U-MING — AGM Information 2019

Jun 27, 2019

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U-MING MARINE TRANSPORT CORP.

Meeting Minutes for the 2019 Annual Shareholders’ Meeting

Time: 9:00 a.m., June 13, 2019

Place: Taipei Hero House’s Auditorium

(No. 20, Sec. 1, Changsha St., Zhongzheng Dist., Taipei, Taiwan) Total number of outstanding shares: 845,055,712 shares

Total shares represented by presence of shareholders: 546,983,800 shares (64.73%) In attendance: Hsu, Shu-Tong (Director)

Chang, Tsai-Hsiung (Director) Lee, Kun-Yen (Director) Ong Choo Kiat (Director) Liu, Chorng-Jian (Independent Director & Member of Remuneration Committee)

Hsu, Shu-Ping (Supervisor) Tung, Li-Chen (Member of Remuneration Committee) Lee, Cheng-Ming (Auditor) Chen, Hsin-Ying (Lawyer)

Chairperson: Hsu Shu-Tong, Chairman of the Board of Directors Recorder: Alex Chen

Important Resolutions

• I. Matters To Be Reported

1. 2018 Business Report

2. 2018 Financial Statements

3. Supervisors’ Review Report on 2018 Business and Financial Statements

4. Distribution of 2018 Remuneration to the Employees, Directors and Supervisors

5. The amendments to “Ethical Corporate Management Best Practice Principles” and “Code of Ethical Conduct” of the Company

II. Matters To Be Ratified

1. The 2018 Business Report and Financial Statements

• Explanation:

• (1) The supervisor’s review report is hereby issued after reviewing the 2018 financial statements (including the business report and the independent auditor’s report issued by CPA Li-Wen Kuo and CPA Cheng-Ming Lee of Deloitte & Touche; please refer to the attachment P.1~P.16) without any nonconformity identified.

• (2) Please approve.

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Resolved that:

Shareholders who are present represented 546,983,800 votes in total (including electronic votes). 535,394,947 votes (including electronic votes) ratify the motion, accounting to 97.88% of total votes ； 140,348 votes (including electronic votes) against the motion ； 10,408,572 votes (including electronic votes) abstained. The motion is ratified.

2. The proposal for Earnings Distribution of 2017

• Explanation:

• (1) Please refer to the 2018 Earnings Distribution proposed in accordance with Article 27 of the Company’s Articles of Incorporation as follows::

	NT$
Unappropriated retained earnings of previous year	5,733,842,715
Less: Investment adjusted retained earnings by using equity
method	59,271
Add: Effect of retrospective application and retrospective
restatement	120,154,739
Add: 2018 actuarial gain & losses appropriated retained
earnings	3,337,146
Adjusted unappropriated retained earnings	5,857,275,329
Add: 2018 net income	1,668,839,657
Less: 10% legal reserve appropriated	166,883,966
Add: Reversal of retained special reserve from before	2,000,954,228
Earnings available for distribution	9,360,185,248
Less: 2018 earning distribution
(cash dividend NT$1.8 per share)	1,521,100,282
Unappropriated retained earnings	7,839,084,966

• (2) The distribution of earnings is calculated to the dollar (round up to the dollar). The total amount of the odd shares will be booked as the other income of the Company. It is proposed that the Board authorized the Chairman to fix the record date of ex-cash dividend after the approved by the year 2019 annual shareholders’ meeting. Upon the approval of the annual shareholders’ meeting, it is proposed that the Board be authorized to adjust the amount per share based on the actual shares outstanding number on the record date of ex-cash dividend for the legal reserve distribution by cash if there is an amendment of the number of shares outstanding before the date.

• (3) Please approve.

Resolved that:

Shareholders who are present represented 546,983,800 votes in total (including

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electronic votes). 536,011,947 votes (including electronic votes) ratify the motion, accounting to 97.99% of total votes ； 141,348 votes (including electronic votes) against the motion ； 9,790,572 votes (including electronic votes) abstained. The motion is ratified.

III. Matters to Be Discussed and Elected

1. The Amendment to the Company Corporate Charter (Articles of Incorporation)

Explanation:

• (1) According to the Article 14-4 of the Securities and Exchange Act and the official letter issued by the Financial Supervisory Commission (Letter No. FSC 10200531121) on 31 December 2013, the Supervisors will cease to function and be replaced by the Audit Committee after the re-election of the Board of Directors. The Audit Committee is responsible of executing powers relegated to Supervisors by the Company Act, Securities and Exchange Act and other laws and regulations. Please refer to the attachment P.17~P.21 for amended articles.

• (2) This proposal has been approved by the 10th meeting of the seventeenth-term Board of Directors on May 7, 2018 and the 13th meeting of the seventeenthterm Board of Directors on March 19, 2019.

• (3) The proposal is hereby presented for referendum.

Resolved that:

Shareholders who are present represented 546,983,800 votes in total (including electronic votes). 534,839,345 votes (including electronic votes) ratify the motion, accounting to 97.78% of total votes ； 1,310,950 votes (including electronic votes) against the motion ； 9,793,572 votes (including electronic votes) abstained. The motion hereby is accepted as submitted.

2. The Amendment to the “Regulations Governing the Election of Board Directors and Supervisors” of the Company

Explanation:

• (1) Pursuant to the Company’s establishment of an Audit Committee to replace the Supervisors, the Company shall amend the company bylaw of “Regulations Governing the Election of Board Directors and Supervisors” and revise the name of the election procedures to “Regulations Governing the Election of Board Directors”. Please refer to the Meeting Handbook for amended articles.

• (2) This proposal has been approved by the 13th meeting of the seventeenth-term Board of Directors on March 19, 2019.

• (3) The proposal is hereby presented for referendum.

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Resolved that:

Shareholders who are present represented 546,983,800 votes in total (including electronic votes). 535,960,857 votes (including electronic votes) ratify the motion, accounting to 97.98% of total votes ； 187,438 votes (including electronic votes) against the motion ； 9,795,572 votes (including electronic votes) abstained. The motion hereby is accepted as submitted.

3. The Amendment to the “Procedures Governing the Acquisition or Disposal of Assets” of the Company Explanation:

• (1) Pursuant to the Company’s establishment of an Audit Committee to replace the Supervisors and to the official letter issued by the Financial Supervisory Commission (Letter No. FSC 1070341072) on 26 Nonmember 2018, the Company shall amend the company bylaw of “Procedures Governing the Acquisition or Disposal of Assets”. Please refer to the Meeting Handbook for amended articles.

• (2) This proposal has been approved by the 13th meeting of the seventeenth-term Board of Directors on March 19, 2019.

• (3) The proposal is hereby presented for referendum.

Resolved that:

Shareholders who are present represented 546,983,800 votes in total (including electronic votes). 535,957,857 votes (including electronic votes) ratify the motion, accounting to 97.98% of total votes ； 191,438 votes (including electronic votes) against the motion ； 9,794,572 votes (including electronic votes) abstained. The motion hereby is accepted as submitted.

4. The Amendment to the “Procedures Governing Loans of Funds to Others” and the “Procedures Governing Endorsements/Guarantees” of the Company Explanation:

• (1) Pursuant to the Company’s establishment of an Audit Committee to replace the Supervisors and to the official letter issued by the Financial Supervisory Commission (Letter No. FSC 1080304826) on 7 March 2019, the Company shall amend the company bylaw of “Procedures Governing Loans of Funds to Others” and the “Procedures Governing Endorsements/Guarantees”. Please refer to the Meeting Handbook for amended articles.

• (2) This proposal has been approved by the 13th meeting of the seventeenth-term Board of Directors on March 19, 2019 and the 14th meeting of the seventeenth-term Board of Directors on May 2, 2019.

• (3) The proposal is hereby presented for referendum.

Resolved that:

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Shareholders who are present represented 546,983,800 votes in total (including electronic votes). 535,931,913 votes (including electronic votes) ratify the motion, accounting to 97.98% of total votes ； 223,438 votes (including electronic votes) against the motion ； 9,788,516 votes (including electronic votes) abstained. The motion hereby is accepted as submitted.

5. The Election of Directors (including Independent Directors) of the Company

• Explanation:

• (1) The 17th term Directors and Supervisors were elected and appointed at the 2016 Annual General Shareholders’ Meeting, serving a term of three years and the tenure will expire. The Board of Directors resolved that Directors be elected at this Annual General Shareholders’ Meeting and the Supervisors will cease to function and be replaced by the Audit Committee.

• (2) According to Article 16 of the “Articles of Incorporation”, 11 Directors (including two Independent Directors) shall be elected, and each Director will serve a three year term beginning from June 13, 2019.

• (3) Director and Independent Director candidates shall be nominated by the candidate nomination system. The Board of Directors or any shareholder with 1% shareholding or more may nominate candidates. The period for candidate nomination of Directors and Independent Directors to be elected in this coming Shareholders’ Meeting is from April 8, 2019 to April 17, 2019. During this period, the Board of Directors has received the nomination of 8 Director candidates and 3 Independent Director candidates from the shareholder, Asia Cement Corporation. The Board has reviewed the candidate list of Directors and Independent Directors in the 14th meeting of the seventeenth-term Board of Directors on May 2, 2019. And the list also be announced publicly in accordance with the law.

• (4) Please refer to the Meeting Handbook for the candidate list.

• (5) Please elect.

Election result:

Title	Name	Votes Received	Name of Institutional Shareholders
Directors	HSU, Shu-Tong	484,408,907	-
	Chee Chen TUNG	458,524,015	-
	HSU, Shu-Ping	457,601,027	-
	CHANG, Tsai-Hsiung	459,435,424	Asia Cement Corp.
	LEE, Kun-Yen	445,946,390	Asia Cement Corp.

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Title	Name	Votes Received	Name of Institutional Shareholders
	Douglas Jefferson HSU	426,764,573	Asia Cement Corp.
	ONG Choo Kiat	442,305,942	Yue DingIndustryCo., Ltd.
	LEE, Kuan-Chun	430,948,776	Yuan DingInvestment Co., Ltd.
Independent Directors	PAN, Wen-Yen	456,957,806	-
	CHU, Sao-Hua	456,058,103	-
	LIU, Chorng-Jian	455,381,481	-

6. The Approval of the Release of the Relevant Directors from the Noncompetition Restriction under Article 209 of the Company Act

• Explanation:

• (1) This is processed in accordance with Paragraph 1 of Article 209 of the Company Act: “A director who acts for himself or on behalf of another person in a manner that is within the scope of the company’s business shall explain to the shareholders’ meeting the essential contents of such act and obtain the approval from shareholders’ meeting”.

• (2) The new Directors of the company are investing in or managing other companies and also acting as directors of such companies which are in the same or similar business as FENC (please refer to the following table). It is proposed to seek approval at the Shareholders’ Meeting to release new Directors and their representatives from the non-competition restriction.

Title	Name	Serve as Director/Chairman at other companies in the industry
Director	Hsu, Shu-Tong	Director, Global Energy Marine Transport Corp.
		Director, Cape Asia Ltd.
		Director, Cape Asia Newbuildings (III) Ltd.
		Director, Winyield Investment Ltd.
Director	Chee Chen Tung	Chairman, Island Navigation Corporation International Ltd.
Director	Chang , Tsai-Hsiung (Representative of Asia Cement Corp.)	Chairman, Wuhan Asia Marine Transport Corp. Ltd.
Director	Douglas Jefferson Hsu	Director, Global Energy Marine Transport Corp.

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Title	Name	Serve as Director/Chairman at other companies in the industry
	(Representative of Asia Cement Corp.)
Director	Ong Choo Kiat (Representative of Yue Ding Industry Co., Ltd.)	Director, Global Energy Marine Transport Corp.
		Director, Winyield Investment Ltd.
		Director, ITG-Uming (Xiamen) Shipping Co., Ltd.
		Director, ITG-Uming Shipping Co., Ltd.

(3) Please approve.

Resolved that:

Shareholders who are present represented 546,983,800 votes in total (including electronic votes). 534,873,785 votes (including electronic votes) ratify the motion, accounting to 97.79% of total votes ； 451,682 votes (including electronic votes) against the motion ； 10,596,400 votes (including electronic votes) abstained. The motion hereby is accepted as submitted.

IV. Extempore Motions: None

V. Meeting Adjourned

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Chairperson: Recorder:
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ATTACHMENT

INDEPENDENT AUDITORS’ REPORT

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

Opinion

We have audited the accompanying consolidated financial statements of U-Ming Marine Transport Corporation and its subsidiaries (the Group), which comprise the consolidated balance sheets as of December 31, 2018 and 2017, the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2018 and 2017, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2018. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

1

Impairment of Transportation Equipment

According to IAS 36, the Group should periodically perform impairment assessment on assets. As the nature of the business of the Group pertains to marine transportation, the transportation equipment is material to its financial statements. Also, the estimates and assumptions adopted by the management for the assessment of impairment on the equipment thereof directly impact the recognition of impairment loss in the financial statements. As a result, impairment assessment of the transportation equipment was deemed to be a key audit matter. For information on impairment assessment of transportation equipment, refer to Note 5 to the consolidated financial statements: critical accounting judgments and key sources of estimation uncertainty.

The main audit procedures we have performed in respect of the key audit matter stated above were as follows:

1. We understood and tested the design and implementation of the key controls over the impairment assessment of property, plant and equipment.

2. We obtained and understood the calculation table of impairment assessment of transportation equipment.

3. We assessed and consulted with our internal specialist regarding the reasonableness of accounting estimates used in the impairment assessment, such as the identification of cash-generating units, the confirmation of fair value of transportation equipment by obtaining supporting documents, and the discount rate and future cash flows used in determining the recoverable amount under the discounted cash flow method.

4. We tested the calculation of impairment loss according to the table provided by the management.

Stage of Completion of Freight Contracts

The Group’s freight revenue is recognized by reference to the stage of completion of the contract. Because making judgements and estimates is required to a certain extent when measuring and calculating the stage of completion of freight contracts, and revenue recognition and expression might be affected by the selection and application of calculation methods, the determination of the stage of completion of freight contracts was deemed to be a key audit matter. Refer to Note 5 to the consolidated financial statements: critical accounting judgments and key sources of estimation uncertainty for information on the stage of completion of freight contracts.

The main audit procedures we have performed in respect of the key audit matter stated above were as follows:

1. We understood and tested the design and implementation of the key controls over the recognition of freight revenue.

2. We obtained relevant documents and understood the determination of the stage of completion of freight contracts, and we confirmed that the calculation method is appropriate and applied consistently.

3. We verified the management’s calculation of percentage of voyages and freight revenue by collating the information on actual voyages, entering/departing reports, sailing schedule and freight contracts.

Other Matter

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, 2018 and 2017 on which we have issued an unmodified opinion.

2

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with 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 and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

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

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.

3

1. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

2. Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2018 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Cheng-Ming Lee and Li-Wen Kuo.

Deloitte & Touche Taipei, Taiwan Republic of China

March 19, 2019

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and consolidated financial statements shall prevail.

4

U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2018 AND 2017

(In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Note 7) Financial assets at fair value through profit or loss - current (Notes 8 and 26) Financial assets at fair value through other comprehensive income - current (Notes 9 and 27 ) Available-for-sale financial assets - current (Notes 10, 26 and 27) Contract assets - current (Notes 20 and 26 ) Trade receivables from unrelated parties (Note 12) Trade receivables from related parties (Notes 12 and 26) Other receivables (Note 12) Fuel inventory Other current assets (Note 26) Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income - non-current (Note 9) Financial assets measured at cost - non-current (Note 11) Investments accounted for using the equity method (Note 14) Property, plant and equipment (Notes 15, 27 and 28) Intangible assets Deferred tax assets (Note 22) Prepayments for equipment (Note 15) Refundable deposits (Notes 26 and 27) Long-term receivables - related parties (Note 26) Other non-current assets Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 16) Short-term bills payable (Notes 16 and 27) Financial liabilities at fair value through profit or loss - current (Note 8) Trade payables (Note 26) Other payables (Note 17) Current tax liabilities (Note 22) Current portion of long-term borrowings (Notes 16 and 27) Other current liabilities (Note 26) Total current liabilities NON-CURRENT LIABILITIES Bank loans (Notes 16 and 27) Deferred tax liabilities (Note 22) Deferred revenue - non-current Net defined benefit liabilities - non-current (Note 18) Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Note 19) Common share capital Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity TOTAL		2018 Amount % $ 16,684,916 27 2,741,003 4 5,815,650 9 - - 189,352 - 355,817 1 81,322 - 185,829 - 410,314 1 232,767 - 26,696,970 42 2,024,330 3 - - 2,826,266 5 29,939,341 48 34,624 - 17,895 - 747,189 1 108,076 - 809,669 1 4,291 - 36,511,681 58 $ 63,208,651 100 $ 6,615,000 10 4,748,161 8 106,395 - 104,938 - 1,219,360 2 28,911 - 6,330,698 10 215,969 - 19,369,432 30 17,673,689 28 170,677 - 170,679 - 198,639 1 18,213,684 29 37,583,116 59 8,450,557 13 115,123 - 6,526,608 11 2,000,954 3 7,526,115 12 16,053,677 26 1,006,178 2 25,625,535 41 $ 63,208,651 100		2017
				Amount % $ 10,528,550 20 147,982 - - - 6,482,215 12 - - 489,217 1 62,388 - 652,469 1 422,490 1 166,094 - 18,951,405 35 - - 892,943 2 2,504,503 5 30,217,912 56 879 - 34,465 - 342,042 1 109,706 - 819,523 1 22,827 - 34,944,800 65 $ 53,896,205 100 $ 5,985,000 11 2,598,642 5 154,238 - 131,536 - 905,443 2 104,532 - 3,370,445 6 211,961 1 13,461,797 25 18,022,116 34 178,726 - 189,459 - 203,897 - 18,594,198 34 32,055,995 59 8,450,557 16 115,135 - 6,426,656 12 - - 8,848,816 17 15,275,472 29 (2,000,954) (4) 21,840,210 41 $ 53,896,205 100

The accompanying notes are an integral part of the consolidated financial statements.

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U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE Freight revenue (Notes 20 and 26) Other operating revenue (Note 21) Total operating revenue OPERATING COSTS Freight cost (Notes 21 and 26) GROSS PROFIT OPERATING EXPENSES (Notes 21 and 26) PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Finance costs (Note 21) Interest income Dividend income Other income (Note 26) Net gain on foreign currency exchange (Note 29) Other losses Gain (loss) on disposal of property, plant and equipment, net Gain (loss) on sale of investments, net Valuation loss on financial assets and liabilities at fair value through profit or loss, net Impairment loss (Note 10) Share of the profit or loss of associates and joint ventures (Note 14) Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX BENEFIT (Note 22) NET PROFIT FOR THE YEAR		2018 Amount % $ 11,350,673 98 172,549 2 11,523,222 100 9,808,074 85 1,715,148 15 382,139 4 1,333,009 11 (626,789) (5) 446,047 4 114,654 1 19,795 - 64,732 1 (6,438) - 285,551 2 24,402 - (165,608) (1) - - 143,749 1 300,095 3 1,633,104 14 (35,736) (1) 1,668,840 15		2017
				Amount % $ 8,285,385 97 215,940 3 8,501,325 100 7,724,280 91 777,045 9 316,027 3 461,018 6 (548,379) (6) 235,651 3 125,303 1 18,894 - 794,145 9 (17,697) - (106) - (299,152) (4) (103,900) (1) (4,900) - 150,537 2 350,396 4 811,414 10 (188,106) (2) 999,520 12 (Continued)

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U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans (Note 18) Unrealized gain(loss) on investments in equity instruments at fair value through other comprehensive income Share of the other comprehensive income (loss) of associates accounted for using the equity method Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign operations Unrealized gain on available-for-sale financial assets Share of the other comprehensive income (loss) of associates accounted for using the equity method Other comprehensive income (loss) for the year, net of income tax TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE YEAR NET PROFIT ATTRIBUTABLE TO: Owners of the Company TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO: Owners of the Company EARNINGS PER SHARE (Note 23) Basic Diluted		2018 Amount % $ 3,949 - 613,277 5 8,216 - 1,337,998 12 - - 43,817 - 2,007,257 17 $ 3,676,097 32 $ 1,668,840 14 $ 3,676,097 32 $ 1.97 $ 1.97		2017
				Amount % $ (4,671) - - - (12,444) (1) (3,584,374) (42) 623,152 7 (107,141) (1) (3,085,478) (37) $ (2,085,958) (25) $ 999,520 12 $ (2,085,958) (25) $ 1.18 $ 1.18
		$
		$
		$

The accompanying notes are an integral part of the consolidated financial statements.

(Concluded)

7

U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

Common Share Capital Capital Surplus BALANCE AT JANUARY 1, 2017 $ 8,450,557 $ 115,140 Appropriation of 2016 earnings Cash dividends distributed from the legal reserve - - Reversal of special reserve - - Change of capital surplus from investments in associates and joint ventures accounted for using the equity method - 2 Net profit for the year ended December 31, 2017 - - Other comprehensive income (loss) for the year ended December 31, 2017, net of income tax - - Total comprehensive income (loss) for the year ended December 31, 2017 - - Dividends claimed after over five years by stockholders - (7 ) Change from investments in associates and joint ventures accounted for using the equity method - - BALANCE AT DECEMBER 31, 2017 8,450,557 115,135 Effect of retrospective application and retrospective restatement - - BALANCE AT JANUARY 1, 2018 AS RESTATED 8,450,557 115,135 Appropriation of 2017 earnings Legal reserve - - Cash dividends distributed by the Company - - Special reserve - - Change of capital surplus from investments in associates and joint ventures accounted for using the equity method - 4 Net profit for the year ended December 31, 2018 - - Other comprehensive income for the year ended December 31, 2018, net of income tax - - Total comprehensive income for the year ended December 31, 2018 - - Dividends claimed after over five years by stockholders - (16 ) Change from investments in associates and joint ventures accounted for using the equity method - - BALANCE AT DECEMBER 31, 2018 $ 8,450,557 $ 115,123		Retained Earnings Legal Reserve Special Reserve Unappropriated Earnings $ 7,060,448 $ 337,186 $ 7,519,741 (633,792 ) - - - (337,186 ) 337,186 - - - - - 999,520 - - (17,115) - - 982,405 - - - - - 9,484 6,426,656 - 8,848,816 - - 120,155 6,426,656 - 8,968,971 99,952 - (99,952 ) - - (1,014,067 ) - 2,000,954 (2,000,954 ) - - - - - 1,668,840 - - 3,337 - - 1,672,177 - - - - - (60) $ 6,526,608 $ 2,000,954 $ 7,526,115		Other Equity	Other Equity	Total $ 1,067,409 - - - - (3,068,363) (3,068,363) - - (2,000,954 ) 1,003,212 (997,742 ) - - - - - 2,003,920 2,003,920 - - $ 1,006,178	Total Equity $ 24,550,481 (633,792 ) - 2 999,520 (3,085,478) (2,085,958) (7 ) 9,484 21,840,210 1,123,367 22,963,577 - (1,014,067 ) - 4 1,668,840 2,007,257 3,676,097 (16 ) (60) $ 25,625,535
				Exchange Differences on Translating Unrealized Gain (Loss) on Financial Assets at Fair Value through Other Unrealized Gain (Loss) on Available-for- Foreign Operations Comprehensive Income sale Financial Assets $ 1,000,343 $ - $ 66,929 - - - - - - - - - - - - (3,693,524) - 625,165 (3,693,524) - 625,165 - - - - - - (2,693,181 ) - 692,094 (1,181) 1,696,487 (692,094) (2,694,362 ) 1,696,487 - - - - - - - - - - - - - - - - 1,381,813 622,105 - 1,381,813 622,105 - - - - - - - $ (1,312,549) $ 2,318,592 $ -	Cash Flow Hedges Gain on Property Revaluation $ 4 $ 133 - - - - - - - - (4) - (4) - - - - - - 133 - - - 133 - - - - - - - - - - 2 - 2 - - - - - $ 2 $ 133

The accompanying notes are an integral part of the consolidated financial statements.

8

U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Expected credit loss reversed on trade receivables (recognition of provision for doubtful accounts) Net loss on financial assets and liabilities at fair value through profit or loss Finance costs Interest income Dividend income Share of the profit of associates and joint ventures (Gain) loss on disposal of property, plant and equipment, net Gain on disposal of investments, net Loss on disposal of associates and joint ventures Impairment loss recognized on available-for-sale financial assets Net loss (gain) on foreign currency exchange Other non-cash items Changes in operating assets and liabilities Financial assets held for trading Financial assets mandatorily classified as at fair value through profit or loss Contract assets Trade receivables Other receivables Fuel inventory Other current assets Trade payables Other payables Other current liabilities Net defined benefit liabilities Cash generated from operations Interest received Dividends received Interest paid Income tax paid Net cash generated from operating activities	2018 $ 1,633,104 2,298,209 8,813 (120) 165,608 626,789 (446,047) (287,203) (143,749) (285,551) - - - 129,382 (24,402) - (1,442,682) (189,352) 114,502 459,489 13,879 (66,661) (26,598) 305,392 4,008 (1,309) 2,845,501 453,198 287,203 (618,738) (31,376) 2,935,788	2017 $ 811,414 2,301,321 41 4,742 103,900 548,379 (235,651) (263,480) (150,537) 106 (266,784) 1 8,643 (938,003) (24,631) 23,187 - - (166,954) 31,941 (160,497) 18,329 (67,707) 240,193 58,654 (58,937) 1,817,670 242,189 263,480 (537,086) (32,434) 1,753,819 (Continued)

9

U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at fair value through other comprehensive income Purchase of available-for-sale financial assets Proceeds from sale of available-for-sale financial assets Acquisition of associates Purchase of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease (increase) in refundable deposits Decrease (increase) in financing provided - related parties Payments for intangible assets Increase in other non-current assets Increase in prepayments for equipment Dividends received from associates Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings Proceeds from short-term bills payable Repayment of bonds payables Proceeds from long-term borrowings Repayments of long-term borrowings Dividends paid to owners of the Company Net cash generated from (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	2018 $ (35,346) - - (167,888) (465,669) 518,053 1,869 26,530 (20,945) (3,077) (1,257,364) 73,417 (1,330,420) 630,000 2,150,000 - 8,229,743 (5,882,922) (1,014,083) 4,112,738 438,260 6,156,366 10,528,550 $ 16,684,916	2017 $ - (1,013,012) 2,869,980 (502) (366,851) - (11,356) (16,129) (920) (22,827) (4,132,450) 809 (2,693,258) 1,585,000 241,000 (1,000,000) 8,527,244 (9,812,674) (633,799) (1,093,229) (979,500) (3,012,168) 13,540,718 $ 10,528,550

The accompanying notes are an integral part of the consolidated financial statements.

(Concluded)

10

U-MING MARINE TRANSPORT CORPORATION BALANCE SHEETS DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents Financial assets at fair value through profit or loss - current Financial assets at fair value through other comprehensive income - current Available-for-sale financial assets - current Contract assets Trade receivables from unrelated parties Trade receivables from related parties Other receivables Fuel inventory Other current assets Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income - non-current Financial assets measured at cost - non-current Investments accounted for using equity method Property, plant and equipment Intangible assets Deferred tax assets Refundable deposits Other non-current assets Total non-current assets TOTAL 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 Other payables from related parties Current tax liabilities Current portion of long-term borrowings Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Bank loans Deferred tax liabilities Net defined benefit liabilities - non-current 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		2018 Amount % $ 12,695 - 259 - 1,726,585 4 - - 5,640 - 7,495 - 77,284 - 74,689 - 24,693 - 55,697 - 1,985,037 4 910,293 2 - - 48,120,696 92 870,896 2 34,624 - 17,895 - 43,657 - 10,301 - 50,008,362 96 $ 51,993,399 100 $ 6,615,000 13 4,748,161 9 5,843 - 24,203 - 346,480 1 1,846,115 4 27,895 - 3,819,611 7 20,571 - 17,453,879 34 8,596,684 17 170,677 - 146,624 - 8,913,985 17 26,367,864 51 8,450,557 16 115,123 - 6,526,608 13 2,000,954 4 7,526,115 14 16,053,677 31 1,006,178 2 25,625,535 49 $ 51,993,399 100		2017
				Amount % $ 17,660 - - - - - 1,626,942 4 - - 22,618 - 40,200 - 39,032 - 25,284 - 61,876 - 1,833,612 4 - - 344,296 1 47,155,049 93 933,858 2 879 - 34,465 - 48,542 - 27,986 - 48,545,075 96 $ 50,378,687 100 $ 5,985,000 12 2,598,642 5 110,559 - 34,902 - 358,923 1 10,726,224 21 103,518 - 835,000 2 20,132 - 20,772,900 41 7,444,288 15 178,726 1 142,563 - 7,765,577 16 28,538,477 57 8,450,557 17 115,135 - 6,426,656 13 - - 8,848,816 17 15,275,472 30 (2,000,954) (4) 21,840,210 43 $ 50,378,687 100

The accompanying notes are an integral part of the consolidated financial statements.

11

U-MING MARINE TRANSPORT CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings/Losses Per Share)

OPERATING REVENUE OPERATING COSTS GROSS PROFIT OPERATING EXPENSES LOSS FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Financial costs Share of the profit or loss of subsidiaries, associates and joint ventures Interest income Dividend income Other income Loss on sale of investments, net Net gain (loss) on foreign currency exchange Valuation gain (loss) on financial assets and liabilities at fair value through profit or loss, net Other losses Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX BENEFIT NET PROFIT FOR THE YEAR		2018 Amount % $ 1,080,444 100 878,018 81 202,426 19 267,293 25 (64,867) (6) (331,247) (31) 1,788,982 166 280 - 108,572 10 44,684 4 - - (51,105) (5) 112,054 10 (5,607) - 1,666,613 154 1,601,746 148 (67,094) (6) 1,668,840 154		2017
				Amount % $ 878,369 100 781,243 89 97,126 11 207,242 23 (110,116) (12) (361,984) (41) 960,445 109 378 - 117,068 13 22,560 3 (499,003) (57) 946,040 108 (287,824) (33) (9,196) (1) 888,484 101 778,368 89 (221,152) (25) 999,520 114 (Continued)

12

U-MING MARINE TRANSPORT CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings/Losses Per Share)

OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Unrealized gain on investments in equity instruments at fair value through other comprehensive income Share of the other comprehensive income (loss) of subsidiaries, associates and joint ventures using the equity method Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign operations Unrealized gain on available-for-sale financial assets Share of the other comprehensive income of subsidiaries, associates and joint ventures using the equity method Other comprehensive income (loss) for the year, net of income tax TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE YEAR EARNINGS PER SHARE Basic Diluted		2018 Amount % $ (12,354) (1) 68,918 6 568,878 53 1,337,857 124 - - 43,958 4 2,007,257 186 $ 3,676,097 340 $ 1.97 $ 1.97		2017
				Amount $ (13,200) - (3,915) (3,585,151) 133,749 383,039 (3,085,478) $ (2,085,958) $ 1.18 $ 1.18	% (2) - - (408) 15 44 (351) (237)
		$

The accompanying notes are an integral part of the consolidated financial statements.

(Concluded)

13

U-MING MARINE TRANSPORT CORPORATION

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

Common Share Capital Capital Surplus BALANCE AT JANUARY 1, 2017 $ 8,450,557 $ 115,140 Appropriation of 2016 earnings Cash dividends distributed from legal reserve - - Reversal of special reserve - - Change of capital surplus from investments in associates and joint ventures accounted for using equity method - 2 Net profit for the year ended December 31, 2017 - - Other comprehensive income for the year ended December 31, 2017, net of income tax - - Total comprehensive income for the year ended December 31, 2017 - - Dividends claimed after over five years by stockholders - (7 ) Change from investments in associates and joint ventures accounted for using equity method - - BALANCE AT DECEMBER 31, 2017 8,450,557 115,135 Effect of retrospective application and retrospective restatement - - BALANCE AT JANUARY 1, 2018 AS RESTATED 8,450,557 115,135 Appropriation of 2017 earnings Legal reserve - - Cash dividends - - Special reserve - - Change of capital surplus from investments in associates and joint ventures accounted for using equity method - 4 Net profit for the year ended December 31, 2018 - - Other comprehensive income for the year ended December 31, 2018, net of income tax - - Total comprehensive income for the year ended December 31, 2018 - - Dividends claimed after over five years by stockholders - (16 ) Change from investments in associates and joint ventures accounted for using equity method - - BALANCE AT DECEMBER 31, 2018 $ 8,450,557 $ 115,123		Retained Earnings Unappropriated Legal Reserve Special Reserve Earnings $ 7,060,448 $ 337,186 $ 7,519,741 (633,792 ) - - - (337,186 ) 337,186 - - - - - 999,520 - - (17,115) - - 982,405 - - - - - 9,484 6,426,656 - 8,848,816 - - 120,155 6,426,656 - 8,968,971 99,952 - (99,952 ) - - (1,014,067 ) - 2,000,954 (2,000,954 ) - - - - - 1,668,840 - - 3,337 - - 1,672,177 - - - - - (60) $ 6,526,608 $ 2,000,954 $ 7,526,115		Other Equity	Other Equity		Total $ 1,067,409 - - - - (3,068,363) (3,068,363) - - (2,000,954 ) 1,003,212 (997,742 ) - - - - - 2,003,920 2,003,920 - - $ 1,006,178	Total Equity $ 24,550,481 (633,792 ) - 2 999,520 (3,085,478) (2,085,958) (7 ) 9,484 21,840,210 1,123,367 22,963,577 - (1,014,067 ) - 4 1,668,840 2,007,257 3,676,097 (16 ) (60) $ 25,625,535
				Exchange Financial Assets Unrealized Gain Differences on at Fair Value (Loss) on Translating through Other Available-for- Foreign Comprehensive sale Financial Operations Income Assets $ 1,000,343 $ - $ 66,929 - - - - - - - - - - - - (3,693,524) - 625,165 (3,693,524) - 625,165 - - - - - - (2,693,181 ) - 692,094 (1,181) 1,696,487 (692,094) (2,694,362 ) 1,696,487 - - - - - - - - - - - - - - - - 1,381,813 622,105 - 1,381,813 622,105 - - - - - - - $ (1,312,549) $ 2,318,592 $ -	Cash Flow Hedges $ 4 - - - - (4) (4) - - - - - - - - - - 2 2 - - $ 2	Gain on Property Revaluation $ 133 - - - - - - - - 133 - 133 - - - - - - - - - $ 133

The accompanying notes are an integral part of the consolidated financial statements.

14

U-MING MARINE TRANSPORT CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Net (loss) gain on financial assets and liabilities at fair value through profit or loss Finance costs Interest income Dividend income Share of the profit of subsidiaries, associates and joint ventures Net loss (gain) on foreign currency exchange Changes in operating assets and liabilities Financial assets mandatorily classified as at fair value through profit or loss Contract assets Trade receivables Other receivables Fuel inventory Other current assets Trade payables Other payables Other current liabilities Net defined benefit liabilities Cash generated (used) in operations Interest received Dividends received Interest paid Income tax paid Net cash used in operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment Decrease (increase) in refundable deposits Payment for intangible assets Increase in other non-current assets Increase in prepayment for equipment Dividends received from subsidiaries and associates Net cash generated from investing activities	2018 $ 1,601,746 115,156 8,813 (112,054) 331,247 (280) (108,572) (1,788,982) 173,746 7,079 (5,640) (21,961) (36,168) 591 6,179 (10,699) (24,609) 439 (8,293) 127,738 791 108,572 (328,964) (8) (91,871) (50,330) 4,885 (20,945) (3,078) (2,714) 3,300,617 3,228,435	2017 $ 778,368 115,875 41 287,824 361,984 (378) (117,068) (960,445) (963,097) - - (10,302) 39,453 (9,662) 23,743 (10,986) 29,467 (3,768) (41,795) (480,746) 100 117,068 (357,046) - (720,624) (68,053) (15,009) (920) (22,827) (5,395) 3,108,150 2,995,946

(Continued)

15

U-MING MARINE TRANSPORT CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM FINANCING ACTIVITIES Proceeds of short-term borrowings Proceeds from short-term bills payable Repayment of bond payables Proceeds from long-term borrowings Repayments of long-term borrowings Decrease in other payables from related parties Dividends paid Net cash used in financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET 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	2018 $ 535,000 2,150,000 - 7,432,000 (3,200,000) (9,044,700) (1,014,083) (3,141,783) 254 (4,965) 17,660 $ 12,695	2017 $ 1,585,000 300,000 (1,000,000) 5,959,000 (7,684,000) (803,520) (633,799) (2,277,319) (533) (2,530) 20,190 $ 17,660

The accompanying notes are an integral part of the consolidated financial statements.

(Concluded)

16

Amendments Table of “Articles of Incorporation”

No.		After amendment		Before amendment	Before amendment
Article 1		The Corporation shall be incorporated as a company limited by shares under the Company Law of the Republic of China, and its name in English shall be U-Ming Marine Transport Corporation.		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)Marine transportation. (2)Sale and purchase of vessels. (3)G401011 Shipping agency. (4)ZZ99999 Apart from business requiring permission, the Corporation can operate business that is not prohibited or restricted by laws and regulations.		The scope of business of the Corporation shall be as follows: (1)Marine transportation. (2)Sale and purchase of vessels. (3)G401011 Shipping agency. (4)ZZ99999 Apart from business requiring permission, the Corporation can operate business that is not prohibited or restricted by laws and regulations.
Article 10		Shareholders’ 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 convenedin accordance with relevant laws and regulations.		Shareholders’ 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 convenedby the Board of Directors whenever deemed necessary by the Board of Directors or upon the written request of shareholders 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 shareholders’meeting, Supervisor(s) can convene the shareholders’meeting if deemed necessary for the benefit of the Corporation.
Section IV		Directors and Managers		Directors	, Supervisors and Managers
Article 16		The Company has 9~13 directors who are competent shareholders elected in the shareholders’ meeting. The total order shares of the Company held by all directors are to be processed in accordance with the “Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies.”		The Company has 9~13 directorsand 3 supervisors who are competent shareholders elected in the shareholders’ meeting. The total order shares of the Company held by all directors and supervisors are to be processed in accordance with the “Rules and Review Procedures for Director and Supervisor

17

No.	After amendment		Before amendment
	The number of directors referred to above shall include at least three independent directors. Directors are elected among the shareholders by nomination system in accordance with Article 192-1 of the Company Act. Votes casted for the election of independent directorsand non-independent directors are counted and elected separately.		Share Ownership Ratios at Public Companies.” The number of directors referred to above shall include at least three independent directors. Directorsand supervisors are elected among the shareholders by nomination system in accordance with Article 192-1 of the Company Act. Votes casted for the election of independent directors, non-independent directors, and supervisors are counted and elected separately.
Article 16-1	Pursuant to Article 14-4 of the Securities and Exchange Act, the Company will establish an Audit Committee. The Audit Committee shall make up of the entire number of independent directors, and it is responsible of executing powers relegated to Supervisors by the Company Act, Securities and Exchange Act and other laws and regulations. The organizing members, exercise of powers and other matters to be abided by the Audit Committee shall follow related laws, regulations or rules or regulation of the Company. The organization regulations of the Audit Committee shall be adopted by the Board of Director.		Pursuant to Article 14-4 of the Securities and Exchange Act, the Company will establish an Audit Committee. The Audit Committee shall make up of the entire number of independent directors, and it is responsible of executing powers relegated to Supervisors by the Company Act, Securities and Exchange Act and other laws and regulations. The Supervisors will cease to function and be ipso facto dismissed on the date of instituting of the Audit Committee. The organizing members, exercise of powers and other matters to be abided by the Audit Committee shall follow related laws, regulations or rules or regulation of the Company. The organization regulations of the Audit Committee shall be adopted by the Board of Director.
Article 17	The term of office for Directors shall be three years and they shall be re- appointed if being re-elected.		The term of office for Directors shall be three yearsand term of office for Supervisors shall be three years and they shall be re-appointed if being re- elected.
Article 20	(Delete)		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.

18

No.		After amendment		Before amendment
Article 23-1		The company shall obtain directors and officers liability insurance with respect to liabilities resulting from exercising their duties during their terms of office.		(New)
Article 25		The Board of Directors shall prepare various financial reports pursuant to relevant laws and regulations. Such reports shall be submitted by the Board of Directors to the regular shareholders’ 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.		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 Directorsthirty days prior to the regular shareholders’ 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		If the Corporation has a profit at the end of a fiscal year, the Corporation shall allocate one percent as the remuneration of employees, and less than one percent as the remuneration of Directors. But if the Corporation still has had losses of the previous years, should remain to make up the losses first. The Corporation may, by a resolution adopted by a majority vote at a meeting of board of directors attended by two- thirds of the total number of directors, have the profit distributable as employees' compensation distributed in the form of shares or in cash; and in addition thereto a report of such distribution shall be submitted to the shareholders’ meeting. Remuneration for Directors, the manner in which it is to be distributed shall be decided by the Board of Directors.		If the Corporation has a profit at the end of a fiscal year, the Corporation shall allocate one percent as the remuneration of employees, and less than one percent as the remuneration of Directors and Supervisors.But if the Corporation still has had losses of the previous years, should remain to make up the losses first. The Corporation may, by a resolution adopted by a majority vote at a meeting of board of directors attended by two- thirds of the total number of directors, have the profit distributable as employees' compensation distributed in the form of shares or in cash; and in addition thereto a report of such distribution shall be submitted to the shareholders’ meeting. Remuneration for Directorsand Supervisors,the manner in which it is to be distributed shall be decided by the Board of Directors.
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 10% of the		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 10% of the

19

No.		After amendment	Before amendment
		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, to be allocated in proportion to all shares. In case of an increase in the capital of the Corporation, the shareholders bonus for the new shares for the same year shall be decided by the shareholders’ meeting. Dividends distributed to shareholders 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, distributing under the objective of maintaining a stable dividend policy. For issue of dividend, except save for the purposes of improving the financial structure, reinvestments, production expansion or other capital expenditures in which capital is required, when distributing shareholders’dividend, which is not less than 50% of the final surplus of after-tax profit in same year to withhold accumulated losses, legal reserve and special reserve, the cash dividend shall not be lower than 10% of shareholders bonus of that year.	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, to be allocated in proportion to all shares. In case of an increase in the capital of the Corporation, the shareholders bonus for the new shares for the same year shall be decided by the shareholders’ meeting. Dividends distributed to shareholders 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, distributing under the objective of maintaining a stable dividend policy. For issue of dividend, except save for the purposes of improving the financial structure, reinvestments, production expansion or other capital expenditures in which capital is required, the cash dividend shall not be lower than 10% of shareholders bonus of that year.
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. (Omitted)	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. (Omitted)

20

No.		After amendment	Before amendment
		The forty-seventh revision was in June 6th 2018. The forty-eighth revision was in June 13th 2019.	The forty-seventh revision was in June 6th 2018.

21