U-MING — AGM Information 2020

Jun 18, 2020

Stock Code: 2606

U-MING MARINE TRANSPORT CORP. Handbook for the 2020 Annual Meeting of Shareholders

MEETING TIME: June 9, 2020

PLACE: Taipei Hero House No. 20, Sec. 1, Changsha St., Zhongzheng Dist., Taipei, Taiwan

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

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U-MING MARINE TRANSPORT CORP.

2020 Annual Meeting of Shareholders

Table of Contents

Table of Contents
I. Meeting Procedure………………………………………………………	P1
II. Matters to Be Reported
1. 2019 Business Report ………………………………………………………………….	P2
2. 2019 Financial Statements ……………………………………………………………..	P6
3. The Audit Committee’s Review Report on 2019 Business and Financial Statements....	P23
4. Distribution of 2019 Remuneration to the Employees and Directors……………..……	P24
5. The amendments to “Ethical Corporate Management Best Practice Principles” and
“Code of Ethical Conduct” of the Company …………………………………………...	P25
III. Matters to Be Ratified
1. The 2019 Business Report and Financial Statements ………………………………….	P32
2. The Proposal for Earnings Distribution of 2019 ……………………………………….	P33
IV. Matters to Be Discussed
1. The Amendment to the Company Corporate Charter (Articles of Incorporation) ……..	P34
2. The Amendment to the “Rules of Procedure for Shareholders’ Meetings” of the
Company…..……………………………………………………………………………	P37
V. Extempore Motions ……………………………………………...	P40
VI. Rules and Regulations
1. Corporate Charter (Articles of Incorporation) …………………………………………	P41
2. Rules of Procedure for Shareholders’ Meetings ……………………………………….	P47
VII. Appendices
1. Current Shareholding of Directors …………………………………... ………………	P50
2. The Impact of Stock dividend Issuance on Business Performance and EPS …………..	P51

U-MING MARINE TRANSPORT CORP. Procedure for the 2020 Annual Meeting of Shareholders

Call the Meeting to Order

Chairman Takes Chair

Chairman Remarks (Management Presentation)

Matters to Be Reported

Matters to Be Ratified

Matters to Be Discussed

Extempore Motions

Adjournment

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Matters to Be Reported:

1. 2019 Business Report

I. Introduction

In 2019, the average Baltic Dry Index (BDI) was 1,353 points, which was unchanged from the previous year. In the first half of the year, the Vale dam accident in Brazil had caused significant disruption in the dry bulk market. The closure of some mines resulted a sharp drop in dry bulk freight rates and the BDI fell to a three-year low of 595 points on February 11, 2019. However, following the announcement in the second half of 2019 that the Brazil's Brucutu mine would resume operations and increase production, the index climbed up and surged to 2,518 points on September 4. Amidst the political and economic uncertainties such as the ongoing US-China trade tension and the Brexit, the global economic growth had slowed down to 3% in 2019, based on IMF's estimate. The trade war had significantly impacted the Chinese market causing a decline in its imports and exports. The average projected growth of China's gross domestic product (GDP) in 2019 was 6.1%, which was at its lowest in nearly 30 years. India and other emerging market economies were also showing a downward trend.

On the overall shipping demand, Clarksons estimated that the global volume of bulk cargo shipping in 2019 was approximately 5.29 billion tons, a year-on-year increase of 1.2%. According to the World Iron and Steel Association report, the global crude steel demand increased by 3.4% to 1.87 billion tons in 2019 - with growth mainly come from China and the developing countries. China's demand for crude steel increased by 8.29% to 996 million tons. The China's strong infrastructure development had driven the demand for crude steel thus supporting the iron ore imports. Following the slowdown in the supply of iron ore exports from Australia and Brazil at the beginning of 2019 due to the weather and mining accident, China began to stockpile iron ore in September, importing 1.047 billion tons for the entire year.

In the coal and grain sector, the demand had increased by 2.69% and 1.48% respectively to 1,297 million tonnes and 479 million tonnes in 2019. The coal demand was mainly from China and India with 8% each in annual growth. The China's coal imports had peaked in the second quarter of 2019 due to the lower coal prices and the Chinese Government’s expanded industrial capacity in order to stimulate its sluggish economy. The grain imports and exports were affected by the US-China trade war resulting a structural change on the shipping trade routes. In 2019, China's overall grain demand remained unchanged but US exports had reduced and falling far behind Brazil's 118 million tons. On the ship supply side, the shipping tonnage had increased rapidly by 4% in 2019 with a total 427 ships delivered – a 43% increase as compared to 299 ships in 2018. Of this, about half of the increased tonnage was 65,000 dwt or more. However, with the expected increase in the number of ships installing ballast water treatment systems, scrubbers and other modifications to meet the IMO environmental regulations, the over-supply tonnage situation was somehow mitigated and come to a more balanced state.

As of December 31 2019, U-Ming owns a fleet of 36 ships. During the year, the Company had sold two 78,000 dwt Panamax "Cemtex Pioneer" and "Cemtex Wisdom"; and took delivery of a new 82,000 dwt Kamsarmax “Cemtex Diligence” as part of the Company’s fleet renewal program. A total of 22 ships in the fleet have been equipped with ballast water treatment systems achieving an overall completion rate of 61.11%. Scrubbers have also been installed on three existing ships in 2019 in response to the IMO 2020 sulphur regulations.

U-Ming’s long-standing commitment to sustainable management has been recognized both domestically and internationally. In 2019, the Company has won the Gold prize in the transportation category of the 2019 Taiwan Corporate Sustainability Awards organized by the Taiwan Institute for Sustainable Energy. The Company had also met the evaluation standards of FTSE Russell and the

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Taiwan Stock Exchange for three consecutive years, and has been included in the FTSE4Good Emerging Index and the FTSE4Good TIP Taiwan ESG Index. Other awards include the "Excellent Business Growth Performance", "Development of Green Shipping Performance", and "Expanded Fleet Performance" awards conferred by the Ministry of Transportation and Communication, R.O.C. in 2018. We were also awarded the "Badge of Accredited Healthy Workplace" by the Health Promotion Administration, MOHW for promoting a friendly workplace and a smoke-free environment. All of these accolades had affirmed U-Ming's outstanding performance in the areas of environmental protection, corporate social responsibility and corporate governance (ESG).

II. Operational Performance

In 2019, U-Ming's consolidated revenue for the whole year was NT$ 10,067,914,000; profit after-tax was NT$ 1,621,695,000; and earnings per share (EPS) after tax was NT$ 1.92. A summary of key highlights is as follows:

(1) Fleet Renewal Program

As of December 31, 2019, two ships were decommissioned and one new ship was delivered. U- Ming’s total fleet is 40 ships, including owned and under construction; with an average age of about 5.7 years. Together with our joint venture and managed ships, the Company’s total fleet capacity is 48 ships totalling 6.709 million deadweight tons.

(2) Ship Safety

U-Ming has collaborated with Ericsson to establish a global fleet safety management system (FSM). The first phase of the project was completed in 2018 which included the safety functions for "collision warning" and "piracy prediction". In 2019, other functions such as "weather data", "anchor alarm" and "dangerous vicinity display" were upgraded to improve the overall safety-related information onboard the ships thus reducing marine accidents caused by bad weather and sea conditions.

(3) Business Development

A joint venture shipping company with Taipower Company, Kuang Ming Shipping Corp. and Kawasaki Kisen Kaisha, Ltd. (K-LINE) has been set up and a Memorandum of Understanding was signed in July 2019. The new joint venture is expected to be established by end 2020 with the purpose of further improving the operating efficiency, reducing the operating costs and ensuring the safety of Taiwan's power generation fuel supply. This joint venture company will further expand into liquefied natural gas (LNG) shipping business in the foreseeable future.

(4) Corporate Social Responsibility

U-Ming has been doing its utmost to care for the earth and the environment. The Company had sponsored and purchased 20 units of solar green power for the Industrial Technology Research Institute at the Lioujia District in response to the government's green energy development policy. In addition, the Company had supported the Far Eastern Group’s 70th Anniversary Charity Campaign by organising a series of "ocean-theme" charity activities - including the donation of "ocean crisis" board games to 200 Taiwanese elementary schools which are in need of teaching resources; and hosting a board game competition to promote marine environmental awareness through recycling, beach clean-up, environmental protection supplies and green technology research and development. The Company had also worked with the Eden Foundation at the National Museum of Marine Science and Technology to help students understand the importance of the ocean and the marine ecology.

III. Business Strategy and Outlook

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The COVID-19 pandemic has been seriously affecting the global economy. In April 2020, The International Monetary Fund (IMF) estimated that the 2020 global economic growth to be -3.0%, the worst recession since the ‘Great Depression’ in the 1930s. As per China’s National Bureau of Statistic, China has suffered the most in the first quarter with its GDP growth fell by 6.8%. Coupled with the ongoing US-China’s trade tension, Brexit, and IMO 2020 sulphur regulations, the shipping industry is expected to face great challenges ahead. U-Ming is determined to continue its adoption on innovative thinking and digitization, together with cross-functional co-operations and integrated thinking, in order to develop new markets and to provide more diversified services to our customers.

(1) Promote Maritime Digitalization

Digitalization will still be a key development project for U-Ming in 2020, despite having built a strong foundation since our implementation in 2016. The Company will continue to upgrade its fleet safety system by incorporating fuel data analyses to effectively optimize ships’ speed and consumption in order to maximize profits and to minimize costs. In the near future, big data analysis will also be applied to more aspects of U-Ming’s operations such as chartering market intelligence for business competitiveness and effective fleet deployment.

(2) Secure Long-Term Revenue Through Good and Synergized Partnerships

Amidst the ongoing global economy slow down and the uncertainty caused by the corona virus pandemic, U-Ming will continue to consolidate its competitive advantage in 2020 and to work in line with our government’s “south-bound” policy by investing into suitable and attractive assets through acquisitions or mergers. At the same time, the Company will continue to seek good and reliable business partners to engage into long-term contracts for securing stable revenue and cash flow to sustain our business.

(3) Diversified Business Development

Environmental protection policies are becoming increasingly stringent. The Chinese Government's promotion of "coal-to-gas" and "electric furnaces replacing blast furnaces in steelmaking" may impact the overall demand and seaborne transportation for coal and iron ore. U-Ming is monitoring this development very closely and is actively exploring new business diversification opportunities in areas such as offshore wind power and liquefied natural gas (LNG) shipping services to provide a more diversified service portfolio instead.

(4) Building a Green Fleet

From January 1, 2020, the sulphur content of marine fuel oil has been reduced mandatory from 3.5% to 0.5%. A prudent evaluation and decision have been made by U-Ming to arrange suitable ships to undergo the installation of scrubbers. Ships without scrubbers will switch over to using low sulphur fuel. Moving forward, LNG (liquefied natural gas) tank space will be reserved for our new vessels as deemed appropriate to enhance our Company’s Green initiatives.

(5) Strengthen Crew Training to Enhance Port State Control (PSC) Compliances

In compliance with International Maritime Organization (IMO) regulations, the Company will continue to emphasize on crew safety and environmental protective through effective trainings onboard and onshore; and to ensure that the highest port state control (PSC) standards are being maintained, achieving a zero-detention goal throughout.

(6) Expand into Asset-light Business to Improve Stable Income

U-Ming shall leverage on its shipping talent pool and resources, combining with its market networking and intelligence, to expand its chartered-in operating capability and ship management services in order to maximize the Company's return on investment.

U-Ming has been constantly fulfilling its corporate social responsibility by reducing the impact of our shipping operations onto marine ecology; providing training to our crew and shore staff to

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strengthen their maritime safety awareness; and creating a good environment for career development for all employees. Under the prudent management team backed by a very strong balance sheet, we remain committed to creating the highest value for our shareholders.

Vice President, Chairman: President: Accounting Division:

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2. 2019 Financial Statements

Consolidated Balance Sheets in Y2019

Consolidated Statements of Comprehensive Income in Y2019

Consolidated Statements of Changes in Equity in Y2019

Consolidated Statements of Cash Flows in Y2019

Individual Balance Sheets in Y2019

Individual Statements of Comprehensive Income in Y2019

Individual Statements of Changes in Equity in Y2019

Individual Statements of Cash Flows in Y2019

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)

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U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2019 AND 2018

(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 25) Financial assets at fair value through other comprehensive income - current (Notes 9 and 26 ) Contract assets - current (Notes 19 and 25 ) Trade receivables from unrelated parties (Note 10) Trade receivables from related parties (Notes 10 and 25) Other receivables (Note 25) Fuel inventory Other current assets (Note 25) Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income - non-current (Note 9) Financial assets at amortized cost - non-current Investments accounted for using the equity method (Note 12) Property, plant and equipment (Notes 13, 26 and 27) Intangible assets Deferred tax assets (Note 21) Prepayments for equipment (Note 13) Refundable deposits (Notes 25 and 26) Long-term receivables - related parties (Note 25) Other non-current assets Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 15) Short-term bills payable (Notes 15 and 26) Financial liabilities at fair value through profit or loss - current (Note 8) Trade payables (Note 25) Other payables (Note 16) Current tax liabilities (Note 21) Current portion of long-term borrowings (Notes 15 and 26) Other current liabilities (Note 25) Total current liabilities NON-CURRENT LIABILITIES Bank loans (Notes 15 and 26) Deferred tax liabilities (Note 21) Deferred revenue - non-current Net defined benefit liabilities - non-current (Note 17) Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Note 18) Common share capital Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity TOTAL		2019 Amount % $ 15,879,242 26 1,941,208 3 7,124,123 12 224,736 - 195,226 - 107,888 - 236,807 1 561,531 1 218,067 - 26,488,828 43 2,544,561 4 192,182 - 2,913,190 5 27,933,249 45 58,799 - 11,703 - 1,265,124 2 125,303 - 726,038 1 - - 35,770,149 57 $ 62,258,977 100 $ 6,500,000 11 3,205,321 5 189,635 - 188,561 - 1,000,195 2 105,919 - 3,387,593 6 200,521 - 14,777,745 24 20,151,636 33 174,185 - 142,330 - 168,522 - 20,636,673 33 35,414,418 57 8,450,557 14 115,152 - 6,693,492 11 - - 9,669,918 15 16,363,410 26 1,915,440 3 26,844,559 43 $ 62,258,977 100		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

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U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE Freight revenue (Notes 19, 25 and 27) Other operating revenue (Note 20) Total operating revenue OPERATING COSTS Freight cost (Notes 20 and 25) GROSS PROFIT OPERATING EXPENSES (Notes 20 and 25) PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Other income (Note 25) Finance costs (Note 20) Interest income Dividend income Gain on disposal of property, plant and equipment Net gain on sale of investment Net gain on foreign currency exchange (Note 28) Share of the profit or loss of associates and joint ventures (Note 12) Other losses Net gain (loss) on financial assets and liabilities at fair value through profit or loss Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (BENEFIT) (Note 21) NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME Items that will not be reclassified subsequently to profit or loss:		2019 Amount % $ 9,822,632 98 245,282 2 10,067,914 100 8,173,206 81 1,894,708 19 438,981 5 1,455,727 14 14,728 - (619,040) (6) 592,935 6 101,715 1 52,395 - 25,019 - 2,760 - 52,749 1 (6,098) - 66,910 1 284,073 3 1,739,800 17 118,105 1 1,621,695 16		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 19,795 - (626,789) (5) 446,047 4 114,654 1 285,551 2 24,402 - 64,732 1 143,749 1 (6,438) - (165,608) (1) 300,095 3 1,633,104 14 (35,736) (1) 1,668,840 15

(Continued)

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U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Remeasurement of defined benefit plans (Note 17) Unrealized gain on investments in equity instruments at fair value through other comprehensive income Share of the other comprehensive income of associates accounted for using the equity method Items that may be reclassified subsequently to profit or loss: Exchange differences on the financial statements of translating foreign operations Share of the other comprehensive (loss) income of associates accounted for using the equity method Other comprehensive income for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE (Note 22) Basic Diluted		2019 Amount % 3,587 - 2,109,054 21 24,599 - (981,092) (10) (37,329) - 1,118,819 11 $ 2,740,514 27 $ 1.92 $ 1.92		2018
				Amount % 3,949 - 613,277 5 8,216 - 1,337,998 12 43,817 - 2,007,257 17 $ 3,676,097 32 $ 1.97 $ 1.97
		$		$

(Concluded)

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U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

Common Share Capital Capital Surplus BALANCE AT JANUARY 1, 2018 $ 8,450,557 $ 115,135 Appropriation of 2017 earnings Legal reserve - - Cash dividends distributed by the Company - - Special reserve - - Change in 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 shareholders - (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 Appropriation of 2018 earnings Legal reserve - - Cash dividends distributed by the Company - - Reversal of special reserve - - Changes in capital surplus from investments in associates and joint ventures accounted for using the equity method - 29 Net profit for the year ended December 31, 2019 - - Other comprehensive income (loss) for the year ended December 31, 2019, net of income tax - - Total comprehensive income (loss) for the year ended December 31, 2019 - - Disposal of investments in equity instruments designated as at fair value through other comprehensive income - - Disposal of investments in equity instruments designated as at fair value through other comprehensive income by associate - - Changes from investments in associates and joint ventures accounted for using the equity method - - BALANCE AT DECEMBER 31, 2019 $ 8,450,557 $ 115,152	Retained Earnings Legal Reserve Special Reserve Unappropriated Earnings $ 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 7,526,115 166,884 - (166,884) - - (1,521,100) - (2,000,954) 2,000,954 - - - - - 1,621,695 - - 6,685 - - 1,628,380 - - 203,950 - - (1,078) - - (419) $ 6,693,492 $ - $ 9,669,918	Other Equity	Total $ (997,742) - - - - - 2,003,920 2,003,920 - - 1,006,178 - - - - - 1,112,134 1,112,134 (203,950) 1,078 - $ 1,915,440	Total Equity $ 22,963,577 - (1,014,067) - 4 1,668,840 2,007,257 3,676,097 (16) (60) 25,625,535 - (1,521,100) - 29 1,621,695 1,118,819 2,740,514 - - (419) $ 26,844,559
		Exchange Differences on Translating the Financial Statements of Unrealized Valuation Gain (Loss) on Financial Assets at Fair Value through Other Gain (Loss) on Foreign Operations Comprehensive Income Hedging Instruments Gain on Property Revaluation $ (2,694,362) $ 1,696,487 $ - $ 133 - - - - - - - - - - - - - - - - - - - - 1,381,813 622,105 2 - 1,381,813 622,105 2 - - - - - - - - - (1,312,549) 2,318,592 2 133 - - - - - - - - - - - - - - - - - - - - (1,018,421) 2,130,555 - - (1,018,421) 2,130,555 - - - (203,950) - - - 1,078 - - - - - - $ (2,330,970) $ 4,246,275 $ 2 $ 133

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U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (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 Net (gain) 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 on disposal of property, plant and equipment Net (gain) loss on foreign currency exchange Net gain on disposal of investment 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 from operations Interest received Dividends received Interest paid Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at fair value through other comprehensive income Proceeds from sale of financial assets at fair value through other comprehensive income Purchase of financial assets at amortized cost Acquisition of associates accounted for using the equity method Purchase of property, plant and equipment Proceeds from disposal of property, plant and equipment (Increase) decrease in refundable deposits	2019 $ 1,739,800 2,399,876 11,437 (90) (66,910) 619,040 (592,935) (346,997) (52,749) (52,395) (54,393) (25,019) 914,967 (35,384) 134,129 41,993 (151,217) 14,750 83,623 (207,972) (15,448) (26,530) 4,331,576 499,964 346,997 (628,720) (31,434) 4,518,383 (10,000) 284,269 (192,182) (123,648) (1,387,811) 422,251 (17,411)	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 (35,346) - - (167,888) (465,669) 518,053 1,869 (Continued)

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U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

Decrease in financing provided - related parties Payments for intangible assets Increase in other non-current assets Increase in prepayments for equipment Dividends received from associates accounted for using the equity method Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES (Repayments of) proceeds from short-term borrowings (Repayments of) proceeds from short-term bills payable Proceeds from long-term borrowings Repayments of long-term borrowings Dividends paid to owners of the Company Net cash (used in) generated from 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	2019 57,496 (4,574) - (610,951) 74,564 (1,507,997) (115,000) (1,544,000) 7,795,975 (8,048,265) (1,521,100) (3,432,390) (383,670) (805,674) 16,684,916 $ 15,879,242	2018 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

(Concluded)

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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 (collectively referred to as the “Group”), which comprise the consolidated balance sheets as of December 31, 2019 and 2018, and 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(collectively referred to as the “consolidated financial statements”).

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, 2019 and 2018, 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, 2019. 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.

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Impairment of Transportation Equipment

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 in the impairment assessment of the transportation equipment directly impact the recognition of impairment loss on assets in the financial statements. As a result, impairment assessment of the transportation equipment was deemed to be a key audit matter. For information on the 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 that we 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 independently assessed the Group’s internal and external information to evaluate the rationality of management’s identification of impairment indicators for transportation equipment. Given that there were impairment indications, we performed the following:

3. a. We obtained the asset impairment valuation form produced by the management for each cash-generating unit.

4. b. 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..

Stage of Completion of Freight Contracts

The Group’s freight revenue is recognized by reference to the stage of completion of the contract. Because management is required to exercise judgements and to have estimates to a certain extent when measuring and calculating the stage of completion of freight contracts, revenue recognition and expression might be affected by the selection and application of calculation methods; therefore, 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 that we 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, 2019 and 2018 on which we have issued an unmodified opinion.

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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 audit committee, 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.

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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, 2019 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 10, 2020

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.

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U-MING MARINE TRANSPORT CORPORATION BALANCE SHEETS DECEMBER 31, 2019 AND 2018 (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 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 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		2019 Amount % $ 45,064 - - - 1,984,687 4 4,562 - 7,890 - 63,349 - 37,524 - 28,669 - 53,371 - 2,225,116 4 1,267,653 2 47,352,099 92 839,966 2 56,274 - 11,703 - 58,487 - 8,780 - 49,594,962 96 $51,820,078 100 $ 6,500,000 13 3,199,322 6 - - 27,657 - 398,372 1 - - 105,252 - 1,035,000 2 15,538 - 11,281,141 22 13,396,648 26 174,185 - 123,545 - 13,694,378 26 24,975,519 48 8,450,557 16 115,152 - 6,693,492 13 - - 9,669,918 19 16,363,410 32 1,915,440 4 26,844,559 52 $ 51,820,078 100		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

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U-MING MARINE TRANSPORT CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (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 Net loss on foreign currency exchange Valuation gain 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 EXPENSE (BENEFIT) NET PROFIT FOR THE YEAR		2019 Amount % $ 1,062,972 100 927,313 87 135,659 13 301,864 29 (166,205) (16) (272,034) (25) 2,023,359 190 668 - 97,117 9 42,718 4 (6,354) (1) 9,696 1 (5,114) - 1,890,056 178 1,723,851 162 102,156 9 1,621,695 153		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 (Continued)

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U-MING MARINE TRANSPORT CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings/Losses Per Share)

OTHER COMPREHENSIVE INCOME 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 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 Share of the other comprehensive income of subsidiaries, associates and joint ventures using the equity method Other comprehensive income for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE Basic Diluted		2019	% - 58 143 (93) (3) 105 258		2018
		Amount $ (2,303) 615,462 1,524,081 (981,569) (36,852) 1,118,819 $ 2,740,514 $ 1.92 $ 1.92			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
		$			$

(Concluded)

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U-MING MARINE TRANSPORT CORPORATION

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

Common Share Capital Capital Surplus BALANCE AT JANUARY 1, 2018 $ 8,450,557 $ 115,135 Appropriation of 2017 earnings Legal reserve - - Cash dividends - - Special reserve - - Change in 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 equity method - - BALANCE AT DECEMBER 31, 2018 8,450,557 115,123 Appropriation of 2018 earnings Legal reserve - - Cash dividends - - Special reserve - - Changes in capital surplus from investments in associates and joint ventures accounted for using the equity method - 29 Net profit for the year ended December 31, 2019 - - Other comprehensive income for the year ended December 31, 2019, net of income tax - - Total comprehensive income for the year ended December 31, 2019 - - Disposal of investments in equity instruments designated as at fair value through other comprehensive income by subsidiary - - Disposal of investments in equity instruments designated as at fair value through other comprehensive income by associate - - Changes from investments in associates and joint ventures accounted for using the equity method - - BALANCE AT DECEMBER 31, 2019 $ 8,450,557 $ 115,152		Retained Earnings Unappropriated Legal Reserve Special Reserve Earnings $ 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 7,526,115 166,884 - (166,884 ) - - (1,521,100 ) - (2,000,954 ) 2,000,954 - - - - - 1,621,695 - - 6,685 - - 1,628,380 - - 203,950 - - (1,078) - - (419) $ 6,693,492 $ - $ 9,669,918	Other Equity	Total $ (997,742 ) - - - - - 2,003,920 2,003,920 - - 1,006,178 - - - - - 1,112,134 1,112,134 (203,950 ) 1,078 - $ 1,915,440	Total Equity $ 22,963,577 - (1,014,067 ) - 4 1,668,840 2,007,257 3,676,097 (16 ) (60) 25,625,535 - (1,521,100 ) - 29 1,621,695 1,118,819 2,740,514 - - (419) $ 26,844,559
			Unrealized Exchange Valuation Gain Differences on (Loss) on Translating the Financial Assets Financial at Fair Value Statements of through Other Gain (Loss) on Foreign Comprehensive Hedging Gain on Property Operations Income Instruments Revaluation $ (2,694,362 ) $ 1,696,487 - $ 133 - - - - - - - - - - - - - - - - - - - - 1,381,813 622,105 2 - 1,381,813 622,105 2 - - - - - - - - - (1,312,549 ) 2,318,592 2 133 - - - - - - - - - - - - - - - - - - - - (1,018,421) 2,130,555 - - (1,018,421) 2,130,555 - - - (203,950 ) - - - 1,078 - - - - - - $ (2,330,970) $ 4,246,275 $ 2 $ 133

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U-MING MARINE TRANSPORT CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Net 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 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 from 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 (Increase) decrease in refundable deposits Payment for intangible assets Increase in other non-current assets Increase in prepayment for equipment Dividends received from associates accounted for using the equity method Net cash generated from investing activities	2019 $ 1,723,851 129,682 10,786 (9,696) 272,034 (668) (97,117) (2,023,359) 11,896 4,112 1,078 13,540 37,479 (3,976) 2,340 3,454 46,349 (5,033) (25,382) 91,370 354 97,117 (268,192) (15,099) (94,450) (92,079) (14,830) (1,319) - (36,283) 3,297,226 3,152,715	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

(Continued)

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U-MING MARINE TRANSPORT CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM FINANCING ACTIVITIES (Repayments of) proceeds from short-term borrowings (Repayments of) proceeds from short-term bills payable 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	2019 $ (115,000) (1,550,000) 7,209,000 (5,194,000) (1,854,720) (1,521,100) (3,025,820) (76) 32,369 12,695 $ 45,064	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

(Concluded)

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3. Audit Committee’ Review Report on 2019 Business and Financial Statements

The Board of Directors have prepared and submitted to us the Company's 2019 Business Reports, the Financial Statements and the Proposal for Earnings Distribution of 2019 with approval and the Financial Statements have also been audited by the CPAs Cheng-Ming Lee and Li-Wen Kuo 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.

To 2020 Shareholders’ Meeting of U-Ming Marine Transport Corp.

Audit Committee Convener: CHU, Shao-Hua

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4. Distribution of 2019 Remuneration to the Employees, Directors and Supervisors

Explanation:

• (1) In accordance with Article 26 of the “Articles of Incorporation”.

• (2) According to the Statements of Comprehensive Income in Y2019, Profit before income tax is NT$ 1,759,031,336. Propose allocate one percent, which is NT$ 17,590,313, as the remuneration of employees. And one percent, which is NT$ 17,590,313, as the remuneration of Directors. The aforesaid items will be paid in cash.

• (3) This proposal has been approved by the 4th meeting of the eighteenth-term Board of Directors on March 10, 2020.

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

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

Explanation:

• (1) According to the official letter issued by the Financial Supervisory Commission (Letter No. TSG 1080008378) on 23 May 2019, and pursuant to the Company’s actual operation, it is proposed to amend “Ethical Corporate Management Best Practice Principles” and “Code of Ethical Conduct” of the Company. The amendments table is attached as following.

• (2) This proposal has been approved by the 5th meeting of the eighteenth-term Board of Directors on May 7, 2020 and the 13th meeting of the seventeenthterm Board of Directors on March 19, 2019.

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

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Amendments Table of “Ethical Corporate Management Best Practice

Principles”

		Principles”
No.		After amendment	Before amendment
Article 6 (Preventive Measures)		The Company has instituted the procedures for the prevention of unethical practices,the code of conduct and training on the basis of this set of principles and with reference to standards and guidelines commonly practices at home and abroad.This set of principles denote the important notice to all in performing their duties in compliance with applicable legal rules.	The Company has instituted the proceduresand a code of conductfor the prevention of unethical practices. This set of principles denote the important notice to all in performing their duties in compliance with applicable legal rules.
Article 7 (Scope of Ethical Corporate Management Best Practice Principles)		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. V. Misappropriation of trade secrets and infringement of trademark	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.
		rights, patent rights, copyrights, and other intellectual property rights. VI. Engaging in unfair competitive practices. VII. Damage directly or indirectly caused to the rights or interests, health, or safety of consumers or other stakeholders in the course of research and development, procurement, manufacture, provision, or sale of products and services.
Article 8 (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 andexecutive- levelmanagement shall promise to pursue the policy under due diligence andproperlyenforce it in internal	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 properlyenforce it in internal

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No.		After amendment	Before amendment
		management and external business activities. The Company shall compile documented information on the ethical management policy, statement, commitment and implementation mentioned in the first	management and external business activities.
		and second paragraphs and retain said
		information properly.
Article 9 (Integrity in business operationsand prohibition of unfair competition)		The Company shall conduct business in a fair and transparent manner, and shall do business in conformity to applicable legal rules governing competition. The Company shall not fix the price, manipulate bidding, limit the production volume and distribution, or share or divide the market through allocation of customers, suppliers, business regions	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.
		or business types. 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.
Article 13 (Prohibition of unreasonable gifts, receptions or other forms of illicit benefit)		Companydirectors, managers and employeesare strictly prohibited from demanding any gifts, special offers or preferential treatment directly or indirectly from current or potential suppliers, contractors, or customers,includingspecial and	Companypersonnelare 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

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No.	After amendment	Before amendment
	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 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 thededicated unitfor 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.	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 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 theCompany Secretariatfor 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 16 (Organization and responsibilities)	Company personnel 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 theproper	Company personnel 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 theproper

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No.			After amendment			Before amendment
		pursuit of the business integrity policy.The Company established the position of Chief Corporate Governance Offices under the Board and Human Resources Departments charged with the duties of pursuing the business integrity policy and the establishment of related measures to make ethical corporate management viable, superviseand enforce of such measures, and report to the Board at regular intervals (once a year).			pursuit of the business integrity policy.Human Resources Department of the Company is dedicated to administer the pursuit ofthe business integrity policy and the establishment of related preventive measures to make ethical corporate management viable, supervisethe enforcement of such measures and make reports to the Board if there is any material misconduct.	of the business integrity Human Resources Department
Article 21 (Training and Evaluation)		The Company shall provide education on this set of principles for Company personnel.Related functional units of business shall also provide education to counterparties of business activities			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.
		with the Company on this matterto 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 22 (Report and punishment)		Company personnel shall voluntarily report to the independent directors, the managers, the internal audit chief, the Chief Corporate Governance Officer, Human Resources Department,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 insists on the principle of zero tolerance to defect. If any of the Company staff attempts to seek unjustified benefits for themselves or a third party by taking advantage of the functions performed, to the extent			Company personnel shall voluntarily report to the independent directors, the 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.

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No.		After amendment	Before amendment
		that loss is inflicted on the Company, such person shall be dismissed and assumed all responsibility of the damages to the Company thereof unconditionally. 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 and content of the violation, applicable provisions and punitive actionat the intranet of the Company. In addition, the Company will report to the competent authority or refer the	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 and content of the violation, applicable provisions and punitive actionon the MOPS website. The Company has established a complaints system for those who allegedly violate these principles to appeal or seek redress.
		case to the judiciary for investigation where necessary. The Company has established a complaints system for those who allegedly violate these principles to appeal or seek redress. The Company has instituted the “Procedures for Ethical Management and Guidelines for Conduct”as the resorts for redress in accordance with applicable rules and regulations for those who violate this set of principles.

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Amendments Table of “Code of Ethical Conduct”

No.		After amendment		Before amendment
Article 10 (Encouragem ent to report any unlawful or unethical practices)		The Company shall organize educational program to promote and reinforce the Guidelines regularly. All employees who discover any violation or appearance of violation of the Guidelines, laws, and regulations shall proactively report tothe audit committee,managers, head of internal audit department, or other properly authorized management according to “Procedures for Ethical Management and Guidelines for Conduct", meanwhile provide sufficient information or evidences to make subsequent investigation and rectification possible. All reports on the aforementioned practices will be kept in strict confidence and verified by independent channels to protect the informer.		The Company shall organize educational program to promote and reinforce the Guidelines regularly. All employees who discover any violation or appearance of violation of the Guidelines, laws, and regulations shall proactively report toindependent directors,managers, head of internal audit department, or other properly authorized management according to the whistle-blowing and disciplinary method
				of violating ethical conduct and ethical management, meanwhile provide sufficient information or evidences to make subsequent investigation and rectification possible. All reports on the aforementioned practices will be kept in strict confidence and verified by independent channels to protect the informer.
Article 11 (Punishment and remedy)		In the event of violation of any part of this code by all employees, 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 all employees 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. “Procedures for Ethical Management and Guidelines for Conduct” is established in the Company. Any of All employees being accused to violate the Guidelines may appeal for remedy.		In the event of violation of any part of this code by all employees, 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 all employees 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 whistle-blowing and disciplinary method of violating ethical conduct and ethical managementis established in the Company. Any of All employees being accused to violate the Guidelines may appeal for remedy.

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Matters to Be Ratified:

1. The 2019 Business Report and Financial Statements

Explanation:

• (1) The audit committee’s review report is hereby issued after reviewing the 2019 financial statements (including the business report and the independent auditor’s report issued by CPA Cheng-Ming Lee and CPA Li-Wen Kuo of Deloitte & Touche; please refer to Page 2~22) without any nonconformity identified.

• (2) Please approve

Resolution:

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2. The Proposal for Earnings Distribution of 2019

Explanation:

• (1) Please refer to the 2019 Earnings Distribution proposed in accordance with Article 27 of the Company’s Articles of Incorporation as follows:

	NT$
Unappropriated retained earnings of previous year	7,839,084,966
Less: Investment adjusted retained earnings by using
equity method	(418,770)
Add: 2019 actuarial gain & losses appropriated retained
earnings	6,685,065
Add: Proceeds from sale of financial assets at fair value
through other comprehensive income	202,872,771
Adjusted unappropriated retained earnings	8,048,224,032
Add: 2019 net income	1,621,695,422
Less: 10% legal reserve appropriated	(183,083,449)
Earnings available for distribution	9,486,836,005
Less: 2019 earning distribution
(cash dividend NT$1.9 per share)	(1,605,605,853)
Unappropriated retained earnings	7,881,230,152

• (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 2020 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.

Resolution:

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Matters to Be Discussed

1. To approve the amendment to the “Company Corporate Charter” (“Articles of Incorporation”).

Explanation:

• (1) According to the official letter issued by the Ministry of Economic Affairs (Letter No. EC 10802432410) on January 9, 2020, which specifies the basis for the legal reserve, it is proposed to amend the No. 27 of the Articles of Incorporation and it will be applied to the earnings distribution of financial statements of 2019. Please refer to the attached Article Amendments Table for amended articles.

• (2) This proposal has been approved by the 4[th] meeting of the eighteenth-term Board of Directors on March 10, 2020.

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

Resolutions:

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Amendments Table of “Articles of Incorporation”

No.		After amendment	Before amendment
Article 27		If the Corporation has a profit at the end of a fiscal year, the Corporation shall make up losses of previous year after paying business income taxes based on Law and, if there is any remaining profit,the Corporation shall add the items beyond the earnings of current period to earnings of current period as undistributed earnings for current period,and set aside 10% 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	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 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 thatyear.

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No.		After amendment	Before amendment
		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.
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 forty-eighth revision was in June 13th 2019. The forty-ninth revision was in June 9th 2020.	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 forty-eighth revision was in June 13th 2019.

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2. To approve the amendment to the “ Rules of Procedure for Shareholders’ Meetings” of the Company.

Explanation:

• (1) Pursuant to the Company’s actual operation and according to the “Sample Template for XXX Co., Ltd. Rules of Procedure for Shareholders Meetings” issued by Taiwan Stock Exchange Corporation, it is proposed to amend the “Rules of Procedure for Shareholders’ Meetings” of the Company. Please refer to the attached Article Amendments Table for amended articles.

• (2) This proposal has been approved by the 4[th] meeting of the eighteenth-term Board of Directors on March 10, 2020.

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

Resolutions:

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Amendments Table of “Rules of Procedure for Shareholders’ Meetings”

No.	After amendment	Before amendment
Article 10	For proposal in which discussion has been concluded or closed, the Chairperson shall submit it or 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. The person responsible for vote overseeing shall be of the shareholder status.	For proposal in which discussion has been concluded or closed, the Chairperson shall submit it or 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 Chairpersonwith the consent of the shareholders (or proxies).The person responsible for vote overseeing shall be of the shareholder 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 shareholders (or proxies) attending the meeting. Proposals shall be resolved by balloting. The Chairperson may refer the proposals to balloting one-by-one, or balloting of all proposals (including election) in aggregate at one time and count the votes cast separately on each proposal. 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	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 shareholders (or proxies) attending the meeting. The proposal for a resolution shall be deemed approved if no objection expressed by stockholders casting their votes via electronic casting, and if the chairperson inquires and receives no objection from stockholders in attendance in person. The validity of such approval has the same effect as if the resolution has been put to vote. Proposals shall be resolved by balloting if the shareholders have objection to them.The Chairperson may refer the proposals to balloting one-by-one, or balloting of all proposals (including election) in aggregate at one time and count the votes cast separately on each proposal. 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

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No.	After amendment	Before amendment
	rejected without requirement to put it to vote. The results of voting shall be reported on the spot and kept for records.	rejected without requirement to put it to vote. The results of voting shall be reported on the spot and kept for records.
Article 13	The Chairperson may announce for a halt of the meeting in the event of force majeure during the session, and may announce for the time of continuing the meeting depending on the circumstances.	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.

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Extempore Motions:

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U-Ming Marine Transport Corporation

Articles of Incorporation

Amended and approved by the Shareholders’ Meeting on June 13, 2019

Section I - General Provisions

• 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.

• 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.

• 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 shareholder 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 (40) per cent 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 1,050,000,000 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.

• 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.

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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 shareholders’ 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 shareholders’ 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 – Shareholders’ Meetings

• 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 convened in accordance with relevant laws and regulations.

• Article 11 Convention of shareholders’ regular meeting shall be notified to various shareholders in writing 30 days in advance. Convention of shareholders shall be notified to various shareholders in writing 15 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 shareholders’ meeting may proceed with its conference if attended by shareholders representing more than one half of the total outstanding shares of the Corporation. Resolutions shall be made by a majority vote of the shareholders present at the meeting.

• 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.

Shareholder shall present power of attorney to assign representative to attend the shareholders’ 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 exceeding portion shall not be counted. In regard to method of appointing for attendance by shareholder, unless otherwise provided in the Company Law, it shall be processed based on the “Rules of Utilization of Power of Attorney to Attend Shareholders’ Meeting Of Public Issue Company”.

• Article 14 During shareholders’ meeting, unless otherwise provided in the Company Law or this Articles of Incorporation, the meeting shall be processed based on the “Rules of Procedure for

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Shareholders’ Meetings” of the Corporation.

• Article 15 The resolutions of the shareholders’ meeting shall be recorded in the minutes, which shall specify the date, place of meeting, number of shareholders 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 shareholders’ attendance book (card) and proxies, shall be kept in the Corporation based on Law.

Section IV - Directors 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 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 directors and nonindependent directors 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. Article 17 The term of office for Directors shall be three years and they shall be re-appointed if being reelected. 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

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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.

• Article 20 (Delete)

• Article 21 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 numbers 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.

• 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.

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 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.

• 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.

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• 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 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.

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 was stipulated on June 22, 1968 and after resolution was obtained in the shareholders’ 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 shareholders’ meeting.

• The 1[st] revision was on August 16, 1968. The 2[nd] revision was on March 21, 1969. The 3[rd] revision was on May 30, 1969. The 4[th] revision was on October 20, 1970. The 5[th] revision was on April 26, 1971. The 6[th] revision was on August 4, 1971. The 7[th] revision was on February 20, 1974. The 8[th] revision was on April 29, 1974. The 9[th] revision was on May 30, 1975. The 10[th] revision was on April 30, 1976.

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The 11[th] revision was on April 29, 1977. The 12[th] revision was on May 15, 1978. The 13[th] revision was on December 22, 1978. The 14[th] revision was on May 29, 1980. The 15[th] revision was on April 25, 1981. The 16[th] revision was on May 27, 1981. The 17[th] revision was on May 27, 1983. The 18[th] revision was on May 18, 1984. The 19[th] revision was on September 17, 1984. The 20[th] revision was on January 16, 1985. The 21[st] revision was on March 27, 1987. The 22[nd] revision was on June 15, 1987. The 23[rd] revision was on December 21, 1987 The 24[th] revision was on February 26, 1988. The 25[th] revision was on August 19, 1988. The 26[th] revision was on May 12, 1989. The 27[th] revision was on April 18, 1990. The 28[th] revision was on May 15, 1991. The 29[th] revision was on May 15, 1992 The 30[th] revision was on May 29, 1993. The 31[st] revision was on August 14, 1993. The 32[nd] revision was on May 18, 1994. The 33[rd] revision was on May 25, 1995. The 34[th] revision was on May 15, 1996. The 35[th] revision was on May 15, 1998. The 36[th] revision was on May 17, 1999. The 37[th] revision was on May 5, 2000. The 38[th] revision was on April 27, 2001. The 39[th] revision was on May 30, 2002. The 40[th] revision was on June 8, 2005. The 41[st] revision was on May 23, 2006. The 42[nd] revision was on June 3, 2010. The 43[rd] revision was on June 8, 2011. The 44[th] revision was on June 14, 2012. The 45[th] revision was on June 10, 2015. The 46[th] revision was on June 8, 2016. The 47[th] revision was on June 6, 2018. The 48[th] revision was in June 13, 2019.

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

Amended and approved by the Shareholders’ Meeting on June 9, 2014

Article 1 The shareholders’ meeting of the Company shall be held according to the rules herein. Article 2 The location for shareholders’ meeting shall be the Company’s place of business or a place convenient for attendance by shareholders (or by proxies) that is suitable to holding of this meeting. The meeting shall be held between 9:00AM and 3:00PM. The shareholders (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 shareholders’ meeting.

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

For a shareholders’ meeting convened by the Board of Directors, the Chairperson of the Board of Directors shall preside at the meeting. If the Chairperson of the Board of Directors is on leave or unable to exert the rights, the Vice-Chairperson of the Board of Directors shall preside instead; if the position of Vice-Chairperson is vacant or the Vice-Chairperson is on leave or unable to exert the rights, the Chairperson of the Board of Directors shall designate a director to preside at the meeting. If no director is so designated, the Chairperson of the meeting shall be elected by the Board of Directors among themselves. For a shareholders’ meeting convened by any other person having the convening right, he/she shall act as the Chairperson of that meeting; if there are two or more persons having the convening right, the Chairperson of the meeting shall be elected 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 shareholders (or proxies) represent more than half of the total shares issued in public. The Chairperson may announce postponement of the 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 shareholders (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 shareholders (or proxies) reached the legal quorum.

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Article 4 If the shareholders’ meeting is convened by the Board of Directors, the agenda shall be 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 shareholders’ 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 shareholders to continue the meeting.

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

Article 5 The shareholders (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 shareholder (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 shareholders (or proxies) to amend, substitute or to initiate extemporary motions with respect to the original proposal shall be seconded by other shareholders (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 shareholders (or proxies) from speaking if that shareholders (or proxies) speak overtime, speak beyond the allowed frequency or content of the speech is beyond the scope of the proposal. When a shareholder (or proxy) is speaking, other shareholder (or proxy) shall not interrupt without consent of the Chairperson and the speaking shareholder (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.

For the same proposal, each person shall not speak more than 2 times.

Article 8

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When a juristic person is a shareholder, only one representative shall be appointed to attend the meeting.

If more than two representatives were appointed to attend the meeting, only one representative is allowed to speak. Article 9 After speaking by the attending shareholder (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 or 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 shareholders (or proxies). The person responsible for vote overseeing shall be of the shareholder 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 shareholders (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 shareholders (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 shareholders’ 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 shareholders’ meeting, the same apply for any amendments.

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Appendices

1. Current Shareholding of Directors

		Book closure date: April 11, 2020	Book closure date: April 11, 2020	Book closure date: April 11, 2020
Position	Name of persons or companies	Representatives appointed	Number of shares	Ratio (%)
Chairman	Hsu, Shu-Tong	---	992,133	0.12%
Director	Chee Chen Tung	---	---	---
	Hsu, Shu-Ping	---	83,595	0.01%
	Asia Cement Corp.	Chang, Tsai-Hsiung	331,701,152	39.25%
		Lee, Kun-Yen	331,701,152	39.25%
		Douglas Jefferson Hsu	331,701,152	39.25%
	Yue Ding Industry Co., Ltd.	Ong Choo Kiat	93,000	0.01%
	Yuan Ding Investment Corp.	Lee, Kuan-Chun	8,869,000	1.05%
Independent Director	Pan, Wen-Yen	---	---	---
	Chu, Shao-Hua	---	---	---
	Liu, Chorng-Jian	---	---	---
	Shareholding of all directors		341,738,880	40.44%
The minimum required combined shareholding of all directors by law			33,802,228	4.00%

Note:

1. The total issued and outstanding shares on the book closure date: 845,055,712 shares.

2. According to Article 26, Paragraph 2 of Securities and Exchange Act and Article 2, Paragraph 5 of the Regulations Governing Ratios and Auditing of Director and Supervisor Share Ownership at Public Companies, the minimum required combined shareholding of all directors are qualified.

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2. The Impact of Stock dividend Issuance on Business Performance and EPS

Unit: NT$

			Unit: NT$
Year Item			2020
Paid-in Capital (beginning of the year)			8,450,557,120
Stock & Cash Dividend Distribution	Cash Distribution from Legal Reserve (NT$/per share)		1.9
	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 & Capital Surplus Distributed in Cash Dividend rather than Stock Dividend	Pro Forma Earnings Per Share
		Pro Forma Average Yearly Return on Investment

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