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Note 36 to our audited consolidated financial statements included elsewhere in this annual report provides a description of the significant difference between R.O.C. GAAP and U.S. GAAP as they related to us and a reconciliation of net income and stockholders’ equity. 

## C. Research, Development, Patents and Licenses, Etc. 

## Research and Development 

Our research and development efforts are focused on the development of advanced network services and operation technologies as well as the development of core technologies for the domestic telecommunications market. For 2009, 2010 and 2011, our research and development expenses were approximately NT$3.2 billion, NT$3.2 billion and NT$ 3.5  billion (US$ 116.5  million), respectively, or approximately 1.6%, 1.6% and  1.6 % of our revenues, respectively. 

As of March 31, 2012, we have more than 2,213 researchers focusing on the following areas: 

● wireless communication; 

● broadband transmission and access; 

● Internet and multimedia applications; 

● network operation support; 

● customer service information; 

● Information and communication security; 

● advanced technologies research; and 

● customer premises equipment. 

We have developed a number of advanced network services, operation technologies and applications and value-added services, including our xDSL/FTTx deployment, internet-based call center, e-commerce platform, mobile internet services, global standard for mobile communications billing system, a new telecommunications operation service system for all business units of our company, government public key infrastructure, a leased line testing and monitoring system and an intelligent transportation system. As of December 31, 2011, we have been granted 360 domestic patents and 60 foreign patents. 

