U-MING — Annual Report 2017

Jul 9, 2018

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U-MING MARINE TRANSPORT CORP.

Meeting Minutes for the 2018 Annual Shareholders’ Meeting

Time: 9:00 a.m., June 6, 2018

Place: Taipei Hero House’s Auditorium

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

Total shares represented by presence of shareholders: 559,975,041 shares (66.26%) In attendance: Hsu, Shu-Tong (Director)

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

Chiang Shao, Ruey-Huey (Supervisor) Chang, Tzu-Pong (Supervisor) Hsu, Shu-Ping (Supervisor) Kuo, Li-Wen (Auditor) Chen, Hsin-Ying (Lawyer)

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

Important Resolutions

I. Matters To Be Reported

1. 2017 Business Report 2016 Business Report

2. 2017 Financial Statements

3. Supervisors’ Review Report on 2017 Business and Financial Statements

4. Distribution of 2017 Remuneration to the Employees, Directors and Supervisors

II. Matters To Be Ratified

1. The 2017 Business Report and Financial Statements

Explanation:

• (1) The supervisor’s review report is hereby issued after reviewing the 2017 financial statements (including the business report and the independent auditor’s report issued by CPA Li-Wen Kuo and CPA Ching-Pin Shih of Deloitte & Touche; please refer to the attachment from Page x to xx) without any nonconformity identified.

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(2) Please approve.

Resolved that:

Shareholders who are present represented 559,975,041 votes in total (including electronic votes). 550,961,902 votes (including electronic votes) ratify the motion, accounting to 98.39% of total votes ； 117,388 votes (including electronic votes) against the motion ； 6,462,281 votes (including electronic votes) abstained. The motion is ratified.

2. The proposal for Earnings Distribution of 2017

Explanation:

• (1) Please refer to the 2017 Earnings Distribution proposed in accordance with Article 27 of the Company’s Articles of Incorporation as follows:

	NT$
Unappropriated retained earnings of previous year	7,856,926,832
Add: Investment adjusted retained earnings by using
equity method	9,484,603
Less: 2017 actuarial gain & losses appropriated
retained earnings	17,115,327
Adjusted unappropriated retained earnings	7,849,296,108
Add: 2017 net income	999,519,654
Less: 10% legal reserve appropriated	99,951,965
Less: 2017 special reserve	2,000,954,228
Earnings available for distribution	6,747,909,569
Less: 2017 earning distribution
(cash dividend NT$1.2 per share)	1,014,066,854
Unappropriated retained earnings	5,733,842,715

• (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 2018 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.

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Resolved that:

Shareholders who are present represented 559,975,041 votes in total (including electronic votes). 551,651,900 votes (including electronic votes) ratify the motion, accounting to 98.51% of total votes ； 125,390 votes (including electronic votes) against the motion ； 5,764,281 votes (including electronic votes) abstained. The motion is ratified.

III. Matters to Be Discussed

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

Explanation:

• (1) According to the official letter No. 10200531121 from Financial Supervisory Commission, R.O.C. (Taiwan), the Audit Committee should be established in lieu of the Supervisors after the seventeenth tenure of the current Directors and Supervisors ended next year, 2019. It is proposed to amend Article 16 of the Company Act. and to enact Article 16-1. Please refer to Page 34~35 of the Handbook for the 2018 Annual Meeting of Shareholders.

• (2) This proposal has been approved by the 9th meeting of the seventeenth-term Board of Directors on March 5, 2018.

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

Resolved that:

Shareholders who are present represented 559,975,041 votes in total (including electronic votes). 551,583,788 votes (including electronic votes) ratify the motion, accounting to 98.50% of total votes ； 151,492 votes (including electronic votes) against the motion ； 5,806,291 votes (including electronic votes) abstained. The motion hereby is accepted as submitted.

IV.Extempore Motions: None

V. Meeting Adjourned

Chairperson:

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Recorder:

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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 (the Group), which comprise the consolidated balance sheets as of December 31, 2017 and 2016, 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.

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, 2017 and 2016, 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, 2017. 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

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

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

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

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

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

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

Stage of Completion of Freight Contracts

The Group’s freight revenue is recognized by reference to the stage of completion of the contract. Because making judgements and estimates is required to a certain extent when measuring and calculating stage of completion of freight contracts, and revenue recognition and expression might be affected by the selection and application of calculation methods, the determination of the stage of completion of freight contracts is deemed to be a key audit matter. Stage of completion of freight contracts has been included in the critical accounting judgements and key sources of estimation uncertainty; please refer to Note 5 to the financial statements.

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

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

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, 2017 and 2016 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 supervisors, are responsible for overseeing the Group’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

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

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

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

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

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

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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, 2017 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 Li-Wen Kuo and Ching-Pin Shih.

Deloitte & Touche Taipei, Taiwan Republic of China

March 5, 2018

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 AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2017 AND 2016 (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 (Note 8) Available-for-sale financial assets - current (Notes 9, 25 and 26) Trade receivables from unrelated parties (Note 11) Trade receivables from related parties (Notes 11 and 25) Other receivables (Note 11) Fuel inventory Other current assets (Note 25) Total current assets NON-CURRENT ASSETS Available-for-sale financial assets - non-current (Note 9) Financial assets measured at cost - non-current (Note 10) Investments accounted for using equity method (Notes 13 and 25) Property, plant and equipment (Notes 14, 26 and 27) Intangible assets Deferred tax assets (Note 21) Prepayment for equipment (Note 14) Refundable deposits (Notes 25 and 26) Long-term receivable - related parties (Notes 13 and 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 17) Current tax liabilities (Note 21) Current portion of long-term borrowings and bonds payable (Notes 15, 16 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 18) Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Note 19) Common share capital Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity TOTAL		2017 Amount % $ 10,528,550 20 147,982 - 6,482,215 12 489,217 1 62,388 - 652,469 1 422,490 1 166,094 - 18,951,405 35 - - 892,943 2 2,504,503 5 30,217,912 56 879 - 34,465 - 342,042 1 109,706 - 819,523 1 22,827 - 34,944,800 65 $ 53,896,205 100 $ 5,985,000 11 2,598,642 5 154,238 - 131,536 - 905,443 2 104,532 - 3,370,445 6 211,961 1 13,461,797 25 18,022,116 34 178,726 - 189,459 - 203,897 - 18,594,198 34 32,055,995 59 8,450,557 16 115,135 - 6,426,656 12 - - 8,848,816 17 15,275,472 29 (2,000,954) (4) 21,840,210 41 $ 53,896,205 100		2016
				Amount % $ 13,540,718 23 237,569 1 8,250,475 14 331,103 1 54,545 - 171,096 - 261,993 1 184,423 - 23,031,922 40 134 - 892,943 1 2,447,985 4 28,315,931 49 - - 36,226 - 2,390,657 4 98,973 - 894,230 2 - - 35,077,079 60 $ 58,109,001 100 $ 3,100,000 5 2,357,157 4 119,978 - 199,243 1 661,745 1 103,920 - 5,132,241 9 153,307 - 11,827,591 20 20,839,714 36 401,639 1 231,413 - 258,163 1 21,730,929 38 33,558,520 58 8,450,557 14 115,140 - 7,060,448 12 337,186 1 7,519,741 13 14,917,375 26 1,067,409 2 24,550,481 42 $ 58,109,001 100

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

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U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2017 AND 2016 (In Thousands of U.S. Dollars, Note 6)

ASSETS CURRENT ASSETS Cash and cash equivalents (Note 7) Financial assets at fair value through profit or loss - current (Note 8) Available-for-sale financial assets - current (Notes 9, 25 and 26) Trade receivables from unrelated parties (Note 11) Trade receivables from related parties (Notes 11 and 25) Other receivables (Note 11) Fuel inventory Other current assets (Note 25) Total current assets NON-CURRENT ASSETS Available-for-sale financial assets - non-current (Note 9) Financial assets measured at cost - non-current (Note 10) Investments accounted for using equity method (Notes 13 and 25) Property, plant and equipment (Notes 14, 26 and 27) Intangible assets Deferred tax assets (Note 21) Prepayment for equipment (Note 14) Refundable deposits (Notes 25 and 26) Long-term receivable - related parties (Notes 13 and 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 17) Current tax liabilities (Note 21) Current portion of long-term borrowings and bonds payable (Notes 15, 16 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 18) Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Note 19) Common share capital Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity TOTAL		2017 Amount % $ 353,782 20 4,973 - 217,816 12 16,439 1 2,096 - 21,924 1 14,197 1 5,581 - 636,808 35 - - 30,005 2 84,157 5 1,015,387 56 30 - 1,158 - 11,493 1 3,686 - 27,538 1 766 - 1,174,220 65 $ 1,811,028 100 $ 201,109 11 87,320 5 5,183 - 4,420 - 30,425 2 3,513 - 113,254 6 7,121 1 452,345 25 605,582 34 6,006 - 6,366 - 6,851 - 624,805 34 1,077,150 59 283,957 16 3,869 - 215,949 12 - - 297,340 17 513,289 29 (67,237) (4) 733,878 41 $ 1,811,028 100		2016
				Amount % $ 419,867 23 7,366 1 255,829 14 10,267 1 1,691 - 5,305 - 8,124 1 5,719 - 714,168 40 4 - 27,688 1 75,907 4 878,013 49 - - 1,123 - 74,129 4 3,069 - 27,728 2 - - 1,087,661 60 $ 1,801,829 100 $ 96,124 5 73,090 4 3,720 - 6,178 1 20,519 1 3,222 - 159,139 9 4,755 - 366,747 20 646,193 36 12,454 1 7,175 - 8,005 1 673,827 38 1,040,574 58 262,033 14 3,570 - 218,929 12 10,455 1 233,170 13 462,554 26 33,098 2 761,255 42 $ 1,801,829 100

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

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U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars, Except Earnings/Losses Per Share)

OPERATING REVENUE (Note 27) Freight revenue (Note 25) Other operating revenue (Notes 9 and 20) Total operating revenue OPERATING COSTS Freight cost (Notes 20 and 25) GROSS PROFIT (LOSS) OPERATING EXPENSES (Notes 20 and 25) PROFIT (LOSS) FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Financial costs (Note 20) Interest income Dividend income Other income (Note 25) Net gain on foreign currency exchange (Notes 20 and 29) Other losses Loss on disposal of property, plant and equipment, net Gain (loss) on sale of investments, net (Note 25) Valuation loss on financial instruments, net Impairment loss (Note 9) Share of the profit or loss of associates and joint ventures (Note 13) Total non-operating income and expenses PROFIT (LOSS) BEFORE INCOME TAX INCOME TAX (BENEFIT) EXPENSE (Note 21) NET PROFIT (LOSS) FOR THE YEAR		2017 Amount % $ 8,285,385 97 215,940 3 8,501,325 100 7,724,280 91 777,045 9 316,027 3 461,018 6 (548,379) (6) 235,651 3 125,303 1 18,894 - 794,145 9 (17,697) - (106) - (299,152) (4) (103,900) (1) (4,900) - 150,537 2 350,396 4 811,414 10 (188,106) (2) 999,520 12		2016
				Amount % $ 6,391,062 98 126,335 2 6,517,397 100 6,716,524 103 (199,127) (3) 267,862 4 (466,989) (7) (535,133) (8) 248,866 4 150,878 2 25,209 - 121,243 2 (7,340) - (215,258) (3) 257,322 4 (357,916) (6) (24,673) - (49,377) (1) (386,179) (6) (853,168) (13) 25,186 1 (878,354) (14) (Continued)

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U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars, Except Earnings/Losses Per Share)

OTHER COMPREHENSIVE LOSS Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans (Note 18) Share of the other comprehensive loss of associates using the equity method Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign operations Unrealized gain (loss) on available-for-sale financial assets Share of the other comprehensive loss of associates using the equity method Other comprehensive loss for the year, net of income tax TOTAL COMPREHENSIVE LOSS FOR THE YEAR NET PROFIT (LOSS) ATTRIBUTABLE TO: Owners of the Company TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO: Owners of the Company EARNINGS (LOSSES) PER SHARE (Note 22) Basic Diluted		2017 Amount % $ (4,671) - (12,444) (1) (3,584,374) (42) 623,152 7 (107,141) (1) (3,085,478) (37) $ (2,085,958) (25) $ 999,520 12 $ (2,085,958) (25) $ 1.18 $ 1.18		2016
				Amount % $ (8,484) - (320) - (931,291) (14) (364,282) (6) (7,186) - (1,311,563) (20) $ (2,189,917) (34) $ (878,354) (13) $ (2,189,917) (34) $ (1.04) $ (1.04)

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

(Concluded)

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U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of U.S. Dollars, Except Earnings/Losses Per Share, Note 6)

OPERATING REVENUE (Note 27) Freight revenue (Note 25) Other operating revenue (Notes 9 and 20) Total operating revenue OPERATING COSTS Freight cost (Notes 20 and 25) GROSS PROFIT (LOSS) OPERATING EXPENSES (Notes 20 and 25) PROFIT (LOSS) FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Financial costs (Note 20) Interest income Dividend income Other income (Note 25) Net gain on foreign currency exchange (Notes 20 and 29) Other losses Loss on disposal of property, plant and equipment, net Gain (loss) on sale of investments, net (Note 25) Valuation loss on financial instruments, net Impairment loss (Note 9) Share of the profit or loss of associates and joint ventures (Note 13) Total non-operating income and expenses PROFIT (LOSS) BEFORE INCOME TAX INCOME TAX (BENEFIT) EXPENSE (Note 21) NET PROFIT (LOSS) FOR THE YEAR		2017 Amount % $ 278,407 97 7,256 3 285,663 100 259,552 91 26,111 9 10,619 3 15,492 6 (18,427) (6) 7,918 3 4,210 1 635 - 26,685 9 (594) - (4) - (10,052) (4) (3,491) (1) (165) - 5,058 2 11,773 4 27,265 10 (6,321) (2) 33,586 12		2016
				Amount % $ 198,172 98 3,917 2 202,089 100 208,264 103 (6,175) (3) 8,306 4 (14,481) (7) (16,593) (8) 7,717 4 4,678 2 782 - 3,759 2 (227) - (6,675) (3) 7,979 4 (11,098) (6) (765) - (1,531) (1) (11,974) (6) (26,455) (13) 781 1 (27,236) (14) (Continued)

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U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of U.S. Dollars, Except Earnings/Losses Per Share, Note 6)

OTHER COMPREHENSIVE LOSS Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans (Note 18) Share of the other comprehensive loss of associates using the equity method Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign operations Unrealized gain (loss) on available-for-sale financial assets Share of the other comprehensive loss of associates using the equity method Other comprehensive loss for the year, net of income tax TOTAL COMPREHENSIVE LOSS FOR THE YEAR NET PROFIT (LOSS) ATTRIBUTABLE TO: Owners of the Company TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO: Owners of the Company EARNINGS (LOSSES) PER SHARE (Note 22) Basic Diluted		2017 Amount % $ (157) - (418) (1) (120,443) (42) 20,939 7 (3,600) (1) (103,679) (37) $ (70,093) (25) $ 33,586 12 $ (70,093) (25) $ 0.04 $ 0.04		2016
				Amount % $ (263) - (10) - (28,877) (14) (11,296) (6) (223) - (40,669) (20) $ (67,905) (34) $ (27,236) (13) $ (67,905) (34) $ (0.03) $ (0.03)

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

(Concluded)

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U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

Common Share Capital Capital Surplus BALANCE AT JANUARY 1, 2016 $ 8,580,167 $ 225,410 Appropriation of 2015 earnings Legal reserve - - Cash dividends distributed by the Company - - Change from investments in associates and joint ventures accounted for using equity method - (29 ) Net loss for the year ended December 31, 2016 - - Other comprehensive income for the year ended December 31, 2016, net of income tax - - Total comprehensive income for the year ended December 31, 2016 - - Cancelation of treasury shares (129,610 ) (110,232 ) Dividends claimed after over five years by stockholders - (9) BALANCE AT DECEMBER 31, 2016 8,450,557 115,140 Appropriation of 2016 earnings Cash dividends distributed from legal reserve - - Reversal of special reserve - - Change from investments in associates and joint ventures accounted for using equity method - 2 Net profit for the year ended December 31, 2017 - - Other comprehensive income for the year ended December 31, 2017, net of income tax - - Total comprehensive income for the year ended December 31, 2017 - - Dividends claimed after over five years by stockholders - (7) BALANCE AT DECEMBER 31, 2017 $ 8,450,557 $ 115,135		Retained Earnings Unappropriated Legal Reserve Special Reserve Earnings $ 6,978,008 $ 337,186 $ 9,573,288 82,440 - (82,440 ) - - (845,056 ) - - (1,362 ) - - (878,354 ) - - (8,484) - - (886,838) - - (237,851 ) - - - 7,060,448 337,186 7,519,741 (633,792 ) - - - (337,186 ) 337,186 - - 9,484 - - 999,520 - - (17,115) - - 982,405 - - - $ 6,426,656 $ - $ 8,848,816			Other Equity		Total Treasury Shares $ 2,370,488 $ (477,693 ) - - - - - - - - (1,303,079) - (1,303,079) - - 477,693 - - 1,067,409 - - - - - - - - - (3,068,363) - (3,068,363) - - - $ (2,000,954) $ -	Total Equity $ 27,586,854 - (845,056 ) (1,391 ) (878,354 ) (1,311,563) (2,189,917) - (9) 24,550,481 (633,792 ) - 9,486 999,520 (3,085,478) (2,085,958) (7) $ 21,840,210
				Exchange Unrealized Gain Differences on (Loss) on Translating Available-for- Foreign sale Financial Operations Assets $ 1,905,051 $ 465,034 - - - - - - - - (904,708) (398,105) (904,708) (398,105) - - - - 1,000,343 66,929 - - - - - - - - (3,693,524) 625,165 (3,693,524) 625,165 - - $ (2,693,181) $ 692,094	Gain on Property Revaluation $ 453 - - - - (320) (320) - - 133 - - - - - - - $ 133	Cash Flow Hedges $ (50 ) - - - - 54 54 - - 4 - - - - (4) (4) - $ -

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

14

U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of U.S. Dollars, Note 6)

Common Share Capital Capital Surplus BALANCE AT JANUARY 1, 2016 $ 261,391 $ 6,867 Appropriation of 2015 earnings Legal reserve - - Cash dividends distributed by the Company - - Change from investments in associates and joint ventures accounted for using equity method - - Net loss for the year ended December 31, 2016 - - Other comprehensive income for the year ended December 31, 2016, net of income tax - - Total comprehensive income for the year ended December 31, 2016 - - Cancelation of treasury shares (4,019 ) (3,418 ) Dividends claimed after over five years by stockholders - - Changes in translation adjustments 4,661 121 BALANCE AT DECEMBER 31, 2016 262,033 3,570 Appropriation of 2016 earnings Cash dividends distributed from legal reserve - - Reversal of special reserve - - Change from investments in associates and joint ventures accounted for using equity method - - Net profit for the year ended December 31, 2017 - - Other comprehensive income for the year ended December 31, 2017, net of income tax - - Total comprehensive income for the year ended December 31, 2017 - - Dividends claimed after over five years by stockholders - - Changes in translation adjustments 21,924 299 BALANCE AT DECEMBER 31, 2017 $ 283,957 $ 3,869	Retained Earnings Unappropriated Legal Reserve Special Reserve Earnings $ 212,582 $ 10,272 $ 291,646 2,556 - (2,556 ) - - (26,203 ) - - (42 ) - - (27,236 ) - - (263) - - (27,499) - - (7,375 ) - - - 3,791 183 5,199 218,929 10,455 233,170 (21,297 ) - - - (11,330 ) 11,330 - - 319 - - 33,586 - - (575) - - 33,011 - - - 18,317 875 19,510 $ 215,949 $ - $ 297,340	Other Equity		Total Treasury Shares Total Equity $ 72,216 $ (14,552 ) $ 840,422 - - - - - (26,203 ) - - (42 ) - - (27,236 ) (40,406) - (40,669) (40,406) - (67,905) - 14,812 - - - - 1,288 (260) 14,983 33,098 - 761,255 - - (21,297 ) - - - - - 319 - - 33,586 (103,104) - (103,679) (103,104) - (70,093) - - - 2,769 - 63,694 $ (67,237) $ - $ 733,878
		Exchange Unrealized Gain Differences on (Loss) on Translating Available-for- Gain on Foreign sale Financial Property Operations Assets Revaluation $ 58,037 $ 14,167 $ 14 - - - - - - - - - - - - (28,054) (12,344) (10) (28,054) (12,344) (10) - - - - - - 1,036 252 - 31,019 2,075 4 - - - - - - - - - - - - (124,111) 21,007 - (124,111) 21,007 - - - - 2,595 174 - $ (90,497) $ 23,256 $ 4	Cash Flow Hedges $ (2 ) - - - - 2 2 - - - - - - - - - - - - $ -

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

15

U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income (loss) before income tax Adjustments for: Depreciation expenses Amortization expenses Recognition (reversal) of provision for doubtful accounts Net loss on financial assets and liabilities at fair value through profit or loss Finance costs Interest income Dividend income Share of the profit of associates and joint ventures Loss on disposal of property, plant and equipment, net (Gain) loss on disposal of investment, net Loss on disposal of associates and joint ventures Impairment loss recognized on available-for-sale financial assets Net gain on foreign currency exchange Other non-cash items Changes in operating assets and liabilities Financial assets held for trading 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 available-for-sale financial assets Proceeds on sale of available-for-sale financial assets Acquisition of associates Purchase of property, plant and equipment Proceeds from disposal of property, plant and equipment (Increase) decrease in refundable deposits Increase in financing provided - related parties Payment for intangible assets	2017 $ 811,414 2,301,321 41 4,742 103,900 548,379 (235,651) (263,480) (150,537) 106 (266,784) 1 8,643 (938,003) (24,631) 23,187 (166,954) 31,941 (160,497) 18,329 (67,707) 240,193 58,654 (58,937) 1,817,670 242,189 263,480 (537,086) (32,434) 1,753,819 (1,013,012) 2,869,980 (502) (366,851) - (11,356) (16,129) (920)	2016 $ (853,168) 2,249,488 - (1,191) 357,916 535,133 (248,866) (301,374) 49,377 215,258 24,161 - 24,673 (278,526) (26,113) 355,612 48,562 (16,337) 53,148 65,002 104,437 (121,760) (133,490) (89,712) 2,012,230 214,976 301,374 (538,293) (100,597) 1,889,690 (18,351) - (480,000) (208,475) 726,667 8,038 (75,496) - (Continued)

16

U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

Increase in other non-current assets Increase in prepayment for equipment Other dividends received Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds (repayments) of short-term borrowings Proceeds (repayments) from short-term bills payable Repayment of bond payables Proceeds from long-term borrowings Repayments of long-term borrowings Dividends paid to owners of the Company 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	2017 $ (22,827) (4,132,450) 809 (2,693,258) 1,585,000 241,000 (1,000,000) 8,527,244 (9,812,674) (633,799) (1,093,229) (979,500) (3,012,168) 13,540,718 $ 10,528,550	2016 $ - (1,689,932) - (1,737,549) (4,530,000) (37,500) (1,000,000) 11,849,200 (8,126,618) (845,065) (2,689,983) (297,312) (2,835,154) 16,375,872 $ 13,540,718

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

(Concluded)

17

U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of U.S. Dollars, Note 6)

CASH FLOWS FROM OPERATING ACTIVITIES Income (loss) before income tax Adjustments for: Depreciation expenses Amortization expenses Recognition (reversal) of provision for doubtful accounts Net loss on financial assets and liabilities at fair value through profit or loss Finance costs Interest income Dividend income Share of the profit of associates and joint ventures Loss on disposal of property, plant and equipment, net (Gain) loss on disposal of investment, net Impairment loss recognized on available-for-sale financial assets Net gain on foreign currency exchange Other non-cash items Changes in operating assets and liabilities Financial assets held for trading 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 available-for-sale financial assets Proceeds on sale of available-for-sale financial assets Acquisition of associates Purchase of property, plant and equipment Proceeds from disposal of property, plant and equipment (Increase) decrease in refundable deposits Increase in financing provided - related parties Payment for intangible assets Increase in other non-current assets	2017 $ 27,265 77,329 1 159 3,491 18,427 (7,918) (8,853) (5,058) 4 (8,965) 290 (31,519) (828) 779 (5,610) 1,073 (5,393) 616 (2,275) 8,071 1,971 (1,980) 61,077 8,138 8,853 (18,047) (1,090) 58,931 (34,039) 96,438 (17) (12,327) - (382) (542) (31) (767)	2016 $ (26,455) 69,752 - (37) 11,098 16,593 (7,717) (9,345) 1,531 6,675 749 765 (8,636) (810) 11,027 1,506 (507) 1,648 2,016 3,238 (3,776) (4,139) (2,782) 62,394 6,666 9,345 (16,691) (3,119) 58,595 (569) - (14,884) (6,464) 22,532 249 (2,341) - - (Continued)

18

U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of U.S. Dollars, Note 6)

Increase in prepayment for equipment Other dividends received Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds (repayments) of short-term borrowings Proceeds (repayments) from short-term bills payable Repayment of bond payables Proceeds from long-term borrowings Repayments of long-term borrowings Dividends paid to owners of the Company 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	2017 $ (138,859) 27 (90,499) 53,259 8,098 (33,602) 286,534 (329,727) (21,297) (36,735) 2,218 (66,085) 419,867 $ 353,782	2016 $ (52,401) - (53,878) (140,465) (1,163) (31,008) 367,416 (251,988) (26,203) (83,411) (323) (79,017) 498,884 $ 419,867

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

(Concluded)

19

U-MING MARINE TRANSPORT CORPORATION

INDIVIDUAL BALANCE SHEETS DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash Financial assets at fair value through profit or loss - current Available-for-sale financial assets - current Trade receivables from unrelated parties Trade receivables from related parties Other receivables Fuel inventory Other current assets Total current assets NON-CURRENT ASSETS Financial assets measured at cost - non-current Investments accounted for using equity method Property, plant and equipment Intangible assets Deferred tax assets Prepayment for equipment 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 from unrelated parties Other payables from related parties Current tax liabilities Current portion of long-term borrowings and bonds payable 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 Common share capital Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity TOTAL		2017	% - - 4 - - - - - 4 1 93 2 - - - - - 96 100 12 5 - - 1 21 - 2 - 41 15 1 - 16 57 17 - 13 - 17 30 (4) 43 100		2016
		Amount $ 17,660 - 1,626,942 22,618 40,200 39,032 25,284 61,876 1,833,612 344,296 47,155,049 933,858 879 34,465 5,159 48,542 22,827 48,545,075 $ 50,378,687 $ 5,985,000 2,598,642 110,559 34,902 358,923 10,726,224 103,518 835,000 20,132 20,772,900 7,444,288 178,726 142,563 7,765,577 28,538,477 8,450,557 115,135 6,426,656 - 8,848,816 15,275,472 (2,000,954) 21,840,210 $ 50,378,687			Amount % $ 20,190 - 177,265 - 1,493,193 3 11,016 - 41,500 - 78,207 - 15,622 - 85,619 - 1,922,612 3 344,296 1 52,499,295 94 978,474 2 - - 36,226 - 2,970 - 33,533 - - - 53,894,794 97 $ 55,817,406 100 $ 3,100,000 6 2,298,194 4 - - 45,888 - 330,737 1 12,494,906 22 103,518 - 2,992,704 5 23,900 - 21,389,847 38 9,304,281 17 401,639 1 171,158 - 9,877,078 18 31,266,925 56 8,450,557 15 115,140 - 7,060,448 13 337,186 1 7,519,741 13 14,917,375 27 1,067,409 2 24,550,481 44 $ 55,817,406 100

20

U-MING MARINE TRANSPORT CORPORATION

INDIVIDUAL STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

FREIGHT REVENUE FREIGHT 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 Gain on disposal of property, plant and equipment, net Gain (loss) on sale of investments, net Net gain on foreign currency exchange Other losses Valuation loss on financial instruments, net Total non-operating income and expenses PROFIT (LOSS) BEFORE INCOME TAX INCOME TAX EXPENSE (BENEFIT) NET PROFIT (LOSS) FOR THE YEAR		2017	% 100 89 11 23 (12) (41) 109 - 13 3 - (57) 108 (1) (33) 101 89 (25) 114		2016
		Amount $ 878,369 781,243 97,126 207,242 (110,116) (361,984) 960,445 378 117,068 22,560 - (499,003) 946,040 (9,196) (287,824) 888,484 778,368 (221,152) 999,520			Amount % $ 1,190,126 100 1,088,884 92 101,242 8 188,395 16 (87,153) (8) (351,264) (29) (604,153) (51) 292 - 139,956 12 34,063 3 978 - 299,477 25 123,193 10 (7,486) - ( 424,046) (36) (788,990) (66) (876,143) (74) 2,211 - (878,354) (74) (Continued)

21

U-MING MARINE TRANSPORT CORPORATION

INDIVIDUAL STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans 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 Unrealized loss on available-for-sale financial assets Share of the other comprehensive income of subsidiaries, associates and joint ventures using the equity method Other comprehensive income (loss) for the year, net of income tax TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE YEAR EARNINGS (LOSSES) PER SHARE Basic Diluted		2017	% (2) - (408) 15 44 (351) (237)		2016
		Amount $ (13,200) (3,915) (3,585,151) 133,749 383,039 (3,085,478) $ (2,085,958) $ 1.18 $ 1.18			Amount % $ (7,219) (1) (1,585) - (932,060) (78) (84,784) (7) (285,915) (24) (1,311,563) (110) $ (2,189,917) (184) $ (1.04) $ (1.04) (Concluded)

22

U-MING MARINE TRANSPORT CORPORATION INDIVIDUAL STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

Common Share Capital Capital Surplus BALANCE AT JANUARY 1, 2016 8,580,167 225,410 Appropriation of 2015 earnings Legal reserve - - Cash dividends distributed by the Company - - Change from investments in associates and joint ventures accounted for using equity method - (29 ) Net loss for the year ended December 31, 2016 - - Other comprehensive income for the year ended December 31, 2016, net of income tax - - Total comprehensive income for the year ended December 31, 2016 - - Cancelation of treasury shares (129,610 ) (110,232 ) Dividends claimed after over five years by stockholders - (9) BALANCE AT DECEMBER 31, 2016 8,450,557 115,140 Appropriation of 2016 earnings Cash dividends distributed from legal reserve - - Reversal of special reserve - - Change from investments in associates and joint ventures accounted for using equity method - 2 Net loss for the year ended December 31, 2017 - - Other comprehensive income for the year ended December 31, 2017, net of income tax - - Total comprehensive income for the year ended December 31, 2017 - - Dividends claimed after over five years by stockholders - (7) BALANCE AT DECEMBER 31, 2017 $ 8,450,557 $ 115,135		Retained Earnings Unappropriated Legal Reserve Special Reserve Earnings 6,978,008 337,186 9,573,288 82,440 - (82,440 ) - - (845,056 ) - - (1,362 ) - - (878,354 ) - - (8,484) - - (886,838) - - (237,851 ) - - - 7,060,448 337,186 7,519,741 (633,792) - - - (337,186) 337,186 - - 9,484 - - 999,520 - - (17,115) - - 982,405 - - - $ 6,426,656 $ - $ 8,848,816			Other Equity		Total Treasury Shares 2,370,488 (477,693 ) - - - - - - - - (1,303,079) - (1,303,079) - - 477,693 - - 1,067,409 - - - - - - - - - (3,068,363) - (3,068,363) - - - $ (2,000,954) $ -	Total Equity 27,586,854 - (845,056 ) (1,391 ) (878,354 ) (1,311,563) (2,189,917) - (9) 24,550,481 (633,792) - 9,486 999,520 (3,085,478) (2,085,958) (7) $ 21,840,210
				Exchange Unrealized Gain Differences on (Loss) on Translating Available-for- Foreign sale Financial Operations Assets 1,905,051 465,034 - - - - - - - - (904,708) (398,105) (904,708) (398,105) - - - - 1,000,343 66,929 - - - - - - - - (3,693,524) 625,165 (3,693,524) 625,165 - - $ (2,693,181) $ 692,094	Revaluation Increment 453 - - - - (320) (320) - - 133 - - - - - - - $ 133	Cash Flow Hedges (50 ) - - - - 54 54 - - 4 - - - - (4) (4) - $ -

23

U-MING MARINE TRANSPORT CORPORATION

INDIVIDUAL STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income (loss) before income tax Adjustments for: Depreciation expenses Amortization expenses Net loss on financial assets and liabilities at fair value through profit or loss Finance costs Interest income Dividend income Share of the profit or loss of subsidiaries, associates and joint ventures Gain on disposal of property, plant and equipment, net Unrealized gain on foreign currency exchange Changes in operating assets and liabilities Trade receivables Other receivables Fuel inventory Other current assets Trade payables Other payables Other current liabilities Net defined benefit liabilities Cash (used in) generated from operations Interest received Dividends received Interest paid Income tax paid Net cash used in operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of associates Purchase of property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in refundable deposits Payment for intangible assets Increase in other non-current assets Increase in prepayment for equipment Dividend received from subsidiaries Net cash generated from investing activities	2017 $ 778,368 115,875 41 287,824 361,984 (378) (117,068) (960,445) - (963,097) (10,302) 39,453 (9,662) 23,743 (10,986) 29,467 (3,768) (41,795) (480,746) 100 117,068 (357,046) - (720,624) - (68,053) - (15,009) (920) (22,827) (5,395) 3,108,150 2,995,946	2016 $ (876,143) 193,256 - 424,046 351,264 (292) (139,956) 604,153 (978) (247,220) 44,464 (23,758) 8,080 (365) 9,539 (30,669) (301) (62,575) 252,545 89 139,956 (354,869) (77,888) (40,167) (480,000) (59,894) 115,233 (8,600) - - (2,970) 3,325,751 2,889,520 (Continued)

24

U-MING MARINE TRANSPORT CORPORATION

INDIVIDUAL STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM FINANCING ACTIVITIES Proceeds (repayments) of short-term borrowings Proceeds from short-term bills payable Repayment of bond payables Proceeds from long-term borrowings Repayments of long-term borrowings Decrease in other payables from related parties Dividends paid Net cash used in financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET (DECREASE) 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	2017 $ 1,585,000 300,000 (1,000,000) 5,959,000 (7,684,000) (803,520) (633,799) (2,277,319) (533) (2,530) 20,190 $ 17,660	2016 $ (4,530,000) 50,000 (1,000,000) 10,750,000 (5,880,000) (1,386,750) (845,065) (2,841,815) (31) 7,507 12,683 $ 20,190

(Concluded)

25

Amendments Table of “Articles of Incorporation”

No.	After amendment	Before amendment	Remark
Article 16	The Company has 9~13 directors and 3 supervisors who are competent shareholders elected in the shareholders’ meeting. The total order shares of the Company held by all directors and supervisors are to be processed in accordance with the “Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies.” The number of directors referred to	The Company has 9~13 directors and 3 supervisors who are competent shareholders elected in the shareholders’ meeting. The total order shares of the Company held by all directors and supervisors are to be processed in accordance with the “Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies.” The number of directors referred to	In accordance with Article 14-4 of the Securities and Exchange Act and the official letter No. 10200531121 from Financial Supervisory Commission, R.O.C. (Taiwan), the Audit Committee should be established in lieu of the Supervisors after the seventeenth tenure of the current Directors and Supervisors ended next year, 2019. It is proposed to amend Article 16 of the Company Act. and to enact Article 16-1.
	above shall include at least three independent directors. Directors and supervisors are elected among the shareholders by nomination system in accordance with Article 192-1 of the Company Act. Votes casted for the election of independent directors, non-independent directors, and supervisors are counted and elected separately.	above shall include at least two independent directors that is not less than one fifth of the board of directors. Directors and supervisors are elected among the shareholders by nomination system in accordance with Article 192-1 of the Company Act. Votes casted for the election of independent directors, non-independent directors, and supervisors are counted and elected separately.
Article 16-1	Pursuant to Article 14-4 of the Securities and Exchange Act, the Company will establish an Audit Committee. The Audit Committee
	shall make up of the entire number
	of independent directors, and it is responsible of executing powers relegated to Supervisors by the Company Act, Securities and Exchange Act and other laws and regulations. The Supervisors will cease to function and be ipso facto
	dismissed on the date of instituting of the Audit Committee. The organizing members, exercise of powers and other matters to be abided by the Audit Committee shall follow related laws, regulations or rules or regulation of the Company. The
	organization regulations of the

26

	Audit Committee shall be adopted by the Board of Director.
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-sixth revision was in June 8th 2016. The forty-seventh revision was in June 6th 2018.	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-sixth revision was in June 8th 2016.

27