U-MING - AGM Information 2014 | FinancialReports.eu

Stock Code: 2606

U-MING MARINE TRANSPORT CORP. Handbook for the 2014 Annual Meeting of Shareholders

MEETING TIME: June 9, 2014 PLACE: Taipei Hero House, 20 Changsha Street, Sec. 1, Taipei, Taiwan

The English version is the translation of the Chinese version and if there is any conflict in the handbook between the meaning of Chinese words of terms in the Chinese version and English words or terms in the English version, the meaning of the Chinese version shall prevail.

U-MING MARINE TRANSPORT CORP.

2014 Annual Meeting of Shareholders

Table of Contents	Table of Contents
I. Meeting Procedure………………………………………………………P1
II. Matters To Be Reported
1.	2013 Business Report ………………………………………………………….. P2
2.	2013 Financial Statements ………………………….………………………….. P9
3.	Supervisor’s Review Report on the 2013 Financial Statements ………………. P22
4.	Report on the Institutionalization of the “Code of Ethical Conduct” and
	“Ethical Corporate Management Best Practice Principles”….….……….…..…. P23
III.	Matters To Be Ratified
1.	Adoption of the 2013 Business Report and Financial Statement ………………. P36
2.	Adoption of the Proposal for Distribution of 2013 Retained Earnings ……….. P37
IV. Matters To Be Discussed
1.	Amendment to provisions in “Procedures for the Acquisition and Disposition of
	Assets”………………………………………………………..………………… P39
2.	Amendment to provisions in “Rules of Procedure for Shareholders’ Meetings”….… P81
V. Questions And Motions……………………………………………..…. P85
VI.	Rules And Bylaws
1.	Articles of Incorporation …………………………………………….………… P86
2.	Rules of Procedure for Shareholders’ Meeting ...…..………………………….. P92
VII. Appendix
1.	Current Shareholding of Directors and Supervisors …………………………... P95
2.	The Impact of Stock dividend Issuance on Business Performance, EPS, and
	Shareholder Return Rate ……………………………………………………..... P96

U-MING MARINE TRANSPORT CORP. Procedure for the 2013 Annual Meeting of Shareholders

Call The Meeting To Order

Chairman Takes Chair

Chairman Remarks

To Report (Management Presentation)

To Ratify

To Discuss

Extemporary Motion

Meeting Adjourned

Matters To Be Reported:

1. 2013 Business Report

I. Introduction

It has been five years since the outbreak of the global financial crisis in 2008. Global economic recovery seemed to take hold in 2013 after years of uncertainty and there was seemingly light at the end of the tunnel. The debt crisis that has clouded Europe for four years is about to end and the governments of most European countries have gradually restored their credit standing. These are positive signs of economic recovery. The USA, once the unquestioned leader of the global economy, announced its retreat from quantitative easing (QE) after the standstill of the government for several instances. According to the latest IMF report, year-on-year economic growth in developed nations in 2013 was 1.2%. In the same period, economic growth in China, which is the engine of global economic growth, was 7.6%. At the global level, year-on-year economic growth was 2.9%. In India, another top performer, year-on-year economic growth has been 3.8%. Japan has made a huge effort to revitalize its economy by pursuing a quantitative easing policy and launching a budget of ¥18.6 trillion to stimulate economic growth. The result was 2% year-on-year growth in 2013. A series of fiscal measures have been introduced so that confidence was restored to global markets and global trade increased by 2.9%. All these indicate an economic upturn in 2013 and further economic growth is yet to come.

However, despite signs of an economic upturn in 2013 it remained relatively weak, as the frailties seen in 2012 persisted. According to statistics compiled by Clarkson, 4.3 billion tons of dry bulk cargo was transported globally in 2013 at a marginal growth rate of 5%. The huge demand in Asian countries for economic development remained the primary source of bulk cargo. Iron ore remained the key material for economic growth with a trade volume of 1.186 billion tons, a growth rate of 7%. The cost of loans remained high and regulations governing environmental pollution remained in place. However, nothing can stop the strong demand for iron or in China. According to statistics released by China Customs, China imported 820 million tons of iron ore in 2013 at the sustained year-on-year growth rate of 10%, which accounted for 68% of global demand. Countries such as Brazil and Australia have developed capacity expansion plans over the years,

which could yet cause an anticipated decline in the price of iron ore. In China, the cost of iron ore production is high and the quality is poor, which compelled her to rely on imports. Wood Mackenzie, a consulting firm, forecasts that the annual increase in iron ore imports to China could be as high as 50 million tons by 2020. Such an import volume would account for approximately 85% of total demand in China. Data released by the World Steel Association indicates that crude steel production in China was 775 million tons in 2013, a year-on-year growth rate of 9%. The figures indicate that China has resumed its demand for iron ore and crude steel, but the volume is still insignificant. Power consumption in China was 5.3223 trillion kilowatt hours (kWh) and railway freight volume was 3.967 billion tons in 2013, driven by an effort to achieve economic growth of 7.3% and 2% year-on-year growth. The balance of loans in various forms fell by 8% from the same period in the previous year. In general, China has eased its strategy of investment in infrastructure as the prime force driving economic growth and demand. It is expected that economic growth in China will not be as strong as in the past. There was also good news for economic stability and growth in 2013. According to data released by China’s National Statistics Bureau, the annual year-on-year increase in PMI in China remained at 10.8 and the urbanization rate increased to 53.73%. According to the World Steel Association, the per capita crude steel consumption rate in China increased to 508 kilograms per annum in 2012. There is also a railway network to be built in China with a budget of RMB500 billion, and an infrastructure project in India worth more than US$1 trillion from 2013~2017. This indicates that confidence will return to the iron ore and steel markets in 2014.

In terms of coal trade, the second largest traded commodity, the market is still clouded by the recession carried forward from 2012. In addition, awareness of environmental protection worldwide has hit the global coal industry hard, with many countries taking action to reduce their reliance on coal and achieve low-carbon targets set for 2020. China has set the target of reducing the use of coal as fuel to less than 65% of total energy consumption by volume by 2017. In the USA, the Environmental Protection Administration requires that the emission of carbon dioxide from new power plants does not exceed 1100 lbs in mega watt hour (mWh). The shale revolution in 2011 made natural gas prices in the USA three to four times cheaper than in Asia. The replacement of coal by regenerated

natural gas seemed to be irreversible. According to statistics from Clarkson, coal trading in 2013 was 1.115 tons by volume, with the year-on-year increase slowed to 5%. Hampered by the mass reduction of imports in the European countries, thermal coal trade increased by only 2%. India, a newly emerging economy, has a pressing need for energy but also feels pressured from environmental protection groups. The temporary shortage of coal increased coal imports by 17% in 2013. Coking coal increased by 13% in trade volume in 2013 due to an economic upturn in China that drove industrial growth. The steel and iron industry contributed to the increase in the demand for coking coal, but the trade off effect between thermal coal and regenerated energy will spur keen competition in the coal industry in 2014.

Although the bulk shipping market is still experiencing excess supply, the situation in 2013 appears to be more optimistic than preceding years because demand has started to increase. According to Clarkson, bulk shipping capacity in 2013 was 683 million tons in deadweight, a slow year-on-year increase of 6%. The actual number of vessels delivered was 785 in total, a sharp year-on-year decline of 36%. That constituted only 2.15 vessels delivered per day. The signs of economic recovery have encouraged ship owners to be more speculative, which resulted in a dramatic year-on-year increase of 159% in new vessel contracts in 2013. Economic recovery also slowed down the market for second-hand vessels. In 2013, the trade in second-hand vessels was down 14% as compared with the same period in the previous year when the growth in capsize vessels was hit the hardly. The ship demolition industry is also on the decline. In 2013, only 400 vessels were scraped, a year-on-year decline of 32%. Although the Chinese government launched a new policy subsidizing the demolition of vessels in service for over 15 years, it takes time for market supply and demand to reach equilibrium. In general, the bulk shipping market is highly sensitive to the economic cycle. Now the market has started to recover, the average Baltic Dry Index shows 31% year-on-year growth in 2013 to 1206. This represents a first economic upturn after five years of sluggishness. Likewise, the bulk shipping market in 2013 also offers a gleam of light.

However, uncertainty presents numerous challenges in the bulk shipping market of 2014. 1. Economic recovery is in place, but the debts of European countries remain high. The withdrawal from QE in the USA creates the potential

risk of an economic slump. Indeed, economic recovery in the USA and Europe is still highly uncertain. 2. Economic growth in China has slowed down as it ’ pursues development based on quality not quantity. In the future, China s development will be critical for global economy growth. 3. The development of shale gas in the USA makes the price of natural gas irrelevant which comes with greater pressure for energy-efficiency and reduced carbon emissions. 2014 will be a very challenging year for the coal industry. 4. In China, the steel and coal industries are mired in excessive production capacity and high debt and these could become serious problems at any time. 5. The persistent dilemma between supply and demand is still the order of the day. For survival, ship owners tend to adopt a cut in operational costs as their core strategy. The demand for raw materials is expected to increase in 2014, as newly emerged economies such as China and India continue their infrastructure buildup. In the future, U-Ming is confident to grab the economic upturn with positive enhancements in operations, and will seek to maximize profit for shareholders and move towards sustainable corporate development.

II. Business Performance

Despite the unfavorable economic factors severely hampering the operational environment, U-Ming still maintained its robust performance, with consolidated revenue of NT$7,407,949,000 corporate earnings NT$1,566,909,000 and basic earnings per share (EPS) of NT$1.83.

U-Ming will continue its fleet renewal and expansion plan. As of the end of 2013, 2 capesize carriers and 2 Panamax carriers were delivered and 1 capesize, 1 Post-panamax and 1 handy size carriers were decommissioned. There are 9 capesize carriers, 4 Panamax carriers, and 4 handy size carriers scheduled for deliver from 2014 to 2017 as an integral part of the U-Ming fleet. U-Ming will further its operations in the crude oil carrier market through Global Energy Maritime, a joint venture with China Petroleum Corporation and Chinese Marine Transport Ltd. of Taiwan, with orders for 2 very large crude carriers (VLCC) at low cost, given the potential presented by economic recovery and new business opportunities in market.

With an elite management team and a reliable information platform, U-Ming can keep abreast of any change in the market and business opportunities as and

when they appear. The established viable risk management system and the flexible carrier scheduling system help to effectively reduce the cost of operations and operational risk. U-Ming also plans to turn its fleet into eco-friendly carriers by introducing green equipment and pursuing a policy of energy-saving and carbon-reduction on sea and land. These include Ship Energy Efficiency Management Plan (SEEMP) and an Environment Management System (EMS) and will help to transform U-Ming into a green business.

III. Business Strategy

In the unpredictable market of marine transport, U-Ming has to be ever more prudent and cautious in its operations. With the establishment of a “ Customer Relations Management (CRM) ” system, the Company can keep track on customers and changes in the industry. In addition, U-Ming can also access information in real-time through its reliable e-platform. This helps the company to better understand customers and market trends enabling it to adjust business strategy and enhance operational efficiency more flexibly.

U-Ming will spare no effort in financial management by creating a healthy financial system as a foundation for sustainable development. Through the development of more financing channels, the Company will be able to control its cost of capital better, and pay more attention to exchange rate fluctuation and interest rates to hedge interest and exchange rate risks.

U-Ming considers its personnel to be vital assets and provides proper training for crews and land staff as needed. In addition, the Company has also established U-Ming Marine Services Co., Ltd. in Xiamen to expand the operations and recruitment of seamen and management ship personnel in China. Besides, ships are an important asset. U-Ming will perform regular service and maintenance of its carriers and improve the work environment for crews, thereby fulfilling its commitment to customers and complying with the inspection requirements at various ports around the world and applicable international laws.

It is the responsibility of everyone to protect the environment. As such, U-Ming considers itself to be a responsible corporate citizen and spares no effort to protect marine ecology and environment in its shipping operations. In practice, U-Ming has adopted related environmental protection policies in its offices and on board carriers. All carriers are equipped with energy-efficient and

carbon-reduction devices and have adopted fuel-efficiency to reduce the emission of harmful gases. Green navigation represents the company ’ s sustainable green journey.

In response to changes in the market, U-Ming has adopted a low-speed fuel-efficient and low-carbon navigation mode for its fleet to reduce fuel consumption and costa. At the same time, the Company also seeks to enlarge the proportion of COA for its fleet to stabilize profits and reduces operational risk. Customers and business partners with good reputation and financial stability will be prioritized for business. U-Ming will expand the size of its fleet with the replacement of old carriers by new carriers when the market price of new ships is favorable. The renewal of carriers will help to keep the fleet young and highly mobile and hence maintain a competitive edge, which is necessary to maximize profits for shareholders and create a win-win scenario.

The short-term goals of U-Ming are:

Continue with vessel renewal plan.
Strengthen carrier deployment plan and cost controls.
Select customers with good credit standing and stable assets, and seek to secure long-term contracts of affreightment (COA) to reduce operational risk.
Properly enforce port state control (PSC) inspection records and move towards the zero detention rate.
Strengthen awareness of environmental protection on board carriers and land to ensure corporate social responsibility with regard the marine ecological environment.

The long-term goals of U-Ming are:

Continue expansion of fuel-efficient and high-performance fleet to achieve the goal of sustainable corporate development.
Diversify regional risk and seek business partners of good reputation and quality.
Diversify the shipping market segment and portfolio of carriers to enlarge scope of service.
Seek investment or mergers and acquisitions with enterprises that have good
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asset quality and reputation.

Embrace corporate social responsibility and be a good corporate citizen.

IV. Conclusion

U-Ming is prepared to respond to any change in the unpredictable market to realize its corporate philosophy of development based on “ Sincerity, Diligence, Thrift, Prudence and Innovation. ” Everyone at U-Ming remains cautious optimistic irrespective of improvements in the economic situation, in order to maximize profits and value for shareholders. Although 2014 will be a year of uncertainty and challenges, U-Ming Marine Transport, with its competent management team and healthy financial position, will prosper together with its shareholders and stakeholders. Nonetheless, U-Ming will dedicate itself as “ ” “ – fallows, Based on shipping core competency, To be world class logistics and transportation company, ” and “ To be first choice for customers, employees and investors ” We will be a good corporate citizen, embrace corporate social responsibility and serve as a model of operational excellence for other enterprises.

2. Financial report of 2013

Consolidated Balance Sheets in Y2013

Consolidated Statements of Comprehensive Income in Y2013

Consolidated Statements of Changes Equity in Y2013

Consolidated Statements of Cash Flows in Y2013

Balance Sheets in Y2013

Statements of Comprehensive Income in Y2013

Statements of Changes in Equity in Y2013

Statements of Cash Flows in Y2013

Please see the attachments for Independent Auditors’ Report of Deloitte & Touche. For complete financial reports, please download from M.O.P.S. (http://mops.twse.com.tw)

U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents Financial assets at fair value through profit or loss - current Available-for-sale financial assets - current Held-to-maturity financial assets - current Trade receivables from unrelated parties Trade receivables from related parties Other receivables Fuel inventory Other current assets Total current assets NON-CURRENT ASSETS Available-for-sale financial assets - non-current Held-to-maturity financial assets - non-current Financial assets measured at cost - non-current Investments accounted for using equity method Property, plant and equipment Deferred tax assets Prepayment for equipment Refundable deposits Long-term receivable - related parties Other non-current financial assets Total non-current assets		December 31, 2013 Amount % $ 13,001,660 25 776,430 2 9,901,316 19 1,811,039 4 457,740 1 193,382 - 110,757 - 381,440 1 184,922 - 26,818,686 52 121 - - - 892,943 2 596,029 1 16,806,347 33 49,624 - 5,443,954 11 116,375 - 695,182 1 - - 24,600,575 48	December 31, 2012 Amount % $ 15,373,468 33 346,307 1 8,980,498 19 9,052 - 450,269 1 98,174 - 202,073 - 344,571 1 138,365 - 25,942,777 55 137 - 1,717,018 4 948,489 2 696,938 2 12,223,412 26 93,722 - 4,463,377 10 208,381 - 649,170 1 - - 21,000,644 45	January 1, 2012
				Amount % $ 15,207,419 32 1,206,467 3 7,559,266 16 2,386 - 496,334 1 139,796 - 147,187 - 204,891 1 99,340 - 25,063,086 53 1,451,259 3 1,769,398 4 822,489 2 552,810 1 9,279,590 20 129,322 - 4,772,754 10 164,243 1 544,676 1 2,422,000 5 21,908,541 47
		$ 51,419,261 100	$ 46,943,421 100

	December 31,	2013			December 31,	2012			January 1,	2012			December 31,	2013			December 31,	2012		January 1,	2012
	Amount	%			Amount	%			Amount	%	LIABILITIES AND EQUITY		Amount	%			Amount	%		Amount	%
											CURRENT LIABILITIES
$	13,001,660	25		$	15,373,468	33		$	15,207,419	32	Short-term borrowings	$	5,440,000	11		$	4,250,000	9	$	4,495,000	10
	776,430		2		346,307		1		1,206,467	3	Short-term bills payable		2,331,348		4		1,956,473	4		2,289,071	5
	9,901,316	19			8,980,498	19			7,559,266	16	Financial liabilities at fair value through profit or loss - current		35,622		-		224,437	1		3,253	-
	1,811,039		4		9,052		-		2,386	-	Trade payables		89,667		-		98,139	-		112,734	-
	457,740		1		450,269		1		496,334	1	Other payables		852,254		2		724,339	2		595,057	1
	193,382		-		98,174		-		139,796	-	Current tax liabilities		208,384		-		64,737	-		3,008	-
	110,757		-		202,073		-		147,187	-	Current portion of long-term borrowings		742,480		1		930,529	2		1,511,518	3
	381,440		1		344,571		1		204,891	1	Obligation under capital leases - current		109,819		-		102,845	-		100,862	-
	184,922		-		138,365		-		99,340	-	Other current liabilities		282,899		1		135,155	-		259,759	1
	26,818,686	52			25,942,777	55			25,063,086	53	Total current liabilities		10,092,473	19			8,486,654	18		9,370,262	20
											NON-CURRENT LIABILITIES
	121		-		137		-		1,451,259	3	Bonds payable		1,991,852		4		1,991,406	4		-	-
	-		-		1,717,018		4		1,769,398	4	Bank loans		12,427,608	24			10,344,594	22		8,782,542	18
	892,943		2		948,489		2		822,489	2	Deferred tax liabilities		513,423		1		730,314	2		924,390	2
	596,029		1		696,938		2		552,810	1	Obligation under capital leases - noncurrent		150,245		-		248,721	-		350,224	1
	16,806,347	33			12,223,412	26			9,279,590	20	Deferred revenue - non-current		286,238		1		302,396	1		339,759	1
	49,624		-		93,722		-		129,322	-	Accrued pension liabilities		455,406		1		440,732	1		432,102	1
	5,443,954	11			4,463,377	10			4,772,754	10	Other non-current liabilities		118		-		99	-		87	-
	116,375		-		208,381		-		164,243	1
	695,182		1		649,170		1		544,676	1	Total non-current liabilities		15,824,890	31			14,058,262	30		10,829,104	23
	-		-		-		-		2,422,000	5
											Total liabilities		25,917,363	50			22,544,916	48		20,199,366	43
	24,600,575	48			21,000,644	45			21,908,541	47
											EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY
											Common share capital		8,580,167	17			8,580,167	18		8,580,167	18
											Capital surplus		225,384		1		225,388	-		225,407	1
											Retained earnings
											Legal reserve		6,613,006	13			6,432,581	14		6,159,747	13
											Special reserve		3,553,170		7		1,912,424	4		2,623,069	5
											Unappropriated earnings		7,388,568	14			9,817,349	21		10,158,399	22
											Total retained earnings		17,554,744	34			18,162,354	39		18,941,215	40
											Other equity		(858,397)	(2)			(2,569,404)	(5)		(974,528)	(2)
											Total equity		25,501,898	50			24,398,505	52		26,772,261	57
											TOTAL	$	51,419,261	100		$	46,943,421	100	$	46,971,627	100
$	51,419,261	100		$	46,943,421	100		$	46,971,627	100

TOTAL

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U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE Freight revenue Other operating revenue Total operating revenue OPERATING COSTS Freight cost GROSS PROFIT OPERATING EXPENSES PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Gain on disposal of properties, plant and equipment Valuation gain on financial instruments, net Financial costs Net (loss) gain on foreign currency exchange Interest income Gain on sale of investment, net Dividend income Other income Share of the profit or loss of associates and joint ventures Impairment loss Other gains and losses Valuation loss on financial instruments, net Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX (EXPENSE) BENEFIT NET PROFIT FOR THE YEAR		For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31
		2013 Amount % $ 7,144,575 96 263,373 4 7,407,948 100 6,364,360 86 1,043,588 14 291,193 4 752,395 10 379,487 5 373,662 5 (299,810) (4) (282,704) (4) 278,053 4 249,147 3 176,216 3 13,325 - 11,978 - (11,831) - (8,123) - - - 879,400 12 1,631,795 22 (64,886) (1) 1,566,909 21		2012
				Amount % $ 7,646,914 96 316,710 4 7,963,624 100 6,760,237 85 1,203,387 15 399,978 5 803,409 10 381,161 5 - - (262,277) (3) 566,944 7 389,841 5 359,816 4 136,087 2 10,218 - (1,165) - - - (22,944) - (619,261) (8) 938,420 12 1,741,829 22 81,259 1 1,823,088 23 (Continued)

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U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OTHER COMPREHENSIVE INCOME (LOSS) Exchange differences on translating foreign operations Unrealized gain on available-for-sale financial assets Actuarial loss arising from defined benefit plans Share of the other comprehensive income (loss) of associates and joint ventures Other comprehensive income (loss) for the period, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR NET PROFIT ATTRIBUTABLE TO: Owner of the Company TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owner of the Company EARNINGS PER SHARE Basic Diluted		For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31
		2013 Amount % $ 1,202,040 16 516,013 7 (29,477) - (7,046) - 1,681,530 23 $ 3,248,439 44 $ 1,566,909 21 $ 3,248,439 44 $ 1.83 $ 1.82		2012
				Amount % $ (1,903,950) (24) 308,560 4 (27,899) - 514 - (1,622,775) (20) $ 200,313 3 $ 1,823,088 23 $ 200,313 3 $ 2.12 $ 2.12

		$		$
		$		$
		$		$

(Concluded)

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U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In Thousands of New Taiwan Dollars)

	Equity Attributable to Owners of the Company	Equity Attributable to Owners of the Company	Equity Attributable to Owners of the Company
Common Share Capital Capital Surplus $ 8,580,167 $ 225,407 - - - - - - - - - - - - - (19) 8,580,167 225,388 - - - - - - - - - - - - - (4) $ 8,580,167 $ 225,384	Retained Earnings Unappropriated Legal Reserve Special Reserve Earnings $ 6,159,747 $ 2,623,069 $ 10,158,399 - (710,645) 710,645 272,834 - (272,834) - - (2,574,050) - - 1,823,088 - - (27,899) - - 1,795,189 - - - 6,432,581 1,912,424 9,817,349 180,425 - (180,425) - 1,640,746 (1,640,746) - - (2,145,042) - - 1,566,909 - - (29,477) - - 1,537,432 - - - $ 6,613,006 $ 3,553,170 $ 7,388,568	Other Equity
		Exchange Unrealized Differences on Gain (Loss) on Translating Available-for- Foreign sale Financial Operations Assets $ (2,245,606) $ 1,217,759 - - - - - - - - (1,905,393) 308,657 (1,905,393) 308,657 - - (4,150,999) 1,526,416 - - - - - - - - 1,201,227 509,107 1,201,227 509,107 - - $ (2,949,772) $ 2,035,523	Revaluation Increment $ 53,319 - - - - 1,860 1,860 - 55,179 - - - - 673 673 - $ 55,852

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U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Gain on disposal of property, plant and equipment, net Dividend income Finance costs Interest income Unrealized loss (gain) on foreign currency exchange Gain on disposal of investment, net Other non-cash items Share of the (profit) loss of associates and joint ventures Impairment loss recognized on available-for-sale financial assets (Reversal of) provision for doubtful accounts Changes in operating assets and liabilities (Increase) decrease in financial assets held for trading Increase in trade receivables (Increase) decrease in other receivables Increase in fuel inventory Increase in other current assets (Decrease) increase in financial liabilities held for trading Decrease in trade payables Increase in other payables Increase (decrease) in other current liabilities Decrease in accrued pension liabilities Cash generated from operations Interest received Dividends received Interest paid Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Increase in prepayment for equipment Purchase of available-for-sale financial assets Proceeds on sale of available-for-sale financial assets Proceeds from disposal of property, plant and equipment Purchase of property, plant and equipment Proceeds on sale of financial assets measured at cost Dividend received from associates Decrease (increase) in refundable deposits Increase in borrowings from related parties		For the Years Ended December 31	For the Years Ended December 31
		2013 $ 1,631,795 1,409,383 (379,487) (300,477) 299,810 (278,053) 272,696 (186,311) (24,029) (11,978) 11,831 (7,719) (430,123) (94,960) (4,045) (36,869) (58,056) (188,815) (8,472) 121,364 147,744 (14,803) 1,870,426 373,414 300,477 (281,315) (94,032) 2,168,970 (6,579,701) (2,389,052) 2,199,914 717,034 (288,469) 105,437 100,052 94,792 (28,800)	2012 $ 1,741,829 1,453,148 (381,161) (290,257) 262,277 (389,841) (815,405) (244,304) (22,250) 1,165 - 95,562 860,160 (7,875) 12,262 (139,680) (41,993) 221,184 (14,595) 120,266 (124,605) (19,269) 2,276,618 322,693 290,257 (246,182) (13,172) 2,630,214 (3,691,829) - 437,896 464,153 (1,079,715) - - (49,409) (111,633) (Continued)

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U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

Net cash inflow on disposal of associates Proceeds on maturity of held-to-maturity financial assets Decrease in other financial assets Acquisition of associates Purchase of financial assets measured at cost Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from long-term borrowings Repayments of long-term borrowings Dividends paid to owners of the Company Proceeds (repayments) of short-term borrowings Proceeds (repayments) of short-term bills payable Decrease in obligation under capital lease Proceeds from issue of bonds Net cash generated from (used in) financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR		For the Years Ended December 31	For the Years Ended December 31
		2013 $ 10,886 9,317 - - - (6,048,590) 6,206,247 (4,428,917) (2,145,046) 1,190,000 374,875 (101,191) - 1,095,968 411,844 (2,371,808) 15,373,468 $ 13,001,660	2012 $ - 5,849 2,422,000 (156,000) (126,000) (1,884,688) 6,429,529 (5,343,557) (2,574,069) (245,000) (332,598) (99,520) 1,987,181 (178,034) (401,443) 166,049 15,207,419 $ 15,373,468

(Concluded)

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U-MING MARINE TRANSPORT CORPORATION

BALANCE SHEETS (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents Financial assets at fair value through profit or loss - current Available-for-sale financial assets – current Trade receivables from unrelated parties Trade receivables from related parties Other receivables Fuel inventory Other current assets Total current assets NON-CURRENT ASSETS Available-for-sale financial assets - non-current Financial assets measured at cost - non-current Investments accounted for using equity method Property, plant and equipment Deferred tax assets Refundable deposits Total non-current assets		December 31, 2013 Amount % $ 105,775 - 50,612 - 1,933,975 4 23,286 - 152,209 - 32,384 - 37,726 - 48,280 - 2,384,247 4 - - 344,296 1 53,119,939 94 425,986 1 49,624 - 32,683 - 53,972,528 96	December 31, 2012 Amount % $ 49,946 - - - 1,787,498 4 30,457 - 97,062 - 23,980 - 61,608 - 40,319 - 2,090,870 4 - - 344,296 1 50,798,074 94 701,061 1 93,722 - 33,940 - 51,971,093 96	January 1, 2012
				Amount % $ 85,613 - 853,364 2 1,193,678 2 54,469 - 140,208 - 30,828 - 51,363 - 35,738 - 2,445,261 4 529,323 1 344,296 1 51,204,269 92 793,744 2 129,322 - 33,555 - 53,034,509 96

TOTAL $ 56,356,775 100 $ 54,061,963 100 $ 55,479,770 100

LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings Short-term bills payable Financial liabilities at fair value through profit or loss - current Trade payables Other payables from unrelated parties Other payables from related parties Current tax liabilities Current portion of long-term borrowings Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Bonds payable Bank loans Deferred tax liabilities Deferred revenue - non-current Accrued pension liabilities Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY Common share capital Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity TOTAL		December 31, 2013		December 31, 2012 Amount % $ 4,250,000 8 1,928,481 4 210,226 - 25,649 - 402,444 1 12,490,366 23 59,178 - 500,000 1 29,141 - 19,895,485 37 1,991,406 4 6,749,736 12 730,314 1 1,593 - 294,924 1 9,767,973 18 29,663,458 55 8,580,167 16 225,388 - 6,432,581 12 1,912,424 4 9,817,349 18 18,162,354 34 (2,569,404) (5) 24,398,505 45 $ 54,061,963 100	January 1, 2012
		Amount % $ 5,440,000 10 2,138,569 4 23,136 - 24,531 - 365,471 1 13,715,331 24 202,187 - - - 101,830 - 22,011,055 39 1,991,852 4 6,059,714 11 513,423 1 1,235 - 277,598 - 8,843,822 16 30,854,877 55 8,580,167 15 225,384 - 6,613,006 12 3,553,170 6 7,388,568 13 17,554,744 31 (858,397) (1) 25,501,898 45 $ 56,356,775 100			Amount % $ 4,495,000 8 1,938,518 4 3,253 - 30,884 - 367,716 1 13,019,136 23 - - 1,257,604 2 25,690 - 21,127,801 38 - - 6,464,681 12 829,392 1 4,251 - 281,384 1 7,579,708 14 28,707,509 52 8,580,167 16 225,407 - 6,159,747 11 2,623,069 5 10,158,399 18 18,941,215 34 (974,528) (2) 26,772,261 48 $ 55,479,770 100

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U-MING MARINE TRANSPORT CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

For the Years Ended December 31	For the Years Ended December 31
2013 Amount % $ 1,486,971 100 1,310,922 88 176,049 12 214,434 15 (38,385) (3) 1,609,553 108 (343,751) (23) (266,466) (18) 237,702 16 161,881 11 154,101 11 48,381 3 33,835 2 (843) - 304 - - - 1,634,697 110 1,596,312 107 29,403 2 1,566,909 105 1,201,825 81 333,182 22 146,476 10 47 - 1,681,530 113 $ 3,248,439 218 $ 1.83 $ 1.82	2012
	Amount $ 1,618,271 1,594,182 24,089 232,051 (207,962) 2,003,339 535,259 (275,002) - 121,531 338,631 2,651 30,520 (7,850) 438 (712,532) 2,036,985 1,829,023 5,935 1,823,088 (1,906,321) 238,897 64,496 (19,847) (1,622,775) $ 200,313 $ 2.12 $ 2.12	% 100 99 1 14 (13) 124 33 (17) - 7 21 - 2 - - (44) 126 113 1 112 (118) 15 4 (1) (100) 12








$	$

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U-MING MARINE TRANSPORT CORPORATION

STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars)

	Equity Attributable to Owners of the Company	Equity Attributable to Owners of the Company	Equity Attributable to Owners of the Company
Common Share Capital Capital Surplus $ 8,580,167 $ 225,407 - - - - - - - - - - - - - (19) 8,580,167 225,388 - - - - - - - - - - - - - (4) $ 8,580,167 $ 225,384	Retained Earnings Unappropriated Legal Reserve Special Reserve Earnings $ 6,159,747 $ 2,623,069 $ 10,158,399 - (710,645) 710,645 272,834 - (272,834) - - (2,574,050) - - 1,823,088 - - (27,899) - - 1,795,189 - - - 6,432,581 1,912,424 9,817,349 180,425 - (180,425) - 1,640,746 (1,640,746) - - (2,145,042) - - 1,566,909 - - (29,477) - - 1,537,432 - - - $ 6,613,006 $ 3,553,170 $ 7,388,568	Other Equity
		Exchange Unrealized Differences on Gain (Loss) on Translating Available-for- Foreign sale Financial Operations Assets $ (2,245,606) $ 1,217,759 - - - - - - - - (1,905,393) 308,657 (1,905,393) 308,657 - - (4,150,999) 1,526,416 - - - - - - - - 1,201,227 509,107 1,201,227 509,107 - - $ (2,949,772) $ 2,035,523	Revaluation Increment $ 53,319 - - - - 1,860 1,860 - 55,179 - - - - 673 673 - $ 55,852

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U-MING MARINE TRANSPORT CORPORATION

STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Share of the (profit) loss of subsidiaries, associates and joint ventures Finance costs Dividend income Depreciation expenses Gain on disposal of property, plant and equipment, net Unrealized loss (gain) on foreign currency exchange Interest income Changes in operating assets and liabilities (Increase) decrease in financial assets held for trading (Increase) decrease in trade receivables (Increase) decrease in other receivables (Increase) decrease in fuel inventory Increase in other current assets (Decrease) increase in financial liabilities held for trading Decrease in trade payables (Decrease) increase in other payables Increase in other current liabilities Decrease in accrued pension liabilities Cash generated from operations Interest received Dividends received Interest paid Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Dividend received from subsidiaries, associates and joint ventures Proceeds from disposal of property, plant and equipment Purchase of property, plant and equipment Decrease (increase) in refundable deposits Acquisition of associates Net cash generated from investing activities		For the Years Ended December 31	For the Years Ended December 31
		2013 $ 1,596,312 (1,609,553) 266,466 (161,881) 155,057 (48,381) 328,383 (304) (50,612) (47,976) (8,199) 23,882 (19,673) (187,090) (1,118) (33,389) 72,689 (17,279) 257,334 99 161,881 (256,028) (59,187) 104,099 822,695 231,219 (63,178) 1,257 - 991,993	2012 $ 1,829,023 (2,003,339) 275,002 (121,531) 202,530 (2,651) (530,174) (438) 853,364 67,158 6,324 (10,245) (6,996) 206,973 (5,235) 32,105 3,451 (6,307) 789,014 962 121,531 (263,460) (10,235) 637,812 898,110 469 (110,323) (385) (156,000) 631,871

(Continued)

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U-MING MARINE TRANSPORT CORPORATION

STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

CASH FLOWS FROM FINANCING ACTIVITIES Repayments of long-term borrowings Dividends paid Proceeds from long-term borrowings Proceeds (repayments) of short-term borrowings Increase in other payables from related parties Proceeds (repayments) of short-term bills payable Proceeds from issue of bonds Net cash used in financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR		For the Years Ended December 31	For the Years Ended December 31
		2013 $ (3,150,000) (2,145,046) 1,959,978 1,190,000 894,150 210,088 - (1,040,830) 567 55,829 49,946 $ 105,775	2012 $ (5,097,549) (2,574,069) 4,625,000 (235,000) - (10,037) 1,987,181 (1,304,474) (876) (35,667) 85,613 $ 49,946

(Concluded)

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INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders U-Ming Marine Transport Corporation

We have audited the accompanying consolidated balance sheets of U-Ming Marine Transport Corporation (the “Company”) and its subsidiaries (collectively referred to as the “Group”) as of December 31, 2013, December 31, 2012 and January 1, 2012, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2013 and 2012. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the Rules Governing the Audit of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Those rules and standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2013, December 31, 2012 and January 1, 2012, and their consolidated financial performance and their consolidated cash flows for the years ended December 31, 2013 and 2012, in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed by the Financial Supervisory Commission of the Republic of China.

We have also audited the parent company only financial statements of U-Ming Marine Transport Corporation as of and for the years ended December 31, 2013 and 2012 on which we have issued an unqualified report.

Our audits also comprehended the translation of the New Taiwan dollar amounts into U.S. dollar amounts and, in our opinion, such translation has been made in conformity with the basis stated in Note 6. Such U.S. dollar amounts are presented solely for the convenience of readers.

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March 5, 2014

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3. Supervisor’s Review Report on the 2013 Financial Statements

The Board of Directors have prepared and submitted to us the Company's 2013 Business Reports, the Financial Statements, and the Proposal for Profit Distribution with approval and the Financial Statements have also been audited by the CPAs, Mr. Shih, Ching-Pin and Mr. Lee, Cheng-Ming of Deloitte and Touche Co. The above reports, financial statements, and proposal have been further examined as conforming the Company Act and related law by the undersigned Supervisors of U-Ming Marine Transport Corp.

According to Article 219 of the Company Act, we hereby submit this report.

2014 Shareholders’ Meeting of U-Ming Marine Transport Corp.

Supervisors﹕

CHIANG SHAO, RUEY-HUEY CHANG, ZE PENG PETER HSU

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March 19, 2014

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4.Report on the Institutionalization of the “Code of Ethical Conduct” and “Ethical Corporate Management Best Practice Principles”

(1) This “Code of Ethical Conduct” was instituted in accordance with the “Guidelines for the Adoption of Codes of Ethical Conduct by TWSE/GTSM Listed Companies” stated in Taiwan Stock Exchange Corporation Letter Tai-Cheng-Shang-Tzi No. 0930028186 dated November 11 2004, for the reinforcement and implementation of corporate governance. Please refer to pp. 24 to 27 for detail.
(2) This “Ethical Corporate Management Best Practice Principles” was instituted in accordance with the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM-Listed Companies” stated in Taiwan Stock Exchange Corporation Letter Tai-Shang-Cheng Tzi No. 0990026534 dated September 3 2010, for the development of a corporate culture of business integrity for the healthy operation of the Company. Please refer to pp. 28 to 35 for detail.
(3) The motion was passed by the 2nd session of the 16th Board of Directors held on August 12 2013.
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U-Ming Marine Transport Corp.

Code of Ethical Conduct

Article I: (Purpose and normative reference)
This code is instituted as an ethical guideline for the behavior of the directors, supervisors, mangers, and all other personnel, to the extent that the Related Parties in the Company understand and duly observe the ethic code of the Company.
Article II:
(Applicability)
This code is applicable to the directors, supervisors, mangers, and all other personnel of the Company (hereinafter referred to as “Company personnel”).
Article III: (The principle of business integrity)
The Company and the Company personnel shall duly observe the ethic code and the principle of business integrity in all business behavior and comply with the code of conduct specified hereunder.
Article IV: (avoidance of the conflict of interest) Company personnel shall handle official business objectively and efficiently. There shall be no undue benefit to the personnel themselves, their spouses, parents, children or relatives as defined by the Civil Code by making use of their position.
If the Company has a financial relationship or guaranty, major asset trade, purchase, transportation services, or other business transactions with enterprises where the aforementioned personnel work, related Company personnel shall voluntarily explain their position and the potential conflict of interest, proceeding in accordance with the code of conduct to avoid any conflict of interest.
Article V: (No private interest is permitted)
Company personnel are prohibited from the following:
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Using the properties and/or information of the Company, or making use of their job for private profiteering or private interest.
Competition with the Company.
Any other behavior banned by the code of ethical conduct or related rules and regulations.
Article VI: (Confidentiality)
Company personnel shall keep strictly confidential technical or non-technical information from the Company and customer information unless otherwise authorized or the need to disclose under law.
Information to be kept confidential covers all undisclosed information that may be exploited by a third party, or the disclosure of which will cause damage to the Company or its customers.
Company personnel shall duly observe the “Declaration of Loyalty” and “Statement of Consent on IT Equipment and Information Software” and other agreements on confidentiality and non-disclosure entered into, by and between the Company personnel and the Company.
Company personnel shall perform their assigned duties under due diligence, and shall not disclose any business secrets or related information to any third party, or display the content any part of documents or ledgers to any third party.

Article VII: (Fair Trade)

Company personnel shall treat customers of the Company, competitors, and employees fairly under the principle of integrity and reasonability. There shall be no manipulation, concealment and abusive use of administrative power granted by their positions. Company personnel shall not make misstatements on the information accessible to them as a
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result of their job or on important matters, or, engaged in unfair trade for illicit benefit.

Company personnel shall duly observe the rules stated in the “Regulations Governing the Acceptance of Gifts by Employees” of the Company when receiving gifts from outside.

Article VIII: (keeping and using Company assets)

Company personnel shall keep the assets of the Company properly and use them efficiently and lawfully for business purposes only. There shall be no theft, negligence, or waste of Company assets.

Company personnel shall not misappropriate Company funds, extravagantly use Company properties or cause damage to Company properties.

Company personnel shall duly observe the principle of frugality in spending. The preauthorization of authorized personnel is necessary for non-routine spending or non-budgeted spending. The Company shall decline any reimbursement for this kind of spending without advance authorization.

Article IX: (Compliance)

Company personnel shall duly observe the Securities and Exchange Act and other applicable legal rules.

Article X: (Encouragement to report any unlawful or unethical practices) Company personnel shall proactively report to supervisors, managers, or internal audit heads any suspected or discovery of unlawful practices, or practices in defiance of this code, and shall provide sufficient information so that the Company can take appropriate action.

All reports on the aforementioned practices will be kept in strict confidence and verified by independent channels to protect the informer.

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Article XI: (Punishment and remedy)

In the event of violation of any part of this code by Company personnel, the Company shall take appropriate action under the law or in accordance with the internal code of the Company. The Company insists on the principle of no corruption in business operations. In the event Company personnel use their position in an attempt to seek illicit private benefit or illicit benefits for a third party, to the extent that damage is inflicted on the Company, said individual will be dismissed. In addition, the person concerned shall be unconditionally responsible for all the damages thereof.

The Company has instituted a complaint system for offenders of this code in seeking remedies.

Article XII: (Means of disclosure)

The Company shall disclose this code on the official website, in the Company’s annual report and Prospectus, and also on the MOPS website.

Article XIII: (Implementation)

This code shall come into full force through a resolution Board of Directors, with copies delivered to supervisors and presented to the Shareholders Meeting for ratification. The same procedure shall be applicable to any amendment thereto.

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U-Ming Marine Transport Corp. Ethical Corporate Management Best Practice Principles

Article I: (purpose of establishment and scope of application)

This set of principles was instituted in accordance with the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM-Listed Companies” announced by Taiwan Stock Exchange Corporation and serves as a guideline to nurture a corporate culture of business integrity and sustainable development for the Company.

This set of principles is applicable to the Company, subsidiaries of the Company, non-profit organizations to which the Company directly or indirectly donates more than 50% of funding, or any other institutions or corporate bodies it controls.

Article II: (Prohibition of unethical practices)

All directors, supervisors, managers, and employees (hereinafter referred to as “Company personnel”) shall not directly or indirectly offer, promise, request or accept illicit benefits in any form in the course of business engagements, or, act in breach of trust, illegally, or the obligation under trust for seeking or keeping benefit (hereinafter referred to as “unethical practices”).

The aforementioned targets shall include civil servants, candidates in political elections, political parties or political party apparatus, and any other enterprises or institutions in the public and private sectors and their directors, supervisors, managers, employees, parties under dominant control, or any other Related Parties.

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Article III: (forms of interest)

Benefits as specified in this set of principles refer to any object or matter of high value, including money, gifts, commissions, offering of positions, service, preferential treatment, and kickbacks in whatever forms or under whatever titles, except for common practices as customs and social interaction that are incidental and do not affect specific rights and obligations.

Article IV: (Compliance)

The Company and Company personnel shall duly observe the Company Act, Securities and Exchange Act, Business Entity Accounting Act, Political Donations Act, Anti-Corruption Act, Government Procurement Act, Act on Recusal of Public Servants Due to Conflicts of Interest, applicable legal rules for listing on TWSE or for regulating commercial behavior as fundamental conditions for the proper enforcement of business integrity.
Article V: (Policy)
The Company maps out its corporate policy on the basis of sincerity under the corporate philosophy of integrity, transparency, and accountability, and has developed a viable system for corporate governance and risk control to establish an environment for corporate sustainability.
Article VI: (Preventive Measures)
The Company has instituted procedures and a code of conduct for the prevention of unethical practices. It is this set of principles that highlights the importance to Company personnel of performing their assigned duties in compliance with applicable legal rules.
Article VII: (Scope of Ethical Corporate Management Best Practice Principles)
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In the preparation of preventive plans, the Company shall analyze areas of business operations that entail high risk of unethical practices, and include the following:

I. Accepting and offering bribes.
II. Offering illegal political donations.
III. Improper charity donations or sponsorship.
IV. Offering or accepting unreasonable gifts, receptions or any other illicit benefits.

Article VIII: (Promise and Execution)

The Company shall announce its policy of business integrity on the official website, in the annual report and related documents for external circulation. The Board and management shall promise to pursue the policy under due diligence and properly enforce it in internal management and external business activities.

Article IX: (Integrity in business operations)

The Company shall conduct business in a fair and transparent manner.

Before proceeding with any business transaction, the Company shall consider the legitimacy of contractors, suppliers, customers and other business partners, confirm if there is any record of unethical practices and avoid engaging in business with parties that have a record of unethical practices.

When entering into an agreement with a third party, the Company shall include its business integrity policy as an integral part of the agreement. In addition, the Company shall also specify in the agreement that in the event of any breach of business integrity by the trading counterparty, the Company can terminate or discharge the provisions of the agreement at any time.

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Article X: (Prohibition of bribery)

In the course of business, Company personnel shall not directly or indirectly offer, promise, demand or accept illicit benefits of any form, including kickbacks, commissions, finder fee, or, offer or accept illicit benefits from customers, contractors, suppliers, civil servants, or any other Related Parties unless otherwise permitted by the law in the place of operation.

Article XI: (Prohibition of illegal political contributions)
Company personnel may make donations to political parties or organizations or individuals participating in political activities directly or indirectly in compliance with the Political Donations Act, and related internal procedures of the Company. There shall be no political donations as an attempt to seek business interest or advantage in trade.
Article XII: (Prohibition of improper charity donations or sponsorship)
Company personnel may make charitable donations or offer sponsorship only in compliance with applicable legal rules and the internal operational procedures of the Company, and shall not use such donations or sponsorship as covert bribery.
Article XIII: (Prohibition of unreasonable gifts, receptions or other forms of illicit benefit)
Company personnel are strictly prohibited from demanding any gifts, special offers or preferential treatment directly or indirectly from current or potential suppliers, contractors, or customers, including special and extravagant meals or other forms of reception unrelated to business or customary practice.
Company personnel shall not accept any gift of special offer from any supplier, contractor, or customer except where the offering is in accordance with local customs and common courtesy and the value is below NT$2,000, or, the gifts bear the logo of related companies and is presented as a souvenir or free items for
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business promotion. If the offering is cash, explain the policy and regulations of the Company and politely decline the offer. If rejection is impossible, surrender the items to the Company Secretariat for further action.

Company personnel shall not accept any price or gifts from related firms at celebrity events unless otherwise made known to the head of the function in advance and in writing.

Company personnel shall not seek loans from, or leases with or without compensation, or any other forms of financing from suppliers, contractors and customers that have a business relationship with the Company.

Company personnel on business trips (official business) shall not accept any improper invitation to a banquet or reception or an invitation to a banquet or reception that will substantiate an act of corruption by the individual concerned. The life style and behavior of personnel on business trips (official business) reflects on the Company and caution is required.

Article XIV: (Organization and responsibilities)

The Board of the Company shall pay close attention to related matters under due diligence, and supervise the Company to ensure there are no unethical practices. The Board shall also review enforcement and make continued improvements to ensure the proper pursuit of the business integrity policy.

The Company appoints a designated body to administer the pursuit of the business integrity policy and the establishment of related preventive measures to make ethical corporate management viable, supervise the enforcement of such measures and make regular reports to the Board.

Article XV: (Compliance with applicable business performance laws)

In performing business operation, Company personnel shall duly observe relevant legal rules and the Company’s preventive measures.

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Article XVI: (Avoidance of conflict of interest by Company personnel)

The Company shall make policy to avoid conflicts of interest, and arrange channels for Company personnel to voluntarily explain possible and potential conflicts of interest with the Company. The directors of the Company shall be highly self-disciplined and be excused from any discussion or voting on motions related to their own interest or the interest of principals they represented that could jeopardize the interests of the Company, except to giving opinions or respond to questions. Likewise, directors shall not act as agents for other directors in the same situation and vote on their behalf or in the name of other directors to avoid conflicts of interest. Directors shall be self-disciplined and not support one another for illicit purposes.

Company personnel shall not enable themselves, their spouses, parents, children, or any other third party to benefit illicitly by using their rank and position in the Company.

Article XVII:(Accounting and internal controls)

The Company shall establish an effective accounting system and internal control system to track business activities with high risk to business integrity. There shall be no off the book ledger or secret ledgers. These systems shall be subject to review as needed, to ensure the continued effectiveness of design and execution.

The auditors of the Company shall audit compliance with the aforementioned systems and prepare audit reports to be presented to the Board of Directors.

Article XVIII:(Operational procedure and action guidelines)

The Company has established operational procedures or action guidelines to prevent unethical practices in business operations in the following areas:
I. Standard to determine the offering or accepting of illicit benefits.
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II. Procedures for offering legally permitted political donations. III. Procedure for making legally permitted charitable donations or sponsorship and limits on the amount of such donations.
IV. Regulations governing the avoidance of conflicts of interest with duties assigned to specific personnel, and procedures for declaration and handling.
V. Regulations governing the confidentiality of secrets and sensitive business information acquired through business operations.
VI. Regulations and procedures for handling unethical suppliers, customers and business partners.
VII. Procedures for handling breaches of ethical corporate management best practice principles.
VIII. Disciplinary action against offenders.

Article XIX: (Training and Evaluation)

The Company shall provide education on this set of principles for Company personnel to ensure their full understanding of the Company’s determination, policy, and preventive measures in the area of business integrity and the results of breaching business integrity.

The Company shall integrate the business integrity policy with employee evaluations, thereby establishing a viable system for rewards and punishments.

Article XX: (Report and punishment)

Company personnel shall voluntarily report to supervisors, managers, the internal audit chief or other appropriate executives if they discovery any violation of these principles. The Company shall keep the identity of informers and the content of the report in strict confidence and investigate through independent channels. The Company shall take relevant punitive action against Company personnel who violate these principles, depending on the severity of the offense. In addition, the Company shall disclose the job titles and names of offenders, as well as the date
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and content of the violation, applicable provisions and punitive action on the MOPS website.

The Company has established a complaints system for those who allegedly violate these principles to appeal or seek redress.

Article XXI : (Disclosure)

The Company shall disclose the state of enforcement of these principles on its official website and in the Company annual report and prospectus.

Article XXII: (review and amendment of this set of principles)

The Company shall pay close attention to the development of business integrity rules and regulations at home and abroad, and encourage recommendations from Company personnel that could serve as a reference for the review and improvement of these principles, and in turn help to enhance ethical corporate management.

Article XXIII: (Implementation)

This set of principles shall come into full force after being passed by the Board with copies delivered to the supervisors and presented to the Shareholders Meeting for ratification. The same procedure is applicable for any amendment thereto.

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Matters to be ratified:

1. Adoption of the 2013 Business Report and Financial Statement

Explanatory Notes：

(1) Please discuss and approve the annual financial statements as of December 31, 2013, including business report and financial statements, which are shown on page 2 to 21. Supervisors of the Company have reviewed these financial statements for the fiscal year 2013 and issued an audit report.
(2) Please approve.

Resolved:

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2. Adoption of the Proposal for Distribution of 2013 Retained Earnings

Explanatory Notes：

(1) According to Article 27 of the Articles of Incorporation, please refer to the following for the company’s 2013 appropriation proposal:

(I) 2013 appropriated R/E	Unit: NTD
2013 net income after tax	1,566,909,220
Less: Legal reserve (10%)	(156,690,922)
Add: Reverse retained special reserve of previous
year	3,215,984,335
Less: Special reserve	(858,397,387)
Add: Unappropriated R/E of previous year	6,507,418,403
Less: Adoption of TIFRS1 and other adjustments	(685,758,669)
Earnings available for distribution	9,589,464,980
Less: Unappropriated earnings	(7,873,431,556)
2013 appropriated R/E	1,716,033,424
(II) Appropriation of 2013 earnings
Cash dividends	1,050,632,709
Bonus to stockholders	665,400,715
Total (Cash dividends-NT$ 2 per share)	1,716,033,424

(II) Appropriation of 2013 earnings

(2) I. It is proposed the Company to distribute Employee's Bonus – Cash of NTD$17,510,545.
II. Proposal regarding stock dividends to employee’s Bonus – Stock: NTD$ 0.
III. It is proposed the Company to distribute remuneration to directors and supervisors of NTD$17,510,545.
(3) It is prioritized to distribute the R/E of Year 1998 when calculating the shareholders’ deductible tax according to #66-6 of Income Tax Law. The “identified method” and “distribution of most recent years’ R/E” were applied when calculating 10% imputing tax according to #66-9 of Income Tax Law.
(4) It is proposed that the record date of ex-cash dividend to be fixed after the approval by the 2014 Annual Shareholders’ Meeting.
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(5) This proposal has been approved by the 5[th] meeting of the sixteenth-term Board of Directors on March 5, 2014.
(6) Please approve.

Resolved:

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Matters To Be Discussed

1. Amendment to provisions in “Procedures for the Acquisition and Disposition of Assets”

Explanatory Notes:

(1) The “Procedure for the Acquisition and Disposition of Assets” is subject to amendment as per the requirement of Financial Supervisory Commission Letter Chin-Kuan-Cheng-Fa Tzi No. 1020014840 dated May 13 2013 and Financial Supervisory Commission Order Chin-Kuan-Cheng-Fa Tzi No., 1020053073 dated December 30 2013. Accordingly, Article 2, Article 3, Article 5, Article 6, Article 7, Article 8, Article 9, Article 10, and Article 12 were amended. The amendment is shown in the mapping table below:
(2) This motion has been approved by the 2[nd] session and the 5[th] session of the 16[th] Board of Directors held on August 12, 2013 and March 5, 2014, respectively.
(3) We ask for your favorable action.

Resolution:

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Mapping Table of the “Procedure for the Acquisitions or Dispositions of Assets”

Clause	Amendment	Originalprovision	Notes
Article 2	Assets as referred to in this procedure shall include the following: I. Securities: investments in stocks, government bonds, corporate bonds, bank debentures, fund certificates, depository receipts, call (put) warrants, beneficiary certificates and other asset-backed securities. II. Real properties (including land, buildings and structures, real estate for investment and right of land use) and equipment. III. Membership cards. IV. Patents, copyrights, trademarks, franchises, and other intangible assets. V. Derivatives. VI. Assets acquired or disposed of due to mergers, split up, acquisitions, or assignment of equity shares under law. VII. Other vital assets.	Assets as referred to in this procedure shall include the following: I. Securities: investments in stocks, government bonds, corporate bonds, bank debentures, fund certificates, depository receipts, call (put) warrants, beneficiary certificates and other asset-backed securities. II. Real estateand other fixed assets. III. Membership cards. IV. Patents, copyrights, trademarks, franchises, and other intangible assets. V. Derivatives. VI. Assets acquired or disposed of due to mergers, split up, acquisitions, or assignment of equity shares under law. VII. Other vital assets.	Wording in Article 2 was amended to conform with the IFRS.
Article 3	The following terms and definitions are used in this procedure: I. Derivatives:Forwards, options, futures, CFD, Swap, and composite contracts of the aforementioned contracts the value of which is derived from assets, interest rates, exchange rates,indexes,or other	The following terms and definitions are used in this procedure: I. Derivatives:Forwards, options, futures, CFD, Swap, and composite contracts of the aforementioned contracts the value of which is derived from assets, interest rates, exchange rates,indexes,or other

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Clause		Amendment		Originalprovision	Notes
	II. III.	commodities. Forwards as referred to exclude insurance agreements, performance agreements, warranty agreements, long-team lease agreement and long-term purchase (sales) agreements. Assets acquired or disposed by merger, split up, acquisition or assignment of equity shares under law: these are assets acquired or disposed from corporate mergers, split up, or acquisitions in accordance with the Business Mergers and Acquisitions Act, Financial Holding Companies Act, Financial Institutions Mergers Act, or other applicable laws, or, pursuant to Article 156 – VIII of the Company Act in issuing new shares to accept assigned shares from other companies (hereinafter, “acceptance of assigned shares”). Related Parties (related parties), subsidiaries:to be defined in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.	II. III. VI.	commodities. Forwards as referred to exclude insurance agreements, performance agreements, warranty agreements, long-team lease agreement and long-term purchase (sales) agreements. Assets acquired or disposed by merger, split up, acquisition or assignment of equity shares under law: these are assets acquired or disposed from corporate mergers, split up, or acquisitions in accordance with the Business Mergers and Acquisitions Act, Financial Holding Companies Act, Financial Institutions Mergers Act, or other applicable laws, or, pursuant to Article 156 – VI of the Company Act in issuing new shares to accept assigned shares from other companies (hereinafter, “acceptance of assigned shares”). Related Parties (related parties):these are the related parties stated in the Statement of Financial Accounting Standards (SFAS) No. 6 announced by the Accounting Research and Development Foundation of the ROC (hereinafter, “ARDF”). Subsidiaries: business entities stated in SFAS	I. Revision of the wording of paragraph 2 to conform with the amendment of Article 156 of the Company Act. II. Paragraph 3 and Paragraph 4 in the old version were combined as Paragraph 3 in the amended version to regulate the Company in identifying Related Parties and subsidiaries under applicable financial reporting standards and preparing financial statements by securities issuers. III. Paragraph 5 and Paragraph 7 were edited as Paragraph 4 and Paragraph 6, with the amendment to the wording of Paragraph 4 conformingto

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Clause	Amendment		Originalprovision	Notes
	IV.Professional appraiser: these are real estate appraisers, or people who can perform the duties of real estate andequipment appraisal under law. V.Day of deed: it is the day on which a trade agreement is signed, payment is made, transaction orders, completed, accounts transferred, resolutions made by the Board, or counterparties and transaction amounts determined (whichever comes first). The day of deed on investment subject to the approval of the competent authority shall be the aforementioned day or the day on which an investment is approved by the competent authority, whichever comes first. VI.Investment in Mainland China: Investment permitted under the Regulations for Investment or Technology Joint Venture in Mainland China promulgated by the Investment Commission of the Ministry of Economic Affairs (MOEA).	No. 5 and No.7 announced by ARDF. V.Professional appraisers: these are real estate appraisers, or people who can perform the duties of appraisal ofother fixed assetsunder law. VI.Day of deed: this is the day on which a trade agreement is signed, payment is made, transaction orders, completed, accounts transferred, resolutions made by the Board, or counterparties and transaction amounts determined (whichever comes first). The day of deed on investment subject to the approval of the competent authority shall be the aforementioned day or the day on which an investment is approved by the competent authority, whichever comes first. VII.Investment in Mainland China: Investment permitted under the Regulations for Investment or Technology Joint Venture in Mainland China promulgated by the Investment Commission of the Ministry of Economic Affairs (MOEA).		IFRS.
Article 5	Securities investments as stated in the consolidated financial statement of the	Securities investment as stated in the consolidated financial statement of the Company		The wording of section 1 was amended in

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Clause	Amendment	Originalprovision	Notes
	Company shall not exceed 150% of shareholder equity as stated in the last financial statement. The investment in particular securities as stated in the consolidated financial statement shall not exceed 60% of shareholder equity as stated in the last financial statement. The total book value of real properties and equipmentnot for business purposes shall not exceed 50% of total assets stated in the last financial statement. The total equity investment of the Company and subsidiaries shall not exceed 150% of shareholder equity stated in the last financial statement. The calculation of this ratio is made in accordance with the Operating Rules of the Taiwan Stock Exchange Corporation and other applicable legal rules. The last financial statement as referred to in this procedure shall be the audited or reviewed financial statement approved before the acquisition or disposition of assets bythe Company.	shall not exceed 150% of shareholder equity as stated in the last financial statement. The investment in a particular security as stated in the consolidated financial statement shall not exceed 60% of shareholder equity as stated in the last financial statement. The total book value of real properties and other fixed assetsnot for business purposes shall not exceed 50% of total assets stated in the last financial statement. The total equity investment of the Company and subsidiaries shall not exceed 150% of shareholder equity stated in the last financial statement. The calculation of this ratio is made in accordance with the Operating Rules of the Taiwan Stock Exchange Corporation and other applicable legal rules. The last financial statement as referred to in this procedure shall be the audited or reviewed financial statement approved before the acquisition or disposition of assets bythe Company.	conformity to IFRS.
Article 6	Procedure for the acquisition or disposition of securities: I. Assessment procedure (I) The Treasury Division and other related functions of the Company shall conduct financial analysis and assess possible return and	Procedure for the acquisition or disposition of securities: I. Assessment procedure (I) The Treasury Division and other related functions of the Company shall conduct financial analysis and assess possible return and

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Clause	Amendment	Originalprovision	Notes
	risk pertinent to the investment in securities by the Company. (II) Decisions on securities trading on the TWSE or GTSM shall be made by the functional unit administering the trade after proper study of the market. The Company shall obtain an audited financial statement or reviewed financial statement on the target of investment before proceeding to securities trade on the TWSE or GTSM as a reference for the assessment of the transaction price and also consider net asset value per share, profitability and potential of the securities. II. Professional opinions (I) The Company shall obtain an audited financial statement or reviewed financial statement from the issuer of the target securities for investment as a reference for the assessment of transaction price before the day of deed before proceedingto the	risk pertinent to the investment in securities by the Company. (II) Decisions on securities trading on the TWSE or GTSM shall be made by the functional unit administering the trade after proper study of the market. The Company shall obtain an audited financial statement or reviewed financial statement on the target of investment before proceeding to securities trade on the TWSE or GTSM as a reference for the assessment of the transaction price and also consider net asset value per share, profitability and potential of the securities. II. Professional opinions (I) The Company shall obtain an audited financial statement or reviewed financial statement from the issuer of the target securities for investment as a reference to assess the transaction price before the day of deed before proceeding to the acquisition or	Effective July 1 2012, the former Executive Yuan Financial Supervisory Commission was reorganized and renamed the Financial Supervisory Commission. Accordingly, the wording in II (I) was amended to conformity to the amendment of Article

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Clause		Amendment	Originalprovision	Originalprovision	Notes
	(II)	acquisition or disposition of securities. In the event that the transaction price exceeds 20% of the paid-in capital of the Company or NT$300 million, seek the opinions of a certified public accountant on the reasonability of the transaction price before proceeding and proceed to SFAS No. 20 announced by theAccounting Research and Development Foundation of the ROD (hereinafter, “ARDF”)if professional reporting is necessary. This provision is not applicable to securities marked to market or otherwise regulated by Executive Yuan’s Financial Supervisory Commission (hereinafter, “FSC”). In the event of acquisition or disposition of assets by the Company through court auction, certification documents issued by the court shall be	(II)	disposition of securities. In the event the transaction price exceeds 20% of the paid-in capital of the Company or NT$300 million, seek professional advice from a certified public accountant on the reasonability of the transaction price before the transaction, and proceed to SFAS No. 20 announced by ARDF.This provision is not applicable to securities marked to market or otherwise regulated by the Executive Yuan’s Financial Supervisory Commission (hereinafter, “FSC”). In the event of acquisition or disposition of assets by the Company through court auction, certification documents issued by the court shall be	III-III

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Clause	Amendment	Originalprovision	Notes
	used in lieu of an appraisal report or opinions from a certified public accountant. III. The determination of authorized limit and the executor of such limits The Company shall, before the acquisition or disposition of securities, refer the information prepared by the Treasury Division on the target securities to the Board for approval. If prior approval is not possible, the President shall be authorized to make a decision at a limit of NT$100 million and below (or as per the authority otherwise granted to the President), and the Chairman of the Board shall be authorized to make a decision at a limit exceeding NT$100 million (or as per the authority granted to the Chairman). The transaction shall be presented to a Board session scheduled to be held on the nearest date for ratification.	used in lieu of an appraisal report or opinions from a certified public accountant. III. The determination of authorized limit and the executor of such limits The Company shall, before the acquisition or disposition of securities, refer the information prepared by the Treasury Division on the target securities to the Board for approval. If prior approval is not possible, the President shall be authorized to make a decision at a limit of NT$100 million and below (or as per the authority otherwise granted to the President), and the Chairman of the Board shall be authorized to make a decision at a limit exceeding NT$100 million (or as per the authority granted to the Chairman). The transaction shall be presented to a Board session scheduled to be held on the nearest date for ratification.
Article 7	The procedure for the acquisition or disposition of real properties orequipment: I. Assessment Procedure (I) The Accounting Division and related functional units shall carefullyassess	The procedure for the acquisition or disposition of real properties orother fixed assets: I. Assessment Procedure (I) The Accounting Division and related functional units shall	The wording of fixed assets was revised to conform with SFRS.

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Clause		Amendment		Originalprovision	Notes
	expected returns on investment and inherent risk when the Company prepares to invest in real properties and equipment. (II) Consult with the posted present value, appraised value, actual transaction price of nearby properties in the acquisition or disposition of real properties, and propose terms, conditions and price for the deal in an analysis report. (III) Make inquiries, bid or negotiate on the price for the acquisition or disposition of equipment,or make a tender offer. II. Appraisal reports on real properties orequipment: With the exception of dealing with government institutions, building on own land, building on leased land, or the acquisition, disposition of real properties or equipmentfor business purposes, the Company shall obtain an appraisal report issued by a professional appraiser (the report shall contain		II.	carefully assess expected returns on investment and inherent risk when the Company prepares to invest in real properties and other fixed assets. (II) Consult with the posted present value, appraised value, actual transaction price of nearby properties in the acquisition or disposition of real properties, and propose terms, conditions and price for the deal in an analysis report. (III) Make inquiries, bid or negotiate the price for acquisitions or disposition offixed assets,or make a tender offer. Appraisal reports on real properties orother fixed assets: With the exception of dealing with government institutions, building on own land, building on leased land, or the acquisition, disposition of real properties or machineryand equipment for business purposes, the Company shall obtain an appraisal report issued by a professional appraiser (the report shall contain

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Clause	Amendment	Originalprovision	Notes
	the content specified in Appendix I of the important notice) if the transaction amount exceeds 20% of paid-in capital or NT$300 million before the day of deed, and shall comply with the following requirements: (I) Where the transaction may be conducted at a conditional price, prearranged price, or special offer due to particular reasons, it can be presented to the Board for consideration in advance. The same procedure shall be applicable to any subsequent change in the terms and condition of the deal. (II) Appraisal reports from at least 2 professional appraisers are required for transactions of NT$1 billion or more. (III) Consult a certified public account to ensure the appraised prices are fairly presented in accordance with SFAS No. 20 announced by ARDF if any of the following conditions applies unless the	the content specified in Appendix I of the important notice) if the transaction amount exceeds 20% of paid-in capital or NT$300 million before the day of deed, and shall comply with the following requirements: (I) Where the transaction may be conducted at a conditional price, prearranged price, or special offer due to particular reasons, it can be presented to the Board for consideration in advance. The same procedure shall be applicable to any subsequent change in the terms and condition of the deal. (II) Appraisal reports from at least 2 professional appraisers are required for transactions of NT$1 billion or more. (III) Consult a certified public account to ensure the appraised prices are fairly presented in accordance with SFAS No. 20 announced by ARDF if any of the following conditions applies unless the

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Clause	Amendment	Originalprovision	Notes
	appraised value is higher than the transaction price in the acquisitions of assets or the appraised value falls below the transaction price in the disposition of assets: 1. The appraised value varies with the actual transaction amount by more than 20%. 2. The appraised value presented by 2 or more professional appraisers varies with the transaction amount by more than 10%. (IV) The date of the appraisal reports issued by professional appraisers shall fall within a period of 3 months from the date the agreement is signed. If the posted present value in the same period is applicable to the appraised value and is within a period of six months the professional appraisers shall present an opinion in writing. (V) Where the Company	appraised value is higher than the transaction price in the acquisitions of assets or the appraised value falls below the transaction price in the disposition of assets: 1. The appraised value varies with the actual transaction amount by more than 20%. 2. The appraised value presented by 2 or more professional appraisers varies with the transaction amount by more than 10%. (IV) The date of the appraisal reports issued by professional appraisers shall fall within a period of 3 months from the date the agreement is signed. If the posted present value in the same period is applicable to the appraised value and is within a period of six months the professional appraisers shall present an opinion in writing. (V) Where the Company

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Clause	Amendment		Originalprovision	Notes
	may acquire or dispose assets through court auction, the certification document issued by the court shall be used in lieu of appraisal reports or opinions from a certified public accountant. III. The determination of an authorize limit and the executor of such limit The Company shall, before the acquisition or disposition of real properties orequipment, refer information prepared by Accounting Division on the target to the Board for approval. If prior approval is not possible, the President shall be authorized to make a decision at a limit of NT$10 million and below (or as per the authority otherwise granted to the President), and the Chairman of the Board shall be authorized to make a decision at a limit exceeding NT$10 million (or as per the authority granted to the Chairman). The transaction shall be presented to a Board session scheduled to be held at the earliest possible date for ratification.	III.	may acquire or dispose assets through court auction, the certification document issued by the court shall be used in lieu of appraisal reports or opinions from a certified public accountant. The determination of an authorize limit and the executor of such limit The Company shall, before the acquisition or disposition of real properties or other fixed assets,refer information prepared by Accounting Division on the target to the Board for approval. If prior approval is not possible, the President shall be authorized to make a decision at a limit of NT$10 million and below (or as per the authority otherwise granted to the President), and the Chairman of the Board shall be authorized to make a decision at a limit exceeding NT$10 million (or as per the authority granted to the Chairman). The transaction shall be presented to a Board session scheduled to be held at the earliest possible date for ratification.

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Clause	Amendment	Originalprovision	Notes
Article 8	Procedure for Related Parties Transactions I. The Company engaged in the acquisition or disposition of assets with related parties in accordance with this procedure in decision-making and assessment of the reasonability of the terms and conditions of the transactions. In addition, the Company shall comply with the requirement of this procedure to obtain an appraisal report issued by a professional appraiser or the opinions of a certified public account if the assets in the transaction exceed 10% of total assets of the Company. Related Parties affiliation shall be determined on the basis of de jure and de facto relationship. II. Assessment and operational procedure The Company may engage in the acquisition or disposition of assets with Related Parties beyond real properties, or Related Parties may engage in the acquisition or disposition of assets with the Company beyond real properties. These shall be presented to the Board for approval and the Supervisors for	Procedure for Related Parties Transactions I. The Company engaged in the acquisition or disposition of assets with related parties in accordance with this procedure in decision-making and assessment of the reasonability of the terms and conditions of the transactions. In addition, the Company shall comply with the requirement of this procedure to obtain an appraisal report issued by a professional appraiser or the opinions of a certified public account if the assets in the transaction exceed 10% of total assets of the Company. Related Parties affiliation shall be determined on the basis of de jure and de facto relationship. II. Assessment and operational procedure The Company may engage in the acquisition or disposition of assets with Related Parties beyond real properties, or Related Parties may engage in the acquisition or disposition of assets with the Company beyond real properties, to be presented to the Board for approval and Supervisors for	I. The trading of government bonds, bonds with R/P or reverse R/P features, subscriptions or redemption of domestic money market fund units with Related Parties entail low risk thereby amend the content pursuant to Article 14 –(II)of the

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Clause		Amendment	Originalprovision	Notes
		recognition before a transaction agreement is entered into and payment made if the asset exceeds 20% of paid-in capital or 10% of the total assets of the Company or NT$300 million with theexception of trading in government bonds, bonds with R/P or reverse R/P features, subscriptions or redemptions of domestic money market fund units: (I) The purpose, necessity and expected benefit from the acquisition or disposition of assets. (II) The reason for selecting a Related Parties as the counterparty in the transaction. (III) Acquisition of real properties from a related parties pursuant to III- (I) and (IV) of this article in assessing the reasonability of the terms and conditions of the transaction and related information. (IV) The original date of the acquisition of the properties by a Related Parties, the price, counterparty, and relationship between the related parties and the	recognition before entering into a transaction agreement and making payment if the asset exceeds 20% of paid-in capital or 10% of total assets of the Company or NT$300 million: (I) The purpose, necessity and expected benefit from the acquisition or disposition of assets. (II) The reason for selecting a Related Parties as the counterparty in the transaction. (III) Acquisition of real properties from a related parties pursuant to III- (I) and (IV) of this article in assessing the reasonability of the terms and conditions of the transaction and related information. (IV) The original date of the acquisition of the properties by a Related Parties, the price, counterparty, and relationship between the related	Regulations Governing the Acquisition and Disposition of Assets by Public Companies (hereinafter, “the Criteria”) and could be exempt from the need for Board approval and supervisors recognition. A decision could be made as per the authority granted under this procedure.

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Clause	Amendment	Originalprovision	Notes
	counterparty and between the counterparty and the Company. (V) The monthly cash flow forecasting sheet from the month of entering into agreement to one year ahead, and assess the necessity of the transaction and the reasonability of the use of capital. (VI) The appraisal report issued by a professional appraiser, or an opinion presented by a certified public accountant as stated in I of this article. (VII) The conditions for this transaction and other arrangements. III. Assessment of the reasonability of the transaction cost: (I) The Company shall assess the reasonability of the transaction cost in acquiring real properties from a related parties: 1. Add the amount of interest on the capital and the cost to be borne by the buyer as required by law to the transaction price with the Related Parties.	parties and the counterparty and between the counterparty and the Company. (V) The monthly cash flow forecasting sheet from the month of entering into agreement to one year ahead, and assess the necessity of the transaction and the reasonability of the use of capital. (VI) The appraisal report issued by a professional appraiser, or an opinion presented by a certified public accountant as stated in I of this article. (VII) The conditions for this transaction and other arrangements. III. Assessment of the reasonability of the transaction cost: (I) The Company shall assess the reasonability of the transaction cost in acquiring real properties from a related parties: 1. Add the amount of interest on the capital and the cost to be borne by the buyer as required by law to the transaction price with the

53 -

Clause	Amendment	Originalprovision	Notes
	Necessary amount of interest of capital shall be calculated on the basis of a weighted average interest rate for the year of asset acquisition by the Company but shall not exceed the interest rate on loans from non-financial institutions as required by the Ministry of Finance. 2. The total appraised value of the asset if the Related Parties has pledged the asset under lien to a financial institution for loans. However, the cumulative draw down on the asset released by the financial institution shall exceed 70% of the appraised value of the asset for lending and the draw down has been made for more than one year. Yet, neither the financial institution nor one side of the trading parties shall be	Related Parties. Necessary amount of interest of capital shall be calculated on the basis of a weighted average interest rate for the year of asset acquisition by the Company but shall not exceed the interest rate on loans from non-financial institutions as required by the Ministry of Finance. 2. The total appraised value of the asset if the Related Parties has pledged the asset under lien to a financial institution for loans. However, the cumulative draw down on the asset released by the financial institution shall exceed 70% of the appraised value of the asset for lending and the draw down has been made for more than one year. Yet, neither the financial institution nor one side of the trading

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Clause	Amendment	Originalprovision	Notes
	Related Parties to each other. (II) For joint purchase land and building of the same subject property, assessment of the transaction cost shall be made by any of the aforementioned methods relating to land and buildings. (III) In acquiring real properties from a related parties, the Company shall appraise the cost of the real properties as per the requirement in the preceding 2 paragraphs, and retain a certified public accountant to review the appraisal and present a substantive professional opinion. (IV) If any of the following applies to the acquisition of real properties by the Company from a related parties, proceed to I and II of this article and the preceding 3 paragraphs of II shall not apply when assessing the reasonability of cost: 1. The Related Parties acquired the real properties through	parties shall be Related Parties to each other. (II) For joint purchase land and building of the same subject property, assessment of the transaction cost shall be made by any of the aforementioned methods relating to land and buildings. (III) In acquiring real properties from a related parties, the Company shall appraise the cost of the real properties as per the requirement in the preceding 2 paragraphs, and retain a certified public accountant to review the appraisal and present a substantive professional opinion. (IV) If any of the following applies to the acquisition of real properties by the Company from a related parties, proceed to I and II of this article and the preceding 3 paragraphs of II shall not apply when assessing the reasonability of cost: 1. The Related Parties acquired the realproperties

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Clause	Amendment	Originalprovision	Notes
	succession or donation. 2. The time of acquisition of real properties by the Related Parties is longer than 5 years from the day of entering into the transaction agreement. 3. Acquisition of real properties through an agreement with a Related Parties for a joint venture to construct properties,build on own land or build on leased land, by contracting with related parties in the project. (V) Pursuant to (I) and (II) of this section, if the appraisal result shows a lower value than the transaction price, proceed to (VI) and (VII) of this section except under the following situations supported by objective evidence, an appraisal report issued by a professional appraiser and the opinion of a certified public accountant:	through succession or donation. 2. The time of acquisition of real properties by the Related Parties is longer than 5 years from the day of entering into the transaction agreement. 3. Acquisition of real properties through an agreement with a related parties on a joint venture in construction of the properties. (V) Pursuant to (I) and (II) of this section, if the appraisal result shows a lower value than the transaction price, proceed to (VI) and (VII) of this section except under the following situations supported by objective evidence, an appraisal report issued by a professional appraiser and the opinion of a certified	II. In consideration of the similarity in the nature of building on own land or building on leased land by contracting with a related parties and a joint project of real properties with a related parties, an amendment was made to III (IV).the requirement requesting that Related Parties provide an assessment report on the reasonability of truncation cost of the real properties is not applicable.

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Clause	Amendment	Originalprovision	Notes
	1. The related parties acquires undeveloped land or lease land for construction, and can prove that he/she meets any of the following conditions: (1) Undeveloped land shall be appraised by any of the aforementioned methods. Buildings shall be appraised on the basis of the cost of construction plus reasonable construction profit, the total of which shall exceed the actual transaction price. Reasonable construction profit shall be the average gross margin of the construction department of the Related Parties over the last 3 years or the latest gross margin of the	public accountant: 1. The related parties acquires undeveloped land or lease land for construction, and can prove that he/she meets any of the following conditions: (1) Undeveloped land shall be appraised by any of the aforementioned methods. Buildings shall be appraised on the basis of the cost of construction plus reasonable construction profit, the total of which shall exceed the actual transaction price. Reasonable construction profit shall be the average gross margin of the construction department of the Related Parties over the last 3 years or the latestgross

57 -

Clause	Amendment	Originalprovision	Notes
	construction industry announced by the Ministry of Finance, whichever is lower. (2) Other stories of the same subject property, or other transactions in nearby areas over the last year not related to the related parties, with similar floor area and terms and conditions of trade are relevant with stories under common practice in real estate trade or related to price difference by region. (3) Leasing of other stories in the same subject property to parties beyond the Related Parties, with assessment on reasonable difference by storyand the	margin of the construction industry announced by the Ministry of Finance, whichever is lower. (2) Other stories of the same subject property, or other transactions in nearby areas over the last year not related to the related parties, with similar floor area and terms and conditions of trade are relevant with stories under common practice in real estate trade or related to price difference by region. (3) Leasing of other stories in the same subject property to parties beyond the Related Parties, with assessment on reasonable difference by

58 -

Clause	Amendment	Originalprovision	Notes
	terms and conditions are relevant. 2. The Company can prove that the real properties being purchased are relevant to transactions with parties beyond the Related Parties over the last year in the nearby area in similar size and with relevant terms and conditions. Transactions in nearby areas shall be property transactions with similar road situations and within a perimeter of 500 meters from the subject property or where the announced present value is relevant to the subject property. Similar size refers to the floor area of another property trade not with a Related Parties that does not fall below 50% of the floor area of the subject property. (VI) If the Company acquires real properties from a	story and the terms and conditions are relevant. 2. The Company can prove that the real properties being purchased are relevant to transactions with parties beyond the related parties over the last year in the nearby area in similar size and with relevant terms and conditions. Transactions in nearby areas shall be property transactions with similar road situations and within a perimeter of 500 meters from the subject property or where the announced present value is relevant to the subject property. Similar size refers to the floor area of another property trade not with a Related Parties that does not fall below 50% of the floor area of the subject property. (VI) If the Company acquires real

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Clause	Amendment	Originalprovision	Notes
	Related Parties subject to appraisals as stated in the previous 5 paragraphs, and the result falls below the transaction price, proceed to the following: 1. The difference between the transaction price of the real property and the appraised cost of the property shall be subject to allocation as a special reserve pursuant to Article 41–I of the Securities and Exchange Act, and shall not be paid out or capitalized into new shares. If the investor of the Company evaluated under the equity method is a public company, the amount mentioned shall be allocated as capital surplus in proportion to the shareholding of the Company. 2. Supervisors shall proceed to Article 218 of the CompanyAct.	properties from a Related Parties subject to appraisals as stated in the previous 5 paragraphs, and the result falls below the transaction price, proceed to the following: 1. The difference between the transaction price of the real property and the appraised cost of the property shall be subject to allocation as a special reserve pursuant to Article 41–I of the Securities and Exchange Act, and shall not be paid out or capitalized into new shares. If the investor of the Company evaluated under the equity method is a public company, the amount mentioned shall be allocated as capital surplus in proportion to the shareholding of the Company. 2. Supervisors shall proceed to Article 218 of the

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Clause	Amendment	Originalprovision	Notes
	3. Report to the Shareholders Meeting on the issues stated in 1 and 2, and disclose the full details of the transaction in the annual report and prospectus. (VII) In allocating a special reserve as stated in the previous paragraph, the Company shall recognize impairment losses, disposition, reasonable compensation, resumption to original condition, or, there is proof that proves the action taken is not unreasonable, and may use this portion of the special reserve only at the permission of the Financial Supervisory Commission. (VIII) In acquiring real properties from Related Parties, if there is any sign of unusual transactions that deviate from common practices in business transactions, proceed to (VI) and (VII). IV. Theprocedure for	Company Act. 3. Report to the Shareholders Meeting on the issues stated in 1 and 2, and disclose the full details of the transaction in the annual report and prospectus. (VII) In allocating a special reserve as stated in the previous paragraph, the Company shall recognize impairment losses, disposition, reasonable compensation, resumption to original condition, or, there is proof that proves the action taken is not unreasonable, and may use this portion of the special reserve only at the permission of the Financial Supervisory Commission. (VIII) In acquiring real properties from Related Parties, if there is any sign of unusual transactions that deviate from common practices in business transactions, proceed to(VI)and(VII).	III. Amendment to IV on the wordingof

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Clause		Amendment	Originalprovision	Notes
	V.	determining the authorized limit and the executor: Before the acquisition or disposition of and equipment for business purposes between the Company and a subsidiary, the Accounting Division and related functional departments shall gather related information and prepare a report to be submitted to the Board for approval in advance. If the amount of the transaction falls below NT$300 million, the Chairman shall be authorized to make a decision in advance and presented that to the earliest possible session of the Board for recognition. There is a requirement of 10% in this procedure calculated on the basis of total assets stated in separate or individual financial statements prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.	IV. The procedure for determining the authorized limit and the executor: Before the acquisition or disposition ofmachinery and equipment for business purposes between the Company and a subsidiary, the Accounting Division and related functional departments shall gather related information and prepare a report to be submitted to the Board for approval in advance. If the amount of the transaction falls below NT$300 million, the Chairman shall be authorized to make a decision in advance and presented that to the earliest possible session of the Board for recognition.	machinery and equipment for business purposes in conforming to IFRS. IV. In consideration that the risk inherent in the acquisition or disposition of assets is to be assumed by the acquiring or disposing party, the materiality of the amount involved in the transaction with related parties shall be assessed on the basis of the regulations of the Company. As such, part V is added pursuant to the requirement of Article 33 – 2 of the Criteria.

Article 9	The procedure for the acquisition or disposition of membership cards or intangible assets: I. Assessment and operation procedure:		The procedure for the acquisition or disposition of membership cards or intangible assets: I. Assessment and operation procedure:

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Clause		Amendment	Originalprovision	Originalprovision	Notes
	(I) (II)	For the acquisition or disposition of membership cards, consult the fair market price, suggest terms and conditions and the price for transaction, compile the information into an analysis report. If the amount is below NT$3 million, present it to the President for approval and report to the Board as the earliest opportunity. If the amount exceeds NT$3 million, the prior approval of the Board is required. For the acquisition or disposition of intangible assets, consult the appraisal report issued by the professionals or fair market value, suggest terms and conditions and the price for the transaction, compiling the data into an analysis report andreport to the President. If the amount of the transaction falls below NT$3 million, the approval of the President and a report to the Board at the earliest possible	(I) (II)	For the acquisition or disposition of membership cards, consult the fair market price, suggest terms and conditions and the price for transaction, compile the information into an analysis report. If the amount is below NT$3 million, present it to the President for approval and report to the Board as the earliest opportunity. If the amount exceeds NT$3 million, the prior approval of the Board is required. For the acquisition or disposition of intangible assets, consult the appraisal report issued by a professional or fair market value, suggest terms and conditions and the price for the transaction, compile the data into an analysis report and submit itto the Board for approval before proceeding.	I. In consideration of the materiality principle and practice, the procedure for acquisition or disposition of membership cards as stated in I (II) shall apply.

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Clause		Amendment	Originalprovision	Notes
	moment is required. If the amount exceeds NT$ 3 million, it must be approved by the Board before proceeding. II. Professional opinion and report from professionals on membership cards or intangible assets: (I) For acquisition or disposition of assets, the Company shall retain a professional to draft an appraisal report.(II) If the amount of transaction in an acquisition or disposition of assets by the Company amounts to 20% of paid-in capital or NT$300 million, a opinion of a professional certified public accountant on the reasonability of the transaction price should be sought before the day of deed. The retained certified public accountant shall present such opinion in accordance with SFAS No. 20 announced by ARDFunless the transaction is made with government institutions.		II. Professional opinion and report from professionals on membership cards or intangible assets: (I) For acquisition or disposition of assets, the Company shall retain a professional to draft an appraisal report. (II) If the amount of the transaction in an acquisition or disposition of assets by the Company amounts to 20% of paid-in capital or NT$300 million, the professional opinion of a certified public accountant should be sought on the reasonability of the transaction price before the day of deed. The retained certified public accountant shall present such an opinion in accordance with SFAS No. 20 announced by ARDF.	II. Government institutions shall comply with related tendering or bidding regulation when disposing of assets. In addition, government institutions will assess the bottom price in the tender offer in accordance with applicable legal rules to ensure the price is being manipulated. Also, trades in real properties between the Company and the government can be undertaken without a professional opinion. As a matter of equity, the amendment to II (II) was made pursuant to Article 11 of the Criteria.

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Clause	Amendment	Originalprovision	Notes
	(III) If the acquisition or disposition of assets by the Company is made under court auction, the certification document issued by the court shall be used in lieu of an appraisal report or the opinion of a certified public accountant. III. Executor For the acquisition or disposition of membership cards or intangible assets by the Company, the Accounting Division shall proceed after the gate approval procedure as stated in I.	(III) If the acquisition or disposition of assets by the Company is made under court auction, the certification document issued by the court shall be used in lieu of an appraisal report or the opinion of a certified public accountant. III. Executor For the acquisition or disposition of membership cards or intangible assets by the Company, the Accounting Division shall proceed after the gate approval procedure as stated in I.
Article 10	The procedure for the acquisition and disposition of derivatives I. The principle and policy of trade (I) Type of trade 1. The Company may engage in derivative trade and the content is defined as contracts specified in Article III – I 2. “For disposal” as referred to in this article shall be the purpose of holding or the realization of the derivative if tradingfor a	The procedure for the acquisition and disposition of derivatives I. The principle and policy of trade (I) Type of trade 1. The Company may engage in derivative trade and the content is defined as contracts specified in Article III – I 2. “For disposal” as referred to in this article shall be the purpose of holding or the realization of the derivative if tradingfor a

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Clause	Amendment	Originalprovision	Notes
	spread, including transactions at fair value through income statements, “not for disposal” refers to derivative trades beyond the aforementioned purpose. (II) Business or hedging strategy: 1. “For disposal”: flexibility, mobility shall be the key principles of business strategy. 2. “Not for disposal”: the hedging strategy shall be based on the principles of stability and a conservative stance. (III) Segregation of duties 1. The signing of transaction contracts and related documents: The Chairman or the company’s authorized agent. 2. The execution of trade and assessment on returns: (1) The Procurement Division shall be responsible	spread, including transactions at fair value through income statements, “not for disposal” refers to derivative trades beyond the aforementioned purpose. (II) Business or hedging strategy: 1. “For disposal”: flexibility, mobility shall be the key principles of business strategy. 2. “Not for disposal”: the hedging strategy shall be based on the principles of stability and a conservative stance. (III) Segregation of duties 1. The signing of transaction contracts and related documents: The Chairman or the company’s authorized agent. 2. The execution of trade and assessment on returns: (1) The Procurement Division shall be responsible

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Clause	Amendment	Originalprovision	Notes
	for raw materials related trade; the Treasury Division shall be responsible for finance related trade. (2) Account opening, trading, confirmation and delivery: executed by relevant functional departments with proper authorization of the authorities. (3) Dealers shall be responsible for preparing dealing slips, payment requests, receipt vouchers and supervisors at various levels shall be responsible for reviewing the trade and passing on the information to the Treasury Division, Accounting Division, and Auditing Division.	for raw materials related trade; the Treasury Division shall be responsible for finance related trade. (2) Account opening, trading, confirmation and delivery: executed by relevant functional departments with proper authorization of the authorities. (3) Dealers shall be responsible for preparing dealing slips, payment requests, receipt vouchers and supervisors at various levels shall be responsible for reviewing the trade and passing on the information to the Treasury Division, Accounting Division, and Auditing Division.

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Clause	Amendment	Originalprovision	Notes
	(4) Designated personnel in relevant departments shall be responsible for the assessment of returns and presenting an assessment report to the head of auditing. 3. Accounting: the Accounting Division shall prepare vouchers on the basis of the source documents provided for bookkeeping and prepare related financial statements in each accounting period. 4. Internal audit: the Auditing Division shall conduct regular and special audits in accordance with the internal auditing system. 5. Legal Affairs: Personnel at a level higher than the legal affairs staff shall be responsible for reviewing trading contracts. 6. Unless otherwise	(4) Designated personnel in relevant departments shall be responsible for the assessment of returns and presenting an assessment report to the head of auditing. 3. Accounting: the Accounting Division shall prepare vouchers on the basis of the source documents provided for bookkeeping and prepare related financial statements in each accounting period. 4. Internal audit: the Auditing Division shall conduct regular and special audits in accordance with the internal auditing system. 5. Legal Affairs: Personnel at a level higher than the legal affairs staff shall be responsible for reviewing trading contracts. 6. Unless otherwise

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Clause	Amendment	Originalprovision	Notes
	specified, the execution of derivative trades by the Company may be undertaken by personnel at the management level or higher. (IV) Performance evaluation Net income at the end of the year shall be the foundation of an assessment. (V) Total contract amount and authorized limit: 1. “For disposal”: The totality of the contract amount at any point in time shall not exceed 10% of the net worth of the Company in the previous fiscal period. If the amount exceeds this limit by less than 5%, the head of the related department shall be authorized to conduct the transactions and then report to the Board. If the amount exceeds 5% of the aforementioned limit, the prior approval of the Board is required	specified, the execution of derivative trades by the Company may be undertaken by personnel at the management level or higher. (IV) Performance evaluation Net income at the end of the year shall be the foundation of an assessment. (V) Total contract amount and authorized limit: 1. “For disposal”: The totality of the contract amount at any point in time shall not exceed 10% of the net worth of the Company in the previous fiscal period. If the amount exceeds this limit by less than 5%, the head of the related department shall be authorized to conduct the transactions and then report to the Board. If the amount exceeds 5% of the aforementioned limit, the prior approval of the Board is required

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Clause	Amendment	Originalprovision	Notes
	before the tradde can proceed. 2. “Not for disposal”: the assets or liabilities in holding or expected to trade with shall represent the upper limit. The head of the related department shall be authorized to conduct the transaction and then report to the Board. (VI) Upper limit of losses 1. “Transaction purpose”: Limits are not set for individual contracts but rather contracts of the same target of trade. Different limits are set for the contracts of different instruments: (1) Forwards or futures: 5% of the average cost. (2) Options: If the Company is the buyer, the upper limit is 5% of the premium paid. If the Companyis	before the tradde can proceed. 2. “Not for disposal”: the assets or liabilities in holding or expected to trade with shall represent the upper limit. The head of the related department shall be authorized to conduct the transaction and then report to the Board. (VI) Upper limit of losses 1. “For disposal”: Limits are not set for individual contracts but rather contracts of the same target of trade. Different limits are set for the contracts of different instruments: (1) Forwards or futures: 5% of the average cost. (2) Options: If the Company is the buyer, the upper limit is 5% of the premium paid. If the Company is the writer,the

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Clause	Amendment	Originalprovision	Notes
	the writer, the upper limit is the sum of the premium paid and 5% of the contract amount. (3) Swaps and other composite instruments: the amount of losses shall not exceed 5% of the totality of contract amount. 2. “Non- transaction purpose”:the upper limit of losses shall be 25% of the total contract amount for an individual contract, the upper limit of losses shall be 25% of the total contract amount for all contracts. II. Risk Management Measures: (I) Credit risk of counterparties – counterparties shall be financial institutions of good credit rating standard. (II) Price reversal market risk – proceed to section I –(VI)of	upper limit is the sum of the premium paid and 5% of the contract amount. (3) Swaps and other composite instruments: the amount of losses shall not exceed 5% of the totality of contract amount. 2. “Not for disposal”:No upper limit is set for losses, as the loss is offset by profit and hedging. II. Risk Management Measures: (I) Credit risk of counterparties – counterparties shall be financial institutions of good credit rating standard. (II) Price reversal market risk – proceed to section I – (VI) of this article. (III) Liquidity risk of market instruments –	As per the requirement of Article 18- I of the “Regulations Governing Acquisitions and Dispositions by Public Companies”, an upper limit was set for losses on individual contracts and the totality of all contracts.

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Clause	Amendment	Originalprovision	Notes
	this article. (III) Liquidity risk of market instruments – any kind of financial instruments in the market shall be subject to two-way quotations by at least 2 financial institutions before trading is permitted. (IV) Cash flow risk – routine disclosure of fair market value is required for all derivative contracts undertaken, to fairly present the expected cash flows from these instruments. (V) Internal operational risk – proceed to section I (III) of this article. (VI) Legal risk inherent in the contracts and related documents – to be subject to the professional opinions of the Legal Affairs Office. (VII) The dealers, confirmation personnel, and settlement personnel of derivatives shall not perform the duties of one another. (VIII) The assessment, monitoring, and control of risk shall be performed by personnel other than	any kind of financial instruments in the market shall be subject to two-way quotations by at least 2 financial institutions before trading is permitted. (IV) Cash flow risk – routine disclosure of fair market value is required for all derivative contracts undertaken, to fairly present the expected cash flows from these instruments. (V) Internal operational risk – proceed to section I (III) of this article. (VI) Legal risk inherent in the contracts and related documents – to be subject to the professional opinions of the Legal Affairs Office. (VII) The dealers, confirmation personnel, and settlement personnel of derivatives shall not perform the duties of one another. (VIII) The assessment, monitoring, and control of risk shall be performed by personnel other than those in the aforementioned departments and

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Clause	Amendment	Originalprovision	Notes
	those in the aforementioned departments and shall be reported to the Board or the senior managers who are not responsible for the trading or decisions on the position. (IX) The position of derivative trades shall be subject to evaluation at least once a week. Derivative trades for hedging shall be subject to assessment at least twice per month. The assessment report shall be submitted to a senior manager authorized by the Board. III. Internal audit system: The internal auditors of the company shall ensure the internal control of derivative trade is appropriate at regular intervals, and audit trading departments to ensure compliance with this procedure, prepare audit reports based on those findings and report to the supervisors in writing on the discovery of any material breach of rules. IV. Routine assessment and handling of nonconformities:	shall be reported to the Board or the senior managers who are not responsible for the trading or decisions on the position. (IX) The position of derivative trades shall be subject to evaluation at least once a week. Derivative trades for hedging shall be subject to assessment at least twice per month. The assessment report shall be submitted to a senior manager authorized by the Board. III. Internal audit system: The internal auditors of the company shall ensure the internal control of derivative trade is appropriate at regular intervals, and audit trading departments to ensure compliance with this procedure, prepare audit reports based on those findings and report to the supervisors in writing on the discovery of any material breach of rules. IV. Routine assessment and handling of nonconformities: (I) The Board shall appoint designated auditors to monitor

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Clause	Amendment	Originalprovision	Notes
	(I) The Board shall appoint designated auditors to monitor and control risk deriving from derivative trade. (II) The Board shall appoint designated personnel to assess the performance of derivative trade to ensure it is congruent with the business strategy of the Company and the risk assumed is within the tolerance of the Company. (III) The head of internal audits shall assess whether or not the risk management measures in effect are appropriate at regular intervals, and ensure that they comply with the procedures stated in this provision. In addition, the head of internal audit shall also monitor the trade and the status of profit, and take necessary measures in case of unusual transactions and report to the Board immediately. If the Company has independent directors, they shall be attend related meetings of the	and control risk deriving from derivative trade. (II) The Board shall appoint designated personnel to assess the performance of derivative trade to ensure it is congruent with the business strategy of the Company and the risk assumed is within the tolerance of the Company. (III) The head of internal audits shall assess whether or not the risk management measures in effect are appropriate at regular intervals, and ensure that they comply with the procedures stated in this provision. In addition, the head of internal audit shall also monitor the trade and the status of profit, and take necessary measures in case of unusual transactions and report to the Board immediately. If the Company has independent directors, they shall be attend related meetings of the Board to express opinions. (IV) A written record

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Clause	Amendment	Originalprovision	Notes
	Board to express opinions. (IV) A written record shall be established to track all the Company’s derivative trades and this shall cover type of derivative trade, amount, date of approval by the Board, and issues to be reviewed and assessed pursuant to section II (IX) and (II) and (III) in this paragraph in detail.	shall be established to track all the Company’s derivative trades and this shall cover type of derivative trade, amount, date of approval by the Board, and issues to be reviewed and assessed pursuant to section II (IX) and (II) and (III) in this paragraph in detail.
Article 12	Procedure for information disclosure I. Content required for disclosure and disclosure standards: (I) The Company may engage in the acquisition or disposition of assets with Related Parties beyond real properties, or Related Parties may engage in the acquisition or disposition of assets with the Company beyond real properties, and shall present these transactions to the Board for approval and Supervisors for recognition before entering into a transaction agreement and	Procedure for information disclosure I. Content required for disclosure and disclosure standards: (I) The Company may engage in the acquisition or disposition of assets with Related Parties beyond real properties, or Related Parties may engage in the acquisition or disposition of assets with the Company beyond real properties, and shall present these to the Board for approval and Supervisors for recognition before entering into a transaction agreement and making payment if	I. The Company invests in domestic money market funds mainly for stable interest income, the nature is of which is similar to the trading of bonds with R/P and reverse R/P features. Amendments to I (I) and (IV)2 were made pursuant to Article 30 of the Criteria.

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Clause	Amendment	Originalprovision	Notes
	making payment if the asset exceeds 20% of paid-in capital, 10% of total Company assets or NT$300 million, except for trades in government bonds, bonds with R/P or reverse R/P features, subscriptions or redemptions of domestic money market fund units. (II) Proceed to corporate mergers, divisions, acquisitions, or acceptance of assigned equity shares. (III) Losses from derivative trade in full as stated in Article X – I –(VI) or the upper limit of individual contracts. (IV) Asset trades listed in the previous 3 paragraphs, investments in Mainland China, which exceed 20% of paid-in capital of the Company or NT$300 million except in the following situations: 1. Trading of government bonds. 2. The trading of bonds with R/P or reverse R/P features,	the asset exceeds 20% of paid-in capital, 10% of total assets of the Company or NT$300 million, except for the trades in government bonds, bonds with R/P or reverse R/P features. (II) Proceed to corporate mergers, divisions, acquisitions, or acceptance of assigned equity shares. (III) Losses from derivative trade in full as stated in Article X – I –(VI) or the upper limit of individual contracts. (IV) Asset trades listed in the previous 3 paragraphs, investments in Mainland China, which exceed 20% of paid-in capital of the Company or NT$300 million except in the following situations: 1. Trading of government bonds. 2. Trading of bonds with R/P and reverse R/P features.

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Clause	Amendment	Originalprovision	Notes
	subscriptions or redemptions of domestic money market fund units. 3. Where assets acquired or disposed are equipment for business purposes, the counterparties are not Related Parties and the amount is less than NT$500 million. 4. Building on own land, building on leased land, joint venture with shared built premises, joint venture with profit sharing, joint venture with shared sales proceeds and an expected amount of investment under NT$500 million. (V) Calculation of the amount for the aforementioned (I)~(IV): 1. The amount of each transaction. 2. The amount from a particular counterparty or the disposition of subject matters of the same nature	3. Where assets acquired or disposed are machineryand equipment for business purposes, the counterparties are not Related Parties and the amount is less than NT$500 million. 4. Building on own land, building on leased land, joint venture with sharoffing of built premises, joint venture with profit sharing, joint venture with shared sales proceeds and an expected amount of investment under NT$500 million. (V) Calculation of the amount for the aforementioned (I)~(IV): 1. The amount of each transaction. 2. The amount from a particular counterparty or the disposition of subject matters of the same nature accumulated in one year. 3. The amount of an acquisition or	II. Amendments to the wording of I (IV) 3 on machinery and equipment for business purposes to conform to IFRS.

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Clause	Amendment	Originalprovision	Notes
	accumulated in one year. 3. The amount of an acquisition or disposition (acquisitions and dispositions shall be accumulated separately) on the same development project of real properties in one year. 4. The amount from the acquisition or disposition (acquisitions and dispositions shall be accumulated separately) of the same security in one year. (VI) One year as referred to in the last paragraph is the period of one year that immediately precedes the current transaction. The portion that has been declared for disclosure in this procedure shall be excluded from the calculation. II. Time for disclosure and declaration: In the acquisition or disposition of assets, the Company shall proceed to disclosure and declaration within 2 days after the dayof deed if anyof the	disposition (acquisitions and dispositions shall be accumulated separately) on the same development project of real properties in one year. 4. The amount from the acquisition or disposition (acquisitions and dispositions shall be accumulated separately) of the same security in one year. (VI) One year as referred to in the last paragraph is the period of one year that immediately precedes the current transaction. The portion that has been declared for disclosure in this procedure shall be excluded from the calculation. II. Time for disclosure and declaration: In the acquisition or disposition of assets, the Company shall proceed to disclosure and declaration within 2 days after the day of deed if any of the situations specified in (I) to (IV) applies. III. The procedure for disclosure and

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Clause	Amendment	Originalprovision	Notes
	situations specified in (I) to (IV) applies. III. The procedure for disclosure and declaration: (I) The Company shall post information designated for disclosure by the Financial Supervisory Commission on its website. (II) The Company shall post information on the state of derivative trade conducted by itself and other domestic subsidiaries which are not public companies in a given month by the 10th day of the next month on the website as designated by Financial Supervisory Commission. (III) In the event of error of missing data in a disclosure, the Company shall make a new round of disclosures in order to make then necessary corrections. (IV) If any of the following applies, the Company shall make disclosures on the website	declaration: (I) The Company shall post information designated for disclosure by the Financial Supervisory Commission on its website. (II) The Company shall post information on the state of derivative trade conducted by itself and other domestic subsidiaries which are not public companies in a given month by the 10th day of the next month on the website as designated by Financial Supervisory Commission. (III) In the event of error of missing data in a disclosure, the Company shall make a new round of disclosures in order to make then necessary corrections. (IV) If any of the following applies, the Company shall make disclosures on the website designated by the Financial Supervisory Commission within

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Clause	Amendment	Originalprovision	Notes
	designated by the Financial Supervisory Commission within 2 days of the event: 1. Original agreements for trade are altered, terminated, or discharged. 2. Mergers, divisions, acquisitions, or acceptance of assigned equity shares are not completed as scheduled. 3. Changes in the content of the original disclosure. IV. Format for disclosure The format for disclosure on subjects to be disclosed by the Company under this procedure is shown in the Appendix to the “Regulations Governing Acquisitions or Dispositions of Assets by Public Companies”.	2 days of the event: 1. Original agreements for trade are altered, terminated, or discharged. 2. Mergers, divisions, acquisitions, or acceptance of assigned equity shares are not completed as scheduled. 3. Changes in the content of the original disclosure. IV. Format for disclosure The format for disclosure on subjects to be disclosed by the Company under this procedure is shown in the Appendix to the “Regulations Governing Acquisitions or Dispositions of Assets by Public Companies”.

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2. Amendment to provisions in “Rules of Procedure for Shareholders’ Meetings”

Explanatory Notes:

(1) The provisions of Article II and Article XI of the “Rules of Procedure for Shareholders’ Meetings” The amendment is shown in the appendix attached.
(2) This motion is presented before the 5th session of the 16th Board of Directors meeting held on March 5 2014.
(3) We ask for your favorable action.

Resolution:

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Mapping Table of the Amendment to the “Rules of Procedure for Shareholders Meeting”

Clause	The amendment	Originalprovision	Notes
Article II	The Company shall hold Shareholders Meetings at the place where the Company is located, or a place convenient for shareholders (or their proxies) and suitable for the Shareholders Meetings. Meetings shall not be held earlier than 9:00am or later than 3:00pm. Shareholders (or their proxies) shall wear their identification badges when attending meetings, presenting the meeting permit in lieu of signing in. When holding a Shareholders Meeting, the Company shall introduce an electronic means of voting, the method of which shall be explicitly stated in the Shareholders Meeting notice. Shareholders who elect to vote electronically shall be deemed present at the meeting in person. However, they shall be deemed to have abstained on impromptu motions, amendments to or substitution of any existing motions. Attendance at Shareholders Meetings shall be calculated on the basis of the quantity of shares being represented. The quantity of shares being represented is calculated on the basis of the meeting permits being surrendered plus the votes cast electronically. The Company may ask retained lawyers or certifiedpublic	The Company shall hold Shareholders Meetings at the place where the Company is located, or a place convenient for shareholders (or their proxies) and suitable for the Shareholders Meetings. Meetings shall not be held earlier than 9:00am or later than 3:00pm. Shareholders (or their proxies) shall wear identification badges when attending meetings, present meeting permits in lieu of signing in and for thecalculation of the number of shares represented by the shareholders (proxies) present at the meeting. The Companymayask retained	Amendment to paragraph 2 in conjunction with the introduction of an electronic voting system at Shareholders Meetings by the Company.Addition of 3 and 4 to this article. Move 3,4 of the

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Clause	The amendment	Originalprovision	Notes
	accountants to attend the Shareholders Meeting as observers. Administrative personnel at Shareholders Meetings shall wear proper identification badges or other forms of identification. The Chairman shall preside over the Shareholders Meeting he/she has called. In the absence of the Chairman due to leave or other reasons, the Vice Chairman shall act on behalf of and in the name of the Chairman. In the event that there is no vice Chairman or the Vice Chairman is absent due to leave or other reasons, the directors shall nominate a temporary chairperson from among their own ranks if no person is designated to take on such duties. Where a Shareholders Meeting can be convened by an external party, said party shall preside over the meeting. If two parties call for the meeting, one of them shall preside over the meeting. The Company shall videotape or keep an audio record of the minutes of the Shareholders Meeting covering the entire duration of the meeting and retain the record for at least one year.	lawyers or certified public accountants to attend the Shareholders Meeting as observers. Administrative personnel at Shareholders Meetings shall wear proper identification badges or other forms of identification. The Chairman shall preside over the Shareholders Meeting he/she has called. In the absence of the Chairman due to leave or other reasons, the Vice Chairman shall act on behalf of and in the name of the Chairman. In the event that there is no vice Chairman or the Vice Chairman is absent due to leave or other reasons, the directors shall nominate a temporary chairperson from among their own ranks if no person is designated to take on such duties. Where a Shareholders Meeting can be convened by an external party, said party shall preside over the meeting. If two parties call for the meeting, one of them shall preside over the meeting. The Company shall videotape or keep an audio record of the minutes of the Shareholders Meeting covering the entire duration of the meeting and retain the record for at least oneyear.	original version to 5, and 6.
Article XI	A motion shall be resolved by a simple majority of the shareholders (proxies) present at the meeting representing more than half of the voting rights unless otherwise specified by law or the Articles of Incorporation.	Motions shall be passed by a simple majority of shareholders (proxies) present at the meeting and representing more than half of voting rights unless otherwise specified by law or the Articles of Incorporation.Motions shall be deemed passed if no objection is	Amendment to 1 in conjunction with the introduction of electronic balloting at Shareholders Meetings to enhance the efficacy of meeting procedures.

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Clause	The amendment	Originalprovision	Notes
	A motion shall be deemed passed if shareholders electing to cast their votes electronically expressed no objection and other shareholders present at the meeting also expressed no objection. Motions resolved in this manner shall be the same as those passed by a vote. Shareholders may object to specific motions and balloting may be necessary to make a decision. In such instances the Chairman shall announce votes on individual motions one by one, or refer the motion (including the motion of election) in one or two balloting and calculate the total votes cast. In the event of an amendment to or substitution of a specific motion, the Chairman has to determine the voting priority. If one of these is passed, the remainder shall be deemed vetoed and no further balloting is necessary. The result of balloting shall be announced during the meeting and kept on record.	expressed at the meeting after being announced by the Chairman. Motions so resolved shall carry the same weight as motions passed by a vote. In the event of an amendment to or substitution of a specific motion, the Chairman has to determine the voting priority. If one of these is passed, the remainder shall be deemed vetoed and no further balloting is necessary. The result of balloting shall be announced during the meeting and kept on record.	Addition of 2 and 3 to this article. 2 and 3 in the original version were moved to 4 and 5.

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Questions And Motions:

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U-MING MARINE TRANSPORT CORPORATION

ARTICLES OF INCORPORATION

June 14, 2012

Section I - General Provisions

Article l: The Corporation shall be incorporated as a company limited by shares under the Company Law of the Republic of China, and its name shall be U-Ming Marine Transport Corporation.
Article 2: The scope of business of the Corporation shall be as follows:
(1) Ship transportation;
(2) Sale and purchase of ship;
(3) G401011 Shipping agency;
(4) ZZ99999 To carry on the businesses which are not prohibited or restricted by law except for the services licensed under approval.
Article 3: The Corporation may provide external guarantee in accordance to the regulations set out in the “Procedure for Corporate Guarantees.”
Article 4: When the Corporation intends to become a limited liability stockholder due to reinvestment in other company, it is not subjected to the restriction stipulated in Article 13 of the Company Law of the Republic of China that the total amount of its reinvestment in other companies shall not exceed forty percent of the amount of its paid-up capital. However, the Corporation's practice in relation to the reinvestment shall be made according to a resolution adopted at the meeting of the Board of Directors.
Article 5: The Corporation shall have its head office in Taipei, and may set up branch offices at various locations inside and outside of the Republic of China, depending upon the Corporation's business necessity.

Section II - Capital Stock

Article 6: The total capital stock of the Corporation shall be in the amount of NT$10,500,000,000 divided into 1,05,000,000 shares, with par value of NT$10 per share. For the un-issued shares, the Board of Directors is authorized to issue these shares in installments.
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Article 7: Shares issued by the Corporation shall be exempted from printing of share certificates. However, the Corporation shall register with the Securities Consolidated Custody Business Organization.

The corporation can issue share certificate for special shares.

When the Corporation merges with other company, on matters related to the merging, it is not necessary to obtain resolution from an extraordinary stockholders’ meeting.

Article 8: Shares affair matters of the Corporation shall be handled based on the provisions in 「Public Issue Shares Company Shares Affairs Handling Standard」and other relevant laws and regulations.
Article 9: No transfer of shares shall be made within sixty days prior to each annual stockholders' regular meeting or within thirty days before an extraordinary meeting or within five days fixed by the Corporation for distributing dividend, bonus or other benefits.

Section III- Stockholders' Meetings

Article 10: Stockholders' meetings of the Corporation are of two kinds:

(l) Regular meetings which shall be convened by the Board of Directors within six months after the close of the fiscal year.
(2) Extraordinary meetings which shall be convened by the Board of Directors whenever deemed necessary by the Board of Directors or upon the written request of stockholders holding three percent or more of the total outstanding capital stock continuously for more than one year.

When the Board of Directors is not going to convene or cannot convene the stockholders’ meeting, Supervisor(s) can convene the stockholders’ meeting if deemed necessary for the benefit of the Corporation.

Article 11: Convention of stockholders’ regular meeting shall be notified to various stockholders in writing thirty days in advance. Convention of stockholders shall be notified to various stockholders in writing fifteen days in advance. That written notice shall state clearly the date and place and the reasons for convening the meeting and shall also be publicly announced based on Law.
Article 12: Unless otherwise provided in the Company Law of the Republic of China, a stockholders' meeting may proceed with its conference if attended by stockholders representing more than one half of the total outstanding shares of the Corporation. Resolutions shall be made by a majority vote of the stockholders present at the meeting.
Article 13: Stockholder shall present power of attorney to assign representative to attend the stockholders’ meeting. Apart from shares affairs representative organization approved by trust business or securities management institution, if more than two powers of attorney are in favor of one person (proxy) the voting right of such proxy shall not exceed three percent of the total outstanding shares of the Corporation, and the
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exceeding portion shall not be counted.

In regard to method of appointing for attendance by stockholder, unless otherwise provided in the Company Law, it shall be processed based on the “Rules Of Utilization of Power of Attorney To Attend Stockholders’ Meeting Of Public Issue Company.”

Article 14: During stockholders’ meeting, unless otherwise provided in the Company Law or this Articles of Incorporation, the meeting shall be processed based on the Rules Of Proceedings For Stockholders’ Meeting of the Corporation.
Article 15: The resolutions of the stockholders' meeting shall be recorded in the minutes, which shall specify the date, place of meeting, number of stockholders who attended such meeting, number of holding shares or representing shares, number or voting rights, name of the chairman, resolutions and method thereof, and such minutes shall be signed or sealed by the Chairman of the meeting. Such minutes, together with the stockholders’ attendance book (card) and proxies, shall be kept in the Corporation based on Law.

Section IV - Directors, Supervisors and Managers

Article 16: The Corporation shall have nine Directors and three Supervisors that shall be elected from among capable persons in the stockholders’ meeting. The total registered shares held by all directors and supervisors shall be stipulated based on the standard in the provision of “Director & Supervisor Share Percentage & Audit Implementation Rules For Public Issue Company.”
Article 17: The term of office for Directors shall be three years and term of office for Supervisors shall be three years and they shall be re-appointed if being re-elected.
Article 18: The Board of Directors shall be organized by Directors to exercise the job authorities of directors. The Directors shall elect from among themselves a Chairman who will represent the company and one Vice Chairman. When the Chairman is absent or cannot exercise his job authorities for any reason whatsoever, the Vice Chairman shall be designated by the Chairman as his agent. When the Vice Chairman is absent or cannot exercise his job authorities, one director will be assigned by the Chairman to be the agent. In case of no such assignment, the Directors shall elect one from among themselves.
Article 19: Meetings of the Board of Directors shall be held regularly. Meetings of the Board of Directors shall be convened by the Chairman of the Board of Directors. Unless otherwise provided for in the Company Law, meetings of the Board of Directors shall be attended by a majority of Directors. Resolutions of the Board of Directors shall be adopted by a majority of the Directors at a meeting attended by majority of the Directors. For urgent matters, the Chairman can convene extraordinary meetings at any time.

If a Director cannot attend a meeting of the Board of Directors, he should submit a power of attorney appointing another Director to act on his behalf in accordance with the Law.

The Notice of Meeting provided in preceding paragraph could be served by way of writing, email or fax.

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Article 20: The Supervisors, in addition to performing their supervising duties in accordance with Applicable laws, shall attend meetings of the Board of Directors and voice opinions, but shall not be entitled to participate in Voting.
Article 21: The remuneration of Directors and Supervisors shall be decided by a stockholders' meeting. And the remuneration of Chairman and Vice Chairman shall be decided by the Board of Directors with consideration of industry and listing companies’ remuneration level.
Article 22: The Corporation shall have one President and various certain number of Vice Presidents, Assistant Vice Presidents and managers and their appointment and dismissal shall be adopted by a majority of the Directors at a meeting attended by a majority of the Directors.
Article 23: The Chairman, deputy chairman and general manager shall perform daily duties of the corporation according to the resolutions made at the meeting of the Board of Directors.

Section V - Financial Reports

Article 24: The fiscal year for the Corporation shall be from January 1 of each year to December 31 of the same year. After the close of each fiscal year, the Corporation shall prepare financial reports.
Article 25: The Board of Directors shall prepare various financial reports pursuant to relevant laws and regulations. Such reports shall, after being reviewed and approved by the Supervisors of the Corporation, be submitted by the Board of Directors thirty days prior to the regular stockholders' meeting for acceptance.

The appointment, dismissal and remuneration of the auditors of the preceding financial reports shall be made with the consent of a majority of the Directors.

Article 26: Dividends distributed to stockholders shall be paid pursuant to the allocation percentage stipulated in the articles of incorporation of the Corporation and consideration shall be given to the business perspective of the corporation, the life cycle of various products or service provided, capital requirement in the future and the effect of possible changes of tax laws respectively and under the objective of maintaining a stable dividend policy. For issue of dividend, the cash dividend shall not be lower than ten percent of total dividend and stockholder bonus of that year.
Article 27: If the Corporation has a profit at the end of a fiscal year, the Corporation shall make up losses of previous years after paying business income taxes based on Law and, if there is any remaining profit, a legal reserve of ten percent of the balance shall be appropriated as legal reserve. In addition, after appropriation of special reserve based on provision in law, together with the accumulated undistributed earnings of the previous year, the total shall be the profit that is available for allocation. However, depending on the condition of the business, part of the profit shall be retained and the balance shall be allocated based on the following percentage:
(1) Sixty percent of the balance as dividends: To be allocated in proportion to all shares. In case of an increase in the capital of the Corporation, unless otherwise provided in
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the law, the dividend for the new shares for the same year shall be decided by the stockholders' meeting.

(2) Thirty-eight percent as bonus to stockholders to be allocated in proportion to all shares. In case of an increase in the capital of the Corporation, the bonus for the new shares for the same year shall be decided by the stockholders’ meeting.
(3) One percent as remuneration for Directors and Supervisors.
(4) One percent as bonus to employees.

When allocating employee bonus in the form of shares certificate, it shall be handled based on the method stipulated by the Board of Directors.

Section VI - Supplementary Provisions

Article 28: Should there be any incomplete matter in the articles of incorporation of the Corporation, it shall be handled based on the provisions in the Company Law and other relevant laws and regulations.
Article 29: The Articles of Incorporation of the Corporation are stipulated on the 22nd day of June 1968 and after resolution was obtained in the stockholders’ regular meeting, it was submitted to the competent authority for approval and became effective on the same day. Subsequent amendment to these Articles of Incorporation shall become effective after being passed at the stockholders’ meeting.

The first revision was in August 16[th] 1968. The second revision was in March 21[st] 1969. The third revision was in May 30[th] 1969. The fourth revision was in October 20[th] 1970. The fifth revision was in April 26[th] 1971. The sixth revision was in August 4[th] 1971. The seventh revision was in February 20[th] 1974. The eighth revision was in April 29[th] 1974. The ninth revision was in May 30[th] 1975. The tenth revision was in April 30[th] 1976. The eleventh revision was in April 29[th] 1977. The twelfth revision was in May 15[th] 1978. The thirteenth revision was in December 22[nd] 1978. The fourteenth revision was in May 29[th] 1980. The fifteenth revision was in April 25[th] 1981. The sixteenth revision was in May 27[th] 1981. The seventeenth revision was in May 27[th] 1983. The eighteenth revision was in May 18[th] 1984. The nineteenth revision was in September 17[th] 1984. The twentieth revision was in January 16[th] 1985. The twenty-first revision was in March 27[th] 1987. The twenty-second revision was in June 15[th] 1987. The twenty-third revision was in December 21[st] 1987. The twenty-fourth revision was in February 26[th] 1988.

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The twenty-fifth revision was in August 19[th] 1988. The twenty-sixth revision was in May 12[th] 1989. The twenty-seventh revision was in April 18[th] 1990. The twenty-eighth revision was in May 15[th] 1991. The twenty-ninth revision was in May 15[th] 1992. The thirtieth revision was in May 29[th] 1993. The thirty-first revision was in August 14[th] 1993. The thirty-second revision was in May 18[th] 1994. The thirty-third revision was in May 25[th] 1995. The thirty-fourth revision was in May 15[th] 1996. The thirty-fifth revision was in May 15[th] 1998. The thirty-sixth revision was in May 17[th] 1999. The thirty-seventh revision was in May 5[th] 2000. The thirty-eighth revision was in April 27[th] 2001. The thirty-ninth revision was in May 30[th] 2002. The fortieth revision was in June 8[th] 2005. The forty-first revision was in May 23[rd] 2006. The forty-second revision was in June 3[rd] 2010. The forty-third revision was in June 8th 2011. The forty-forth revision was in June 14th 2012.

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U-Ming Marine Transport Corporation Rules of Procedure for Shareholders’ Meeting

Approved by Annual Shareholder’s Meeting on 2002/5/30

Article 1 The stockholders’ meeting of the Company shall be held according to the rules herein.
Article 2 The location for stockholders’ meeting shall be the Company’s place of business or a place convenient for attendance by stockholders (or by proxies) that is suitable to holding of this meeting. The meeting shall be held between 9:00AM and 3:00PM. The stockholders (or proxies) when attending the meeting shall wear admission badge and hand in signed attendance form to be used to calculate the number of attending shares.
The Company may appoint lawyers, accountants or related personnel to attend the stockholders’ meeting.

The personnel in charge of handling the affairs of the meeting shall wear identification badge or armband.

For a stockholders’ meeting convened by the board of directors, the chairman of the board of directors shall preside at the meeting. If the chairman of the board of directors is on leave or unable to exert the rights, the vice-chairman of the board of directors shall preside instead. If the position of vice-chairman is vacant or the vice-chairman is on leave or unable to exert the rights, the chairman of the board of directors shall designate a director to preside at the meeting. If no director is so designated, the chairman of the meeting shall be elected by the board of directors from among themselves. For a stockholders’ meeting convened by any other person having the convening right, he/she shall act as the chairman of that meeting; if there are two or more persons having the convening right, the chairman of the meeting shall be elected from among themselves.
The complete processes of the meeting shall be recorded by voice or video recorders and all the records shall be kept by the Company for a minimum period of at least one year.
Article 3 The chairperson shall announce starting of the meeting when the attending stockholders (or proxies) represent more than half of the total shares issued in public. The chairperson may announce postponement of meeting if the legal quorum is not present after the designated meeting time. Such postponement is limited to two times and the aggregated postponed time shall not exceed one hour. If quorum is still not present after two postponements but the attending stockholders (or proxies) represent more than one third of the total shares issued in public, tentative resolution/s may be passed with respect to ordinary resolution/s by a majority of those present. After proceeding with the aforesaid tentative resolutions, the chairperson may put the tentative resolutions for re-voting over the meeting if and when the shares represented by the attending stockholders (or proxies) reached the legal quorum.
Article 4 If the stockholders’ meeting is convened by the board of directors, the agenda shall be
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designated by the board of directors. The meeting shall proceed in accordance with the designated agenda and shall not be amended without resolutions.

If the meeting is convened by person, other than the board of directors, having the convening right, the provision set out in the preceding paragraph shall apply mutatis mutandis.

Except with stockholders’ resolution, the chairperson shall not declare adjournment of the meeting before the first two matters set out in the agendas (including extemporary motions) are concluded. During the meeting, if the chairperson declares adjournment of the meeting in violation of the preceding rule, a new chairperson may be elected by a resolution passed by majority of the attending stockholders to continue the meeting.

When the meeting is adjourned by resolution, the stockholders shall not elect another chairperson to continue the meeting at the same location or another venue.

Article 5 The stockholders (or proxies) shall complete statement slip setting out the number of his/her attendance card, name and statement brief before speaking, and the chairperson will designate the order in which each person is to speak during the session.
No statement will be considered to have been made if the stockholder (or proxies) merely completes the statement slip without speaking at the meeting. If there are any discrepancies between the content of the statement slip and the speech made, the statement to be adopted shall be the statement confirmed.
Article 6 Any proposal for the agendas shall be submitted in written form. Except for the proposals set out in the agenda, any proposal by the stockholders (or proxies) to amend, substitute or to initiate extemporary motions with respect to the original proposal shall be seconded by other stockholders (or proxies). The same rule shall apply to any proposal to amend the agenda and motion to adjourn the meeting. The shares represented by the proponents and the seconders shall reach 100,000.
Article 7 The explanation of proposal shall be limited to 5 minutes. The statement of inquiry and reply shall be limited to 3 minutes per person. The time may be extended for 3 minutes with the chairperson’s permission.
The chairperson may restrain stockholders (or proxies) from speaking if that stockholders (or proxies) speak overtime, speak beyond the allowed frequency or content of the speech is beyond the scope of the proposal. When a stockholder (or proxy) is speaking, other stockholder (or proxy) shall not interrupt without consent of the chairperson and the speaking stockholder (or proxy). Any disobedient of the preceding rule shall be prohibited by the chairperson. Article 15 of this meeting rule shall apply if the disobedient do not follow the chairperson’s instructions.
Article 8 For the same proposal, each person shall not speak more than 2 times. When a juristic person is a stockholder, only one representative shall be appointed to attend the meeting.
If more than two representatives were appointed to attend the meeting, only one
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representative is allowed to speak.

Article 9 After speaking by the attending stockholder (or proxy), the chairperson may reply in person or assign relevant officer to reply.
Over the proposal discussion, the chairperson may conclude the discussion in a timely manner and where necessary announce discussion is closed.
Article 10 For proposal in which discussion has been concluded or closed, the chairperson shall submit it for voting.

No discussion or voting shall proceed for matters unrelated to the proposal.

The personnel responsible for overseeing and counting of the votes for resolutions shall be appointed by the chairperson with the consent of the stockholders (or proxies). The person responsible for vote overseeing shall be of the stockholder status.
Article 11 In regards to the resolution of proposals, unless otherwise provided for in the relevant law and regulation or Company’s articles of incorporation, resolution shall be passed by a majority of the voting rights represented by the stockholders (or proxies) attending the meeting. The proposal for a resolution shall be deemed approved if the chairperson inquires and receives no objection. The validity of such approval has the same effect as if the resolution has been put to vote.
If there are amendments or substitute proposals for the same proposal, the sequence of which to be put to vote shall be decided by the chairperson. If one of the two proposals has been approved, the other shall be deemed rejected without requirement to put it to vote. The results of voting shall be reported on the spot and kept for records.
Article 12 During the meeting, the chairperson may at his/her discretion declare time for break.
Article 13 The meeting shall be adjourned if encountering an air-raid alarm during the meeting. The meeting shall resume one hour after the alarm is lifted.
Article 14 The chairperson may maintain the meeting order by instructing the security guards. The security guards shall wear the armband for identification when helping maintaining the venue order.
Article 15 The stockholders (or proxies) shall obey the instructions of the chairperson and security guards in terms of maintaining the order. The chairperson or security guards may exclude the persons disturbing the stockholders’ meeting from the meeting.
Article 16 For matters not governed by the rules specified herein, shall be governed according to Company Law, Stock Exchange Law and the other related laws and regulations.
Article 17 The rules herein take effect after approval at the stockholders’ meeting, the same apply for any amendments.
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Appendix

1. Current Shareholding of Directors and Supervisors

			Book closure date: 11 April 2014	Book closure date: 11 April 2014
Position	Name of persons or companies	Representatives appointed	Number of shares held	Percentage of shares held
Chairman	Douglas Tong Hsu	---	992,133	0.11%
Director	Chee-Chen Tung	---	---	---
	Yun-Peng Chu	---	---	---
	Wenent P. Pan	---	---	---
	Asia Cement Corp.	Tsai-Hsiung Chang	331,701,152	38.66%
		Kun-Yen Lee	331,701,152	38.66%
		Douglas Jefferson Hsu	331,701,152	38.66%
	Ya Li Transportation Co., LTD.	Champion Lee	6,348,103	0.74%
	Yue Ding Industry Co., LTD.	C.K. Ong	93,000	0.01%
Shareholding	of all directors		339,134,388	39.52%
Supervisor	Peter Hsu	---	83,595	0.01%
	Yuan Ding Investment Corp.	Virginia Shao	5,281,000	0.62%
	Far Eastern Construction CO., LTD.	Z.P. Chang	1,589,790	0.18%
Shareholding	of all supervisors		6,954,385	0.81%

Note:

The total issued and outstanding shares on the book closure date: 858,016,712shares.
The minimum required combined shareholding of all directors by law: 34,320,668 shares.
The minimum required combined shareholding of all supervisors by law: 3,432,067 shares.
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2. Effects on business performance and EPS resulting from stock dividend distribution proposed by 2014 annual shareholders' meeting.

Unit: NT$

			Unit: NT$
Year Item			2014 Estimate
Paid-in Capital (beginning of the year)			8,580,167,120
Stock & Cash Dividend Distribution	Cash Dividend (NT$/per share)		2.00
	Stock Dividend from Retained Earnings (per share)		0.00
	Stock Dividend from Capital Surplus		0.00
Variance in Business Performance	Operating Income		Not Applicable
	% Change in Operating Income
	Net Income
	% Change in Net Income
	Earnings Per Share
	% Change in EPS
	Average Return on Investment (%)(Reciprocal of Average P/E Ratio)
Pro Forma EPS & P/E Ratio	If Retained Earnings Distributed in Cash Dividend	Pro Forma Earnings Per Share
		Pro Forma Average Yearly Return on Investment
	If Capital Surplus not Distributed in Stock Dividend	Pro Forma Earnings Per Share
		Pro Forma Average Yearly Return on Investment
	If Retained Earnings &	Pro Forma Earnings Per Share
	Capital Surplus Distributed in Cash Dividend rather than Stock Dividend	Pro Forma Average Yearly Return on Investment

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AI assistant

U-MING — AGM Information 2014

52160_rns_2014-06-27_7a698231-448f-48cd-937f-d4d0d80f3c77.pdf

U-MING MARINE TRANSPORT CORP. Handbook for the 2014 Annual Meeting of Shareholders

U-MING MARINE TRANSPORT CORP.

2014 Annual Meeting of Shareholders

Table of Contents

U-MING MARINE TRANSPORT CORP. Procedure for the 2013 Annual Meeting of Shareholders

Matters To Be Reported:

1. 2013 Business Report

I. Introduction

II. Business Performance

III. Business Strategy

IV. Conclusion

2. Financial report of 2013

U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In Thousands of New Taiwan Dollars)

U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

U-MING MARINE TRANSPORT CORPORATION

BALANCE SHEETS (In Thousands of New Taiwan Dollars)

U-MING MARINE TRANSPORT CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

U-MING MARINE TRANSPORT CORPORATION

STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars)

U-MING MARINE TRANSPORT CORPORATION

STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

U-MING MARINE TRANSPORT CORPORATION

STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

INDEPENDENT AUDITORS’ REPORT

3. Supervisor’s Review Report on the 2013 Financial Statements

4.Report on the Institutionalization of the “Code of Ethical Conduct” and “Ethical Corporate Management Best Practice Principles”

U-Ming Marine Transport Corp.

Code of Ethical Conduct

U-Ming Marine Transport Corp. Ethical Corporate Management Best Practice Principles

Article IV: (Compliance)

Article XV: (Compliance with applicable business performance laws)

Article XXI : (Disclosure)

Matters to be ratified:

1. Adoption of the 2013 Business Report and Financial Statement

2. Adoption of the Proposal for Distribution of 2013 Retained Earnings

(II) Appropriation of 2013 earnings

Matters To Be Discussed

Mapping Table of the “Procedure for the Acquisitions or Dispositions of Assets”

2. Amendment to provisions in “Rules of Procedure for Shareholders’ Meetings”

Mapping Table of the Amendment to the “Rules of Procedure for Shareholders Meeting”

Questions And Motions:

U-MING MARINE TRANSPORT CORPORATION

ARTICLES OF INCORPORATION

June 14, 2012

Section I - General Provisions

Section II - Capital Stock

Section III- Stockholders' Meetings

Section IV - Directors, Supervisors and Managers

Section V - Financial Reports

Section VI - Supplementary Provisions

U-Ming Marine Transport Corporation Rules of Procedure for Shareholders’ Meeting

Appendix

1. Current Shareholding of Directors and Supervisors

Note:

2. Effects on business performance and EPS resulting from stock dividend distribution proposed by 2014 annual shareholders' meeting.

More from U-MING

U-MING AGM Information 2014