U Ming Marine Transport : 2021 Annual Report

U-MING MARINE ANNUAL REPORT 2021

Table of Contents

 Name, Title, Telephone Number, and E-mail Address of the Spokesman

Name：Tsung-Liang , Chang

Title：Senior Vice President

Tel.：[phone]

E-mail：[e-mail]



 Name, Title, Telephone Number, and E-mail Address of the Acting Spokesman

Name：Chang-Sheng, Chen

Title：Vice President

Tel.：[phone]

E-mail：[e-mail]



 Address and Telephone Number of the Company

Address：29F., No. 207, Sec. 2, Dunhua S. Rd., Da'an Dist., Taipei City 106 , Taiwan

Telephone Number：[phone]



 Name, Address, Website, and Telephone Number of the Agency Handling Shares Transfer

Name：Oriental Securities Corporation

Address：13F., No. 16, Xinzhan Rd., Banqiao Dist., New Taipei City 220 , Taiwan

Website：www.osc.com.tw

Tel.：[phone]



 Name of the Certified Public Accountant who Duly Audited the Annual Financial Report for the Most Recent Fiscal Year, and the Name, Address and Telephone Number of said Person's Accounting Firm.

Name of CPA：Wen-Ching Lin and Yi-Wen Wang

Name of Accounting Firm：Deloitte & Touche

Address：20F., No. 100, Songren Rd., Xinyi Dist., Taipei City 110 , Taiwan

Website：www.deloitte.com.tw

Tel.：[phone]



 Name of Any Exchanges where the Company's Securities are Traded Offshore, and the Method by which to Access Information on Said Offshore Securities: No

 Official Website：www.uming.com.tw

U-Ming Marine Transport Corp .
The 2021 Annual Report
Table of Contents
ONE. LETTER TO SHAREHOLDERS ...........................................................................................	1
I. INTRODUCTION .............................................................................................................................	1
II. BUSINESS PERFORMANCE............................................................................................................	3
III. BUSINESS STRATEGIES AND PROSPECTS ....................................................................................	5
TWO. COMPANY PROFILE ............................................................................................................	8
I. DATE OF INCORPORATION AND BUSINESS OPERATION..................................................................	8
II. COMPANY HISTORY.....................................................................................................................	8
THREE. CORPORATE GOVERNANCE REPORT.....................................................................	18
I. ORGANIZATIONAL SYSTEM.........................................................................................................	18

1. PROFILE OF THE DIRECTORS, PRESIDENT, VICE PRESIDENTS, JUNIOR VICE PRESIDENTS, AND

HEADS OF VARIOUS DEPARTMENTS AND BRANCHES ...............................................................

20

1. REMUNERATION PAID TO DIRECTORS, PRESIDENT, AND VICE PRESIDENT IN THE MOST

RECENT YEAR .........................................................................................................................	32
IV. CORPORATE GOVERNANCE MANAGEMENT ............................................................................	41
V. DISCLOSURE OF INDEPENDENT AUDITORS' FEES .....................................................................	107
VI. CHANGE OF INDEPENDENT AUDITORS....................................................................................	108
VII. THE COMPANY'S CHAIRMAN, PRESIDENT, OR MANAGERIAL OFFICERS INVOLVED IN
FINANCIAL OR ACCOUNTING AFFAIRS BEING EMPLOYED BY THE ACCOUNTING FIRM OR
ANY OF ITS ASSOCIATES WITHIN THE MOST RECENT YEAR ...................................................	109
VIII. DETAILS OF SHARES TRANSFERRED AND CHANGES IN EQUITY PLEDGED BY DIRECTORS,
MANAGERIAL OFFICERS, AND SHAREHOLDERS WITH MORE THAN 10% SHAREHOLDINGS IN
THE MOST RECENT YEAR AND AS OF THE ANNUAL REPORT PUBLICATION DATE ..................	109
IX. INFORMATION ON THE RELATIONSHIPS AMONG TOP-10 SHAREHOLDERS WHO ARE
RELATED PARTIES, SPOUSES, OR RELATIVES WITHIN THE SECOND DEGREE OF KINSHIP ......	110

1. INVESTMENTS JOINTLY HELD BY THE COMPANY, THE COMPANY'S DIRECTORS, MANAGERIAL OFFICERS, AND ENTERPRISES DIRECTLY OR INDIRECTLY CONTROLLED BY

THE COMPANY AND WITH THE SHAREHOLDING CALCULATED AGGREGATELY ....................	113
FOUR. CAPITAL OVERVIEW......................................................................................................	114
I. CAPITAL AND SHARES ..............................................................................................................	114
II. ISSUANCE OF CORPORATE BOND .............................................................................................	125
III. ISSUANCE OF PREFERRED STOCKS .........................................................................................	125
IV. ISSUANCE OF GLOBAL DEPOSITARY RECEIPTS (GDR).........................................................	125
V. ISSUANCE OF EMPLOYEE STOCK WARRANTS ...........................................................................	125
VI. ISSUANCE OF NEW RESTRICTED EMPLOYEE SHARES..............................................................	125
VII. NEW SHARES ISSUED FOR MERGING OR ACQUIRING SHARES OF OTHER COMPANIES ...........	125
VIII. PROGRESS ON PLANNED USE OF CAPITAL: ........................................................................	125
FIVE. OPERATIONAL OVERVIEW...........................................................................................	126
I. BUSINESS ACTIVITIES ...............................................................................................................	126
II. MARKET, PRODUCTION, AND SALES OVERVIEW......................................................................	135
III. EMPLOYEE INFORMATION ....................................................................................................	143
IV. CONTRIBUTION TO ENVIRONMENTAL PROTECTION .............................................................	144
V. LABOR RELATIONS ..................................................................................................................	145
VI. MAJOR CONTRACTS...............................................................................................................	152
SIX FINANCIAL SUMMARY.......................................................................................................	155
I. CONDENSED BALANCE SHEET AND COMPREHENSIVE INCOME STATEMENT FOR THE LAST
FIVE YEARS, AND THE INDEPENDENT AUDITORS' OPINIONS.................................................	155
II. FINANCIAL ANALYSIS FOR THE LAST FIVE YEARS ...................................................................	161

U-MING MARINE ANNUAL REPORT 2021

Table of Contents

III. AUDIT COMMITTEE'S REVIEW REPORT ON THE LATEST FINANCIAL STATEMENTS ............	165
IV. LATEST FINANCIAL REPORT .................................................................................................	166
V. LATEST AUDITED STANDALONE FINANCIAL REPORT.............................................................	114
VI. FINANCIAL DIFFICULTIES ENCOUNTERED BY THE COMPANY AND ITS ASSOCIATES IN THE
MOST RECENT YEAR AND AS OF THE ANNUAL REPORT PUBLICATION DATE. ....................	181
SEVEN. REVIEW AND ANALYSIS OF FINANCIAL POSITION AND BUSINESS PERFORMANCE, AND
RISKS....................................................................................................................................	182
I. FINANCIAL REVIEW AND ANALYSIS ..........................................................................................	182
II. REVIEW AND ANALYSIS OF FINANCIAL PERFORMANCE .........................................................	183
III. REVIEW AND ANALYSIS OF CASH FLOW ...............................................................................	185
IV. THE IMPACT OF SIGNIFICANT CAPITAL EXPENDITURES ON THE FINANCIAL BUSINESS IN THE
MOST RECENT YEAR .............................................................................................................	186
V. REVIEW AND ANALYSIS OF REINVESTMENT POLICY IN THE MOST RECENT YEARS..................	186
VI. RISK ANALYSIS ......................................................................................................................	187
VII. OTHER MATERIAL ISSUES ....................................................................................................	195
EIGHT. SPECIAL DISCLOSURES....................................................................................................	196
I. ASSOCIATE INFORMATION........................................................................................................	196

1. PRIVATE PLACEMENT OF SECURITIES IN THE MOST RECENT YEAR AND AS OF THE ANNUAL

REPORT PUBLICATION DATE .................................................................................................

203

1. THE COMPANY'S SHARES HELD OR DISPOSED OF BY SUBSIDIARIES IN THE MOST RECENT

YEAR AND AS OF THE ANNUAL REPORT PUBLICATION DATE ...................................................	203
IV. OTHER SUPPLEMENTARY INFORMATION ..............................................................................	203
V. OCCURRENCE OF THE MATTERS LISTED IN ARTICLE 36, PARAGRAPH 3, SUBPARAGRAPH 2 OF
THE SECURITIES AND EXCHANGE ACT AFFECTING SHAREHOLDERS' EQUITY OR SECURITY
PRICE IN THE MOST RECENT YEAR OR AS OF THE ANNUAL REPORT PUBLICATION DATE ........	203

U - M I N G M A R I N E ANNUAL REPORT 2021

ONE. LETTER TO SHAR EHOLDERS

One. Letter to Shareholders

I. Introduction

The recovery of tramp shipping market was gradually underway in 2021 along with the implementation of anti-pandemic measures in many countries and the increase of industrial demand and demand for necessities. Benefited from the governments' expanding the construction of infrastructure to stimulate global economy, including the Biden administration of the United States has launched a comprehensive 10-year infrastructure construction plan for an amount of US$2 trillion and the prevalence of vaccination and easing of pandemic impact, the global economy recovery is expected to accelerate in the future, which is beneficial to the growing demand for dry bulk raw materials. The efficiency of port operations is affected by the pandemic and thus affects the supply of tramp shipping capacity. The Baltic Dry Index (BDI) was climbing and reached the highest of 5,650 points on October 7 for the year, a record high in 13 years with an average of 2,943 points throughout the year, representing an increase of 176% from the year of 2020.

According to the "World Economic Outlook (WEO)" report released by The World Bank in January 2022, the economic growth of the United States and China, the two largest economies in the world, had outperformed what it was prior to the outbreak of the pandemic in 2021. China's economic growth rate was expected to reach 8.0% in 2021, a record high since 2012, and the U.S. economic growth rate was expected to grow 5.6%, a record high since 1985. Emerging markets and developing economies continued to grow strongly with a GDP growth of 6.3% achieved in 2021, of which, India, the 6th largest economy in the world, performed significantly better than expected as a result of increase in tax income, growth in export, increase in retail sales, and increase in electricity demand. India's GDP had grown to 8.3% from the bottom in 2020, in fact, its growth rate significantly outperformed the average of other Asian countries and the overall emerging market. The global economic growth has mostly broken through the poor performance experienced before the pandemic outbreak and achieved a record high. The transformation of the global economic structure and the high contribution of emerging markets have driven the growth momentum of the global economy with the global GDP growth rate achieved as high as 5.5%.

Many provinces and cities in China had successively imposed electricity and production restrictions in September 2021 due to the "energy consumption and intensity dual control system" policy and the intensified conflict between coal supply and demand, added with environmental protection controls, China had experienced a power shortage crisis, and coal prices from major exporting countries also reached a new high. In addition to coal, the impact of China's restricting steel production on the demand for imported iron ore had caused concerns. The blast furnace process has been adopted by many steel mills in China with iron ore used as the raw material. In addition, the production cost of local iron ore was high and the iron content was low; therefore, China continued to increase the import of iron ore that caused the Capesize Bulk Commodity Index (BCI) to go up in October.

China had relied heavily on imported grains due to the outputs of the summer crops affected by the floods in the summer of 2021. According to the statistics of the U.S. Department of Agriculture, China will purchase about 9.5 million tons of corn from the United States during the 2021~2022 corn seasons, a record high of corn import. The 4th quarter was the peak season for the export of grains of the Northern America that activated the freight rate of small and medium-sized ships to rise. The Handymax BSI had reached an average of US$26,770 in 2021, an increase of 224% from the same period last year.

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