Market risk is the risk of loss related to adverse changes in market prices, including interest rates and foreign exchange rates, of financial instruments. In the normal course of business, we are routinely subject to a variety of risks, including market risk associated with interest rate movements, currency rate movements on non-NT dollar-denominated assets and liabilities and equity price movements on our portfolio of equity securities. We regularly assess these financial instruments and their ability to address market risk and have established policies and business practices to protect against the adverse effects of these and other potential exposures. Interest Rate Risk We do not expect interest rate risk to have a material impact on our financial condition and results of operations. Please refer to “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources” for a discussion of our loans. For our non-fixed interest rate loans, the interest rates will change in accordance with the benchmark rates of the banks we borrowed from. For the financial assets, the risk associated with fluctuating interest rates is principally confined to our cash deposits in banks, which is one of the many ways we manage our capital. Assuming an increase or decrease of 0.25% in the interest rates of our non-fixed interest rate financial assets and loans, our profit before tax for the year ended December 31, 2025 would have increased or decreased by NT$42 million (US$1.3 million). We have not used any derivative financial instruments to hedge interest rate risk. We have not been exposed, nor do we anticipate being exposed to material risks due to changes in interest rates. As of December 31, 2025, our cash and cash equivalents amounted to NT$36.9 billion (US$1.2 billion). Interest income from our cash deposits in banks accounts for only a very small percentage of our total revenues. Therefore, we believe our exposure to interest rate risk is immaterial. Foreign Currency Risk We are exposed to foreign currency risk as a result of (i) our foreign currency and derivative trading activities; (ii) our telecommunications equipment being sourced from overseas suppliers; (iii) our international settlement payments associated with our services for international calls and roaming traffic; and (iv) investment denominated in foreign currencies. We entered into forward exchange contracts to reduce our exposure to foreign currency risk due to fluctuations in exchange rates. Outstanding forward exchange contracts on December 31, 2025 were as follows: FX Instrument Currencies Involved Maturity Period Contract Amount Forward exchange contracts-Buy NT$/USD January 2026 NT$30 million/USD1.0 million Forward exchange contracts-Buy NT$/EUR January 2026 NT$55 million/EUR1.5 million Forward exchange contracts-Buy NT$/EUR March 2026 NT$89 million/EUR2.5 million Forward exchange contracts-Buy NT$/EUR March 2026 NT$89 million/EUR2.5 million 86 Note 38 to our consolidated financial statements included elsewhere in this annual report provides a sensitivity analysis for foreign currency risk. Equity Price Risk We are exposed to equity price risk as a result of holding other company’s equity and we manage our investment portfolio in accordance with our internal policies and procedures. The table below presents the carrying amount and accumulated unrealized gain or loss for our financial assets at fair value through profit or loss, or FVTPL, and financial assets at fair value through other comprehensive income, or FVOCI, as of December 31, 2025. Carrying Amount Unrealized Gain Unrealized Loss NT$ NT$ NT$ (in millions) Financial assets at FVTPL Non-listed stocks and limited partnership 1,141 11 401 Financial assets at FVOCI Listed stocks 316 127 182 Non-listed stocks 6,490 1,877 687 The value of our equity holdings fluctuates depending on the market conditions. Assuming an increase or decrease of 5% in the equity prices, our profit before tax and other comprehensive income before tax for the year ended December 31, 2025 would have increased or decreased by NT$57 million (US$1.8 million) and NT$340 million (US$10.8 million) as a result of the changes in fair value of financial assets at FVTPL and financial assets at FVOCI, respectively. However, we do not expect the gains and losses in the values of the equities that we hold to have a material impact on our financial condition and results of operations.