● The High-Availability systems in our data centers deploy firewall and Intrusion Prevention System, or IPS, to defend against hacker’ attacks, and the web application programs enforce penetration test to ensure the security of our customers’ information. 

● The network equipments in our data centers could distinguish DDoS threats and reject or block the attacks. In the future, we could even block the DDoS traffic over the backbone network. 

On April 27, 2010, the R.O.C. legislature passed the Personal Information Protection Act. or PIPA, which may become fully effective in 2012 and will be applied to all individuals, legal entities and enterprises that collect, process and use personal information. Furthermore, PIPA will have a significant impact on the banking and service industries in Taiwan. Under the amendments, the level of responsibility and liability on personal information protection of a company will be raised. We need to conduct inventory checks of personal information that we currently hold, establish standard operating procedures, or SOP, to comply with the requirements under PIPA, and take information security measures to protect the data. 

To comply with the PIPA, we implemented a series of measures to avoid the customer’s information leakage: 

●  The customer information systems have been enforced on firewall and IPS to avoid hacker’s attacks. 

● Regular internal audit: Our auditing department completes an annual audit plan and regularly audits information circulation in each department on customer information management and protection. 

● External consulting: We, in accordance with the PIPA, request accounting firms not performing audit service for us to conduct external consulting every year on customer information management and protection. 

● Documents  containing customer’s personal information are labeled highly confidential. All levels of managers shall monitor the usage of customers’ personal information by employees. 

## Properties 

Our properties consist mainly of land, land improvements and buildings located throughout Taiwan. We own approximately 411 hectares of land and 3.5 million square meters of building floor space. In January 2008, we established Light Era Development Co., Ltd. for the purpose of developing our real estate properties. As of December 31, 2011, we have transferred six properties to Light Era. Five of these properties are under development. The Wan-Xi project, Li-Shui B project and LightEra-Covent Project have been completed in 2011 and the Guang-Dian project and Li-Shui A project are expected to be completed in 2012. Following the gradual completion of land rezoning, we have focused our real estate development more towards multiuse and diverse projects. Hence, besides the six properties we transferred to Light Era, we have developed more properties for commercial use and participated in government urban redevelopment plans. We have received approximately NT$696 million (US$22.7 million) in rental income in 2011 from such properties, and expect to receive approximately NT$515 million (US$15.6 million) in 2012. 

## Insurance 

We do not carry comprehensive insurance for our properties or any insurance for business disruptions. We do, however, maintain in-transit insurance for key materials, such as cables, equipment and equipment components. We carried insurance for the ST-1 satellite until July 1, 2011 when it ceased business operation. We do not carry insurance for the ST-2 satellite since we only lease capacity for our operations instead of owning the satellite. 

## Employees 

Please refer to “Item 6. Directors, Senior Management and Employees—D. Employees” for a discussion of our employees. 

