FSC - AGM Information 2021 | FinancialReports.eu

Stock Code: 2601

FIRST STEAMSHIP COMPANY LIMITED

2021 Regular Shareholding Meeting Handbook June 11, 2021

One. Meeting Procedure	2
Two Meeting Agenda	3
I. Report Items
(i). 2020 business report	4
(ii). Audit Committee’s audit of 2020 final accounting reports	12
(iii). Remuneration distribution for directors and employees for 2020	13
(iv). Endorsement and guarantee in 2020	14
(v). Investment status and operating performance of reinvested
enterprises in 2020	15
(vi). Issuance of overseas convertible bonds	17
(vii). Private placement of domestic or overseas convertible bonds in
2020	18
II. Proposed Resolutions
(i). 2020 business report and financial statements	19
(ii). 2020 appropriation of profit or loss	39
III. Other Proposals:
(i). Removal of restrictions on directors’ competition for business	41
IV. Extraordinary Motions	42
V. Adjournment	42
Three. Appendices
I. Article of Incorporation	43
II. Rules of Procedure for Shareholder Meeting	53
III. Shareholding of directors	65
IV. Proposals for the shareholder meeting	67

Meeting Procedure for FIRST STEAMSHIP COMPANY LIMITED 2021 regular shareholder meeting

I. Call the meeting to order

II. Chair Address

III. Report Items

IV. Proposed Resolutions

V. Other Proposals:

VI. Extraordinary Motions

VII. Adjournment

Meeting Agenda for FIRST STEAMSHIP COMPANY LIMITED 2021 Regular Shareholder Meeting

Time: 9:00 am, June 11, 2021 (Friday)

Location: International Conference Hall, B1F., No. 231, Sec. 2, Jianguo S. Rd.,

Taipei City

I. Call the meeting to order

II. Chair Address

III. Report Items

(i). 2020 business report

(ii). Audit Committee’s audit of 2020 final accounting reports

(iii). Remuneration distribution for directors and employees for 2020

(iv). Endorsement and guarantee in 2020

(v). Investment status and operating performance of reinvested enterprises in 2020
(vi). Issuance of overseas convertible bonds
(vii). Private placement of domestic or overseas convertible bonds in 2020
IV. Proposed Resolutions
(i). 2020 business report and financial statements
(ii). 2020 appropriation of profit or loss proposal
V. Other Proposals:

(i). Removal of restrictions on directors’ competition for business

VI. Extraordinary Motions

VII. Adjournment

Report Items

Report no. 1

2020 Business Report

Business Report

The consolidated operating revenues of FIRST STEAMSHIP COMPANY in 2020 were NT$6,441,828 thousand, 20.78% lower than the NT$8,132,005 thousand in 2019. After tax, the net loss were NT$321,142 thousand, where the stand-alone net loss after-tax attributable to FIRST STEAMSHIP COMPANY were NT$286,807 thousand. Basic loss per share were NT$0.42, diluted loss per share NT$0.42, and net worth per share NT$12.50 .

I. 2020 Business Overview

(i). Marine Transportation Business

In 2020, the covid-19 epidemic ravaged the w

orld. All countries adopted the lockdown policy, which seriously affected people's free movement and severely set back the development of the global economy. Major economic powerhouses such as the United States, Japan, China, Germany, and Russia, etc. all sacrificed economic and financial development while preventing the spread of the epidemic in their countries. Unemployment rose sharply, domestic consumption shrank, the overall macro economy plummeted, crude oil prices plunged, and trade volumes decreased.

The international dry bulk freight market was affected by the negative growth of the global economy caused by the covid-19 pandemic, and the freight rates were also fluctuating sharply. The epidemic has caused major shipbuilding countries to delay or cancel ship deliveries, and the reduced supply of vessels has eased the downward pressure on the market. The steady growth in demand for grains and iron ore and the decline in fuel oil prices also added some momentum to the market, contributing to a strong rebound in July's freight market. In the second half of the

year, the freight rate finally broke away from the negative shadow. On the whole, the annual freight rate showed a trend of low first and high afterward.

In response to the fluctuations in the international dry bulk marine transportation market, the fleet is operated on a short and long-term charter basis. The marine fleet consists of 9 vessels, all within 10 years of age, 2 of which are operated under profitable long-term contracts and 7 operated under charter or in association with a syndicated fleet. Combining the two operating strategies has enabled the marine transportation business unit to grow steadily in an uncertain environment.

As of the end of 2020, the FIRST STEAMSHIP fleet consisted of 9 vessels, including 3 KAMSARMAX, 4 SUPRAMAX, and 2 HANDY. With a total tonnage of 536,706.8 tons, the nine vessels are leased out by time or syndicated operation to ship or cargo owners with high creditworthiness and large companies. Some are chartered out on a long-term contract with fixed rent to obtain higher freight rates for cargo contracts with operational advantages.

(ii). Department Store Business

At the beginning of 2020, the sudden outbreak of COVID-19 stroke us all, challenging China’s retail business, which we have never seen. At the start of this pandemic, the authority of every region announced the Level 1 Public Health Emergency of International Concern (PHEIC) as the countermeasure. Fifteen stores of Grand Ocean all stopped operations until the end of January due to the authority's requests, and the three stores located at Wuhan were even closed for 67 days. Facing the influence of COVID-19, Grand Ocean started to take the initiative and promote the deep integration of multi-formats, trans-fields, polymerization, scenarization, and synchronization. Through information and technology, we significantly develop quality sales, smart sales, crossover fusion, and boundless retail. We dedicate ourselves to improving quality and efficiency, meeting the increasing demands of our consumers.

（ 1 ） For the impact brought by COVID-19, Grand Ocean took several countermeasures as the followings.
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① Thus we are one of the first corporations to resume operations.
② Response to the authority’s policy by using “evening economy” to resurrect consumer flow.
③ Pay all the expenses on time, relieve the rent for our partnerships when our stores were closed, as well as deposit-free, rent and fees reduction after our stores reopened.
（ 2 ） In 2020 we had accomplished the adjustment of format transition on the 5[th] floor at Hengyang Store, plan of the categorized boutiques as well as the return of LOUIS VUITTON on the 1[st] floor at Fuzhou Store No.2. Moreover, the environmental sets on the 8[th] and the 9[th] floors as well as the project of newly purchased surrounding areas on the 1[st] and the 2[nd] floors at Shiyan Store are ongoing. Reasonable arrangement and traffic flow and flawless scenario upgrade both elaborate the functions to improve the comfort of shopping, as well as introduce the formats and brands which can gather more consumers. We have initially been proved by our suppliers and customers, and we have now reversed the declining situation. It marks the remarkable success of the comprehensive transformation of the operational thinking of Grand Ocean.

（ 3 ） Our Sales Department insists on aggressive actions, revolution and innovation. So far, we have accomplished the adjustment and branding upgrade in many of our stores. On partnership invitation, we make operating revenue as our premise and market as our direction to select our target consumers. We aim at the millennium age as our major customers in the future. We further introduce (redecorate) a huge volume of best international makeup brands to achieve the market demand, as well as grasping the opportunities to comprehensively update our store image. Also, we introduce the vending machines selling the hottest mystery toy boxes nowadays, and design a doll set “Sapphire & Jenny” representing the image of Grand Ocean, targeting at utilizing the vividly lovely model and the unexpected surprise to inspire curiosity and fun for our fans. Grand Ocean keeps leveling up ourselves to cater to younger consumers, and attempting on diversity, fashion and smartization in different dimensions, including our

products, environments, services and so forth. The return of LOUIS VUITTON makes Fuzhou Store No.2 even more blossoming. Furthermore, the top restaurant brand in China, Haidilao, is now in store at Fuzhou Store No.1, Hengyang Store and Shiyan Store. All these measures efficiently improve the consumer flow, and meanwhile help us stabilize our sales performance.

（ 4 ） Grand Ocean continues to advance the O2O strategy: the online services such as Grand Ocean APP, Grand Ocean Big Data, WeMall applet, MeiTuan.com, and MeiTuan catering service plus shopping center have all been released. Also, we conduct Enterprise Wechat to expand social media marketing, and cooperate with Jingdong to Home and MeiTuan Flash Sale to Home.
（ 5 ） In order to meet the consumption model, Grand Ocean established the Department of Boundless Retail on March 13, 2020, extending the online business of the Grand Ocean APP as well as actively attempting livestream selling on WeMall, TikTok, Kwai and so forth, of which the online sales performance weighed over 10% compared with the operating revenue within the same period. This is an astonishing outcome. Expanding online profits is as same important as elaborating offline advantage. We shall not only establish the third life space for people, but also break through the boundaries between online and offline consumption via digitalized platforms for merchandise sharing and partner services. We shall provide digitalized services for our partners and offer a better consumption experience with more plentiful products for our customers.

II. Future Outlook

(i). Marine Transportation Business

Although the covid-19 vaccine is now available and governments of various countries are actively asking people to get injections, pessimism still prevails all over the world. All have fairly conservative expectations for the economy. The U.S. and some of its allies have not eased their China containment strategy, and bilateral trade frictions have intensified. From China's bitter ban on Australian coal export,

it can be felt that geopolitical risks are still tense, and oil prices have risen again, creating a high degree of instability and uncertainty in dry bulk freight.

For the outlook of the marine transportation market in 2021, FIRST STEAMSHIP plans to add two new vessels of the KAMSARMAX type to strengthen the fleet in response to the marine's demand and competitive transportation market. Although the global economic situation has not yet fully stabilized, trade activity has been warm up again in anticipation of a possible improvement in the U.S.-China relation with the ouster of the Trump administration. The new shipbuilding market is sluggish, and the increase in ship tonnage is limited. As a whole, the outlook for the marine transportation market is relatively positive but still uncertain.

In response to the uncertain factors and changes in the market, the FIRST STEAMSHIP fleet has been able to reduce operating costs, eliminate outdated vessels, and improve operating efficiency with its stability and strength. And will purchase new types of vessels that meet future regulatory requirements at the right time and seek reputable charterers in the market to sign stable and profitable contracts in order to enhance fleet capacity and improve the competitiveness in the marine transportation market.

(ii). Department Store Business

In 2021, Grand Ocean shall use the idea of “Centralize The Customers, Build A Platform Exemplified Of Experience Consumption, and Break Through The Boundary of Space-Time Between Online and Offline Shopping With Smartization.” as our guidelines to deepen the revolution, as well as to initiatively commence our plans as the following:

（ 1 ） Our very target in the future is to create the business pattern centralizing the experience of our customers. Big data as the prerequisite, we shall ultimately meet and identify the true needs desired of our consumers, to promote merchandise (product) based on users’ (human) requirements, as well as to build the scenario of consumption for users (store). It is always our mission to deliver the best and thoughtful services to our customers. We confront the
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innovative demand from millennium consumers, and insist on our original intention to continually keep up with the new consumption behaviors of the younger generation.

（ 2 ） The overall plans and arrangements for all kinds of commercial promotion events at each store will be carried out. Not only planning for the six major vacations in China, including the Chinese New Year, May Day (Labor Day), Summer Sale, National Day of China, Anniversary, as well as Christmas and New Year’s Eve, but also focusing more on other holidays and festivals. Focus on who you are marketing to, control the expenditure of each project, hold the market rhythm and purchase trend, as well as to use all kinds of innovative online promotion to gather our customers. Thus our popularity can be pulled up to increase the bag-in rate, and our sales performance can also be raised.
（ 3 ） According to the planning and deployment of our Group, we have executed several adjustments which include: At Nanjing Store No1., Dong Fa Dao catering was introduced, and several adjustments on the 5[th] floor and the 7[th] floor were made. At Wuhan Store No.1, several adjustments on the 4[th] floor and the 5[th] floor were made. At Chongqing Store, several adjustments to the whole mall were made. At Shiyan Store, the environmental sets on the 8[th] and the 9[th] floors as well as the project of new purchased surrounding areas on the 1[st] and the 2[nd] floors are ongoing.
（ 4 ） Partnership invitation with our Group shall be enhanced. Each of Grand Ocean stores has been posited in different cities and different regions. Depending on the different internal conditions of each store, external environment for competition, and different market locations, there is an obvious difference between the ones with merits and those ones that are less advantageous. Grand Ocean plans to enhance the ability of partnership invitation through the Sales Department headquarters, uniting the strength of all our stores to achieve the universal administration of Grand Ocean upon the operation and cooperation with those brands. Therefore we can acquire better business offers for the advantageous stores. At the same time, the less advantageous ones
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can also reinforce their competitiveness through the introduction of first-class brands to improve the brand architecture due to the support of our Group. 。

（ 5 ） Change of Traditional Thinking, Expansion of Operational Idea, Ranking management shall be conducted in the Grand Ocean

membership system, providing diverse and customized services. 。 Each

store has to make up its own business strategy depending on the actual situations, to profoundly comprehend the quintessence of new vision, new knowledge and new scenario in the era of new retail, as well as to lead the business by service, brand, experience, scenario, and boundlessness. Grand Ocean shall, even more, utilize the big data accumulated from our fans and members for years to judge the favor of our customers and to build unique services and products for our VIP customers. We shall continue to release innovative merchandise combining services to make our customers feel refreshed, to create an ambiance that shopping in Grand Ocean is the only way to be content. Furthermore, we attempt to make our fans generate belongingness to Grand Ocean, and through the good reputation propagandized by our fans, Grand Ocean can appeal to the broader consumer groups, as well as heightening the royalty of or fans. Grand Ocean does not fear spoiling those VIP members. The better we treat our VIPs, the more positive feedback we can obtain.

（ 6 ） Under the framework of “better employee, simplified administration,” our group is adamant about the systems of cadre examination and elite recruit, which is beneficial building a system for us to sift and choose the extraordinary talents, improving the entire qualities of our cadres and managers, keeping training and perfecting their business skills, to guarantee the stable increase of the comprehensive qualities of our Group.
（ 7 ） We implement a liability system upon the total target, fragmenting the annual budget indices of the Company, distributing to each department or even personnel who is in charge, and collocating with the checking system. Through encouraging and assisting our employees in obtaining
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better performance, we can inspire their passion as well as arousing their skills and quality. As a result, we anticipate that we can gather the centripetal force of all Grand Ocean employees to ultimately accomplish the rich outcomes of corporate operation.

III. Conclusion

As the Covid-19 pandemic continues to expand and spread worldwide in 2021, global economic activities will still be hampered by the epidemic. Fortunately, vaccine and medicine research and development have brought hope to the market. Although the global market is disrupted by noises such as the second wave of the epidemic, the MSCI World Index continues to improve. With the introduction of the Covid-19 vaccine and the continued monetary easing and fiscal policies by governments, the International Monetary Fund (IMF) predicts that the global economy will grow better in 2021 than 2020.

In the face of changes in the global economy and market fluctuations, the FIRST STEAMSHIP team remains rigorous and prudent, strengthening its control over operating costs and reducing unnecessary expenditures. The Group has thoroughly implemented employee self-management of health and protection so that routine operations are unaffected by the epidemic; will carry out the ship operations in the most favorable mode and continue to expand brick-and-mortar department stores, e-commerce business, automobile financing lease business, real estate development and sales business, etc. We are convinced that a diversified enterprise with good strategies is the driving force for profitability, progress and growth of the FIRST STEAMSHIP Company.

FIRST STEAMSHIP COMPANY LIMITED

Chairperson: KUO, JEN-HAO General manager: KUO, JEN-HAO Accounting officer: PEI, TZ-YUAN

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Report Items

Report no. 2

Audit Committee’s audit of 2020 final accounting reports

Audit Committee’s audit report

The Board of Directors prepared the Company's 2020 business report, consolidated financial statements, etc. The consolidated financial statements were audited by CPAs CHANG, SHU-YING and LAI, LI-CHEN from KPMG, who have issued an audit report. The Audit Committee has audited the above-mentioned business report, consolidated financial statement, and appropriation of profit or loss proposal and no discrepancies were found. In accordance with Article 14-4 of the Securities and Exchange Act of the Republic of China and Article 219 of the Company Act, the report is as above. Please review it.

The 2021 regular shareholder meeting of FIRST STEAMSHIP COMPANY LIMITED

FIRST STEAMSHIP COMPANY LIMITED

Audit Committee convener ： CHAO, TSENG-PING

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Report Items

Report no. 3

Remuneration distribution for directors and employees for 2020

I. The Company's 2020 financial statements were audited by KPMG CPA, and the loss before tax (excluding the estimated amount of remuneration for employees and directors) were NT$287,243,420.
II. According to the Company’s Article of Incorporation, if the Company makes any profits, it should appropriate no less than 1% for employee remuneration and no more than 3% for director remuneration. Because of the losses before tax in 2020, no such appropriations were made.
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Report Items

Report no. 4

Endorsement and guarantee in 2020

I. As of December 31, 2020, the Company's endorsement and guarantee to subsidiaries and sub-subsidiaries amounted to NT$6,306,603 thousand; endorsement and guarantee from subsidiaries and sub-subsidiaries to the Company amounted to NT$0 thousand; and endorsement and guarantee among subsidiaries and sub-subsidiaries amounted to NT$4,402,055 thousand, totaling NT$10,708,658 thousand, accounting for 126.56% of the Company's shareholder equity.
II. The endorsement and guarantee are mainly for the Company and subsidiaries to obtain financing from financial institutions due to working capital needs, serving as the guarantors for each other for the sustainable development of the businesses Therefore, the necessity and reasonableness of the endorsement and guarantee made by following the "Operating Procedures for Endorsement and Guarantee" for business needs are indeed normal and reasonable.
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Report Items

Report no. 5

Investment status and operating performance of reinvested enterprises in 2020

		NT$ thousand	NT$ thousand	NT$ thousand	NT$ thousand
Reinvested enterprises	Original investment amount	Holding, end of the period			Profits and losses for the period of the invested company
		Number of shares	Shareholding (%)	Book value
Yee Shin Investment Co., Ltd.	128,900	12,890,000	100.00%	197,183	(16,803)
Yee Young Investment Co., Ltd.	414,077	22,275,000	100.00%
				439,669	(31,473)

Royal Sunway Development Co.,Ltd..	110,000	11,000,000	55.00%
				111,867	50,262

First Steamship S.A.	6,550,400	2,300	100.00%	9,220,997	17,628
First Mariner Holding Ltd.	1,430,380	50,224,000	100.00%	767,229	(143,304)
New Urban Investments Ltd.	-	-	0.00%	-	(22)
Grand Ocean Retail Group Ltd.	3,559,783	113,760,000	58.19%	4,952,810	(122,122)
Taiwan Environmental Scientific Co.,Ltd.	240,617	17,541,227	28.99%
				179,497	(64,192)

Jia Wang Asset Development Co.,Ltd.	9,800	980,000	49.00%
				7,884	(3,591)

Ahead Capital Ltd.	441,440	1,550	100.00%	(440,545)	(7,014)
Media Assets Global Ltd.	142,400	50,000	100.00%	(320,861)	(584)
Heritage Riches Ltd.	28,480	500	100.00%	391,260	29,717
Nature Sources Ltd.	240,086	8,430,000	100.00%	256,636	(118)
Praise Maritime S.A.	455,680	160,000	100.00%	516,557	63,145
Longevity Navigation S.A.	568,176	199,500	100.00%	614,624	48,178

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Reinvested enterprises	Original investment amount	Holding, end of the period	Holding, end of the period	Holding, end of the period	Profits and losses for the period of the invested company
		Number of shares	Shareholding (%)	Book value
Best Steamship S.A.	682,381	239,600	100.00%	703,648	22,059
Grand Steamship S.A.	398,720	140,000	100.00%	449,845	2,490
Black Sea Steamship S.A	230,688	81,000	100.00%	297,291	(17,402)
Ship Bulker Steamship S.A.	301,888	106,000	100.00%	344,717	(4,571)
Reliance Steamship S.A.	534,000	187,500	100.00%	541,744	8,032
Alliance Steamship S.A.	253,472	89,000	100.00%	261,073	7,884
Sure Success Steamship S.A.	398,720	140,000	100.00%	413,389	15,216
Shining Steamship International S.A.
	256,320	90,000	100.00%	255,032	(2,398)

Excellent Steamship International S.A.
	256,320	90,000	100.00%	259,919	754

First Mariner Capital Ltd.	961,542	33,762,000	100.00%	526,556	(25,279)
Mariner Far East Ltd.	108,224	3,800,000	100.00%	143,612	16,089
Mariner Capital Ltd.	797,725	28,010,000	100.00%	491,034	1,737
Morton Securities Ltd.	106,585	25,000,000	100.00%	32,502	(22,258)
Morgan Finance Limited	33,051	9,000,000	100.00%	21,587	810
Da Yu Financial Holdings Limited	639,372	331,660,000	29.11%	687,415	183,652

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Report Items

Report no. 6

Issuance of overseas convertible bonds

I. The overseas guaranteed convertible corporate bonds of US$50 million were issued on February, 26, 2019, which tenor is two years and eleven months and its coupon rate is 0%..
II. As of March 23, 2021, the bonds of US$20 million have been converted into common stock of the company equal to 59,205,374 shares, and the remaining amount of convertible corporate bonds is US$30 million.
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Report Items

Report no. 7

Private placement of domestic or overseas convertible bonds in 2020

I. In order to repay borrowings, enrich working capital, and support other capital needs for long-term development, the Company plans to process domestic or overseas bonds through private placement, which was approved by the Board of Directors on August 13, 2020 and approved on record by the first special shareholder meeting on September 30, 2020.
II. As of now, the Company has not identified any qualified subscribers and therefore has not yet processed the 2020 private placement of domestic or overseas convertible bonds.
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Proposed Resolutions

Proposal no. 1

by the Board of Directors

Subject:2020 business report and financial statements. Please ratify the proposal.

Explanation:

I. Please refer to pages 4 to 11 of this handbook for the Company's 2020 business report
II. The Company’s 2020 consolidated and parent company only financial statements have been audited by CPA Shu-Ying Chang and Li-Chen Lai from KPMG. For details, please refer to pages 20 to 38 of this handbook.

Resolution:

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KPMG

台北市110615信義路5段7號68樓(台北101大樓) Telephone 電話 + 886 2 8101 6666 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, Fax 傳真 + 886 2 8101 6667 Xinyi Road, Taipei City 110615, Taiwan (R.O.C.) Internet 網址 home.kpmg/tw

Independent Auditors’ Report

To the Board of Directors of First Steamship Company Ltd.:

Opinion

We have audited the consolidated financial statements of First Steamship Company Ltd. and its subsidiaries (“the Group”), which comprise the consolidated statement of financial position as of December 31, 2020 and 2019, and the consolidated statement of comprehensive income, changes in equity and cash flows for the years then ended and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other auditors (please refer to other matter paragraph), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards (“IFRSs”), International Accounting Standards (“IASs”), interpretation developed by the International Financial Reporting Interpretations Committee (“ IFRIC” ) or the former Standing Interpretations Committee (“ SIC” ) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audit of the consolidated financial statements for the year ended December 31, 2020 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China. We conducted our audit of the consolidated financial statements for the year ended December 31, 2019 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants , Rule No. 1090360805 issued by the FSC and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“ the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. Based on our audits and the reports of other auditors, we believe that the audit evidence we have obtained, is sufficient and appropriate to provide a basis of our opinion.

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KPMG, a Taiwan partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

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Other Matter

We did not audit the financial statements of Mariner Finance Ltd., a subsidiary of the Group. Those statements were audited by another auditor, whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Mariner Finance Ltd., is based solely on the report of other auditor. The financial statements of Mariner Finance Ltd. reflect the total assets constituting 5% and 6% of the consolidated total assets at December 31, 2020 and 2019, respectively, and the total operating revenues constituting both 4% of the consolidated total operating revenues for the years ended December 31, 2020 and 2019, respectively.

We did not audit the financial statements of certain investees which represented the investment in other entities accounted for using the equity method of the Group. Those statements were audited by other auditors, whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts is based solely on the report of other auditors. The investments in other entities accounted for using the equity method constituting both 1% of the total assets at December 31, 2020 and 2019, respectively, and the related share of profit of associates accounted for using the equity method constituted (12)% and 1% of the total profit before tax for the years ended December 31, 2020 and 2019, respectively.

First Steamship Company Ltd. has prepared its parent-company-only financial statements as of and for the years ended December 31, 2020 and 2019, on which we have issued an unqualified opinion with emphasis of matter or other matter paragraph.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

1. Impairment of goodwill and trademark

Please refer to notes 4(n), 4(o), 5(b), and 6(l) to the consolidated financial statements for the accounting principles on the recognition of impairment of intangible assets, non-financial assets, the accounting estimates and uncertainty of assumptions in assessment of impairment of goodwill and intangible assets, as well as details of impairment of goodwill and intangible assets, respectively.

Description of key audit matter:

As of December 31, 2020, the carrying amounts of intangible assets constituted 6% of the total assets of the Group. The major part of goodwill and trademark originated from the acquisition of GORG in 2006. Since retailing business was influenced by COVID-19 pandemic, maintaining revenue and profitability had become a challenge. Therefore, the goodwill and trademark from acquisition were affected, and the Group concerned if the carrying amounts exceeded recoverable amounts of retailing department. The Group’s management should follow IAS 36 to determine the value in use using a discounted cash flow forecast of retailing department. Due to the fact that the estimated recoverable amounts involved management’s judgment, and it had great uncertainty, there was an overestimated risk on value in use of goodwill, trademark, and assets of retailing business department. Therefore, we considered the assessment of assets impairment as one of the key audit matters to the consolidated financial statements in the audit process.

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How the matter was addressed in our audit

We casted professional doubt on the model that the Group’s management used to assess the impairment of goodwill and trademark, including to evaluate whether management had identified cash generating units (“ CGU” ) which might have impairments, and to consider all the assets that had to be tested had been included in the assessment. We also reviewed separate financial assumptions that the management used to assess impairments and related verification of recoverable amounts. We verified the reasonability of the assumptions and accuracy of management’ s calculation based on available data. We also examined the appropriateness of disclosure for the aforesaid assets.

2. Assets impairment

Please refer to notes 4(o), 5(a), 6(i), and 6(j) to the consolidated financial statements for the accounting principles on the recognition of impairment of non-financial assets, the accounting estimates and assumptions uncertainty in assessment of impairment of property, plant and equipment, and right of use assets, details of impairment of property, plant and equipment, as well as right-of-use assets, respectively.

Description of key audit matter:

As of December 31, 2020, the carrying amounts of property, plant and equipment and right-of-use assets constitute 60% of the total assets of the Group. The major part of property, plant and equipment was operating assets in retailing and shipping departments. Since retailing business was influenced by COVID-19 pandemic; shipping business was affected by the uncertainty of international economic cycle and transportation volume, maintaining revenue and profitability had become a challenge. Therefore, the carrying amounts of operating assets were affected, and the Group concerned if the carrying amounts exceeded recoverable amounts. The Group's management should follow IAS 36 to determine the recoverable amounts by the higher of using discounted cash flow forecast or fair value less disposal costs. Due to the fact that the estimated recoverable amounts involved management’s judgment, and it had great uncertainty, there was an overestimated risk on value in use of operating assets. Therefore, we considered the assessment of assets impairment as one of the key audit matters to the consolidated financial statements in the audit process.

How the matter was addressed in our audit

We casted professional doubt on the model that the Group’s management used to assess assets impairment, including to evaluate whether management had identified CGU which might have impairments, and to consider all the assets that had to be tested had been included in the assessment. We also reviewed separate financial assumptions that the management used to assess impairments and related verification of recoverable amounts. We verified the reasonability of the assumptions and accuracy of management’ s calculation based on available data. We also examined the appropriateness of disclosure for the aforesaid assets.

3. Recoverability of other receivables

Please refer to notes 4(g), 6(e), and 6(m) to the consolidated financial statements for the accounting principles on the recognition of financial instruments, the disclosures of other receivables and other financial assets, respectively.

Description of key audit matter:

The retailing department of the Group recently ended part of their investment due to the downturn of business cycle and rigorous competition in mainland China. As of December 31, 2020, the carrying amounts of other receivables, originated from uncollected prepaid investments, amounted to $707,100 thousand, and constituted 2% of the total assets of the Group. The Group measured loss allowance for expected credit losses of other receivables in accordance with IFRS 9 “Financial Instruments”. Therefore, we considered the assessment as one of the key audit matters to the consolidated financial statements in the audit process.

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How the matter was addressed in our audit

We obtained the management’s assessment for the expected credit losses of other receivables to examine the related supporting documents of default risk. We evaluated the reasonability of expected credit losses of other receivables in duration according to IFRS 9 “Financial Instruments”.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs, IASs, interpretation as well as related guidance endorsed by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
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Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Shu-Ying Chang and LiChen Lai.

KPMG

Taipei, Taiwan (Republic of China) March 31, 2021

Notes to Readers

The accompanying consolidated financial statements are intended only to present the consolidated statement of financial position, financial performance and cash flows in accordance with the 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.

The independent auditors’ audit report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ audit report and consolidated financial statements, the Chinese version shall prevail.

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Assets Current assets: 1100 Cash and cash equivalents (Note 6(a)) 1110 Current financial assets at fair value through profit or loss (Notes 6(b) and (p)) 1170 Accounts receivable, net (Notes 6(d), (w), 7 and 8) 1200 Other receivables, net (Notes 6(e), (m) and 7) 1300 Inventories, net 1320 Inventories (for construction business), net (Notes 6(f), 8 , 9 and13) 1461 Non-current assets classified as held for sale(Note 6(g)) 1476 Other current financial assets (Notes 6(m) and 8) 1479 Other current assets (Notes 7 and 9) Non-current assets: 1510 Total non-current financial assets at fair value through profit or loss (Note 6(b)) 1535 Non-current financial assets at amortized cost, net (Note 6(c)) 1550 Investments accounted for using equity method, net (Notes 6(j) and 8) 1600 Property, plant and equipment (Notes 6(j) and 8) 1755 Right-of-use assets (Notes 6(k) and 8) 1760 Investment property, net (Note 8) 1780 Intangible assets (Note 6(I)) 1840 Deferred tax assets (Note 6(t)) 1915 Prepayments for business facilities (Note 9) 1935 Long-term lease payments receivable (Notes 6(d), 7 and 8) 1975 Net defined benefit asset, non-current 1980 Other non-current financial assets (Notes 6(m), (z), 7 and 8) 1990 Other non-current assets (Notes 6(u) and 7) Total assets	December 31, 2020 Amount % $ 3,982,775 11 192,024 - 863,587 3 488,430 1 397,965 1 1,292,259 4 120,633 - 411,510 1 344,824 1 8,094,007 22 154,077 - 59,900 - 874,796 2 12,874,104 36 8,656,377 24 143,036 - 2,072,474 6 1,051,329 3 1,217,580 4 511,346 1 490 - 491,720 1 202,326 1 28,309,555 78 $ 36,403,562 100	December 31, 2019 Amount % 5,149,276 14 162,866 - 941,101 2 228,612 1 335,800 1 645,975 2 283,041 1 546,052 1 365,058 1 8,657,781 23 - - 29,900 - 909,626 2 13,578,283 36 9,614,639 25 144,009 - 2,136,205 6 877,785 2 386,227 1 790,610 2 - - 884,894 2 259,806 1 29,611,984 77 38,269,765 100 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (Notes 6(d) and (n)) 2110 Short-term notes and bills payable 2120 Current financial liabilities at fair value through profit or loss (Notes 6(b) and (p)) 2130 Current contract liabilities (Notes 6(w) and 9) 2170 Accounts payable (Note 6(q)) 2200 Other payables (Notes 6(f) and (q)) 2230 Current tax liabilities 2280 Current lease liabilities (Notes 6(r) and 7) 2321 Current portion of bonds payable (Note 6(p)) 2322 Current portion of long-term borrowings (Note 6(o)) 2399 Other current liabilities (Note 6(m)) Non-Current liabilities: 2530 Bonds payable (Note 6(p)) 2540 Long-term borrowings (Note 6(o)) 2570 Deferred tax liabilities (Note 6(t)) 2580 Non-current lease liabilities (Notes 6(r) and 7) 2640 Net defined benefit liability, non-current 2645 Guarantee deposits Total liabilities Equity attributable to owners of parent (Notes 6(h), (p) and (u)): 3100 Capital stock 3200 Capital surplus 3300 Retained earnings 3400 Other equity interest 3500 Treasury shares(note) Total equity attributable to owners of parent: 36XX Non-controlling interests (Notes 6(h) and (u)) Total equity Total liabilities and equity		December 31, 2020	December 31, 2020		December 31, 2019 Amount % 3,544,958 9 49,954 - 2,622 - 150 - 3,053,857 8 1,082,030 3 133,670 - 955,219 2 999,223 3 1,074,361 3 99,728 - 10,995,772 28 1,336,572 3 3,675,728 10 49,030 - 8,232,934 22 422 - 720,549 2 14,015,235 37 25,011,007 65 6,308,832 16 1,947,686 5 1,450,781 4 (565,892) (1) - - 9,141,407 24 4,117,351 11 13,258,758 35 38269765 100
				Amount	%
				5,844,838 49,992 - - 2,315,165 1,010,668 9,967 878,522 1,431,651 1,971,667 113,295
				13,625,765
				- 2,745,440 70,355 7,306,931 - 543,726
				10,666,452
				24,292,217

25 -

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars , Except for Earnings Per Common Share)

2020
Amount
%
4000
Operating revenues (Notes 6(w) and 7)
6,441,828
100
5000
Operating costs (Notes 6(s) and (y))
2,822,134
44
Gross profit from operations
3,619,694
56
6000
Operating expenses (Notes 6(i), (r), (x) and 7)
3,226,462
50
6450
Expected credit loss (Note 6(d))
76,648
1
Net operating income
316,584
5
Non-operating income and expenses (Notes 6(e), (g), (h), (k), (m), (p), (r), (y), (z) and 7):
7100
Total interest income
32,414
1
7010
Other income
3,011
-
7020
Other gains and losses, net
100,381
2
7050
Finance costs
(772,339)
(12)
7055
Impairment loss determined in accordance with IFRS 9
(73,008)
(1)
7060
Share of loss of associates accounted for using equity method, net
21,639
-
(687,902)
(10)
7900
(Loss) Profit from continuing operations before tax
(371,318)
(5)
7950
Less: Income tax expenses (Note 6(t))
(50,176)
(1)
(Loss) Profit
(321,142)
(4)
8300
Other comprehensive income:
8310
Components of other comprehensive income that will not be reclassified to profit or loss
8311
Gains on remeasurements of defined benefit plans
55
-
8349
Income tax related to components of other comprehensive income that will not be reclassified to
profit or loss
-
-
55
-
8360
Components of other comprehensive income (loss) that will be reclassified to profit or loss
8361
Exchange differences on translation of foreign financial statements
(88,971)
(1)
8365
Equity related to non-current assets classified as held for sale
(9,565)
-
8370
Share of other comprehensive income of associates accounted for using equity method,
components of other comprehensive income that will be reclassified to profit or loss
(44,979)
(1)
8399
Income tax related to components of other comprehensive income that will be reclassified to
profit or loss
-
-
(143,515)
(2)
8300
Other comprehensive income (loss)
(143,460)
(2)
Comprehensive income
$
(464,602)
(6)
Profit (loss), attributable to:
8610
Owners of parent
$ (286,807)
(3)
8620
Non-controlling interests
(34,335)
(1)
$
(321,142)
(4)
Comprehensive income (loss) attributable to:
8710
Owners of parent
$ (493,632)
(8)
8720
Non-controlling interests
29,030
2
$
(464,602)
(6)
Earnings (loss) per share (Note 6(v))
9750
Basic earnings (loss) per share (NT dollars)
$
(0.42)
9850
Diluted earnings (loss) per share (NT dollars)
$
(0.42)

2019
Amount
%
8,132,005
100
2,672,165
33
5,459,840
67
3,984,383
49
54,773
1
1,420,684
17
78,683
1
3,371
-
1,465,407
18
(939,644)
(12)
18,627
-
(32,102)
-
594,342
7
2,015,026
24
343,747
4
1,671,279
20
407
-
-
-
407
-
(506,314)
(6)
(6,218)
-
6,035
-
-
-
(506,497)
(6)
(506,090)
(6)
1,165,189
14
1,404,377
17
266,902
3
1,671,279
20
1,069,744
13
95,445
1
1,165,189
14
2.04
1.81

See accompanying notes to consolidated financial statements.

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

			Equity attributable to owners of parent	Equity attributable to owners of parent	Equity attributable to owners of parent	Equity attributable to owners of parent	Equity attributable to owners of parent	Equity attributable to owners of parent						Non- controlling interests
Share capital	Capital surplus		Retained earnings				Total other equity interest		Equity related to non-current assets classified as held for sale		Treasury shares	Total equity attributable to owners of parent
Common stock		Legal reserve	Special reserve	Unappropriated retained earnings		Total retained earnings	Exchange differences on translation of foreign financial statements
$ 6,308,832 - - - - - - - - - - - 6,308,832 - - - - - - 558,795 - - - - - $ 6,867,627	1,953,436	163,964	336,136		(373,644) 1,404,377 407 1,404,784 (640) (63,088) 105,284 - (17,371) - - - 1,055,325 (286,807) 55 (286,752) (83,291) (335,040) (62,088) (558,795) - - - - - (270,641)	126,456		(266,508) - (329,172) (329,172) - - - - - - - - (595,680) - (197,810) (197,810) - - - - - - - - - (793,490)		35,656	-		8,157,872	3,938,602 266,902 (171,457) 95,445 - - - - - - 237,293 (153,989) 4,117,351 (34,335) 63,365 29,030 - - - - - - (313,136) 890 (183,973) 3,650,162
	- -	- -	- -			1,404,377 407					- -
	-	-	-			1,404,784					-
		640 - - - - - - -									- - - - - - - -
		164,604 - -									- - -
		-									-
		83,291 - - - - - - - -
		247,895

See accompanying notes to consolidated financial statements.

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: (Loss) profit before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Expected credit loss Net gain on financial assets or liabilities at fair value through profit or loss Interest expense Operating costs (interest expense) Impairment loss (gain) on non-current assets classified as held for sale Interest income Dividend income Cost of share-based payments awards Share of (gain) loss of associates accounted for using equity method Loss on disposal of property, plant and equipment Gain on disposal of intangible assets Gain on disposal of non-current assets classified as held for sale Loss (gain) on disposal of investments Impairment loss on non-financial assets Gain on lease modification Gain on rent concessions Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Changes in operating assets: Financial assets and liabilities at fair value through profit or loss Accounts receivable Other receivables Inventories Other current assets Other financial assets The defined benefit assets Changes in operating liabilities: Contract liabilities Accounts payable Other payables Other current liabilities Net defined benefit liability Total adjustments Cash inflow generated from operations Interest received Dividends received Interest paid Income taxes paid Net cash flows from operating activities	2020 $ (371,318) 1,860,506 36,720 149,656 (59,911) 772,339 56,541 152,842 (32,414) (3,011) 2,071 (21,639) 2,647 (3,752) - 237 - - (190,193) 2,722,639 (132,521) 292,550 36,042 (714,227) 22,561 477 (490) (150) (761,206) 26,286 7,217 (367) 1,498,811 1,127,493 24,573 3,011 (746,913) (208,023) 200,141	2019 2,015,026 1,991,674 41,698 36,146 (58,998) 939,644 56,985 (31,816) (78,683) (3,371) 1,271 32,102 17,033 - (217,213) (1,000,407) 23,273 (19) - 1,749,319 41,593 239,110 (38,435) 27,808 45,296 - - (5,023) (511,163) (173,193) (28,936) (821) 1,345,555 3,360,581 98,823 3,371 (940,710) (437,314) 2,084,751

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (CONT’D)

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) investing activities:
Acquisition of financial assets at amortized cost
Proceeds from disposal of financial assets at amortized cost
Acquisition of investments accounted for using equity method
Proceeds from disposal of investments accounted for using equity method
Proceeds from disposal of subsidiaries
Proceeds from disposal of non-current assets classified as held for sale
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Decrease in other receivables
Acquisition of intangible assets
Proceeds from disposal of intangible assets
Decrease in other financial assets
Decrease (Increase) in other non-current assets
Increase in prepaid equipment
Net cash flows from (used in) investing activities
Cash flows from (used in) financing activities:
Increase in short-term borrowings
Increase in short-term notes and bills payable
Proceeds from issuing bonds
Redemption of bonds payable
Proceeds from long-term borrowings
Repayments of long-term borrowings
Decrease in guarantee deposits
Payment of lease liabilities
Subsidiaries' cash dividends paid
Payments to acquire treasury shares
Treasury shares sold to employees
Acquisition of ownership interests in subsidiaries
Cash dividends paid
Net cash flows used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

See accompanying notes to consolidated financial statements.

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3-3 3-1

Independent Auditors' Report

To the Board of Directors of First Steamship Company Limited:

Opinion

We have audited the financial statements of First Steamship Company Ltd. (“the Company”), which comprise the statement of financial position as of December 31, 2020 and 2019, and the statement of comprehensive income, changes in equity and cash flows for the years then ended and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other auditors (please refer to other matter paragraph), the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards (“IFRSs”), International Accounting Standards (“IASs”), interpretation developed by the International Financial Reporting Interpretations Committee (“IFRIC”) or the former Standing Interpretations Committee (“SIC”) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audit of the financial statements for the year ended December 31, 2020 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China.We conducted our audit of the financial statements for the year ended December 31, 2019 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants, Rule No. 1090360805 issued by the Company and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the financial statements section of our report. We are independent of the Company in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. Based on our audits and the reports of other auditors, we believe that the audit evidence we have obtained, is sufficient and appropriate to provide a basis of our opinion.

Other Matter

We did not audit the financial statements of certain investees which represented the investment in other entities accounted for using the equity method of the Company. Those statements were audited by other auditors, whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts is based solely on the report of other auditors. The investments in other entities accounted for using the equity method constituting both 8 % and 8% of the total assets at December 31, 2020 and 2019, respectively, and the related share of profit of associates accounted for using the equity method constituted (19%) and 2% of the total profit before tax for the years ended December 31, 2020 and 2019, respectively.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Equity-based subsidiaries

Please refer to notes 4(i) and 6(d) to the financial statements for the accounting principles on the recognition

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of equity-based subsidiaries, as well as details of equity-based subsidiaries, respectively.

Description of key audit matter:

The assessment of the impairment of goodwill and trademark, impairment of assets and the recoverability of other financial assets of some subsidiaries of the company depends on the subjective judgment of management, which is an uncertain accounting estimate and affects the operating results of subsidiaries. Therefore, we consider the assessment of the impairment of goodwill and trademark, impairment of assets and the recoverability of other financial assets of some subsidiaries of the company as the key audit matters to the financial statements in the audit process.

How the matter was addressed in our audit

The accountants' major review procedures for the impairment of goodwill and trademark and the impairment of assets of subsidiaries using the equity method include: We cast professional doubt on the model that the subsidiary's management used to assess the impairment of goodwill and trademark, including to evaluate whether management has identified cash generating units (“CGU”) which might have impairments, and to consider all the assets that have to be tested have been included in the assessment. We also review separate financial assumptions that the management used to assess impairments and related verification of recoverable amounts. We verify the reasonability of the assumptions and accuracy of management's calculation based on available data. We also examine the appropriateness of disclosure for the aforesaid assets.

The main audit procedures performed by the accountant on the recoverability of other receivables of subsidiaries using the equity method include: To evaluate the expected credit losses of other receivables, we obtained documentation of management’s assessment to examine the possibility of default. Also, we assess the reasonability of expected credit losses of other receivables in duration according to IFRS 9 “Financial Instruments”.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (including the audit committee) are responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
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3-3

sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on this financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditor’s report are Shu-Ying Chang and Li-Chen Lai.

KPMG

Taipei, Taiwan (Republic of China) March 31, 2021

Notes to Readers

The accompanying financial statements are intended only to present the statement of financial position, financial performance and cash flows in accordance with the 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.

The independent auditor’s audit report and the accompanying financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditor’s audit report and financial statements, the Chinese version shall prevail.

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(English Translation of Financial Statements Originally Issued in Chinese) FIRST STEAMSHIP COMPANY LIMITED

Parent Company Only Balance Sheets For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars )

			2020		2019
			Amount	%	Amount	%
	Assets
	Current assets:
1100	Cash and cash equivalents (Note 6(a))	$	50,052	-	80,758	1
1110	Current financial assets at fair value through profit or loss (Notes 6(j) and (q))		6,818	-	-	-
1180	Accounts receivable -related parties (Notes 6(n) and 7)		5,165	-	5,455	-
1320	Inventories (for construction business), net (Notes 6(b) and 8)		518,292	4	-	-
1200	Other receivables -related parties (Notes 7)		256,429	2	585,217	5
1476	Other current financial assets (Notes 8)		320,680	3	430,150	3
1479	Other current assets		2,756	-	6,564	-
	1,160,192			9	1,108,144	9
	Non‑current assets:
1510	Total non-current financial assets at fair value through profit or loss (Note 6(q))		46,800	-	-	-
1551	Investments accounted for using equity method, net (Note 6(d) and 8)		11,051,869	89	11,166,387	89
1600	Property, plant and equipment (Notes 6(e) and 8)		172,903	1	176,065	1
1760	Investment property, net (Notes 6(f) and 8)		143,036	1	144,009	1
1755	Right‑of‑use assets		-	-	974	-
1975	Net defined benefit asset, non-current		490	-	-	-
1980	Other non‑current financial assets (Notes 8)		15,750	-	1,000	-
1990	Other non‑current assets		1,984	-	499	-
			11,432,832	91	11,488,934	91
	Total assets	$	12,593,024	100	12,597,078	100

33 -

4-1

(English Translation of Financial Statements Originally Issued in Chinese) FIRST STEAMSHIP COMPANY LIMITED

Parent Company Only Balance Sheets (CONT'D)

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars )

Liabilities and Equity Current liabilities: 2100 Short‑term borrowings (Notes 6(g) ) $ 2110 Short‑term notes and bills payable(Note 6(h)) 2120 Current financial liabilities at fair value through profit or loss (Notes 6(j)) 2209 Other payables (Notes 6(o)) 2220 Other payables -related parties (Notes 7) 2230 Current tax liabilities (Notes 6(k)) 2280 Current lease liabilities 2321 Current portion of bonds payable (Note 6(j)) 2322 Current portion of long‑term borrowings (Note 6(i)) 2399 Other current liabilities Non‑Current liabilities: 2530 Bonds payable (Note 6(j)) 2540 Long‑term borrowings (Note 6(i)) 2570 Deferred tax liabilities (Note 6(k)) 2640 Net defined benefit liability, non‑current 2645 Guarantee deposits (Note 7) Total liabilities Retained earnings (Notes 6(d), (j) and (l)): 3100 Capital stock 3200 Capital surplus 3300 Retained earnings 3400 Other equity interest 3500 Treasury shares Total equity Total liabilities and equity $	2020	% 14 - - 1 - - 11 - - 26 - 4 - - - 4 30 55 15 4 (6) - 68 98	2019
	Amount 1,794,200 49,992 - 58,663 138,812 - - 1,431,651 296,887 1,038 3,771,243 - 349,443 8,883 - 2,272 360,598 4,131,841 6,867,627 1,917,673 543,146 (772,772) (94,491) 8,461,183 12,593,024		Amount % 445,000 4 49,954 - 2,622 - 106,070 1 - - 1,894 - 949 - 999,223 8 150,000 1 1,118 - 1,756,830 14 1,336,572 11 353,000 3 7,425 - 422 - 1,422 - 1,698,841 14 3,455,671 28 6,308,832 49 1,947,686 15 1,450,781 12 (565,892) (4) - - 9,141,407 72 12,597,078 100

See accompanying notes to consolidated financial statements

34 -

(English Translation of Financial Statements Originally Issued in Chinese) FIRST STEAMSHIP COMPANY LIMITED

Parent Company Only Statements of Comprehensive Income

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars , Except for Earnings Per Common Share)

Amount % 71,499 100 17,003 24 54,496 76 59,997 84 (5,501) (8) 15,768 22 (5,604) (8) (151,865) (212) (140,041) (196) (281,742) (394) (287,243) (402) (436) (2) (286,807) (400) 55 - - - 55 0 (206,880) (289) - - (206,880) (289) (206,825) (289) (493,632) (689) 2020 (0.42) (0.42)	2019
Amount	Amount 76,188 16,423 59,765 92,188 (32,423) 9,250 240,641 1,344,921 (141,579) 1,453,233 1,420,810 16,433 1,404,377 407 - 407 (335,040) - (335,040) (334,633) 1,069,744	%
71,499 17,003		100 22
54,496 59,997		78 121
(5,501)		(43)
15,768 (5,604) (151,865) (140,041)		12 316 1,765 (186)
(281,742)		1,907
(287,243) (436)		1,864 21
(286,807)		1,843
55 -		1 -
55		1
(206,880) -		(440) -
(206,880)		(440)
(206,825)		(439)
(493,632)		1,404
		2.04
		1.81

See accompanying notes to consolidated financial statements

(English Translation of Financial Statements Originally Issued in Chinese)

FIRST STEAMSHIP COMPANY LIMITED

Parent Company Only Statements of Changes in Equity For the years ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)

Capital surplus		Retained earnings	Retained earnings	Exchange differences on translation of foreign financial statements Equity related to non‑current assets classified as held for sale (266,508) 35,656 - - (329,172) (5,868) (329,172) (5,868) - - - - - - - - - - - - - - (595,680) 29,788 - - (197,810) (9,070) (197,810) (9,070) - - - - - - - - - - - - - - - - (793,490) 20,718 Total other equityinterest	Total equity
	Legal reserve	Special reserve 336,136 - - 0 - - (105,284) - - - - 230,852 - - 0 - 335,040 - - - - - - 565,892	Unappropri ated retained earnings	Exchange differences on translation of foreign financial statements (266,508) - (329,172) (329,172) - - - - - - - (595,680) - (197,810) (197,810) - - - - - - - - (793,490)
1,953,436	163,964		(373,644)		8,157,872
- -	- -		1,404,377 407		1,404,377 (334,633)
0	0		1,404,784		1,069,744
- - - 96,902 1,718 (22,126) (82,244)	640 - - - - - -		(640) (63,088) 105,284 - (17,371) - -		0 (63,088) 0 96,902 (15,653) (22,126) (82,244)
1,947,686 - -	164,604 - -		1,055,325 (286,807) 55		9,141,407 (286,807) (206,825)
0	0		(286,752)		(493,632)
- - (186,142) - - (10,732) 165,680 1,181	83,291 - - - - - - -		(83,291) (335,040) (62,088) (558,795) - - - -		0 0 (248,230) 0 (94,491) (10,732) 165,680 1,181
1,917,673	247,895		(270,641)		8,461,183

See accompanying notes to consolidated financial statements

36 -

(English Translation of Financial Statements Originally Issued in Chinese) FIRST STEAMSHIP COMPANY LIMITED

Parent Company Only Statements of Cash Flows For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars )

Cash flows from (used in) operating activities:
(Loss) Profit before tax
$ Adjustments:
Adjustments to reconcile profit (loss):
Depreciation expense
Amortization expense
Net gain on financial assets or liabilities at fair value through
profit or loss
Interest expense
Interest income
Share of loss (gain) of associates accounted for using equity
method
Loss on disposal of non‑current assets classified as held for sale
Loss on disposal of investments
Total adjustments to reconcile profit (loss)
Changes in operating assets and liabilities:
Changes in operating assets:
Financial assets and liabilities at fair value through profit or loss
Accounts receivable
Other receivables
Inventories
Other current assets
Net defined benefit assets
Changes in operating liabilities:
Contract liabilities
Other payables
Other current liabilities
Net defined benefit liability
Total adjustments
Cash outflow generated from operations
Interest received
Dividends received
Interest paid
Income taxes paid
Net cash flows from operating activities

2020
2019
Amount
Amount
(287,243)
1,420,810
5,295
5,143
1,271
614
(907)
(3,856)
140,041
141,579
(15,768)
(9,250)
151,865
(1,344,921)
-
(217,213)
237
-
282,034
(1,427,904)
(55,333)
-
290
22,427
16,394
24,810
(518,292)
-
3,808
9,690
(490)
-
-
(281)
(39,688)
(119,978)
(80)
93
(367)
(821)
(311,724)
(1,491,964)
(598,967)
(71,154)
15,489
5,933
15,897
12,239
(51,904)
(72,123)
-
(32,399)
(619,485)
(157,504)

37 -

7-1

(English Translation of Financial Statements Originally Issued in Chinese) FIRST STEAMSHIP COMPANY LIMITED

Parent Company Only Statements of Cash Flows(CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars )

Cash flows from (used in) investing activities:
Acquisition of investments accounted for using equity method
$ Proceeds from disposal of investments accounted for using equity
method
Refund of capital reduction on investments accounted for using
equity method
Proceeds from disposal of non‑current assets classified as held for
sale
Acquisition of property, plant and equipment
Decrease (increase) in other receivables
Decrease (increase) in other financial assets
Increase in other non‑current assets
Net cash flows from (used in) investing activities
Cash flows from (used in) financing activities:
Increase (decrease) in short‑term borrowings
Increase in short‑term notes and bills payable
Proceeds from issuing bonds
Redemption of bonds payable
Proceeds from long‑term borrowings
Repayments of long‑term borrowings
Increase (decrease) inother payables -related parties
Payment of lease liabilities
Decrease in guarantee deposits
Payments to acquire treasury shares
Cash dividends paid
Net cash flows from (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
$

2020
2019
Amount
Amount
(700)
(1,542,300)
78,745
3,357,043
23
-
-
463,360
(186)
(92)
130,373
(560,470)
94,720
39,519
(2,756)
(55)
300,219
1,757,005
1,349,200
195,000
38
7
-
1,542,300
(1,000,000)
(1,000,000)
443,330
458,000
(300,000)
(923,000)
138,812
(1,858,289)
(949)
(765)
850
(1,371)
(94,491)
-
(248,230)
(63,088)
288,560
(1,651,206)
(30,706)
(51,705)
80,758
132,463
50,052
80,758

See accompanying notes to consolidated financial statements

38 -

Proposed Resolutions

Proposal no. 2

by the Board of Directors

Subject: Appropriation of profit or loss of 2020. Please ratify the proposal.

Explanation:

I. The Company's net loss after-tax for 2020 were NT$286,807,060. Therefore, no dividend was distributed. Please refer to page 40 o f t h i s handbook for Statement of appropriation of profit or loss.

Resolution:

39 -

FIRST STEAMSHIP COMPANY LIMITED

Statement of appropriation of profit or loss

For the years ended December 31, 2020

Unit: NT$

	Unit: NT$
Items	Amount
Unappropriated retained earnings at Junuary 1,2020	16,111,329
Add：Gains on remeasurements of defined benefitplans	54,792
Less：Loss for the year ended December 31,2020	(286,807,060)
Loss make-up for 2020	(270,640,939)
Make-up items：
Add：Legal Rreserve	247,895,131
Capital Surplus	22,745,808
Unappropriated retained earnings at December 31,2020	0

Chairperson: KUO, JEN-HAO General manager: KUO, JEN-HAO Accounting officer: PEI, TZ-YUAN

40 -

Other Proposals:

by the Board of Directors

Subject: Removal of restrictions on directors’ competition for business. Please ratify the proposal.

Explanation:

I. In accordance with Article 209 of the Company Act, directors who act for themselves or others within the company's business scope should explain the important content of their acts to the shareholder meeting and obtain approvals.

II. When the Company directors hold a position in re-invested enterprises, have investments in or operate other companies with the same or similar business scope as the Company, they shall apply to the shareholder meeting for approval to remove the restrictions on competition for business for the Company's directors and representatives in accordance with law.

III. The circumstances of the dismissal of concurrent directorship are

described as follows.

Title	The name of the company in which the individual concurrently serves and position
Director: Representative, Yonghenghui Investment limited Mr.KUO, JEN-HAO	Taiwan Environmental Scientific Co., Ltd. Chief executive officer
Independent director: Mr. KUNG, HSIN-KAI	CASTLES TECHNOLOGY CO., LTD. Independent director

Resolution:

41 -

Extraordinary Motions

Adjournment

42 -

Appendix i

Article of Incorporation of the FIRST STEAMSHIP COMPANY LIMITED

Chapter 1 General Principles

Article 1: The Company is organized in accordance with the provisions of the Company Act and is named “FIRST STEAMSHIP COMPANY, LIMITED.”

Article 2: The Company’s business scope is as follows:

(i). F111090 Wholesale of Building Materials (ii). F113010 Wholesale of Machinery (iii). F113030 Wholesale of Precision Instruments (iv). F114010 Wholesale of Motor Vehicles (v). F114060 Wholesale of Ship and Component Parts (vi). F211010 Retail Sale of Building Materials (vii). F213040 Retail Sale of Precision Instruments (viii). F213080 Retail Sale of Other Machinery and Equipment (ix). F214010 Retail Sale of Motor Vehicles (x). F401010 International Trade (xi). G801010 Warehousing (xii). H201010 Investment (xiii). H701010 Housing and Building Development and Rental (xiv). H701020 Industrial Factory Development and Rental (xv). H701040 Specific Area Development

(xvi). H701050 Investment, Development and Construction in Public Construction

(xvii). H701060 New County and Community Construction and Investment

(xviii). H703090 Real Estate Business

(xix). H703100 Real Estate Leasing (xx). I101120 Shipbuilding Consulting (xxi). I102010 Investment Consulting

43 -

(xxii). I103060 Management Consulting

(xxiii). I401010 General Advertising Services

(xxiv). JB01010 Conference and Exhibition Services

(xxv). JE01010 Rental and Leasing

(xxvi). ZZ99999 All business items that are not prohibited or restricted by laws and regulations, except those subject to special approval.

Article 2-1: The Company may make external guarantees in accordance with the "Operating Procedures for Endorsement and Guarantee.”

Article 2-2: The company's total reinvestment is not subject to the restriction that it may not exceed 40% of the Company's paid-in capital as stipulated in Article 13 of the Company Act.

Article 3: The Company has its head office in Taipei City, Republic of China. When necessary, branches may be established domestically and abroad by the resolution of the Board of Directors.

Article 4: The Company’s announcement method shall be handled in accordance with Article 28 of the Company Act.

Chapter 2 Shares

Article 5: The total capital of the Company is set at NT$12 billion, divided into 1,200 million shares at NT$10 per share, and the Board of Directors is authorized to issue the shares in installments.

Article 5-1: In accordance with relevant laws and regulations, the Company may

issue new shares to employees for the subscription of employee stock purchase plan and employee restricted stock or transfer bought-back treasury stocks to employees. The issuance or transfer may be made to employees of the holding and subordinate companies that meet certain criteria.

Article 6: The Company’s shares are all registered, signed or sealed by three or

==> picture [36 x 9] intentionally omitted <==

more directors and issued after obtaining a certification from an institution approved by the competent authority for issuance and certification of stocks. The Company may also consolidate and exchange large denomination securities at the centralized securities depository institution's request.

The shares issued by the Company may be exempted from printing stocks in accordance with the Company Act

The shares issued under the preceding paragraph should be registered or kept by the centralized securities depository institution.

Article 7: (Deleted)

Article 8: (Deleted)

Article 9: The Company shall comply with the Company Act, the criteria issued by the Securities and Futures Bureau, and other relevant laws and regulations in the handling of its stock affairs.

Article 10: The transfer of shares shall cease within 60 days before a regular shareholder meeting or within 30 days before a special shareholder meeting or within 5 days before the base date on which the Company decides to distribute dividends and bonuses or other benefits.

Chapter 3 Shareholder Meeting

Article 11: There are two types of shareholder meeting, regular and special:

A. A regular shareholder meeting is convened once a year within six months after the end of each fiscal year.

B. A special meeting can be convened when necessary.

Shareholders should be notified in writing or electronically of the date and place of the meeting and the reason for the meeting at least 30 days before a regular shareholder meeting and 15 days before a special shareholder meeting, except for shareholders holding less than 1,000 registered shares, which may be notified by public announcement.

45 -
Article 12: The convening of regular and special shareholder meetings shall be in accordance with the provisions of the Company Act.
Article 13: The Company's shareholders shall have one voting right per share, except for those who have no voting rights or restricted voting rights in accordance with the Company Law.
Article 14: Shareholder may provide a proxy form issued by the Company stating the scope of authorization and appoint a proxy to attend a shareholder meeting. Except for a trust enterprise or a stock affairs agency approved by the competent securities authority when one person is concurrently appointed as a proxy by two or more shareholders, the voting rights of that proxy must not exceed 3% of the voting rights of the total number of issued shares. If that percentage is exceeded, the voting rights in excess of that percentage shall not be included in the calculation in excess of that shall not be counted.
Article 15: Unless otherwise required by the Company Act, resolutions in a shareholder meeting should be made with the presence of shareholders representing a majority of the total number of outstanding shares and with the consent of a majority of the shareholders' voting rights present.

Article 16: (Deleted)

Article 17: Resolutions of a shareholder meeting should be recorded in meeting minutes in accordance with Article 183 of the Company Act.

Chapter 4 Directors, Audit Committee and managerial officers

Article 18: The Company shall have five to nine directors, who the shareholder meeting shall elect in accordance with the law.

Regarding the number of directors in the preceding paragraph, the

46 -

number of independent directors must not be less than three and must not be less than one-fifth of the number of directors.

The Company adopts the candidate nomination system for the election of directors under Article 192-1 of the Company Act, and the shareholders shall elect the directors from a list of candidates. The acceptance of the nomination of director candidates and announcements of related matters shall be handled in accordance with the Company Act, Securities and Exchange Act and other relevant laws and regulations.

For the election of directors, each share shall have the same number of voting rights as the number of directors to be elected, which may be cast collectively for a single candidate or split among several candidates, and those receiving the greater number of voting rights shall be elected as directors. Independent directors and non-independent directors should be elected at the same time, but their respective elected numbers shall be calculated separately.

Article 19: The Company shall establish an Audit Committee in accordance with

the Securities and Exchange Act, which shall consist of all independent directors.

The Audit Committee and its members shall exercise their authorities and related matters in accordance with the relevant laws and regulations of the competent securities authority.

Article 20: The Board of Directors are composed of directors, and the chairperson of the board shall be elected to represent the Company externally from among the directors; and there may be a vice-chairperson of the board; When the vacancy of directors reaches one-third, a by-election should be convened at a special shareholder meeting, and the term of office of the succeeding director shall be limited to the original term of office.

Article 21: The term of office of the directors shall be three years and they shall be

47 -

eligible for re-election. When the term of office of a director expires before re-election, his or her authorities and duties shall be extended until the re-elected director takes office. However, the competent authority may, in accordance with its authority, order the Company to re-elect within a time limit. If the re-election does not take place by the end of the time limit, the director shall be dismissed from office by the end of the time limit.

Article 22: The boarding meetings shall be convened with seven days' notice to all directors but may be convened at any time in case of emergency. Notice for the convening of the board meetings can be made in writing, email or fax.
When a director entrusts another director to attend the board meeting as a proxy, he or she shall provide a proxy form every time and specify the scope of authorization. A proxy can only be entrusted by one person.
Directors residing abroad may entrust other domestic shareholders in writing to attend the board meetings as proxies.
The proxies mentioned in the preceding paragraph should apply to the competent authority for registration, and the same applies to amendments.
Article 23: The board's chairperson shall chair both the board meeting and the shareholder meeting internally and represent the Company externally. If the chairperson is absent from work or is unable to exercise his or her authority for any reason, related affairs shall be handled in accordance with the provisions of Article 208 of the Company Act.
Article 24: Unless otherwise required by the Company Act, the board meetings shall be convened only with the presence of more than half of the directors, and its resolutions shall only be valid with the approvals of more than half of the directors.
48 -

Article 25: The remuneration for chairperson and directors is authorized to the Board of Directors in accordance with the extent of their participation in the Company's operations and the value of their contributions, and regarding the usual standard in the industry. However, independent directors must not participate in the distribution of the remuneration under Article 31.

The Company may purchase liability insurance for the directors during their term of office for the directors' scope of business. The Company may purchase liability insurance for all directors and representatives appointed as directors or supervisors in a re-invested enterprise during their term of office for the actual needs of the business they perform.

Article 26: The authorities and duties of the Board of Directors are as follows.

(i). Follow the resolution of the shareholder meeting to determine the business policy.

(ii). Formulate detailed rules for each department.

(iii) The selection or dismissal of the general managers.

(iv). Review budget, final accounting reports, various schedules and business reports.

(v). Convening of a shareholder meeting.

(vi). Review sales report.

(vii). Other authorities and duties in accordance with the Company Act.

Article 27: The resolutions of the Board of Directors shall be recorded in the minutes, signed or sealed by the chairperson, and kept for record together with the attendance book.
Article 28: The Company shall have managerial officers whose appointment, dismissal and remuneration shall be in accordance with Article 29 of the Company Act.

Article 29: Deleted

49 -

Chapter 5 Accounting

Article 30: The Company’s fiscal year starts from January 1st to December 31st.

After the end of each fiscal year, the Board of Directors should prepare the following schedules and submit them to the regular shareholder meeting for ratification in accordance with the statutory procedures.

(i). Business report

(ii). Financial statements

(iii). Earnings distribution or losses make-up proposal

Article 31: If the Company makes profits during the year (profits before tax minus the distribution of remuneration for employees and directors), no less than 1% should be appropriated for employee remuneration and no more than 3% for director remuneration. However, if the Company still has accumulated losses, it should reserve the make-up amount in advance.

The aforementioned employee remuneration may be in the form of stock or cash. It may be paid to employees of the holding and subordinate companies who meet the Board of Directors' criteria. Remuneration for directors can only be in the form of cash.

The previous two provisions shall be resolved by the Board of Directors and reported to the shareholder meeting.
Article 31-1: If the result of the final accounting close concludes the Company makes profits for the period, it should first make up for the accumulated losses, then allocate 10% as legal reserve according to law except when the legal reserve has reached the amount of the Company’s paid-in capital. Then, in accordance with laws and regulations, the appropriated earnings are set aside or reversed. The Board of Directors shall prepare a proposal for distributing the remaining earnings, together with the cumulative unappropriated earnings at the beginning of the period, and
50 -

submit it to the shareholder meeting for resolution.

The Company's dividend policy should be based on actual operating conditions of the year, future investment, development, capital needs, and the financial structure and interests of shareholders. The distributable earnings can be paid in stock or cash except for discretionary retention. However, the cash dividend must not be less than 10% of the total dividend. When cash dividend per share is less than NT$0.5, the dividend will not be distributed unless otherwise resolved by the shareholder meeting.

The Company’s Board of Directors may, with a resolution approved by a majority of the directors present, with the presence of at least two-thirds of the directors, declare all or part of the dividends to be distributed in cash and report the resolution to the shareholder meeting.

Article 32: (Deleted)

Chapter 6 Supplementary provisions

Article 33: Other internal regulations of the Company shall be stipulated separately.
Article 34: Any matters not covered in this Article of Incorporation shall be governed by the Company Act and relevant laws and regulations.
Article 35: This Article of Incorporation was established on 1963.9.3, the 1st amendment was made on 1964.9.5, the 2nd amendment on 1965.11.4, the 3rd amendment on 1966.10.24, the 4th amendment on 1967.4.12, the 5th amendment on 1968.11.26, the 6th amendment on 1970.4.28, the 7th amendment on 1971.5.6, the 8th amendment on 1972.5.19, the 9th amendment on 1973.5.7, the 10th amendment on 1974.5.10, the 11th amendment on 1975.5.12, the 12th
51 -

amendment on 1975.10.15, the 13th amendment on 1976.5.10, the 14th amendment on 1977.4.25, the 15th amendment on 1978.5.10, the 16th amendment on 1979.4.25, the 17th amendment on 1980.5.7, the 18th amendment on 1981.5.7, the 19th amendment on 1982.4.30, the 20th amendment on 1984.9.29, the 21st amendment on 1987.6.19, the 22nd amendment on 1988.5.5, the 23rd amendment on 1989.5.16, the 24th amendment on 1990.6.29, the 25th amendment on 1993.11.6, the 26th amendment on 1994.5.21, the 27th amendment on 1996.5.9, the 28th amendment on 1997.5.3, the 29th amendment on 1999.1.12, the 30th amendment on 1999.6.16, the 31st amendment on 2000.5.5, the 32nd amendment on 2002.1.29, the 33rd amendment on 2002.1.29, the 34th amendment on 2002.5.29, the 35th amendment on 2003.10.24, the 36th amendment on 2004.6.25, the 37th amendment on 2005.6.14, the 38th amendment on 2007.6.15, the 39th amendment on 2010.6.25, the 40th amendment on 2012.6.21, the 41st amendment on 2013.6.21, the 42nd amendment on 2016.6.23, the 43rd amendment on 2017.6.21, the 44th amendment on 2019.6.28, the 45th amendment on 2020.9.30.

52 -

Appendix ii

FIRST STEAMSHIP COMPANY LIMITED

Rules of Procedure for Shareholder Meeting

Article 1

In order to establish a good governance system for the shareholder meeting of the Company, improve supervision functions and strengthen management functions, these rules are set forth in accordance with Article 5 of the “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” for compliance.

Article 2

The rules of procedure for the Company's shareholder meeting should comply with the provisions of these rules unless otherwise provided by laws or regulations.

Article 3 (Convening of Shareholder Meeting and Notice of Meeting)

Unless otherwise provided by laws and regulations, the Company's shareholder meeting shall be convened by the Board of Directors.

This Company should prepare electronic versions of the shareholder meeting notice, proxy forms, and the causes and explanations of proposals for ratification or discussion, or the election or dismissal of directors, and upload them to the Market Observation Post System 30 days before a regular shareholder meeting or 15 days before a special shareholder meeting. And 21 days before a regular shareholder meeting or 15 days before a special shareholder meeting, the electronic versions of the shareholder meeting handbook and supplementary materials of the meeting shall be prepared and uploaded to the Market Observation Post System. The meeting handbook and supplementary materials of the meeting should be made available to shareholders 15 days before the shareholder meeting, and are exhibited on the premises of the Company and the professional stock affairs agency appointed by the Company, and are distributed on-site in the shareholder meeting.

The notice and announcement should specify the causes for convening the

53 -

meeting; with the corresponding party's consent, the meeting notice may be given in an electronic form.

The election or dismissal of directors, change of the Article of Incorporation, reduction of capital, application for suspension of a public offering, permission for directors to compete for business, transfer of earnings to capital, transfer of reserves to capital, dissolution, merger, demerger, or the matters set forth in Article 185, Paragraph 1 of the Company Act should be listed and explained in the cause for convening and must not be proposed as extraordinary motions; the main contents thereof should be stated, and shall not be proposed by extraordinary motions; the main contents thereof may be stated on the website designated by the competent securities authority or the Company, and the website address should be included in the notice.

Where re-election of all directors and the date of their assumption of offices are stated in the causes for convening the shareholder meeting, after the completion of the re-election in the meeting, such date of their assumption of offices may not be altered by any extraordinary motion or other means in the same meeting.

Shareholders holding more than 1% of the total number of issued shares may submit a proposal to the Company for a regular shareholder meeting. However, the number of items in the proposal is limited to one. A proposal containing more than one item will not be included in the meeting agenda. However, if the shareholder’s proposal is to urge the Company to promote public interests or fulfill its social responsibilities. The Board of Directors may include it in the meeting agenda. In addition, when any of the circumstances of Paragraph 4 of Article 172-1 of the Company Act applies to a proposal put forward by a shareholder, the Board of Directors may exclude it from the meeting agenda.

Prior to the date for the suspension of a stock transfer before a regular shareholder meeting is held, the Company should publicly announce its acceptance of shareholder proposals in writing or electronically, and the location and time period for their submission; the period for submission of shareholder proposals must not be less than 10 days.

A shareholder proposal is limited to 300 words. If it exceeds 300 words, the

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proposal shall not be included in the meeting agenda; the proposing shareholder should attend the shareholder meeting in person or entrust others to attend and participate in the proposal's discussion.

Prior to the date for issuance of the shareholder meeting notice, the Company should inform the proposing shareholder of the proposal screening results. It shall list the proposals that conform to the provisions of this regulation in the meeting notice. For shareholder proposals that are not included in the meeting agenda, the Board of Directors should explain why they are not included in the shareholder meeting.

Article 4

A shareholder may appoint a proxy to attend a shareholder meeting at each shareholder meeting by presenting a proxy form issued by the Company, stating the scope of authorization.

A shareholder shall issue only one proxy form and appoint only one proxy and deliver the proxy form to the Company 5 days before the shareholder meeting. In the event of duplicate proxies, the one received earliest shall prevail. However, this does not apply to the situation where a declaration is made to cancel the previous proxy appointment.

After a proxy form has been delivered to the Company, if the shareholder intends to attend the meeting in person or exercise voting rights by correspondence or electronically, a written notice of proxy cancellation should be submitted to the Company 2 days before the meeting. If the cancellation notice is submitted after that time, the exercise of voting right by the proxy in the meeting shall prevail.

Article 5 (Principles Governing the Location and Time of Shareholder Meetings)

The location for a shareholder meeting should be the Company's premises, or a place easily accessible to shareholders and suitable for a shareholder meeting. The meeting may begin no earlier than 9 a.m. and no later than 3 p.m. The location and time of the meeting should be thoroughly considered with the opinions of independent directors.

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Article 6 (Preparation of signature book and other documents)

The Company should specify in its shareholder meeting notice the time during which shareholder attendance registrations will be accepted, the place to register for attendance, and other matters for attention.

The time during which shareholder attendance registrations will be accepted, as stated in the preceding paragraph, should be at least 30 minutes prior to the time the meeting commences. The place at which attendance registrations are accepted should be clearly marked and a sufficient number of suitable personnel should be assigned to handle the registrations.

Shareholders or their proxies (hereinafter referred to as the shareholders) should present attendance cards, sign-in cards, or other attendance certificates to attend a shareholder meeting. The Company must not arbitrarily add requirements for other documents from the shareholders in support of their eligibility to attend. Solicitors seeking proxy forms sho

The Company should furnish a signature book for attending shareholders, or the attending shareholders may hand in a sign-in card instead.

The Company should give attending shareholders with the meeting handbook, annual report, attendance card, speaker slips, voting ballots, and other meeting materials. Where there is an election of directors, election ballots should also be furnished.

When a shareholder is a government or a juristic person, the number of representatives to attend the shareholder meeting is not limited to one. When a juristic person is entrusted to attend a shareholder meeting, only one representative can be appointed to attend.

Article 7 (Chair and Attendees of Shareholder Meeting)

If a shareholder meeting is convened by the Board of Directors, the chairperson of the board shall chair the meeting. When the chairperson is on leave or for any reason unable to exercise the powers of office, the vice chairperson shall act in place of the chairperson; if there is no vice chairperson or the vice chairperson also is on leave or for any reason unable to exercise the powers of

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office, the chairperson shall appoint one of the managing directors to act as chair, or, if there are no managing directors, one of the directors shall be appointed to act as chair. Where the chairperson does not make such a designation, the managing directors or the directors shall select from among themselves one person to serve as chair.

When a managing director or a director serves as chair, as referred to in the preceding paragraph, the managing director or director shall be one who has held that position for six months or more and understands the company's financial and business conditions. The same shall be true for a representative of a juristic-person director that serves as chair. The same applies if the chair is a representative of a juristic-person director.

For the shareholder meeting convened by the Board of Directors, the chairperson of the board should preside in person, and a majority of the directors, at least one independent director, and at least one representative of various functional committees should attend. The attendance should be recorded in the shareholder meeting minutes.

If a shareholder meeting is convened by someone with the convening right but other than the Board of Directors, the convening person shall chair the meeting and if there are more than two such persons, one of them shall be elected as the chair of the meeting.

The Company may appoint lawyers, CPA, or related personnel to attend the shareholder meeting.

Article 8 (Audio or video recordings of shareholder meetings as evidence)

The Company, beginning from the time it accepts shareholder attendance registrations, should make an uninterrupted audio and video recording of the registration procedure, the shareholder meeting proceedings, and the voting and vote-counting processes.

The recorded materials of the preceding paragraph should be kept for at least one year. However, if any shareholder files a lawsuit in accordance with Article 189 of the Company Act, they shall be kept until the end of the lawsuit

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Article 9

Attendance in a shareholder meeting should be calculated based on the number of shares. The number of shares in attendance shall be calculated based on the shares indicated by the signature book or sign-in cards handed in, plus the number of shares whose voting rights are exercised by correspondence or electronically.

The chair should call the meeting to order at the scheduled meeting time. However, when the attending shareholders do not represent a majority of the total number of issued shares, the chair may announce a postponement. No more than two such postponements may be made for a combined total of no more than one hour. When there are still insufficiently attending shareholders representing more than one-third of the total issued shares after two postponements, the chair shall announce the meeting to be aborted.

When there are still insufficiently attending shareholders representing more than one-third of the total issued shares after two postponements, a tentative resolution may be adopted in accordance with Article 175, Paragraph 1 of the Company Act and all shareholders shall be notified of the tentative resolution. Another shareholder meeting shall be convened within one month.

Before the meeting's conclusion, if the attending shareholders represent a majority of the total number of issued shares, the chair may submit a tentative resolution for voting by the shareholder meeting in accordance with Article 174 of the Company Act.

Article 10 (Proposal Discussion)

If a shareholders meeting is convened by the Board of Directors, the meeting agenda shall be set by the Board of Directors. Votes shall be cast on each separate proposal in the agenda (including extraordinary motions and amendments to the original proposals of that meeting). The meeting should proceed in the order set by the agenda, which may not be changed without a resolution of the shareholder meeting.

If a shareholder meeting is convened by someone with the convening right but other than the Board of Directors, the preceding paragraph's provisions shall

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apply mutatis mutandis.

The chair must not declare the meeting adjourned before the conclusion of the meeting agenda of the preceding two paragraphs (including extraordinary motions), except by a resolution of the shareholder meeting. If the chair declares the meeting adjourned in violation of the rules of procedure, the other members of the Board of Directors should promptly assist the attending shareholders in electing a new chair in accordance with statutory procedures, by agreement of a majority of the votes represented by the attending shareholders, and then continue the meeting.

The chair shall allow ample opportunity during the meeting for explanation and discussion of proposals and of amendments or extraordinary motions put forward by shareholders; when the chair is of the opinion that a proposal has been discussed sufficiently to put it to voting, the chair may announce the discussion closed, call for voting, and schedule sufficient time for voting.

Article 11 (Shareholder's Speech)

Before speaking, an attending shareholder must specify the speech's subject on a speaker slip, his or her shareholder account number (or attendance card number), and account name. The order in which shareholders speak will be set by the chair.

An attending shareholder who has submitted a speaker slip but does not actually speak shall be deemed to have not spoken. When the speech's content does not correspond to the subject given on the speaker slip, the spoken content shall prevail.

Except with the chair's consent, a shareholder may not speak more than twice on the same proposal, and a single speech may not exceed 5 minutes. If the shareholder's speech violates the rules or exceeds the scope of the topic, the chair may terminate the speech.

When an attending shareholder is speaking, other shareholders must not speak or interrupt unless they have sought and obtained the chair's consent and the speaking shareholder; the chair should stop any violation.

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When a juristic-person shareholder appoints two or more representatives to attend a shareholder meeting, only one person may speak on the same proposal.

After an attending shareholder has spoken, the chair may respond in person or direct relevant personnel to respond.

Article 12 (Calculation of Voting Shares, Recusal System)

Voting in a shareholder meeting should be calculated based on the number of shares.

With respect to resolutions of a shareholder meeting, the number of shares held by a shareholder with no voting right shall not be calculated as part of the total number of issued shares.

When a shareholder has a personal interest in relation to an agenda item that would compromise the Company's interests, that shareholder must not vote on that item and must not exercise voting rights as a proxy for another shareholder.

The number of shares for which voting rights are not allowed to be exercised in the preceding paragraph shall not be calculated as part of the voting rights represented by attending shareholders.

Except for a trust enterprise or a stock affairs agency approved by the competent securities authority, when one person is concurrently appointed as a proxy by two or more shareholders, the voting rights of that proxy must not exceed 3% of the voting rights of the total number of issued shares. If that percentage is exceeded, the voting rights in excess of that percentage shall not be included in the calculation.

Article 13

A shareholder shall have one voting right per share, except when the shares are restricted shares or have no voting rights under Article 179, Paragraph 2 of the Company Act.

When the Company holds a shareholder meeting, it shall allow the exercise of voting rights by electronic means or by correspondence. When voting rights are exercised by correspondence or electronic means, the method of exercise should be specified in the shareholder meeting notice. A shareholder exercising voting rights

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by correspondence or electronic means shall be deemed to have attended the meeting in person, But his or her rights shall be considered abstained with respect to the extraordinary motions and amendments to original proposals of that meeting, so the Company should avoid submitting extraordinary motions and amendments to original proposals.

A shareholder intending to exercise voting rights by correspondence or electronic means under the preceding paragraph should deliver a written declaration of intent to the Company 2 days before the shareholder meeting. In the event of duplicate declarations of intent, the one received earliest shall prevail. Except when a declaration is made to cancel the earlier declaration of intent.

After a shareholder has exercised voting rights by correspondence or electronic means, if the shareholder intends to attend the shareholders meeting in person, a written declaration of intent to retract the voting rights already exercised under the preceding paragraph should be made to the Company by the same means by which the voting rights were exercised, 2 days before the shareholder meeting. If the notice of retraction is submitted after that time, the voting rights already exercised by correspondence or electronic means shall prevail. When a shareholder has exercised voting rights by correspondence or electronic means and also appointed a proxy to attend the shareholder meeting, the voting rights exercised by the proxy in the meeting shall prevail.

Unless otherwise required by the Company Act and by the Company's Article of Incorporation, the approval of a proposal shall require an affirmative vote of a majority of the attending shareholders' voting rights. At the time of voting, the chair or the person designated by the chair should first announce the total number of voting rights of the attending shareholders for each proposal. The shareholders shall vote on each proposal. On the same day after the meeting, the results of shareholders’ approvals, disapprovals and abstentions, shall be entered into the Market Observation Post System.

When there is an amendment or an alternative to a proposal, the chair shall present the amended or alternative proposal together with the original proposal and decide the order in which they will be put to the vote. When anyone is approved, the other proposals will then be deemed rejected, and no further voting shall be

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required.

Monitoring and counting personnel for voting on a proposal shall be appointed by the chair, but all monitoring personnel should be shareholders.

Vote counting for shareholder meeting proposals or elections should be conducted in a public place in the shareholder meeting. Immediately after vote counting has been completed, the voting results, including the statistics of the number of rights, shall be announced on the spot and recorded.

Article 14 (Election Matters)

In the event of an election of directors in a shareholder meeting, the election results, including the list of elected directors and the number of their elected rights, should be announced on the spot in accordance with the relevant election regulations established by the Company.

The ballots for the election mentioned in the preceding paragraph should be sealed and signed by the monitoring personnel and then properly kept for at least one year. However, if any shareholder files a lawsuit in accordance with Article 189 of the Company Act, they shall be kept until the end of the lawsuit

Article 15

A shareholder meeting's resolutions should be recorded in the meeting minutes, which shall be signed or sealed by the chair and distributed to each shareholder within 20 days after the meeting. The meeting minutes may be produced and distributed in electronic form.

The Company may distribute the meeting minutes of the preceding paragraph by a public announcement through the Market Observation Post System

The meeting minutes should accurately record the year, month, day, and place of the meeting, the chair's name, the methods of ratification, and a summary of the discussions and voting results (including statistics of voting rights), and disclose the number of voting rights won by each candidate in the event of an election of directors. The meeting minutes should be kept for the duration of the existence of the Company.

Article 16 (Public Announcement)

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On the day of a shareholder meeting, the Company should compile in the prescribed format a statistical statement of the number of shares obtained by solicitors and the number of shares represented by proxies. It shall make an express disclosure in the shareholder meeting.

If a resolution in a shareholder meeting constitutes material information required by relevant laws or regulations or by Taiwan Stock Exchange (Taipei Exchange), the Company should transmit the content of such resolution to the Market Observation Post System within the prescribed time period.

Article 17 (Maintenance of the order of the meeting)

The personnel administering the shareholder meeting should wear identification cards or armbands.

The chair may direct proctors or security personnel to help maintain order in the meeting place. Proctors or security officers, when helping maintain order at the scene, should wear armbands or identification cards with the word “Proctor.”

If the meeting place is equipped with sound-amplifying equipment, the chair may stop any shareholders from speaking unless they are using the equipment set up by the Company.

When a shareholder violates the rules of procedure, disobeys the chair's correction, or obstructs the proceedings and refuses to follow the call to stop, the chair may direct proctors or security personnel to escort the shareholder out of the meeting.

Article 18 (Meeting Break, Resumption)

When a meeting is in progress, the chair may announce a break based on time considerations. If a force majeure event occurs, the chair may rule the meeting temporarily suspended and announce a time when, in view of the circumstances, the meeting will be resumed.

If the meeting place cannot be further used and not all of the items (including extraordinary motions) on the meeting agenda have been addressed, the shareholder meeting may ratify a resolution to resume the meeting at another place.

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The shareholder meeting may, in accordance with the provisions of Article 182 of the Company Act, be resolved to be postponed or resumed within five days.

Article 19

The rules will be implemented after approval by a shareholder meeting, and the same applies to amendments.

The entire context of the rules was amended and published on June 18,

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Appendix iii

Shareholdings of all directors of FIRST STEAMSHIP COMPANY LIMITED. The date for the suspension of share transfer: April 13, 2021

Title	Name	Shareholding	Shareholding (%)
Chairperson	Yonghenghui Investment limited Representative: KUO, JEN-HAO	23,326,000 shares	3.13%
Director Director	Henghua Investment Co., Ltd. Representative: NG, QING-HAI Representative: CHUANG,CHIEN-WAN	57,065,945 shares	7.65%
Director	Xundong Investment Co., Ltd. Representative: YAU, DENNIS WAI TAK	15,154,441 shares	2.03%
Independent director Independent director Independent director	CHAO, TSENG-PING KUNG, HSIN-KAI YANG, JUNG-TSUNG	- - -	- - -
Total		95,546,386 shares	12.81%

Note: I. The total number of issued shares on April 13, 2021 was 745,968,008. II. The minimum total number of shares legally required to be held by all Company directors is 23,870,976 . As of April 13, 2020, all directors

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held 95,546,386 shares, which complies with the Act.

III. The Company has an Audit Committee. There is no compliance issue about the number of shares legally required to be held by supervisors.
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Appendix iv

Proposals for the shareholder meeting

I . In accordance with Article 172-1 of the Company Act, Shareholders holding more than 1% of the total number of issued shares may submit a written proposal to the Company for discussion in a regular shareholder meeting.
II. The period for submission of shareholder proposals for the Company is from April 6, 2021 to April 15, 2021, and it is announced on the Market Observation Post System in accordance with law.
III. The Company did not receive any shareholder proposals during the period for submission of shareholder proposals.
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AI assistant

FSC — AGM Information 2021

52157_rns_2021-08-11_235f2c1e-5223-4f90-963f-5ca3a5d5851c.pdf

FIRST STEAMSHIP COMPANY LIMITED

Table of Contents

Report Items

Report no. 1

Business Report

I. 2020 Business Overview

(i). Marine Transportation Business

II. Future Outlook

(i). Marine Transportation Business

III. Conclusion

FIRST STEAMSHIP COMPANY LIMITED

Audit Committee’s audit report

FIRST STEAMSHIP COMPANY LIMITED

Report Items

Report Items

Report no. 4

Report Items

Report no. 5

Report Items

Report Items

Proposed Resolutions

KPMG

Independent Auditors’ Report

Opinion

Basis for Opinion

Other Matter

Key Audit Matters

1. Impairment of goodwill and trademark

Description of key audit matter:

How the matter was addressed in our audit

2. Assets impairment

Description of key audit matter:

How the matter was addressed in our audit

3. Recoverability of other receivables

Description of key audit matter:

How the matter was addressed in our audit

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Notes to Readers

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars , Except for Earnings Per Common Share)

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the years ended December 31, 2020 and 2019

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) FIRST STEAMSHIP COMPANY LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (CONT’D)

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Independent Auditors' Report

Opinion

Basis for Opinion

Other Matter

Key Audit Matters

Description of key audit matter:

How the matter was addressed in our audit

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

KPMG

Notes to Readers

Parent Company Only Balance Sheets For the years ended December 31, 2020 and 2019

Parent Company Only Balance Sheets (CONT'D)

For the years ended December 31, 2020 and 2019

Parent Company Only Statements of Comprehensive Income

For the years ended December 31, 2020 and 2019

(English Translation of Financial Statements Originally Issued in Chinese)

FIRST STEAMSHIP COMPANY LIMITED

Parent Company Only Statements of Changes in Equity For the years ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)

FSC AGM Information 2021