U Ming Marine Transport : Handbook

Stock Code: 2606

U-MING MARINE TRANSPORT CORP.

Handbook for the 2023 Annual Meeting of Shareholders

Meeting date: June 13, 2023

Meeting location: Taipei Hero House

No. 20, Sec. 1, Changsha St., Zhongzheng Dist., Taipei, Taiwan

Convening method: Hybrid shareholders' meeting

Online participants will attend through the e-Meeting Platform

(https://www.stockvote.com.tw) run by the Taiwan Depository Clearing

Corporation (TDCC).

*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.

2023 Annual Meeting of Shareholders

Table of Contents

I. Meeting Procedure ……………………………………………………… P1

1. Matters to Be Reported

1. 2022 Business Report …………………………………………………………………. P2
2. 2022 Financial Statements …………………………………………………………….. P7
3. The Audit Committee' Review Report on 2022 Business and Financial Statements….. P28
4. Distribution of 2022 Remuneration to the Employees and Directors……………..…… P29
5. The Amendment to the "Corporate Sustainable Development Policy" of the Company P30

1. Matters to Be Ratified

1. The 2022 Business Report and Financial Statements …………………………………. P38
2. The Proposal for Earnings Distribution of 2022 ………………………………………. P39

IV. Extempore Motions ……………………………………………... P40

V. Attachments (Company Rules and Regulations)

1. Articles of Incorporation ………………………………………………………………. P42
2. Rules of Procedure for Shareholders' Meetings ………………………………………. P49

VI. Appendices

1. Current Shareholding of Directors …………………………………... ……………… P54
2. The Impact of Stock dividend Issuance on Business Performance and EPS ………….. P55

U-MING MARINE TRANSPORT CORP.

Procedure for the 2023 Annual Meeting of Shareholders

1. The Meeting Begins.

2. The Chairman Takes His Seat.

3. Everyone Stands up Solemnly to

4. Sing the National Anthem.

5. Then Bow Three Times to the National Flag and the Statue of the

Founding Father.

6. The Chairman Delivers a Speech.

7. Matters to Be Reported

8. Matters to Be Ratified

9. Extempore Motions 10. Adjournment

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Matters to Be Reported:

1. 2022 Business Report

I. Overview of Shipping Market

In 2022, global economic growth was affected by factors such as the Russia-Ukraine conflict, geopolitics, rising inflation, and the COVID-19 pandemic. Bulk shipping demand was also influenced by many uncertain factors: Indonesia issued a coal export ban in January; China implemented steel production restrictions during the Winter Olympics in February, and Chinese steel mills reduced production in response to the government's policy to cut output and weak demand from the real estate sector, which reduced demand for iron ore imports. Additionally, Brazil, a major iron ore producer, experienced consecutive heavy rainfalls at the beginning of the year, which impacted iron ore production and shipment, leading to relatively low Capesize freight rates in the first quarter. At the end of February, the Russia-Ukraine conflict broke out, severely affecting the export of dry bulk goods such as coal and grains from the Black Sea region. As a result, countries searched for alternative sources based on energy and food security, leading to price increases in coal and grains and driving demand for bulk trade. The Baltic Dry Index (BDI) reached an annual high in the second quarter. However, in the second half of the year, due to the easing of port congestion, weak demand and low real estate sentiment in China, the BDI decreased from an average of 2,269 points in the first half of the year to an average of 1,590 points in the second half. The BDI averaged 1,934 points for the whole year, a 34% decrease compared to 2021.

China's major cities were under lockdown measures due to the impact of the pandemic since March 2022, and the overall Chinese economy faced three pressures of "contracting demand, supply shock, and weakened expectations." The crisis in the real estate market also affected the demand for iron ore and steel, which dragged down the rental rates of Capesize. At the end of 2022, China focused on "stabilizing growth," successively proposing the "16 Financial Measures," "10 New Epidemic Prevention Measures," and "Expanding Domestic Demand Strategic Plan (2022-2035)." The macroeconomic policy was loosened and active, with priority given to restoring and expanding consumption. After the 20th National Congress of the Communist Party of China, the economic strategy highlighted safety as the top priority, emphasizing independent innovation in industrial technology, common prosperity, green development, and increasing energy, resource, and food reserves. With the support of the stabilizing growth policy, the overall economic policy remained positive, and policy and development financial instruments increased their support. It is expected that China's economy will moderately improve from the first quarter to the first half of 2023, and the second quarter or the second half of the year is expected to bring a turning point in the economic recovery, which will be beneficial to the growth of bulk shipping demand.

According to the International Monetary Fund, India and China will be the two bright spots for economic recovery in 2023, accounting for half of global growth. India's economy is estimated to grow by 6.1% in 2023, making it the world's fifth-largest economy. India's population is expected to surpass China's in 2023, making it the country with the largest population in the world. The Modi government plans to invest $120 billion (10 trillion rupees) in the "Gati Shakti" infrastructure project to create massive employment opportunities and stimulate the domestic economy. India's many infrastructure projects and demographic dividend have also brought strong demand for steel, and the World Steel Association estimates that India's steel demand will grow by 6.7% to 120 million tons in 2023, ranking first globally in terms of growth rate (the global average is only 1%) and making it the world's second-largest steel consumer after China. It is estimated that India's crude steel production capacity will double to 300 million tons by 2030.

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Looking ahead, global inflationary pressure continues to rise, and central banks in many countries have initiated interest rate hikes and tightened monetary policies to alleviate the pressure of rising prices. The global economy is at risk of stagflation, with slower economic growth, geopolitical tensions, a significant downturn in China's real estate market, pandemic disruptions, and challenges in bulk shipping operations. However, China has gradually implemented loosening measures against the pandemic and is expected to resume normal economic activity after the lifting of restrictions. According to the International Monetary Fund (IMF), the global economic growth rate is expected to reach 2.9% in 2023. According to the data of the "Dry Bulk Trade Outlook" by Clarksons in January 2023, the expected growth rate of bulk shipping supply in 2023 is 1.8%, but the growth rate of dry bulk shipping demand in ton-miles is estimated to reach 2.0%, and the dry bulk shipping market is expected to grow quarter by quarter.

II. Previous Year's Business performance

U-Ming 2022's consolidated revenue for the full year was NT$14.17 billion, an increase of 1.13% from the previous year. The operating profit was NT$4.33 billion and the after-tax net profit was NT$4.46 billion, with earnings per share (EPS) of NT$5.21. The following is a summary of the key operating points:：

(I) Owned-ships operating performance

In 2022, U-Ming adjusted the fleet's time-charter and spot market ratio according to the supply and demand trends in the bulk shipping market, and achieved excellent financial performance through flexible and agile business operations. The annual actual average daily rental rates of U-Ming's Capesize, Panamax and Handysize fleets were all over 35% higher than the average daily time-charter rates in the spot market. U-Ming owns the most advanced energy-saving fleet and utilizes digital ship management systems, combined with an experienced management team, to create outstanding performance.

(II) Continued Digital Transformation

U-Ming continues its digital transformation with its proprietary Fleet Safety Management System (FSM), which has been in practical use for many years. In 2021, U-Ming was awarded the "Innovation Endorsement Certificate" by the ClassNK, and in 2022, it was honored with the Singapore International Safety@Sea Award, further proving the reliability of its self-developed ship safety management system.

In addition, in terms of maritime environmental protection, U-Ming uses the FSM to obtain real-time information on ship position, weather, and ocean conditions, allowing it to optimize the route of its own cross-ocean vessels. In 2022, U-Ming was able to save approximately one million US dollars in fuel and time costs. This drives U-Ming to transform into a digital and intelligent shipping company, advancing towards a sustainable business model of green energy vessels.

(III) Strengthening Corporate Responsibility

U-Ming has long been committed to sustainable management and has been recognized both domestically and internationally. It has passed the evaluation standards of FTSE Russell for five consecutive years and has been included in the "FTSE4Good Emerging Index" and the "FTSE4Good TIP Taiwan ESG Index" of the Taiwan Stock Exchange for seven consecutive years. Its sustainability report also won the gold award in the transportation category of the 2022 Taiwan Corporate Sustainability Awards (TCSA).

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