Wisdom Marine Lines Co. Limited

Wisdom Marine Group FY 2024 - FRC 2138002Y4SAHF7NM3W372024-12-312138002Y4SAHF7NM3W372024-01-012024-12-312138002Y4SAHF7NM3W372023-01-012023-12-312138002Y4SAHF7NM3W372023-12-312138002Y4SAHF7NM3W372022-01-012022-12-312138002Y4SAHF7NM3W372022-12-312138002Y4SAHF7NM3W372023-01-012023-12-31ifrs-full:IssuedCapitalMember2138002Y4SAHF7NM3W372023-01-012023-12-31ifrs-full:SharePremiumMember2138002Y4SAHF7NM3W372023-01-012023-12-31ifrs-full:OtherReservesMember2138002Y4SAHF7NM3W372023-01-012023-12-31ifrs-full:RetainedEarningsMember2138002Y4SAHF7NM3W372023-01-012023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember2138002Y4SAHF7NM3W372023-01-012023-12-31ifrs-full:ReserveOfGainsAndLossesOnFinancialAssetsMeasuredAtFairValueThroughOtherComprehensiveIncomeMember2138002Y4SAHF7NM3W372024-01-012024-12-31ifrs-full:IssuedCapitalMember2138002Y4SAHF7NM3W372024-01-012024-12-31ifrs-full:SharePremiumMember2138002Y4SAHF7NM3W372024-01-012024-12-31ifrs-full:OtherReservesMember2138002Y4SAHF7NM3W372024-01-012024-12-31ifrs-full:RetainedEarningsMember2138002Y4SAHF7NM3W372024-01-012024-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember2138002Y4SAHF7NM3W372024-01-012024-12-31ifrs-full:ReserveOfGainsAndLossesOnFinancialAssetsMeasuredAtFairValueThroughOtherComprehensiveIncomeMember2138002Y4SAHF7NM3W372022-12-31ifrs-full:IssuedCapitalMember2138002Y4SAHF7NM3W372023-12-31ifrs-full:IssuedCapitalMember2138002Y4SAHF7NM3W372022-12-31ifrs-full:SharePremiumMember2138002Y4SAHF7NM3W372023-12-31ifrs-full:SharePremiumMember2138002Y4SAHF7NM3W372022-12-31ifrs-full:OtherReservesMember2138002Y4SAHF7NM3W372023-12-31ifrs-full:OtherReservesMember2138002Y4SAHF7NM3W372022-12-31ifrs-full:RetainedEarningsMember2138002Y4SAHF7NM3W372023-12-31ifrs-full:RetainedEarningsMember2138002Y4SAHF7NM3W372022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember2138002Y4SAHF7NM3W372023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember2138002Y4SAHF7NM3W372022-12-31ifrs-full:ReserveOfGainsAndLossesOnFinancialAssetsMeasuredAtFairValueThroughOtherComprehensiveIncomeMember2138002Y4SAHF7NM3W372023-12-31ifrs-full:ReserveOfGainsAndLossesOnFinancialAssetsMeasuredAtFairValueThroughOtherComprehensiveIncomeMember2138002Y4SAHF7NM3W372024-12-31ifrs-full:IssuedCapitalMember2138002Y4SAHF7NM3W372024-12-31ifrs-full:SharePremiumMember2138002Y4SAHF7NM3W372024-12-31ifrs-full:OtherReservesMember2138002Y4SAHF7NM3W372024-12-31ifrs-full:RetainedEarningsMember2138002Y4SAHF7NM3W372024-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember2138002Y4SAHF7NM3W372024-12-31ifrs-full:ReserveOfGainsAndLossesOnFinancialAssetsMeasuredAtFairValueThroughOtherComprehensiveIncomeMemberISO4217:USDISO4217:USDxbrli:shares 1 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 2 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 3 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 4 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. 5 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. 6 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. 7 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 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) 8 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 9 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 10 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. 11 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 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. 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. 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. 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. 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. 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% 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% 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% 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% 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% 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: 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. 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. 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: 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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: 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. 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. 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. 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. 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. 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 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. 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. 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. 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. 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 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 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 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: 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) 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 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 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. 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 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). 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. 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 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 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. 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% 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. 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. 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 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 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 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 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 $- 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 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 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) WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES 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: WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES 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 WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES 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 WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES 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 WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES 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 WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES 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 WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES 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 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. WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES 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). WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES 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 - 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 WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES 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 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. WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D) 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. WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D) 87 (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 WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D) 88 (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: WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D) 89 (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: WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D) 90 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. WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT’D) 91 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. WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES 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 WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES 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 WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES 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 WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES 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 WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES 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 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. 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 WISDOM MARINE LINES CO., LIMITED (CAYMAN) AND ITS SUBSIDIARIES 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

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