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WISDOM MARINE LINES CO., LIMITED (CAYMAN)

AND ITS SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

INDEPENDENT AUDITORS’ REPORT

31 DECEMBER 2024 AND 2023

Registered: Windward 3, Regatta Office Park, PO Box 1350, Grand Cayman

KY1-1108, Cayman Islands

Address: 7F., No. 237, Sec. 2, Fushing S. Rd., Taipei City, Taiwan

Telephone: 886-2-2755-2637

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TABLE OF CONTENTS

|  |  |  |
| --- | --- | --- |
| Contents |  | Page |
| Cover page |  | 1 |
| Table of contents |  | 2 |
| Statement by directors |  | 3 |
| Independent auditors’ report |  | 4-7 |
| Consolidated balance sheets |  | 8-9 |
| Consolidated statements of comprehensive income |  | 10 |
| Consolidated statements of changes in equity |  | 11 |
| Consolidated statements of cash flows |  | 12 |
| Notes to the consolidated financial statements |  |  |
| 1. | History and organization | 13 |
| 2. Date and procedures of authorization of financial statements for issue |  | 13 |
| 3. Newly issued or revised standards and interpretations |  | 13-16 |
| 4. Summary of significant accounting policies |  | 16-45 |
| 5. Significant accounting judgments, estimates and assumptions |  | 46-48 |
| 6. Contents of significant accounts |  | 48-76 |
| 7. Related party transactions |  | 76-82 |
| 8. Pledged assets |  | 82 |
| 9. Significant commitments and contingencies |  | 82-83 |
| 10. Losses due to major disasters |  | 84 |
| 11. Significant subsequent events |  | 84 |
| 12. Others |  | 84-97 |
| 13. Other disclosures |  | 97-98 |
| 14. Segment information |  | 98-99 |

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STATEMENT BY DIRECTORS

This statement specifies the responsibility of the Board of Directors in compiling the Consolidated

Financial  Report  of  Wisdom  Marine  Lines  Co.,  Limited  (Cayman)  (the  “Company”)  and  its

subsidiaries (together the “Group”).

In addition to the disclosure of accounting information, a complete consolidated financial report shall

include the roles of each segment of the Group and their future development, so that the readers of

the Financial Report can fully understand the future development and potential risk of the Group. In

respect of the full and complete disclosure of accounting procedures and financial information, the

Board  has  responsibility  to  review  the  Group’s  strategies,  important  business  plans,  and  risk

management policies, to set operational targets, and to monitor the results of operations, in order to

comply with relevant regulations, protect company interests, and avoid potential fraud within the

Group. We  have  provided the relevant  financial information for every financial  report year, and

disclosed  the  consolidated  assets,  liabilities,  financial  structure  and  operating  performance  in  a

truthful, fair and objective manner. Our disclosure is based on the principles of consistency and going

concern assumption, and we make fair judgments and estimations regarding accrual items at the end

of each year, in order to prevent erroneous information in the consolidated financial report.

The Board of Directors and management reviewed the consolidated financial report of the Company

and its subsidiaries for 2024 and 2023 on 24 February 2025. The consolidated financial report have

been  prepared  in  accordance  with  International  Financial  Reporting  Standards,  International

Accounting  Standards  and  Interpretations  developed  by  the  International  Financial  Reporting

Interpretations Committee or the former Standing Interpretations Committee, and give a true and fair

view of the consolidated financial position of the Group as at 31 December 2024 and 2023 and the

consolidated results and changes in equity of the Group for the years then ended, and there is no

fraudulent or concealed information.

The Board of Directors has, on the date of this statement, authorized these financial statements for

issue.

Wisdom Marine Lines Co., Limited

Director

24 February 2025

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Independent Auditors’ Report

To the Board of Directors and Stockholders of

Wisdom Marine Lines Co., Limited (Cayman)

Opinion

We  have  audited  the  consolidated  financial  statements  of  Wisdom  Marine  Lines  Co.,  Limited

(Cayman) and its subsidiaries ( the Group) , which comprise the consolidated statement of financial

position as at 31 December 2024, and the related consolidated statements of comprehensive income,

changes in equity and cash flows for the years ended 31 December 2024, and notes to the consolidated

financial statements, including the summary of material accounting policies.

In our opinion, the consolidated financial statements referred to above present fairly, in all material

respects,  the  consolidated  financial  position  of  the  Group  as  at  31  December  2024,  and  their

consolidated  financial  performance  and  cash  flows  for  the  years  ended  31  December  2024,  in

accordance with International Financial Reporting Standards (IFRSs).

Basis for Opinion

We conducted our audits in accordance with the International Standards on Auditing (ISAs). 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  (the  “Norm”),  which  includes  International  Ethics  Standards  Board  for

Accountants’ International Code of Ethics for Professional Accountants (including International In-

dependence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in

accordance with the IESBA Code. 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 of the current period. These matters were addressed

in the context of our audit of the consolidated financial statements as a whole, and in forming our

opinion thereon, and we do not provide a separate opinion on these matters.

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Revenue recognition

Hire revenues amounted to $627,027,305 for the year ended 31 December 2024, accounting for 99%

of operating revenues, which is significant to the consolidated financial statements. Therefore, we

have determined the validity of hire revenue as a key audit matter. The audit procedures we conducted

regarding the hire revenue recognition included but not limited to the following: understanding the

design and implementation of internal controls with regard to hire revenue recognition in order to

design relevant internal control audit procedures in response to the validity of hire revenue so as to

verify the effectiveness of the design and implementation of the Group's internal controls; selecting

samples  from  the  population  of  hire  revenues  to perform  tests  of  control  and  tests  of  details;

examining lease contracts, debit notes, bank statements and remittances to ensure whether recognition

of  hire  revenues  are  in  accordance  with  contract  terms  and  remitters  are  consistent  with  the

counterparty of the lease contracts, performing confirmations of lease contracts to verify existence of

lessees and validity of contract terms; analyzing variances in hire revenues and fluctuations in gross

margin and assessing the reasonable. We also evaluated the disclosure regarding revenue recognition

in Notes 4 and 6 of the consolidated financial statements.

Impairment of property, plant and equipment

As  at  31  December  2024,  the  amount  of  the  Group’s  property,  plant  and  equipment  was

$2,295,049,049, which accounted for 82% of total assets. The management assessed if there is any

indication that an asset may be impaired on balance sheet date. If there is any indication that an asset

may be impaired,  the Group should evaluate the recoverable amount of  the  cash-generating-unit

(CGU), to which the asset belongs. The property, plant and equipment of the Group mainly consists

of vessel equipment. The subsidiaries of the Company took the one-vessel-one-company strategy to

manage vessels, and the main CGU for each subsidiary is their vessels. With the view that the amount

of property, plant and equipment being material and the calculation of recoverable amount involving

numerous assumptions and estimates, we have determined the impairment of property, plant and

equipment as a key audit matter. The audit procedures we conducted regarding the impairment of

property,  plant  and  equipment  included  but  not  limited  to  the  following:  evaluating  the

appropriateness of the accounting policy for impairment of property, plant and equipment; inspecting

the  impairment  evaluation  report  provided  by  the  Group  and  assessing  the  reasonableness  of

managements  identification  of  indicators  of  impairment  and  the  assumptions  used,  including

identification of CGU, estimation of cash flows and discount rate. We also evaluated the disclosure

regarding property, plant and equipment in Notes 4, 5 and 6 of the consolidated financial statements.

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 IFRSs, 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.

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Those  charged  with  governance,  including  audit  committee,  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 ISAs 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 ISAs, we exercise professional judgment and 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.

5. Evaluate the overall presentation, structure and content of the consolidated financial statements,

including the accompanying notes, and whether the consolidated financial statements represent the

underlying transactions and events in a manner that achieves fair presentation.

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6. Obtain sufficient appropriate audit evidence regarding the financial information of the 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 of the current

period 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.

/S/Lu, Chian Uen

/S/Liu, Jung Chin

for and on behalf of

Ernst & Young LLP

Chartered Accountants and Statutory Auditors

Taiwan

24 February 2025

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|  |  |  |  |
| --- | --- | --- | --- |
|  | Notes | 31 December 2024 31 December 2023 |  |
| ASSETS |  |  |  |
| Cash and cash equivalents | 6.(1) | $135,150,365 | $116,946,577 |
| Current financial assets at fair value through profit or loss | 6.(2) | 822,100 | 902,700 |
| Current financial assets at fair value through |  |  |  |
| other comprehensive income | 6.(3) & 8 | 9,717,541 | 11,864,671 |
| Accounts receivable, net | 6.(4) & 6.(16) | 4,832,273 | 4,570,206 |
| Accounts receivable due from related parties, net | 6.(4), 6.(16) & 7 | 283,147 | 299,989 |
| Other receivables | 7 | 6,619,288 | 2,108,709 |
| Inventories | 6.(5) | 2,934,774 | 3,689,083 |
| Prepayments | 7 | 3,834,012 | 3,682,733 |
| Other current financial assets | 6.(1) & 8 | 36,491,161 | 51,807,798 |
| Other current assets, other | 7 | 34,765,557 | 16,991,750 |
| Total current assets |  | 235,450,218 | 212,864,216 |
| Investments accounted for using the equity method | 6.(6) | 9,902,886 | 11,905,112 |
| Property, plant and equipment | 6.(7), 7 & 8 | 2,295,049,049 | 2,367,805,863 |
| Right-of-use assets | 6.(12) & 7 | 177,747,906 | 186,358,566 |
| Investment property, net | 6.(8) & 8 | 2,194,490 | 2,352,002 |
| Deferred tax assets | 6.(20) | 10,997 | 32,351 |
| Guarantee deposits paid |  | 12,819,612 | 13,811,397 |
| Net defined benefit asset, non-current | 6.(13) | 36,720 | 6,959 |
| Other non-current assets | 6.(9) | 49,993,014 | 64,309,667 |
| Total non-current assets |  | 2,547,754,674 | 2,646,581,917 |
| TOTAL ASSETS |  | $2,783,204,892 | $2,859,446,133 |

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

WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

31 DECEMBER 2024 AND 2023

(All Amounts Expressed in US Dollars)

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (CONT’D)

(All Amounts Expressed in US Dollars)

|  |  |  |  |
| --- | --- | --- | --- |
|  | Note | 31 December 2024 31 December 2023 |  |
| LIABILITIES |  |  |  |
| Short-term borrowings | 6.(10) | $21,470,519 | $30,527,226 |
| Accounts payable |  | 6,017,870 | 5,758,865 |
| Accounts payable to related parties | 7 | 45,982 | - |
| Other accrued expenses | 7 | 22,897,429 | 27,386,743 |
| Advance receipts |  | 12,816,169 | 14,594,007 |
| Other current liabilities, other | 7 | 5,028,447 | 2,481,400 |
|  |  | 68,276,416 | 80,748,241 |
| Current lease liabilities | 6.(12) & 7 | 28,488,199 | 13,391,453 |
| Bonds payable, current portion | 6.(11) | - | 45,059,803 |
| Long-term borrowings, current portion | 6.(10) | 173,686,399 | 214,728,297 |
| Long-term accounts payable, current portion | 6.(12) | 7,735,490 | 4,846,444 |
| Long-term accounts payable to related parties, current portion | 6.(12) & 7 | 555,627 | 818,273 |
|  |  | 210,465,715 | 278,844,270 |
| Total current liabilities |  | 278,742,131 | 359,592,511 |
| Bonds payable | 6.(11) | 30,197,916 | - |
| Long-term borrowings, non-current portion | 6.(10) | 626,205,475 | 747,686,428 |
| Deferred tax liabilities | 6.(20) | 24,759 | 13,774 |
| Non-current lease liabilities | 6.(12) & 7 | 93,931,608 | 130,152,801 |
| Long-term accounts payable, non-current portion | 6.(12) | 63,199,737 | 32,514,688 |
| Long-term accounts payable to related parties, non-current portion | 6.(12) & 7 | 92,711,038 | 124,063,266 |
| Guarantee deposits received |  | 183 | 195 |
| Total non-current liabilities |  | 906,270,716 | 1,034,431,152 |
| TOTAL LIABILITIES |  | 1,185,012,847 | 1,394,023,663 |
| EQUITY | 6.(14) |  |  |
| Common stock |  | 238,739,686 | 238,739,686 |
| Capital surplus |  | 1,237,415 | 1,237,415 |
| Legal reserve |  | 6,960 | 6,960 |
| Unappropriated retained earnings |  | 1,089,832,443 | 965,322,804 |
| Exchange differences on translation of foreign financial statements |  | 268,608,077 | 260,505,757 |
| Unrealized gains (losses) from financial assets measured |  |  |  |
| at fair value through other comprehensive income |  | (232,536) | (390,152) |
| TOTAL EQUITY |  | 1,598,192,045 | 1,465,422,470 |
| TOTAL LIABILITIES AND EQUITY |  | $2,783,204,892 | $2,859,446,133 |

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

31 DECEMBER 2024 AND 2023

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(All Amounts Expressed in US Dollars)

|  |  |  |  |
| --- | --- | --- | --- |
|  | Notes | 2024 | 2023 |
| Operating revenue | 6.(15) & 7 | $634,431,170 | $545,530,289 |
| Operating costs | 6.(17) & 7 | 417,680,331 | 428,615,293 |
| Gross profit from operations |  | 216,750,839 | 116,914,996 |
| Operating expenses |  |  |  |
| Administrative expenses | 6.(17) & 7 | 5,149,957 | 5,046,214 |
| Expected credit losses | 6.(16) | 280,486 | 286,890 |
| Total operating expenses |  | 5,430,443 | 5,333,104 |
| Net operating income |  | 211,320,396 | 111,581,892 |
| Non-operating income and expenses |  |  |  |
| Interest income | 6.(18) | 7,239,525 | 6,859,227 |
| Other income, others | 6.(18) & 7 | 320,167 | 1,078,502 |
| Gains on disposal of property, plant and equipment | 6.(7), 6.(18) & 7 | 31,267,595 | 53,876,999 |
| Foreign exchange gains | 6.(18) | 6,216,483 | 3,929,478 |
| Miscellaneous expenses | 6.(18) | (1,208,412) | (2,452,822) |
| Losses on disposals of investments | 6.(18) | (11,418) | (1,402) |
| Losses from lease modification | 6.(18) | - | (1,358) |
| (Losses) gains on financial assets (liabilities) |  |  |  |
| at fair value through profit or loss | 6.(2) & 6.(18) | (26,743) | 713,053 |
| Other impairment loss | 6.(6) & 6.(18) | (1,712,900) | - |
| Interest expense | 6.(7), 6.(11), 6.(18) & 7 | (61,525,898) | (68,757,353) |
| Share of loss of associates and joint ventures accounted |  |  |  |
| for using the equity method | 6.(6) | (3,347,544) | (1,072,279) |
| Total non-operating income and expenses |  | (22,789,145) | (5,827,955) |
| Profit from continuing operations before tax |  | 188,531,251 | 105,753,937 |
| Income tax expense | 6.(20) | 689,372 | 787,219 |
| Net income |  | 187,841,879 | 104,966,718 |
| Other comprehensive income (loss): | 6.(19) |  |  |
| Components of other comprehensive income (loss) that will not be |  |  |  |
| reclassified to profit or loss |  |  |  |
| Remeasurement of defined benefit plans |  | 25,491 | 177,301 |
| Income tax expense (income) relating to items that will not be reclassified |  | 5,098 | (1,001) |
| Components of other comprehensive income (loss) that will be |  |  |  |
| reclassified to profit or loss |  |  |  |
| Exchange differences on translation of foreign financial statements |  | 8,102,320 | (15,346,026) |
| Unrealized gains from investments in debt instruments |  |  |  |
| measured at fair value through other comprehensive income |  | 157,616 | 345,837 |
| Other comprehensive income (loss) |  | 8,280,329 | (14,821,887) |
| Total comprehensive income |  | $196,122,208 | $90,144,831 |
| Net income attributable to: |  |  |  |
| Net income attributable to owners of parent |  | $187,841,879 | $104,966,718 |
| Comprehensive income attributable to: |  |  |  |
| Comprehensive income attributable to owners of parent |  | $196,122,208 | $90,144,831 |
| Basic earnings per share | 6.(21) | $0.25 | $0.14 |
| Diluted earnings per share | 6.(21) | $0.25 | $0.14 |

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

FOR THE YEARS ENDED 31 DECEMBER 2024 AND 2023

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED 31 DECEMBER 2024 AND 2023

(All Amounts Expressed in US Dollars)

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  | Total retained earnings |  | Other components of equity |  |  |
|  |  |  |  |  |  | Unrealized gains |  |
|  |  |  |  |  | (losses) on financial |  |  |
|  |  |  |  |  | Exchange differences | assets measured at |  |
|  |  |  |  |  | on translation of | fair value through |  |
|  |  |  |  | Unappropriated | foreign financial | other comprehensive |  |
|  | Common stock | Capital surplus | Legal reserve | retained earnings | statements | income | Total |
| Balance, 1 January 2023 | $238,739,686 | $1,237,415 | $6,960 | $1,017,955,338 | $275,851,783 | $(735,989) | $1,533,055,193 |
| Appropriation and distribution of retained earnings: |  |  |  |  |  |  |  |
| Cash dividends of ordinary share | - | - | - | (157,777,554) | - | - | (157,777,554) |
| Profit for the year ended 31 December 2023 | - | - | - | 104,966,718 | - | - | 104,966,718 |
| Other comprehensive income (loss) for the year ended 31 December 2023 | - | - | - | 178,302 | (15,346,026) | 345,837 | (14,821,887) |
| Total comprehensive income (loss) for the year ended 31 December 2023 | - | - | - | 105,145,020 | (15,346,026) | 345,837 | 90,144,831 |
| Balance, 31 December 2023 | $238,739,686 | $1,237,415 | $6,960 | $965,322,804 | $260,505,757 | $(390,152) | $1,465,422,470 |
| Balance, 1 January 2024 | $238,739,686 | $1,237,415 | $6,960 | $965,322,804 | $260,505,757 | $(390,152) | $1,465,422,470 |
| Appropriation and distribution of retained earnings: |  |  |  |  |  |  |  |
| Cash dividends of ordinary share | - | - | - | (63,352,633) | - | - | (63,352,633) |
| Profit for the year ended 31 December 2024 | - | - | - | 187,841,879 | - | - | 187,841,879 |
| Other comprehensive income (loss) for the year ended 31 December 2024 | - | - | - | 20,393 | 8,102,320 | 157,616 | 8,280,329 |
| Total comprehensive income (loss) for the year ended 31 December 2024 | - | - | - | 187,862,272 | 8,102,320 | 157,616 | 196,122,208 |
| Balance, 31 December 2024 | $238,739,686 | $1,237,415 | $6,960 | $1,089,832,443 | $268,608,077 | $(232,536) | $1,598,192,045 |

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

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEARS ENDED 31 DECEMBER 2024 AND 2023

(All Amounts Expressed in US Dollars)

|  |  |  |
| --- | --- | --- |
|  | 2024 | 2023 |
| CASH FLOWS FROM OPERATING ACTIVITIES |  |  |
| Profit from continuing operations before tax | $188,531,251 | $105,753,937 |
| Adjustments to reconcile net income before tax: |  |  |
| Depreciation expense | 152,288,779 | 152,965,877 |
| Amortization expense | 19,318 | 17,489 |
| Expected credit losses | 280,486 | 286,890 |
| Net losses on financial assets or liabilities at fair value through profit or loss | 94,693 | 8,000 |
| Interest expense | 61,525,898 | 68,757,353 |
| Interest income | (7,239,525) | (6,859,227) |
| Effect of exchange rate changes of bonds payable | (2,701,131) | 16,583 |
| Share of loss of associates and joint ventures accounted for using the equity method | 3,347,544 | 1,072,279 |
| Gains on disposals of property, plant and equipment | (31,267,595) | (53,876,999) |
| Losses on disposals of investments | 11,418 | 1,402 |
| Impairment loss on non-financial assets | 1,712,900 | - |
| Unrealized foreign exchange (gain) loss | (4,472,560) | 1,961,419 |
| Amortization of financial assets at fair value through other comprehensive income | (64,320) | (134,582) |
| Other adjustments | 165,751 | (4,717,490) |
| Changes in operating assets and liabilities: |  |  |
| Decrease (increase) in accounts receivable | (542,553) | (139,978) |
| Decrease (increase) in accounts receivable-related parties | 16,842 | 19,023 |
| Decrease (increase) in other receivables | (561,727) | 153,687 |
| Decrease (increase) in inventories | 683,180 | 2,715,334 |
| Decrease (increase) in prepayments | (422,110) | 3,912,452 |
| Decrease (increase) in other current assets | (17,773,807) | 8,194,292 |
| Increase (decrease) in accounts payable | 259,005 | (2,244,012) |
| Increase (decrease) in accounts payable to related parties | 45,982 | (508,700) |
| Increase (decrease) in other accrued expenses | 1,245,031 | (6,559,453) |
| Increase (decrease) in advance receipts | (1,778,210) | (1,450,414) |
| Increase (decrease) in other current liabilities | (628,150) | (690,364) |
| Cash generated from operations | 342,776,390 | 268,654,798 |
| Interest received | 6,007,940 | 7,150,287 |
| Interest paid | (61,653,377) | (68,847,880) |
| Income taxes paid | (773,762) | (662,974) |
| Net cash flows from operating activities | 286,357,191 | 206,294,231 |
| CASH FLOWS FROM INVESTING ACTIVITIES |  |  |
| Acquisition of financial assets at fair value through other comprehensive income | - | (582,886) |
| Proceeds from disposals of financial assets |  |  |
| at fair value through other comprehensive income | 2,295,825 | 2,054,691 |
| Proceeds from disposals of financial assets for hedging | - | 417,664 |
| Acquisition of investments accounted for using the equity method | (3,710,210) | (2,605,439) |
| Acquisition of property, plant and equipment | (23,279,945) | (22,097,733) |
| Proceeds from disposals of property, plant and equipment | 84,406,585 | 201,581,411 |
| Decrease (increase) in guarantee deposits paid | (1,285) | (224,487) |
| Acquisition of right-of-use assets | (1,403,661) | (862,997) |
| Decrease (increase) in other financial assets | 15,316,637 | (1,994,986) |
| Decrease (increase) in other non-current assets (prepayments for vessels) | (116,098,901) | (189,486,670) |
| Net cash (used in) flows from investing activities | (42,474,955) | (13,801,432) |
| CASH FLOWS FROM FINANCING ACTIVITIES |  |  |
| Increase in short-term borrowings | 31,362,374 | 57,338,260 |
| Decrease in short-term borrowings | (39,400,509) | (52,047,609) |
| Proceeds from issuing bonds | 30,533,282 | - |
| Repayments of bonds | (42,786,531) | - |
| Increase in long-term borrowings | 417,659,431 | 626,566,888 |
| Decrease in long-term borrowings | (536,715,780) | (747,084,778) |
| Increase (decrease) in guarantee deposits received | - | 193 |
| Repayments of the principal portion of lease liabilities | (12,956,121) | (18,839,655) |
| Increase in other financial liabilities | 49,000,000 | 26,621,352 |
| Decrease in other financial liabilities | (43,337,207) | (18,655,476) |
| Distribution of cash dividend | (63,052,460) | (157,845,660) |
| Net cash used in financing activities | (209,693,521) | (283,946,485) |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (15,984,927) | 43,415 |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 18,203,788 | (91,410,271) |
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 116,946,577 | 208,356,848 |
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $135,150,365 | $116,946,577 |

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

12

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13

WISDOM MARINE LINES CO., LIMITED (CAYMAN)

AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31 DECEMBER 2024 AND 2023

(In US Dollars Unless Stated Otherwise)

1.  History and organization

Wisdom Marine Lines Co., Limited (Cayman) (the “Company”) was incorporated in the Cayman

Islands on 21 October 2008 as a tax-exempt company with limited liability under the Companies

Act, Cap 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands. The Company

and its subsidiaries (the “Group”) primarily provide marine cargo transportation services, service

related to the maintenance, vessel leasing, and shipping agency and management services. On 1

December 2010, the Company was approved and listed on Taiwan Stock Exchange (TWSE).

The Company’s ultimate parent company: None.

2.  Date and procedures of authorization of financial statements for issue

The consolidated financial statements were authorized for issue by the board of directors on 24

February 2025.

3.  Newly issued or revised standards and interpretations

(1)  The Group applied for the first time International Financial Reporting Standards, International

Accounting Standards, and Interpretations issued, revised or amended which are recognized

by  Financial  Supervisory  Commission  (“FSC”)  and  become  effective  for  annual  periods

beginning on or after 1 January 2024. The adoption of these new standards and amendments

had no material impact on the Group.

(2)  The following standards or interpretations issued by IASB are not yet effective:

A. IFRS 10“Consolidated Financial Statements” and IAS 28“Investments in Associates and

Joint Ventures”-Sale or Contribution of Assets between an Investor and its Associate or

Joint Ventures

The  amendments  address  the  inconsistency  between  the  requirements  in IFRS  10

Consolidated  Financial  Statements  and IAS  28  Investments  in  Associates  and  Joint

Ventures,  in  dealing  with  the  loss  of  control  of  a  subsidiary  that  is  contributed  to  an

associate or a joint venture. IAS 28 restricts gains and losses arising from contributions of

non-monetary  assets  to  an  associate  or  a  joint  venture  to  the  extent  of  the  interest

attributable to the other equity holders in the associate or joint ventures. IFRS 10 requires

full profit or loss recognition on the loss of control of the subsidiary. IAS 28 was amended

so that the gain or loss resulting from the sale or contribution of assets that constitute a

business as defined in IFRS 3 between an investor and its associate or joint venture is

recognized in full.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

14

IFRS 10 was also amended so that the gains or loss resulting from the sale or contribution

of a subsidiary that does not constitute a business as defined in IFRS 3 between an investor

and its associate or joint venture is recognized only to the extent of the unrelated investors’

interests in the associate or joint venture.

B. Lack of Exchangeability – Amendments to IAS 21

These amendments specify whether a currency is exchangeable into another currency and,

when it is not, to determining the exchange rate to use and the disclosures to provide.

C. IFRS 18 “Presentation and Disclosure in Financial Statements”

IFRS 18 replaces IAS 1 Presentation of Financial Statements. The main changes are as

below:

(a)  Improved comparability in the statement of profit or loss (income statement)

IFRS 18 requires entities to classify all income and expenses within their statement of

profit or loss into one of five categories: operating; investing; financing; income taxes;

and  discontinued  operations.  The  first  three  categories  are  new,  to  improve  the

structure of the income statement, and requires all entities to provide new defined

subtotals, including operating profit or loss. The improved structure and new subtotals

will give investors a consistent starting point for analyzing entities’ performance and

make it easier to compare entities.

(b)  Enhanced transparency of management-defined performance measures

IFRS 18 requires entities to disclose explanations of those entity-specific measures

that  are  related  to  the  income  statement,  referred  to  as  management-defined

performance measures.

(c)  Useful grouping of information in the financial statements

IFRS 18 sets out enhanced guidance on how to organize information and whether to

provide it in the primary financial statements or in the notes. The changes are expected

to provide  more  detailed and useful  information.  IFRS  18 also requires entities  to

provide more transparency about operating expenses, helping investors to find and

understand the information they need.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

15

D.  Disclosure Initiative – Subsidiaries without Public Accountability: Disclosures (IFRS 19)

This  standard  permits  subsidiaries  without  public  accountability  to  provide  reduced

disclosures when applying IFRS Accounting Standards in their financial statements. IFRS

19 is optional for subsidiaries that are eligible and sets out the disclosure requirements for

subsidiaries that elect to apply it.

E.  Amendments  to  the  Classification  and  Measurement  of  Financial  Instruments  –

Amendments to IFRS 9 and IFRS 7

The amendments include:

(a)  Clarify that a financial liability is derecognised on the settlement date and describe

the accounting treatment for settlement of financial liabilities using an electronic

payment system before the settlement date.

(b)  Clarify how to assess the contractual cash flow characteristics of financial assets that

include  environmental,  social  and  governance  (ESG)-linked  features  and  other

similar contingent features.

(c)  Clarify the treatment of non-recourse assets and contractually linked instruments.

(d)  Require  additional  disclosures  in  IFRS  7  for  financial  assets  and  liabilities  with

contractual terms that reference a contingent event (including those that are ESG-

linked), and equity instruments classified at fair value through other comprehensive

income.

F.  Annual Improvements to IFRS Accounting Standards – Volume 11

(a)  Amendments to IFRS 1

The  amendments  mainly  improve  the  consistency in  wording  between  first-time

adoption of IFRS and requirements for hedge accounting in IFRS 9.

(b)  Amendments to IFRS 7

The  amendments  update  an  obsolete  cross-reference  relating  to  gain  or  loss  on

derecognition.

(c)  Amendments to Guidance on implementing IFRS 7

The amendments improve some of the wordings in the implementation guidance,

including the introduction, disclosure of deferred difference between fair value and

transaction price and credit risk disclosures.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

16

(d)  Amendments to IFRS 9

The amendments add a cross-reference to resolve potential confusion for a lessee

applying the derecognition requirements and clarify the term “transaction price”.

(e)  Amendments to IFRS 10

The  amendments  remove  the inconsistency between  paragraphs  B73 and B74  of

IFRS 10.

(f)  Amendments to IAS 7

The amendments remove a reference to “cost method” in paragraph 37 of IAS 7.

G.  Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9 and IFRS

7

The amendments include:

(a)  Clarify the application of the ‘own-use’ requirements.

(b)  Permit hedge accounting if these contracts are used as hedging instruments.

(c)  Add new disclosure requirements to enable investors to understand the effect of these

contracts on a company’s financial performance and cash flows.

The abovementioned standards and interpretations issued by IASB are not yet effective at the

date when the Group’s financial statements were authorized for issue. As the Group is still

currently  determining  the  potential  impact  of  the  new  or  amended  standards  and

interpretations listed under A, B, C, D, F and G. it is not practicable to estimate their impact

on the Group at this point in time.

4.  Summary of material accounting policies

(1)  Statement of compliance

The consolidated financial statements of the Group for the years ended 31 December 2024

and 2023 have been prepared in accordance with International Financial Reporting Standards

(IFRSs) as issued by the International Accounting Standards Board.

(2)  Basis of preparation

A. Basis of measurement

The  consolidated  financial  statements  have  been  prepared  under  the  historical  cost

convention, except for those financial  instruments that  are measured at fair value with

changes therein shown in the consolidated financial statements.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

17

B. Functional and presentation currency

The  functional  currency  of  each  Group  entities  is  determined  based  on  the  primary

economic environment in which the entities operate. The Group’s consolidated financial

statements are presented in US Dollar, which is the Company’s functional currency and

presentation currency.

(3)  Basis of consolidation

A. Preparation principle of consolidated financial statements

Control is achieved when the Group is exposed, or has rights, to variable returns from its

involvement with the investee and has the ability to affect those returns through its power

over the investee. Specifically, the Group controls an investee if and only if the Group has:

(a)  power over the investee (i.e. existing rights that give it the current ability to direct

the relevant activities of the investee)

(b)  exposure, or rights, to variable returns from its involvement with the investee, and

(c)  the ability to use its power over the investee to affect its returns

When the Group has less than a majority of the voting or similar rights of an investee, the

Group considers all relevant facts and circumstances in assessing whether it has power over

an investee, including:

(a)  the contractual arrangement with the other vote holders of the investee

(b)  rights arising from other contractual arrangements

(c)  the Group’s voting rights and potential voting rights

The Group re-assesses whether or not it controls an investee if facts and circumstances

indicate that there are changes to one or more of the three elements of control.

Subsidiaries are fully consolidated from the acquisition date, being the date on which the

Group obtains control, and continue to be consolidated until the date that such control

ceases. The financial statements of the subsidiaries are prepared for the same reporting

period as the parent company, using uniform accounting policies. All intra-group balances,

income and expenses, unrealized gains and losses and dividends resulting from intra-group

transactions are eliminated in full.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

18

A change in the ownership interest of a subsidiary, without a change of control, is accounted

for as an equity transaction.

Total comprehensive income of the subsidiaries is attributed to the owners of the parent

and to  the non-controlling interests  even if this results in  the  non-controlling interests

having a deficit balance.

If the Group loses control of a subsidiary, it:

(a) derecognizes the assets (including goodwill) and liabilities of the subsidiary;

(b)  derecognizes the carrying amount of any non-controlling interest;

(c) recognizes the fair value of the consideration received;

(d) recognizes the fair value of any investment retained;

(e)  reclassifies  the  parent’s  share  of  components  previously  recognized  in  other

comprehensive income to profit or loss,  or transfer  directly to retained earnings if

required by other IFRSs; and

(f)  recognizes any resulting difference in profit or loss.

The consolidated entities are listed as follows:

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  | 2024.12.31 | 2023.12.31 |
| Investor | Investee Company Name | Main businesses | Ownership | Ownership |
|  |  |  | Percentage | Percentage |
| The Company | Wisdom Marine Lines S.A.(WML) | Shipping Industry | 100% | 100% |
| The Company | Wisdom Marine International Inc. (WII) | Shipping Management Industry | 100% | 100% |
| WII | Well Ship Management and Maritime  Consultant Co., Ltd. (WELL) | Shipping Management Industry | 100% | 100% |
| WII | Huian Ship Management Co., Ltd. | Shipping Management Industry | 100% | 100% |
| WII | Wisdom Lines Europe B.V. | Shipping Management Industry | 100% | 100% |
| WML | Adixi Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Amis Carriers S.A. | Shipping Industry | 100% | 100% |
| WML | Amis Elegance S.A. | Shipping Industry | 100% | 100% |
| WML | Amis Fortune S.A. | Shipping Industry | 100% | 100% |
| WML | Amis Hero S.A. | Shipping Industry | 100% | 100% |
| WML | Amis Integrity S.A. | Shipping Industry | 100% | 100% |
| WML | Amis International S.A. | Shipping Industry | 100% | 100% |

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

19

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  | 2024.12.31 | 2023.12.31 |
| Investor | Investee Company Name | Main businesses | Ownership | Ownership |
|  |  |  | Percentage | Percentage |
| WML | Amis Justice S.A. | Shipping Industry | 100% | 100% |
| WML | Amis Mariner S.A. | Shipping Industry | 100% | 100% |
| WML | Amis Miracle S.A. | Shipping Industry | 100% | 100% |
| WML | Amis Nature Inc. | Shipping Industry | 100% | 100% |
| WML | Amis Navigation S.A. | Shipping Industry | 100% | 100% |
| WML | Amis Queen S.A. | Shipping Industry | 100% | 100% |
| WML | Amis Star S.A. | Shipping Industry | 100% | 100% |
| WML | Amis Victory S.A. | Shipping Industry | 100% | 100% |
| WML | Amis Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Amis Xcel Inc. | Shipping Industry | 100% | 100% |
| WML | Arikun Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Atayal Brave S.A. | Shipping Industry | 100% | 100% |
| WML | Atayal Mariner S.A. | Shipping Industry | 100% | 100% |
| WML | Atayal Star S.A. | Shipping Industry | 100% | 100% |
| WML | Atayal Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Babuza Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Beagle Marine S.A. | Shipping Industry | - | 100% |
| WML | Beagle Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Bunun Brave S.A. | Shipping Industry | 100% | 100% |
| WML | Bunun Champion S.A. | Shipping Industry | 100% | 100% |
| WML | Bunun Dynasty S.A. | Shipping Industry | 100% | 100% |
| WML | Bunun Elegance S.A. | Shipping Industry | 100% | 100% |
| WML | Bunun Fortune S.A. | Shipping Industry | 100% | 100% |
| WML | Bunun Hero S.A. | Shipping Industry | 100% | 100% |
| WML | Bunun Infinity S.A. | Shipping Industry | 100% | 100% |
| WML | Bunun Justice S.A. | Shipping Industry | 100% | 100% |
| WML | Bunun Marine S.A. | Shipping Industry | 100% | 100% |
| WML | Bunun Navigation S.A. | Shipping Industry | 100% | 100% |
| WML | Bunun Noble Inc. | Shipping Industry | 100% | 100% |
| WML | Bunun Treasure S.A. | Shipping Industry | 100% | 100% |
| WML | Bunun Unicorn S.A. | Shipping Industry | 100% | 100% |
| WML | Bunun Victory S.A. | Shipping Industry | 100% | 100% |

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

20

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  | 2024.12.31 | 2023.12.31 |
| Investor | Investee Company Name | Main businesses | Ownership | Ownership |
|  |  |  | Percentage | Percentage |
| WML | Bunun Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Bunun Youth Inc. | Shipping Industry | 100% | 100% |
| WML | Bunun Zest S.A. | Shipping Industry | 100% | 100% |
| WML | Cosmic Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Daiwan Champion S.A. | Shipping Industry | 100% | 100% |
| WML | Daiwan Dolphin S.A. | Shipping Industry | 100% | 100% |
| WML | Daiwan Elegance S.A. | Shipping Industry | 100% | 100% |
| WML | Daiwan Fortune S.A. | Shipping Industry | 100% | 100% |
| WML | Daiwan Glory S.A. | Shipping Industry | 100% | 100% |
| WML | Daiwan Hero S.A. | Shipping Industry | 100% | 100% |
| WML | Daiwan Infinity S.A. | Shipping Industry | 100% | 100% |
| WML | Daiwan Justice S.A. | Shipping Industry | 100% | 100% |
| WML | Daiwan Kalon S.A. | Shipping Industry | 100% | 100% |
| WML | Daiwan Leader S.A. | Shipping Industry | 100% | 100% |
| WML | Daiwan Miracle S.A. | Shipping Industry | 100% | 100% |
| WML | Dumun Marine S.A. | Shipping Industry | 100% | 100% |
| WML | Dumun Navigation S.A. | Shipping Industry | 100% | 100% |
| WML | Elite Steamship S.A. | Shipping Industry | 100% | 100% |
| WML | Euroasia Investment S.A. | Shipping Industry | 100% | 100% |
| WML | Favoran Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Fourseas Maritime S.A. Panama | Shipping Industry | 100% | 100% |
| WML | Fraternity Marine S.A. | Shipping Industry | 100% | 100% |
| WML | Fraternity Ship Investment S.A. | Shipping Industry | 100% | 100% |
| WML | Genius Marine S.A. | Shipping Industry | 100% | 100% |
| WML | Genius Prince S.A. | Shipping Industry | 100% | 100% |
| WML | Genius Star Carriers S.A. | Shipping Industry | 100% | 100% |
| WML | Genius Star Navigation S.A. | Shipping Industry | 100% | 100% |
| WML | GS Global S.A. | Shipping Industry | 100% | 100% |
| WML | GS Navigation S.A. | Shipping Industry | 100% | 100% |
| WML | GSX Maritime S.A. | Shipping Industry | 100% | 100% |
| WML | Guma Marine S.A. | Shipping Industry | 100% | 100% |
| WML | Guma Navigation S.A. | Shipping Industry | 100% | 100% |

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

21

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  | 2024.12.31 | 2023.12.31 |
| Investor | Investee Company Name | Main businesses | Ownership | Ownership |
|  |  |  | Percentage | Percentage |
| WML | Harmony Pescadores S.A. (Panama) | Shipping Industry | 100% | 100% |
| WML | Harmony Transport S.A. | Shipping Industry | 100% | 100% |
| WML | Hoanya Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Infinite Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Katagalan Ace S.A. | Shipping Industry | 100% | 100% |
| WML | Katagalan Brave S.A. | Shipping Industry | 100% | 100% |
| WML | Katagalan Carriers S.A. | Shipping Industry | 100% | 100% |
| WML | Katagalan Champion S.A. | Shipping Industry | 100% | 100% |
| WML | Katagalan Line S.A. | Shipping Industry | 100% | 100% |
| WML | Katagalan Marine S.A. | Shipping Industry | 100% | 100% |
| WML | Katagalan Navigation S.A. | Shipping Industry | 100% | 100% |
| WML | Katagalan Star S.A. | Shipping Industry | 100% | 100% |
| WML | Katagalan Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Kavalan Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Ligulao Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Lloa Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Log Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Luilang Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Magnate Maritime S.A. | Shipping Industry | 100% | 100% |
| WML | Makatao Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Mercy Marine Line S.A. | Shipping Industry | 100% | 100% |
| WML | Mighty Maritime S.A. | Shipping Industry | 100% | 100% |
| WML | Mimasaka Investment S.A. | Shipping Industry | 100% | 100% |
| WML | Mount Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Paiwan Ace S.A. | Shipping Industry | 100% | 100% |
| WML | Paiwan Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Papora Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Pazeh Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Pescadores International Line S.A. | Shipping Industry | 100% | 100% |
| WML | Poavosa International S.A. | Shipping Industry | 100% | 100% |
| WML | Poavosa Maritime S.A. | Shipping Industry | 100% | 100% |
| WML | Poavosa Navigation S.A. | Shipping Industry | 100% | 100% |

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

22

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  | 2024.12.31 | 2023.12.31 |
| Investor | Investee Company Name | Main businesses | Ownership | Ownership |
|  |  |  | Percentage | Percentage |
| WML | Poavosa Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Rukai Maritime S.A. | Shipping Industry | 100% | 100% |
| WML | Sakizaya Diamond S.A. | Shipping Industry | 100% | 100% |
| WML | Sakizaya Fortune S.A. | Shipping Industry | 100% | 100% |
| WML | Sakizaya Glory S.A. | Shipping Industry | 100% | 100% |
| WML | Sakizaya Hero S.A. | Shipping Industry | 100% | 100% |
| WML | Sakizaya Integrity S.A. | Shipping Industry | 100% | 100% |
| WML | Sakizaya Justice S.A. | Shipping Industry | 100% | 100% |
| WML | Sakizaya Kalon S.A. | Shipping Industry | 100% | 100% |
| WML | Sakizaya Leader S.A. | Shipping Industry | 100% | 100% |
| WML | Sakizaya Line S.A. | Shipping Industry | 100% | 100% |
| WML | Sakizaya Marine S.A. | Shipping Industry | 100% | 100% |
| WML | Sakizaya Miracle S.A. | Shipping Industry | 100% | 100% |
| WML | Sakizaya Navigation S.A. | Shipping Industry | 100% | 100% |
| WML | Sakizaya Orchid S.A. | Shipping Industry | 100% | 100% |
| WML | Sakizaya Power S.A. | Shipping Industry | 100% | 100% |
| WML | Sakizaya Queen S.A. | Shipping Industry | 100% | 100% |
| WML | Sakizaya Respect S.A. | Shipping Industry | 100% | 100% |
| WML | Sakizaya Unicorn S.A. | Shipping Industry | 100% | 100% |
| WML | Sakizaya Victory S.A. | Shipping Industry | 100% | 100% |
| WML | Sakizaya Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Sakizaya Youth S.A. | Shipping Industry | 100% | 100% |
| WML | Sao Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Saysiat Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Siraya Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Taivoan Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Tao Ace S.A. | Shipping Industry | 100% | 100% |
| WML | Tao Brave S.A. | Shipping Industry | 100% | 100% |
| WML | Tao Mariner S.A. | Shipping Industry | 100% | 100% |
| WML | Tao Star S.A. | Shipping Industry | 100% | 100% |
| WML | Tao Treasure S.A. | Shipping Industry | 100% | 100% |
| WML | Taokas Marine S.A. | Shipping Industry | 100% | 100% |

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

23

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  | 2024.12.31 | 2023.12.31 |
| Investor | Investee Company Name | Main businesses | Ownership | Ownership |
|  |  |  | Percentage | Percentage |
| WML | Taokas Navigation S.A. | Shipping Industry | 100% | 100% |
| WML | Taokas Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Taroko Maritime S.A. | Shipping Industry | 100% | 100% |
| WML | Taroko Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Triumph Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Trobian Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Unicorn Bravo S.A. | Shipping Industry | 100% | 100% |
| WML | Unicorn Fortune S.A. | Shipping Industry | - | 100% |
| WML | Unicorn Logger S.A. | Shipping Industry | 100% | 100% |
| WML | Unicorn Logistics S.A. | Shipping Industry | 100% | 100% |
| WML | Unicorn Marine S.A. | Shipping Industry | 100% | 100% |
| WML | Unicorn Pescadores S.A. | Shipping Industry | 100% | 100% |
| WML | Unicorn Successor S.A. | Shipping Industry | 100% | 100% |
| WML | Vayi Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Winsome Wisdom S.A. | Shipping Industry | 100% | 100% |
| WML | Wisdom Ace S.A. | Shipping Industry | - | 100% |
| WML | Wisdom Capital (BVI) Inc. | Investment Industry | 100% | - |
| WML | Wisdom Chartering S.A. | Shipping Industry | 100% | 100% |

Subsidiaries excluded from consolidation: None.

(4)  Foreign currency transactions

Transactions  in  foreign  currencies  are  initially  recorded  by  the  Group  entities  at  their

respective functional currency rates prevailing at the date of the transaction. Monetary assets

and liabilities denominated in foreign currencies are retranslated at the functional currency

closing rate of exchange ruling at the reporting date. Non-monetary items measured at fair

value in a foreign currency are translated using the exchange rates at the date when the fair

value is determined. Non-monetary items that are measured at historical cost in a foreign

currency are translated using the exchange rates as at the dates of the initial transactions.

All  exchange  differences  arising  on  the  settlement  of  monetary  items  or  on  translating

monetary items are taken to profit or loss in the period in which they arise except for the

following:

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

24

A. Exchange differences arising from foreign currency borrowings for an acquisition of a

qualifying asset to the extent that they are regarded as an adjustment to interest costs are

included in the borrowing costs that are eligible for capitalization.

B. Foreign currency items within the scope of IFRS 9 “Financial Instruments” are accounted

for based on the accounting policy for financial instruments.

C. Exchange differences arising on a monetary item that forms part of a reporting entity’s net

investment in a foreign operation is recognized initially in other comprehensive income

and reclassified from equity to profit or loss on disposal of the net investment.

When a gain or loss on a non-monetary item is recognized in other comprehensive income,

any exchange component of that gain or loss is recognized in other comprehensive income.

When a gain or loss on a non-monetary item is recognized in profit or loss, any exchange

component of that gain or loss is recognized in profit or loss.

(5)  Translation of financial statements in foreign currency

The assets and liabilities of foreign operations are translated at the closing rate of exchange

prevailing at the reporting date and their income and expenses are translated at an average rate

for the period. The exchange differences arising on the translation are recognized in other

comprehensive income. On the disposal of a foreign operation, the cumulative amount of the

exchange differences relating to that foreign operation, recognized in other comprehensive

income and accumulated in the separate component of equity, is reclassified from equity to

profit or loss when the gain or loss on disposal is recognized.

The following partial disposals are accounted for as disposals:

A. when the partial disposal involves the loss of control of a subsidiary that includes a foreign

operation; and

B. when the retained interest after the partial disposal of an interest in a joint arrangement or

a partial disposal of an interest in an associate that includes a foreign operation is a financial

asset that includes a foreign operation.

On the partial disposal of a subsidiary that includes a foreign operation that does not result in

a loss of control, the proportionate share of the cumulative amount of the exchange differences

recognized in other comprehensive income is re-attributed to the non-controlling interests in

that  foreign  operation.  In  partial  disposal  of  an associate  or  jointly  controlled entity  that

includes a foreign operation that does not result in a loss of significant influence or joint

control, only the proportionate share of the cumulative amount of the exchange differences

recognized in other comprehensive income is reclassified to profit or loss.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

25

Any goodwill and any fair value adjustments to the carrying amounts of assets and liabilities

arising on the acquisition of a foreign operation are treated as assets and liabilities of the

foreign operation and expressed in its functional currency.

(6)  Current and non-current distinction

An asset is classified as current when:

A. The Group  expects  to realize the asset, or intends to  sell  or  consume  it,  in  its  normal

operating cycle

B. The Group holds the asset primarily for the purpose of trading

C. The Group expects to realize the asset within twelve months after the reporting period

D. The asset is cash or cash equivalent unless the asset is restricted from being exchanged or

used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is classified as current when:

A. The Group expects to settle the liability in its normal operating cycle

B. The Group holds the liability primarily for the purpose of trading

C. The liability is due to be settled within twelve months after the reporting period

D. The Group does not have the right at the end of the reporting period to defer settlement of

the liability for at least twelve months after the reporting period.

(7)  Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits and short-term, highly

liquid time deposits or investments that are readily convertible to known amounts of cash and

which are subject to an insignificant risk of changes in value.

Time deposits which mature over three months are held for the purpose of meeting short-term

cash commitments rather than for investment or other purposes. They are readily convertible

to known amounts of cash and are subject to an insignificant risk of changes in value, therefore

they are reported as cash and cash equivalents.

(8)  Financial instruments

Financial assets and financial liabilities are recognized when the Group becomes a party to

the contractual provisions of the instrument.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

26

Financial assets and financial liabilities within the scope of IFRS 9 “Financial Instruments”

are recognized initially at fair value plus or minus, in the case of investments not at fair value

through profit or loss, directly attributable transaction costs.

A. Financial instruments: recognition and measurement

The Group accounts for regular way purchase or sales of financial assets on the trade date.

The Group classified financial assets as subsequently measured at amortized cost or fair

value through other comprehensive income on the basis of both:

(a)  the Group’s business model for managing the financial assets and

(b)  the contractual cash flow characteristics of the financial asset.

Financial assets measured at amortized cost

A financial asset is measured at amortized cost if both of the following conditions are met

and presented as note receivables, trade receivables financial assets measured at amortized

cost and other receivables etc., on balance sheet as at the reporting date:

(a)  the financial asset is held within a business model whose objective is to hold financial

assets in order to collect contractual cash flows and

(b)  the contractual terms of the financial asset give rise on specified dates to cash flows

that are solely payments of principal and interest on the principal amount outstanding.

Such financial assets are subsequently measured at amortized cost (the amount at which

the financial asset is measured at initial recognition minus the principal repayments, plus

or minus the cumulative amortization using the effective interest method of any difference

between the initial amount and the maturity amount and adjusted for any loss allowance)

and is not part of a hedging relationship. A gain or loss is recognized in profit or loss when

the  financial  asset  is  derecognized,  through  the  amortization  process  or  in  order  to

recognize the impairment gains or losses.

Interest revenue is calculated by using the effective interest method. This is calculated by

applying the effective interest rate to the gross carrying amount of a financial asset except

for:

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

27

(a)  purchased or originated credit-impaired financial assets. For those financial assets, the

Group applies the credit-adjusted effective interest rate to the amortized cost of the

financial asset from initial recognition.

(b)  financial assets that are not purchased or originated credit-impaired financial assets but

subsequently have become credit-impaired financial assets. For those financial assets,

the Group applies the effective interest rate to the amortized cost of the financial asset

in subsequent reporting periods.

Financial asset measured at fair value through other comprehensive income

A financial asset is measured at fair value through other comprehensive income if both of

the following conditions are met:

(a)  the financial asset is held within a business model whose objective is achieved by both

collecting contractual cash flows and selling financial assets and

(b)  the contractual terms of the financial asset give rise on specified dates to cash flows

that are solely payments of principal and interest on the principal amount outstanding.

Recognition  of  gain  or  loss  on  a  financial  asset  measured  at  fair  value  through  other

comprehensive income is described as below:

(a)  A gain or loss on a financial asset measured at fair value through other comprehensive

income recognized in  other comprehensive  income, except for impairment  gains or

losses and foreign exchange gains and losses, until the financial asset is derecognized or

reclassified.

(b)  When  the  financial  asset  is  derecognized  the  cumulative  gain  or  loss  previously

recognized in other comprehensive income is reclassified from equity to profit or loss

as a reclassification adjustment.

(c)  Interest revenue is calculated by using the effective interest method. This is calculated

by applying the effective interest rate to the gross carrying amount of a financial asset

except for:

i.  Purchased  or  originated  credit-impaired  financial  assets.  For  those  financial

assets, the Group applies the credit-adjusted effective interest rate to the amortized

cost of the financial asset from initial recognition.

ii.  Financial  assets that  are  not  purchased  or  originated  credit-impaired  financial

assets but subsequently have become credit-impaired financial assets. For those

financial assets, the Group applies the effective interest rate to the amortized cost

of the financial asset in subsequent reporting periods.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

28

Besides, for certain equity investments within the scope of IFRS 9 that is neither held for

trading nor contingent consideration recognized by an acquirer in a business combination

to which IFRS 3 applies, the Group made an irrevocable election to present the changes of

the fair value in other comprehensive income at initial recognition. Amounts presented in

other comprehensive income shall not be subsequently transferred to profit or loss (when

disposal of such equity instrument, its cumulated amount included in other components of

equity is transferred directly to the retained earnings) and these investments should be

presented as financial assets measured at fair value through other comprehensive income

on the balance sheet. Dividends on such investment are recognized in profit or loss unless

the dividends clearly represent a recovery of part of the cost of investment.

Financial asset measured at fair value through profit or loss

Financial assets were classified as measured at amortized cost or measured at fair value

through other comprehensive income based on aforementioned criteria. All other financial

assets were measured at fair value through profit or loss and presented on the balance sheet

as financial assets measured at fair value through profit or loss.

Such  financial  assets  are  measured  at  fair  value,  the  gains  or  losses  resulting  from

remeasurement  is recognized  in  profit  or  loss  which  includes  any  dividend  or  interest

received on such financial assets.

B. Impairment of financial assets

The  Group  recognizes  a  loss  allowance  for  expected  credit  losses  on  debt  instrument

investments measured at fair value through other comprehensive income and financial asset

measured at amortized cost. The loss allowance on debt instrument investments measured

at fair value through other comprehensive income is recognized in other comprehensive

income and not reduce the carrying amount in the statement of financial position.

The Group measures expected credit losses of a financial instrument in a way that reflects:

(a)  an unbiased and probability-weighted amount that is determined by evaluating a range

of possible outcomes;

(b) the time value of money; and

(c)  reasonable and supportable information that is available without undue cost or effort

at  the  reporting  date  about  past  events,  current conditions  and  forecasts  of  future

economic conditions.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

29

The loss allowance is measures as follow:

(a)  At an amount equal to 12-month expected credit losses: the credit risk on a financial

asset has not increased significantly since initial recognition or the financial asset is

determined  to  have  low  credit  risk  at  the  reporting  date.  In  addition,  the  Group

measures  the  loss  allowance  for  a  financial  asset  at  an  amount  equal  to  lifetime

expected credit losses in the previous reporting period, but determines at the current

reporting date that condition is no longer met.

(b)  At an amount equal to the lifetime expected credit losses: the credit risk on a financial

asset  has  increased  significantly  since  initial  recognition  or  financial  asset  that  is

purchased or originated credit-impaired financial asset.

(c)  For trade receivables or contract assets arising from transactions within the scope of

IFRS  15,  the  Group  measures  the  loss  allowance  at  an  amount  equal  to  lifetime

expected credit losses.

At each reporting date, the Group needs to assess whether the credit risk on a financial

asset has been increased significantly since initial recognition by comparing the risk of a

default occurring at the reporting date and the risk of default occurring at initial recognition.

Please refer to Note 12 for further details on credit risk.

C. Derecognition of financial assets

A financial asset is derecognized when:

(a)  The rights to receive cash flows from the asset have expired

(b)  The Group has transferred the asset and substantially all the risks and rewards of the

asset have been transferred

(c)  The Group has neither transferred nor retained substantially all the risks and rewards

of the asset, but has transferred control of the asset.

On derecognition of a financial asset in its entirety, the difference between the carrying

amount and the consideration received or receivable including any cumulative gain or loss

that had been recognized in other comprehensive income is recognized in profit or loss.

D. Financial liabilities and equity

Classification between liabilities or equity

The Group classifies the instrument issued as a financial liability or an equity instrument

in accordance with the substance of the contractual arrangement and the definitions of a

financial liability, and an equity instrument.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

30

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an

entity after deducting all of its liabilities. The transaction costs of an equity transaction are

accounted for as a deduction from equity (net of any related income tax benefit) to the

extent  they  are  incremental  costs  directly  attributable  to  the  equity  transaction  that

otherwise would have been avoided.

Compound instruments

The Group evaluates the terms of the convertible bonds issued to determine whether it

contains both a liability and an equity component. Furthermore, the Group assesses if the

economic characteristics and risks of the put and call options contained in the convertible

bonds are closely related to the economic characteristics and risk of the host contract before

separating the equity element.

For the liability component excluding the derivatives, its fair value is determined based on

the rate of interest applied at that time by the market to instruments of comparable credit

status. The liability component is classified as a financial liability measured at amortized

cost before the instrument is converted or settled.

For the embedded derivative that is not closely related to the host contract (for example, if

the exercise price of the embedded call or put option is not approximately equal on each

exercise date to the amortized cost of the host debt instrument), it is classified as a liability

component and subsequently measured at fair value through profit or loss unless it qualifies

for  an  equity component. The equity component is assigned the residual  amount after

deducting  from  the  fair  value  of  the  instrument  as  a  whole  the  amount  separately

determined  for  the  liability  component.  Its  carrying  amount  is  not  re-measured  in  the

subsequent accounting periods. If the convertible bond issued does not have an equity

component, it is accounted for as a hybrid instrument in accordance with the requirements

under IFRS 9 “Financial Instruments”.

Transaction  costs  are  apportioned  between  the  liability  and  equity  components  of  the

convertible bond based on the allocation of proceeds to the liability and equity components

when the instruments are initially recognized.

On conversion of a convertible bond before maturity, the carrying amount of the liability

component being the amortized cost at the date of conversion is transferred to equity.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

31

Financial liabilities

Financial liabilities within the scope of IFRS 9 “Financial Instruments” are classified as

financial liabilities at fair value through profit or loss or financial liabilities measured at

amortized cost upon initial recognition.

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for

trading and financial liabilities designated upon initial recognition as at fair value through

profit or loss. A financial liability is classified as held for trading if:

(a) it is acquired or incurred principally for the purpose of selling or repurchasing it in the

near term;

(b) on initial recognition it is part of a portfolio of identified financial instruments that are

managed together and for which there is evidence of a recent actual pattern of short-

term profit-taking; or

(c)  it is a derivative (except for a derivative that is a financial guarantee contract or a

designated and effective hedging instrument).

If a contract contains one or more embedded derivatives, the entire hybrid (combined)

contract may be designated as a financial liability at fair value through profit or loss; or a

financial liability may be designated as at fair value through profit or loss when doing so

results in more relevant information, because either:

(a)  it eliminates or significantly reduces a measurement or recognition inconsistency; or

(b)  a group of financial assets, financial liabilities or both is managed and its performance

is evaluated on a fair value basis, in accordance with a documented risk management

or investment strategy, and information about the group is provided internally on that

basis to the key management personnel.

Gains or losses on the subsequent measurement of liabilities at fair value through profit or

losses including interest paid are recognized in profit or loss.

Financial liabilities at amortized cost

Financial  liabilities  measured  at  amortized  cost  include  interest  bearing  loans  and

borrowings that are subsequently measured using the effective interest rate method after

initial recognition. Gains and losses are recognized in profit or loss when the liabilities are

derecognized as well as through the effective interest rate method amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition

and fees or transaction costs.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

32

Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or

cancelled or expires.

When  an  existing  financial  liability  is  replaced  by  another  from  the  same  lender  on

substantially different terms, or the terms of an existing liability are substantially modified

(whether or not attributable to the financial difficulty of the debtor), such an exchange or

modification is treated as a derecognition of the original liability and the recognition of a

new liability, and the difference in the respective carrying amounts and the consideration

paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit

or loss.

E. Offsetting of financial instruments

Financial  assets and  financial  liabilities  are  offset  and  the  net  amount  reported  in  the

balance  sheet  if,  and  only  if,  there  is  a  currently  enforceable  legal  right  to  offset  the

recognized amounts and there is an intention to settle on a net basis, or to realize the assets

and settle the liabilities simultaneously.

(9)  Derivative instrument

The Group uses derivative instruments to hedge its foreign currency risks. A derivative is

classified in the balance sheet as financial assets or liabilities at fair value through profit or

loss (held for trading) except for derivatives that are designated effective hedging instruments

which are classified as derivative financial assets or liabilities for hedging.

Derivative instruments are initially recognized at fair value on the date on which a derivative

contract is entered into and are subsequently re-measured at fair value. Derivatives are carried

as financial assets when the fair value is positive and as financial liabilities when the fair value

is negative. Any gains or losses arising from changes in the fair value of derivatives are taken

directly  to  profit  or  loss,  except  for  the  effective  portion  of  cash  flow  hedges,  which  is

recognized in equity.

When the host contracts are either non-financial assets or liabilities, derivatives embedded in

host contracts are accounted for as separate derivatives and recorded at fair value  if their

economic characteristics and risks are not closely related to those of the host contracts and the

host contracts are not designated at fair value though profit or loss.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

33

(10) Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in

an orderly transaction between market participants at the measurement date. The fair value

measurement is based on the presumption that the transaction to sell the asset or transfer the

liability takes place either:

A. In the principal market for the asset or liability, or

B. In the absence of a principal market, in the most advantageous market for the asset or

liability

The principal or the most advantageous market must be accessible to by the Group.

The  fair  value  of  an  asset  or  a  liability  is  measured  using  the  assumptions  that  market

participants would use when pricing the asset or liability, assuming that market participants

in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s

ability to generate economic benefits by using the asset in its highest and best use or by selling

it to another market participant that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for which

sufficient data are available to measure fair value, maximizing the use of relevant observable

inputs and minimizing the use of unobservable inputs.

(11) Inventories

Inventories are bunker oil and are carried at the lower of cost or net realizable value. The cost

of fuel is determined using the weighted-average cost method. Net realizable value is the

determined based on the estimated selling price in the ordinary course of business, less the

estimated selling expenses at the end of the period.

(12) Investments accounted for using the equity method

The Group’s investment in its associate is accounted for using the equity method other than

those that meet the criteria to be classified as held for sale. An associate is an entity over which

the Group has significant influence. A joint venture is a type of joint arrangement whereby

the parties that have joint control of the arrangement have rights to the net assets of the joint

venture.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

34

Under the equity method, the investment in the associate or an investment in a joint venture is

carried in the balance sheet at cost and adjusted thereafter for the post-acquisition change in the

Group’s share of net assets of the associate or joint venture. After the interest in the associate or

joint venture is reduced to zero, additional losses are provided for, and a liability is recognized,

only to the extent that the Group has incurred legal or constructive obligations or made payments

on  behalf  of  the  associate  or  joint  venture.  Unrealized  gains  and  losses  resulting  from

transactions between the Group and the associate or joint venture are eliminated to the extent of

the Group’s related interest in the associate or joint venture.

When changes in the net assets of an associate or a joint venture occur and not those that are

recognized in profit or loss or other comprehensive income and do not affects the Group’s

percentage of ownership interests in the associate or joint venture, the Group recognizes such

changes in equity based on its percentage of ownership interests. The resulting capital surplus

recognized will be reclassified to profit or loss at the time of disposing the associate or joint

venture on a prorata basis.

When the associate or joint venture issues new stock, and the Group’s interest in an associate

or a joint venture is reduced or increased as the Group fails to acquire shares newly issued in

the associate or joint venture proportionately to its original ownership interest, the increase or

decrease in the interest in the associate or joint venture is recognized in Additional Paid in

Capital and Investment accounted for using the equity method.    When the interest in the

associate or joint venture is reduced, the cumulative amounts previously recognized in other

comprehensive  income  are  reclassified  to  profit  or  loss  or  other  appropriate  items.  The

aforementioned capital surplus recognized is reclassified to profit or loss on a pro rata basis

when the Group disposes the associate or joint venture.

The financial statements of the associate or joint venture are prepared for the same reporting

period as the Group. Where necessary, adjustments are made to bring the accounting policies

in line with those of the Group.

The Group determines at each reporting date whether there is any objective evidence that the

investment in the associate or an investment in a joint venture is impaired in accordance with

IAS 28 Investments in Associates and Joint Ventures. If this is the case the Group calculates

the amount of impairment as the difference between the recoverable amount of the associate

or joint venture and its carrying value and recognizes the amount in the ‘share of profit or loss

of  an  associate’  in  the  statement  of  comprehensive  income  in  accordance  with  IAS  36

Impairment of Assets. In determining the value in use of the investment, the Group estimates:

A. Its share of the present value of the estimated future cash flows expected to be generated

by  the  associate  or  joint  venture,  including  the  cash  flows  from  the  operations  of  the

associate and the proceeds on the ultimate disposal of the investment; or

B. The present value of the estimated future cash flows expected to arise from dividends to be

received from the investment and from its ultimate disposal.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

35

Because goodwill that forms part of the carrying amount of an investment in an associate or

an investment in a joint venture is not separately recognized, it is not tested for impairment

separately  by  applying  the  requirements  for  impairment  testing  goodwill  in  IAS  36

Impairment of Assets.

Upon loss of significant influence over the associate or joint venture, the Group measures and

recognizes any retaining investment at its fair value. Any difference between the carrying

amount of the associate or joint venture upon loss of significant influence and the fair value

of  the  retaining  investment  and  proceeds  from  disposal  is  recognized  in  profit  or  loss.

Furthermore, if an investment in an associate becomes an investment in a joint venture or an

investment in a joint venture becomes an investment in an associate, the entity continues to

apply the equity method and does not remeasure the retained interest.

(13) Property, plant and equipment

Property,  plant  and  equipment  is  stated  at  cost,  net  of  accumulated  depreciation  and

accumulated  impairment  losses,  if  any.  Such  cost  includes  the  cost  of  dismantling  and

removing  the  item  and  restoring  the  site  on  which  it  is  located  and  borrowing  costs  for

construction in progress if the recognition criteria are met. Each part of an item of property,

plant and equipment with a cost that is significant in relation to the total cost of the item is

depreciated separately. When significant parts of property, plant and equipment are required

to be replaced in intervals, the Group recognized such parts as individual assets with specific

useful  lives  and  depreciation,  respectively.  The  carrying  amount  of  those  parts  that  are

replaced  is  derecognized  in  accordance  with  the  derecognition  provisions  of  IAS  16

“Property,  Plant  and  Equipment”.  When  a  major  inspection  is  performed,  its  cost  is

recognized  in  the  carrying  amount  of  the  plant  and  equipment  as  a  replacement  if  the

recognition criteria are satisfied. All other repair and maintenance costs are recognized in

profit or loss as incurred.

All major components of the vessels are depreciated on a straight-line basis over the useful

life of the assets. Depreciation is based on cost less the estimated residual value. The residual

value is estimated as the lightweight tonnage of each vessel multiplied by scrap value per ton.

The dry-docking cost, including acquisition of a new vessel, is separated from the remaining

cost of the vessel. These two cost elements are recognized and depreciated separately. For the

building  of  new  vessels,  the  initial  dry-docking  cost  is  also  segregated  and  capitalized

separately.

The Group has a long-term plan for dry-docking of the vessels. Dry-docking cost is capitalized

and  depreciated  until  the  next  planned  dry-docking.  Other  capitalized  improvements  are

depreciated over the estimated economic life.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

36

The carrying values of vessels and equipment are reviewed for impairment when events or

changes in circumstances indicate that the carrying value may not be recoverable. Valuations

are  performed frequently  to  ensure  that the  fair value  of  a revalued asset does not  differ

materially  from  its  carrying  amount.  The  residual  values,  useful  lives,  and  depreciation

methods are reviewed, and adjusted if appropriate, at the end of each reporting period, except

for those cases which are of little consequence.

A vessel or item of equipment is derecognized upon disposal or when no future economic

benefits are expected from its use or disposal. Any gain or loss arising from derecognition of

an asset (calculated  as  the  difference  between  the  net  disposal proceeds and the carrying

amount of the asset) is included in the consolidated income statement in the year the asset is

derecognized.

Expenditures on the building of new vessels are capitalized as vessels under construction as

they are paid. Capitalized value is reclassified from vessel under construction to vessels upon

delivery from the dock. The total acquisition cost of a vessel is determined based on the sum

of installments paid plus the costs incurred during the construction period. Borrowing costs

that are attributable to the construction of the vessels are capitalized as part of the vessel. The

interest rate is based on the weighted-average borrowing costs for the Group, limited to the

total borrowing costs incurred in the period.

Depreciation is calculated on a straight-line basis over the estimated economic lives of the

following assets:

|  |  |
| --- | --- |
| Buildings | 28 years |
| Vessels | 16-25 years |
| Vessel equipment | 3-5 years |
| Dry dock | 2.5 years |
| Other | 3-5 years |
| Right-of-use assets | 3-25 years |

An  item  of  property,  plant  and  equipment and  any significant part initially  recognized is

derecognized upon disposal or when no future economic benefits are expected from its use or

disposal. Any gain or loss arising on derecognition of the asset is recognized in profit or loss.

The residual values, useful lives and methods of depreciation of property, plant and equipment

are reviewed at each financial year end and adjusted prospectively, if appropriate.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

37

(14) Investment property

The Group’s owned investment properties are measured initially at cost, including transaction

costs.  The  carrying  amount  includes  the  cost  of  replacing  part  of  an  existing  investment

property at the time that cost is incurred if the recognition criteria are met and excludes the

costs of day-to-day servicing of an investment property. Subsequent to initial recognition,

other than those that meet the criteria to be classified as held for sale (or are included in a

disposal group that is classified as held for sale) in accordance with IFRS 5 Non-current Assets

Held for Sale and Discontinued Operations, investment properties are measured using the cost

model in accordance with the requirements of IAS 16 Property, Plant and Equipment for that

model. If investment properties are held by a lessee as right-of-use assets and are not held for

sale in accordance with IFRS 5, investment properties are measured in accordance with the

requirements of IFRS 16.

Depreciation is calculated on a straight-line basis over the estimated economic lives of the

following assets:

Buildings 28 years

Investment properties are derecognized when either they have been disposed of or when the

investment property is permanently withdrawn from use and no future economic benefit is

expected from its disposal.

The Group transfers properties to or from investment properties according to the actual use of

the properties.

The Group transfers properties to or from investment properties when there is a change in use

for these assets. Properties are transferred to or from investment properties when the properties

meet, or cease to meet, the definition of investment property and there is evidence of the change

in use.

(15) Leases

The Group assesses whether the contract is, or contains, a lease. A contract is, or contains, a

lease if the contract conveys the right to control the use of an identified asset for a period of time

in exchange for consideration. To assess whether a contract conveys the right to control the use

of an identified asset for a period of time, the Group assesses whether, throughout the period of

use, has both of the following:

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

38

A. the right to obtain substantially all of the economic benefits from use of the identified

asset; and

B. the right to direct the use of the identified asset.

For a contract that is, or contains, a lease, the Group accounts for each lease component within

the contract as a lease separately from non-lease components of the contract. For a contract

that contains a lease component and one or more additional lease or non-lease components,

the Group allocates the consideration in the contract to each lease component on the basis of

the relative stand-alone price of the lease component and the aggregate stand-alone price of

the non-lease components. The relative stand-alone price of lease and non-lease components

shall be determined on the basis of the price the lessor, or a similar supplier, would charge the

Group for that component, or a similar component, separately. If an observable stand-alone

price is not readily available, the Group estimates the stand-alone price, maximising the use

of observable information.

Group as a lessee

Except for leases that meet and elect short-term leases or leases of low-value assets, the Group

recognizes right-of-use asset and lease liability for all leases which the Group is the lessee of

those lease contracts.

At the commencement date, the Group measures the lease liability at the present value of the

lease payments that are not paid at that date. The lease payments discount using the interest

rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily

determined, the Group uses its incremental borrowing rate. At the commencement date, the

lease payments included in the measurement of the lease liability  comprise the following

payments for the right to use the underlying asset during the lease term that are not paid at the

commencement date:

A. fixed  payments  (including  in-substance  fixed  payments),  less  any  lease  incentives

receivable;

B. variable lease payments that depend on an index or a rate, initially measured using the

index or rate as at the commencement date;

C. amounts expected to be payable by the lessee under residual value guarantees;

D. the exercise price of a purchase option if the Group is reasonably certain to exercise that

option; and

E. payments  of  penalties  for  terminating  the  lease,  if  the  lease  term  reflects  the  lessee

exercising an option to terminate the lease.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

39

After the commencement date, the Group measures the lease liability on an amortised cost

basis, which is increasing the carrying amount to reflect interest on the lease liability by using

an effective interest method; and reducing the carrying amount to reflect the lease payments

made.

At the commencement date, the Group measures the right-of-use asset at cost. The cost of the

right-of-use asset comprises:

A. the amount of the initial measurement of the lease liability;

B. any lease payments made at or before the commencement date, less any lease incentives

received;

C. any initial direct costs incurred by the lessee; and

D. an  estimate  of  costs  to  be  incurred  by  the  lessee  in  dismantling  and  removing  the

underlying asset, restoring the site on which it is located or restoring the underlying asset

to the condition required by the terms and conditions of the lease.

For subsequent measurement of the right-of-use asset, the Group measures the right-of-use

asset at cost less any accumulated depreciation and any accumulated impairment losses. That

is, the Group measures the right-of-use applying a cost model.

If the lease transfers ownership of the underlying asset to the Group by the end of the lease

term or if the cost of the right-of-use asset reflects that the Group will exercise a purchase

option, the Group depreciates the right-of-use asset from the commencement date to the end

of the useful life of the underlying asset. Otherwise, the Group depreciates the right-of-use

asset from the commencement date to the earlier of the end of the useful life of the right-of-

use asset or the end of the lease term.

The Group applies IAS 36 “Impairment of Assets” to determine whether the right-of-use asset

is impaired and to account for any impairment loss identified.

Except for leases that meet and elect short-term leases or leases of low-value assets, the Group

presents right-of-use  assets and lease liabilities  in the  balance sheet and  presents interest

expense  separately  from  the  depreciation  charge  associate  with  those  leases  in  the

consolidated income statement.

For short-term leases or leases of low-value assets, the Group elects to recognize the lease

payments associated with those leases as an expense on either a straight-line basis over the

lease term or another systematic basis.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

40

Group as a lessor

At inception of a contract, the Group classifies each of its leases as either an operating lease

or a finance lease. A lease is classified as a finance lease if it transfers substantially all the

risks and rewards incidental to ownership of an underlying asset. A lease is classified as an

operating  lease  if it does not transfer  substantially all the risks and rewards  incidental  to

ownership of an underlying asset. At the commencement date, the Group recognizes assets

held under a finance lease in its balance sheet and present them as a receivable at an amount

equal to the net investment in the lease.

For a contract that contains lease components and non-lease components, the Group allocates

the consideration in the contract applying IFRS 15.

The Group recognizes lease payments  from operating leases as rental income  on  either  a

straight-line basis or another systematic basis. Variable lease payments for operating leases

that do not depend on an index or a rate are recognized as rental income when incurred.

(16) Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost.    The cost of

intangible  assets  acquired  in  a  business  combination  is  its  fair  value  as  at  the  date  of

acquisition.    Following  initial  recognition,  intangible  assets  are  carried  at  cost  less  any

accumulated amortization and accumulated impairment losses, if any.    Internally generated

intangible assets, excluding capitalized development costs, are not capitalized and expenditure

is reflected in profit or loss for the year in which the expenditure is incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortized over the useful economic life and assessed for

impairment whenever there is an indication that the intangible asset may be impaired.    The

amortization period and the amortization method for an intangible asset with a finite useful

life is reviewed at least at the end of each financial year.    Changes in the expected useful life

or the expected pattern of consumption of future economic benefits embodied in the asset is

accounted for by changing the amortization period or method, as appropriate, and are treated

as changes in accounting estimates.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

41

Intangible assets with indefinite useful lives are not amortized, but are tested for impairment

annually, either individually or at the cash-generating unit level. The assessment of indefinite

life is reviewed annually to determine whether the indefinite life continues to be supportable.

If not, the change in useful life from indefinite to finite is made on a prospective basis.

Gains  or  losses  arising  from  derecognition  of  an  intangible  asset  are  measured  as  the

difference between the net disposal proceeds and the carrying amount of the asset and are

recognized in profit or loss when the asset is derecognized.

(17) Impairment of non-financial assets

The Group assesses at the end of each reporting period whether there is any indication that an

asset in the scope of IAS 36“Impairment of Assets” may be impaired. If any such indication

exists, or when annual impairment testing for an asset is required, the Group estimates the

asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-

generating unit’s (“CGU”) fair value less costs to sell and its value in use and is determined

for  an  individual  asset,  unless  the  asset  does  not  generate  cash  inflows  that  are  largely

independent of those from other assets or groups of assets. Where the carrying amount of an

asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written

down to its recoverable amount.

For assets excluding goodwill, an assessment is made at each reporting date as to whether

there is any indication that previously recognized impairment losses may no longer exist or

may  have  decreased.  If  such  indication  exists,  the  Group  estimates  the  asset’s  or  cash-

generating unit’s recoverable amount. A previously recognized impairment loss is reversed

only if there has been an increase in the estimated service potential of an asset which in turn

increases the recoverable amount. However, the reversal is limited so that the carrying amount

of the asset does not exceed its recoverable amount, nor exceed the carrying amount that

would have been determined, net of depreciation, had no impairment loss been recognized for

the asset in prior years.

An  impairment  loss  of  continuing  operations  or  a  reversal  of  such  impairment  loss  is

recognized in profit or loss.

(18) Provisions

Provisions are recognized when the Group has a present obligation (legal or constructive) as

a result of a past event, it is probably  that an outflow of resources embodying economic

benefits will be required to settle the obligation and a reliable estimate can be made of the

amount  of  the  obligation.  Where  the  Group  expects  some  or  all  of  a  provision  to  be

reimbursed,  the  reimbursement  is  recognized  as  a  separate  asset  but  only  when  the

reimbursement  is  virtually  certain.  If  the  effect  of  the  time  value  of  money  is  material,

provisions are discounted using a current pre-tax rate that reflects the risks specific to the

liability. Where discounting is used, the increase in the provision due to the passage of time is

recognized as a finance cost.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

42

The liability to pay a levy is recognised progressively if the obligating event occurs over a

period of time.

(19) Revenue recognition

Hire revenue

Hire revenue is recognized when it is probable that the economic benefits will flow to the

Group and when the revenue can be measured reliably. The revenue is measured at the fair

value of consideration that the Group has received or had the right to receive. The revenue is

recognized on a time proportion basis over the lease term.

Freight revenue and vessel management revenue

The  Group’s  revenue  arising  from  contracts  with  customers  are  rendering  of  services,

including  shipping services and vessel management services. Such  services are separately

priced  or negotiated,  and  provided  based on  contract periods. As the  Group provides the

services over the contract period, so that the customers simultaneously receive and consume

the benefits provided by the Group. Accordingly, the performance obligations are satisfied

over time, and the related revenue are recognized by reference to the stage of completion over

the period.

Most  of  the  contractual  considerations  of  the  Group  are  received  on  average  during  the

contract period after the provision of services. When the Group has performed the services to

customers but does not has a right to an amount of consideration that is unconditional, these

contacts should  be  presented  as contract  assets. However,  for some rendering of services

contracts, part of the consideration was received from customers upon signing the contract,

and the Group has the obligation to  provide the services subsequently; accordingly, these

amounts are recognized as contract liabilities.

The period between the transfers of contract liabilities to revenue is usually within one year,

thus, no significant financing component arises.

(20) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset

that necessarily takes a substantial period of time to get ready for its intended use or sale are

capitalized as part of the cost of the respective assets. All other borrowing costs are expensed

in the period they occur. Borrowing costs consist of interest and other costs that an entity

incurs in connection with the borrowing of funds.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

43

(21) Post-employment benefits

A. Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays

fixed contributions into a separate entity and will have no legal or constructive obligation

to pay further amounts. Obligations for contributions to defined contribution pension plans

are recognized as an employee benefit expense in profit or loss during which services are

rendered by employees.

B. Defined benefit plans

Post-employment benefit plan that is classified as a defined benefit plan uses the Projected

Unit Credit Method to measure its obligations and costs based on actuarial assumptions.

Re-measurements, comprising of the effect of the actuarial gains and losses, the effect of

the asset ceiling (excluding net interest) and the return on plan assets, excluding net interest,

are recognized as other comprehensive  income with a corresponding  debit or credit to

retained earnings in the period in which they occur.

Past service costs are recognized in profit or loss on the earlier of:

(a)  the date of the plan amendment or curtailment, and

(b)  the date that the Group recognizes restructuring-related costs

Net interest is calculated by applying the discount rate to the net defined benefit liability or

asset, both as determined at the start of the annual reporting period, taking account of any

changes  in  the  net  defined  benefit  liability  (asset)  during  the  period  as  a  result  of

contribution and benefit payment.

The Group will remeasure the net defined benefit liability (asset) and determine current

service  costs  and  net  interest  for  the  remaining  reporting  period  by renewed  actuarial

assumptions  since  the  post-employment  benefit  plan  ofthe  defined  benefit  plan  be

amended, curtailed or settled.

C. Short-term benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are

expensed as related service is provided

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

44

A liability is recognized for the amount expected to be paid under short-term cash bonus or

profit-sharing plans if the Group has a present legal or constructive obligation to pay this

amount as a result of past service provided by the employee and the obligation can be

estimated reliably.

(22) Income taxes

Income tax expense (income) is the aggregate amount included in the determination of profit

or loss for the period in respect of current tax and deferred tax.

Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the

amount expected to be recovered from or paid to the taxation authorities, using the tax rates

and tax laws that have been enacted or substantively enacted by the end of the reporting period.

Current income tax relating to items recognized in other comprehensive income or directly in

equity is recognized in other comprehensive income or equity and not in profit or loss.

The  income  tax  for  undistributed  earnings  is  recognized  as  income  tax  expense  in  the

subsequent year when the distribution proposal is approved by the Shareholders’ meeting.

Deferred tax

Deferred tax is provided on temporary differences at the reporting date between the tax bases

of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognized for all taxable temporary differences, except:

A. Where the deferred tax liability arises from the initial recognition of goodwill or of an asset

or liability in a transaction that is not a business combination; at the time of the transaction,

affects  neither  the  accounting  profit  nor  taxable  profit  or  loss;  and  at  the  time  of  the

transaction, does not give rise to equal taxable and deductible temporary differences.

B. In respect of taxable temporary differences associated with investments in subsidiaries,

associates  and  interests  in  joint  arrangements,  where  the  timing  of the  reversal  of the

temporary differences can be controlled and it is probable that the temporary differences

will not reverse in the foreseeable future.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

45

Deferred tax assets are recognized for all deductible temporary differences, carry forward of

unused tax credits and unused tax losses, to the extent that it is probable that taxable profit

will be available against which the deductible temporary differences, and the carry forward of

unused tax credits and unused tax losses can be utilized, except:

A. Where the deferred tax asset relating to the deductible temporary difference arises from

the  initial  recognition  of  an  asset  or  liability  in  a  transaction  that  is  not  a  business

combination; at the time of the transaction, affects neither the accounting profit nor taxable

profit or loss; and at the time of the transaction, does not give rise to equal taxable and

deductible temporary differences.

B. In respect of deductible temporary differences associated with investments in subsidiaries,

associates and interests in joint arrangements, deferred tax assets are recognized only to the

extent that it is probable that the temporary differences will reverse in the foreseeable future

and taxable profit will be available against which the temporary differences can be utilized.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in

the year when the asset is realized or the liability is settled, based on tax rates and tax laws

that have been enacted or substantively enacted at the reporting date. The measurement of

deferred tax assets and deferred tax liabilities reflects the tax consequences that would follow

from the manner in which the Group expects, at the end of the reporting period, to recover or

settle the carrying amount of its assets and liabilities.

Deferred tax relating to items recognized outside profit or loss is recognized outside profit or

loss. Deferred tax items are recognized in correlation to the underlying transaction either in

other comprehensive income or directly in equity. Deferred tax assets are reassessed at each

reporting date and are recognized accordingly.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists

to set off current income tax assets against current income tax liabilities and the deferred taxes

relate to the same taxable entity and the same taxation authority.

According to the temporary exception in the International Tax Reform – Pillar Two Model

Rules (Amendments to IAS 12), deferred tax assets and liabilities related to Pillar Two income

tax will not be recognized nor disclosed.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

46

5.  Significant accounting judgments, estimates and assumptions

The preparation of the Group’s consolidated financial statements require management to make

judgements, estimates and assumptions that affect the reported amounts of revenues, expenses,

assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period.

However, uncertainty about these assumption and estimate could result in outcomes that require a

material adjustment to the carrying amount of the asset or liability affected in future periods. Please

find the details as below:

(1)  Judgement

In  the  process  of  applying  the  Group’s  accounting  policies,  management  has  made  the

following judgements, which have the most significant effect on the amounts recognized in

the consolidated financial statements:

A. Investment properties

Certain properties of the Group comprise a portion that is held to earn rentals or for capital

appreciation and another portion that is owner-occupied. If these portions could be sold

separately, the Group accounts for the portions separately as investment properties and

property, plant and equipment. If the portions could not be sold separately, the property is

classified as investment property in its entirety only if the portion that is owner-occupied

is under 1% of the total property.

(2)  Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at

the reporting date, that have a significant risk of causing a material adjustment to the carrying

amounts of assets and liabilities within the next financial year are discussed below.

A. Fair value of financial instruments

Where the fair value of financial assets and financial liabilities recorded in the balance

sheet  cannot  be  derived  from  active  markets,  they  are  determined  using  valuation

techniques including the income approach (for example the discounted cash flows model)

or market approach. Changes in assumptions about these factors could affect the reported

fair value of the financial instruments. Please refer to Note 12 for more details.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

47

B. Impairment of non-financial assets

An impairment exists when the carrying value of an asset or cash generating unit exceeds

its recoverable amount, which is the higher of its fair value less costs to sell and its value

in use. The fair value less costs to sell calculation is based on the price that would be

received to sell an asset or paid to transfer a liability in an orderly transaction between

market participants at the measurement date less incremental costs that would be directly

attributable to the disposal of the asset or cash generating unit. The value in use calculation

is based on a discounted cash flow model. The cash flows projections are derived from the

budget for the next five years and do not include restructuring activities that the Group is

not  yet  committed  to  or  significant  future  investments  that  will  enhance  the  asset’s

performance of the cash generating unit being tested. The recoverable amount is most

sensitive  to  the  discount  rate  used for  the  discounted  cash  flow  model  as  well  as  the

expected future cash-inflows and the growth rate used for extrapolation purposes.

C. Useful lives and depreciation of vessels

Management determines the estimated useful lives and related depreciation charges for its

vessels. This estimate is based on the historical experience of the actual useful lives of

vessels of similar nature and functions. It could change significantly as a result of technical

innovations and competitor actions in response to severe industry activities. Management

will increase the depreciation charge where useful lives are less than previously estimated

lives,  or  it will  write  down  technically obsolete or  non-strategic assets that  have  been

abandoned or sold. Management assesses the scrap value according to the characteristics

of the Group’s vessels and the market research from Clarkson and Demolition Market.

The Group determines the depreciation amount of vessels based on the estimated useful

lives  and  residual  values,  which  are  reviewed  at  each  reporting  date.  The  principal

assumptions for the Group’s estimation of the useful lives and residual values include those

related to the mode of operations, government regulations, and scrap value of vessels in

future.

D. Provision for losses from accidents

Provision for losses from accidents is made based on an assessment of the outcome of

negotiations,  arbitration  or  litigation,  and  the  recoverability  of  losses  from  insurance

companies,  which  requires  management’s  judgment  and  estimates.  Where  the  actual

outcome or expectation in the future differs from the original estimate, such differences

will  have  an  impact  on  the  carrying  amount  of  the  provisions  and  losses  incurred  in

accidents/write-back in the period in which such estimate is changed.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

48

E. Fair value of investment property

Where the fair value of investment property disclosed in Note 6 and Note 12 cannot be

obtained from the active market, it is determined using valuation techniques including the

sales comparison approach and the income approach. Changes in assumptions adopted in

the valuation methods could affect the disclosed fair value of investment property and the

result of impairment testing. Please refer to Note 6 and Note 12 for more details.

6.  Contents of significant accounts

(1)  Cash and cash equivalents

|  |  |  |
| --- | --- | --- |
|  | 31 December 2024 | 31 December 2023 |
| Cash on hand | $2,502 | $4,224 |
| Demand deposits | 23,667,863 | 21,242,353 |
| Time deposits | 111,480,000 | 95,700,000 |
| Total | $135,150,365 | $116,946,577 |

As at  31  December  2024  and  2023,  cash  and  cash equivalents  with  carrying amounts  of

$36,491,161  and  $51,807,798  respectively,  were  pledged  to  secure  bank  loans  and  were

classified under other financial assets.

(2)  Financial assets at fair value through profit or loss

|  |  |  |
| --- | --- | --- |
|  | 31 December 2024 | 31 December 2023 |
| Mandatorily measured at fair value through profit |  |  |
| or loss: |  |  |
| Structured notes |  |  |
| -Current | $822,100 | $902,700 |

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  | For the Year Ended |  |  |
|  |  |  |  | 31 December |  |  |
|  |  |  |  | Realized | Unrealized | Equity |
|  | Amount in |  | Contract | gains | gains | linked note |
| Type of contract | contract | Counter party | period | (losses) | (losses) | (Y/N) |
| 2024.12.31 |  |  |  |  |  |  |
| 10 year USD |  | Taichung Commercial | 2022.08.05~ |  |  |  |
| range accrual note | $1,000,000 | Bank Co., Ltd. | 2032.08.05 | $53,857 | $(80,600) | No |

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

49

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  | For the Year Ended |  |  |
|  |  |  |  | 31 December |  |  |
|  |  |  |  | Realized | Unrealized | Equity |
|  | Amount in |  | Contract | gains | gains | linked note |
| Type of contract | contract | Counter party | period | (losses) | (losses) | (Y/N) |
| 2023.12.31 |  |  |  |  |  |  |
| 10 year USD |  | Taichung Commercial | 2022.08.05~ |  |  |  |
| range accrual note | $1,000,000 | Bank Co., Ltd. | 2032.08.05 | $90,600 | $(8,000) | No |

A. The aforementioned financial assets at fair value through profit or loss will be re-evaluated

for their potential sale, due to changes in interest rate spreads in the future. There is no

reasonable assurance that these assets will be held for more than one year; therefore, they

have been reclassified to the current portion.

B. The aforementioned financial assets were not pledged as collateral.

C. For the credit risk information of financial assets at fair value through profit or loss, please

refer to Note 12.

(3)  Financial assets at fair value through other comprehensive income

|  |  |  |
| --- | --- | --- |
|  | 31 December 2024 | 31 December 2023 |
| Investments in debt instruments measured at fair |  |  |
| value through other comprehensive income |  |  |
| Bonds |  |  |
| -Current | $9,717,541 | $11,864,671 |

A. For  the  amount  of  aforementioned  financial  assets  pledged  for  bank  loans  as  at  31

December 2024 and 2023, please refer to Note 8.

B. For the credit risk information of financial assets at fair value through other comprehensive

income, please refer to Note 12.

(4)  Accounts receivable and accounts receivable due from related parties, net

|  |  |  |
| --- | --- | --- |
|  | 31 December 2024 | 31 December 2023 |
| Accounts receivable | $4,942,245 | $4,786,202 |
| Less: loss allowance | (109,972) | (215,996) |
| Subtotal | 4,832,273 | 4,570,206 |
| Accounts receivable due from related parties | 283,147 | 299,989 |
| Less: loss allowance | - | - |
| Subtotal | 283,147 | 299,989 |
| Accounts receivable, net | $5,115,420 | $4,870,195 |

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

50

The aforementioned accounts receivable is generated from operations and the Group does not

hold any collateral for such trade receivables.

The total carrying amount as at 31 December 2024 and 2023 are $5,225,392 and $5,086,191,

respectively. Please refer to Note 6.(16) for more details on loss allowance of trade receivables

for the years ended 31 December 2024 and 2023. Please refer to Note 12 for more details on

credit risk management.

(5)  Inventories

|  |  |  |
| --- | --- | --- |
|  | 31 December 2024 | 31 December 2023 |
| Fuel | $2,934,774 | $3,689,083 |

A. The cost of inventories recognized in expenses amounts to $3,260,890 and $6,461,502 for

the years ended 31 December 2024 and 2023, including the write-down of inventories of

$207,341 and the reversal of write-down of inventories of $70,942.

B. Because of the rising prices of the crude oil, the Group had recognized the reversal of write-

down of inventories in the amount of $70,942 for the year ended 31 December 2023.

C. As at 31 December 2024 and 2023, the aforementioned inventories were not pledged as

collateral.

(6)  Investments accounted for using the equity method

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  | 31 December 2024 |  | 31 December 2023 |  |
|  | Carrying | Percentage of | Carrying | Percentage of |
| Investees | amount | ownership (%) | amount | ownership (%) |
| Investments in associates: |  |  |  |  |
| Pescadores Investment and |  |  |  |  |
| Development Inc. | $11,580,467 | 40% | $11,905,112 | 40% |
| Accumulated impairment | (1,677,581) |  | - |  |
| Subtotal | 9,902,886 |  | 11,905,112 |  |
| Investments in joint venture: |  |  |  |  |
| Wisdom Synergy |  |  |  |  |
| Shipmanagement Pte. Ltd. | 50% | - | - | - |
| Total | $9,902,886 |  | $11,905,112 |  |

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

51

A. Investments in associates

(a)  For the purpose of building the Group’s headquarter, the Group has participated in an

investment with Pescadores Co., Ltd. and Mr. Lan Chun Sheng by subscribing for new

shares of Pescadores Investment and Development Inc., of which capital has amounted

to  NT$2.08  billion.  The  Group  holds  40%  of  the  shares  issued  by  Pescadores

Investment and Development Inc. As at 31 December 2024, the Group had contributed

capital amounting to NT$832 million and cumulative recognized investment losses

amounting to NT$452 million. Based on available evidence indicating an impairment

in the investment value of Pescadores Investment and Development Inc., the Group

has adjusted the investment to its recoverable amount, resulting in an impairment loss

of  $1,712,900  (NT$55  million).  This  has  been  recognized  in  the  statement  of

comprehensive income, with the recoverable amount measured based on the value in

use at the cash generating unit.

(b)  The Group has subscribed for new shares of Pescadores Investment and Development

Inc. in April 2023, of which capital has amounted to NT$1.78 billion, with a par value

of NT$10 per share for 8,000,000 shares. The Group remains 40% interest in the shares

issued by Pescadores Investment and Development Inc. As at 8 September 2023, the

Group had fully paid the amount. As at 6 October 2023, Pescadores Investment and

Development Inc. had completed the alteration of the registered capital amount.

(c)  The Group has subscribed for new shares of Pescadores Investment and Development

Inc. in June 2024, of which capital has amounted to NT$2.08 billion, with a par value

of NT$10 per share for 12,000,000 shares. The Group remains 40% interest in the

shares issued by Pescadores Investment and Development Inc. As at 13 August 2024,

the Group had fully paid the amount. As at 5 September 2024, Pescadores Investment

and Development Inc. had completed the alteration of the registered capital amount.

(d)  The  urban  renewal  project  of  Pescadores  Investment  and  Development  Inc.  was

approved by Taipei City Government on 17 December 2019. The building permit was

obtained on 15 February 2022, while the construction registration was approved on 15

July  2022,  the  demolition  was  completed  on  28  December  2022,  and  the

groundbreaking ceremony was held on 13 June 2024.

(e)  Reconciliation of the associate’s summarized financial information presented to the

carrying amount of the Group’s interest in the associate:

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

52

|  |  |  |
| --- | --- | --- |
|  | 31 December 2024 | 31 December 2023 |
| Current assets | $2,507,078 | $916,296 |
| Non-current assets | 141,566,717 | 152,646,009 |
| Current liabilities | (84,805) | (122,703,939) |
| Non-current liabilities | (115,037,822) | (1,095,587) |
| Equity | 28,951,168 | 29,762,779 |
| Percentage of ownership (%) | 40% | 40% |
| Group’s carrying amount of the investment | $11,580,467 | $11,905,112 |

|  |  |  |
| --- | --- | --- |
|  | For the Years Ended 31 December |  |
|  | 2024 | 2023 |
| Operating revenue | $- | $- |
| Loss from continuing operations | (8,243,860) | (2,680,697) |
| Other comprehensive income | - | - |
| Total comprehensive loss | $(8,243,860) | $(2,680,697) |

The investments in associates do not have a quoted market price in active market.

B. Investments in joint venture

(a)  As  at 27 December  2023, The Group entered into a joint venture agreement with

Synergy Marine Pte. Ltd., establishing a joint venture company, Wisdom Synergy

Shipmanagement Pte. Ltd. in Singapore., with a capital amounting to $100,000. Its

business shall be the provision of technical management to owners and charterers. The

Group holds 50% of the shares issued by Wisdom Synergy Shipmanagement Pte. Ltd.

The Group has subscribed for new shares with a par value of $1 per share for 50,000

shares. As at 16 February 2024, the Group had fully paid the amount.

(b)  The  joint  venture  with  Wisdom  Synergy  Shipmanagement  Pte.  Ltd.  was  not

significant. The summary financial information of joint venture was listed below:

|  |  |
| --- | --- |
|  | For the Year Ended |
|  | 31 December |
|  | 2024 |
| Loss from continuing operations | $(182,710) |
| Other comprehensive income (loss) | - |
| Total comprehensive income (loss) | $(182,710) |

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

53

C. The  aforementioned  investments  in  associates  had  no  contingent  liabilities,  capital

commitments, or guarantees as at 31 December 2024 and 2023.

D. The  aforementioned  investments  in  joint  venture  had  no  contingent  liabilities,  capital

commitments, or guarantees as at 31 December 2024. The joint venture cannot distribute

its profits until it obtains the consent from all venture partners.

(7)  Property, plant and equipment

|  |  |  |
| --- | --- | --- |
|  | 31 December 2024 | 31 December 2023 |
| Owner occupied property, plant and equipment | $11,874,399 | $12,744,400 |
| Property, plant and equipment leased out under |  |  |
| operating leases | 2,283,174,650 | 2,355,061,463 |
| Total | $2,295,049,049 | $2,367,805,863 |

A. Owner occupied property, plant and equipment

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  | Foreign exchange |  | Ending |
| 31 December 2024 | Beginning balance | Additions | Disposals | Re-classification | differences | balance |
| Cost |  |  |  |  |  |  |
| Land | $11,373,392 | $- | $- | $- | $(721,569) | $10,651,823 |
| Buildings | 1,577,517 | 9,040 | - | - | (100,269) | 1,486,288 |
| Transportation equipment | 92,168 | - | - | - | (5,848) | 86,320 |
| Office equipment | 376,146 | 19,558 | - | - | (24,267) | 371,437 |
| Total | 13,419,223 | 28,598 | - | - | (851,953) | 12,595,868 |
| Accumulated depreciation |  |  |  |  |  |  |
| Buildings | 286,857 | 66,143 | - | - | (19,562) | 333,438 |
| Transportation equipment | 86,161 | 4,308 | - | - | (5,555) | 84,914 |
| Office equipment | 301,805 | 20,891 | - | - | (19,579) | 303,117 |
| Total | 674,823 | 91,342 | - | - | (44,696) | 721,469 |
| Net balance | $12,744,400 | $(62,744) | $- | $- | $(807,257) | $11,874,399 |

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

54

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  | Foreign exchange |  | Ending |
| 31 December 2023 | Beginning balance | Additions | Disposals | Re-classification | differences | balance |
| Cost |  |  |  |  |  |  |
| Land | $11,369,690 | $- | $- | $- | $3,702 | $11,373,392 |
| Buildings | 1,559,019 | 17,731 | - | - | 767 | 1,577,517 |
| Transportation equipment | 92,137 | - | - | - | 31 | 92,168 |
| Office equipment | 324,672 | 50,628 | - | - | 846 | 376,146 |
| Total | 13,345,518 | 68,359 | - | - | 5,346 | 13,419,223 |
| Accumulated depreciation |  |  |  |  |  |  |
| Buildings | 218,427 | 67,374 | - | - | 1,056 | 286,857 |
| Transportation equipment | 81,629 | 4,440 | - | - | 92 | 86,161 |
| Office equipment | 285,163 | 16,311 | - | - | 331 | 301,805 |
| Total | 585,219 | 88,125 | - | - | 1,479 | 674,823 |
| Net balance | $12,760,299 | $(19,766) | $- | $- | $3,867 | $12,744,400 |

B. Property, plant and equipment leased out under operating leases

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  | Ending | Foreign exchang | e |
| 31 December 2024 | Beginning balance | Additions | Disposals | Re-classification | differences | balance |
| Cost |  |  |  |  |  |  |
| Vessels | $3,470,606,591 | $380,429 | $176,985,557 | $129,472,211 | $(165,629) | $3,423,308,045 |
| Vessel equipment | 8,794,226 | 1,869,384 | 1,067,059 | - | (831) | 9,595,720 |
| Dry-dock | 38,690,094 | 21,001,534 | 15,099,759 | 1,110,000 | (40,304) | 45,661,565 |
| Total | 3,518,090,911 | 23,251,347 | 193,152,375 | 130,582,211 | (206,764) | 3,478,565,330 |
| Accumulated depreciation |  |  |  |  |  |  |
| and impairment |  |  |  |  |  |  |
| Vessels | 1,141,505,564 | 121,735,334 | 93,345,301 | - | (135,106) | 1,169,760,491 |
| Vessel equipment | 4,228,763 | 2,091,930 | 1,067,059 | - | (831) | 5,252,803 |
| Dry-dock | 17,295,121 | 17,695,547 | 14,572,978 | - | (40,304) | 20,377,386 |
| Total | 1,163,029,448 | 141,522,811 | 108,985,338 | - | (176,241) | 1,195,390,680 |
| Net balance | $2,355,061,463 | $(118,271,464) | $84,167,037 | $130,582,211 | $(30,523) | $2,283,174,650 |

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

55

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  | Ending | Foreign exchang | e |
| 31 December 2023 | Beginning balance | Additions | Disposals | Re-classification | differences | balance |
| Cost |  |  |  |  |  |  |
| Vessels | $3,628,751,284 | $1,649,821 | $350,494,519 | $190,699,155 | $850 | $3,470,606,591 |
| Vessel equipment | 8,725,592 | 2,344,759 | 2,276,129 | - | 4 | 8,794,226 |
| Dry-dock | 37,409,561 | 18,034,794 | 18,768,784 | 2,014,317 | 206 | 38,690,094 |
| Total | 3,674,886,437 | 22,029,374 | 371,539,432 | 192,713,472 | 1,060 | 3,518,090,911 |
| Accumulated depreciation |  |  |  |  |  |  |
| and impairment |  |  |  |  |  |  |
| Vessels | 1,185,065,925 | 124,806,325 | 171,624,849 | 3,256,286 | 1,877 | 1,141,505,564 |
| Vessel equipment | 4,783,053 | 1,721,835 | 2,276,129 | - | 4 | 4,228,763 |
| Dry-dock | 15,164,647 | 16,270,042 | 14,305,237 | 165,271 | 398 | 17,295,121 |
| Total | 1,205,013,625 | 142,798,202 | 188,206,215 | 3,421,557 | 2,279 | 1,163,029,448 |
| Net balance | $2,469,872,812 | $(120,768,828) | $183,333,217 | $189,291,915 | $(1,219) | $2,355,061,463 |

C. As at 31 December 2024 and 2023, the residual value of the vessels amounted to $446,081

thousand and $447,632 thousand, respectively, and the estimated useful lives were ranging

from 16 to 25 years and 16 to 25 years, respectively.

D. As at 31 December 2024 and 2023, the Group had deposited the chartering income of some

vessels, including those still being built, into reserve accounts of lending institutions.

E. For the amount of property, plant and equipment under pledge as at 31 December 2024 and

2023. Please refer to Note 8 for further details.

F.  As at 31 December 2024, the Group has entered into certain ship building contracts. Please

refer to Note 9.(1) for further details.

G. For the years ended 31 December 2024 and 2023, the amounts of total interest expense

before capitalization of borrowing costs were $61,549,153 and $68,929,079; the capitalized

interest were $23,255 and $171,726, respectively, with capitalization of rate of borrowing

costs at 1.46%~3.50% and 1.27%~7.20%, respectively.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

56

H. For the years ended 31 December 2024 and 2023, the Group disposed of certain vessels for

total contract price $90,300,000 and $190,375,000, ¥2,100,000,000, which resulted in gains

on  disposals  of  property,  plant  and  equipment  of  $31,267,595  and  $53,876,999,

respectively, after deducting commissions.

(8)  Investment property, net

The Group’s investment property is owned investment properties. The Group has entered into

commercial property leases on its owned investment properties with terms within two years.

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  | Foreign exchange |  | Ending |
| 31 December 2024 | Beginning balance | Additions | Disposals | Re-classification | differences | balance |
| Cost |  |  |  |  |  |  |
| Land | $2,135,804 | $- | $- | $- | $(135,503) | $2,000,301 |
| Buildings | 256,781 | - | - | - | (16,291) | 240,490 |
| Total | 2,392,585 | - | - | - | (151,794) | 2,240,791 |
| Accumulated |  |  |  |  |  |  |
| depreciation |  |  |  |  |  |  |
| Buildings | 40,583 | 8,467 | - | - | (2,749) | 46,301 |
| Total | 40,583 | 8,467 | - | - | (2,749) | 46,301 |
| Net balance | $2,352,002 | $(8,467) | $- | $- | $(149,045) | $2,194,490 |

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  | Foreign exchange |  | Ending |
| 31 December 2023 | Beginning balance | Additions | Disposals | Re-classification | differences | balance |
| Cost |  |  |  |  |  |  |
| Land | $2,135,108 | $- | $- | $- | $696 | $2,135,804 |
| Buildings | 256,698 | - | - | - | 83 | 256,781 |
| Total | 2,391,806 | - | - | - | 779 | 2,392,585 |
| Accumulated |  |  |  |  |  |  |
| depreciation |  |  |  |  |  |  |
| Buildings | 31,718 | 8,727 | - | - | 138 | 40,583 |
| Total | 31,718 | 8,727 | - | - | 138 | 40,583 |
| Net balance | $2,360,088 | $(8,727) | $- | $- | $641 | $2,352,002 |

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

57

|  |  |  |
| --- | --- | --- |
|  | For the Years Ended 31 December |  |
|  | 2024 | 2023 |
| Rental income from investment property | $98,240 | $102,579 |
| Less: |  |  |
| Direct operating expenses from investment |  |  |
| property generating rental income | (37,033) | (36,339) |
| Direct operating expenses from investment |  |  |
| property not generating rental income | - | - |
| Total | $61,207 | $66,240 |

A. The Group acquired land and buildings located at the 3th subsection, Da-an district, Taipei

for $15,032,027 in May 2019 for the use of office space. As all the rental agreements with

existing lessees, for approximately 37.41% of the total pings, have been expired in March

2020, the investment property was transferred to property, plant and equipment. On 14

September 2020, the Group leased out unused office space for approximately 15.81% of

the  total  pings  of  the  property,  which  had  been  transferred  from  property,  plant  and

equipment to investment property.

B. For the amount of investment property under pledge as at 31 December 2024 and 2023,

please refer to Note 8.

C. Investment properties held by the Group are not measured at fair value but for which the

fair  value  is  disclosed.  The  fair  value  measurements  of  the  investment  properties  are

categorized within  Level  3. The fair  value  of investment properties is  $2,531,838  and

$2,661,916  as  at  31  December  2024  and  2023,  respectively.  The  fair  value  has  been

determined based on valuations performed by an independent valuer and rental rates. The

valuation methods used are sales comparison approach and income approach.

(9)  Other non-current assets

|  |  |  |
| --- | --- | --- |
|  | 31 December 2024 | 31 December 2023 |
| Prepayment for vessels | $49,528,000 | $64,273,500 |
| Deferred expenses | 34,982 | 36,167 |
| Carbon credits intangible asset | 430,032 | - |
| Total | $49,993,014 | $64,309,667 |

Prepayment for vessels is the amount prepaid for building new vessels. The Group had entered

into ship building contracts, please refer to Note 9.(1).

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

58

(10) Borrowings

|  |  |  |
| --- | --- | --- |
|  | 31 December 2024 | 31 December 2023 |
| Bank loans |  |  |
| － Short-term borrowings | $21,470,519 | $30,527,226 |
| － Long-term borrowings (including current portion) | $799,891,874 | $962,414,725 |

A. Terms and conditions of outstanding loans were as follows:

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
| Loans | Currency | Nominal interest rates | Maturity date | Amount |
| 31 December 2024 |  |  |  |  |
| Unsecured | USD | 5.32%~7.00% | 2023.06.05~2026.06.05 | $4,188,750 |
|  | JPY | 0.90%~1.40% | 2023.09.01~2026.08.31 | 10,434,003 |
|  | CHF | 2.87% | 2024.07.10~2025.07.10 | 18,205,892 |
|  | TWD | 2.22% | 2024.05.31~2029.05.31 | 1,067,562 |
| Secured | USD | 5.09%~7.71% | 2012.01.18~2033.06.05 | 488,489,908 |
|  | JPY | 0.60%~2.42% | 2010.08.03~2031.10.17 | 216,649,550 |
|  | CHF | 2.02%~3.50% | 2024.02.22~2034.02.22 | 74,529,260 |
|  | TWD | 2.22% | 2024.05.30~2029.05.30 | 7,797,468 |
| Total |  |  |  | $821,362,393 |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
| Loans | Currency | Nominal interest rates | Maturity date | Amount |
| 31 December 2023 |  |  |  |  |
| Unsecured | USD | 5.96%~6.91% | 2022.09.30~2026.06.05 | $20,399,583 |
|  | JPY | 0.88%~0.99% | 2023.09.01~2025.08.31 | 14,850,435 |
| Secured | USD | 5.16%~7.75% | 2012.01.18~2033.06.05 | 647,145,236 |
|  | JPY | 0.60%~1.98% | 2010.08.03~2031.10.17 | 301,585,941 |
|  | TWD | 1.98%~2.11% | 2019.05.31~2024.05.31 | 8,960,756 |
| Total |  |  |  | $992,941,951 |

B. Future settlements of long-term borrowings were as follows:

|  |  |  |
| --- | --- | --- |
| Maturity period | 31 December 2024 | 31 December 2023 |
| Within one year | $173,686,399 | $214,728,297 |
| Beyond one year and up to five years | 393,756,256 | 511,233,498 |
| More than five years | 232,449,219 | 236,452,930 |
| Total | $799,891,874 | $962,414,725 |

(a) As at 31 December 2024 and 2023, WML had provided financing guarantees for its

subsidiaries of $708,188 thousand and $840,720 thousand, respectively.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

59

(b) As at 31 December 2024 and 2023, the Group had unused credit facilities of $134,746

thousand and $100,930 thousand, respectively.

(c) The Group’s covenants under the loan agreements are as follows:

i.  Loan  lenders  shall  be  notified  of  any  significant  movement  of  the  Group’s

shareholder’s equity.

ii.  In certain circumstances, the Group retains the option to select the currency to be

used for loan or debt settlement.

iii.  Some equity shares of the Company’s subsidiaries were pledged to secure bank

loans.

(d) As at 31 December 2024 and 2023, WML and the Company had provided financial

guarantees  for  the  Company’s  subsidiaries.  Please  refer  to  Note  9.(2)  for  further

details.

(11) Bonds payable

|  |  |  |
| --- | --- | --- |
|  | 31 December 2024 | 31 December 2023 |
| Secured bonds | $30,197,916 | $45,059,803 |
| Less: current portion | - | (45,059,803) |
| Net | $30,197,916 | $- |

The Group’s overseas secured bonds were as follows:

|  |  |  |
| --- | --- | --- |
|  | 31 December 2024 | 31 December 2023 |
| First R.O.C. secured bonds issued in 2019 |  |  |
| Bonds issued | $44,814,755 | $44,814,755 |
| Accumulated converted amount | - | (20,811) |
| Valuation on bonds payable | (2,052,843) | 265,859 |
| Repayment of principal at maturity | (42,761,912) | - |
| Net | - | 45,059,803 |
| Less: current portion of bonds payable | - | (45,059,803) |
| Subtotal | - | - |
| First R.O.C. secured bonds issued in 2024 |  |  |
| Bonds issued | 30,888,031 | - |
| Accumulated converted amount | (307,686) | - |
| Valuation on bonds payable | (382,429) | - |
| Net | 30,197,916 | - |
| Less: current portion of bonds payable | - | - |
| Subtotal | 30,197,916 | - |
| Total | $30,197,916 | $- |
| Interest expense | $586,853 | $530,856 |

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

60

The Group issued five-year secured bonds with a face value of NT$1,385,000 thousand for

the first time on 7 May 2019. The interest is paid every year at the annual interest rate of

0.86%.

The Group issued five-year secured bonds with a face value of NT$1,000,000 thousand for

the first time on 3 May 2024. The interest is paid every year at the annual interest rate of

1.75%.

(12) Leases

A. Group as a lessor

Please refer to Notes 6.(7) and 6.(8) for relevant disclosure of property, plant and equipment

for  operating  leases  and  the  Group’s  owned  investment  properties.  Leases  of  owned

investment properties and property, plant and equipment are classified as operating leases

as they do not transfer substantially all the risks and rewards incidental to ownership of

underlying assets.

|  |  |  |
| --- | --- | --- |
|  | For the Years Ended 31 December |  |
|  | 2024 | 2023 |
| Lease income for operating leases |  |  |
| Income relating to fixed lease payments and |  |  |
| variable lease payments that depend on an |  |  |
| index or a rate | $627,191,948 | $535,042,547 |

For operating leases entered by the Group, the undiscounted lease payments to be received

and a total of the amounts for the remaining years as at 31 December 2024 and 2023 are as

follows:

|  |  |  |
| --- | --- | --- |
|  | 31 December 2024 | 31 December 2023 |
| Not later than one year | $228,241,046 | $471,442,640 |
| Later than one year but not later than two years | 29,129,926 | 128,272,681 |
| Later than two years but not later than three years | 1,391,623 | 29,214,111 |
| Later than three years but not later than four years | 40,128 | - |
| Total | $258,762,595 | $628,969,560 |

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

61

B. Group as a lessee

The Group leases various assets, including vessels and buildings. The lease terms range

from 3 to 15 years.

The effect that leases have on the financial position, financial performance and cash flows

of the Group are as follows:

(a) Amounts recognized in the balance sheet

i.  Right-of-use assets

The carrying amount of right-of-use assets

|  |  |  |
| --- | --- | --- |
|  | 31 December 2024 | 31 December 2023 |
| Vessels | $176,985,551 | $185,909,635 |
| Buildings | 762,355 | 448,931 |
| Total | $177,747,906 | $186,358,566 |

During the years ended 31 December 2024 and 2023, the additions to right-of-use

assets of the Group amounting to $2,122,616 and $28,183,768, respectively.

ii.  Lease liabilities

|  |  |  |
| --- | --- | --- |
|  | 31 December 2024 | 31 December 2023 |
| Lease liabilities |  |  |
| Current | $28,488,199 | $13,391,453 |
| Non-current | 93,931,608 | 130,152,801 |
| Total | $122,419,807 | $143,544,254 |

(i) Please refer to Note 6.(18).D for the interest on lease liabilities recognized

during the years ended 31 December 2024 and 2023 and refer to Note 12.(5)

liquidity risk management for the maturity analysis for lease liabilities.

(ii)  Please refer to Note 7 for further details of lease liabilities recognized for

related party transactions.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

62

(b) Amounts recognized in the statement of comprehensive income

Depreciation charge for right-of-use assets

|  |  |  |
| --- | --- | --- |
|  | For the Years Ended 31 December |  |
|  | 2024 | 2023 |
| Vessels | $10,317,155 | $9,717,931 |
| Buildings | 349,004 | 352,892 |
| Total | $10,666,159 | $10,070,823 |

(c) Income and costs relating to leasing activities

|  |  |  |
| --- | --- | --- |
|  | For the Years Ended 31 December |  |
|  | 2024 | 2023 |
| The expense relating to short-term leases | $13,659 | $13,081 |
| The expense relating to leases of low- | value |  |
| assets (Not including the expenses |  |  |
| relating to short-term leases of low- |  |  |
| value assets) | 6,540 | 6,548 |
| The expense relating to variable lease |  |  |
| payments not included in the |  |  |
| measurement of lease liabilities | 502 | 477 |
| Income from subleasing right-of-use assets | 45,424,572 | 38,712,135 |
| Losses arising from sale and leaseback |  |  |
| transactions | 2,152,903 | 385,935 |

(d) Cash outflow relating to leasing activities

For the years ended 31 December 2024 and 2023, the Group’s total cash outflows for

leases amounting to $17,001,066 and $23,063,605, respectively.

(e) Sale and leaseback transaction

i. As  at  31  December  2024  and  2023,  the  Group  engaged  in  vessels  sale  and

leaseback transactions based on operating performance and investment strategies.

The sale and leaseback transactions resulted in financial leases, and the related

information of these transactions was as follows:

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
| 31 December 2024 | Vessel | Lease term | Rent | Contract price | Interest rates |
|  | (i) | 7 years from 2018.09 | ¥28,928,000/quarter | ¥810,000,000 | 1.50% |
|  | (ii) | 7 years from 2021.11 | ¥45,900,000/quarter | ¥1,485,000,000 | TIBOR+1.35% |
|  | (iii) | 7 years from 2023.01 | ¥64,162,300/quarter | ¥1,941,800,000 | TIBOR+1.00% |
|  | (iv) | 7.5 years from 2024.03 | $680,570/quarter | $16,500,000 | SOFR+1.48% |
|  | (v) | 6.9 years from 2024.03 | $711,400/quarter | $15,840,000 | SOFR+1.38% |

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

63

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
| 31 December 2023 | Vessel | Lease term | Rent | Contract price | Interest rates |
|  | (i) | 7 years from 2018.09 | ¥28,928,000/quarter | ¥810,000,000 | 1.50% |
|  | (ii) | 7 years from 2021.11 | ¥45,900,000/quarter | ¥1,485,000,000 | TIBOR+1.35% |
|  | (iii) | 7 years from 2023.01 | ¥64,162,300/quarter | ¥1,941,800,000 | TIBOR+1.00% |

ii. Future non-cancellable chartering payments as at 31 December 2024 and 2023

were as follows:

|  |  |  |
| --- | --- | --- |
|  | 31 December 2024 | 31 December 2023 |
| Within one year | $6,796,430 | $3,705,874 |
| Beyond one year and up to five years | 27,749,767 | 13,758,842 |
| More than five years | 27,709,284 | 9,167,061 |
| Total | $62,255,481 | $26,631,777 |

iii. Based on the agreements of the sale and leaseback transactions, the Group has the

option to buy the vessels at maturity date and can acquire the lease vessels when

the Group makes the payment.

iv. Please  refer  to  Note  7  for  further  details  of  sale  and  leaseback  transactions

regarding related parties.

(13) Post-employment defined benefit plan

A. Defined contribution plans

WELL and WII provide cash contribution at the rate of 6% of the employee’s monthly

wages to the Labor Pension personal account of the Bureau of the Labor Insurance in

accordance with the provisions of the Labor Pension Act.

B. Defined benefit plans

WII also have a defined benefit plan covering all regular employees in accordance with the

Labor Standards Act. This plan provides for a pension benefit payment of 2 units for each

year of service. Each unit of retirement payment referred to above shall be computed as the

average monthly salary for the last six months at the time of approved retirement. Under

this plan, the Company contributes monthly an amount equal to 2% of gross salary to a

pension fund, which is deposited into a designated depository account with the Bank of

Taiwan.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

64

(14) Equities

A. Capital

(a)  On 21 October 2008, the Company was incorporated with a registered capital of NT

$3,300,000 thousand. In January 2009, based on the approval of the board of directors,

the  Company  issued  shares  of  stock  worth  NT$2,000,000  thousand,  divided  into

200,000  thousand  shares with par value  of NT$10 per share  for  listing in Taiwan

purpose.

As at 31 December 2024 and 2023, the total outstanding capital of the Company both

amounted to NT$7,464,092 thousand, consisting of 746,409 thousand shares with a

par value of NT$10 per share.

(b)  On 12 May 2023, the shareholders resolved at their meeting to appropriate the 2022

earnings, by distributing the cash dividends from retained earnings at NT$6.50 per

share. The record date of cash dividends was 5 June 2023, and the distribution date

was 28 June 2023.

(c)  On 31 May 2024, the shareholders resolved at their meeting to appropriate the 2023

earnings, by distributing the cash dividends from retained earnings at NT$2.75 per

share. The record date of cash dividends was 6 July 2024, and the distribution date was

26 July 2024.

B. Capital surplus

The components of the capital surplus were as follows:

|  |  |  |
| --- | --- | --- |
|  | 31 December 2024 | 31 December 2023 |
| Additional paid-in capital | $1,237,415 | $1,237,415 |

C. Retained earnings

(a)  The Company’s distribution of directors’ and supervisors’ remuneration is based on

the  level  of earnings  and  the resolution  of the  board  of  directors.  Distributions  of

directors’ and supervisors’ remuneration are classified into cost or operating expense.

Any difference between the amounts approved in the shareholders’ meeting and those

recognized  in  the  financial  statements,  if  any,  is  accounted  for  as  a  change  in

accounting estimates and is charged to profit or loss.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

65

(b)  On  31  May  2024  and  12  May  2023,  the  Company’s  shareholders  resolved  at  the

shareholder’s meeting to appropriate the 2023 and 2022 earnings, respectively. These

earnings were distributed as dividends and remuneration to directors and supervisors

as follows:

Unit: NTD

|  |  |  |
| --- | --- | --- |
|  | For the Years Ended 31 December |  |
| Item | 2023 | 2022 |
| Cash dividends from retained earnings-per share | $2.75 | $6.50 |

For the amount and estimate basis of Directors’ and supervisors’ remuneration please

refer to Note 6.(17).E.

(15) Operating revenue

|  |  |  |
| --- | --- | --- |
|  | For the Years Ended 31 December |  |
|  | 2024 | 2023 |
| Revenue from contracts with customers |  |  |
| Freight revenue | $- | $1,561,136 |
| Vessel management revenue | 706,437 | 656,869 |
| Subtotal | 706,437 | 2,218,005 |
| Hire revenue (Note) |  |  |
| Hire revenue-long term | 560,405,345 | 457,146,288 |
| Hire revenue-short term | 66,621,960 | 77,734,692 |
| Subtotal | 627,027,305 | 534,880,980 |
| Other operating revenue | 6,697,428 | 8,431,304 |
| Total | $634,431,170 | $545,530,289 |

Note:   The Group accounted the hire revenue with lease terms within six months for hire

revenue-short term.

Analysis of revenue from contracts with customers during the years ended 31 December 2024

and 2023 are as follows:

A. Disaggregation of revenue

|  |  |  |
| --- | --- | --- |
|  | For the Years Ended 31 December |  |
|  | 2024 | 2023 |
| Rendering of services | $706,437 | $2,218,005 |
| Timing of revenue recognition: |  |  |
| Over time | $706,437 | $2,218,005 |

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

66

B. Contract balances

None.

C. Transaction price allocated to unsatisfied performance obligations

No disclosure of transaction price allocated to unsatisfied performance obligation as the

duration of all contracts with customers is within one year.

D. Assets recognized from costs to fulfill a contract

None.

(16) Expected credit losses

|  |  |  |
| --- | --- | --- |
|  | For the Years Ended 31 December |  |
|  | 2024 | 2023 |
| Operating expenses – expected credit losses |  |  |
| Accounts receivable | $280,486 | $286,890 |

Please refer to Note 12 for more details on credit risk.

The Group  measures the loss allowance of its accounts receivable at an amount equal to

lifetime  expected  credit  losses.  The  assessment  of  the  Group’s  loss  allowance  as  at  31

December 2024 and 2023 are as follows:

Considering counterparties credit rating, industry characteristics and past experiences, the loss

allowance of accounts receivable is measured as a single group by using a provision matrix.

Details for the provision matrix are as follows:

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
| 31 December 2024 |  |  |  | Past due |  |  |  |
|  | Not yet due | Under 6 months | 7~12 months | 13~18 months | 19~24 months | Over 24 months | Total |
| Gross carrying amount | $3,756,871 | $369,404 | $239,968 | $417,324 | $441,825 | $- | $5,225,392 |
| Loss ratio | 0.57% | 3.70% | 4.53% | 6.10% | 8.70% | 100% |  |
| Lifetime expected credit |  |  |  |  |  |  |  |
| losses | 21,537 | 13,668 | 10,871 | 25,457 | 38,439 | - | 109,972 |
| Net carrying amount | $3,735,334 | $355,736 | $229,097 | $391,867 | $403,386 | $- | $5,115,420 |

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

67

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
| 31 December 2023 |  |  |  | Past due |  |  |  |
|  | Not yet due | Under 6 months | 7~12 months | 13~18 months | 19~24 months | Over 24 months | Total |
| Gross carrying amount | $3,149,195 | $472,103 | $539,998 | $900,449 | $- | $24,446 | $5,086,191 |
| Loss ratio | 0.87% | 7.77% | 8.64% | 8.98% | 8.70% | 100% |  |
| Lifetime expected credit |  |  |  |  |  |  |  |
| losses | 27,352 | 36,682 | 46,656 | 80,860 | - | 24,446 | 215,996 |
| Net carrying amount | $3,121,843 | $435,421 | $493,342 | $819,589 | $- | $- | $4,870,195 |

The movement in the provision for impairment of accounts receivable during the years ended

31 December 2024 and 2023 is as follows:

|  |  |  |
| --- | --- | --- |
|  | For the Years Ended 31 December |  |
|  | 2024 | 2023 |
| Beginning balance | $215,996 | $311,564 |
| Addition for the current period | 280,486 | 286,890 |
| Write off for past due over 25 months | (386,510) | (382,458) |
| Ending balance | $109,972 | $215,996 |

(17) Operating costs

|  |  |  |
| --- | --- | --- |
|  | For the Years Ended 31 December |  |
|  | 2024 | 2023 |
| Depreciation | $152,050,003 | $152,744,562 |
| Cost of materials | 58,311,885 | 62,416,368 |
| Expenses for chartering services | 50,275,843 | 42,789,337 |
| Wages and personnel expenses | 145,065,097 | 158,263,121 |
| Other operating costs | 11,977,503 | 12,401,905 |
| Total | $417,680,331 | $428,615,293 |

A. Cost of materials

|  |  |  |
| --- | --- | --- |
|  | For the Years Ended 31 December |  |
|  | 2024 | 2023 |
| Fuel | $3,260,890 | $6,461,502 |
| Lubricants | 11,481,675 | 12,169,891 |
| Materials | 11,937,087 | 12,897,183 |
| Spare parts | 17,069,437 | 17,051,451 |
| Inspection fees | 8,058,489 | 8,417,455 |
| Repairs and maintenance | 4,879,981 | 3,778,611 |
| Paints | 1,624,326 | 1,640,275 |
| Total | $58,311,885 | $62,416,368 |

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

68

B. Expenses for chartering services

|  |  |  |
| --- | --- | --- |
|  | For the Years Ended 31 December |  |
|  | 2024 | 2023 |
| Commissions | $32,484,812 | $27,323,438 |
| Management fee | 8,249,050 | 5,102,583 |
| Port charges | 843,797 | 1,189,857 |
| Agency costs | 415,923 | 677,906 |
| Dispatch expenses | 8,900 | 78,451 |
| Postage expenses | 3,029,720 | 2,999,980 |
| Others | 5,225,782 | 5,417,122 |
| Carbon fee | 17,859 | - |
| Total | $50,275,843 | $42,789,337 |

C. Wages and personnel expenses

|  |  |  |
| --- | --- | --- |
|  | For the Years Ended 31 December |  |
|  | 2024 | 2023 |
| Crew wages | $118,468,897 | $121,644,806 |
| Insurance expenses | 11,809,752 | 13,209,369 |
| Food and meals | 8,405,585 | 8,749,520 |
| Crew travel fees | 3,561,223 | 11,075,793 |
| Bonus | 2,649,070 | 3,406,722 |
| Pension | 170,570 | 176,911 |
| Total | $145,065,097 | $158,263,121 |

D. Other operating costs

|  |  |  |
| --- | --- | --- |
|  | For the Years Ended 31 December |  |
|  | 2024 | 2023 |
| Hull and machinery insurance | $9,327,986 | $10,067,548 |
| Compensation for damage | 1,710,728 | 1,184,915 |
| Lease payments | 2,803 | 2,889 |
| Others | 935,986 | 1,146,553 |
| Total | $11,977,503 | $12,401,905 |

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

69

E. Summary  statement  of  employee  benefits,  depreciation  and  amortization  expenses  by

function for the years ended 31 December 2024 and 2023:

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  | For the Years Ended 31 December |  |  |  |
|  |  | 2024 |  |  | 2023 |  |
|  | Operating | Operating | Total | Operating | Operating | Total |
|  | costs | expenses | amount | costs | expenses | amount |
| Employee benefits expense |  |  |  |  |  |  |
| Salaries | $121,117,967 | $2,620,000 | $123,737,967 | $125,051,528 | $2,036,179 | $127,087,707 |
| Insurance expenses | 11,809,752 | 153,281 | 11,963,033 | 13,209,369 | 157,241 | 13,366,610 |
| Pension | 170,570 | 68,141 | 238,711 | 176,911 | 65,542 | 242,453 |
| Other employee benefits |  |  |  |  |  |  |
| expense | 8,406,753 | 71,323 | 8,478,076 | 8,755,714 | 66,222 | 8,821,936 |
| Depreciation | 152,050,003 | 238,776 | 152,288,779 | 152,744,562 | 221,315 | 152,965,877 |
| Amortization | - | 19,318 | 19,318 | - | 17,489 | 17,489 |

The differences between the actual appropriations of 2023 and 2022 earnings for directors

and supervisors’ remunerations as approved at the shareholders’ meeting and the amounts

recognized in the financial statements were as follows:

|  |  |  |  |
| --- | --- | --- | --- |
|  |  | 2023 |  |
|  | The actual |  |  |
|  | appropriation | The amount |  |
|  | according to the | recognized in the |  |
|  | shareholders meeting | financial report | Difference |
| Directors’ and supervisors’ remuneration | $382,177 | $382,288 | $(111) |

|  |  |  |  |
| --- | --- | --- | --- |
|  |  | 2022 |  |
|  | The actual |  |  |
|  | appropriation | The amount |  |
|  | according to the | recognized in the |  |
|  | shareholders meeting | financial report | Difference |
| Directors’ and supervisors’ remuneration | $1,233,969 | $1,233,969 | $- |

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

70

The  aforementioned  difference  for  the  years  ended  31  December  2023  and  2022  was

accounted for as a change in accounting estimates and was charged to profit or loss for the

years ended 31 December 2024 and 2023.

The Group estimated the amounts of the remuneration to directors and supervisors’ to be

$586,390 and $382,288 for the years ended 31 December 2024 and 2023, respectively.

These amounts were calculated based on the Company’s net profit for the years ended 31

December 2024 and 2023, and were estimated according to the earnings allocation method,

priority and factors for employee benefits and key management personnel compensation as

stated  under  the Articles  of Association.  These  benefits  were  expensed  under  salaries

expense for the years ended 31 December 2024 and 2023.

Information  on  the  board  of  directors’  recommendations  and  shareholders’  approval

regarding  the  employee bonuses and  remuneration  to  directors  and supervisors can  be

obtained from the “Market Observation Post System” on the website of the TWSE.

(18) Non-operating income and expenses

A. Interest income

|  |  |  |
| --- | --- | --- |
|  | For the Years Ended 31 December |  |
|  | 2024 | 2023 |
| Interest income |  |  |
| Bank deposits | $6,672,045 | $6,047,909 |
| Financial assets at fair value through other |  |  |
| comprehensive income | 567,480 | 811,318 |
| Total | $7,239,525 | $6,859,227 |

B. Other income

|  |  |  |
| --- | --- | --- |
|  | For the Years Ended 31 December |  |
|  | 2024 | 2023 |
| Other income, others | $320,167 | $1,078,502 |

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

71

C. Other gains and losses

|  |  |  |
| --- | --- | --- |
|  | For the Years Ended 31 December |  |
|  | 2024 | 2023 |
| Gains on disposals of property, plant and |  |  |
| equipment | $31,267,595 | $53,876,999 |
| Losses on disposals of investments | (11,418) | (1,402) |
| Losses from lease modification | - | (1,358) |
| Foreign exchange gains | 6,216,483 | 3,929,478 |
| (Losses) gains on financial assets at fair value |  |  |
| through profit or loss (Note) | (26,743) | 713,053 |
| Other impairment loss | (1,712,900) | - |
| Subtotal | 35,733,017 | 58,516,770 |
| Miscellaneous expenses | (1,208,412) | (2,452,822) |
| Total | $34,524,605 | $56,063,948 |

Note: Balances  were  arising  from  financial  assets  mandatorily  measured  at  fair  value

through  profit  or  loss, including  valuation  adjustment, interest income,  exchange

difference, etc.

D. Interest expense

|  |  |  |
| --- | --- | --- |
|  | For the Years Ended 31 December |  |
|  | 2024 | 2023 |
| Interest on borrowings from bank | $47,084,255 | $54,404,761 |
| Interest on bonds payable | 586,853 | 530,856 |
| Interest on lease liabilities | 4,024,244 | 4,203,844 |
| Interest on long-term accounts payable |  |  |
| (including from related parties) | 9,830,546 | 9,617,892 |
| Total interest expense | $61,525,898 | $68,757,353 |

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

72

(19) Components of other comprehensive income (loss)

For the year ended 31 December 2024

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  | The original |  |  | Other |
|  |  | cost that was | Other | Income tax | comprehensive |
|  | Arising during | removed to | comprehensive | income | income, net |
|  | the period | hedged item | income (loss) | (expenses) | of tax |
| Components of other comprehensive income that |  |  |  |  |  |
| will not be reclassified to profit or loss: |  |  |  |  |  |
| Remeasurements of defined benefit plans | $25,491 | $- | $25,491 | $(5,098) | $20,393 |
| Components of other comprehensive income that |  |  |  |  |  |
| will be reclassified to profit or loss: |  |  |  |  |  |
| Exchange differences on translation of foreign |  |  |  |  |  |
| financial statements | 8,102,320 | - | 8,102,320 | - | 8,102,320 |
| Unrealized gains (losses) from investments in |  |  |  |  |  |
| debt instruments measured at fair value |  |  |  |  |  |
| through other comprehensive income | 157,616 | - | 157,616 | - | 157,616 |
| Total of other comprehensive income (loss) | $8,285,427 | $- | $8,285,427 | $(5,098) | $8,280,329 |

For the year ended 31 December 2023

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  | The original |  |  | Other |
|  |  | cost that was | Other | Income tax | comprehensive |
|  | Arising during | removed to | comprehensive | income | income, net |
|  | the period | hedged item | income (loss) | (expenses) | of tax |
| Components of other comprehensive income that |  |  |  |  |  |
| will not be reclassified to profit or loss: |  |  |  |  |  |
| Remeasurements of defined benefit plans | $177,301 | $- | $177,301 | $1,001 | $178,302 |
| Components of other comprehensive income that |  |  |  |  |  |
| will be reclassified to profit or loss: |  |  |  |  |  |
| Exchange differences on translation of foreign |  |  |  |  |  |
| financial statements | (15,346,026) | - | (15,346,026) | - | (15,346,026) |
| Unrealized gains (losses) from investments in |  |  |  |  |  |
| debt instruments measured at fair value |  |  |  |  |  |
| through other comprehensive income | 345,837 | - | 345,837 | - | 345,837 |
| Total of other comprehensive income (loss) | $(14,822,888) | $- | $(14,822,888) | $1,001 | $(14,821,887) |

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

73

(20) Income tax

A. Pursuant to the rules and regulations of the local authority, the Group income tax includes

WML  and  its  subsidiaries  and  the  Company’s  subsidiaries  in  Taiwan.  The  remaining

subsidiary has no tax obligations pursuant to the rules and regulations of the local authority.

B. For the years ended 31 December 2024 and 2023, the components of income tax expenses

(income) of WML and its subsidiaries and the Company’s subsidiaries in Taiwan were as

follows:

Income tax expense (income) recognized in profit or loss

|  |  |  |
| --- | --- | --- |
|  | For the Years Ended 31 December |  |
|  | 2024 | 2023 |
| Current income tax expense: |  |  |
| Current income tax charge | $662,654 | $761,392 |
| Deferred tax expense (income): |  |  |
| Deferred tax expense (income) relating to |  |  |
| origination and reversal of temporary |  |  |
| differences | 26,718 | 25,827 |
| Total income tax expense | $689,372 | $787,219 |

Income tax relating to components of other comprehensive income

|  |  |  |
| --- | --- | --- |
|  | For the Years Ended 31 December |  |
|  | 2024 | 2023 |
| Deferred tax expense (income): |  |  |
| Remeasurements of the defined benefit plans | $5,098 | $(1,001) |
| Income tax relating to components of other |  |  |
| comprehensive income | $5,098 | $(1,001) |

Reconciliation between tax expense and the product of accounting profit multiplied by

applicable tax rates is as follows:

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

74

|  |  |  |
| --- | --- | --- |
|  | For the Years Ended 31 December |  |
|  | 2024 | 2023 |
| Tax at the domestic rates applicable to profits in |  |  |
| the country concerned | $(424,265) | $366,742 |
| Tax effect of revenues exempt from taxation |  |  |
| and expenses not deductible for tax purposes | 1,055,828 | 331,518 |
| Tax effect of deferred tax assets/liabilities | 57,809 | 87,877 |
| Corporate income surtax on undistributed |  |  |
| retained earnings | - | 1,082 |
| Total income tax expense recognized in profit or loss | $689,372 | $787,219 |

Deferred tax assets (liabilities) relate to the following:

(a)  Unrecognized deferred tax assets

Unrecognized deferred tax assets of the Group are as follows:

|  |  |  |
| --- | --- | --- |
|  | 31 December 2024 | 31 December 2023 |
| Deductible temporary difference |  |  |
| Tax loss | $2,882,881 | $2,745,687 |
| Impairment loss | 420,180 | 547,972 |
| Total | $3,303,061 | $3,293,659 |

The ROC Income Tax Act allows net losses, as assessed by the tax authorities, to offset

taxable  income  over  a  period  of  ten  years  for  local  tax  reporting  purposes  and

Impairment loss.

The Group’s estimated unused tax effects of the loss carry-forwards as at 31 December

2024:

|  |  |  |
| --- | --- | --- |
| Year | Unused Amount | Expiration Year |
| 2017 assessed amount | $48,221 | 2027 |
| 2019 assessed amount | 446,780 | 2029 |
| 2020 assessed amount | 478,288 | 2030 |
| 2021 assessed amount | 468,361 | 2031 |
| 2022 assessed amount | 554,820 | 2032 |
| 2023 filed amount | 510,301 | 2033 |
| 2024 filed amount | 376,110 | 2034 |
|  | $2,882,881 |  |

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

75

(b)  Recognized deferred tax assets (liabilities)

For the years ended 31 December 2024 and 2023, changes in deferred tax assets and

liabilities are as follows:

|  |  |  |  |
| --- | --- | --- | --- |
|  | Defined |  |  |
|  | benefit plans | Other | Total |
| Deferred tax assets (liabilities): |  |  |  |
| Balance, 1 January 2024 | $(1,392) | $19,969 | $18,577 |
| (Debit) credit in income statement | (1,069) | (25,649) | (26,718) |
| Relating to components of other |  |  |  |
| comprehensive income | (5,098) | - | (5,098) |
| Exchange rate effects | 215 | (738) | (523) |
| Balance, 31 December 2024 | $(7,344) | $(6,418) | $(13,762) |
| Balance, 1 January 2023 | $35,062 | $8,689 | $43,751 |
| (Debit) credit in income statement | (36,941) | 11,114 | (25,827) |
| Relating to components of other |  |  |  |
| comprehensive income | 1,001 | - | 1,001 |
| Exchange rate effects | (514) | 166 | (348) |
| Balance, 31 December 2023 | $(1,392) | $19,969 | $18,577 |

Reflected in balance sheet as follows:

|  |  |  |
| --- | --- | --- |
|  | 31 December 2024 | 31 December 2023 |
| Deferred tax assets | $10,997 | $32,351 |
| Deferred tax liabilities | $24,759 | $13,774 |

C. The assessment of income tax returns

As at 31 December 2024, the assessment of the income tax returns of the Company and its

subsidiaries is as follows:

|  |  |
| --- | --- |
|  | The assessment of income tax returns |
| Wisdom Marine International Inc. (WII) | Assessed and approved up to 2022 |
| Well Ship management and Maritime |  |
| Consultant Co., Ltd. (WELL) | Assessed and approved up to 2022 |
| Huian Ship Management Co., Ltd. | Assessed and approved up to 2022 |

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

76

(21) Earnings per share

Basic  earnings  per  share  amounts  are  calculated  by  dividing  net  profit  for  the  period

attributable to ordinary equity holders of the parent entity by the weighted average number of

ordinary shares outstanding during the period.

Diluted earnings per share amounts are calculated by dividing the net profit attributable to

ordinary equity holders of the parent entity (after adjusting for interest on the convertible

bonds and etc.) by the weighted average number of ordinary shares outstanding during the

period  plus  the  weighted  average  number  of  ordinary  shares  that  would  be  issued  on

conversion of all the dilutive potential ordinary shares into ordinary shares.

|  |  |  |
| --- | --- | --- |
|  | For the Years Ended 31 December |  |
|  | 2024 | 2023 |
| Basic/diluted earnings per share |  |  |
| Profit attributable to ordinary shareholders | $187,841,879 | $104,966,718 |
| Weighted average number of ordinary shares | 746,409,199 | 746,409,199 |
| Basic/diluted earnings per share | $0.25 | $0.14 |

There have been no other transactions involving ordinary shares or potential ordinary shares

between the reporting date and the date of completion of the financial statements.

7.  Related party transactions

(1)  Names and Relationships of Related Parties

Name of Related Party Relationship

Lan Chun Sheng Chairman

Pescadores Merchandise Co., Ltd Other Related Party

Pescadores Travel Co., Ltd Other Related Party

Wisdom Marine Agency Co., Ltd. Other Related Party

Hui-wen Investment Co., Ltd Other Related Party

Brave Line Co., Ltd. Other Related Party

YOKO CO., LTD. Other Related Party

Benefit Transport S.A. Other Related Party

Samurai Investment S.A. Other Related Party

Fortunate Transport S.A. Other Related Party

Asiaeuro Investment S.A. Other Related Party

Wisdom Synergy Shipmanagement Pte. Ltd. Joint Venture

Genius Star Management Consulting Co., Ltd. Other Related Party

Oceanlance Maritime Co., Ltd. Other Related Party

Pescadores Investment and Development Inc. Associates

Directors, President and Vice President Key Management

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

77

Note 1: The name of related party with balance or amount of single transaction over 10% of

the total transaction balance or amount would be disclosed separately.

Note 2: Wisdom Synergy Shipmanagement Pte. Ltd. has become our joint venture since 16

February 2024.

(2)  Significant transactions with related parties

A. Hire revenue

For the years ended 31 December 2024 and 2023, the Group entered into time chartering

with other related parties as follows:

|  |  |  |
| --- | --- | --- |
|  | For the Years Ended 31 December |  |
| Related party | 2024 | 2023 |
| Other related parties | $1,704,457 | $1,854,479 |

The price of time chartering with other related parties was determined based on the market

rate and operating costs of the Group.

B. Services received / rendered

For the years ended 31 December 2024 and 2023, the Group received services from (or

rendered services to) related parties as follows:

|  |  |  |
| --- | --- | --- |
| Related party | Item | Amount |
| For the Year Ended |  |  |
| 31 December 2024 |  |  |
| Other related parties | Vessel management service income | $(705,502) |
| ″ | Other income (ticket revenue and other income-other) | (109,950) |
| ″ | Commissions | 6,632,039 |
| ″ | Other expenses (business travel expenses, agency fees, |  |
|  | inspection fees, management consulting fees and etc.) | 502,849 |
| ″ | Operating expenses (business travel expenses, |  |
|  | entertainment expenses and etc.) | 85,006 |
| ″ | Other income, others | (560) |
| ″ | Ballast water management systems costs and dry- |  |
|  | docking cost | 173,388 |
| ″ | Losses on disposals of property, plant and equipment |  |
|  | (commissions) | 200,000 |
| Associates | Management revenue | (934) |
| Joint Venture | Management expense | 558,932 |

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

78

|  |  |  |
| --- | --- | --- |
| Related party | Item | Amount |
| For the Year Ended |  |  |
| 31 December 2023 |  |  |
| Other related parties | Vessel management service income | $(655,906) |
| ″ | Other income (ticket revenue and other income-other) | (106,747) |
| ″ | Commissions | 5,460,870 |
| ″ | Other expenses (business travel expenses, agency fees, |  |
|  | inspection fees, management consulting fees and etc.) | 595,268 |
| ″ | Operating expenses (business travel expenses, |  |
|  | entertainment expenses and etc.) | 113,404 |
| ″ | Ballast water management systems costs and dry- |  |
|  | docking cost | 726,000 |
| ″ | Losses on disposals of property, plant and equipment |  |
|  | (Commissions) | 575,000 |
| Associates | Management revenue | (963) |

C. Receivables and payables

As at  31 December 2024 and 2023, the Group incurred receivables and payables with

related parties due to vessels operation as follows:

|  |  |  |
| --- | --- | --- |
| Accounts receivable | 31 December 2024 | 31 December 2023 |
| Name of related party |  |  |
| Asiaeuro Investment S.A | $283,147 | $299,989 |
| Other receivables | 31 December 2024 | 31 December 2023 |
| Name of related party |  |  |
| Other related parties | $2,299 | $11,692 |
| Prepayments | 31 December 2024 | 31 December 2023 |
| Name of related party |  |  |
| Other related parties | $- | $270,859 |
| Other current assets, other | 31 December 2024 | 31 December 2023 |
| Name of related party |  |  |
| Other related parties | $1,136,761 | $701,844 |
| Joint Venture | 94,450 | - |
| Total | $1,231,211 | $701,844 |

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

79

|  |  |  |
| --- | --- | --- |
| Accounts payable | 31 December 2024 | 31 December 2023 |
| Name of related party |  |  |
| Genius Star Management Consulting Co., Ltd. | $45,982 | $- |

|  |  |  |
| --- | --- | --- |
| Other accrued expenses | 31 December 2024 | 31 December 2023 |
| Name of related party |  |  |
| Benefit Transport S.A. | $6,649,265 | $6,796,453 |
| Other related parties | 716,257 | 658,587 |
| Total | $7,365,522 | $7,455,040 |

|  |  |  |
| --- | --- | --- |
| Other current liabilities, other | 31 December 2024 | 31 December 2023 |
| Name of related party |  |  |
| Other related parties | $- | $243,277 |

D. Financing

Details of financing provided by a related party to the Group were as follows (accounted

for under long-term accounts payable to related parties):

31 December 2024

|  |  |  |
| --- | --- | --- |
| Name of related party | Max balance | Ending balance |
| Benefit Transport S.A. | $79,098,448 | $53,220,685 |
| Samurai Investment S.A. | 44,351,000 | 39,490,353 |
| Total | $123,449,448 | $92,711,038 |

31 December 2023

|  |  |  |
| --- | --- | --- |
| Name of related party | Max balance | Ending balance |
| Benefit Transport S.A. | $90,581,247 | $79,098,448 |
| Samurai Investment S.A. | 44,351,000 | 44,351,000 |
| Total | $134,932,247 | $123,449,448 |

|  |  |  |
| --- | --- | --- |
| Interest expenses | For the Years Ended 31 December |  |
| Name of related party | 2024 | 2023 |
| Benefit Transport S.A. | $4,442,150 | $5,847,736 |
| Samurai Investment S.A. | 3,053,779 | 3,183,586 |
| Total | $7,495,929 | $9,031,322 |

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

80

The interest expenses of financing were calculated based on the LIBOR rate plus 2% per

month commencing from 2011.

E. Leases

(a)  For the years ended 31 December 2024 and 2023, the Group entered into leases on its

office space with other related parties and key management as a lessee as follows:

|  |  |  |
| --- | --- | --- |
| Right-of-use assets | 31 December 2024 | 31 December 2023 |
| Name of related party |  |  |
| Key management | $304,396 | $- |
| Other related parties | 144,499 | - |
| Total | $448,895 | $- |

|  |  |  |
| --- | --- | --- |
| Lease liabilities | 31 December 2024 | 31 December 2023 |
| Name of related party |  |  |
| Key management | $300,470 | $- |
| Other related parties | 142,463 | - |
| Total | $442,933 | $- |

|  |  |  |
| --- | --- | --- |
| Interest expense | For the Years Ended 31 December |  |
| Name of related party | 2024 | 2023 |
| Key management | $470 | $1,046 |
| Other related parties | - | 371 |
| Total | $470 | $1,417 |

(b)  In August and October 2023, an office lease contract signed with key management,

which located in 3F., No. 137, Sanduo 3rd Rd., Qianzhen Dist., Kaohsiung City, was

terminated before expiration. The $173 lease modification profit was generated and

has been recognized in the statement of comprehensive income.

(c)  As  at  1  January  2024,  the  Group  entered  into  3-year  office  lease  contracts  with

chairman, with underlying assets including parking lots and office spaces located in

3F., No. 137, Sanduo 3rd Rd., Qianzhen Dist., Kaohsiung City and 7F.-1-3,-5-11,-13,

No. 237, Sec. 2, Fushing S. Rd., Taipei City, respectively, which resulted in acquisition

of right-of-use assets-buildings amounting to $487,524.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

81

(d)  As at 1 January 2024, the Group entered into a 3-year office lease contract with Hui-

wen Investment Co., Ltd, with underlying assets including office spaces located in 7F.-

12,15-19, No. 237, Sec. 2, Fushing S. Rd., Taipei City,    which resulted in acquisition

of right-of-use assets-buildings amounting to $231,431.

(e)  For the years ended 31 December 2024 and 2023, the Group entered into leases with

other related parties as a lessor as follows:

|  |  |  |
| --- | --- | --- |
| Rent revenue | For the Years Ended 31 December |  |
| Name of related party | 2024 | 2023 |
| Other related parties | $153,159 | $157,804 |

The above leases are paid monthly without rental deposits. Lease terms and conditions

are agreed by both parties which are not significant different from those with third

parties.

F.  Guarantee

As at 31 December 2023, Benefit Transport S.A. had provided a time deposit guarantee for

the Group’s borrowings of $500 thousand. No such situation as at 31 December 2024.

G. Others

(a) For  the  year  ended  31  December  2023,  the  installments  for  sale  and  leaseback

transactions  paid  to  other  related  parties  were  ¥115,712  thousand,  while  interest

expenses were ¥4,114,750. As at 31 December 2023, the unpaid amount of sale and

leaseback  transactions  was  ¥202,512  thousand  (accounted  for  under  long-term

accounts payable to related parties, current and non-current portion, at $1,432,091).

(b) For the  year  ended  31  December  2024,  the  installments  for  sale  and  leaseback

transactions  paid  to  other  related  parties  were  ¥115,712  thousand,  while  interest

expenses were ¥2,385,016. As at 31 December 2024, the unpaid amount of sale and

leaseback transactions was ¥86,800 thousand (accounted for under long-term accounts

payable to related parties, current portion, at $555,627).

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

82

(3)  Key management personnel compensation

For the years ended 31 December 2024 and 2023, key management personnel compensation

was as follows:

|  |  |  |
| --- | --- | --- |
|  | For the Years Ended 31 December |  |
|  | 2024 | 2023 |
| Salary and bonus | $1,122,594 | $905,976 |
| Post-employment benefits | 7,671 | 10,107 |
|  | $1,130,265 | $916,083 |

8.  Pledged assets

The carrying values of pledged assets were as follows:

|  |  |  |  |
| --- | --- | --- | --- |
| Pledged assets | Secured liabilities | 31 December 2024 | 31 December 2023 |
| Property, plant and equipment | Bank loans and long- |  |  |
|  | term payables |  |  |
|  | (including due to |  |  |
|  | related parties) | $1,848,275,000 | $2,079,972,000 |
| Investment property | Bank loans | 2,194,490 | 2,352,002 |
| Financial | assets at fair value through |  |  |
| other comprehensive income | Bank loans | 2,531,091 | 4,326,021 |
| Other financial assets | Bank loans | 36,491,161 | 51,807,798 |
|  |  | $1,889,491,742 | $2,138,457,821 |

9.  Significant commitments and contingencies

(1) The Group had entered into ship building contracts as follows:

|  |  |  |
| --- | --- | --- |
|  | 31 December 2024 |  |
| Vessels |  | 13 |
| Contract price | $424,523 | thousand |
| Prepaid | 49,528 | thousand |
| Financed ship building contracts | thousand | - |

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

83

The  remaining  balance  of  the  contract  price  is  payable  upon  keel-laying,  launching,  and

delivery.

The ship building contracts categorized by year of delivery were as follows:

|  |  |  |
| --- | --- | --- |
|  | Contract Price |  |
| Year of delivery | (USD thousand) | Number of vessels |
| 2025 | $62,000 | 2 |
| 2026 | 221,201 | 7 |
| 2027 | 141,322 | 4 |
| Total | $424,523 | 13 |

(2)  Financial guarantee

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
| Guarantor | party guarantee | 31 December 2024 | Ending date | Purpose |
| WML | Subsidiaries | $483,226 thousand | 2033.06 | Borrowings |
|  |  | ¥28,782,453 thousand |  |  |
|  |  | CHF67,546 thousand |  |  |
| The Company | Subsidiaries | $595,125 thousand | 2033.06 | Borrowings and |
|  |  | ¥50,209,797 thousand |  | operating fund |
|  |  | CHF44,306 thousand |  |  |
| WML | The Company | $3,000 thousand | 2025.07 | Operating fund |
| The Company | WII | NT$290,640 thousand | 2029.05 | Borrowings |
| Amis Integrity S.A. | Daiwan Glory S.A. | ¥874,141 thousand | 2027.07 | Borrowings |
| Daiwan Glory S.A. | Amis Integrity S.A. | ¥1,247,814 thousand | 2027.07 | Borrowings |

Name of relative

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
| Guarantor | party guarantee | 31 December 2023 | Ending date | Purpose |
| WML | Subsidiaries | $609,662 thousand | 2033.06 | Borrowings |
|  |  | ¥38,061,135 thousand |  |  |
| The Company | Subsidiaries | $683,473 thousand | 2033.06 | Borrowings and |
|  |  | ¥60,643,109 thousand |  | operating fund |
| WML | The Company | $3,000 thousand | 2024.06 | Operating fund |
| The Company | WII | NT$275,140 thousand | 2024.05 | Borrowings |
| Amis Integrity S.A. | Daiwan Glory S.A. | ¥1,029,221 thousand | 2027.07 | Borrowings |
| Daiwan Glory S.A. | Amis Integrity S.A. | ¥1,409,446 thousand | 2027.07 | Borrowings |

Name of relative

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

84

10. Losses due to major disasters:

None.

11. Significant subsequent events:

On  6  January  2025,  the  Group  has  entered  into  ship  selling  contract  to  sell  one  vessel  for

$7,420,000. The delivery of the vessel was completed on 17 January 2025.

12. Others

(1)  Categories of financial instruments

Financial assets

|  |  |  |
| --- | --- | --- |
|  | 31 December 2024 | 31 December 2023 |
| Financial assets at fair value through profit or loss | $822,100 | $902,700 |
| Financial assets at fair value through other |  |  |
| comprehensive income | 9,717,541 | 11,864,671 |
| Financial assets at amortized cost: |  |  |
| Cash and cash equivalents (excluding cash on hand) | 135,147,863 | 116,942,353 |
| Accounts receivable and other receivables |  |  |
| (including due from related parties) | 11,734,708 | 6,978,904 |
| Subtotal | 146,882,571 | 123,921,257 |
| Other financial assets | 36,491,161 | 51,807,798 |
| Total | $193,913,373 | $188,496,426 |

Financial liabilities

|  |  |  |
| --- | --- | --- |
|  | 31 December 2024 | 31 December 2023 |
| Financial liabilities at amortized cost: |  |  |
| Short-term borrowings | $21,470,519 | $30,527,226 |
| Accounts payable (including to related parties) | 6,063,852 | 5,758,865 |
| Bonds payable (including current portion) | 30,197,916 | 45,059,803 |
| Long-term borrowings (including current portion) | 799,891,874 | 962,414,725 |
| Long-term accounts payable (including due to |  |  |
| related parties) | 164,201,892 | 162,242,671 |
| Lease liabilities (including current portion) | 122,419,807 | 143,544,254 |
| Total | $1,144,245,860 | $1,349,547,544 |

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

85

(2)  Financial risk management objectives and policies

The Group’s principal financial risk management objective is to manage the market risk, credit

risk and liquidity risk related to its operating activities. The Group identifies measures and

manages the aforementioned risks based on the Group’s policy and risk appetite.

The Group has established appropriate policies, procedures and internal controls for financial

risk management. Before entering into significant transactions, due approval process by the

Group’s board of directors and audit committee must be carried out based on related protocols

and  internal  control  procedures.  The  Group  complies  with  its financial  risk  management

policies at all times.

(3)  Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will

fluctuate  because of  the changes  in  market  prices. Market  prices  comprise currency risk,

interest rate risk and other price risk (such as equity risk).

In practice, it is rarely the case that a single risk variable will change independently from other

risk  variables;  there  are  usually  interdependencies  between  risk  variables.  However  the

sensitivity analysis disclosed below does not take into account the interdependencies between

risk variables.

Foreign currency risk

The  Group  is  exposed  to  currency  risk  on  sales,  purchases  and  borrowings  that  are

denominated in a currency other than the respective functional currencies of Group entities,

primarily USD and Japanese Yen.

The foreign currency sensitivity analysis of the possible change in foreign exchange rates on

the  Group’s  profit  is  performed  on  significant  monetary  items  denominated  in  foreign

currencies as at the end of the reporting period. The Group’s foreign currency risk is mainly

related to the volatility in the exchange rates for foreign currency Yen. The information of the

sensitivity analysis is as follows:

When USD strengthens/weakens against foreign currency Yen by 10%, the profit for the years

ended  31  December  2024  and  2023  increases/decreases  by  $2,521,634  and  $4,915,930,

respectively; the equity increases/decreases by $0 and $0, respectively.

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86

Interest rate risk

Interest rate risk is managed by the Group on an ongoing basis with the primary objective of

limiting the extent to which net interest expense could be affected by an adverse movement in

interest rates.  The Group’s  has no financial  liabilities  at fair  value through profit  or loss

bearing fixed interest payable. The Group does not use financial derivatives to hedge against

interest rate risk.

The interest rate sensitivity analysis is performed on items exposed to interest rate risk as at

the end of the reporting period, including investments and borrowings with variable interest

rates. At the reporting date, a change of 0.25% of interest rate in a reporting period could cause

the profit for the years ended 31 December 2024 and 2023 to decrease/increase by $2,768,166

and $3,245,783, respectively; the equity decrease /increase by $0 and $0, respectively.

(4)  Credit risk management

Credit risk is the risk that a counter party will not meet its obligations under a contract, leading

to a financial loss. The Group is exposed to credit risk from operating activities (primarily for

accounts receivables)  and from its financing  activities,  including  bank  deposits  and other

financial instruments.

Credit  risk  is  managed  by  each  business  unit  subject  to  the  Group’s  established  policy,

procedures and control relating to credit risk management. Credit limits are established for all

counter parties based on their financial position, rating from credit rating agencies, historical

experience, prevailing economic condition and the Group’s internal rating criteria etc. Certain

counter parties’ credit risk will also be managed by taking credit enhancing procedures, such

as requesting for prepayment or insurance.

As at  31 December 2024 and 2023, the accounts receivable amounted to $5,225,392 and

$5,086,191, constituting 0.19% and 0.18% of the consolidated total assets, respectively. The

credit concentration risk of accounts receivable is insignificant.

Credit risk from balances with banks, fixed income securities and other financial instruments

is managed by the Group’s treasury in accordance with the Group’s policy. The Group only

transacts with counterparties approved by the internal control procedures, which are banks

and  financial  institutions,  companies  and  government  entities  with  good  credit  rating.

Consequently, there is no significant credit risk for these counter parties.

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(5)  Liquidity risk management

The Group’s objective is to maintain a balance between continuity of funding and flexibility

through  the  use  of  cash  and  cash  equivalents,  highly  liquid  equity  investments,  bank

borrowings, bonds and finance leases. The table below summarizes the maturity profile of the

Group’s financial liabilities based on the contractual undiscounted payments and contractual

maturity. The payment amount includes the contractual interest. The undiscounted payment

relating  to  borrowings  with  variable  interest rates  is  extrapolated  based  on  the  estimated

interest rate yield curve as of the end of the reporting period.

As at 31 December 2024:

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  | Contractual |  |  |  |  |
|  | Carrying amount | cash flow | 1 year | 2 years | 3 to 5 years | > 5 years |
| Non-derivative financial liabilities |  |  |  |  |  |  |
| Short-term borrowings | $21,470,519 | $21,721,397 | $21,721,397 | $- | $- | $- |
| Accounts payables |  |  |  |  |  |  |
| (including due to related parties) | 6,063,852 | 6,063,852 | 6,063,852 | - | - | - |
| Bonds payable | 30,197,916 | 33,170,658 | 533,781 | 533,781 | 32,103,096 | - |
| Long-term borrowings | 799,891,874 | 915,204,613 | 213,877,455 | 141,304,847 | 318,468,528 | 241,553,783 |
| Long-term accounts payable |  |  |  |  |  |  |
| (including due to related parties) | 164,201,892 | 201,125,148 | 16,555,859 | 15,436,148 | 49,918,310 | 119,214,831 |
| Lease liabilities | 122,419,807 | 135,608,780 | 31,849,614 | 20,024,471 | 52,706,989 | 31,027,706 |
|  | $1,144,245,860 | $1,312,894,448 | $290,601,958 | $177,299,247 | $453,196,923 | $391,796,320 |

As at 31 December 2023:

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  | Contractual |  |  |  |  |
|  | Carrying amount | cash flow | 1 year | 2 years | 3 to 5 years | > 5 years |
| Non-derivative financial liabilities |  |  |  |  |  |  |
| Short-term borrowings | $30,527,226 | $31,175,568 | $31,175,568 | $- | $- | $- |
| Accounts payable |  |  |  |  |  |  |
| (including due to related parties) | 5,758,865 | 5,758,865 | 5,758,865 | - | - | - |
| Bonds payable | 45,059,803 | 45,494,577 | 45,494,577 | - | - | - |
| Long-term borrowings | 962,414,725 | 1,123,200,926 | 262,457,380 | 229,069,236 | 381,207,909 | 250,466,401 |
| Long-term accounts payable |  |  |  |  |  |  |
| (including due to related parties) | 162,242,671 | 207,884,421 | 15,008,124 | 14,437,630 | 40,833,244 | 137,605,423 |
| Lease liabilities | 143,544,254 | 161,296,488 | 17,496,970 | 45,985,201 | 37,713,021 | 60,101,296 |
|  | $1,349,547,544 | $1,574,810,845 | $377,391,484 | $289,492,067 | $459,754,174 | $448,173,120 |

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(6)  Reconciliation of liabilities arising from financing activities

Reconciliation of liabilities for the year ended 31 December 2024:

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  | Long-term | Long-term |  |  |  |  |
|  |  | borrowings | accounts payable | Lease liabilities |  | Guarantee | Total liabilities |
|  | Short-term | (including | (including due to | (including |  | deposits | from financing |
|  | borrowings | current portion) | related parties) | current portion) | Bonds payable | received | activities |
| As at 1 Jan. 2024 | $30,527,226 | $962,414,725 | $162,242,671 | $143,544,254 | $45,059,803 | $195 | $1,343,788,874 |
| Cash flows | (8,038,135) | (119,056,349) | 5,662,793 | (12,956,121) | (12,253,249) | - | (146,641,061) |
| Non-cash changes |  |  |  |  |  |  |  |
| Foreign exchange |  |  |  |  |  |  |  |
| movement | (1,018,572) | (43,466,502) | (3,997,888) | (8,984,931) | (2,701,131) | (12) | (60,169,036) |
| Other movements | - | 1,203,414 | - | 294,316 | 816,605 | 92,493 | - |
| As at 31 Dec. 2024 | $21,470,519 | $799,891,874 | $164,201,892 | $122,419,807 | $30,197,916 | $183 | $1,138,182,191 |

Reconciliation of liabilities for the year ended 31 December 2023:

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  | Long-term | Long-term |  |  |  |  |
|  |  | borrowings | accounts payable | Lease liabilities |  | Guarantee | Total liabilities |
|  | Short-term | (including | (including due to | (including |  | deposits | from financing |
|  | borrowings | current portion) | related parties) | current portion) | Bonds payable | received | activities |
| As at 1 Jan. 2023 | $25,000,000 | $1,102,443,232 | $158,277,941 | $141,662,070 | $44,904,899 | $- | $1,472,288,142 |
| Cash flows | 5,290,651 | (120,517,890) | 7,965,876 | (18,839,655) | - | 193 | (126,100,825) |
| Non-cash changes |  |  |  |  |  |  |  |
| Foreign exchange |  |  |  |  |  |  |  |
| movement | 236,575 | (19,510,617) | (4,098,361) | (4,949,769) | 16,583 | 2 | (28,305,587) |
| Other movements | 25,907,144 | - | - | 97,215 | 25,671,608 | 138,321 | - |
| As at 31 Dec. 2023 | $30,527,226 | $962,414,725 | $162,242,671 | $143,544,254 | $45,059,803 | $195 | $1,343,788,874 |

(7)  Fair values of financial instruments

A. The  methods  and  assumptions  applied  in  determining  the  fair  value  of  financial

instruments:

Fair value is the price that would be received to sell an asset or paid to transfer a liability

in  an  orderly  transaction  between  market  participants  at  the  measurement  date.  The

following methods and assumptions were used by the Group to measure or disclose the fair

values of financial assets and financial liabilities:

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(a)  The carrying amount  of  cash and  cash equivalents, accounts receivables, accounts

payable and other  current liabilities approximate their fair value due to their short

maturities.

(b)  Fair value of debt instruments without market quotations, bank loans, bonds payable

and other non-current liabilities are determined based on the counterparty prices or

valuation  method.  The  valuation  method  uses  DCF  method  as  a  basis,  and  the

assumptions such as the interest rate and discount rate are primarily based on relevant

information  of  similar  instrument  (such  as  yield  curves  published  by  the  GreTai

Securities Market, average prices for fixed rate commercial paper published by Reuters

and credit risk, etc.)

(c)  The fair value of derivatives which are not options and without market quotations, is

determined based on the counterparty prices or discounted cash flow analysis using

interest rate yield curve for the contract period. Fair value of option-based derivative

financial instruments is obtained using the counterparty prices or appropriate option

pricing model (for example, Binomial Tree model) or other valuation method (for

example, Monte Carlo Simulation).

B. Fair value of financial instruments measured at amortized cost

The carrying amount of the Group’s financial assets and liabilities measured at amortized

cost approximate their fair value, including cash and cash equivalents, accounts receivable,

account payable and other current liabilities.

C. Fair value measurement hierarchy for financial instruments

Please refer to Note 12.(8) for fair value measurement hierarchy for financial instruments

of the Group.

(8)  Fair value measurement hierarchy

A. Fair value measurement hierarchy

All  asset  and  liabilities for  which  fair  value  is measured  or  disclosed  in  the financial

statements are categorized within the fair value hierarchy, based on the lowest level input

that is significant to the fair value measurement as a whole. Level 1, 2 and 3 inputs are

described as follows:

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Level 1–  Quoted  (unadjusted)  market  prices  in  active  markets  for  identical  assets  or

liabilities that the entity can access at the measurement date

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for

the asset or liability, either directly or indirectly

Level 3 – Unobservable inputs for the asset or liability

For assets and liabilities that are recognized in the financial statements on a recurring basis,

the Group determines whether transfers have occurred between Levels in the hierarchy by

re-assessing categorization at the end of each reporting period.

B. Fair value measurement hierarchy of the Group’s assets and liabilities

The Group does not have assets that are measured at fair value on a non-recurring basis.

Fair value measurement hierarchy of the Group’s assets and liabilities measured at fair

value on a recurring basis is as follows:

As at 31 December 2024

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  | Level 1 | Level 2 | Level 3 | Total |
| Financial assets at fair value through |  |  |  |  |
| profit or loss | $- | $- | $822,100 | $822,100 |
| Financial assets at fair value through |  |  |  |  |
| other comprehensive income | $9,717,541 | $- | $- | $9,717,541 |

As at 31 December 2023

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  | Level 1 | Level 2 | Level 3 | Total |
| Financial assets at fair value through |  |  |  |  |
| profit or loss | $- | $- | $902,700 | $902,700 |
| Financial assets at fair value through |  |  |  |  |
| other comprehensive income | $11,864,671 | $- | $- | $11,864,671 |

Transfers between Level 1 and Level 2 during the period

During the years ended 31 December 2024 and 2023, there were no transfers between Level

1 and Level 2 fair value measurements.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

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Reconciliation  for  fair  value  measurements  in  Level  3  of  the  fair  value  hierarchy  for

movements during the period is as follows:

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  | Assets |
|  |  | through | At fair value |
|  |  |  | profit or loss |
|  |  |  | Structured note |
| Beginning balances as at 1 January 2024 |  |  | $902,700 |
| Total gains and losses recognized for the year ended 31 December 2024: |  |  |  |
| Amount recognized in profit or (loss) (presented in “other profit or loss”) |  |  | (26,743) |
| Acquisition/issues for the year ended 31 December 2024 |  |  | - |
| Others |  |  | (53,857) |
| Ending balances as at | 31 December | 2024 | $822,100 |

|  |  |  |  |
| --- | --- | --- | --- |
|  |  |  | Assets |
|  |  |  | At fair value through |
|  |  |  | profit or loss |
|  |  |  | Structured note |
| Beginning balances as at 1 January 2023 |  |  | $910,700 |
| Total gains and losses recognized for the year ended |  | 31 December | 2023: |
| Amount recognized in profit or (loss) (presented in “other profit or loss”) |  |  | 82,600 |
| Acquisition/issues for the year ended | 2023 | 31 December | - |
| Others |  |  | (90,600) |
| Ending balances as at | 31 December | 2023 | $902,700 |

Total gains and losses recognized for the years ended 31 December 2024 and 2023 in the

table above contain gains and (losses) related to structured note on hand as at 31 December

2024 and 2023 in the amount of $(26,743) and $82,600, respectively.

Information on significant unobservable inputs to valuation

The Group’s assets that are measured at fair value categorized within Level 3 of the fair

value hierarchy on a recurring basis are the structured note. The significant unobservable

inputs to valuation of recurring fair value measurements categorized within Level 3 of the

fair value hierarchy is based on counterparty quotations.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

92

Valuation process used for fair value measurements categorized within Level 3 of the fair

value hierarchy

The Group ensures the results of the valuation are in line with market conditions, based on

independent and reliable inputs which are consistent with other information, and represent

exercisable prices. The Group also analyses the movements in the values of assets and

liabilities  which  are  required  to  be  re-measured  or  re-assessed  as  per  the  Group’s

accounting policies at each reporting date.

C. Fair value measurement hierarchy of the Group’s assets not measured at fair value but for

which the fair value is disclosed

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
| As at 31 December 2024 | Level 1 | Level 2 | Level 3 | Total |
| Assets not measured at fair |  |  |  |  |
| value but for which the fair |  |  |  |  |
| value is disclosed: |  |  |  |  |
| Investment properties (please |  |  |  |  |
| refer to Note 6.(8)) | $- | $- | $2,531,838 | $2,531,838 |
| As at 31 December 2023 | Level 1 | Level 2 | Level 3 | Total |
| Assets not measured at fair |  |  |  |  |
| value but for which the fair |  |  |  |  |
| value is disclosed: |  |  |  |  |
| Investment properties (please |  |  |  |  |
| refer to Note 6.(8)) | $- | $- | $2,661,916 | $2,661,916 |

(9)  Significant assets and liabilities denominated in foreign currencies

The Group is mainly affected by the impact of fluctuation in the currency exchange rate for

US Dollar, Japanese Yen or Swiss Franc. The Group’s significant exposure to foreign currency

risk was as follows:

|  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  | As at 31 December 2024 |  |  | As at 31 December 2023 |  |
|  |  |  | Foreign currency | Exchange rate |  | Foreign currency | Exchange rate |  |
|  |  |  | (Note 1) | (Note 2) | USD/JPY | (Note 1) | (Note 2) | USD/JPY |
| Financial liabilities |  |  |  |  |  |  |  |  |
| Monetary item |  |  |  |  |  |  |  |  |
| USD | ：JPY |  | $11,053,440 | 156.22 | ¥1,726,768,397 | $8,737,280 | 141.41 | ¥1,235,538,765 |
| JPY ：USD |  |  | ¥5,666,064,676 | 0.0064 | $36,269,778 | ¥8,187,154,794 | 0.0071 | $57,896,576 |
| NTD | ： | USD | NT$990,038,677 | 0.0305 | $30,197,916 | NT$1,383,561,254 | 0.0326 | $45,059,803 |

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

93

Note 1:  The foreign currency amount of monetary item is the carrying amount of foreign

currency financial liabilities

Note 2:  The exchange rate of monetary item is spot rate.

For the years ended 31 December 2024 and 2023, the Group had foreign exchange gains of

$6,216,483 and $3,929,478, respectively.

(10) Capital management

The capital risk management is established to ensure the Group’s ability to continue to operate

as a going concern. Under this risk management, the Group may adjust dividend payment to

the shareholders, reduce the capital for redistribution to shareholders, issue new shares, adjust

capital expenditure plan and dispose assets to settle any liabilities in order to maintain or adjust

capital structure according to operating needs, investment purpose and market environment.

The Group’s capital structures consisted of net liabilities (borrowings excluding the amount

of cash and cash equivalents) and equity (common stock, capital surplus and other equity).

(11) Accounting  policy  differences  as  referred  in  Article  3  of  Regulations  Governing  the

Preparation of Financial Reports by Securities Issuers with respect to the Group’s balance

sheet and statement of comprehensive income for the periods: None.

(12)List of the Group vessels as at 31 December 2024

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
| No. | Name of Vessel | Construction year | D.W.T. | Vessel type |
| 1 | Amis Ace | 2013 | 60,830 | Supramax |
| 2 | Amis Brave | 2013 | 61,467 | Supramax |
| 3 | Amis Champion | 2014 | 60,830 | Supramax |
| 4 | Amis Dolphin | 2015 | 60,830 | Supramax |
| 5 | Amis Elegance | 2015 | 55,404 | Supramax |
| 6 | Amis Fortune | 2015 | 55,468 | Supramax |
| 7 | Amis Glory | 2016 | 55,474 | Supramax |
| 8 | Amis Hero | 2017 | 63,469 | Supramax |
| 9 | Amis Integrity | 2017 | 62,980 | Supramax |
| 10 | Amis Justice | 2017 | 63,531 | Supramax |
| 11 | Amis Kalon | 2010 | 58,107 | Supramax |

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

94

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
| No. | Name of Vessel | Construction year | D.W.T. | Vessel type |
| 12 | Amis Leader | 2010 | 58,107 | Supramax |
| 13 | Amis Nature | 2018 | 55,472 | Supramax |
| 14 | Amis Power | 2018 | 64,012 | Supramax |
| 15 | Amis Queen | 2019 | 63,424 | Supramax |
| 16 | Amis Respect | 2020 | 63,449 | Supramax |
| 17 | Amis Star | 2019 | 61,123 | Supramax |
| 18 | Amis Treasure | 2020 | 61,125 | Supramax |
| 19 | Amis Unicorn | 2020 | 60,903 | Supramax |
| 20 | Amis Victory | 2020 | 63,364 | Supramax |
| 21 | Amis Wealth | 2021 | 63,364 | Supramax |
| 22 | Amis Wisdom I | 2010 | 61,611 | Supramax |
| 23 | Amis Wisdom II | 2010 | 61,611 | Supramax |
| 24 | Amis Wisdom III | 2011 | 61,527 | Supramax |
| 25 | Amis Wisdom VI | 2011 | 61,456 | Supramax |
| 26 | Amis Xcel | 2024 | 63,793 | Supramax |
| 27 | Amis Youth | 2024 | 63,434 | Supramax |
| 28 | Atayal Ace | 2013 | 16,805 | Handy |
| 29 | Atayal Brave | 2012 | 16,811 | Handy |
| 30 | Atayal Mariner | 2012 | 16,813 | Handy |
| 31 | Atayal Star | 2012 | 16,806 | Handy |
| 32 | Bunun Ace | 2013 | 37,744 | Handy |
| 33 | Bunun Benefit | 2019 | 37,372 | Handy |
| 34 | Bunun Dynasty | 2014 | 37,795 | Handy |
| 35 | Bunun Fortune | 2015 | 37,790 | Handy |
| 36 | Bunun Hero | 2015 | 37,811 | Handy |
| 37 | Bunun Infinity | 2016 | 37,654 | Handy |
| 38 | Bunun Justice | 2017 | 37,748 | Handy |
| 39 | Bunun Kalon | 2018 | 37,653 | Handy |
| 40 | Bunun Leader | 2019 | 37,650 | Handy |
| 41 | Bunun Miracle | 2020 | 37,060 | Handy |
| 42 | Bunun Noble | 2020 | 37,655 | Handy |
| 43 | Bunun Orchid | 2021 | 37,875 | Handy |
| 44 | Bunun Power | 2021 | 37,283 | Handy |
| 45 | Bunun Queen | 2022 | 37,299 | Handy |
| 46 | Bunun Respect | 2021 | 37,987 | Handy |

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

95

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
| No. | Name of Vessel | Construction year | D.W.T. | Vessel type |
| 47 | Bunun Star | 2022 | 37,301 | Handy |
| 48 | Bunun Treasure | 2022 | 37,875 | Handy |
| 49 | Bunun Unicorn | 2023 | 39,413 | Handy |
| 50 | Bunun Victory | 2023 | 34,559 | Handy |
| 51 | Bunun Wisdom | 2012 | 38,168 | Handy |
| 52 | Bunun Xcel | 2023 | 39,697 | Handy |
| 53 | Bunun Youth | 2023 | 39,703 | Handy |
| 54 | Bunun Zest | 2023 | 39,601 | Handy |
| 55 | Daiwan Elegance | 2015 | 35,331 | Handy |
| 56 | Daiwan Fortune | 2015 | 34,893 | Handy |
| 57 | Daiwan Glory | 2015 | 35,531 | Handy |
| 58 | Daiwan Hero | 2016 | 34,376 | Handy |
| 59 | Daiwan Infinity | 2016 | 34,376 | Handy |
| 60 | Daiwan Justice | 2016 | 34,327 | Handy |
| 61 | Daiwan Kalon | 2016 | 34,327 | Handy |
| 62 | Daiwan Leader | 2018 | 34,442 | Handy |
| 63 | Daiwan Miracle | 2019 | 34,447 | Handy |
| 64 | Daiwan Wisdom | 2010 | 31,967 | Handy |
| 65 | Frontier Bonanza | 2010 | 179,435 | Cape |
| 66 | Genius Ace | 2007 | 20,150 | Handy |
| 67 | Genius Star IX | 2009 | 12,005 | Handy |
| 68 | Genius Star X | 2010 | 12,005 | Handy |
| 69 | Genius Star XI | 2012 | 13,663 | Handy |
| 70 | Genius Star XII | 2013 | 13,077 | Handy |
| 71 | Global Faith | 2010 | 28,386 | Handy |
| 72 | Golden Kiku | 2022 | 82,459 | Panamax |
| 73 | Hibiscus | 2002 | 48,610 | Handy |
| 74 | Jacques | 2021 | 4,745 | LPG |
| 75 | Kanavu Benefit | 2021 | 37,929 | Handy |
| 76 | Katagalan Ace | 2023 | 82,680 | Panamax |
| 77 | Katagalan Brave | 2023 | 82,719 | Panamax |
| 78 | Katagalan Champion | 2024 | 84,792 | Panamax |
| 79 | Katagalan Wisdom | 2012 | 98,697 | Panamax |
| 80 | Katagalan Wisdom III | 2012 | 98,697 | Panamax |
| 81 | Ligulao | 2010 | 5,296 | Other-PCTC |

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

96

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
| No. | Name of Vessel | Construction year | D.W.T. | Vessel type |
| 82 | Mega Benefit | 2018 | 80,733 | Panamax |
| 83 | Naluhu | 2010 | 58,107 | Supramax |
| 84 | Ocean Victory | 2011 | 28,386 | Handy |
| 85 | Paiwan Ace | 2024 | 40,236 | Handy |
| 86 | Paiwan Wisdom | 2010 | 31,967 | Handy |
| 87 | Papora Wisdom | 2009 | 28,344 | Handy |
| 88 | Pescadores | 1999 | 44 | Other-Passenger |
| 89 | Poavosa Ace | 2013 | 28,208 | Handy |
| 90 | Poavosa Brave | 2009 | 28,367 | Handy |
| 91 | Poavosa Wisdom | 2009 | 28,234 | Handy |
| 92 | Poavosa Wisdom III | 2011 | 28,232 | Handy |
| 93 | Poavosa Wisdom VI | 2011 | 28,213 | Handy |
| 94 | Poavosa Wisdom VII | 2012 | 28,208 | Handy |
| 95 | Poavosa Wisdom VIII | 2013 | 28,208 | Handy |
| 96 | Rukai Benefit | 2019 | 14,040 | Handy |
| 97 | Sakizaya Ace | 2013 | 74,936 | Panamax |
| 98 | Sakizaya Brave | 2013 | 74,940 | Panamax |
| 99 | Sakizaya Champion | 2014 | 78,080 | Panamax |
| 100 | Sakizaya Diamond | 2015 | 81,938 | Panamax |
| 101 | Sakizaya Elegance | 2015 | 81,938 | Panamax |
| 102 | Sakizaya Future | 2016 | 81,938 | Panamax |
| 103 | Sakizaya Glory | 2016 | 84,883 | Panamax |
| 104 | Sakizaya Hero | 2016 | 81,067 | Panamax |
| 105 | Sakizaya Integrity | 2016 | 81,010 | Panamax |
| 106 | Sakizaya Justice | 2017 | 81,691 | Panamax |
| 107 | Sakizaya Kalon | 2017 | 81,691 | Panamax |
| 108 | Sakizaya Leader | 2017 | 81,691 | Panamax |
| 109 | Sakizaya Miracle | 2017 | 81,668 | Panamax |
| 110 | Sakizaya Orchid | 2017 | 81,588 | Panamax |
| 111 | Sakizaya Power | 2017 | 81,574 | Panamax |
| 112 | Sakizaya Queen | 2018 | 81,858 | Panamax |
| 113 | Sakizaya Respect | 2018 | 81,858 | Panamax |
| 114 | Sakizaya Star | 2020 | 82,516 | Panamax |
| 115 | Sakizaya Treasure | 2020 | 82,400 | Panamax |
| 116 | Sakizaya Unicorn | 2021 | 82,527 | Panamax |

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

97

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
| No. | Name of Vessel | Construction year | D.W.T. | Vessel type |
| 117 | Sakizaya Victory | 2021 | 82,418 | Panamax |
| 118 | Sakizaya Wisdom | 2011 | 76,457 | Panamax |
| 119 | Sakizaya Xcel | 2022 | 82,446 | Panamax |
| 120 | Sakizaya Youth | 2022 | 82,501 | Panamax |
| 121 | Sakizaya Zest | 2022 | 82,501 | Panamax |
| 122 | Saysiat Benefit | 2018 | 13,900 | Handy |
| 123 | Scarlet Eagle | 2014 | 81,842 | Panamax |
| 124 | Scarlet Falcon | 2014 | 82,260 | Panamax |
| 125 | Scarlet Rosella | 2015 | 82,235 | Panamax |
| 126 | Seediq Benefit | 2021 | 16,920 | Handy |
| 127 | Taikli | 2011 | 13,139 | Handy |
| 128 | Tao Ace | 2013 | 25,037 | Handy |
| 129 | Tao Brave | 2011 | 25,065 | Handy |
| 130 | Tao Mariner | 2010 | 25,065 | Handy |
| 131 | Tao Star | 2010 | 25,065 | Handy |
| 132 | Tao Treasure | 2013 | 25,036 | Handy |
| 133 | Taokas Wisdom | 2008 | 31,943 | Handy |
| 134 | Tekung Benefit | 2024 | 63,553 | Supramax |

13. Other disclosures

Information on major shareholders

|  |  |  |
| --- | --- | --- |
| Name of Major Shareholder | Number of shares | Percentage of Ownership |
| Lan Chun Sheng | 191,815,349 | 25.69% |
| Capital Tip Customized Taiwan Select High |  |  |
| Dividend ETF Account | 55,600,000 | 7.44% |
| Pescadores Merchandise Co., Ltd. | 52,569,814 | 7.04% |

(1) The  information  on  major  shareholders,  which  is  provided  by  the  Taiwan  Depository  &

Clearing Corporation, summarized the shareholders who held over 5% of total non-physical

common stocks and preferred stocks (including treasury stocks) on the last business date of

each quarter. The  registered  non-physical stocks may be different from the capital  stocks

disclosed in the financial statement due to different calculation basis.

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WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

98

(2) If shares are entrusted, the above information regarding such shares will be revealed by each

trustors of individual trust  account. The  shareholders holding more than 10%  of the total

shares of the company should declare insider’s equity according to Securities and Exchange

Act. The numbers of the shares declared by the insider include the shares of the trust assets

which the insider has discretion over use. For details of the insider’s equity announcement

please refer to the TWSE website.

14. Segment information

(1)  General information

The Group operates in a single industry. According to the global management nature of the

ship management industry, the Group determined each business unit as an operating segment

and  was  disclosed  according  to  their  operating  types,  operating  assets  and  the  Group’s

operating structure. The Group was identified as a single reportable segment.

The board of directors allocates the profit and assesses performance of the segments based on

the  financial  information  used  in  internal  management  which  is  based  on  each  vessel’s

operating result. The financial information is not different from the consolidated statement of

comprehensive income therefore no further segmental information was disclosed.

(2)  Geographic information

Revenue from external customers is classified according to the location of customers and non-

current  assets  are  classified  according  to  the  registry  of  assets.  The  Group’s  geographic

information is as follows:

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  | For the Years Ended 31 December |  |  |
|  |  | Percentage |  | Percentage |
|  | 2024 | (%) | 2023 | (%) |
| Revenue from external customers: |  |  |  |  |
| Singapore | $313,211,472 | 49 | $238,109,212 | 44 |
| The Netherlands | 119,272,341 | 19 | 104,332,906 | 19 |
| Denmark | 53,860,005 | 9 | 30,061,591 | 5 |
| Panama | 51,002,657 | 8 | 36,408,992 | 7 |
| Switzerland | 27,456,553 | 4 | 20,432,028 | 4 |
| Germany | 13,724,158 | 2 | 41,289,171 | 7 |
| Others | 55,903,984 | 9 | 74,896,389 | 14 |
| Total | $634,431,170 | 100 | $545,530,289 | 100 |

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D)

99

|  |  |  |
| --- | --- | --- |
|  | 2024.12.31 | 2023.12.31 |
| Non-current assets: |  |  |
| Panama | $2,015,100,509 | $2,188,899,202 |
| Cayman | 2,345,725 | 4,513,755 |
| Taiwan | 15,227,071 | 16,052,796 |
| Liberia | 491,846,140 | 411,324,178 |
| Total | $2,524,519,445 | $2,620,789,931 |

Note: non-current assets are property, plant and equipment, right-of-use assets, investment

property and prepaid expenses-vessel.

(3)  Major customers

Individual customers accounting for at least 10% of net sales for the years ended 31 December

2024 and 2023 were as follows:

|  |  |  |
| --- | --- | --- |
|  | For the Years Ended 31 December |  |
|  | 2024 | 2023 |
| Customer A: | $127,104,211 | $109,576,232 |
| Customer B: | $119,134,062 | $104,379,248 |
| Customer C: | $86,736,350 | $67,278,795 |