Chapter 1  General Principles

Article 1  Chunghwa Telecom Co., Ltd. (herein referred to as the "Company") has hereby determined the
             Code of Corporate Governance for Chunghwa Telecom Co., Ltd. in accordance with the "Corporate
             Governance Best-Practice Principles for TSE/GTSM Listed Companies" drafted by the Taiwan Stock
             Exchange Corporation (herein referred to as "TSEC") and GreTai Securities Market in order to
             establish a sound corporate governance system.

Article 2  In addition to abiding by laws and the articles of incorporation, the corporate governance system
             established by the Company shall uphold the following principles:

             1. Establish an effective corporate governance structure.

             2. Protect shareholders' rights and interests.

             3. Strengthen the functions of the Board of Directors.

             4. Fulfill the function of supervisors.

             5. Respect for stakeholders' rights and interests.

             6. Enhance information transparency

Article 3  The Company shall, pursuant to the Regulations Governing Establishment of Internal Control
             Systems by Public Companies, establish an effective internal control system in consideration of the
             overall operating activities of the Company and its subsidiaries, and shall regularly review said
             system in order to ensure the continued effectiveness of its design and implementation in light of
             changes in the Company's internal and external environment.

             The determination or revision of the internal control system shall be submitted to the Board for
             approval; any opposed or qualified opinions stated by independent directors shall be explicitly
             recorded in the Board meeting minutes.

             Apart from effectively implementing self-audits of the internal control system, the Company's
             Board and the management shall review self-audit results of each department and the audit
             reports of audit organization at least once each year; the supervisors shall pay close attention
             to and supervise this review work. The directors and supervisors shall hold a meeting in person
             every year with internal auditors to review the internal control system for deficiency(ies), and duly
             keep in minutes or other records.

             The Company's management shall place importance on the internal audit department and its
             personnel, grant  it full authority, and urge it to conduct audits effectively, evaluate the deficiencies
             in the internal control system and assess the Company's operating efficiency to ensure the system
             can be carried out effectively on a continuous basis and can assist the Board of Directors and the
             management to execute their responsibilities, and thereby make the corporate governance system
             practicable.

             For the purpose of raising and preserving the quality and effect of execution for practicing sound
             internal control system, strengthening professional ability of the substitutes of the internal auditors,
             the Company shall establish designated substitutes of internal auditors.

             Article 11, paragraph 3 regarding the prerequisites for internal auditors, and article 16, 17 and 18
             of the Regulations Governing Establishment of Internal Control Systems by Public Companies shall
             apply mutatis mutandis to the preceding paragraph.

Chapter 2  Protection of Shareholders' rights and interests

Section One  Encouraging Shareholders to Participate in Corporate Governance

Article 4  The Company shall take protection of shareholders' rights and interests as its foremost goal when
             implementing the corporate governance system, and shall treat all shareholders equally.

             The Company shall establish a corporate governance system that can ensure shareholders’ right to
             know, right to participate and right to determine the Company's material matters, all in accordance
             with the laws.

Article 5  The Company shall convene shareholders meetings in accordance with the Company Act and
             relevant laws and regulations, and shall establish comprehensive meeting rules of order; any
             matters that must be determined by resolution of the shareholders meeting shall be implemented
             in accordance with the meeting rules of order.

             The content of resolutions of the shareholders meeting shall comply with laws, regulations, and
             articles of incorporation of the Company.

Article 6  The Company's Board shall properly arrange shareholders meeting discussion topics and
             procedures. Each issue shall be allotted to reasonable time for discussion in the shareholders
             meeting, and shareholders shall be given appropriate opportunities for speaking out.

             A majority of the directors shall personally attend shareholders meetings convened by the Board.

Article 7  The Company shall encourage shareholders to participate in corporate governance, and shall
             hold shareholders meetings in a legal, effective, and secure manner. The Company shall employ
             all types of methods and channels as well as make full use of technological methods of
             information disclosure to increase the percentage of shareholders attending the shareholders
             meeting, and shall ensure that shareholders may fulfill their shareholders' rights at the
             shareholders meeting in accordance with relevant laws.

Article 8  The Company shall record minutes of the shareholders meeting in accordance with the Company
             Act and other relevant laws and regulations.

             Elections of Directors and Supervisors shall be explicitly specified to be the resolution by voting
             with the weighted numbers of voting rights that elected directors and supervisors received.

             The shareholders meeting minutes shall be kept indefinitely and appropriately as long as the
             Company is in existence, and should be sufficiently disclosed on the Company's website.

Article 9  The chairman of shareholders meeting shall be fully aware of and comply with the Company’s
             Ordinance of Shareholders Meeting, ensuring the proper progress of the proceedings of the
             agenda, and may not arbitrarily declaring adjournment of the meeting.

             In order to protect the rights and interests of the majority of shareholders, if the chairman
             declares the adjournment of a meeting in violation of the meeting rules of order, the other
             members of the Board should quickly assist attending shareholders, in accordance with
             statutory procedures, to elect one person as chairman on the basis of the majority of
             shareholders' voting rights, and continue the meeting.

Article 10  The Company shall place high importance on shareholders' right of being informed and
             thoroughly comply with relevant regulations concerning information disclosure to regularly
             and promptly provide shareholders the information concerning the Company's finances,
             operations, insiders shareholdings and corporate governance by using of the Market
             Observation Post System or the Company's website.

Article 11  Shareholders shall have the right to share the Company's earnings. In order to
             safeguard shareholders' investment rights and interests, the shareholders meeting may,
             in accordance with Article 184 of the Company Act, audit statements and books produced
             by the Board and supervisors' audit reports, and resolve to distribute earnings or decide
             deficit off-setting plans. The shareholders meeting may appoint an inspector to perform the
             foregoing audit tasks.

             Shareholders may, in accordance with Article 245 of the Company Act, apply with the court to
             appoint an inspector to audit the Company's accounts of operation and property holdings.

             The Board, supervisors, and managers shall comply fully with the audit tasks performed by
             the inspector in the two foregoing paragraphs, and may not attempt to obstruct, refuse, or
             evade the inspector's work.

Article 12  To protect shareholders' rights and interests, the Company shall handle major financial
             actions, including acquisition or disposal of assets, lending capital to and making endorsements
             or providing guarantees for any other entities, in accordance with relevant laws and regulations,
             and shall draft and submit relevant handling procedures to the shareholders meeting for approval.

             In the event of Management Buyout (MBO), the Company may, in addition to abiding by relevant
             laws and regulations when handling the matter, establish an objective and independent committee
             to review the reasonableness of the buyout price and buyout plan and shall pay attention to follow
             such rules related to information disclosure.

             Any of the Company's personnel, when handling matters prescribed in the above paragraph, shall
             take note of any conflicts of interest and the need to rescue.

Article 13  To protect shareholders' rights and interests, the Company should have dedicated personnel to
             properly handle shareholders' recommendations, questions, and disputes.

             If a resolution of the shareholders meeting or a board meeting violates laws and regulations or
             the articles of incorporation, or if the directors, supervisors, or managers violate laws and
             regulations or the articles of incorporation in the course of their duties, and results in harming
             shareholders' rights and interests, the Company shall appropriately handle any lawsuits
             initiated by shareholders in accordance with law.

Section Two  Corporate Governance Relationship Between the Company and Affiliated Enterprises

Article 14  The allocation of management authorities and responsibilities over personnel, assets and
            financial affairs of the Company and its affiliated enterprises shall be clearly identified; risk
            evaluation shall be conducted exactly and appropriate firewalls shall be established.

Article 15  Unless otherwise provided by the laws and regulations, the Company's managers may not
            concurrently serve as managers at affiliated enterprises.

             A director, who engages on behalf of himself or third party within the scope of the Company's
             operations, shall explain the major content of such actions to the shareholders meeting and
             obtain the latter's consent.

Article 16  The Company shall establish sound management systems for finance, operations, and
             accounting in accordance with relevant laws and regulations. It shall further properly perform
             overall risk evaluation with its affiliated enterprises on main correspondent banks, customers,
             and vendors, and shall implement necessary control mechanisms in order to lessen credit risk.

Article 17  Based on the principles of fairness and reasonableness, when the Company has a business
             transaction with an affiliated enterprise, the Company shall determine written standards for the
             conduct of mutual financial and business operations.

             Transactions or contractual matters between the Company and related parties and shareholders
             shall also be conducted according to the principles set forth in the foregoing paragraph, and
             tunneling of benefit shall be strictly prohibited.

Article 18  A juristic shareholder having controlling power over the Company shall comply with the following
             provisions:

             1. It shall bear a duty of good faith to other shareholders and shall not directly or indirectly
                 cause the Company to be engaged in transactions at other than arm!|s length or involved in
                 a management conduct for illegal profit.

             2. Its representative shall follow the Company's regulations with respect to the exercise of rights
                 and participation in resolution, so that at shareholders meeting, the representative shall
                 exercise his/her voting right for the best interest of all shareholders and in good faith and
                 exercise the fiduciary duty of care of a directors and supervisors.

             3. It shall comply with relevant laws, regulations, and the Articles of Incorporation of the Company
                 in nominating of the Company's directors and supervisors and shall not act beyond the authority
                 granted by the shareholders meeting or the board meeting.

             4. It shall not improperly intervene in corporate policy making or obstruct corporate management
                 activities.

             5. It shall not restrict or impede the Company's production operations by methods of unfair
                 competition such as monopolizing corporate procurement or foreclosing sales channels.

Article 19  The Company shall ensure the command at any time of information on the identity of major
             shareholders, who own the higher percentage of shares and have an actual control over the
             Company, and its ultimate control persons.

             To enable other shareholders to exercise supervision function, the Company shall regularly disclose
             important information about its shareholders holding more than ten percent of the outstanding
             shares relating to the pledge, increase or decrease of share ownership, or other important matters
             that may possibly trigger a change in the ownership of their shares.

Chapter 3  Enhancing the Functions of the Board of Directors

Section One  Structure of the Board of Directors

Article 20  The Board of Directors of the Company shall be accountable to the shareholders at the
             shareholders’ meetings with respect to all procedures and arrangements under the corporate
             governance system, so as to ensure the Directors’ proper conduct of its duties in compliance with
             the applicable laws, regulations and Articles of Incorporation as well as corporate resolutions
             approved by the shareholders.

             Regarding the structure of the Board of Directors of the Company, the number of directors, which
             shall be more than five, shall be properly determined by reviewing the scale of corporate
             management and operation and the shareholding of the major shareholders and taking into
             consideration of the practical needs for operation.

             The Board member shall possess the necessary knowledge, skill, and experience for performing
             their duties. In order to achieve the ideal goals of corporate governance, the Board of Directors
             shall possess the following abilities:

             1. ability to make operational judgment

             2. ability to perform accounting and financial analysis

             3. ability to conduct management administration

             4. ability to conduct crisis management

             5. possession Industrial knowledge

             6. possession perspective of International market

             7. ability to lead

             8. ability to make decisions

Article 21  The Company shall incorporate a fair, just, and open procedure for the election of directors, and
             adopt the cumulative voting mechanism in order to fully reflect shareholders’ views.

             A majority of the Company's directors may not be the spouse of or relative two-degree of
             consanguinity with each other.

             The Company shall elect a director to fill the vacancy at the first subsequent shareholders meeting
             after a  director has been released for a particular reason and the Board is left with less than five
             members. If, however, the number of vacancies exceeds one-third of the number of directors
             designated in the Articles of Incorporation, the Company shall, within 60 days after the vacancies
             arise, convene a special shareholders meeting to elect for filling the vacancies.

             The aggregate shareholding percentage of all of the directors of the Company shall comply with
             the laws and regulations. Restrictions on the share transfer of each director and the creation,
             release, or changes of any pledges over the shares held by each director shall be subject to the
             relevant laws and regulations, and the relevant information shall be fully disclosed.

Article 22  Before the Company convenes a shareholders’ meeting to re-elect the directors, the
             qualifications, education, working experience, background and the existence of any other
             matters set forth in Article 30 of the Company Act with respect to the candidates recommended
             by shareholders or directors should be reviewed in advance and the result thereof be provided to
             shareholders for their reference, so that qualified directors will be elected.

Article 23  The responsibilities and duties of the Chairman, CEO, and president shall be clearly distinct.

             It would be inappropriate for the Chairman to also act as the president. If the chairman also acts
             as the president or they are spouses or relatives within one degree of consanguinity, the number
             of independent directors should be increased.

Section Two  The Independent Director System

Article 24  In accordance with the Articles of Incorporation, the Company shall have three independent
            directors.

             The Company's independent directors shall be elected via a nomination system; elections shall be
             held as prescribed in Article 12-1 of the Articles of Incorporation.

             Independent directors and non-independent directors may not switch their status during their terms
             of appointment.

             The subsequent shareholders meeting shall have election to fill the vacancy if an independent
             director is released for a particular reason and the number of independent directors is less than the
             number designated in the first paragraph or in the Articles of Incorporation. If the independent
             directors are all released, the Company shall, within 60 days after the vacancies arise, convene a
             special shareholders meeting to  elect for filling the vacancies.

             The independent directors, when carrying out their duties, shall maintain their independence and
             may not have any direct or indirect interest with the Company. Regarding directors' professional
             qualifications, shareholding and multiple posts holding restrictions as well as determination of
             independency, manner of nomination and other matters requiring compliance, shall be  handled
             in accordance with the Securities and Exchange Law,  Regulations Governing Appointment of
             Independent Directors and Compliance Matters for Public Companies and other regulations and
             rules set forth by the Taiwan Stock Exchange.

Article 25  Except when approved by the competent authority, the following matters shall be submitted to
             the Board for approval; any opposed or qualified opinions stated by independent directors shall
             be explicitly stated in the Board meeting minutes:

             1. Determination or revision of the internal control system in accordance with Article 14-1 of the
                 Securities and Exchange Law.

             2. Determination or revision in accordance with Article 36-1 of the Securities and Exchange Law of
                 procedures for handling major financial and operational actions such as acquisition or disposal
                 of assets, implementation of derivatives trading, lending of funds, and endorsements or
                 providing of guarantees to third parties.

             3. Matters in which directors or supervisors have a personal interest.

             4. Transactions involving material assets or derivatives.

             5. Material fund lending, and endorsements or guarantees for others.

             6. Offering, issuing, or private offering of equity-type securities.

             7. Appointment/dismissal and compensation of the certifying certified public accountant.

             8. Appointment and dismissal of officers of finance, accounting, and internal audit departments.

             9. Other material matters designated by the authority.

Article 26  The Company shall stipulate expressly the scope of duties of the independent directors and
             empower them with manpower and material support related to the exercise of their powers.

             Neither the Company nor other members of the Board shall restrict or obstruct the independent
             directors' performance of their duties.

             The Company shall expressly stipulate independent directors' compensation in Articles of
             Incorporation or pursuant to a resolution of the shareholders meeting.  The compensation to
             the directors shall adequately reflect the long-term performance of the Company, and shall
             comprehensively contemplate the risks of running a business. Different but reasonable
             compensation from that of other directors may be set forth for independent directors.

Section Three  Functional Committees

Article 27  For the purpose of developing monitoring functions and  strengthening management
            mechanisms, the Board of Directors of the Company may, taking into account the basis of the
            size of the Board and number of independent directors, set up functional committees and have
            them stipulated in the Articles of Incorporation.

            Functional committees shall be responsible to the Board and submit proposals to the Board of
            Directors for approval.

            Functional committees shall adopt organizational regulations governing the exercise of their
            power and duty to be approved by the Board of Directors. The content of organizational rules
            shall include the number of committee members, term of appointment, authority and duties,
            meeting rules and resources to be provided by the Company to facilitate the committee's
            carrying out its duties.

Article 28  The Board shall establish an Audit Committee comprising the three independent directors;
            one of the audit committee's members shall serve as chairman, and at least one member
            shall possess professional expertise in accounting or finance.

            The Company's Audit Committee shall perform its main duties as prescribed in the
            organizational regulations of audit committee.

Article 28~1: The Company’s Board shall set up a Compensation Committee.  The Compensation
            Committee shall consist of at least three directors, including at least (one) independent
            director(s) who shall be the president of the meeting of the Committee.

            The Compensation Committee shall give advice to the Board of Directors regarding the
            compensation policy for the directors, supervisors and managerial officers.

            The compensation policy of the Company shall not lead the directors and managerial officers
            to conduct activities at excessive risks for the Company.

Article 29  The Company shall select a professional, responsible, and independent certifying CPA to
            perform regular review of the financial conditions and internal control measures of the Company.
            With regard to the irregularity or deficiency timely discovered and disclosed by the CPA during
            the review, and the concrete measures for improvement or prevention suggested by the CPA,
            the Company shall faithfully implement improvement actions.

            The Company shall evaluate the independence of the CPA engaged by the Company regularly
            and no less frequently than once annually. In the event that the Company engages the same
            CPA without replacement for five years consecutively, or if the CPA is subject to disciplinary
            actions or other circumstances prejudicial to the independence of the CPA, the Company shall
            review the necessity of replacing the CPA, and shall submit the conclusion of such review to the
            Board.

Article 30  The Company should engage a competent and professional legal counsel to provide adequate
           legal consulting services to the Company, or to assist the directors, the supervisors and the
           management improve their knowledge of the law, for the purpose of preventing any infraction by
           the Company or its staff of laws or regulations, and ensuring the corporate governance matters
           will proceed pursuant to the relevant legal framework and prescribed procedures.

           In the event that  the directors, supervisors, or the management are involved in litigation as result
           of performing his or her duties as provided by the law or arising from shareholders disputes,
           depending on the circumstances, the Company shall retain a legal counsel to provide assistance.

           The Audit Committee may, on behalf of the Company, engage a legal Counsel, CPA, or other
           professional to perform necessary auditing tasks or provide consulting services in connection with the
           committee's exercise of its powers; the Company shall bear responsibility for payment of the
           expenses so incurred.

Section Four  Rules for the Proceedings of Board Meetings and the Decision-making Procedures

Article 31  The Company shall convene the Board meeting once every two months, and may convene the
           Board at any time when urgent circumstances have arisen. When convening the Board, the Company
           shall state the main contents of the meeting, notify all directors to attend at the designated time,
           and invite supervisors to attend in a non-voting capacity. The Company shall also provide sufficient
           meeting materials when notifying the directors. If the provided materials are insufficient, the directors
           have the right to request supplementary information, or may delay deliberation following a Board
           resolution.

           The Company shall draft the regulations governing procedures for Board meetings and report the
           same to the shareholders meeting. Regulations governing major deliberation items, operating
           procedures, items to be explicitly stated in the minutes, announcements, and other binding matters
           shall comply with the Regulations Governing Procedure for Board of Directors Meetings of Public
           Companies.

Article 32  A director shall exercise a high degree of self-discipline and shall voluntarily abstain from voting,
           for himself or herself or as proxy for another director, on a proposal submitted to the Board of
           Directors that risks the involvement of the director!|s own interest to the detriment of the interest
           of the Company. The directors shall also practice self-discipline as to their internal relationship and
           must not support each other in an inappropriate manner.

           The matters that a director shall voluntarily abstain from voting shall be clearly set forth in the rules
           for the proceedings of the board meetings.

Article 33  The independent directors shall attend meetings in person, and may not appoint a
           non-independent director to attend in their stead, when the Board discusses matters that must be
           submitted to the Board pursuant to Article 14-3 of the Securities and Exchange Law. Independent
           directors' opposed or qualified opinions shall be explicitly recorded in the Board meeting minutes.
           If an independent director cannot attend a Board meeting in person to express an opposed or
           qualified opinion, unless he or she has a legitimate excuse, the independent director shall submit
           a written opinion in advance; said opinion shall be explicitly recorded in the Board meeting minutes.

           In the foregoing paragraph, the Company shall announce publicly and report on the information
           reporting website designated by the competent authority within two days after the Board meeting.

           When the content of proposals to be discussed warrants, the Board may notify managerial personnel
           in relevant departments who don!|t have the title as directors to attend the Board meeting in a
           non-voting capacity in order to report on the Company's current business situation and respond to
           inquiries raised by the directors. When necessary, the Board may also invite the CPA, legal counsel,
           or other professional to attend the meeting in a non-voting capacity to assist the directors in
           understanding the conditions of the Company for the purpose of adopting an appropriate resolution.

Article 34  In accordance with relevant regulations, staff personnel of the Company attending Board
           meetings shall collect and correctly  record the meeting minutes in detail, and the summary,
           method of resolution, and voting results of all the proposals submitted to the Board meeting.

           The Board meeting minutes shall be signed by the chairman and secretary of the Board
           meeting. The director attendance records should be kept completely. Board meeting minutes
           shall be treated as important corporate records and be placed in safekeeping permanently as
           long as the company is in existence.

           The minutes may be produced, distributed, and kept via electronic methods.

           The Company shall make audio or video recordings of Board meetings, and shall keep such
           recordings for at least five years. Recordings may be kept via electronic methods.

           If a lawsuit concerning a relevant Board resolution occurs before the end of the preservation period
           mentioned in the foregoing paragraph, relevant archival audio or video recordings shall be kept
           indefinitely, and the regulations of the foregoing paragraph shall not apply.

           When a Board meeting is held by means of videoconferencing, audio and video recordings of the
           meeting shall be part of the minutes, and shall be kept indefinitely.

           Where a resolution of the Board violates laws, regulations, articles of incorporation, or resolutions
           adopted in the shareholders meeting, and thus causes an injury to the Company, dissenting
           directors whose dissent can be proven by minutes or written statements will not be liable for
           damages.

Article 35  The Company shall submit the following matters to the Board for discussion:

           1. The Company's operating plan.

           2. Annual and semiannual financial statements.

           3. Determination or revision of the internal control system in accordance with Article 14-1 of the
               Securities and Exchange Law.

           4. Determination or revision in accordance with Article 36-1 of the Securities and Exchange Law of
               procedures for handling major financial actions such as acquisition or disposal of assets,
               implementation of derivatives trading, lending of funds, and endorsements or providing of
               guarantees to third parties.

           5. Offering, issuing, or private offering of equity-type securities.

           6. Standards of performance evaluation and compensation of the managerial officers.

           7. The compensation structure and system of directors.

           8. Appointment and dismissal of officers of finance, accounting, and internal audit departments.

           9. Matters that must be decided by a resolution of the shareholders meeting or submitted to the
               Board in accordance with Article 14-3 of the Securities and Exchange Law or the articles of
               incorporation of the Company, or other material matters designated by the authority.

           The company shall submit the minutes of the seminars regarding the problems and review of the
           internal control system to the board of directors and make a report to the same.

           Apart from matters in the foregoing paragraph that shall be submitted to the Board for discussion,
           the Chairman and CEO or president shall exercise the powers of the Board in accordance with the
           table of scope of duties of the Board and the management when the Board is adjourned. However,
           matters involving the Company's material interests must still be decided by resolution of the Board.

Article 36  The Company shall ask the appropriate corporate department or personnel to handle matters and
           implement actions pursuant to the Board of Directors' resolutions in a way consistent with the
           program schedule and objectives. It shall also follow up on these matters and faithfully review their
           implementation.

           The Board of Directors shall ensure full control of implementation and progress of these matters and
           make a report in subsequent meeting so as to ensure that the Board!|s management decisions are
           faithfully implemented.

Article 37 Board members shall faithfully conduct corporate affairs and discharge the duty of care as a good
           administrator. In conducting the affairs of the Company, they shall exercise their power with a
           hightened level of self-discipline and prudential attitude.

           Unless matters are reserved for shareholders meeting by law or in the articles of incorporation of the
           Company, they shall ensure that all matters will faithfully adhere to the Board's resolutions.

           Where resolutions of the Board involve major policy directions and the corporate management, the
           Board shall make careful consideration and may not affect the implementation and effectiveness of
           corporate governance.

           Independent directors shall perform duties faithfully in accordance with laws and ordinances and the
           Company’s Articles of Incorporation so as to safeguard the interests of the Company and the
           Company’s shareholders.

           The Company’s Board shall assess the performance of the Board of Directors, the Functional
           Committees and respective directors by means of self-evaluation, peer evaluation, evaluation by
           out-sourcing professional institutions, or any other methods as deemed appropriate.

Article 37-1:The Company shall establish a succession plan for management. The Board of Directors shall
           evaluate the development and implementation of the said plan on a regular basis to assure the
           sustainability of the performance of the said plan.

Article 38  If a resolution of the Board of Directors violates laws, regulations or the Company’s articles of
           incorporation, at the request of shareholders holding shares continuously for a year or an
           independent director, or at the notice of a supervisor to discontinue the implementation of the
           resolution, members of the Board shall promptly take appropriate measures or discontinue the
           implementation of such resolution as soon as possible.

           Upon discovering any threat of the Company suffering material injury, members of the Board shall
           immediately report to the independent directors or supervisors in accordance with the foregoing
           paragraph.

Article 39  The Company may take out liability insurance for directors with respect to their liabilities resulting
           exercising their duties during their terms of occupancy so as to reduce and spread the risk of material
           harm to the Company and shareholders arising from any illegal conduct.

Article 40  Members of the Board should participate in training courses, offered by an organization designated
           in the Advanced Study Promotion Guidelines for the Directors and Supervisors of TSE/GTSM Listed
           Companies, of finance, risk management, business, commerce, accounting or law which cover subjects
           relating to corporate governance upon becoming directors and throughout their terms of occupancy.
           They should also ensure that the Company employees at all levels will enhance their professionalism
           and knowledge of the law.

Chapter 4  Empowering the Supervisors

Section One  Duties of Supervisors

Article 41  The Company shall stipulate a fair, impartial, and open procedure for the election of supervisors,
           and shall adopt the cumulative voting mechanism to fully reflect the opinions of shareholders, unless
           a different mechanism has otherwise been implemented in the articles of incorporation.

           The aggregate shareholding percentage of all of the supervisors of the Company shall comply with
           laws and regulations.

           Restrictions on the share transfer of each supervisor and the creation, release, or other changes of
           any pledges over the shares held by each supervisor shall comply with the relevant laws and
           regulations, and the relevant information shall be fully disclosed.

Article 42  Before the Company convenes a shareholders’ meeting to re-elect the supervisors, the
           qualifications, education, working experience, background and the existence of any other matters set
           forth in Article 30 of the Company Act apply with respect to the candidates recommended by the
           shareholders or directors should be reviewed in advance and the results thereof be provided to
           shareholders for their reference, so that qualified supervisors will be elected.

Section Two  Duties and Obligations of Supervisors

Article 43  At least one of the Company's supervisors may not be the spouse of or share kinship of the
           second-degree or closer with another supervisor or director.

           The election of supervisors shall be held in accordance with the Company's "Regulations of Election
           of Directors and Supervisors." Supervisors should have a domicile within the territory of R.O.C. in
           order to timely perform the supervisory functions.           

Article 44  A supervisor shall be familiar with the relevant laws and regulations, understand the rights,
           obligations, and duties of the directors of the Company and the functions, duties, and operation of
           each department, and frequently attend meetings of the Board of Directors to supervise the
           operations and to state his/her opinions when appropriate so as to control or discover any abnormal
           situation early on.

           The Company shall expressly stipulate the compensation of the supervisors in the Articles of
           Incorporation of the Company or reach a resolution through the shareholders meetings.

Article 45  A supervisor shall supervise the implementation of operations of the Company, and the
           performance of duties by directors and managers, and care the enforcement of the internal control
           system as to reduce the financial and operational risks of the Company.

           Where a director, for himself/herself or on behalf of others, enters into a sale/purchase or loan
           transaction, or conduct any legal act with the Company, a supervisor shall act as the representative
           of the Company.

Article 46  A supervisor shall investigate the operational and financial conditions of the Company from time
           to time, and the relevant departments in the Company shall provide the books or documents that
           will be needed for supervisor's review.

           When reviewing the finance or operations of the Company, a supervisor may retain attorneys or
           accountants on behalf of the Company to perform the review; however, the Company shall inform
           the relevant persons of their confidentiality obligations.

           The Board of Directors or managers shall submit reports in accordance with the request of the
           supervisors and shall not for any reason attempt to obstruct, circumvent, or refuse the inspection
           of the supervisor.

           When a supervisor performs his/her duties, the Company shall provide necessary assistance as
           needed by the supervisor, and the reasonable expenses that the supervisor needs shall be borne
           by the Company.

Article 47  For supervisors to timely discover any possible irregular conduct in the Company,  the Company
           shall establish a channel for supervisors to communicate with  relevant persons.

           Upon discovering any irregular conduct, a supervisor shall take appropriate measures timely to curb
           the expansion of the irregular conduct, and file a report to the relevant regulatory authorities if
           necessary.

           When any of the independent directors, President, officers of finance, accounting, R&D, and internal
           audit departments, or CPAs resigns or is removed from his/her position, the supervisors shall further
           investigate the reason thereof.

           In the event that a supervisor neglects his/her duties and therefore causes harm to the Company,
           the supervisor shall be liable for compensation to the Company.           

Article 48  When exercising her/her supervisory power, each supervisor of the Company, after taking into
           consideration the overall interest of the Company and shareholders, convene a meeting to exchange
           opinions among all the supervisors when he or she feels necessary, but may not by such way obstruct
           each supervisor in exercising his/her duties.

Article 49  The Company may take out liability insurance for supervisors with respect to their liabilities resulting
           from exercising their duties during their terms of occupancy so as to reduce and spread the risk of
           material harm to the Company and shareholders arising from any illegal conduct.

Article 50  Supervisors should participate in training courses, offered by an organization designated in the
           Advanced Study Promotion Guidelines for the Directors and Supervisors of TSE/GTSM Listed Companies,
           of finance, risk management, business, commerce, accounting or law which cover subjects relating to
           corporate governance upon becoming supervisors and throughout their terms of occupancy.

Chapter 5  Respecting Stakeholders' Rights

Article 51  The Company shall maintain open communication channels with correspondent banks and other
           creditors, employees, consumers, vendors, the community, and all other parties connected with the
           Company's interests, and shall respect and maintain those parties' due lawful rights and interests.

           In the event of management buyout, the Company shall take note of the subsequent impact on the
           overall soundness of the Company's financial structure.

           The Company shall take appropriate action in the principle of good faith when the lawful rights and
           interests of stakeholders are infringed. 

Article 52  The Company shall provide full information to correspondent banks and other creditors in order
           to facilitate their judgments concerning the Company's operating and financial status and
           decision-making process. The Company shall respond proactively when the lawful rights and interests
           of these parties are infringed, and shall give creditors appropriate routes for redress with a forthright
           and responsible attitude.

Article 53  The Company has established communication channels with employees, and encourages employees
           to appropriately express their opinions concerning the Company's operating and financial status and
           major decisions affecting employees'  interests.           

Article 54  The Company shall show concern for consumers' rights and interests while it maintains normal
           operations and seeks to maximize stockholders' interests. The Company will actively participate in
           various types of activities through marketing packaging to enhance the Company's public-spirited
           image and fulfill its social responsibilities.           

Chapter 6  Enhancement of Information Transparency

Section One  Strengthening Information Disclosure

Article 55  The Company shall certainly discharge its duties of information disclosure in accordance with
           relevant laws and regulations, including regulations of Taiwan Stock Exchange.

           To ensure the prompt, appropriate disclosure of information that may affect the decisions of
           shareholders and stakeholders, the Company shall designate specific personnel to be in charge of
           information collection and disclosure, and shall establish a spokesperson system.

Article 56  To enhance the accuracy and efficiency of information disclosure, the Company shall assign
           persons who have a comprehensive understanding of the Company's finances and operations,
           or who are able to coordinate the provision of relevant data from individual displays, and who are
           able to single-handedly speak on behalf of the Company to the public, to serve as the Company's
           spokespersons and deputy spokespersons.           

          The Company shall assign more than one deputy spokespersons, and each one shall be able to
          speak single-handedly on behalf of the spokesperson when the spokesperson is unable to perform
          the speaking duties. However, to avoid confusion, the Company shall confirm the order in which
          deputy spokespersons perform their duties.

          In order to effectively implement its spokesperson system, the Company shall explicitly prescribe
          unified speaking procedures, and shall request management and employees to maintain the
          confidentiality of financial and business secrets and not arbitrarily disseminate information without
          authorization.

          Any changes in the status of spokespersons or deputy spokespersons shall be promptly disclosed.

Article 57  The Company should establish a website in order to take advantage of the speed and
           convenience of the Internet.

           The Company shall post the information regarding finance, operation and corporate governance on
           said website to facilitate the reference for shareholders and stakeholders.

           The Company should also provide an English version of such on the website.

           The website in the foregoing paragraph shall be maintained by specific personnel. To avoid
           misleading information, posted data shall be accurate, in detail and updated timely.           

Article 58  The Company shall hold institutional investor conferences in accordance with Taiwan Stock
           Exchange regulations, and should keep audio or video recordings of said conferences.

           Financial and operation information disclosed at investor conferences shall be filed on the
           designated Internet information posting system of the Taiwan Stock Exchange in accordance with
           Taiwan Stock Exchange regulations, and shall be provided for queries via the Company's website
           or other appropriate channels.           

Section Two  Disclosure of Corporate Governance Information

Article 59  The Company shall disclose the information regarding corporate governance in the fiscal year
           in accordance with relevant laws and regulations, including Taiwan Stock Exchange regulations.

           1. Corporate governance framework and rules.

           2. The ownership structure and the shareholders’ equity of the Company.

           3. The structure and independence of the Board of Directors.

           4. Responsibility of the Board of Directors and managerial officers.

           5. The composition, duties, and independence of the Audit Committee or supervisors.

           6. The composition, duties, and operation of the Compensation Committee.

           7. The compensation of the directors, supervisors, president and senior vice president in the most
               recent year; the analysis regarding the percentage ratio of the aggregate remuneration divided
               into the net profit after tax; the compensation policy, standards and composition; the process of
               determining the compensation, and the relation with performance; In particular situation, the
               compensation of respective directors or supervisors may be disclosed.

           8. Training status of the directors and supervisors.

           9. Rights and relationship of stakeholders.

         10. Detailed status of the information disclosure required by laws and regulations.

         11. The difference between the operation status of the Company, the Code of Corporate Governance
               for the Company, and the Corporate Governance Best-Practice Principles for TSEC/GTSM Listed
               Companies; the reasons for the difference.

         12. Other information relating to corporate governance.

           The Company should, according to the actual performance of the corporate governance, disclose
           the specific plans and measures to improve its corporate governance via appropriate
           mechanisms.           

Chapter 7  Supplementary Provisions

Article 60  The Company shall at all times monitor the domestic and international development of corporate
           governance and thereby review and revise its corporate governance system so as to enhance the
           performance of corporate governance.