Stock Code: 2606

U-MING MARINE TRANSPORT CORP.

2017 Annual Shareholders Meeting Handbook

MEETING TIME: June 13, 2017 PLACE: Taipei Hero House, 20 Changsha Street, Sec. 1, Taipei, Taiwan

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

U-MING MARINE TRANSPORT CORP. 2017 Annual Meeting of Shareholders

Table of Contents I. Meeting Procedure ……………………………………………………… P1

II. Matters to Be Reported

1. 2016 Business Report ………………………………………………………….. P2

2. 2016 Financial Statements ………………………….………………………….. P6

3. Supervisor’s Review Report on the 2016 Financial Statements ………………. P23

III. Matters to Be Ratified

1. The 2016 Business Report and Financial Statements………………………….. P24

2. The Proposal for 2016 Deficit Compensation………………………………… P25

IV. Matters to Be Discussed

1. To approve the proposal for distribution by cash from legal reserve…………… P26

2. To approve the amendment to the company bylaws on “Procedures for the

Acquisition and Disposal of Assets” …………………………………………… P27

V. Extempore Motions P36

VI. Rules and Bylaws

1. Articles of Incorporation …………………………………………….………… P37

2. Rules of Procedure for Shareholders’ Meeting ...…..………………………….. P43

VII. Appendix

1. Current Shareholding of Directors and Supervisors …………………………... P46

2.

The Impact of Stock dividend Issuance on Business Performance, EPS, and Shareholder Return Rate ……………………………………………………..... P47

U-MING MARINE TRANSPORT CORP. Procedure for the 2017 Annual Meeting of Shareholders

Call the Meeting to Order

Chairman Takes Chair

Chairman Remarks (Management Presentation)

To Report

To Ratify

To Discuss

Extempore Motions

Meeting Adjourned

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Matters to Be Reported: 1. 2016 Business Report

The Baltic Dry Index (BDI) had fallen since the second half of 2010 and had entered its sixth year of falling trend. The average index of 673 points for 2016 was even the lowest in six years. Under the market condition of imbalance between supply and demand, numerous shipping companies, including operators of container ships and bulk carriers had suffered losses in the operating and financial aspects one after the other. The world's seventh largest and South Korea's largest container shipping company, Hanjin Shipping Co. Ltd. filed for bankruptcy protection in August of the same year, shocking the world. This indicated that under the situation of depression in international trade and the shipping market, business operators may face the risk of bankruptcy and delisting from the market.

The insane world political situation in 2016 also brought considerable shocks and uncertainties to the global economy. Firstly, the occurrence of frequent terrorist attacks, followed by the passing of referendum by the United Kingdom to leave the European Union in June and then the election of American President Donald Trump who pushes ‘America First’ policies and protectionism at the end of the year implied the emergence of a new trend of setting up restrictions against global trade and immigration by various countries. In view of the emergence of these doctrines which may undermine the original productivity, coupled with potential geopolitical conflict factors, the International Monetary Fund (IMF) estimated that the global economy still faces the risk of decline in the medium and long term. For the time being, the signs of recovery of the United States’ economy are obvious and the IMF forecasted that the growth rate for the American economy will reach 2% next year and may reach 3% in the future. The inevitable trend of interest rate increase in the United States is bound to affect the economic aspects of other countries and impact the trends of the various industries in the future. The IMF report has also given a positive boost of confidence as they have forecasted the world economic growth rate for 2017 and 2018 to be at 3.4% and 3.6% respectively. China's economic growth rate in 2016 was only at 6.7%, slightly lower than the 6.9% of the previous year and barely maintained within the acceptable range when compared with its official target of 6.5%. Nevertheless, China’s economy is expected to have a soft landing of slow growth. The “One Belt, One Road” program of China is foreseen to have positive economic effects. According to the statistics of the Ministry of Commerce of the People's Republic of China, as at the end of 2016, Chinese enterprises made non-financial direct investments amounting to a total of US$14.53 billion in 53 countries along the route of “One Belt, One Road”; mainly in such countries as Singapore, Indonesia, India, Thailand, Malaysia, etc. For foreign contracted projects, the Chinese state enterprises had signed new contracts amounting to US$126.03 billion in 61 countries along the route of “One Belt, One Road”, accounting for 51.6% of newly signed contracts for the same period and indicating an increase of 36% on a year-on-year basis. China's railway investment in fixed assets reached CNY801.5 billion in 2016 and continued investment is expected to remain at the same scale in 2017. The recent reforms in Indonesia and India were also conducive to the investment environment. Last August, Indonesia’s President implemented a tax rate amnesty, which added US$7.7 billion in revenue to the Indonesian government thereby injecting a boost to the huge infrastructure spending plan of Indonesia. At the same time, India’s Prime Minister Narendra Modi’s movement to abolish paper money was also aimed at expanding the national income of India and implementing digital payment. Although India's economic growth rate fell to 6.6% in 2016, the IMF is still very optimistic about its next two years’ forecast ie. returning to above 7% in 2017 and 2018.

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Driven by the national infrastructure construction, China's iron ore imports as a whole had exceeded 1 billion tons in 2016, indicating a growth of 7.5% when compared to the 0.953 billion tons for the previous year. Due to climate issues and its policies’ implementation, the global coal trade volume fell by 1% compared to the same period last year, indicating a negative growth for two consecutive years. Overall, according to the Clarksons research report, the total dry bulk growth rate will remain at a low 2% in 2016 and 2017. Since 2008, the most important factor affecting the bulk shipping market is the oversupply of vessels, resulting in long-term depressed freight rates in the market. The current dry bulk vessel capacity has reached 794 million tons, twice as much as in 2008. However, the dry bulk fleet growth has been decreasing year by year since 2013; slowing down from 10% or more to just 2% in the past two years; thus moving towards a healthier supply and demand equilibrium. According to the “Shipping Confidence Survey” report published by renowned international accounting and shipping advisory organization ‘Moore Stephens’, the overall shipping market confidence index at the end of 2016 rose 0.6 compared with the beginning of the year. After a one quarter per year survey, the index rose from 5.0 at the beginning of the year to an eventual index of 5.6, indicating that the overall shipping market sentiment is gradually warming up. During the past years, U-Ming has been steadily strengthening its inherent foundation in the depressed market through actively making strategic planning to reinvent itself. After the global financial crisis, the company rose to the challenges by adopting various reform initiatives like eco-friendly fleet renewals to improve fuel efficiency and protect the environment. As early as 2010, it had moved ahead of other shipping companies by ordering 8 Capsize eco-ships from Shanghai Waigaoqiao Shipbuilding Co., Ltd. (SWS) and 6 Panamax eco-ships and 4 Ultramax ships in succession from Japan’s Oshima Shipbuilding Co., Ltd., exhibiting its commitment to environment protection and fuel efficiency. Following the United Nation’s Paris Climate Change Conference held at the end of 2015, it is inevitable that harsher CO2 emission regulations would be imposed onto the shipping industry. U-Ming, through its early implementation of its “young and eco-fleet portfolio” strategy, has been in the forefront of increasing the company’s competiveness which was highly appreciated and favoured by its customers. The further introduction of the e-platform helps the company to build a more efficient management platform and to reduce costs while improving service quality at the same time. These initiatives reflect U-Ming’s innovative spirit to continuously paying attention to world trends and always being at the forefront of the industry. This affirms the company’s philosophy in building itself into a sustainable enterprise for all of its shareholders, clients and stakeholders. Business Performance In 2016, U-Ming reported a consolidated revenue of NT$6.517 billion, net loss after tax of -NT$878.354 million and negative earnings per share (EPS) of - NT$1.04. U-Ming will continue its fleet renewal and expansion plan. There was 1 Ultramax bulk carrier delivered in 2016. 3 Capesize bulk carriers, 2 Panamax bulk carriers and 1 cement ship were disposed-off in the same year. As of the end of 2016, U-Ming owned a total of 32 vessels. For the new building orders, 2 Capesize, 2 Ultramax and 3 Ultramax bulk carriers are expected to be added to the fleet between 2017 and 2019. The company will carry on its ‘smart and eco-friendly’ fleet policy at appropriate timings in the future. The joint venture company “Global Energy Maritime Co., Ltd.”, which U-Ming has set up with CPC Taiwan, is another avenue for the company to strengthen its fleet portfolio and leverage on other market sectors’ opportunities. At present, a very large crude carrier (VLCC) has been delivered to the joint venture company and 3 oil tankers will be added one after another in the near future. As of the end of 2016, U-Ming has a total of 37

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vessels (including joint venture ships) with Gross Dead Weight Tonnage of 4.38 million tons. Under the prudent leadership of our management and with sound financial and funding strategy, U-Ming is able to expand its fleet and at the same time continuously tracking down the industry’s development and await its next investment opportunities. Furthermore, the company is able to reduce operating costs effectively and to mitigate operational risks through sound risk management and optimal vessels’ planning and scheduling. While abiding by the World Convention on Environmental Ecology, U-Ming has also committed to building new green ships with energy saving and environment-friendly designs; and adopting sound ashore and on-board energy-efficient and carbon-reduction initiatives such as Ship Energy Efficiency Management Plan (SEEMP) and Environment Management System (EMS) to strive to become a green and responsible corporate citizen.

Business Strategy

Facing with a rapidly changing market environment, U-Ming has to keep abreast of information at all times and take a positive response strategy. Currently, the company is gradually improving the e-platform and fully grasping the various operational data with the aim of creating an effective and intelligent team. Furthermore, the newly enhanced information platform also allows more effective connectivity between ships and shore personnel with information being transmitted timely, thus it is able to monitor the vessels’ operations more closely and effectively to achieve higher efficiency and lowering the overall operating costs. At the same time, U-Ming is also planning to deploy frontline footholds for its business overseas and striving to have a faster grasp of the market trends and build an interactive bridge to foster close contact with its customers. Depending on the development of the freight market, the company will appropriately increase the proportion of long-term contracts through comprehensive strategic thinking, data analysis and flexible mode of operations to secure stable revenue thus reducing operating risks. The company will also carefully select reputable and financially-sound customers as its business partners and take advantage of favourable new building prices for its continuous fleet renewal program to ensure a young fleet portfolio in order to maintain its competitiveness and maximizing the shareholders’ value, thereby achieving a win-win situation. Maintaining a healthy financial system is an important foundation for sustainable operations. U-Ming takes full advantage of its diversified financing channels to keep its cost of capital under tight control and constantly monitors the foreign currency exchange rate and interest rate trends in order to manage these risks effectively. This excellent control ability has enabled U-Ming to create a sound business foundation which acts as a strong backing for elevating its enterprise scale.

U-Ming treasures its employees as a highly important asset of the company. Human resource trainings and upgrading for onshore and sea personnel are scheduled periodically. U-Ming Marine (Xiamen) International Ship Management Co., Ltd. was established to expand the scope of operations in China that includes crew recruitment and deployment, as well as ship management functions, striving to recruit more high-quality talents. Vessels are also another important asset of U-Ming. The company also abides by its operating philosophy to carry out regular vessels’ maintenance and provide proper working environment on-board to ensure crew safety; and to set up effective safety management systems to comply with the international maritime regulations and port state control inspections at the same time. In order to reduce the risk of occurrence of major maritime cases, the company also especially set up a full-time corresponding team of SDO (Safety Discipline Officers), which is responsible for vessel inspection and improvement of fleet safety and discipline with the aim of reducing human errors and ensuring that the crews have a safe and

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efficient operating environment. Feeling at ease while working, the crew can further provide the customers with better quality fleet services.

U-Ming spares no effort in protecting the marine ecological environment. It has developed a “Green Vision” for both ashore and on-board personnel, implementing various environmental protection policies such as innovative green-vessel designs and opting for slow steaming speed for vessels to reduce harmful gas emissions, thereby cultivating a green mindset throughout the organization to achieve sustainable growth.

U-Ming’s short-term goals are: 1. Continue with the fleet renewal plan; 2. Strengthen the operational strategies and business development of the various shipping

markets; 3. Introduce e-platform to enhance ship deployment plan & cost control and to improve the

efficiency of various departments; 4. Improve the Port State Control’s (PSC) inspection records and achieve a zero detention

rate; 5. Improve the overall maritime safety and discipline management, strengthen the fleet

navigation safety awareness and upgrade the fleet information management system; 6. Increase environmental awareness both on-board and ashore to demonstrate corporate

social responsibility for preserving the marine ecological environment. U-Ming’s long-term goals are: 1. Continue to plan and expand fuel-efficient fleet and to achieve a sustainable growth; 2. Diversify regional risks and seek for reliable business partners; 3. Master the opportunity for cross-field investment in different ship and logistics-related

transport operations; 4. Merge or acquire suitable enterprises with good synergy and asset standing; 5. Commit to good corporate social responsibility and to become a top corporate citizen.

Conclusion The road ahead in 2017 for the dry bulk shipping market is still uncertain of which the company is facing it with cautious optimism. U-Ming has always relied on its steady operations as its development foundation. The company will continue to seek positive changes and innovations; to enhance the quality of its professional team; and to introduce more intelligence business models to actively develop the market. It will continue to practise its philosophy for business development, namely “Sincerity, Diligence, Thrift, Prudence and Innovation” in order to create the maximum value for all stakeholders. Under the prudent leadership of our management and with a healthy financial position, we are confident that U-Ming will live up to the expectations of all our stakeholders and will continue to grow and prosper; striving towards the vision of “Based on Our Shipping Core Competency”, “To be a World-class Logistics and Transportation Company” and “To be the First Choice for our Customers, Employees and Investors”. We shall continue to be a good corporate citizen to fulfil its corporate social responsibility and be a role model for operational excellence.

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2. 2016 Financial Statements

Consolidated Balance Sheets in Y2016

Consolidated Statements of Comprehensive Income in Y2016

Consolidated Statements of Changes Equity in Y2016

Consolidated Statements of Cash Flows in Y2016

Individual Balance Sheets in Y2016

Individual Statements of Comprehensive Income in Y2016

Individual Statements of Changes in Equity in Y2016

Individual Statements of Cash Flows in Y2016

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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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, 2016 and 2015, 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, 2016 and 2015, 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, 2016. 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. Key audit matters for the Company’s consolidated financial statements for the year ended December 31, 2016 are stated as follows:

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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. Refer to Note 5 to the financial statements for disclosure on impairment assessment of transportation equipment. The main audit procedures we have performed in respect of the key audit matter stated above were as follows: 1. Understood and tested the design and implement of the key controls over the impairment assessment of

property, plant and equipment. 2. Obtained and understood the calculation table of impairment assessment of transportation equipment. 3. Assessed and consulted with internal our specialist 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 flow used in determining the recoverable amount in discount cash flow method.

4. Tested the calculation of impairment loss according to the table provided by the management. Income Tax Tax credit for the overseas subsidiary’s earnings, which was deemed after-tax, used in the income tax returns was applied by U-Ming Marine Transport Corporation. The grant of tax credit depended on the decision of tax authority in accordance with tax law in different jurisdictions. Due to the uncertainty involved in the final decision of the tax authority of which the result may cause significant impact on the amount of current tax and deferred tax recognized in financial statements, the recognition of the tax credit has been considered as a key audit matter. The main audit procedures we have performed in respect of the key audit matter stated above were as follows: 1. Obtained and understood the calculation, relevant accounting estimates, and income tax law applied. 2. Assessed the reasonableness of income tax related accounting estimates, including application of income

tax law, obtained the application certificates of income tax law issued by tax authorities and tracked the final assessment result of income tax returns of prior years.

3. Obtained the resource documents for calculating income tax, including the final assessments result of

income tax returns of prior years, tax certificates, financial reports, and earnings distribution document, and recalculated the amount of income tax.

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, 2016 and 2015 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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5. 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.

6. 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, 2016 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 6, 2017

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, 2016 AND 2015 (In Thousands of New Taiwan Dollars) 2016 2015 ASSETS Amount % Amount % CURRENT ASSETS

Cash and cash equivalents $ 13,540,718 23 $ 16,375,872 26 Financial assets at fair value through profit or loss - current 237,569 1 1,014,670 2 Available-for-sale financial assets - current 8,250,475 14 8,692,432 14 Trade receivables from unrelated parties 331,103 1 350,000 - Trade receivables from related parties 54,545 - 81,852 - Other receivables 171,096 - 120,869 - Fuel inventory 261,993 1 350,969 1 Other current assets 184,423 - 249,425 -

Total current assets 23,031,922 40 27,236,089 43

NON-CURRENT ASSETS

Available-for-sale financial assets - non-current 134 - 125 - Financial assets measured at cost - non-current 892,943 1 892,943 1 Investments accounted for using equity method 2,447,985 4 1,977,723 3 Property, plant and equipment 28,315,931 49 30,968,544 49 Deferred tax assets 36,226 - 107,525 - Prepayment for equipment 2,390,657 4 1,543,005 3 Refundable deposits 98,973 - 107,154 - Long-term receivable - related parties 894,230 2 884,448 1

Total non-current assets 35,077,079 60 36,481,467 57

TOTAL $ 58,109,001 100 $ 63,717,556 100 LIABILITIES AND EQUITY CURRENT LIABILITIES

Short-term borrowings $ 3,100,000 5 $ 7,130,000 11 Short-term bills payable 2,357,157 4 2,395,020 4 Financial liabilities at fair value through profit or loss - current 119,978 - 161,665 - Trade payables 199,243 1 94,806 - Other payables 661,745 1 786,544 1 Current tax liabilities 103,920 - 181,542 1 Current portion of long-term borrowings and bonds payable 5,132,241 9 4,581,707 7 Other current liabilities 153,307 - 286,797 1

Total current liabilities 11,827,591 20 15,618,081 25

NON-CURRENT LIABILITIES

Bonds payable - - 992,420 2 Bank loans 20,839,714 36 18,447,976 29 Deferred tax liabilities 401,639 1 470,727 1 Deferred revenue - non-current 231,413 - 262,107 - Net defined benefit liabilities - non-current 258,163 1 339,391 -

Total non-current liabilities 21,730,929 38 20,512,621 32

Total liabilities 33,558,520 58 36,130,702 57

EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY

Common share capital 8,450,557 14 8,580,167 13 Capital surplus 115,140 - 225,410 - Retained earnings

Legal reserve 7,060,448 12 6,978,008 11 Special reserve 337,186 1 337,186 1 Unappropriated earnings 7,519,741 13 9,573,288 15

Total retained earnings 14,917,375 26 16,888,482 27 Other equity 1,067,409 2 2,370,488 4 Treasury shares - - (477,693) (1)

Total equity 24,550,481 42 27,586,854 43

TOTAL $ 58,109,001 100 $ 63,717,556 100 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, 2016 AND 2015 (In Thousands of New Taiwan Dollars, Except Earnings Per Share) 2016 2015 Amount % Amount % OPERATING REVENUE

Freight revenue $ 6,391,062 98 $ 7,733,341 98 Other operating revenue 126,335 2 190,747 2

Total operating revenue 6,517,397 100 7,924,088 100

OPERATING COSTS

Freight cost 6,716,524 103 7,544,723 95 GROSS PROFIT (LOSS) (199,127) (3) 379,365 5 OPERATING EXPENSES 267,862 4 314,266 4 PROFIT (LOSS) FROM OPERATIONS (466,989) (7) 65,099 1 NON-OPERATING INCOME AND EXPENSES

Financial costs (535,133) (8) (461,525) (6) Interest income 248,866 4 294,851 4 Dividend income 150,878 2 296,684 4 Other income 25,209 - 107,932 1 Gain (loss) on disposal of property, plant and

equipment, net (215,258) (3) 192,882 3 Gain on sale of investments, net 257,322 4 967,332 12 Net gain (loss) on foreign currency exchange 121,243 2 (453,926) (6) Other losses (7,340) - (5,185) - Valuation loss on financial instruments, net (357,916) (6) (318,693) (4) Impairment loss (24,673) - (62,386) (1) Share of the profit or loss of associates and joint

ventures (49,377) (1) 102,246 1

Total non-operating income and expenses (386,179) (6) 660,212 8 PROFIT (LOSS) BEFORE INCOME TAX (853,168) (13) 725,311 9 INCOME TAX EXPENSE (BENEFIT) 25,186 1 (99,086) (1) NET PROFIT (LOSS) FOR THE YEAR (878,354) (14) 824,397 10

(Continued)

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U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars, Except Earnings Per Share) 2016 2015 Amount % Amount % OTHER COMPREHENSIVE INCOME (LOSS)

Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans $ (8,484) - $ 4,672 -

Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign

operations (931,291) (14) 1,873,370 24 Unrealized loss on available-for-sale financial

assets (364,282) (6) (975,537) (12) Share of the other comprehensive loss of

associates using the equity method (7,506) - (61,108) (1)

Other comprehensive income (loss) for the year, net of income tax (1,311,563) (20) 841,397 11

TOTAL COMPREHENSIVE INCOME (LOSS) FOR

THE YEAR $ (2,189,917) (34) $ 1,665,794 21 NET PROFIT (LOSS) ATTRIBUTABLE TO:

Owners of the Company $ (878,354) (13) $ 824,397 10 TOTAL COMPREHENSIVE INCOME (LOSS)

ATTRIBUTABLE TO: Owners of the Company $ (2,189,917) (34) $ 1,665,794 21

EARNINGS (LOSSES) PER SHARE

Basic $ (1.04) $ 0.96 Diluted $ (1.04) $ 0.96

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 CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars)

Other Equity Exchange Unrealized Gain Differences on (Loss) on Retained Earnings Translating Available-for- Common Share Unappropriated Foreign sale Financial Revaluation Cash Flow Capital Capital Surplus Legal Reserve Special Reserve Earnings Operations Assets Increment Hedges Total Treasury Shares Total Equity BALANCE AT JANUARY 1, 2015 $ 8,580,167 $ 225,368 $ 6,769,696 $ 1,195,583 $ 9,981,770 $ 31,558 $ 1,446,353 $ 55,852 $ - $ 1,533,763 $ - $ 28,286,347 Appropriation of 2014 earnings

Legal reserve - - 208,312 - (208,312 ) - - - - - - - Special reserve - - - (858,397 ) 858,397 - - - - - - - Cash dividends distributed by the Company - - - - (1,887,636 ) - - - - - - (1,887,636 )

Change from investments in associates and joint ventures accounted for

using equity method - 44 - - - - - - - - - 44 Net profit for the year ended December 31, 2015 - - - - 824,397 - - - - - - 824,397 Other comprehensive income for the year ended December 31, 2015, net

of income tax - - - - 4,672 1,873,493 (981,319 ) (55,399 ) (50 ) 836,725 - 841,397 Total comprehensive income for the year ended December 31, 2015 - - - - 829,069 1,873,493 (981,319 ) (55,399 ) (50 ) 836,725 - 1,665,794 Buy-back of ordinary shares - - - - - - - - - - (477,693 ) (477,693 ) Dividends claimed after over five years by stockholders - (2 ) - - - - - - - - - (2 ) BALANCE AT DECEMBER 31, 2015 8,580,167 225,410 6,978,008 337,186 9,573,288 1,905,051 465,034 453 (50 ) 2,370,488 (477,693 ) 27,586,854 Appropriation of 2015 earnings

Legal reserve - - 82,440 - (82,440 ) - - - - - - - Cash dividends distributed by the Company - - - - (845,056 ) - - - - - - (845,056 )

Change from investments in associates and joint ventures accounted for

using equity method - (29 ) - - (1,362 ) - - - - - - (1,391 ) Net loss for the year ended December 31, 2016 - - - - (878,354 ) - - - - - - (878,354 ) Other comprehensive income for the year ended December 31, 2016, net

of income tax - - - - (8,484 ) (904,708 ) (398,105 ) (320 ) 54 (1,303,079 ) - (1,311,563 ) Total comprehensive income for the year ended December 31, 2016 - - - - (886,838 ) (904,708 ) (398,105 ) (320 ) 54 (1,303,079 ) - (2,189,917 ) Cancelation of treasury shares (129,610 ) (110,232 ) - - (237,851 ) - - - - - 477,693 - Dividends claimed after over five years by stockholders - (9 ) - - - - - - - - - (9 ) BALANCE AT DECEMBER 31, 2016 $ 8,450,557 $ 115,140 $ 7,060,448 $ 337,186 $ 7,519,741 $ 1,000,343 $ 66,929 $ 133 $ 4 $ 1,067,409 $ - $ 24,550,481 The accompanying notes are an integral part of the consolidated financial statements.

14

U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars) 2016 2015 CASH FLOWS FROM OPERATING ACTIVITIES

Income (loss) before income tax $ (853,168) $ 725,311Adjustments for:

Depreciation expenses 2,249,488 2,278,587Finance costs 535,133 461,525Dividend income (301,374) (498,757)Unrealized (gain) loss on foreign currency exchange (276,251) 509,935Interest income (248,866) (294,851)Loss (gain) on disposal of property, plant and equipment, net 215,258 (192,882)Net loss (gain) on financial assets and liabilities at fair value through

profit or loss 100,594 (381,334)Share of the profit of associates and joint ventures 49,377 (102,246)Other non-cash items (26,113) (122,282)Impairment loss recognized on available-for-sale financial assets 24,673 46,042Recognition (reversal) of provision for doubtful accounts (1,191) 9,383Impairment loss recognized on transportation equipment - 16,343Gain on disposal of investment, net - (267,305)

Changes in operating assets and liabilities Financial assets held for trading 676,507 695,852Trade receivables 48,562 157,146Other receivables (16,337) (15,198)Fuel inventory 53,148 51,468Other current assets 66,121 (6,035)Financial liabilities held for trading (41,687) 137,469Trade payables 104,437 (41,213)Other payables (121,760) (83,807)Other current liabilities (133,490) 154,988Net defined benefit liabilities (89,712) (33,333)

Cash generated from operations 2,013,349 3,204,806Interest received 214,976 381,218Dividends received 301,374 498,757Interest paid (539,007) (440,581)Income tax paid (100,597) (279,051)

Net cash generated from operating activities 1,890,095 3,365,149

CASH FLOWS FROM INVESTING ACTIVITIES

Increase in prepayment for equipment (1,689,932) (4,719,574)Proceeds from disposal of property, plant and equipment 726,667 314,708Acquisition of associates (480,000) (760,000)Purchase of property, plant and equipment (208,475) (1,683,251)Increase in financing provided - related parties (75,496) (59,352)Purchase of available-for-sale financial assets (18,351) (2,942,876)

(Continued)

15

U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars) 2016 2015

Decrease in refundable deposits $ 8,038 $ 15,696Proceeds on sale of available-for-sale financial assets - 3,074,266

Net cash used in investing activities (1,737,549) (6,760,383)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from long-term borrowings 11,849,158 8,708,213Repayments of long-term borrowings (8,126,618) (4,980,736)Repayments of short-term borrowings (4,530,000) (450,000)Repayment of bond payables (1,000,000) -Dividends paid to owners of the Company (845,065) (1,887,638)(Repayments) proceeds from short-term bills payable (37,863) 63,020Decrease in obligation under capital lease - (753,610)Payments for buy-back ordinary shares - (477,693)

Net cash (used in) generated from financing activities (2,690,388) 221,556

EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE

OF CASH HELD IN FOREIGN CURRENCIES (297,312) 495,408 NET DECREASE IN CASH AND CASH EQUIVALENTS (2,835,154) (2,678,270) CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE

YEAR 16,375,872 19,054,142 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR $ 13,540,718 $ 16,375,872 The accompanying notes are an integral part of the consolidated financial statements. (Concluded)

16

U-MING MARINE TRANSPORT CORPORATION INDIVIDUAL BALANCE SHEETS DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars) 2016 2015 ASSETS Amount % Amount % CURRENT ASSETS

Cash $ 20,190 - $ 12,683 - Financial assets at fair value through profit or loss - current 177,265 - 601,310 1 Available-for-sale financial assets - current 1,493,193 3 1,577,977 3 Trade receivables from unrelated parties 11,016 - 14,822 - Trade receivables from related parties 41,500 - 82,158 - Other receivables 78,207 - 54,246 - Fuel inventory 15,622 - 30,890 - Other current assets 85,619 - 85,255 -

Total current assets 1,922,612 3 2,459,341 4

NON-CURRENT ASSETS

Financial assets measured at cost - non-current 344,296 1 344,296 1 Investments accounted for using equity method 52,499,295 94 57,170,150 93 Property, plant and equipment 978,474 2 1,219,423 2 Deferred tax assets 36,226 - 107,525 - Prepayment for equipment 2,970 - - - Refundable deposits 33,533 - 24,933 -

Total non-current assets 53,894,794 97 58,866,327 96

TOTAL $ 55,817,406 100 $ 61,325,668 100 LIABILITIES AND EQUITY CURRENT LIABILITIES

Short-term borrowings $ 3,100,000 6 $ 7,130,000 12 Short-term bills payable 2,298,194 4 2,248,617 4 Trade payables 45,888 - 36,349 - Other payables from unrelated parties 330,737 1 370,844 1 Other payables from related parties 12,494,906 22 14,122,893 23 Current tax liabilities 103,518 - 181,406 - Current portion of long-term borrowings and bonds payable 2,992,704 5 2,574,736 4 Other current liabilities 23,900 - 24,201 -

Total current liabilities 21,389,847 38 26,689,046 44

NON-CURRENT LIABILITIES

Bonds payable - - 992,420 1 Bank loans 9,304,281 17 5,359,587 9 Deferred tax liabilities 401,639 1 470,727 1 Deferred revenue - non-current - - 520 - Net defined benefit liabilities - non-current 171,158 - 226,514 -

Total non-current liabilities 9,877,078 18 7,049,768 11

Total liabilities 31,266,925 56 33,738,814 55

EQUITY

Common share capital 8,450,557 15 8,580,167 14 Capital surplus 115,140 - 225,410 - Retained earnings

Legal reserve 7,060,448 13 6,978,008 11 Special reserve 337,186 1 337,186 1 Unappropriated earnings 7,519,741 13 9,573,288 16

Total retained earnings 14,917,375 27 16,888,482 28 Other equity 1,067,409 2 2,370,488 4 Treasury shares - - (477,693) (1)

Total equity 24,550,481 44 27,586,854 45

TOTAL $ 55,817,406 100 $ 61,325,668 100

17

U-MING MARINE TRANSPORT CORPORATION INDIVIDUAL STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars, Except Earnings Per Share) 2016 2015 Amount % Amount % FREIGHT REVENUE $ 1,190,126 100 $ 1,387,973 100 FREIGHT COSTS 1,088,884 92 1,252,806 91 GROSS PROFIT 101,242 8 135,167 9 OPERATING EXPENSES 188,395 16 208,342 15 LOSS FROM OPERATIONS (87,153) (8) (73,175) (6) NON-OPERATING INCOME AND EXPENSES

Financial costs (351,264) (29) (315,932) (23) Share of the profit or loss of subsidiaries, associates and joint ventures (604,153) (51) 639,243 46 Interest income 292 - 300 - Dividend income 139,956 12 284,165 21 Other income 34,063 3 29,953 2 Gain on disposal of property, plant and equipment,

net 978 - 357 - Gain on sale of investments, net 299,477 25 750,008 54 Net gain (loss) on foreign currency exchange 123,193 10 (484,590) (35) Other losses (7,486) - (2,155) - Valuation loss on financial instruments, net ( 424,046) (36) (127,821) (9)

Total non-operating income and expenses (788,990) (66) 773,528 56

PROFIT (LOSS) BEFORE INCOME TAX (876,143) (74) 700,353 50 INCOME TAX EXPENSE (BENEFIT) 2,211 - (124,044) (9) NET PROFIT (LOSS) FOR THE YEAR (878,354) (74) 824,397 59

(Continued)

18

U-MING MARINE TRANSPORT CORPORATION INDIVIDUAL STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars, Except Earnings Per Share) 2016 2015 Amount % Amount % OTHER COMPREHENSIVE INCOME (LOSS)

Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans $ (7,219) (1) $ (5,814) - Share of the other comprehensive income of

subsidiaries, associates and joint ventures using the equity method (1,265) - 10,486 1

Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign

operations (932,060) (78) 1,873,370 135 Unrealized loss on available-for-sale financial

assets (84,784) (7) (192,775) (14) Share of the other comprehensive income of

subsidiaries, associates and joint ventures using the equity method (286,235) (24) (843,870) (61)

Other comprehensive income (loss) for the year,

net of income tax (1,311,563) (110) 841,397 61 TOTAL COMPREHENSIVE INCOME (LOSS) FOR

THE YEAR $ (2,189,917) (184) $ 1,665,794 120 EARNINGS (LOSSES) PER SHARE

Basic $ (1.04) $ 0.96 Diluted $ (1.04) $ 0.96

(Concluded)

19

U-MING MARINE TRANSPORT CORPORATION INDIVIDUAL STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars) Other Equity Exchange Unrealized Gain Differences on (Loss) on Retained Earnings Translating Available-for- Common Share Unappropriated Foreign sale Financial Revaluation Cash Flow Capital Capital Surplus Legal Reserve Special Reserve Earnings Operations Assets Increment Hedges Total Treasury Shares Total Equity BALANCE AT JANUARY 1, 2015 $ 8,580,167 $ 225,368 $ 6,769,696 $ 1,195,583 $ 9,981,770 $ 31,558 $ 1,446,353 $ 55,852 $ - $ 1,533,763 $ - $ 28,286,347 Appropriation of 2014 earnings

Legal reserve - - 208,312 - (208,312 ) - - - - - - - Special reserve - - - (858,397 ) 858,397 - - - - - - - Cash dividends distributed by the Company - - - - (1,887,636 ) - - - - - - (1,887,636 )

Change from investments in associates and joint ventures accounted for

using equity method - 44 - - - - - - - - - 44 Net profit for the year ended December 31, 2015 - - - - 824,397 - - - - - - 824,397 Other comprehensive income for the year ended December 31, 2015, net

of income tax - - - - 4,672 1,873,493 (981,319 ) (55,399 ) (50 ) 836,725 - 841,397 Total comprehensive income for the year ended December 31, 2015 - - - - 829,069 1,873,493 (981,319 ) (55,399 ) (50 ) 836,725 - 1,665,794 Buy-back of ordinary shares - - - - - - - - - - (477,693 ) (477,693 ) Dividends claimed after over five years by stockholders - (2 ) - - - - - - - - - (2 ) BALANCE AT DECEMBER 31, 2015 8,580,167 225,410 6,978,008 337,186 9,573,288 1,905,051 465,034 453 (50 ) 2,370,488 (477,693 ) 27,586,854 Appropriation of 2015 earnings

Legal reserve - - 82,440 - (82,440 ) - - - - - - - Cash dividends distributed by the Company - - - - (845,056 ) - - - - - - (845,056 )

Change from investments in associates and joint ventures accounted for

using equity method - (29 ) - - (1,362 ) - - - - - - (1,391 ) Net loss for the year ended December 31, 2016 - - - - (878,354 ) - - - - - - (878,354 ) Other comprehensive income for the year ended December 31, 2016, net

of income tax - - - - (8,484 ) (904,708 ) (398,105 ) (320 ) 54 (1,303,079 ) - (1,311,563 ) Total comprehensive income for the year ended December 31, 2016 - - - - (886,838 ) (904,708 ) (398,105 ) (320 ) 54 (1,303,079 ) - (2,189,917 ) Cancelation of treasury shares (129,610 ) (110,232 ) - - (237,851 ) - - - - - 477,693 - Dividends claimed after over five years by stockholders - (9 ) - - - - - - - - - (9 ) BALANCE AT DECEMBER 31, 2016 $ 8,450,557 $ 115,140 $ 7,060,448 $ 337,186 $ 7,519,741 $ 1,000,343 $ 66,929 $ 133 $ 4 $ 1,067,409 $ - $ 24,550,481

20

U-MING MARINE TRANSPORT CORPORATION INDIVIDUAL STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars) 2016 2015 CASH FLOWS FROM OPERATING ACTIVITIES

Income (loss) before income tax $ (876,143) $ 700,353 Adjustments for:

Share of the profit or loss of subsidiaries, associates and joint ventures 604,153 (639,243)

Finance costs 351,264 315,932 Unrealized (gain) loss on foreign currency exchange (247,219) 540,354 Depreciation expenses 193,256 215,609 Dividend income (139,956) (284,165) Net loss (gain) on financial assets and liabilities at fair value through

profit or loss 124,569 (622,187) Loss (gain) on disposal of property, plant and equipment, net (978) (357) Interest income (292) (300)

Changes in operating assets and liabilities Financial assets held for trading 299,476 750,008 Trade receivables 44,464 18,000 Other receivables (23,758) (24,951) Fuel inventory 8,080 19,925 Other current assets 100 (22,451) Trade payables 9,539 (1,976) Other payables (30,669) (74,109) Other current liabilities (301) 5,512 Net defined benefit liabilities (62,575) (28,946)

Cash generated from operations 253,010 867,008 Interest received 89 584 Dividends received 139,956 284,165 Interest paid (354,869) (293,533) Income tax paid (77,888) (254,028)

Net cash generated from operating activities (39,702) 604,196

CASH FLOWS FROM INVESTING ACTIVITIES

Dividend received from subsidiaries 3,325,751 2,672,896 Acquisition of associates (480,000) (760,000) Proceeds from disposal of property, plant and equipment 115,233 - Purchase of property, plant and equipment (59,894) (100,945) Decrease (increase) in refundable deposits (8,600) 8,751 Increase in prepayment for equipment (2,970) -

Net cash used in investing activities 2,889,520 1,820,702

(Continued)

21

U-MING MARINE TRANSPORT CORPORATION INDIVIDUAL STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 (In Thousands of New Taiwan Dollars) 2016 2015 CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from long-term borrowings $ 10,749,958 $ 4,880,000 Repayments of long-term borrowings (5,880,000) (3,619,965) Repayments of short-term borrowings (4,530,000) (450,000) Decrease in other payables from related parties (1,386,750) (984,750) Repayment of bond payables (1,000,000) - Dividends paid (845,065) (1,887,638) Proceeds from short-term bills payable 49,577 109,531 Payments for buy-back ordinary shares - (477,693)

Net cash (used in) generated from financing activities (2,842,280) (2,430,515)

EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE

OF CASH HELD IN FOREIGN CURRENCIES (31) 146 NET DECREASE IN CASH AND CASH EQUIVALENTS 7,507 (5,471) CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE

YEAR 12,683 18,154 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR $ 20,190 $ 12,683 (Concluded)

22

3. Supervisor’s Review Report on the 2016 Financial Statements

The Board of Directors have prepared and submitted to us the Company's 2016 Business Reports, the Financial Statements, and the Proposal for 2016 Deficit Compensation with approval and the Financial Statements have also been audited by the CPAs Li-Wen Kuo and Ching-Pin Shih 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 2017 Shareholders’ Meeting of U-Ming Marine Transport Corp. Supervisors﹕

Ruey-Huey Shao Tzu-Pong Chang Shu-Ping Hsu

23

Matters to Be Ratified: 1. The 2016 Business Report and Financial Statements

Explanation:

(1) The supervisor’s review report is hereby issued after reviewing the 2016 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 Page 2~22) without any nonconformity identified.

(2) Please approve.

Resolution:

24

2. The Proposal for 2016 Deficit Compensation

Explanation:

(1) Please refer to the 2016 Deficit Compensation proposed in accordance with Article 25 of the Company’s Articles of Incorporation as follows:

NT$ Unappropriated retained earnings of previous year 8,645,793,038 Less: Investment adjusted retained earnings by

using equity method (1,361,953) Less: 2016 actuarial gain & losses appropriated

retained earnings (8,484,726) Less: Retired treasury stock debit to retained

earnings (237,851,824) Adjusted unappropriated retained earnings 8,398,094,535

Less: 2016 net losses (878,353,346) Add: reversal of special reserve by

self-appropriated 337,185,643 Unappropriated retained earnings after offsetting deficits 7,856,926,832

(2) Please approve.

Resolution:

25

Matters to Be Discussed 1. To approve the proposal for distribution by cash from legal reserve.

Explanation:

(1) In accordance with article 241 of the Company Act, “Where a company incurs no loss, it may, pursuant to a resolution to be adopted by a shareholders' meeting as required in the preceding Article, distribute its legal reserve and the following capital reserve, in whole or in part, by issuing new shares which shall be distributable as dividend shares to its original shareholders in proportion to the number of shares being held by each of them or by cash; where legal reserve is distributed by issuing new shares or by cash, only the portion of legal reserve which exceeds 25 percent of the paid-in capital may be distributed.”

(2) It is proposed to distribute legal reserve, NT$633,791,784, by cash, which is NT$0.75 per share.

(3) Upon the approval of the annual meeting of shareholders, it is proposed that the Board be authorized to resolve to adjust the amount per share based on the actual shares outstanding number on the dividend date for the legal reserve distribution by cash if there is an amendment of the number of shares outstanding before the date. 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 2017 annual shareholders’ meeting.

(4) The legal reserve distribution will be distributed from the reserve during 1998 to 2009, and then from the reserve after 2010 if insufficient.

Resolution:

26

2. To approve the amendment to the company bylaws on “Procedures for the Acquisition and Disposal of Assets”

Explanation:

(1) According to official letter No. 1060001296 from Financial Supervisory Commission R.O.C.(Taiwan), it is proposed to amend the Company’s “Procedures for the acquisition and disposal of assets”.

(2) The proposal is hereby presented for referendum.

Resolutions:

27

Amendments Table of “Procedures for the Acquisition and Disposal of Assets”

No. After amendment Before amendment Remark

Article 7 Appraisal reports for real property or facilities 2. Unless real property or

facilities are acquired or disposed of through transactions with a government agency, commissioned construction on owned or rented land, or acquisition and disposal of operating facilities, appraisal reports shall be issued by professional appraisers before the occurrence date for transaction values exceeding 20% of the total paid-in capital or NT$ 300 million (a detailed list of required items for appraisal reports is provided in Appendix 1). The following regulations shall be observed: (Omitted)

Appraisal reports for real property or facilities

2. Unless real property or facilities are acquired or disposed of through transactions with government agencies, commissioned construction on owned or rented land, or acquisition and disposal of operating facilities, appraisal reports shall be issued by professional appraisers before the occurrence date for transaction values exceeding 20% of the total paid-in capital or NT$ 300 million (a detailed list of required items for appraisal reports is provided in Appendix 1). The following regulations shall be observed: (Omitted)

It is wording revision in Chinese in accordance with Article 9 of the “Regulations Governing the Acquisition and Disposal of Assets by Public Companies.”

Article 8 Procedures governing transactions by related parties

2. Appraisal and operating procedures If transaction amounts for assets other than real property acquired or disposed of from or to related parties exceed 20% of the total paid-in capital of the Corporation, 10% of the total asset value, or NT$ 300 million, the following data shall be submitted to the board of directors for approval and the supervisors for confirmation before transaction contracts may be signed or payments made. These regulations shall not apply to the trading of government bonds, bonds under repurchase or resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust

Procedures governing transactions by related parties

2. Appraisal and operating procedures If transaction amounts for assets other than real property acquired or disposed of from or to related parties exceed 20% of the total paid-in capital of the Corporation, 10% of the total asset value, or NT$ 300 million, the following data shall be submitted to the board of directors for approval and the supervisors for confirmation before transaction contracts may be signed or payments made. These regulations shall not apply to the trading of government bonds, bonds under repurchase or resale agreements, or subscription or redemption of domestic money market funds:

In accordance with Article 14 of the “Regulations Governing the Acquisition and Disposal of Assets by Public Companies,” it is amended of Article 8, Section 2. The domestic money market funds is refer to The securities investment trust funds that is in accordance with the “Securities Investment Trust and Consulting Act” and approved by Financial Supervisory Commission.

28

enterprises, Article 9 Procedures governing the

acquisition or disposal of memberships or intangible assets

2. Expert appraisal reports and opinions for memberships or intangible assets (a) (Omitted) (b) Unless memberships or

intangible assets are acquired or disposed of through transactions with a government agency, accountants shall be hired to render opinions regarding the reasonableness of transaction prices in accordance with the provisions prescribed in Statement on Auditing Standards No. 20 issued by the Accounting Research and Development Foundation before the occurrence date for transaction values exceeding 20% of the total paid-in capital or NT$ 300 million.

(c) (Omitted)

Procedures governing the acquisition or disposal of memberships or intangible assets

2. Expert appraisal reports and opinions for memberships or intangible assets (a) (Omitted) (b) Unless memberships or

intangible assets are acquired or disposed of through transactions with government agencies, accountants shall be hired to render opinions regarding the reasonableness of transaction prices in accordance with the provisions prescribed in Statement on Auditing Standards No. 20 issued by the Accounting Research and Development Foundation before the occurrence date for transaction values exceeding 20% of the total paid-in capital or NT$ 300 million.

(c) (Omitted)

It is wording revision in Chinese in accordance with Article 11 of the “Regulations Governing the Acquisition and Disposal of Assets by Public Companies.”

Article 10 Transaction principles and strategies 1. Transaction types

(a) (Omitted) (b) (Omitted) (c) Division of authority

1. Signing of transaction contracts and relevant documents: Chairman or other designated persons representing the Corporation.

2. Execution of transactions and assessment of profits and losses: (1) (Omitted) (2) (Omitted) (3) (Omitted) (4) Profit and loss

assessments are carried out by

Transaction principles and strategies 1. Transaction types

(a) (Omitted) (b) (Omitted) (c) Division of authority

1. Signing of transaction contracts and relevant documents: Chairman or other designated persons representing the Corporation.

2. Execution of transactions and assessment of profits and losses: (1) (Omitted) (2) (Omitted) (3) (Omitted) (4) Profit and loss

assessments are carried out by

According to the authority’s opinion, internal auditing department shall check the suitability of internal control of financial derivatives trading regularly. It is not allowed that the board to authorize auditing department executives to manage and supervise the financial derivatives trading. That is, to

29

dedicated personnel of relevant departments and assessment reports are submitted to Chairman or his assigned proxy.

2. Risk management measures: (a) (Omitted) (b) (Omitted) (c) (Omitted) (d) (Omitted) (e) (Omitted) (f) (Omitted) (g) (Omitted) (h) (Omitted) (i) Positions held in

derivative trading shall be evaluated at least once a week, while hedge trading required for business operations shall be evaluated at least twice a month. Evaluation reports shall be forwarded to Chairman or his assigned proxy.

3. Internal audit system (Omitted)

4. Methods for regular assessments and handling of irregularities (a) Chairman or his assigned

proxy to closely monitor the supervision and control of risks pertaining to derivative trading.

(b) Chairman or his assigned proxy to evaluate the performance in the field of derivative trading on a regular basis to determine conformance with adopted business strategies and ascertain whether or not incurred risks fall within the tolerance range set by the Corporation.

(c) Chairman or his assigned proxy shall evaluate the

dedicated personnel of relevant departments and assessment reports are submitted to Auditing Department executives.

2. Risk management measures: (a) (Omitted) (b) (Omitted) (c) (Omitted) (d) (Omitted) (e) (Omitted) (f) (Omitted) (g) (Omitted) (h) (Omitted) (i) Positions held in

derivative trading shall be evaluated at least once a week, while hedge trading required for business operations shall be evaluated at least twice a month. Evaluation reports shall be forwarded to top-level executives authorized by the board of directors

3. Internal audit system (Omitted)

4. Methods for regular assessments and handling of irregularities (a) The board of directors

shall assign executives of the auditing department to closely monitor the supervision and control of risks pertaining to derivative trading.

(b) The board of directors shall assign specialists to evaluate the performance in the field of derivative trading on a regular basis to determine conformance with adopted business strategies and ascertain whether or not incurred risks fall within the

revise it to Chairman or his assigned proxy for the supervising and control of the risk of financial derivatives trading.

30

suitability of currently adopted risk management measures on a regular basis and determine proper handling in accordance with the procedures set forth in this article. They shall also monitor transactions and profits/losses. Detected irregularities shall be reported to the board of directors in a prompt manner and required response measures shall be adopted. If independent directors have been appointed, they shall attend board meetings and express their opinions.

(d) (Omitted)

tolerance range set by the Corporation.

(c) Executives of auditing departments shall evaluate the suitability of currently adopted risk management measures on a regular basis and determine proper handling in accordance with the procedures set forth in this article. They shall also monitor transactions and profits/losses. Detected irregularities shall be reported to the board of directors in a prompt manner and required response measures shall be adopted. If independent directors have been appointed, they shall attend board meetings and express their opinions.

(d) (Omitted) Article 11 Procedures governing mergers,

demergers, acquisitions, or transfer of shares

1. Appraisal and operating procedures (a) When this Corporation

engages in mergers, demergers, acquisitions, or transfer of shares, the Accounting Division shall commission an accountant, lawyer, or securities underwriter to render an opinion on the reasonableness of share swap ratios, acquisition prices, or distribution of cash or other property to shareholders before board meetings are convened and submit it to the board of directors for deliberation and approval. However, the requirement of obtaining

Procedures governing mergers, demergers, acquisitions, or transfer of shares

1. Appraisal and operating procedures (a) When this Corporation

engages in mergers, demergers, acquisitions, or transfer of shares, the Accounting Division shall commission an accountant, lawyer, or securities underwriter to render an opinion on the reasonableness of share swap ratios, acquisition prices, or distribution of cash or other property to shareholders before board meetings are convened and submit it to the board of directors for deliberation and approval.

(b) (Omitted)

According to the “Business Mergers And Acquisitions Act,” to merge 100% invested subsidiary or the merge of two 100% invested subsidiaries is considered as reorganization in a group that does not involve conversion ratio agreements, cash dividend distribution or other property actions. In accordance with Article 22 of the “Regulations Governing the Acquisition and

31

an aforesaid opinion on reasonableness issued by an expert may be exempted in the case of a merger by a public company of a subsidiary in which it directly or indirectly holds 100 percent of the issued shares or authorized capital, and in the case of a merger between subsidiaries in which the public company directly or indirectly holds 100 percent of the respective subsidiaries’ issued shares or authorized capital.

(b) (Omitted) (c) (Omitted)

(c) (Omitted)

Disposal of Assets by Public Companies,” it is amended to relax restrictions from specialists’ opinions.

Article 12 Procedures governing the public disclosure of information

1. Items to be publicly announced and reported and relevant standards (a) Transaction amounts for

real property acquired or disposed of from or to a related party as well as assets other than real property acquired or disposed of from or to a related party exceed 20% of the total paid-in capital of the Corporation, 10% of the total asset value, or NT$ 300 million. These regulations shall not apply to trading of government bonds, bonds under repurchase or resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises,

(b) (Omitted) (c) (Omitted) (d) Acquisition or disposal of

Procedures governing the public disclosure of information

1. Items to be publicly announced and reported and relevant standards (a) Transaction amounts for

real property acquired or disposed of from or to a related party as well as assets other than real property acquired or disposed of from or to a related party exceed 20% of the total paid-in capital of the Corporation, 10% of the total asset value, or NT$ 300 million. These regulations shall not apply to trading of government bonds, bonds under repurchase or resale agreements, or subscription or redemption of domestic money market funds.

(b) (Omitted) (c) (Omitted) (d) Asset transactions or

investments in Mainland China not stated in the preceding three clauses if

In accordance with Article 33 of the “Regulations Governing the Acquisition and Disposal of Assets by Public Companies,” it is amended of Article 12, Section 1, item 1, 4, and 6.

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operating facilities if the transaction party is not a related party and transaction amounts fall short of NT$ 500 million.

(e) If real property is acquired through commissioned construction on owned or rented land, joint construction and allocation of housing units or ownership percentages or separate sale with projected transaction amounts of less than NT$ 500 million.

(f) Asset transactions or investments in Mainland China not stated in the preceding five clauses if transaction amounts exceed 20% of the total paid-in capital of the Corporation or NT$ 300 million. This shall not apply to the following conditions

1. Trading of government bonds.

2. Bonds under repurchase or resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises,

(g) The transaction amounts specified in the preceding six clauses shall be calculated as follows:

1. Amount of any individual transaction.

2. Cumulative transaction amount through acquisitions and disposals of the same type of underlying asset with the same trading counterpart within the last year.

transaction amounts exceed 20% of the total paid-in capital of the Corporation or NT$ 300 million. This shall not apply to the following conditions

1. Trading of government bonds.

2. Bonds under repurchase or resale agreements, or subscription or redemption of domestic money market funds.

3. Acquisition or disposal of operating facilities if the transaction party is not a related party and transaction amounts fall short of NT$ 500 million.

4. If real property is acquired through commissioned construction on owned or rented land, joint construction and allocation of housing units or ownership percentages or separate sale with projected transaction amounts of less than NT$ 500 million.

(e) The transaction amounts specified in the preceding four clauses shall be calculated as follows:

1. Amount of any individual transaction.

2. Cumulative transaction amount through acquisitions and disposals of the same type of underlying asset with the same trading counterpart within the last year.

3. Cumulative transaction amount through acquisitions or disposals (acquisitions and disposals cumulated

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3. Cumulative transaction amount through acquisitions or disposals (acquisitions and disposals cumulated separately) of real property of the same development program within the last year.

4. Cumulative transaction amount through acquisitions or disposals (acquisitions and disposals cumulated separately) of the same security type within the last year.

(h) “Within the last year” as used herein shall refer to one year calculated back from the occurrence date of this transaction. Items already announced in accordance with these Procedures need not be counted toward the transaction amount.

2. Public announcements and reports for asset acquisitions and disposals as specified in Clause a-h of the preceding paragraph shall be issued within two days after occurrence.

3. Announcement and reporting procedures (a) (Omitted) (b) (Omitted) (c) In case of necessary

corrections of errors and omissions in required items for public announcements, the Corporation shall re-announce all required items within two days counting inclusively from the date of knowing of such error or omission.

(d) (Omitted)

separately) of real property of the same development program within the last year.

4. Cumulative transaction amount through acquisitions or disposals (acquisitions and disposals cumulated separately) of the same security type within the last year.

(f) “Within the last year” as used herein shall refer to one year calculated back from the occurrence date of this transaction. Items already announced in accordance with these Procedures need not be counted toward the transaction amount.

2. Public announcements and reports for asset acquisitions and disposals as specified in Clause 1-4 of the preceding paragraph shall be issued within two days after occurrence.

3. Announcement and reporting procedures (a) (Omitted) (b) (Omitted) (c) In case of necessary

corrections of errors and omissions in required items for public announcements, the Corporation shall re-announce all required items.

(d) (Omitted)

Article 14 Subsidiaries of this Corporation shall abide by the following

Subsidiaries of this Corporation shall abide by the following

It is company’s self-government

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regulations: 1. Subsidiaries shall also

formulate Procedures Governing the Acquisition or Disposal of Assets in accordance with relevant provisions set forth in the Regulations Governing the Acquisition and Disposal of Assets by Public Companies. These procedures shall be reported to the Accounting Division of the Corporation upon approval by the board of directors and a shareholders’ meeting of said subsidiary. The Accounting Division shall control and manage the summaries of procedures formulated by subsidiaries for future reference. The same procedure shall apply to amendments.

2. (Omitted)

regulations: 1. Subsidiaries shall also

formulate Procedures Governing the Acquisition or Disposal of Assets in accordance with relevant provisions set forth in the Regulations Governing the Acquisition and Disposal of Assets by Public Companies. These procedures shall be reported to the Accounting Division of the Corporation upon approval by the board of directors and a shareholders’ meeting of said subsidiary. The Accounting Division shall forward the summaries of procedures formulated by subsidiaries to the board of directors, which shall approve them for future reference. The same procedure shall apply to amendments.

2. (Omitted)

affair whether the subsidiary’s “Procedures for the Acquisition and Disposal of Assets” shall be proposed to the parent company’s board. For simplifying the procedure, it is amended of Article 14, Section 1.

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Extempore Motions:

36

U-MING MARINE TRANSPORT CORPORATION

ARTICLES OF INCORPORATION

June 8, 2016

Section I - General Provisions

Article l: The Corporation shall be incorporated as a company limited by shares under the Company Law of the Republic of China, and its name shall be U-Ming Marine Transport Corporation.

Article 2: The scope of business of the Corporation shall be as follows:

(1) 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 stockholder due to reinvestment in other company, it is not subjected to the restriction stipulated in Article 13 of the Company Law of the Republic of China that the total amount of its reinvestment in other companies shall not exceed forty (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 1,05,000,000 shares, with par value of NT$10 per share. For the un-issued shares, the Board of Directors is authorized to issue these shares in installments.

37

Article 7: Shares issued by the Corporation shall be exempted from printing of share certificates. However, the Corporation shall register with the Securities Consolidated Custody Business Organization

The corporation can issue share certificate for special shares.

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

Article 8: Shares affair matters of the Corporation shall be handled based on the provisions in 「Public Issue Shares Company Shares Affairs Handling Standard」and other relevant laws and regulations.

Article 9: No transfer of shares shall be made within sixty days prior to each annual stockholders' regular meeting or within thirty days before an extraordinary meeting or within five days fixed by the Corporation for distributing dividend, bonus or other benefits.

Section III- Stockholders' Meetings

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

(l) Regular meetings which shall be convened by the Board of Directors within six months after the close of the fiscal year.

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

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

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

Article 13: Stockholder shall present power of attorney to assign representative to attend the stockholders’ meeting. Apart from shares affairs representative organization approved by trust business or

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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 stockholder, unless otherwise provided in the Company Law, it shall be processed based on the「Rules Of Utilization of Power of Attorney To Attend Stockholders’ Meeting Of Public Issue Company」.

Article 14: During stockholders’ meeting, unless otherwise provided in the Company Law or this Articles of Incorporation, the meeting shall be processed based on the Rules Of Proceedings For Stockholders’ Meeting of the Corporation.

Article 15: The resolutions of the stockholders' meeting shall be recorded in the minutes, which shall specify the date, place of meeting, number of stockholders who attended such meeting, number of holding shares or representing shares, number or voting rights, name of the chairman, resolutions and method thereof, and such minutes shall be signed or sealed by the Chairman of the meeting. Such minutes, together with the stockholders’ attendance book (card) and proxies, shall be kept in the Corporation based on Law.

Section IV - Directors, Supervisors and Managers

Article 16: The 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 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 17: The term of office for Directors shall be three years and term of office for Supervisors shall be three years and they shall be re-appointed if being re-elected.

Article 18: The Board of Directors shall be organized by Directors to exercise the job authorities of directors. The Directors shall elect from among themselves a Chairman who will represent the company and one Vice Chairman. When the Chairman is absent or cannot exercise his job authorities for any reason whatsoever, the Vice Chairman shall be designated by the Chairman as his agent. When the Vice Chairman is absent or cannot exercise his job authorities, one director will be assigned by the Chairman to be the agent. In case of no such assignment, the Directors shall elect one from among themselves.

Article 19: Meetings of the Board of Directors shall be held regularly. Meetings of the Board of Directors

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shall be convened by the Chairman of the Board of Directors. Unless otherwise provided for in the Company Law, meetings of the Board of Directors shall be attended by a majority of Directors. Resolutions of the Board of Directors shall be adopted by a majority of the Directors at a meeting attended by majority of the Directors. For urgent matters, the Chairman can convene extraordinary meetings at any time.

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

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

Article 20: The Supervisors, in addition to performing their supervising duties in accordance with Applicable laws, shall attend meetings of the Board of Directors and voice opinions, but shall not be entitled to participate in Voting.

Article 21: The remuneration of Chairman and Vice Chairman shall be decided by the Board of Directors with consideration of industry and listing companies’ remuneration level.

Article 22: The Corporation shall have one President and various certain number of Vice Presidents, Assistant Vice Presidents and managers and their appointment and dismissal shall be adopted by a majority of the Directors at a meeting attended by a majority of the Directors.

Article 23: The Chairman, deputy chairman and general manager shall perform daily duties of the corporation according to the resolutions made at the meeting of the Board of Directors.

Section V - Financial Reports

Article 24: The fiscal year for the Corporation shall be from January 1 of each year to December 31 of the same year. After the close of each fiscal year, the Corporation shall prepare financial reports.

Article 25: The Board of Directors shall prepare various financial reports pursuant to relevant laws and regulations. Such reports shall, after being reviewed and approved by the Supervisors of the Corporation, be submitted by the Board of Directors thirty days prior to the regular stockholders' meeting for acceptance.

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

Article 26: If the Corporation has a profit at the end of a fiscal year, the Corporation shall allocate one percent as the remuneration of employees, and less than one percent as the remuneration of Directors and Supervisors. But if the Corporation still have losses of 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

40

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.

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 stockholders bonus for the new shares for the same year shall be decided by the stockholders' meeting.

Dividends distributed to stockholders consideration shall be given to the business perspective of the corporation, the life cycle of various products or service provided, capital requirement in the future and the effect of possible changes of tax laws respectively. And distributed under the objective of maintaining a stable dividend policy. For issue of dividend, except save for the purposes of improving the financial structure, reinvestments, production expansion or other capital expenditures in which capital is required, the cash dividend shall not be lower than 10% of stockholders 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 are stipulated on the 22nd day of June 1968 and after resolution was obtained in the stockholders’ regular meeting, it was submitted to the competent authority for approval and became effective on the same day. Subsequent amendment to these Articles of Incorporation shall become effective after being passed at the stockholders’ meeting. The first revision was in August 16th 1968. The second revision was in March 21st 1969. The third revision was in May 30th 1969. The fourth revision was in October 20th 1970. The fifth revision was in April 26th 1971. The sixth revision was in August 4th 1971. The seventh revision was in February 20th 1974. The eighth revision was in April 29th 1974. The ninth revision was in May 30th 1975. The tenth revision was in April 30th 1976. The eleventh revision was in April 29th 1977. The twelfth revision was in May 15th 1978.

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The thirteenth revision was in December 22nd 1978. The fourteenth revision was in May 29th 1980. The fifteenth revision was in April 25th 1981. The sixteenth revision was in May 27th 1981. The seventeenth revision was in May 27th 1983. The eighteenth revision was in May 18th 1984. The nineteenth revision was in September 17th 1984. The twentieth revision was in January 16th 1985. The twenty-first revision was in March 27th 1987. The twenty-second revision was in June 15th 1987. The twenty-third revision was in December 21st 1987. The twenty-fourth revision was in February 26th 1988. The twenty-fifth revision was in August 19th 1988. The twenty-sixth revision was in May 12th 1989. The twenty-seventh revision was in April 18th 1990. The twenty-eighth revision was in May 15th 1991. The twenty-ninth revision was in May 15th 1992. The thirtieth revision was in May 29th 1993. The thirty-first revision was in August 14th 1993. The thirty-second revision was in May 18th 1994. The thirty-third revision was in May 25th 1995. The thirty-fourth revision was in May 15th 1996. The thirty-fifth revision was in May 15th 1998. The thirty-sixth revision was in May 17th 1999. The thirty-seventh revision was in May 5th 2000. The thirty-eighth revision was in April 27th 2001. The thirty-ninth revision was in May 30th 2002. The fortieth revision was in June 8th 2005. The forty-first revision was in May 23rd 2006. The forty-second revision was in June 3rd 2010. The forty-third revision was in June 8th 2011. The forty-forth revision was in June 14th 2012. The forty-fifth revision was in June 10th 2015. The forty-sixth revision was in June 8th 2016.

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U-Ming Marine Transport Corporation

Rules of Procedure for Shareholders Meetings

Amended and approved by the shareholders’ meeting on May 30, 2002

I. The procedures for shareholders’ meetings shall conform to these rules.

II. Shareholders’ meetings of this Corporation shall be held at the seat of this Corporation or

another location convenient for shareholders (or their proxies) and suitable for shareholders’

meetings. Meetings shall not start earlier than 9:00 am or later than 3:00 pm.

Shareholders (or their proxies) shall wear their attendance ID and submit sign-in cards to

indicate attendance when attending shareholders’ meetings. Attendance numbers shall be

calculated based on the number of submitted cards.

The corporation may assign commissioned lawyers, accountants, or related personnel to

attend shareholders’ meetings. Personnel in charge of the handling of meeting affairs shall

wear identification badges or armbands.

If shareholders’ meetings are convened by the board, the chairman of the board shall serve

as the chair. If the chairman is on leave or cannot exercise his/her powers for certain reasons,

the Vice Chairman shall take over his/her functions. If no Vice Chairman has been appointed

or the Vice Chairman is on leave or cannot exercise his/her powers for certain reasons, the

Chairman shall designate a proxy. If no proxy has been designated, the board directors shall

nominate a proxy from within their ranks. If shareholders’ meetings are convened by another

party with the right to call a meeting, that person shall also serve as the chair. If shareholders’

meetings are convened by two or more parties with the right to call a meeting, they shall

nominate a chair from within their ranks. The entire proceedings of the shareholders’

meetings shall be recorded in audio or video format as evidence and said records shall be

preserved for a minimum of one year.

III. If the shareholders (or their proxies) in attendance of a shareholders’ meeting represent a

majority of the total number of issued shares, the chair may announce the start of the

meeting. If the legally required quorum is not met at the scheduled starting time, the chair

may announce a postponement. A maximum of two postponements may be announced. The

total delay shall not exceed one hour.

If the required quorum is still not met after two postponements and the shareholders in

attendance represent at least one third of the total number of issued shares, tentative

resolutions may be adopted by consent of a majority of the votes held by attending

shareholders (or their proxies) regarding ordinary items.

If the legally required quorum of attendance is met after tentative resolutions as specified in

the preceding paragraph have been adopted, the chair may resubmit the tentative resolution

to the shareholders’ meeting for approval.

IV. If shareholders’ meetings are convened by the board of directors, the meeting agenda shall

be determined by the board of directors. The meeting procedures shall be in compliance

with the order specified in the agenda. This order may only be altered by resolution of the

shareholders’ meeting.

If shareholders’ meetings are convened by a party with the right to call a meeting other than

the board, the regulations set forth in the preceding paragraph shall apply mutatis mutandis.

The chair may not arbitrarily declare an adjournment of the meeting without resolution prior

to the completion of all items specified on the agenda as set in the preceding two paragraphs

(including extempore motions).

If the chair adjourns shareholders’ meetings in violation of the regulations set forth in the

preceding paragraph, the shareholders in attendance may appoint an acting chair by consent

of a majority of the votes held by attending shareholders and continue the meeting.

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If a meeting is adjourned by resolution of the shareholders, they may not appoint an acting

chair to continue the meeting at the site of the original meeting or another location.

V. Before shareholders (or their proxies) make a statement, they shall specify on a speaker’s

slip their attendance ID number, account name, and subject of their statement. The chair

shall determine the order of the speakers.

Attending shareholders (or their proxies) who submit speaker’s slips but fail to make a

statement shall not be considered speakers. If the contents of statements do not correspond

to the subject indicated on the speaker’s slip, confirmed contents of statements shall be

considered the official subject.

VI. Motions shall be submitted in writing. Motions not listed in the agenda, such as revision of

original motions, substitute motions, or extempore motions submitted by shareholders (or

their proxies) are required to be seconded by other shareholders (or their proxies). The same

regulations shall apply to alteration of the agenda and motions for adjournment. The mover

and seconder shall jointly represent a minimum of 100,000 shares.

VII. Explanations of motions shall be confined to five minutes, while inquiries and responses are

limited to three minutes per speaker. Extensions by three minutes shall be allowed by

consent of the chair.

If statements by shareholders (or their proxies) exceed the time limit, the maximum allowed

number, or the range of issues, the chair shall be authorized to terminate the statement.

When shareholders (or their proxies) make a statement, other shareholders (or their proxies)

shall not interrupt them unless by consent of the chair and the shareholder (or proxy) that

has the floor. The chair shall stop any violations. In case of non-compliance with orders by

the chair, the regulations set forth in Article 15 shall apply mutatis mutandis.

VIII. A shareholder may not make more than two statements on the same motion.

Corporations may only designate one representative to attend shareholders’ meetings on

their behalf. If corporate shareholders designate two or more representatives to attend

shareholders’ meetings, only one representative shall be authorized to make statements.

IX. After attending shareholders (or their proxies) have made their statements, the chair may

respond in person or designate relevant personnel to reply.

During the discussion of motions, the chair may announce the closing of discussions at

appropriate times or the termination of discussions if deemed necessary.

X. Upon the closing or termination of discussions on proposals, the chair shall put the motion

to a vote. Only motions may be discussed or voted on.

Personnel in charge of monitoring of the voting process and counting of votes shall be

designated by the chair and approved by the attending shareholders (or their proxies).

Monitoring personnel shall have shareholder status.

XI. Motions shall be passed by a majority of the votes held by the attending shareholders (or

their proxies) unless stipulated otherwise in relevant decrees or company rules and

regulations. If no dissenting opinions are expressed upon queries by the chair, motions shall

be considered passed. This procedure shall have the same validity as a vote by ballot.

If revisions or substitute motions exist for the same motion, the chair shall determine the

voting sequence. If one of the motions has been passed, the other motions shall be

considered rejected and no further voting shall be required.

The voting results shall be reported immediately and a record shall be created.

XII. The chair may announce a recess at an appropriate time when a meeting is in progress.

XIII. In case of an air-raid warning, meetings shall be temporarily suspended and the premises

evacuated. The meeting shall be resumed one hour after the warning has been lifted.

XIV. The chair shall be authorized to order stewards or security personnel to provide assistance in

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the maintenance of order at the meeting venue. Stewards or security personnel shall wear

armbands with the Chinese characters for “steward” when providing assistance.

XV. Shareholders (or their proxies) shall follow the directions of the chair and stewards or

security personnel with regard to the maintenance of order. Persons who obstruct

shareholders’ meetings may be removed by the chair and stewards or security personnel.

XVI. For matters not regulated in these rules, the regulations set forth in the Company Act, the

Securities and Exchanges Act, and other relevant decrees shall apply.

XVII. These rules and all amendments hereof shall be implemented upon approval by a

shareholders’ meeting.

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Appendix

1. Current Shareholding of Directors and Supervisors

Book closure date: 15 April 2017

Position Name of persons or companies Representatives

appointed

Number of

shares held

Percentage of

shares held

Chairman Shu-Tong Hsu --- 992,133 0.12%

Director

Chee Chen Tung --- --- ---

Asia Cement Corp.

Tsai-Hsiung Chang 331,701,152 39.25%

Kun-Yen Lee 331,701,152 39.25%

Douglas Jefferson Hsu 331,701,152 39.25%

Ya Li Transportation Co., Ltd. Kuan-Chun Lee 6,348,103 0.75%

Yue Ding Industry Co., Ltd. Choo Kiat Ong 93,000 0.01%

Independent

Director

Shao-Hua Chu --- --- ---

Chorng-Jian Liu --- --- ---

Shareholding of all directors 339,134,388 40.13%

The minimum required combined shareholding of all directors by law 33,802,228 4.00%

Supervisor

Shu-Ping Hsu --- 83,595 0.01%

Yuan Ding Investment Corp. Ruey-Huey Shao 8,859,000 1.05%

Far Eastern Construction Co., Ltd. Tzu-Pong Chang 1,589,790 0.19%

Shareholding of all supervisors 10,532,385 1.25%

The minimum required combined shareholding of all supervisors by law 3,380,223 0.40%

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 and all supervisors are qualified.

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2. Effects on business performance and EPS resulting from stock dividend distribution proposed by 2017 annual shareholders' meeting.

Unit: NT$

Year

Item 2017

Paid-in Capital (beginning of the year) 8,450,557,120

Stock & Cash

Dividend

Distribution

Cash Distribution from Legal Reserve (NT$/per share) 0.75

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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