U Ming Marine Transport : Financial Statements for the Three Months Ended March 31, 2023 and 2022

U-Ming Marine Transport Corporation and

Subsidiaries

Consolidated Financial Statements for the

Three Months Ended March 31, 2023 and 2022

Note：The translation version is intended for reference only. If any inconsistency between the Chinese and English versions, the Chinese version shall govern.

INDEPENDENT AUDITORS' REVIEW REPORT

The Board of Directors and Shareholders

U-Ming Marine Transport Corporation

Introduction

We have reviewed the accompanying consolidated balance sheets of U-Ming Marine Transport Corporation (the "Company") and its subsidiaries (collectively, the "Group") as of March 31, 2023 and 2022, the related consolidated statements of comprehensive income for the three months ended March 31, 2023 and 2022, the consolidated statements of changes in equity and cash flows for the three months then ended, and the related notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as 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 Accounting Standard 34 "Interim Financial Reporting" endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

We conducted our reviews in accordance with the Standards on Review Engagements of the Republic of China 2410"Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for Qualified Conclusion

As disclosed in Note 10 and 11 to the consolidated financial statements, the financial statements of some non-significant subsidiaries and the investments accounted for using the equity method included in the consolidated financial statements referred to in the first paragraph were not reviewed. As of March 31, 2023 and 2022, the unreviewed assets and the investments accounted for using the equity method amounted to NT$15,326,423 thousand and NT$14,877,605 thousand, respectively, (19% and 22% of the consolidated assets, respectively), and the unreviewed liabilities amounted to NT$1,922,943 thousand and NT$1,569,489 thousand, respectively, (both were 4% of the consolidated liabilities). The unreviewed comprehensive income (loss) for the three months ended March 31, 2023 and 2022 were NT$(22,078) thousand and NT$(42,278) thousand, respectively, representing (10%) and (1%) of the consolidated comprehensive income, respectively.

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The related investment income, the investments accounted for using the equity method (including losses offset against long-term receivables - related parties) for the three months ended March 31, 2023 and 2022 were NT$31,531 thousand and NT$61,958 thousand, respectively, representing 14% and 2% of the consolidated comprehensive income, respectively. Further, as disclosed in Note to the consolidated financial statements, information on investees were based on unreviewed financial statements.

Qualified Conclusion

Based on our reviews, except for the adjustments, if any, as might have been determined to be necessary had the financial statements of the non-significant subsidiaries and the investments accounted for using the equity method as described in the preceding paragraph been reviewed, nothing has come to our attention that caused us to believe that the accompanying consolidated financial statements do not give a true and fair view of the consolidated financial position of the Group as of March 31, 2023 and 2022, its consolidated financial performance for the three months ended March 31, 2023 and 2022, and its consolidated cash flows for the three months ended March 31, 2023 and 2022 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34 "Interim Financial Reporting" endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

The engagement partners on the reviews resulting in this independent auditors' review report are Wen-Ching Lin and Xin-Wei Tai.

Deloitte & Touche

Taipei, Taiwan

Republic of China

May 9, 2023

Notice to Readers

The translation version is intended for reference only. If any inconsistency between the Chinese and English versions, the Chinese version shall govern.

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U-MING MARINE TRANSPORT CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (In Thousands of New Taiwan Dollars)

			March 31, 2023						December 31, 2022				March 31, 2022
ASSETS			Amount	%					Amount	%					Amount	%
CURRENT ASSETS
Cash and cash equivalents (Note 6 and 23)	$	14,229,144		18		$	14,558,599	19	$	16,276,520		24
Financial assets at fair value through profit or loss (Note 7)			1,485,284		2					1,454,502		2					1,499,168		2
Financial assets at fair value through other comprehensive income (Notes 8 and 24)			7,430,243		9					7,398,815		10				7,528,742		11
Financial assets at amortized cost			162,517		-					393,316		1					316,051		1
Contract assets (Notes 18)			409,383		1					208,995		-					289,526		1
Trade receivables from unrelated parties (Note 9)			602,587		1					763,260		1					339,229		1
Trade receivables from related parties (Notes 9 and 23)			56,385	-					147,259		-					50,713		-
Other receivables (Note 23)			403,910		-					380,089		-					86,444		-
Fuel inventory			744,094		1					524,841		1					773,209		1
Other current assets			248,943		-					255,001		-					199,456		-
Total current assets			25,772,490		32					26,084,677		34				27,359,058		41
NON-CURRENT ASSETS
Financial assets at fair value through other comprehensive income (Note 8)			2,336,526		3					2,265,992		3					2,413,682		3
Financial assets at amortized cost			1,738,998	2					1,407,451		2					424,500		1
Investments accounted for using the equity method (Notes 11)			4,666,716		6					4,637,204		6					4,234,068		6
Property, plant and equipment (Notes 12, 24 and 25)			42,206,758		53					32,380,475		42				28,996,128		43
Intangible assets			54,955	-					60,191		-					66,789		-
Deferred tax assets			3,346	-					3,472		-					4,904		-
Prepayments for equipment (Notes 12 and 25)			2,563,985		3					9,137,927		12				3,391,449		5
Refundable deposits (Notes 23 and 24)			85,840	-					60,668		-					80,802		-
Long-term receivables from related parties (Note 23)			371,179		1					388,333		1					556,591		1
Total non-current assets			54,028,303		68					50,341,713		66				40,168,913		59
TOTAL	$	79,800,793		100		$	76,426,390		100	$	67,527,971		100
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term borrowings (Notes 14, 23 and 24)	$	7,342,000		9		$	7,367,000		10	$	5,928,000		9
Short-term bills payable (Notes 14 and 24)			3,884,916		5					3,819,551		5					7,633,004		11
Financial liabilities at fair value through profit or loss (Note 7)			3,502	-					3,191		-					42,851		-
Trade payables (Note 23)			445,627		1					242,772		-					230,270		-
Other payables (Note 15)			1,133,380		1					1,085,905		2					1,120,734		2
Current tax liabilities			36,101	-					39,232		-					1,189		-
Current portion of long-term borrowings (Notes 14 and 24)			4,161,923		5					3,714,757		5					3,777,746		6
Other current liabilities (Note 18 and 23)			255,451		-					266,168		-					377,942		-
Total current liabilities			17,262,900		21					16,538,576		22				19,111,736		28
NON-CURRENT LIABILITIES
Bank loans (Notes 14 and 24)			29,314,291		37					26,686,484		35				19,123,172		29
Deferred tax liabilities			14,261	-					216,892		-					194,578		-
Net defined benefit liabilities			83,448	-					83,935		-					111,885		-
Total non-current liabilities			29,412,000		37					26,987,311		35				19,429,635		29
Total liabilities			46,674,900		58					43,525,887		57				38,541,371		57
EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Note 17)
Common share capital			8,450,557		11					8,450,557		11				8,450,557		13
Capital surplus			118,663		-					118,545		-					115,148		-
Retained earnings
Legal reserve			7,454,292		10					7,454,292		10				6,964,052		10
Special reserve			2,227,895		3					2,227,895		3					1,022,797		2
Unappropriated earnings			12,227,748		15					11,731,182		15				12,379,561		18
Total retained earnings			21,909,935		28					21,413,369		28				20,366,410		30
Other equity			2,465,348		3					2,722,838		4					54,485	-
Total equity attributable to owners of the Company			32,944,503		42					32,705,309		43				28,986,600		43
NON-CONTROLLING INTERESTS			181,390		-					195,194		-					-		-
Total equity			33,125,893		42					32,900,503		43				28,986,600		43
TOTAL	$	79,800,793		100		$	76,426,390		100	$	67,527,971		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 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

		For the Three Months Ended March 31
	2023						2022
		Amount	%				Amount	%
OPERATING REVENUE
Freight revenue (Notes 18 and 23)	$ 2,855,677			100		$ 3,042,844		100
Other operating revenue (Note 19)		1,401			-			3,107			-
Total operating revenue	2,857,078			100		3,045,951		100
OPERATING COSTS
Freight cost (Notes 19 and 23)		2,388,878			83			1,998,942			66
GROSS PROFIT	468,200			17		1,047,009		34
OPERATING EXPENSES (Notes 9, 19 and 23)		161,936			6			168,991			5
PROFIT FROM OPERATIONS	306,264		11		878,018		29
NON-OPERATING INCOME AND EXPENSES
Other income (Note 23)	9,594			-		9,572		-
Finance costs	(309,247)	(11)	(85,530)	(3)
Share of the profit or loss of associates and joint
ventures (Note 11)	40,394			2		42,187		1
Interest income	148,646			5		22,248		1
Dividend income	2,493			-		2,305		-
Net loss on sale of investment	-				-		(21,500)	(1)
Net gain (loss) on foreign currency exchange	6,139			-		(10,043)	-
Net gain on financial assets and liabilities at fair
value through profit or loss	74,968			3		23,002		1
Other losses		(4,149)		-		(9,554)	-
Total non-operating income and expenses		(31,162)		(1)	(27,313)	(1)
PROFIT BEFORE INCOME TAX		275,102			10			850,705		28
INCOME TAX (BENEFIT) EXPENSE (Note 20)		(205,544)		(7)	7,585		-
NET PROFIT FOR THE YEAR		480,646		17			843,120	28

(Continued)

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