Holders of preferred shares shall be entitled to receive dividends and bonuses of 4.5% of the face value of the preferred shares per annum, in cash, payable in one installment; however, the entitlement to dividends and bonuses in the year in which the preferred shares are issued shall be proportional to the number of days in a fiscal year after the Date of Issue. (For the purpose of this Article, the Date of Issue shall mean the next day after the day on which the preferred shares are fully paid up.) Holders of preferred shares shall not be entitled to the aforesaid dividends and bonuses in the year in which the preferred shares are converted to common shares, but shall nevertheless be entitled to participate in the distribution of earnings and capital surplus of common shareholders in that year.

(3) Dividends and bonuses on the preferred shares shall be non-cumulative, if and to the extent that all or any part of the aforesaid dividends and bonuses are not paid because there is no or insufficient earnings in respect of a particular fiscal year.

(4) Holders of preferred shares shall not be entitled to participate in the distribution of earnings of the common shareholders.

(5) Holders of preferred shares shall not be entitled to participate in the recapitalization of retained earnings or capital surplus.

(6) Both holders of common shares and preferred shares shall be entitled to subscribe news shares issued by the Company in rights issues.

(7) Holders of preferred shares shall not be entitled to vote at any shareholders’ meetings of the Company and shall not have any rights of election.

(8) Holders of preferred shares shall have the right prior to the common shareholders to the distribution of the residual assets of the Company, provided however, the entitlement to the distribution shall not be in excess of the paid up capital of their respective preferred shares.

(9) Capital surplus from share premium attributable to the issuance of preferred shares shall not be transferred to the capital account, except for the purpose of recovery of prior year losses of the Company, prior to conversion of preferred shares to common shares, unless approved by two thirds of the preferred shareholders at the preferred shareholders’ meeting attended by at least one half of all preferred shareholders.

(10) Preferred shares shall not be converted to common shares during the circulation period of the preferred shares but shall all be converted to common shares two years after the date of issue. Each preferred share is convertible into one common share. Rights and obligations of the common shares converted from preferred shares shall be the same as those of the common shares.

Article 7-2 The Company may, upon the approval at a shareholders’ meeting which is attended

by shareholders holding at least 50% of the issued capital stock, by more than two-thirds of the shareholders attending the meeting, transfer the treasury shares to its employees at a price lower than the average buyback price.

Article 8 Share certificates of the Company shall be issued only if they bear the names of the

shareholders, be appropriately serial numbered, be signed by or affixed with the personal seals of three or more Directors of the Company, and be duly signed and authenticated by the responsible authority or a share registry endorsed by the regulatory authority. The Company is exempted from issuing any physical share certificates for the shares issued. A physical share certificate may be issued for all the new shares issued at a particular point in time, provided that the share certificate shall be placed in custody or for registration with a centralized depositary.

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Article 9 Shareholders shall provide their names, addresses, and a sample of their personal

seals to the Company for record. The same shall also be provided upon variation of any of the above details. Where any personal seals of the shareholders are lost, the sample of the personal seals shall only be replaced with a new sample if the shareholders report the loss to the Company.

Article 10 Upon transfer of shares, the transferor and transferee shall complete an application

for registration of the transfer and affix their personal seals on the application. The application and the associated share certificates, affixed with the personal seals of the transferor and transferee on the back page, together with other documents evidencing the transfer, shall be submitted to the Company for the purpose of registration of the transfer. The transferee shall not have a right of action against the Company with respect to matters associated with or arising from the transfer if the name of the transferee is not recorded on the share certificates and the name and address of the transferee are not entered onto the register of shareholders of the Company.

Article 11 Where a share certificate is lost, the shareholder shall immediately file an application

to report the loss and submit the same to the Company for audit and record. The shareholder shall also apply to the competent court for a judgment declaring the original share certificate invalid, in accordance with the procedures for public announcement of invalidation of a certificate under the Code of Civil Procedures. After obtaining the judgment from the court, the shareholder shall apply to the Company for the share certificate to be reissued, with the original copy of the aforementioned court judgment. Where a share certificate is worn out or defaced and the shareholder wishes to apply for a replacement of the share certificate, the shareholder shall apply to the Company for the replacement by submitting to the Company the original copy of the share certificate with a completed application for replacement of share certificate.

Article 12 The Company shall charge for administrative fees and stamp duties for the reissue of

share certificates due to loss of the original share certificates or for other reasons. Article 13 Registration of share transfers shall be suspended for a 60–day period immediately

prior to a general meeting of the shareholders; for a 30–day period immediately prior to an extraordinary meeting of the shareholders; and for a 5–day period immediately prior to the record date for distribution of dividend, bonuses or other benefits.

Article 14 Shareholders shall submit a sample of their personal seals to the Company for record.

The same personal seals shall be used by the shareholders for the purposes of claiming their dividends and when exercising their rights as shareholders via written documents.

Chapter III Shareholders' Meetings Article 15 There are two types of shareholders’ meetings: the general meetings and the

extraordinary meetings.

(1) General Meetings – General meetings shall be held within 6 months of the end of each fiscal year, and shall be convened by the Board with no less than 30 days’ prior

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notice to the shareholders. (2) Extraordinary Meetings – Extraordinary meetings shall be convened in accordance

with the relevant laws, with no less than 15 days’ prior notice to the shareholders. Article 16 A shareholder is entitled to appoint a proxy to attend and vote on behalf of the

shareholder at a shareholders’ meeting by completing and submitting to the Company a form prescribed by the Company stating the scope of authorization.

Article 17 The Chairman or, in his absence, the Vice Chairman, shall preside as the chairman of

the shareholders’ meetings of the Company. If neither the Chairman nor the Vice Chairman shall be present at the meetings, the Chairman shall designate one of the Directors as the chairman, failing which, the Directors present at the meetings shall elect the chairman from amongst themselves.

Article 18 Except under the circumstances set forth in Article 179 of the Company Act,

shareholders of the Company shall be entitled to one vote for each share held at the shareholders’ meeting.

Article 18-1 Shareholders may exercise their voting rights in written or electronic form at the shareholders’ meetings. Article 19 Unless otherwise provided by the Company Act, all resolutions of a shareholders

meeting of the Company shall be passed, at a meeting attended by shareholders holding at least 50% of the issued capital stock, by more than 50% of the shareholders attending the meeting.

Article 20 Resolutions at a shareholders’ meeting shall be recorded in a meeting minute signed

by or affixed with the personal seal of the chairman. The meeting minute shall be distributed to all the shareholders of the Company within 20 days after the shareholders’ meeting, except however, for shareholders with less than 1,000 shares, public announcement of the meeting minute shall suffice. The meeting minute shall contain information such as the time and venue of the meeting, name of the chairman of the meeting, manner in which resolutions are passed, and a summary and outcome of all proceedings of the meeting.

Chapter IV Directors and Supervisors Article 21 There shall be 9 to 11 Directors and 2 to 3 Supervisors of the Company. Directors

and Supervisors shall be persons with legal capacity and shall be elected by the shareholders at the shareholders’ meeting. The tenure of offices of Directors and Supervisors shall be 3 years and the Directors and Supervisors shall be eligible for re-elections. No more than half of the Directors of the Company shall have the following relationships among them:

1. A spousal relationship. 2. A familial relationship within the second degree of kinship.

And Supervisors, or one or more Supervisors and Directors shall not have the following relationships among them:

1. A spousal relationship. 2. A familial relationship within the second degree of kinship.

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The Chairman and the Vice Chairman shall be elected from amongst the Directors by a simple majority of the Directors present at the Board meetings attended by at least two thirds of all the Directors.

The Company may purchase liability insurance for directors and supervisors with respect to their liabilities resulting from exercising their duties during their terms of occupancy.

Article 21-1 According to Article 14-2 of Securities and Exchange Act, among the directors, there

shall be no less than 3 independent directors, and the election of independent directors is adopted by candidate nomination systems per in Article 192-1 of Company Act. To conform with Article 14-4 and Article 181-2 of Securities and Exchange Act, the ipso facto dismissal of supervisors will be applied when an audit committee is established.

Article 22 If one third of the offices of Directors become vacant, the Board shall convene an extraordinary meeting of the shareholders within 60 days to re-elect and re-appoint Directors to fill the vacancies. The tenure of offices so filled shall be the balance of the term of the relevant offices.

Article 23 If any new Directors or Supervisors are not elected in time before the expiration of

the tenure of the relevant existing offices of Directors or Supervisors, the tenure of the existing offices shall be extended until such time when the new Directors or Supervisors duly elected to assume their offices.

Article 24 The business policy and other imperative matters of the Company shall be

determined by the Board. The Board shall be entitled to form different functional committees such as, Corporate Governance Committee and Audit Committee etc., and determine the duties and responsibilities of the committees. Except for the first meeting of each term of the Board which shall be convened by the Director who received a ballot representing the largest number of votes at the election of Directors, Board meetings shall be convened by the Chairman, who shall also be the chairman of the meetings. If the Chairman is unable to perform his duties for any reasons, the Vice Chairman shall act on his behalf. If the Vice Chairman is also absent from the meetings, the Chairman shall designate one of the Directors to act on his behalf, failing which, the Directors present at the meetings shall elect a person from amongst themselves to act on behalf of the Chairman. The notice of the Board meeting may be made and delivered by letter, email or facsimile.

Article 25 Unless otherwise provided for in the Company Act, all resolutions of the Board shall

be passed by a simple majority of Directors present at Board meetings attended by at least 50% of all Directors. If a Director is unable to attend the meeting, he shall be entitled to authorize another Director to represent him at the meeting by executing a power of attorney stating therein the scope of authorization with respect to each matter proposed at the meeting, however, a Director attending the meeting shall not be authorized to represent more than one absent Directors at the meeting. If any Director attends the Board meeting by video conference, it is deemed that such Director has participated in person.

Article 26 All proceedings at a Board meeting shall be recorded in a meeting minute signed by

or affixed with the personal seal of the chairman of the meeting. The meeting minute shall be distributed to all Directors of the Company within 20 days after the

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Board meeting. The meeting minute shall contain information such as the time and venue of the meeting, name of the chairman of the meeting, manner in which resolutions are passed, and a summary and outcome of all proceedings of the meeting.

Article 27 Supervisors shall independently exercise their supervisory powers in accordance

with the relevant laws and shall be entitled to attend the Board meetings. Supervisors, however, shall not be entitled to vote at the aforesaid meetings.

Article 27-1 If all Supervisors of the Company are discharged, the Board shall, within 60 days,

convene an extraordinary meeting of the shareholders to elect new Supervisors. Article 27-2 The Board is authorized to decide the Chairman and Vice Chairman’s remunerations

which should not be higher than the upper limit on the remunerations payable to the President of the Company.

Article 27-3 The Board is authorized to decide the remuneration for directors (including

independent directors), according to his/her contribution to the operation and involvement in the operation of the Company, comparable to peer’s levels, transportation and other allowance included.

Chapter V Managers and Officers Article 28 There shall be several Presidents and Vice Presidents of the Company. The President

shall be nominated by the Chairman; and his appointment or removal shall be approved by more than 50% of the Directors. The Vice Presidents shall be nominated by the President; and their appointment or removal shall be approved by more than 50% of the Directors.

Article 29 The Company may, by resolution of the Board, retain consultants or key officers. Article 29-1 The Company shall purchase liability insurance for key management based on their

duties and terms. Chapter VI Financial Reports Article 30 The fiscal year of the Company shall begin on 1 January and end on 31 December of

each year. The Board shall prepare the following reports after the end of each fiscal year, present the same first to the Supervisors for their inspection at least 30 days prior to the general meeting of the shareholders, and then to the shareholders at the general meeting of the shareholders for their ratifications:

(4) Business Report (5) Financial Statements (6) Proposal for distribution of earnings to shareholders or recovery of prior year losses.

Article 31 The profits of the Company of each fiscal year shall first be applied to payment of

taxes and recovery of prior year losses, 10% of which balance shall then be set aside as Legal Reserve. Thereafter, the Company shall set aside special reserves in accordance with the law or to satisfy the business needs of the Company. Any balance left over shall be applied in the following order:

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(1) Dividends and bonuses for preferred shareholders; (2) Remuneration of Directors and Supervisors, not exceeding 0.3%; (3) Employee bonuses in the sum of 1% to 3%; (4) The balance shall be distributed to the shareholders as dividends and bonuses in

accordance with resolutions of the shareholders’ meetings. If any of the employee bonuses referred to in Item (3) above shall be paid in the form

of bonus shares, the employees entitled to such bonus shares may include employees of subsidiaries of the Company satisfying certain criteria. The criteria and the proportion of such employee bonus shares distributable shall be determined by the Board.

Article 31-1 The Company adopts a dividend distribution policy whereby only surplus profits of

the Company shall be distributed to shareholders. That is, only the surplus profit, after setting aside amounts for retained earnings based on the Company’s capital budget plan, shall be distributed as cash dividend. The value of stock dividend in a particular year shall not be more than 80% of the value of dividend distributed for that year. The amount of the distributable dividend, the forms in which dividend shall be distributed and the ratios thereto, shall depend on the actual profit and funding position of the Company and shall be approved by resolutions of the Board, who shall, upon such approval, recommend the same to the shareholders for approval by resolution at the shareholders’ meetings.

Article 32 The internal organization and the detailed procedures relevant to the business

operation of the Company shall be separately determined by the Board. Article 33 Matters not specifically provided for in these Articles of Incorporation shall be

governed by the Company Act and any other relevant laws. Article 34 The Articles of Incorporation were agreed to and signed on 30 January 1997.

The first amendment was made on 18 February 1997. The second amendment was made on 22 February 1997. The third amendment was made on 2 April 1997. The fourth amendment was made on 30 August 1997. The fifth amendment was made on 12 December 1997. The sixth amendment was made on 21 March 1998. The seventh amendment was made on 23 June 1998. The eighth amendment was made on 3 February 1999. The ninth amendment was made on 22 June 1999. The tenth amendment was made on 6 March 2000. The eleventh amendment was made on 30 March 2001. The twelfth amendment was made on 30 March 2001. The thirteenth amendment was made on 26 April 2002. The fourteenth amendment was made on 25 June 2003. The fifteenth amendment was made on 15 June 2004. The sixteenth amendment was made on 14 June 2005. The seventeenth amendment was made on 15 June 2006.

The eighteenth amendment was made on 15 June 2007. Except for the Article 7-2, which shall be effective on January 1st 2008, these Articles of Incorporation and amendments thereto shall be effective upon approval by the general meetings.

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The nineteenth amendment was made on 13 June 2008. The twentieth amendment was made on 19 June 2009. The twenty-first amendment was made on 15 June 2011.

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Appendix V

Rules and Procedures Governing Shareholders’ Meeting Officially resolved in the Founders Meeting held on September 30, 1997

First amendment was approved by the Shareholders’ meeting on April 26, 2002 Second amendment was approved by the Shareholders’ meeting on June 15, 2006

Article 1: The Company’s Shareholders’ meeting (the “Meeting”) shall be conducted in accordance with the Rules and Procedures. Article 2: Shareholders attending the Meeting shall submit the attendance card for the purpose of signing in. Representatives appointed by institutional shareholders to attend the Meeting shall submit the Letter of Appointment and the supporting identification documents of the appointee upon signing in. If an institutional shareholder appoints both a proxy and a representative, the appointed representative shall be accepted. The Meeting shall be held at the Company’s headquarter or at a place that is both convenient for shareholders to attend and suitable for holding the Meeting. The Meeting shall start not earlier than 9:00 a.m. or later than 3:00 p.m. The Company may appoint designated counsel, Certified Public Accountant or other relevant persons to attend the Meeting. The staff in charge of handling the affairs of the Meeting shall wear badges. If the Meeting is called by the board of directors, the board chairman shall preside at the Meeting. In case the chairman is on leave of absence, or cannot exercise his powers and authority, the vice chairman shall act in lieu of him. If the vice chairman is also on leave of absence, or cannot exercise his powers and authority, the chairman shall designate a director to act in lieu of him. If the chairman does not designate a director, the directors shall elect one from among themselves to act in lieu of the chairman. If the Meeting is called by any other person than the board of directors, who has the right to call the Meeting, the said person shall preside at that Meeting. If there are more than two said persons calling the Meeting, one of the two persons shall be chairing the Meeting. The entire proceedings of the Meeting shall be tape recorded or videotaped and these tapes shall be archived for a minimum of one year. Article 2-1: Shareholder(s) holding one percent (1%) or more of the total number of outstanding shares of the Company may propose to the Company a proposal for discussion at the Meeting, but only one matter shall be allowed in each single proposal, and in case a proposal contains more than one matter, such proposal shall not be included in the agenda. The board of directors shall not include a proposal into the agenda if the proposal falls under any clause set forth in Company Act Article 172-1, Paragraph 4. Prior to the date on which share transfer registration is suspended before the convention of the Meeting, the Company shall give a public notice announcing the place and the period for shareholders to submit proposals for discussions at the Meeting; and the period for accepting such proposals shall not be less than ten(10) days.


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The number of words of a proposal to be submitted by a shareholder shall be limited to no more than three hundred (300) words, and any proposal containing more than 300 words shall not be included in the agenda of the Meeting. The shareholder who has submitted a proposal shall attend, in person or by a proxy, the Meeting where his proposal is to be discussed and shall take part in the discussion of such proposal. The Company shall, prior to preparing and delivering the Meeting notice, inform the proposal submitting shareholders of the results of the proposal, and shall list in the Meeting notice the proposals conforming to the requirements set out in this rule. With regard to the proposals submitted by shareholders but not included in the agenda of the Meeting, the cause for exclusion of such proposals and explanation shall be made by the board of directors at the Meeting to be convened. Article 3: The presence of shareholders in the Meeting and their voting thereof shall be calculated in accordance with the number of shares. The number of shares representing shareholders present at the Meeting shall be calculated based on the submitted attendance cards plus the number of shares whose voting powers are exercised in writing or by way of electronic transmission. Article 4: The chairman shall call the Meeting to order at the time scheduled for the Meeting provided that the number of shares represented by the shareholders present at the Meeting reaches the specified quorum. The chairman may postpone the start time for the Meeting if the number of represented shares has not yet constituted the quorum at the time of the Meeting. The number of postponement shall be limited to a maximum of two times and each postponement shall not exceed thirty minutes. If after two postponements no quorum can yet be constituted but the number of represented shares is more than one-third of the total issued shares, tentative resolutions may be made by a majority vote of the present shareholders in accordance with Article 175 of the Company Act. If during the process of tentative resolutions the number of represented shares becomes sufficient to constitute the quorum, the Chairman may call the Meeting to order and submit the tentative resolutions to the Meeting for approval. Article 5: If the Meeting is convened by the board of directors, the agenda of the Meeting shall be set by the board of directors. Unless otherwise resolved at the Meeting, the Meeting shall proceed in accordance with the scheduled agenda. If the Meeting is convened by any person other than the board of directors, the provision set forth in the preceding paragraph shall be applicable mutatis mutandis. Unless otherwise resolved at the Meeting, the chairman shall not adjourn the Meeting until the discussion items (including extraordinary motions) listed on the agenda have been resolved. After the Meeting is adjourned, the shareholders shall not appoint another chairman to continue the Meeting at the same place or at a new location unless the chairman has violated the Rules and Procedures for the Meeting in adjourning the Meeting. Article 6: During the proceedings of the Meeting, the chairman may, at his discretion, set time for intermission.

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Article 7: When a shareholder present at the Meeting wishes to speak, the shareholder shall first fill out a slip, specifying therein the shareholder’s serial number (or the number of attendance card), the name of the shareholder, and the key points of the speech. The chairman shall determine the sequence of speeches by the shareholders. If any shareholder present at the Meeting submits a slip for speech but does not speak, no speech shall be deemed to have been made by such shareholder. In case there is a discrepancy between the contents of the speech and the contents specified on the slip, the contents of actual speech shall prevail. Article 8: A shareholder shall not speak more than two times for each discussion item, unless with the prior consent from the chairman, and each speech shall not exceed 5 minutes. Article 9: In case the speech of a shareholder violates the time provisions or exceeds the scope of the discussion item, the chairman may stop the speech of such shareholder. While a shareholder is speaking, other shareholders shall not interrupt the speech unless the shareholders have obtained prior consent of the chairman and the speaking shareholder. Otherwise, the chairman shall stop such interruption. If the offender defies the order to stop, Article XIV shall be applicable. Article 10: Any legal entity designated as proxy by a shareholder to be present at the Meeting may appoint only one representative to attend the Meeting. If an institutional shareholder designates two or more representatives to attend the Meeting, only one representative may speak for each discussion item. Article 11: After the speech of a shareholder, the chairman may respond in person or appoint an appropriate person to respond. When the chairman considers that the discussion item has reached the extent for making a resolution, he may announce discontinuance of the discussion and submit the motion for resolution. Article 12: Unless otherwise specified for in the Company Act or the Articles of Incorporation of the Company, resolutions shall be adopted by a majority vote at the Meeting. The resolution is deemed to have been adopted if no objection is heard in response to the chairman’s inquiry. Such a resolution is equivalent to a decision duly resolved through voting. In case of an amendment or an alternative to a discussion item, the chairman shall determine the sequence of voting. If any one of them has been resolved, the other(s) shall be deemed vetoed and no further voting is necessary. Each share hereof is entitled to one voting power. However, shares that fall under the clause set forth under Article 179-2 of the Company Act shall have no voting power. Except for trust enterprises or stock agencies approved by the competent authority, when a person who acts as the proxy for two or more shareholders, the number of voting power represented by the person shall not exceed 3% of the total number of voting shares of the company, otherwise, the portion of excessive voting power shall not be counted. Article 13: The persons for supervising the casting of votes and the counting thereof for resolutions shall be designated by the chairman. The person supervising the casting of votes, however, shall be a shareholder. The results of resolution(s) shall be announced in the Meeting, and recorded in the

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Meeting minutes. Article 14: The chairman may direct disciplinary (or security) personnel to assist in maintaining the order of the Meeting. Such disciplinary (or security) personnel shall wear badges marked “Disciplinary Personnel” for identification purpose. The chairman or the disciplinary (or security) personnel may expel anyone who disturbs the order of the Meeting. Article 15: If the continuation of the Meeting proves to be impossible due to force majeure, the chairman may suspend or reschedule the Meeting. Article 16: Any matters not provided in the Rules and Procedures shall be handled in accordance with the Company Act, Articles of Incorporation of the Company and relevant laws and regulations. Article 17: The Rules & Procedures were put into effect by the Founders’ Meeting. Any amendments are subject to the approval of the Shareholders’ Meeting.

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